Document:

Recapitalization Agreement

    Exhibit
      10.5

     

    FLUID
      AUDIO NETWORK, INC. 

    STOCK
      RESTRICTION AGREEMENT

     

    THIS
      STOCK RESTRICTION AGREEMENT (the "Agreement")
      is
      entered into as of March 15, 2006 by and among Fluid Audio Network, Inc., a
      Delaware corporation (the "Company")
      and
      Robert Buch (the "Stockholder").

     

    RECITALS

     

    A.    The
      Stockholder owns 431,338 of the outstanding shares of the Company's Common
      Stock
      (the "Shares").

     

    B.    The
      Company and the Stockholder wish to enter into this Agreement in order to
(a)
      protect the Company and the Company's other stockholders in the event the
      Stockholder is no longer employed by the Company and (b) make the Company more
      attractive to prospective investors and business partners.

     

    NOW
      THEREFORE, THE PARTIES AGREE AS FOLLOWS: 

     

    1.    Definitions.

     

    1.1    "Anti-Dilution
      Securities" means the securities issued by the Company pursuant to Section
      3(b)
      of the Restricted Stock Purchase Agreement.

     

    1.2    "Cause"
      means a termination of Stockholder's engagement or employment with
      the
      Company by the Company due to (A) Stockholder's (after the cure period set
      forth
below)
      gross negligence and/or misconduct (including but not limited to dishonesty,
      fraud, deceit,
      material incidents of insubordination, poor performance or excessive absenteeism
      or tardiness), (B) the conviction (by trial, upon a plea or otherwise) of
      Stockholder of, or the admission
      of guilt by Stockholder of, a felony or a crime involving moral turpitude or
      any
      other act
      of
      dishonesty, fraud or deceit or is punishable by imprisonment of thirty (30)
      days
      or more, provided, however, that nothing in this Agreement shall obligate the
      Company to pay any compensation or benefits during
      any
      period that Stockholder is unable to perform his duties hereunder due to any
      incarceration, and also provided, however, that nothing shall prevent
      Consultant's termination under another section of this Agreement if it provides
      independent grounds
      for termination, (C) a material breach of the Agreement or a breach of fiduciary
      duty to the Company, or (D)
      a
      breach
      of this Agreement that adversely affects the Company; provided that
      the
      Company may not terminate Stockholder's engagement pursuant to clauses (A)
      or
      (D), unless,
      as to matters that are capable of cure, the Company has given Stockholder
      written notice of such matters in specific detail and of its intention to so
      terminate Stockholder if such matter is not
      remedied within ten (10) days after written notice thereof from the
      Company.

     

    1.3    "Change
      of Control" shall mean the occurrence of any one of the following:
      (i) any "person", as such term is used in Section 13(d) and 14(d) of the
      Securities Exchange
      Act of 1934, as amended (the "Exchange Act") (other than the Company, a
      subsidiary, an
      affiliate, or a Company employee benefit plan, including any trustee of such
      plan acting as  trustee)
      is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
      Exchange Act), directly or indirectly, of securities of Company representing
      fifty percent (50%) or more of the combined
      voting
      power of Company's then outstanding securities; (ii) a sale of assets involving
      all
      or
      substantially all of die assets of Company; or (iii) a merger, reorganization
      or
      other transaction
      of Company whether or not another entity is the survivor, pursuant to which
      holders. of
      all
      the shares of capital stock of Company outstanding prior to the transaction
      hold, as a group, less
      than
.fifty
      percent (50%) of the shares of capital stock of the Company outstanding after
      the transaction; provided, however, that a transaction the sole purpose of
      which
      is to change the Company's
      state of incorporation or to raise capital for the Company shall not constitute
      a Chanue
      of
      Control.

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    1.4    "Option
      Notice" has the meaning set forth in Section 2.3 hereof.

     

    1.5    "Option
      Period" has the meaning set forth in. Section 2.1 hereof.

     

    1.6    "Option
      Price" means $0.01 per share.

     

    1.7    "Repurchase
      Option" has the meaning set forth in Section 2.1 hereof

     

    1.8    "Restricted
      Shares" means, as of any date, the Shares and the Anti-dilution Securities
      that remain subject to the Repurchase Option, as more specifically set forth
      on
Schedule
      I hereto and Section 2.1 hereof.

     

    1.9    "Restricted
      Stock Purchase Agreement" means that certain Restricted Stock
      Purchase Agreement, dated August 1, 2004, by and between Stockholder and the
      Company.

