Document:

EXHIBIT
4.7

 

NEITHER
THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY OTHER
APPLICABLE SECURITIES LAWS IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS. NEITHER THIS
WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF MAY BE SOLD, PLEDGED,
TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR IN A TRANSACTION WHICH IS
EXEMPT FROM REGISTRATION UNDER THE PROVISIONS OF THE SECURITIES ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.

 

FORM
OF
WARRANT

 

 

To
Purchase 434,783 Shares of the Common Stock

of

SMARTVIDEO
TECHNOLOGIES, INC.

 

THIS
CERTIFIES that, for value received, Interim CFO Solutions LLC or registered
assigns (the "Holder" or “Registered Holder”), is entitled, upon the terms and
subject to the conditions hereinafter set forth, at any time on or after the
date hereof (the "Exercise Date") and on or prior to the close of business on
the date which is five years after the date hereof (the "Termination Date"), to
subscribe for and purchase from SmartVideo Technologies, Inc. (the "Company"),
up to 434,783 (One hundred thousand) shares (the "Warrant Shares") of common
stock, par value $.001 per share (the "Common Stock") of the Company. The
purchase price of one share of Common Stock (the "Exercise Price") under this
Warrant shall be $2.00 (Two dollars and no cents). The Exercise Price and the
number of shares for which the Warrant is exercisable shall be subject to
adjustment as provided herein. 

 

1.     Title
to Warrant. Prior
to the Termination Date and subject to compliance with applicable laws and the
terms of this Warrant, this Warrant and all rights hereunder are transferable,
in whole or in part, at the office or agency of the Company by the holder hereof
in person or by duly authorized attorney, upon surrender of this Warrant
together with the Assignment Form annexed hereto properly endorsed.

 

2.     Authorization
of Shares. The
Company covenants that all shares of Common Stock which may be issued upon the
exercise of rights represented by this Warrant will, upon exercise of the rights
represented by this Warrant, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).

 

1

 

3.     Exercise
of Warrant.
Exercise of the purchase rights represented by this Warrant may be made at any
time or times on or after the Exercise Date and before the close of business on
the Termination Date by the surrender of this Warrant and the Notice of Exercise
Form annexed hereto duly executed, at the office of the Company (or such other
office or agency of the Company as it may designate by notice in writing to the
registered holder hereof at the address of such holder appearing on the books of
the Company) and (A) upon payment of the Exercise Price of the shares thereby
purchased by wire transfer, check, certified check or cashiers check payable to
SmartVideo Technologies, Inc. and/or (B) by notifying the Company that this
Warrant is being exercised pursuant to a Cashless Exercise (as defined in
Section 4), the holder shall be entitled to receive a certificate for the number
of shares of Common Stock so purchased. Certificates for shares purchased
hereunder shall be delivered to the holder hereof within five (5) business days
after the date on which this Warrant shall have been exercised as aforesaid.
This Warrant shall be deemed to have been exercised and such certificate or
certificates shall be deemed to have been issued, and the Holder or any other
person so designated to be named therein shall be deemed to have become a holder
of record of such shares for all purposes, as of the date the Holder faxes a
Notice of Exercise to the Company, provided that such fax notice is followed by
delivery of the original notice and payment to the Company of the Exercise Price
and all taxes required to be paid by the Holder, if any, pursuant to Section 6
prior to the issuance of such shares, have been paid within three (3) business
days of such fax notice. If this Warrant shall have been exercised in part, the
Company shall, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to the Holder a new Warrant evidencing the
rights of Holder to purchase the unpurchased shares of Common Stock called for
by this Warrant, which new Warrant shall in all other respects be identical with
this Warrant. 

 

4.     Cashless
Exercise.
Notwithstanding anything contained herein to the contrary, the Holder may, in
its sole discretion, exercise this Warrant in whole or in part and, in lieu of
making the cash payment otherwise contemplated to be made to the Company upon
such exercise in payment of the Aggregate Exercise Price, elect instead to
receive upon such exercise the "Net Number" of shares of Common Stock determined
according to the following formula (a "Cashless Exercise"):

 

Net
Number = (A x
B) - (A x C)
                              B

 

For
purposes of the foregoing formula:

 

A= the
total number of shares with respect to which this Warrant is then being
exercised.

 

B= the
Closing Sale Price of the shares of Common Stock (as reported by Bloomberg) on
the date immediately preceding the date of the Exercise Notice.

 

C= the
Exercise Price then in effect for the applicable Warrant Shares at the time of
such exercise.

