<PAGE>
Exhibit 10.34

                              CONSULTING AGREEMENT

     This is a Consulting Agreement ("Consulting Agreement") dated as of August
5, 1996, between Video Network Services, Inc. ("Video Network"), a New York
corporation, and VideoLan Technologies, Inc. ("VideoLan"), a Delaware
corporation.

                                    Recitals

     A. Video Network has experience in supervising the development of computer
software programs.

     B. VideoLan desires to develop computer software for the VideoLan VL2000
System (the "Software") and desires to employ Video Network as a consultant in
connection with the supervision over the development of the Software.

NOW, THEREFORE, the parties agree as follows:

     1. Consulting Services.

          (a) VideoLan hereby employs Video Network to provide consulting
services to VideoLan in connection with the development of the Software.

          (b) In performing such services, Video Network shall be under the
direction of VideoLan's acting Vice President of Engineering or his designee as
determined by VideoLan's Chief Executive Officer.

          (c) Video Network's consulting services will relate to the following:
(i) subject to VideoLan's approval, hiring the necessary personnel in order to
form a qualified and competent software team for VideoLan; (ii) supervise the
development of the Software; (iii) provide training to VideoLan 's personnel
with respect to the operation of the Software; and (iv) provide technical
assistance with respect to the Software.

     2. Term. Subject to earlier termination pursuant to Section 8 hereof, the
term of this Consulting Agreement shall commence as of the date of this
Consulting Agreement and shall terminate on August 6, 1997, unless extended
and/or renewed upon the mutual agreement of Video Network and VideoLan.
<PAGE>

     3. Video Network Personnel. VideoLan shall approve all personnel used by
Video Network (the "Video Network Personnel") in performing consulting services
under this Consulting Agreement. VideoLan shall provide Video Network with a
plan setting forth (1) the consulting services to be provided by the Video
Network Personnel, and (2) the number of Video Network Personnel (and estimated
hours) required and the time period during which such personnel will be
utilized.

     4. Compensation.

          (a) VideoLan shall compensate Video Network for its consulting

services under this Consulting Agreement in accordance with Exhibit A which is
based on the milestones ("Milestones") set forth on Exhibit B attached hereto.
Furthermore, provided that this Consulting Agreement is approved by the Board of
Directors of VideoLan, VideoLan will grant to Video Network options ("Options')
to purchase up to 40,000 in shares of VideoLan's Common Stock in accordance with
the form of Option Agreement attached hereto as Exhibit C. 14,000 of these
Options will be granted upon the execution of this Consulting Agreement with the
remaining 26,000 Options to be granted upon Video Network's request within
twelve months after the Company has notified Video Network that it has
determined that Video Network has achieved the First Milestone (as defined on
Exhibit B attached hereto).

          (b) VideoLan shall pay Video Network for those pre-approved reasonable
interim resource costs listed on Exhibit D attached hereto which are required
for Video Network to expeditiously reach the Milestones.

          (c) Pursuant to this Consulting Agreement entered into in connection
herewith between VideoLan and Video Network, VideoLan shall pay the reasonable
out-of-pocket expenses incurred by Video Network and its personnel in connection
with the providing of its consulting services. Reasonable out-of-pocket expenses
shall include travel expenses, including the cost of meals, lodging, related
telephone expenses, rental car, and parking and tolls, but shall not include
entertainment expenses. Video Network shall not incur out-of-pocket expenses in
excess of $2000 per month without the prior written approval of VideoLan.

      5.    Video Network Representations and Warranties; Disclaimers.

          (a) Video Network represents and warrants that the Video Network
Personnel used in the performance of its consulting services shall perform such
services in a professional and workmanlike manner.

          (b) Except for a claim by VideoLan arising out of a breach of Video
Network's representations and warranties in this Consulting Agreement and for
damages incurred by VideoLan arising out of Video Network's gross negligence or
willful misconduct with respect to the performance of Video Network's consulting
services under this Consulting Agreement, neither Video Network nor its
affiliates, officers, attorneys, agents, employees or directors shall be liable
to VideoLan or any party claiming through VideoLan for, and VideoLan hereby
releases Video


                                     -2-
<PAGE>

Network and its affiliates, agents, employees, officers, attorneys and directors
with respect to, any direct damages, or indirect, special or consequential
damages, including lost profits, allegedly incurred in connection with or
arising out of the performance of Video Network's consulting services under this
Consulting Agreement.