     

    1.10          
      "Securities Act" means the Securities Act of 1933, as amended.

     

    1.11          
      "Termination
      Date" means the date on which Stockholder's employment or
      consulting relationship with the Company terminates, whether voluntarily or
      involuntarily, with
      or
      without cause, and including termination resulting from Stockholder's death
      or
      disability.

     

    1.12           
      "Unrestricted Shares" means, as of any date, the Shares and the Anti-dilution
      Securities
      that
      are
      no longer subject to
      the
      Repurchase Option.

     

    2.    Right
      of Companyto
      Repurchase Shares and the Anti-Dilution Securities.

     

    2.
      I    Repurchase
      Option. The
      Restricted Shares shall initially consist of 260,600 of the Shares and all
      Anti-Dilution Securities. Effective as
      of
      the
      Termination Date, the Company shall have an irrevocable_ exclusive
      option
      to
      repurchase all or any portion of the Restricted
      Shares (the "Repurchase Option") at the Option Price. The Repurchase Option
      will
expire
      with respect to 8,986 of the Restricted Shares on April 1, 2006, and with
      respect to an additional 8,986 of the Restricted Shares on the first day of
      each
      calendar month thereafter until August I, 2008, so that the Repurchase Option
      shall have expired with respect to all of the Restricted Shares on August 1,
      2008. The Repurchase Option with respect to any Anti-Dilution Securities shall
      expire in the same proportion as the Shares (i.e., if upon issuance of the
      Anti-Dilution
      Securities the Repurchase Right has expired with respect to 75% of the Shares,
      and 12 months
      remain until the Repurchase Right shall have expired with respect to all of
      the
      Shares, then
      the
      Repurchase Right
      shall
      apply to 25% of the Anti-Dilution Securities upon issuance and shall
      expire ratably monthly over 12 months thereafter).

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    2.2    Repurchase
      Option Exercise Period. Subject
      to Section 2.5 hereof, the Repurchase
      Option shall be exercisable for a period of sixty (60) days from the Termination
      Date (such period, the "Option Period"); provided, however, that the Company
      may
      extend the Option Period for up to one (1) year from the Termination Date if
      the
      Board reasonably determines that such
      extension is necessary to prevent a material adverse effect on the Company's
      financial or operational
      status. If the Company so extends the Option Period, during the period between
      the date
      of
      delivery of notice extending the Option Period and the earlier of exercise
      of
      the Right of Repurchase
      and expiration of such one-year period. the Stockholder hereby grants the
      Company with
      full
      power of substitution an irrevocable proxy to vote such the shares subject
      to
      the Repurchase
      Option (or execute a written consent) on all matters submitted to a vote of
      stockholders.
      lithe Company elects to extend the Option Period, it shall deliver written
      notice of
      same
      to Stockholder within thirty (30) days of the Termination Date. A right to
      a
      Repurchase Option
      with respect to fractional shares shall be rounded to the nearest whole
      share.

     

    2.3    Exercise
      ofRepurchase
      Option. Subject
      to Section 2.5 hereof', the Company shall, within sixty (60) days after the
      Termination Date, deliver written notice to Stockholder
      of its election to exercise its Repurchase Option (the "Option Notice"), and
      shall (A) deliver
      a
      check in the amount of the Option Price, (B) in the event Stockholder is
      indebted to the Company,
      cancel Stockholder's debt in an amount equal to the Option Price, or (C) take
      combined
      action under (A) and (13), such that the combined payment and cancellation
      of
indebtedness
      equals the Option Price. Upon delivery of the Option Notice and compliance
      with
(A),
      (B)
      and/or (C) above. the Company shall become the legal and beneficial owner of
      the
repurchased
      securities and all rights and interest therein or related thereto, and the
      Company shall have the right to transfer to its own name the number of
      repurchased securities without further action
      by
      Stockholder.

     

    2.4    Transfer
      ofSecurities.
      Stockholder
      acknowledges and agrees that in addition
      to the limitations set forth herein. the Shares and the Anti-dilution Securities
      are or will be
      subject to certain transfer restrictions set forth in the Restricted Stock
      Purchase Agreement, and
      that
      certain Stockholders Agreement to be made by and among the Company (the
"Stockholders
      Agreement"), Stockholder and certain other stockholders of the Company.
Stockholder
      agrees that he shall not transfer any of the Shares or Anti-dilution Securities
      except in
      accordance with the terms and conditions set forth herein and in the Restricted
      Stock Purchase Agreement
      and the Stockholders Agreement. In the event the Stockholder transfers any
      of
      the Shares
      or
      Anti-dilution Securities, in addition such other restrictions on transfer that
      may apply, any
      Restricted Shares at the time of such transfer shall continue to be Restricted
      Shares in the possession of such transferee.

