Document:

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EXHIBIT 10.12

                             NEW VISUAL CORPORATION
                      NON-QUALIFIED STOCK OPTION AGREEMENT
                      ------------------------------------

                                 PURSUANT TO THE

               NEW VISUAL CORPORATION 2000 OMNIBUS SECURITIES PLAN

         THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "AGREEMENT") is made
and entered into by and between NEW VISUAL CORPORATION, a Utah corporation (the
"COMPANY"), and BRAD KETCH (the "OPTIONEE"), effective as of July 1, 2002 (the
"DATE OF GRANT").

         1. GRANT OF OPTION. The Company hereby grants to the Optionee and the
Optionee hereby accepts, subject to the terms and conditions hereof, a
Non-Qualified Stock Option (the "OPTION") to purchase up to 405,000 shares of
Company's Common Stock, par value $0.001 per share (the "COMMON STOCK"), at the
Exercise Price per share set forth in SECTION 4 below.

         2. GOVERNING PLAN. This Option is granted pursuant to the Company's
2000 Omnibus Securities Plan (the "PLAN"), a copy of which is attached hereto as
ATTACHMENT ONE and incorporated herein for all purposes. Capitalized terms used
but not otherwise defined herein have the meanings as set forth in the Plan. The
Optionee agrees to be bound by the terms and conditions of the Plan, which
control in case of any conflict with this Agreement, except as otherwise
specifically provided for in the Plan.

         3. EXPIRATION OF THE OPTION. The Option (to the extent not earlier
exercised or terminated in accordance with the Plan) will expire at the end of
business on July 1, 2012, which date is not in excess of ten (10) years from the
Date of Grant of the Option. The Option will terminate one (1) year after the
termination of the Optionee's employment regardless of the reason therefor. The
Option may not be exercised after its expiration or termination.

         4. EXERCISE PRICE. The "EXERCISE PRICE" of the Option is One Dollar and
Nine Cents ($1.09) per share of Common Stock. The Exercise Price is subject to
adjustment or amendment as set forth in the Plan, including SECTION 3.4, SECTION
4.5(b) or SECTION 6.2 of the Plan.

         5. VESTING. (a) On each Measurement Date set forth in Column 1 below,
the Option shall vest and become exercisable for the corresponding number of
shares of Common Stock set forth in Column 2 below if the Optionee's employment
or engagement with the Company and/or any Affiliated Entity has not terminated.
The "VESTED PORTION" of the Option as of any particular date shall be the
cumulative total of all shares for which the Option has become exercisable as of
that date.

------------------------------------- ----------------------------------
              COLUMN 1                            COLUMN 2

          Measurement Date                 Number of Shares Vested
------------------------------------- ----------------------------------
            July 1, 2002                           105,000
------------------------------------- ----------------------------------
            May 31, 2003                           37,500
------------------------------------- ----------------------------------
          August 31, 2003                          37,500
------------------------------------- ----------------------------------
         November 30, 2003                         37,500
------------------------------------- ----------------------------------
         February 28, 2004                         37,500
------------------------------------- ----------------------------------
            May 31, 2004                           37,500
------------------------------------- ----------------------------------
          August 31, 2004                          37,500
------------------------------------- ----------------------------------
         November 30, 2004                         37,500
------------------------------------- ----------------------------------
         February 28, 2005                         37,500
------------------------------------- ----------------------------------

         (b) Notwithstanding the forgoing, in the event of a "Change of Control"
(as defined in Article 9 of the Plan), immediately prior to such Change in
Control, the Option shall become fully vested (if not already vested).

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         (c) In addition, upon a Change in Control pursuant to SECTION 8.2 of
the Plan, this Option shall be automatically converted into the right to
receive, and thereafter shall be exercisable for, in accordance with the Plan
and this Agreement, the securities, cash and/or other consideration that a
holder of the shares underlying the Options would have been entitled to receive
upon a consummation of the Change in Control had such shares been issued and
outstanding immediately prior to the effective date and time of the Change in
Control (net of appropriate exercise prices).

         6. EXERCISE OF THE OPTION. The Vested Portion (as herein defined) of
the Option may be exercised, to the extent not previously exercised, in whole or
in part, at any time or from time to time prior to the expiration or termination
of the Option, except that no Option shall be exercisable except in respect to
whole shares, and not less than one hundred (100) shares may be purchased at one
time unless the number purchased is the total number at the time available for
purchase under the terms of the Option. Exercise shall be accomplished by
providing the Company with written notice in the form of EXHIBIT A hereto, which
notice shall be irrevocable when delivered and effective upon payment in full of
the Option Price in accordance with SECTION 5.4 of the Plan and any amounts
required in accordance with SECTION 5.11 of the Plan for withholding taxes, and
the satisfaction of all other conditions to exercise imposed under the Plan.