          (c) VideoLan agrees to indemnify, defend, and hold Video Network, and
its affiliates, employees, directors, officers, agents and attorneys, harmless
from and against any claim arising out of or with respect to the performance of
Video Network's consulting services under this Consulting Agreement unless such

claim arises out of Video Network's gross negligence or willful misconduct with
respect to the performance of Video Network's consulting services under this
Consulting Agreement.

          (d) Video Network agrees to indemnify, defend, and hold VideoLan, and
its affiliates, employees, directors, officers, agents and attorneys, harmless
from and against any claim arising out of or with respect to the damages arising
out of Video Network's gross negligence or willful misconduct with respect to
the performance of Video Network's consulting services under this Consulting
Agreement

     6. Confidentiality.

          (a) Video Network acknowledges that as a consequence of the
performance of its consulting services under this Consulting Agreement, and
otherwise through the relationship between VideoLan and Video Network
established by this Consulting Agreement, certain trade secrets and information
of a proprietary or confidential nature will be disclosed to Video Network and
its personnel, relating to the VideoLan VL2000 System, which is of commercial
value to VideoLan and is not known generally or publicly outside of VideoLan's
business (collectively, the "Confidential Information").

          (b) Video Network acknowledges that the Confidential Information is of
considerable importance to VideoLan and the result of the incurrence by VideoLan
and its affiliates of substantial costs and expenses and the expenditure of
substantial development time and agrees that its relationship to VideoLan with
respect to such Confidential Information shall be fiduciary in nature. Video
Network agrees to hold in confidence and not disclose and not make use of
Confidential Information.

     7. Technological Developments. Video Network and VideoLan agree that any
invention, formula, method, pattern, device, apparatus, product, product
enhancement or application, material, design, drawing, know-how or service
developed by Video Network Personnel while performing their consulting services
for VideoLan shall belong to VideoLan.

     8. Termination. The term of this Consulting Agreement shall be terminated:


                                       -3-
<PAGE>

          (a) By Video Network, upon at least sixty (60) days prior notice;

          (b) By VideoLan at any time after May 1, 1997, upon at least sixty
     (60) days prior notice; and

          (c) By VideoLan at any time "for cause," such termination to take
     effect immediately upon written notice from VideoLan to Video Network.

          The following actions, failures or events by or affecting any Video
Network Personnel shall constitute "cause" for termination within the meaning of
the foregoing paragraph: (1) conviction of having committed a felony, (2) acts
of dishonesty or moral turpitude that are materially detrimental to VideoLan,

(3) acts or omissions which any Video Network Personnel knew or should have
reasonably known were likely to materially damage the business of VideoLan and
did in fact materially damage VideoLan, (4) failure by any Video Network
Personnel to obey the reasonable and lawful directions of VideoLan's Board of
Directors, Chief Executive Officer, or Vice President of Engineering (or his
designee), (5) gross negligence by any Video Network Personnel in the
performance of his or her obligations hereunder, or continuing failure by any
Video Network Personnel to perform his or her obligations hereunder more than 30
days after the particular Video Network Personnel has been provided with written
notice of his or her failure to perform such obligations, or (6) any Video
Network Personnel's willful breach of any material agreement or covenant of this
Consulting Agreement or any fiduciary duty owed to VideoLan.

     9. Data. Upon termination of this Consulting Agreement for any reason,
Video Network and all Video Network Personnel shall promptly deliver to VideoLan
all books, memoranda, plans, records, information and written data, and all
copies of same, of every kind relating to the business and affairs of the
Company which are then in their possession.

     10. Notices. All notices, approvals, consents and demands required or
permitted under this Consulting Agreement shall be in writing and sent by hand
delivery, facsimile, overnight mail, certified mail or registered mail, postage
prepaid, to the parties at their addresses set forth below, and shall be deemed
given when delivered by hand delivery, transmitted by facsimile or mailed by
overnight, certified or registered mail. Any party may specify a different
address by notifying the other party in writing of the different address.