 

5.     No
Fractional Shares or Scrip. No
fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant. As to any fraction of a share which Holder would
otherwise be entitled to purchase upon such exercise, the Company shall pay a
cash adjustment in respect of such final fraction in an amount equal to the
Exercise Price.

 

2

 

6.     Charges,
Taxes and Expenses.
Issuance of certificates for shares of Common Stock upon the exercise of this
Warrant shall be made without charge to the holder hereof for any issue or
Federal or State transfer tax or other incidental expense in respect of the
issuance of such certificate, all of which taxes and expenses shall be paid by
the Company, and such certificates shall be issued in the name of the holder of
this Warrant or in such name or names as may be directed by the holder of this
Warrant; provided, however, that in the event certificates for shares of Common
Stock are to be issued in a name other than the name of the holder of this
Warrant, this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the holder hereof; and the
Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.

 

7.     Closing
of Books. The
Company will not close its stockholder books or records in any manner which
prevents the timely exercise of this Warrant.

 

a)    
Transfer, Division and Combination.

 

(a)   the
Holder (and its transferees and assigns), by acceptance of this Warrant,
covenants and agrees that it is acquiring the Warrants evidenced hereby, and,
upon exercise hereof, the Warrant Shares, for its own account as an investment
and not with a view to the resale or distribution thereof. The Warrant Shares
have not been registered under the Securities Act or any state securities laws
and no transfer of any Warrant Shares shall be permitted unless the Company has
received notice of such transfer, at the address of its principal office set
forth in the Subscription Agreement, in the form of assignment attached hereto,
accompanied by an opinion of counsel reasonably satisfactory to the Company that
an exemption from registration of such Warrants or Warrant Shares under the
Securities Act is available for such transfer, except that no such opinion shall
be required after the registration for resale by the Holder of the Warrant
Shares, as contemplated by the Registration Rights Agreement. Upon any exercise
of the Warrants, certificates representing the Warrant Shares shall bear a
restrictive legend substantially identical to that set forth on the face of this
Warrant certificate. Any purported transfer of any Warrant or Warrant Shares not
in compliance with the provisions of this section shall be null and
void.

 

(b)   This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by Holder or its agent or attorney. Subject to compliance with Section
8(a), as to any transfer which may be involved in such division or combination,
the Company shall execute and deliver a new Warrant or Warrants in exchange for
the Warrant or Warrants to be divided or combined in accordance with such
notice.

 

(c)   The
Company shall prepare, issue and deliver at its own expense (other than transfer
taxes) the new Warrant or Warrants under this Section 8.

 

(d)   The
Company agrees to maintain, at its aforesaid office or the office of its
transfer or registration agent, books for the registration and the registration
of transfer of the Warrants.

 

9.     No
Rights as Stockholder until Exercise. This
Warrant does not entitle the holder hereof to any voting rights or other rights
as a shareholder of the Company prior to the exercise hereof. Upon the surrender
of this Warrant and the payment of the aggregate Exercise Price, the Warrant
Shares so purchased shall be and be deemed to be issued to such holder as the
record owner of such shares as of the close of business on the later of the date
of such surrender or payment. 

 

3

10.   Loss,
Theft, Destruction or Mutilation of Warrant. The
Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
certificate or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory
to it (which shall not exceed that customarily charged by the Company’s transfer
agent), and upon surrender and cancellation of such Warrant or stock
certificate, if mutilated, the Company will make and deliver a new Warrant or
stock certificate of like tenor and dated as of such cancellation, in lieu of
such Warrant or stock certificate.

 

11.   Saturdays,
Sundays, Holidays, etc. If the
last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall be a Saturday, Sunday or a legal holiday,
then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday, Sunday or legal holiday.

 

12.   Adjustments
of Exercise Price and Number of Warrant Shares.

 