         7. PAYMENT OF OPTION PRICE. Upon any exercise of the Option, the total
Exercise Price for the number of shares for which the Option is then being
exercised and the amount of any federal, state and local withholding taxes shall
be paid in full to the Company in cash or with shares of Common Stock that have
been owned for at least six months by the Optionee (or by the Optionee and his
or her spouse jointly), or a combination thereof, or in such other form
permitted by applicable law and the Plan as the Administering Body deems
acceptable at the time of exercise.

         8. [RESERVED]

         9. NONTRANSFERABILITY OF OPTION. The Option shall not be transferable
or assignable by the Optionee, other than in accordance with Section 5.9 of the
Plan or by will or the laws of descent and distribution (or as otherwise
permitted by the Administering Body in its sole discretion), and shall be
exercisable during the Optionee's lifetime only by him or her or by his or her
legal representative(s) or guardian(s) or any permitted transferee.

         10. ADMINISTRATION. The Plan and this Agreement shall be administered
and may be definitively interpreted by the Administering Body, and the Optionee
agrees that the decisions of such Administering Body concerning administration
and interpretation of the Plan and this Agreement shall be final, binding and
conclusive on all persons.

         11. NOTICES. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if (i) personally
delivered, (ii) sent by nationally-recognized overnight courier or (iii) sent by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows: (a) if to Optionee, at the address set forth on the
signature page hereto; or (b) if to the Company, at the address set forth in the
signature page hereto, or in either case, to such other address as the party to
whom notice is to be given may have furnished to each other party in writing in
accordance herewith. Any such communication shall be deemed to have been given
(i) when delivered, if personally delivered, (ii) on the first Business Day (as
hereinafter defined) after dispatch, if sent by nationally-recognized overnight
courier and (iii) on the third Business Day following the date on which the
piece of mail containing such communication is posted, if sent by mail. As used
herein, "Business Day" means a day that is not a Saturday, Sunday or a day on
which banking institutions in the city to which the notice or communication is
to be sent are not required to be open.

         12. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

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         IN WITNESS WHEREOF, this Agreement has been executed on behalf of the
Company by its duly authorized officer, and by the Optionee in acceptance of the
above-mentioned Option, subject to the terms and conditions of the Plan and of
this Agreement, all as of the day and year first above written.

                                        COMPANY:
                                        --------

                                        NEW VISUAL CORPORATION,
                                        a Utah corporation

                                        BY:/s/ Thomas J. Cooper

                                        Name:/s/ Thomas J. Cooper

                                        Title: President & CEO

                                        Address:   5920 Friars Road
                                                   Suite 104
                                                   San Diego, California 92108
                                        Telephone: 619-692-0333

                                        OPTIONEE:
                                        ---------

                                        /s/ Brad Ketch

                                        Printed Name:  Brad Ketch

                                        Address:    17112 SE Powell Blvd
                                                    STE 2 #447
                                                    Portland OR 97233

                                        Telephone No.:    503-380-5827
                                                          ------------

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                                    EXHIBIT A
                                    ---------

                               NOTICE OF EXERCISE
                                      UNDER
                      NON-QUALIFIED STOCK OPTION AGREEMENT
                      ------------------------------------
                             ISSUED PURSUANT TO THE
               NEW VISUAL CORPORATION 2000 OMNIBUS SECURITIES PLAN

To:      New Visual Corporation (the "COMPANY")

From:    Brad Ketch

Date:
         -----------------------------------

         Pursuant to the New Visual Corporation 2000 Omnibus Securities Plan
(the "PLAN") and the Non-Qualified Stock Option Agreement (the "AGREEMENT")
(capitalized terms used without definition herein have the meanings given such
terms in the Agreement or the Plan) between the Company and myself effective
July 1, 2002, I hereby exercise my Option as follows:

<TABLE>
<CAPTION>

------------------------------------------------------------------------- ---------------
<S>                                                                       <C>
Number of shares of Common Stock I wish to purchase under the Option
------------------------------------------------------------------------- ---------------
Exercise Price per Share                                                  $  1.09
------------------------------------------------------------------------- ---------------
Total Exercise Price                                                      $
------------------------------------------------------------------------- ---------------
"Vested Portion" of Option (see definition in Section 5 of the Agreement)
------------------------------------------------------------------------- ---------------
Number of shares I have previously purchased by exercising the Option
------------------------------------------------------------------------- ---------------
Expiration Date of the Option                                              July 1, 2012
------------------------------------------------------------------------- ---------------
</TABLE>