      If to Video Network:    Video Network Services, Inc.
                              99  Wheeler Road
                              Hollis, NH  03049
                              Attention: Edward E. Weston, President
                              Telecopy No.  (603) 465-9350

      If to VideoLan :        VideoLan Technologies, Inc.
                              100 Mallard Creek Road, Suite 250
                              Louisville, KY  40207


                                     -4-
<PAGE>

                              Attention: Steven B. Rothenberg
                              Telecopy No. (502) 895-9073

      With a copy to:         William G. Strench, Esq.
                              Brown, Todd & Heyburn PLLC
                              3200 Providian Center
                              Louisville, KY  40202
                              Telecopy No.  (502) 581-1087

     11. Governing Law. This Consulting Agreement and the rights of the parties
hereto shall be governed by and interpreted in accordance with the laws of the
Commonwealth of Kentucky.


     12. Benefit and Binding Effect. Except as otherwise specifically provided
herein, this Consulting Agreement shall be binding upon and shall inure to the
benefit of the parties and their successors and permitted assigns.

     13. Headings. The headings contained in this Consulting Agreement are
inserted only as a matter of convenience, and in no way define, limit or extend
the scope or intent of this Consulting Agreement or any provision hereof.

     14. Partial Enforceability. If any provision of this Consulting Agreement,
or the application of any provision to any Person or circumstance shall be held
invalid, illegal or unenforceable, then the remainder of this Consulting
Agreement, or the application of that provision to persons or circumstances
other than those with respect to which it is held invalid, illegal or
unenforceable, shall not be affected thereby.

     15. Entire Agreement. This Agreement, including the preambles and exhibits,
together with the Option Agreement, sets forth the entire agreement between the
parties as to the subject matter hereof and merges all prior discussions between
them, and neither of the parties shall be bound by any conditions, definitions,
understandings, or representations with respect to such subject matter other
than as expressly provided herein and in the Option Agreement, or as duly set
forth subsequent to the effective date hereof in writing and signed by the duly
authorized representatives of both parties. Without limiting the generality of
the foregoing, that certain Letter of Intent dated June 7, 1996 between Video
Network and the Company shall be and is null, void and of no further force and
effect. This Consulting Agreement shall supersede all previous agreements of the
parties with respect to the matters to which this Consulting Agreement pertains.

     16. Enforcement. In the event of a breach or threatened breach by a party
of any of the provisions of this Consulting Agreement, the other party shall be
entitled to obtain a temporary

                                       -5-
<PAGE>

restraining order and temporary and permanent injunctive relief without the
necessity of proving actual damages by reason of such breach or threatened
breach, and to the extent permissible under the applicable statutes and rules of
procedure, a temporary injunction or restraining order may be granted
immediately upon the commencement of any such suit and without notice. Nothing
in this Consulting Agreement may be construed as prohibiting a party from
pursuing any other remedy or remedies, including without limitation, the
recovery of damages. A party who is successful in an action against the other
party with respect to this Consulting Agreement shall be entitled to reasonable
legal fees and expenses.

     17. Scope. If any one or more of the provisions of this Consulting
Agreement shall for any reason be held to be excessively broad as to time,
duration, geographical scope, activity, or subject, each such provision shall be
construed, by limiting and reducing it, so as to be enforceable to the extent
compatible with applicable law then in force.

     18. No Waiver. No waiver by any party hereto at any time of a breach by a
party of any provision of this Consulting Agreement to be performed by such

other party shall be deemed a waiver of any similar or dissimilar provisions
hereof at the same or any prior or subsequent time.

     19. Amendments. Any amendments to this Consulting Agreement shall be in
writing and shall be executed by authorized representatives of each of the
parties.

     20. Effect of Termination The termination of this Consulting Agreement for
any reason shall not extinguish those obligations of Video Network described in
Sections 6, 7 and 9, nor shall the same extinguish the right of either party to
bring an action, either in law or in equity, for breach of this Consulting
Agreement by the other party.

     21. No Third Party Beneficiary. It is specifically agreed between the
parties executing this Consulting Agreement that it is not intended by any of
the provisions of any part of the Consulting Agreement to create the public or
any member thereof a third party beneficiary under the Consulting Agreement, or
to authorize anyone not a party to this Consulting Agreement to maintain a suit
for damages pursuant to the terms or provisions of this Consulting Agreement.
The duties, obligations, and responsibilities of the parties to this Consulting
Agreement with respect to third parties shall remain as imposed by law.

     IN WITNESS WHEREOF, the parties have executed this Consulting Agreement as
of the date first set forth above.

                                    VIDEO NETWORK SERVICES, INC.