(a)   Stock
Splits, etc. The
number and kind of securities purchasable upon the exercise of this Warrant and
the Exercise Price shall be subject to adjustment from time to time upon the
happening of any of the following. In case the Company shall (i) pay a dividend
in shares of Common Stock or make a distribution in shares of Common Stock to
holders of its outstanding Common Stock, (ii) subdivide its outstanding shares
of Common Stock into a greater number of shares of Common Stock, (iii) combine
its outstanding shares of Common Stock into a smaller number of shares of Common
Stock or (iv) issue any shares of its capital stock in a reclassification of the
Common Stock, then the number of Warrant Shares purchasable upon exercise of
this Warrant immediately prior thereto shall be adjusted so that the holder of
this Warrant shall be entitled to receive the kind and number of Warrant Shares
or other securities of the Company which he would have been entitled to receive
had such Warrant been exercised in advance thereof. Upon each such adjustment of
the kind and number of Warrant Shares or other securities of the Company which
are purchasable hereunder, the holder of this Warrant shall thereafter be
entitled to purchase the number of Warrant Shares or other securities resulting
from such adjustment at an Exercise Price per Warrant Share or other security
obtained by multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of Warrant Shares purchasable pursuant hereto
immediately prior to such adjustment and dividing by the number of Warrant
Shares or other securities of the Company resulting from such adjustment. An
adjustment made pursuant to this paragraph shall become effective immediately
after the effective date of such event retroactive to the record date, if any,
for such event.

 

(b)   Reorganization,
Reclassification, Merger, Consolidation or Disposition of
Assets. In case
the Company shall reorganize its capital, reclassify its capital stock (other
than a change in nominal value to no nominal value, or from no nominal value to
nominal value, or as a result of a subdivision, combination or other event
described in paragraph (a) of this Section), consolidate or merge with or into
another corporation (where the Company is not the surviving corporation or where
there is a change in or distribution with respect to the Common Stock of the
Company), or sell, transfer or otherwise dispose of all or substantially all its
property, assets or business to another corporation and, pursuant to the terms
of such reorganization, reclassification, merger, consolidation or disposition
of assets, shares of common stock of the successor or acquiring corporation, or
any cash, shares of stock or other securities or property of any nature
whatsoever (including warrants or other subscription or purchase rights) in
addition to or in lieu of common stock of the successor or acquiring corporation
("Other Property"), are to be received by or distributed to the holders of
Common Stock of the Company, then Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the number of shares of common stock of
the successor or acquiring corporation or of the Company, if it is the surviving
corporation, and Other Property receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of assets
by a holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of shares of
Common Stock for which this Warrant is exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section 12.
For purposes of this Section 12, "common stock of the successor or acquiring
corporation" shall include stock of such corporation of any class which is not
preferred as to dividends or assets over any other class of stock of such
corporation and which is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 12 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.

 

4

 

13.   Voluntary
Adjustment by the Company. The
Company may at any time during the term of this Warrant, reduce the then current
Exercise Price to any amount and for any period of time deemed appropriate by
the Board of Directors of the Company.

 

14.   Notice
of Adjustment.
Whenever the number of Warrant Shares or number or kind of securities or other
property purchasable upon the exercise of this Warrant or the Exercise Price is
adjusted, as herein provided, the Company shall promptly mail by registered or
certified mail, return receipt requested, to the holder of this Warrant notice
of such adjustment or adjustments setting forth the number of Warrant Shares
(and other securities or property) purchasable upon the exercise of this Warrant
and the Exercise Price of such Warrant Shares (and other securities or property)
after such adjustment, setting forth a brief statement of the facts requiring
such adjustment and setting forth the computation by which such adjustment was
made. Such notice, in the absence of manifest error, shall be conclusive
evidence of the correctness of such adjustment.

 

15.   Notice
of Corporate Action. If at
any time:

 

(a)   the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution, or any right to
subscribe for or purchase any evidences of its indebtedness, any shares of stock
of any class or any other securities or property, or to receive any other right,
or

 

5

(b)   there
shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation with
or merger of the Company into, or any sale, transfer or other disposition of all
or substantially all the property, assets or business of the Company to, another
corporation or,

 

(c)   there
shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Company;

 

then, in
any one or more of such cases, the Company shall give to Holder (i) at least 10
days’ prior written notice of any record date for such dividend, distribution or
right or for determining rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
liquidation or winding up, and (ii) in the case of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up, at least 10 days’ prior written notice
of the date when the same shall take place. Such notice in accordance with the
foregoing clause also shall specify (i) the date on which any such record is to
be taken for the purpose of such dividend, distribution or right, the date on
which the holders of Common Stock shall be entitled to any such dividend,
distribution or right, and the amount and character thereof, and (ii) the date
on which any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up is to take place
and the time, if any such time is to be fixed, as of which the holders of Common
Stock shall be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such disposition, dissolution, liquidation or
winding up. Each such written notice shall be sufficiently given if addressed to
Holder at the last address of Holder appearing on the books of the Company and
delivered in accordance with Section 17(d).