         I hereby represent, warrant, and covenant to the Company that:

         a. I am acquiring the Common Stock for my own account, for investment,
and not for distribution or resale, and I will make no transfer of such Common
Stock except in compliance with applicable federal and state securities laws and
in accordance with the provisions of the Plan.

         b. I can bear the economic risk of the investment in the Common Stock
resulting from this exercise of the Option, including a total loss of my
investment.

         c. I am experienced in business and financial matters and am capable of
(i) evaluating the merits and risks of an investment in the Common Stock; (ii)
making an informed investment decision regarding exercise of the Option; and
(iii) protecting my interests in connection therewith.

         d. Any subsequent offer for sale or distribution of any of the shares
of Common Stock shall be made only pursuant to (i) a registration statement on
an appropriate form under the Securities Act, which registration statement has
become effective and is current with regard to the shares being offered or sold,
or (ii) a specific exemption from the registration requirements of the
Securities Act, it being understood that to the extent any such exemption is
claimed, I shall, prior to any offer for sale or sale of such shares, obtain a
prior favorable written opinion, in form and substance satisfactory to the
Administering Body, from counsel for or approved by the Administering Body, as
to the applicability of such exemption thereto.

                                      A-1
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         I acknowledge that I must pay the total Exercise Price in full and make
appropriate arrangements for the payment of all federal, state and local tax
withholdings due with respect to the Option exercised herein, before the stock
certificate evidencing the shares of Common Stock resulting from this exercise
of the Option will be issued to me.

         Attached in full payment of the Exercise Price for the Option exercised
herein is ( ) a check made payable to the Company in the amount of
$___________________ and/or ( ) a stock certificate for _______ shares of Common
Stock that have been owned by me or by me and my spouse jointly for at least six
months, with a duly completed stock power attached, with a total Fair Market
Value on the date hereof to the Total Exercise Price.

         Also attached in full payment of all withholding tax obligations
arising from exercise of the Option is (___) a check made payable to the Company
in the amount of such required withholding and/or (____) a stock certificate for
____ shares of Common Stock that have been owned by me or by me and my spouse
jointly for at least six months, with a duly completed stock power attached,
with a total Fair Market Value on the date hereof to the amount of such required
withholding.

y
                                           -------------------------------------
                                           Printed Name:  Brad Ketch

                                           Address:
                                                      --------------------------

                                           RECEIVED BY THE COMPANY:

                                           NEW VISUAL CORPORATION

                                           By:
                                              ----------------------------------
                                           Name:
                                                --------------------------------
                                           Title:
                                                 -------------------------------

                                           Date:
                                                --------------------------------

                                      A-2
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                                 ATTACHMENT ONE
                                 --------------
                                       TO
                             NEW VISUAL CORPORATION
                      NON-QUALIFIED STOCK OPTION AGREEMENT
                             ISSUED PURSUANT TO THE
                          2000 OMNIBUS SECURITIES PLAN

                                     COPY OF
                             NEW VISUAL CORPORATION

                          2000 OMNIBUS SECURITIES PLAN

                                 (SEE ATTACHED)<PAGE>

EXHIBIT 10.13

                              CONSULTING AGREEMENT

         This Consulting Agreement (the "Agreement") is dated as of July 17,
2002 (the "Effective Date") by and between NEW VISUAL CORPORATION, a Utah
corporation (the "Company"), and CHARLES R. CONO ("Consultant").

                                    RECITALS:

         WHEREAS, the Company desires to engage the services of the Consultant
for the purpose of performing consulting services on behalf of the Company, and
the Consultant agrees to perform such services, subject to the terms and
conditions contained herein.

         NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Consultant hereby agree as follows:

         1. SERVICES. During the term of this Agreement, Consultant shall act in
the best interests of the Company and provide such consulting, advisory and
related services as may be reasonably requested by the Company. At all times the
method of performing the specific duties designated by the Company shall be
within the control of the Consultant. Consultant acknowledges and agrees that he
shall be an Independent Contractor and shall not be an "employee" of the Company
for any purpose. Consultant acknowledges that he shall provide his own welfare
benefits and that the Company shall not provide any welfare benefits to
Consultant. Consultant shall be solely responsible for the payment of all
foreign, federal, state and local sales taxes, use taxes, value added tax,
withholding taxes, income tax, unemployment and workers' compensation insurance
premiums, and similar taxes and charges of any kind with respect to his
compensation and the services provided under this Agreement.

         2. TERM AND TERMINATION. The term of this Agreement shall begin on the
Effective Date and terminate one year after the Effective Date; provided,
however, that this Agreement may be terminated at any time by either party upon
thirty days' written notice to the other party.