     

    2.5    Acceleration
      ofLapse
      of Repurchase
      Rights Upon
      Certain Events. Notwithstanding
      the provisions of Section 2.1 hereof, the Repurchase Option shall expire with
      respect
      to all Restricted Shares existing upon the consummation of a Change or Control
      or a termination
      of Stockholder's engagement or employment with the Company without
      Cause.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    3.    Company
      Enforcement.

     

    3.1    Company
      Records. The
      Company shall not transfer on its books any of the
      shares of Common Stock held by the Stockholder without first ascertaining
      compliance with all
      of
      the applicable provisions of this Agreement with respect to such
      transfer.

     

    3.2    Stop-Transfer
      Orders.The
      Stockholder agrees that, in order to ensure compliance
      with the restrictions referred to herein, the Company may issue appropriate
      "stop-transfer"
      instructions to its transfer agent, if any, and that, if the Company transfers
      its own securities,
      it may make appropriate notations to the same effect in its own records. The
      Company shall
      not
      be required to transfer on its books any Shares or Anti-dilution Securities
      that
      have been sold
      or
      otherwise transferred in violation of any of the provisions of this Agreement
      or
      any federal
      or state securities laws, or to treat as owner of such Shares or Anti-dilution
      Securities or to
      accord
      the right to vote or pay dividends to any purchaser or other transferee to
      whom
      such Shares
      or
      Anti-dilution Securities shall have been so transferred.

     

    3.3    NoRegistration.
      Stockholder
      understands that the Shares and the Anti-dilution
      Securities have not been registered under the Securities Act by reason of a
      specific exemption
      therefrom, which exemption depends upon, among other things, the bona fide
      nature of
      Stockholder's investment intent as expressed herein.

     

    3.4    Restricted
      Securities. Stockholder
      understands that the Shares and the Anti-dilution
      Securities are "restricted securities" under applicable U.S. federal and state
      securities
      laws and that, pursuant to these laws, he must hold the Shares and the
      Anti-dilution Securities indefinitely unless they are registered with the
      Securities and Exchange Commission and qualified by state authorities, or unless
      an exemption from such registration and qualification requirements is available.
      Stockholder acknowledges that the Company has no obligation to register or
      qualify the Shares or the Anti-dilution Securities for resale. Stockholder
      further acknowledges that if an exemption from registration or qualification
      is
      available, it may be conditioned
      on various requirements including, but not limited to, the time and manner
      of
      sale, the
      holding period for the Shares and the Anti-dilution Securities, and requirements
      relating to the
      Company which are outside of the Stockholder's control, and which the Company
      is
      under no obligation
      and may not be able to satisfy.

     

    3.5    No
      Transfer. Without
      limiting the representations set forth above, the Stockholder
      will not make any disposition of all or any part of the Shares or the
      Anti-dilution Securities which will result in the violation by the Stockholder
      or by the Company of the Securities Act, the California Corporate Securities
      Law
      of 1968, or any other applicable securities
      laws. Without limiting the foregoing, the Stockholder agrees not to make any
      disposition
      of all or any part of the Shares or the Anti-dilution Securities unless and
      until:

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (a)    There
      is
      then in effect a registration statement under the Securities Act covering such
      proposed disposition and such disposition is made in accordance with such
      registration statement and any applicable requirements of state securities
      laws;
      or

     

    (b)    The
      Stockholder has notified the Company of the proposed disposition and has
      furnished the Company with a detailed statement of the circumstances surrounding
      the proposed disposition, and, if reasonably requested by the Company, the
      undersigned will have furnished to the Company a written opinion of counsel,
      reasonably satisfactory
      to the Company, that such disposition will not require registration of any
      securities under
      the
      Securities Act or the consent of or a permit from appropriate authorities under
      any applicable state securities law.

     

    4.    Legend-Requirement.All
      certificates evidencing Shares and the Anti-dilution Securities
      subject to this Agreement shall, during the term of this Agreement, bear such
      restrictive
      legends as the Company and the Company's counsel deem necessary or advisable
      under
      applicable law or pursuant to this Agreement, including, without limitation,
      the
      following;

     

    "CERTAIN
      OF THE SECURITIES REPRESENTED HEREBY MAY BE
      SUBJECT
      TO A RIGHT OF REPURCHASE BY THE COMPANY PURSUANT TO AN AGREEMENT RELATING TO
      SUCH SECURITIES,
      SHOULD THE PERSON INITIALLY ISSUED THESE SECURITIES CEASE TO BE EMPLOYED BY
      THE
      COMPANY OR ANY AFFILIATE THEREOF, AND SUCH SECURITIES MAY NOT BE SOLD OR
      OTHERWISE TRANSFERRED IF SUCH SECURITIES ARE SUBJECT TO SUCH RIGHT OF
      REPURCHASE."