 

16.   Authorized
Shares. The
Company covenants that during the period the Warrant is outstanding, it will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the exercise of
any purchase rights under this Warrant. The Company further covenants that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for the Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take all such reasonable action as
may be necessary to assure that such Warrant Shares may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of the Principal Market upon which the Common Stock may be listed.

 

The
Company shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder against impairment.
Without limiting the generality of the foregoing, the Company will (a) not
increase the par value of any shares of Common Stock receivable upon the
exercise of this Warrant above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (b) take all such action as may
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock upon the exercise of
this Warrant, and (c) use its best efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be necessary to enable the Company to perform its obligations
under this Warrant.

 

6

Before
taking any action which would result in an adjustment in the number of shares of
Common Stock for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.

 

17.   Miscellaneous.

 

(a)    Jurisdiction. This
Warrant shall be binding upon any successors or assigns of the Company. This
Warrant shall constitute a contract under the laws of Delaware without regard to
its conflict of law, principles or rules, and be subject to arbitration pursuant
to the terms set forth in the Exchange Agreement.

 

(b)   Restrictions. The
holder hereof acknowledges that the Warrant Shares acquired upon the exercise of
this Warrant, if not registered, will have restrictions upon resale imposed by
state and federal securities laws.

 

(c)   Nonwaiver
and Expenses. No
course of dealing or any delay or failure to exercise any right hereunder on the
part of the Holder shall operate as a waiver of such right or otherwise
prejudice Holder’s rights, powers or remedies, except that all rights hereunder
terminate on the Termination Date. If the Company fails to comply with any
provision of this Warrant, the Company shall pay to the Holder such amounts as
shall be sufficient to cover any costs and expenses including, but not limited
to, reasonable attorneys’ fees, including those of appellate proceedings,
incurred by the Holder in collecting any amounts due pursuant hereto or in
otherwise enforcing any of its rights, powers or remedies
hereunder.

 

(d)   Notices. Any
notice, request or other document required or permitted to be given or delivered
to the holder hereof by the Company shall be delivered in accordance with the
notice provisions of the Subscription Agreement.

 

(e)   Limitation
of Liability. No
provision hereof, in the absence of affirmative action by Holder to purchase
shares of Common Stock, and no enumeration herein of the rights or privileges of
Holder hereof, shall give rise to any liability of the Holder for the purchase
price of any Common Stock or as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the
Company.

 

(f)    Remedies. The
Holder, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Warrant. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Warrant and hereby agrees to waive the defense in any action
for specific performance that a remedy at law would be adequate.

 

(g)   Successors
and Assigns. Subject
to applicable securities laws, this Warrant and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and permitted assigns of the
Holder. The provisions of this Warrant are intended to be for the benefit of all
Holders from time to time of this Warrant and shall be enforceable by any such
Holder or holder of Warrant Shares.

 

7

 

(h)   Amendment. This
Warrant may be modified or amended or the provisions hereof waived only with the
written consent of the Company and the Holder.

 

(i)    Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.

 

(j)    Headings. The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

 

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.

 

	 	Dated:
      October 1, 2005
	 	 	 
	 	SMARTVIDEO TECHNOLOGIES,
      INC.
	 
 	 
 	 
 
		By:  	/s/ 
	 	
      

      Name:
      Richard E. Bennett, Jr.
	
      [Corporate
      Seal]
	Title: President &
    CEO

 

8

NOTICE
OF EXERCISE

 

To:    SmartVideo
Technologies, Inc.

 

1.     The
Undersigned Registered Holder hereby elects to exercise _______________
Warrants
represented by this Warrant Certificate, and to purchase the securities issuable
upon the exercise of such Warrants. Pursuant to the terms of the attached
Warrant, the Holder hereby tenders herewith the payment of the exercise price,
together with all applicable transfer taxes, if any, as follows: 

 

b) 
a Cash
Exercise with respect to ______________ Warrants;
and/or

 

c) 
a
Cashless Exercise with respect to _______________ Warrants.

 

2.    Please
issue a certificate or certificates representing said issuable securities in the
name of the undersigned or in such other name as is specified
below:

Interim
CFO Solutions LLC

7469
W. Lake Mead Blvd., Suite 200

Las
Vegas, Nevada  89126 

 

If the
number of Warrants exercised shall not be all of the Warrants evidenced by this
Warrant Certificate, a New Warrant Certificate for the balance of such Warrants
shall be registered in the name of, and delivered to, the Registered Holder at
the address stated below: 

Holder's
Name: Interim
CFO Solutions LLC

 

Holder's
Address:    7469
W. Lake Mead Blvd., Suite 200
Las
Vegas, Nevada  89126 

Social
Security, Employer or Other Tax Identification

Number of
Holder: 35-2211450

 

 

Dated:__________________,
_________

 

 

Holder's
Signature:_______________________________

 

Name:_______________________________

 

Title:________________________________

 

NOTE: The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust company. Officers of
corporations and those acting in an fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing
Warrant.