         3. COMPENSATION. In consideration of the services to be rendered by the
Consultant during the term hereof, the Company shall pay Consultant $250,000,
which shall be payable, in full, only if and at such time as Company shall have
received gross revenues in the amount of at least Two Million Two Hundred Fifty
Thousand Dollars ($2,250,000) from the distribution of the Company's motion
picture currently titled "STEP INTO LIQUID."

         4. REIMBURSEMENT OF EXPENSES. In addition to the Compensation described
in Section 3 above, Consultant shall be reimbursed by the Company for all
reasonable out-of-pocket disbursements incurred by Consultant in connection with
the performance of his services under this Agreement, including but not limited
to meal, lodging and other travel expenses. Expenses in excess of $1,000 must be
approved in advance by the Chief Executive Officer of the Company.

<PAGE>

         5. CERTAIN FEDERAL SECURITIES LAW MATTERS. Consultant acknowledges that
he is aware that the federal securities laws prohibit any person who has
received from an issuer material, non-public information concerning the issuer
from purchasing or selling securities of such issuer or from communicating such
information to any other person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell such securities.
Consultant acknowledges receipt of and agrees to abide by the Company's insider
trading policy.

         6. COMPANY'S REPRESENTATIONS. Company represents and warrants that it
is free to enter into this Agreement and to perform each of its terms and
covenants. Company represents and warrants that it is not restricted or
prohibited, contractually or otherwise, from entering into and performing this
Agreement and that its execution and performance of this Agreement is not a
violation or breach of any other agreements between Company and any other person
or entity. The Company represents and warrants that this Agreement is a legal,
valid and binding agreement of the Company, enforceable in accordance with its
terms.

         7. CONSULTANT REPRESENTATIONS. Consultant represents and warrants that
he is free to enter into this Agreement and to perform each of its terms and
covenants. Consultant represents and warrants that he is not restricted or
prohibited, contractually or otherwise, from entering into and performing this
Agreement, and that his execution and performance of this Agreement is not a
violation or breach of any other agreement between Consultant and any other
person or entity. The Consultant represents and warrants that this Agreement is
a legal, valid and binding agreement of the Consultant, enforceable in
accordance with its terms.

         8. MULTIPLE COUNTERPARTS. This Agreement may be executed in
counterparts, each of which for all purposes is to be deemed an original, and
all of which constitute, collectively, one agreement.

         9. SUCCESSORS; ASSIGNMENT; SURVIVAL. This Agreement and the rights and
obligations under this Agreement shall be binding upon and inure to the benefit
of the parties to this Agreement and their respective successors and permitted
assigns. Neither this Agreement nor any rights or benefits under this Agreement
may be assigned by either party to this Agreement without the other party's
prior written consent.

         10. ENTIRE AGREEMENT; AMENDMENT. This Agreement supersedes any and all
other agreements, either oral or in writing, between the parties with respect to
the engagement of the Consultant by the Company and contains all of the
covenants and agreements between the parties with respect thereto. This
Agreement can only be amended by the parties in writing, executed by the party
against whom enforcement of any modifications may be sought.

         11. GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the substantive laws of the State of California without regard
to conflict of law provisions.

         12. NOTICES. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if (i) personally
delivered, (ii) sent by nationally- recognized overnight carrier or (iii) sent
by registered or certified mail, postage prepaid, return receipt requested,
addressed to the addresses set forth below each party's name on the signature

                                       2
<PAGE>

page hereto, or to such other address as the party to whom notice is to be given
may have furnished to each other party in accordance herewith. Any such
communication shall be deemed to have been given (i) when delivered, if
personally delivered, (ii) on the first Business Day (as hereinafter defined)
after dispatch, if sent by nationally-recognized overnight courier and (iii) on
the third Business Day following the date on which the piece of mail containing
such communication is posted, if sent by mail. As used herein, "Business Day"
means a day that is not a Saturday, Sunday or a day on which banking
institutions in the city to which the notice or communication is to be sent are
not required to be open.

         13. THIRD PARTY BENEFICIARY. No person, firm, group or corporation is a
third party beneficiary of this Agreement.

                            (SIGNATURE PAGE FOLLOWS)

                                       3
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         IN WITNESS WHEREOF, the parties hereto have executed the Agreement as
of the date first mentioned above.

                                          COMPANY:

                                          NEW VISUAL CORPORATION

                                          By:  /s/ Ray Willenberg
                                          Name: Ray Willenberg
                                          Title: Chairman

                                          Address: 5920 Friars Road, Suite 104
                                                   San Diego, CA 92108

                                          CONSULTANT:

                                          /s/ Charles R. Cono
                                          CHARLES R. CONO

                                          Address:     _____________________
                                                       _____________________
                                                       _____________________

                                       4

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