     

    5.    Tax
      Advice.The
      Stockholder acknowledges that he has not relied and will not rely
      upon
      the Company with respect to any tax consequences related to the ownership,
      purchase, or
      disposition of the Shares and the Anti-dilution Securities. The Stockholder
      assumes full responsibility for all such consequences and for the preparation
      and filing of all tax returns and elections which may or must be filed in
      connection with such Shares and the Anti-dilution Securities.
      The Stockholder has executed and delivered to the Company an Acknowledgment
      in
the
      form
      of Exhibit
      A hereto.

     

    6.    Miscellaneous.

     

    6.1    Binding
      Effect.This
      Agreement shall be binding upon, and inure to the benefit
      of, the executors. administrators, heirs, legal representatives, successors,
      and
      assigns of the
      parties hereto.

     

    6.2    Governing
      Law.This
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      the State of California excluding those laws that direct the application of
      another jurisdiction's laws.

     

    6.3    Counterparts.This
      Agreement may be executed in counterparts, each of which
      shall be deemed an original, but which together shall constitute one instrument.
      This Agreement may also be executed and delivered by facsimile signature and
      in
      two or more counterparts, each of which shall be deemed an original, but all
      of
      which together shall constitute one
      and
      the same instrument.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    6.4    Notices.Any
      notice required or permitted by this Agreement shall be in writing
      and shall be deemed sufficient when delivered personally or sent by telegram
      or
      fax or forty-eight
      (48) hours after being deposited in the U.S. mail, as certified or registered
      mail, with postage
      prepaid, and addressed to the party to be notified at such party's address
      as
      set forth below
      the
      signatures of the parties or as subsequently modified by written
      notice.

     

    6.5    Entire
      Areement.This
      Agreement constitutes and contains the entire agreement
      of the parties pertaining to its subject matter and supersedes any and all
      prior
      and contemporaneous agreements, representations, and understandings; provided
      however, that this Agreement
      amends only those provisions of the Stockholder's stock purchase agreement
      with
      the Company
      relating to repurchase rights with respect to shares held by the
      Stockholder.

     

    6.6    Arbitration.Any
      and
      all disputes or controversies arising out of this Agreement,
      except for the obligation of Stockholder to deliver certificates representing
      the Shares
      or
      the Anti-dilution Securities, shall be finally settled by arbitration conducted
      in Los Angeles
      County in accordance with the then existing Commercial Arbitration Rules of
      the
      American Arbitration Association, and judgment upon the award rendered by the
      arbitrators may be
      entered in any court having jurisdiction thereof; provided that nothing in
      this
      Section 6.6 shall prevent
      a
      party from applying to a court of competent jurisdiction to obtain temporary
      relief pending
      resolution of the dispute through arbitration. The parties hereby agree that
      service of and
      notices in the course of such arbitration at their respective addresses as
      provided for in Section
      6.4 shall be valid and sufficient. If any party to this Agreement seeks to
      enforce its rights under this Agreement, the non-prevailing party shall pay
      all
      costs and expenses incurred by the prevailing
      party, including reasonable attorneys, fees.

     

    6.7    Adjustments.This
      Agreement, and the rights and obligations of the parties
      hereunder, shall be interpreted insofar as practicable to account for any stock
      combination.
      stock dividend, stock split, recapitalization, or other similar transaction
      occurring after
      the
      effective date of this Agreement.

     

    6.8    Amendment.This
      Agreement may he amended, and any term hereof waived,
      by the written consent of the Company and the Stockholder.

     

    6.9    Enforcement.If
      any
      portion of this Agreement is determined to
      be
      invalid or
      unenforceable, the remainder shall be valid and enforceable to the maximum
      extent possible.

     

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        6

        
          

        

      

      
        
        

      

    

     

    In
      WITNESS WHEREOF, the parties hereto have executed this Stock Restriction
      Agreement as of the date first above written.