                                       -6-
<PAGE>

                                    By:_________________________
                                         Edward E. Weston, President

                                    VIDEOLAN TECHNOLOGIES, INC.

                                    By:_________________________

                                    Title:______________________


                                       -7-



<PAGE>

                                                                       EXHIBIT A

                                 Consulting Fees

Consulting Fees. During the term of this Consulting Agreement, Video Network
shall receive the following fees for its consulting services provided under this
Consulting Agreement (prorated for partial periods):


     (a) During the period beginning July 1, 1996 and ending September 30, 1996,
Video Network shall be paid $15,000 per calendar month, payable within fifteen
(15) days of the end of each month;

     (b) During the period beginning October 1, 1996 and ending December 31,
1996, Video Network shall be paid $18,330 per calendar month, payable within
fifteen (15) days of the end of each month;

     (c) During the period beginning January 1, 1997 and ending March 31, 1997,
Video Network shall be paid $30,000 per calendar month, payable within fifteen
(15) days of the end of each month; and

     (d) During the period beginning April 1, 1997 and ending June 30, 1997,
Video Network shall be paid $30,000 per calendar month, payable within fifteen
(15) days of the end of each month.


                                       -8-
<PAGE>

                                                                       EXHIBIT B

                                   Milestones

     (a) First Milestone - Completion Date: August 31, 1996

          o    Software development organization functional: hired and/or
               subcontracted resources, actively developing VL2000 software
               product

          o    Intra-HUB communications capabilities integrated into current
               Gateway application software; developed and tested

          o    Gateway software functional and ready for field installation;
               including ISDN (1, 2 and 3 BRI), T1 and Intra-HUB trunking

          o    VL2000 Version 2.0 applications software GPF and "bug list"
               tested and functionally operational (dependencies: Seven Lands
               Software on-time delivery as per negotiated contract).

     (b) Second Milestone - Completion Date: November 15, 1996

         To be determined.

     (c) Third Milestone - Completion Date: January 31, 1997

         To be determined.


                                       -9-
<PAGE>

                                                                       EXHIBIT C


                                OPTION AGREEMENT

     THIS OPTION AGREEMENT (this "Agreement") is made as of the 5th day of
August 1996, by and between VIDEOLAN TECHNOLOGIES, INC., a Delaware corporation
(the "Company") and VIDEO NETWORKS, INC., a New York corporation (the
"Optionee").

     WHEREAS, pursuant to that certain Consulting Agreement dated August 5, 1996
between the Company and Optionee (the "Consulting Agreement"), Optionee was
granted options (the "Options") to purchase up to 40,000 shares of the Company's
common stock (the "Shares") over a certain period of time;

     WHEREAS, Optionee and the Company desire to set forth the terms and
conditions of the Options;

     NOW, THEREFORE, in consideration of the promises and other good and
valuable consideration, the receipt, mutuality and sufficiency of which is
acknowledged, the parties hereto agree as follows:

     1. Option. On the terms and subject to the conditions of this Agreement,
Optionee shall have the right to purchase up to 40,000 Shares, subject to
adjustment in accordance with Section 6 of this Agreement and subject to the
exercise requirements set forth in Sections 4(a), (b), (c) and (d) of this
Agreement.

     2. Option Exercise Price. The exercise price of the Option (the "Exercise
Price") shall be $15.50 per Share, subject to adjustment in accordance with
Section 6 of this Agreement.

     3. Duration of Option. The Option shall expire five years from the date
hereof.

     4. Exercise of Option.

          (a) Options with respect to 14,000 Shares shall vest and be
exercisable six months after the Company has notified the Optionee that it has
determined the Optionee has achieved the First Milestone (as defined on Exhibit
B of the Consulting Agreement);

          (b) Options with respect to an additional 13,000 Shares shall vest and
be exercisable six months after the Company has notified the Optionee that it
has determined the Optionee has achieved the Second Milestone (as defined on
Exhibit B of the Consulting Agreement); and


                                      -10-
<PAGE>

          (c) Options with respect to the remaining 13,000 Shares shall vest and
be exercisable six months after the Company has notified the Optionee that it
has determined the Optionee has achieved the Third Milestone (as defined on
Exhibit B of the Consulting Agreement).


          (d) Upon termination of this Agreement for any reason, all unvested
Options shall be canceled effective upon the date of such termination and all
vested Options shall terminate thirty (30) days after the date of such
termination.