 

ASSIGNMENT
FORM

 

 

(To
assign the foregoing warrant, execute

this form
and supply required information.

Do not
use this form to exercise the warrant.)

 

		FOR
      VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are
      hereby
	 	 	 	 	 
	 	assigned
      to	 

 

	 	whose
      address is  	 
	 	 	 	 	 
	 	 
	 	 	 	 	 
	 	 	 	 	 

 

 

Dated:__________________,
_________

 

 

Holder's
Signature:_______________________________

 

Name:_______________________________

 

Title:________________________________

 

Holder's
Name: Interim
CFO Solutions LLC    

Holder's
Address:    7469
W. Lake Mead Blvd., Suite 200
Las
Vegas, Nevada  89126

Social
Security, Employer or 

Other Tax
Identification Number of Holder: 35-2211450

 

 

Signature
Guaranteed:_______________________________________________________

 

NOTE:
 The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust company. Officers of
corporations and those acting in an fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing
Warrant.Exhibit
10.3

[SmartVideo
Technologies, Inc. Letterhead]

	
      Date:
	
      December
      9, 2003

	 	 
	
      To:
	
      Ronald
      Warren

	 	
      4655
      Gran River Glen

	 	
      Duluth,
      GA 30096

	 	
      Tel:
      770-300-9311

	 	
      Mobile:
      678-516-5910

	 	
      ronwarren@bellsouth.net

	 	 
	 	 
	
      Subject:
	
      Employment
      Proposal

This
letter will confirm your desire for employment with OVT, Inc. (Company) and
define your terms and conditions of employment. 

	1.  	
      Your
      job title will be Marketing Communications Manager, which may be changed
      at some future point to more accurately reflect your
    duties.

 

	2.  	
      You
      will report directly to Roger Dunavant, or
designee.

 

	3.  	
      You
      will be expected to perform the duties and responsibilities of your job in
      a professional manner consistent with your job to ensure the successful
      operation and profitability of the Company.

 

	4.  	
      Your
      semi-monthly base salary will be $2,770.0, which if annualized will equal
      $72,020. Any future increases will be made annually and will be based upon
      your performance and Company policy. 

 

	5.  	
      You
      will be eligible to receive performance bonuses. Your performance bonuses
      shall be in accordance with OVT Inc’s policy, which is in development.
      

 

 

	6.  	
      You
      will be issued stock options in the amount of 25,000 shares of SmartVideo
      Technologies, Inc. Common Stock, which is subject to the terms and
      conditions of the Employee Stock Option Agreement. (Employee Stock Option
      Plan and Agreement are currently being developed and will be issued no
      later than Jan 1, 2004. Provided you are an employee of OVT, Inc, and in
      the event that there is a liquidation event prior to issuance of the
      Employee Stock Option Plan, you will be granted said 25,000 shares of
      common stock, at a date prior to any effective date of any liquidation
      event.)

 

	7.  	
      Company’s
      payroll is issued on the 10th
      and the 25th of
      each month, for the previous half-month period. 

 

	8.  	
      You
      will be eligible for participation in all benefit plans generally
      available to Company employees. This includes health plan, dental, life,
      vision, and disability. Your eligibility for all benefits will be the
      first of the month following ninety-day (90) days of employment. Detailed
      summary of benefits will be provided separately.

 

	9.  	
      You
      will accrue vacation at the rate of one day of vacation for each month of
      employment in 2003 and thereafter in accordance with the established
      vacation policy.

 

	10.  	
      Your
      start date will be December 9, 2003, or sooner.

 

	11.  	
      For
      every new employee, there will be a ninety-day introductory period of
      employment. This is a trial period for both you and the Company. During
      this time, you will be able to learn about the Company, your job, and your
      new surroundings and the Company will be able to evaluate your
      performance.

 

This
letter does not create a contract of employment or a contract for benefits. Your
employment relationship with OVT is at-will. At either your option or OVT's
option, your employment may be terminated at any time, with or without
cause.

Please
indicate that these conditions are acceptable by signing and dating
below:

 

Signature
_________________________________ Date
_____________

Also,
please indicate your acceptance of the attached Employment Agreement by signing
where indicated. Please return the original of each document to me and I will
provide you a signed copy.

OVT, Inc.
is very pleased to extend this offer of employment and we look forward to a
mutually beneficial relationship.

Sincerely,

/s/
Richard E. Bennett

 

Richard
E. Bennett, President

EMPLOYMENT
AGREEMENT

THIS
EMPLOYMENT AGREEMENT ("Agreement") is entered into effective as of the 9 day of
December 2003 (“Effective Date”), by and between OVT, Inc. (“Company”), a
Georgia corporation, and Ronald Warren ("Employee"), an individual. For and in
consideration of the mutual covenants described below, the parties agree as
follows:

 

1.    Employment.
Company agrees to employ or continue to employ Employee, and Employee agrees to
accept and continue such employment, upon the following terms and conditions.

 

2.    Duties.
Employee shall assume the responsibilities and perform the duties specified in
Exhibit A ("Duties"). Employee agrees to devote his or her full time and energy
to the furtherance of the business of Company and shall not during the term
hereof work or perform services in any advisory or other capacity for any
individual, firm, company, or corporation other than for Company without
Company's prior written consent. This Agreement may be supplemented from time to
time by rules and regulations of employment issued by Company, including,
without limitation, such rules and regulations described in the Company employee
handbook, and Employee agrees to adhere to these rules and
regulations.

 

3.    Term and
Termination. This Agreement shall be effective upon execution by the parties and
shall remain in full force and effect for an indefinite period of time. The
parties agree that employment hereunder is “at will” and Employee's term of
employment may be terminated at any time, for any reason or for no reason, for
cause or not for cause, with or without notice, by Company or Employee. Upon
termination of employment for any reason, Employee shall return immediately to
Company all documents, property, and other records of Company, and all copies
thereof, and all Work Product (as defined below) within Employee's possession,
custody or control, including but not limited to any materials containing any
Trade Secrets or Confidential Information (as defined below) or any portion
thereof.

 

4.    Ownership.

 

(a) For
purposes of this Agreement, "Work Product" shall mean the data, materials,
documentation, computer programs, inventions (whether or not patentable), and
all works of authorship, including all worldwide rights therein under patent,
copyright, trade secret, confidential information, or other property right,
created or developed in whole or in part by Employee, whether prior to or after
the Effective Date, while retained or employed by Company (whether developed
during work hours or not). All Work Product shall be considered work made for
hire by the Employee and owned by Company. If any of the Work Product may not,
by operation of law or otherwise, be considered work made for hire by Employee
for Company, or if ownership of all right, title, and interest of the
intellectual property rights therein shall not otherwise vest exclusively in
Company, Employee hereby assigns to Company, and upon the future creation
thereof during his term of employment with the Company automatically assigns to
Company, without further consideration, the ownership of all Work Product.
Company shall have the right to obtain and hold in its own name copyrights,
patents, registrations, and any other protection available in the Work Product.
Employee agrees to perform, during or after Employee's employment, at the
Company’s expense, such further acts as may be necessary or desirable to
transfer, perfect, and defend Company's ownership of the Work Product that are
reasonably requested by Company. 

 

(b) Furthermore,
at Company’s request Employee will furnish all information in his or her
possession pertaining to the Work Product that may be necessary or useful for
the preparation, filing, and prosecution of patent applications for the
protection of such Work Product. Company will upon receipt of the foregoing
information accept responsibility for preparation, filing, and prosecution of
patent application(s) in the United States Patent Office including the financial
responsibility associated therein. However, Company may in its sole discretion
elect not to prepare, file, and prosecute such patent applications.

 

(c) Employee
agrees that during the term of employment, any money or other remuneration
received by Employee for services rendered to a customer or potential customer
of Company shall be the property of Company.

 

5.    License.
To the extent any materials other than Work Product are contained in the
materials Employee delivers to Company or Company’s customers (“Licensed
Materials”), Employee grants to Company an irrevocable, nonexclusive, worldwide,
royalty-free license to: (i) use and distribute (internally or externally)
copies of, and prepare derivative works based upon, the Licensed Materials and
derivative works thereof, and (ii) authorize others to do any of the foregoing.

 

6.    Trade
Secrets and Confidential Information. 

 

(a) Company
may disclose to Employee certain Trade Secrets and Confidential Information.
Employee acknowledges and agrees that the Trade Secrets and the Confidential
Information of Company are the sole and exclusive property of Company (or a
third party providing such information to Company) and that Company owns all
worldwide copyrights, trade secret rights, confidential and proprietary
information rights, and all other property rights therein.