          (e) This Option may be exercised by delivery of written notice to the
Company at its executive offices, addressed to the attention of the Chief
Financial Officer. Such notice: (i) shall be accompanied by all necessary
corporate authorization and signed by the president of Optionee or its legal
representatives; (ii) shall specify the number of full Shares then elected to be
purchased with respect to the Option; and (iii) shall be accompanied by payment
in full of the Exercise Price of the Shares to be purchased.

          (f) The Exercise Price upon exercise of this Option shall be payable
to the Company in cash or its equivalent.

          (g) As promptly as practicable after the receipt of notice and payment
upon exercise, the Company shall cause to be delivered to Optionee certificates
for the Shares so purchased. If the Option shall have been exercised in full,
this Agreement shall be returned to the Company and canceled.

     5. Registration of Shares. In the event that Optionee should acquire any
Shares which, at the time of acquisition, are not duly registered under the Act
and, as necessary, applicable state securities law, certificates evidencing the
unregistered Shares shall bear the following legends:

          THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
          UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
          SECURITIES LAWS OF ANY STATE. THEY MAY NOT BE OFFERED FOR SALE, SOLD,
          TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF, AND WILL
          NOT BE TRANSFERRED ON THE BOOKS AND RECORDS OF THE COMPANY, UNLESS (i)
          THEY HAVE BEEN REGISTERED UNDER THE ACT AND UNDER APPLICABLE STATE
          SECURITIES LAWS, OR (ii) REGISTRATION UNDER THE ACT AND APPLICABLE
          STATE SECURITIES LAWS IS NOT REQUIRED.

Upon the registration of any shares represented by a certificate bearing this
legend, the Company shall issue replacement certificates free of this legend.

     6. Adjustments in Authorized Shares and the Option. In the event of a
merger, reorganization, consolidation, recapitalization, reclassification,
split-up, spin-off, separation,


                                      -11-
<PAGE>

liquidation, share dividend, share split, reverse share split, share
combination, share exchange or other change in the capital structure of the
Company affecting the Shares, the Board of Directors of the Company may
substitute or adjust the total number and class of Shares or other securities
that may be issued hereunder, and the Exercise Price, as it determines to be
appropriate and equitable to prevent dilution or enlargement of the rights of
Optionee and to preserve, without diluting or exceeding, the value of the
Option, provided, however, that such adjustments shall be equivalent to that

imposed equally upon all other option holders and/or shareholders in the
Company.

     7. Miscellaneous.

          (a) Tax Withholding. The parties acknowledge and agree that any and
all compensation received by Optionee pursuant to any exercise of the Option
will be self-employment income, and that Optionee shall bear the sole
responsibility with respect to withholding and estimated tax payments on such
compensation.

          (b) Amendment. This Agreement may not be changed or terminated except
by written instrument signed by the parties.

          (c) Successors; Binding Agreement. The Company agrees that:

               (i) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to Optionee, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no succession had taken place; and

               (ii) This Agreement and all rights of Optionee hereunder shall
inure to the benefit of and be enforceable by Optionee or its successors or
assignees.

          (d) Severability. In the event any provision of this Agreement shall
be held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of this Agreement, and this Agreement shall be
construed and enforced as if the illegal or invalid provision had not been
included.

          (e) Entire Agreement. This Agreement, including the preambles and
exhibits, together with the Consulting Agreement, sets forth the entire
agreement between the parties as to the subject matter hereof and merges all
prior discussions between them, and neither of the parties shall be bound by any
conditions, definitions, understandings, or representations with respect to such
subject matter other than as expressly provided herein and in the Consulting
Agreement, or as duly set forth subsequent to the effective date hereof in
writing and signed by the duly authorized representatives of both parties.
Without limiting the generality of the foregoing, that certain Letter of Intent
dated June 7, 1996 between Video Network and the Company shall be and is null,
void and of no further force and effect.


                                     -12-
<PAGE>

          (f) Governing Law. This Agreement, and the application or
interpretation thereof, shall be governed by the laws of the Commonwealth of
Kentucky.

     IN WITNESS WHEREOF, the parties have signed this Agreement as of the date

first above written.

                                    VIDEOLAN TECHNOLOGIES, INC.
                                    (the "Company")

                                    By:

                                    Title:

                                    VIDEO NETWORK, INC.
                                    ("Optionee")

                                    By:

                                    Title:


                                      -13-