 

(b) Employee
acknowledges and agrees that the disclosure of the Trade Secrets and the
Confidential Information of Company to Employee does not confer upon Employee
any license, interest or rights of any kind in or to the Trade Secrets or
Confidential Information.

 

(c) Employee
agrees to use the Trade Secrets and Confidential Information solely for the
benefit of Company. Except in the performance of services for Company, Employee
will hold in confidence and not use, reproduce, distribute, transmit, reverse
engineer, decompile, disassemble, or transfer, directly or indirectly, in any
form, by any means, or for any purpose, the Trade Secrets or the Confidential
Information of Company or any portion thereof communicated, discussed, delivered
or made available by Company to or received by Employee, whether orally or in
written form, without the prior written consent of Company. Employee shall
notify Company immediately upon discovery of any unauthorized use or disclosure
of the Trade Secrets and Confidential Information.

 

(d) Employee
acknowledges that its obligations under this Agreement with regard to the Trade
Secrets of Company remain in effect for as long as such information shall remain
a trade secret under applicable law. Employee acknowledges that its obligations
with regard to the Confidential Information of Company shall remain while
Employee is retained by Company to perform the Duties and for three (3) years
thereafter. The foregoing obligations shall not apply if and to the extent that:
(a) Employee establishes that the information communicated was already known to
Employee, without obligation to keep it confidential, at the time of its receipt
from Company; (b) Employee establishes that the information communicated was
received by Employee in good faith from a third party lawfully in possession
thereof and having no obligation to keep such information confidential; or (c)
Employee establishes that the information communicated was publicly known at the
time of its receipt by Employee or has become publicly known other than by a
breach of this Agreement or other action by Employee.

 

(e) As used
herein, "Trade Secrets" means information constituting a trade secret within the
meaning of Section 10-1-761(4) of the Georgia Trade Secrets Act of 1990,
including all amendments hereafter adopted. As used herein, "Confidential
Information" means information, other than Trade Secrets, that is of value to
its owner and is treated as confidential. 

 

7.    Customer
Non-Solicitation. The relationships made or enhanced in the course of Employee’s
employment with the Company belong to Company. During the Limitation Period (as
hereinafter defined), Employee shall not contact, solicit or attempt to solicit,
on Employee’s own behalf or on behalf of any other person or entity, any
customer or prospective customer of Company with whom Employee had contact in
the two (2) years prior to the end of Employee’s employment with Company
(“Restrictive Period”) with a view to offering, providing, selling or licensing
during the Limitation Period any program, product or service that is competitive
with the Company’s business as defined in Exhibit B (“Company Business”). The
“Limitation Period” shall mean either (i) the two-year period immediately
following the termination of Employee’s employment with Company for cause (as
hereinafter defined) or (ii) the one-year period immediately following the
termination of Employee’s employment with Company other than for cause, as the
case may be. The term “cause” shall mean conduct involving one or more of the
following: (i) willful and substantial failure or neglect by employee, after
notice thereof, to follow the directions of the Board of Directors and such
failure is not cured within 15 days of such notice, (ii) disloyalty, gross
negligence, willful misconduct, dishonesty or breach of fiduciary duty to the
Company; (iii) the commission of an act of embezzlement or fraud; (iv) the
deliberate disregard of the rules or policies of the Company which results in
direct or indirect loss, damage or injury to the Company; (v) the unauthorized
disclosure of any trade secret or confidential information of the Company; or
(vi) the commission of an act which constitutes unfair competition with the
Company or which induces any customer or supplier to breach a contract with the
Company.

 

8.    Employee
Non-Solicitation. During the Limitation Period, Employee agrees not to call
upon, solicit, recruit, or assist others in calling upon, recruiting or
soliciting any person who is or was an employee of Company during the
Restrictive Period, for the purpose of having such person work in any other
corporation, association, entity, or business that is competitive with the
Company Business.

 

9.    NON-COMPETITION.
During the Limitation Period, Employee agrees that, without the prior written
consent of Company, Employee shall not directly or indirectly compete with the
Company Business in the territory described in Exhibit B (“Territory”), provided
that Company is still engaged in the Company Business. The parties agree and
acknowledge that: (i) the periods of restriction and Territory of restriction
contained in this Agreement are fair and reasonable in that they are reasonably
required for the protection of Company and that the Territory is the area in
which Employee shall perform (or currently performs) services for Company; and
(ii) by having access to information concerning employees and actual or
prospective customers of Company, Employee shall obtain a competitive advantage
as to such parties. If, however, for any reason any court determines that the
restrictions in Sections 6 through 9 are not reasonable or that consideration is
inadequate, then such restrictions shall be interpreted, modified or re-written
to include as much of the duration, scope and geographic area in this section as
will render such restrictions valid and enforceable. 

 

10.    Warranties
of Employee. 

 

(a) Employee
warrants to Company that (i) Employee is not presently under any contract or
agreement with any party that will prevent Employee from performing the Duties,
and (ii) Employee is not in breach of any agreement with respect to any trade
secrets or confidential information owned by any other party.

 

(b) Employee
agrees to indemnify and hold harmless Company, any affiliated corporation or
other entity, and their respective shareholders, directors, officers, agents,
and employees, from and against any and all liability, including payment of
attorneys' fees, arising directly or indirectly from a violation of Section
10(a).

 

11.    Equitable
Relief. The parties to this Agreement acknowledge that a breach by Employee of
any of the terms or conditions of this Agreement will result in irrevocable harm
to Company and that the remedies at law for such breach may not adequately
compensate Company for damages suffered. Accordingly, Employee agrees that in
the event of such breach, Company shall be entitled to injunctive relief or such
other equitable remedy as a court of competent jurisdiction may provide. Nothing
contained herein will be construed to limit Company's right to any remedies at
law, including the recovery of damages for breach of this
Agreement.

 

12.    Severability.
If any provision or part of any provision of this Agreement is held invalid or
unenforceable by a court of competent jurisdiction, such holding shall not
affect the enforceability of any other provisions or parts thereof, and all
other provisions and parts thereof shall continue in full force and
effect.

 

13.    Miscellaneous.
This Agreement shall not be amended or modified except by a writing executed by
both parties. This Agreement shall be binding upon and inure to the benefit of
Company and its successors and assigns. Due to the personal nature of this
Agreement, Employee shall not have the right to assign Employee's rights or
obligations under this Agreement without the prior written consent of Company.
This Agreement shall be governed by the laws of the State of Georgia without
regard to its rules governing conflicts of law. This Agreement and the attached
Exhibits represent the entire understanding of the parties concerning the
subject matter hereof and supersede and terminate all prior communications,
agreements and understandings, whether oral or written, relating to the subject
matter hereof. All communications required or otherwise provided under this
Agreement shall be in writing and shall be deemed given when delivered to the
address provided below such party's signature (as may be amended by notice from
time to time), by hand, by courier or express mail, or by registered or
certified United States mail, return receipt requested, postage prepaid. The
exhibits attached hereto are incorporated herein by this reference. Employee
acknowledges that Employee has not been represented by the Company’s attorney’s
in connection with this Agreement, and Employee has been advised to seek
separate legal counsel and representation in this matter.

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement and affixed
their hands and seals effective as of the date first above written.

 

	
      Company:
      OVT, Inc.

       

       

       

       

      By: Richard
      E. Bennett 

       

      Title:
      President 

       

      Date:
      ______________
	 	
      Employee:
      

       

      __________________________________

      Signature

       

      Name: __________________________________

       

      Date:
      ___________________________________

       

      Address:________________________________

       

      _______________________________________

       

      _______________________________________

EXHIBIT
A

TO

EMPLOYMENT
AGREEMENT

Duties

 

Position
Profile: 

 

 

To assist
management with communications media, advertising materials, and investor
relation packages to effectively represent the company's products and services
to customers, prospects, and investors. 

 

 

Direct
position responsibilities:

 

Deliver
the following services and programs in order to reach the goals and objectives
of the Comapny.

	-  	
      Strategic
      Planning

	-  	
      Communications
      Audit

	-  	
      Key
      Message Development

	-  	
      Investor
      Relations / Press Kit Development 

	-  	
      Marketing
      and Sales Collateral Materials

	-  	
      Presentation
      Development and Training

	-  	
      Corporate
      Identity

	-  	
      Event
      Planning

	-  	
      General
      Counsel, Investor / Public Relations Coordination

 

EXHIBIT
B

TO

EMPLOYMENT
AGREEMENT

Company
Business

Description
of Business of the Company: 

OVT, Inc.
(dba: SmartVideo Technologies) is a Georgia based, Internet communications
company. OVT is a developer of communications software, hardware infrastructure,
and service provider. OVT markets its products and services to resellers, who
sell to end-users.

Territory:
Worldwide

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