     

    
      	Company: 	
              FLUID AUDIO NETWORK, INC.

              a Delaware corporation 

            
	 	 	 
	 	By:	
              

            
	 	Justin Beckett, Chief Executive
              Officer  
	 	 	 
	 	
              Address:       
                _________________________________

                                      _________________________________

            
	 	 	 
	 	
              

              ____________________________________________

              Robert Buch 

            
	 	 	 
	 	
              Address:        3967
                Marcasel Ave

                                     
                Los Angeles, CA 90066

            

    

     

     

    CONSENT
      OF SPOUSE

    (if
      applicable)

     

    I,
      Heather Buch, spouse of Robert Buch, have read and hereby approve the foregoing
      Agreement. By execution of this Agreement, I agree to be irrevocably bound
      by
      the terms of this Agreement as to my interest, whether as community property
      or
      otherwise, if any, in the Shares and the Anti-dilution Securities, including,
      without limitation, the terms of Section 1 of this Agreement. I hereby appoint
      my spouse as my attorney-in-fact with respect to any amendment or exercise
      of
      any rights under the Agreement., 

     

    
      	 	
	 	
              Purchaser's Spouse, if applicable 

              (Mark
                "N/A" if not
                applicable) 

            

    

     

    7Unassociated Document

Exhibit
    10.6
     

    
       
RESTRICTED
      STOCK PURCHASE AGREEMENT

     

    This
      Restricted Stock Purchase Agreement (the "Agreement")
      is
      made
      effective as of September
      30, 2004 , by and between Fluid Audio Network, Inc., a Delaware corporation
      (the
"Company"),
      and
      Robert Buch (the "Consultant").

     

    RECITALS

     

    WHEREAS,
      the Company is engaged in the business of providing online music services
(the
      "Business");

     

    WHEREAS,
      concurrently herewith, Consultant is entering into an independent contractor
      relationship
      with the Company as set forth in the consulting agreement (the "Consulting
      Agreement")
      between
      Consultant and the Company of even date herewith;

     

    WHEREAS,
      Consultant desires to receive from Company, and Company desires to issue
to
      Consultant, certain shares of the Company's common stock; and

     

    WHEREAS,
      the Company and Consultant recognize that, in order to provide the Company
      with the maximum value of Consultant's contributions to the Company for the
      benefit of
      all
      stockholders, including Consultant, it is necessary and appropriate for
      Consultant to agree to
      certain restrictions in respect of the Shares and the Anti-dilution Securities
      (as defined herein).

     

    NOW
      THEREFORE, for good and valuable consideration, the sufficiency of which is
      hereby
      acknowledged, the parties agree as follows:

     

    AGREEMENT

     

    Section
      1. Definitions.

     

    a. "Agreement"
      has
      the
      meaning set forth in the first paragraph hereof.

     

    b. "Anti-Dilution
      Securities" means
      the
      securities issued by the Company pursuant
      to Section 3(b) hereof.

     

    c. "Change
      of Control" shall
      mean the occurrence of any one of the following:
      (i) any "person", as such term is used in Section 13(d) and 14(d) of the
      Securities Exchange
      Act of 1934, as amended (the "Exchange Act") (other than the Company, a
      subsidiary, an
      affiliate, or a Company employee benefit plan, including any trustee of such
      plan acting as trustee)
      is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
      Exchange Act), directly
      or indirectly, of securities of Company representing filly percent (50%) or
      more
      of the combined
      voting power of Company's then outstanding securities; (ii) a sale of assets
      involving all
      or
      substantially all of the assets of Company; or (iii) a merger, reorganization
      or
      other transaction
      of Company whether or not another entity IS the survivor, pursuant to which
      holders of
      all
      the shares of capital stock of Company outstanding prior to the transaction
      hold, as a group, less
      than
      fifty percent (50%) of the shares of capital stock of the Company outstanding
      after the transaction;
      provided, however, that a transaction the sole purpose of which is to change
      the
Company's
      state of incorporation or to raise capital for the Company shall not constitute
      a Change
      of
      Control.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    d. "Code"
      means
      the
      internal Revenue Code of 1986, as amended.

     

    e. "Common
      Stock" means
      the
      Company's common stock.

     

    f. "Common
      Stock Equivalents" means
      any
      securities of the Company or any subsidiary
      which would entitle the holder thereof to acquire at any time Common Stock,
      including
      without limitation, any debt, !Preferred stock, rights, options, warrants or
      other instrument
      that is at any time convertible into or exchangeable for, or otherwise entitles
      the holder
      thereof toreceive Common Stock.

     

    g. "Fully
      Diluted Basis" means
      a
      basis assuming that all outstanding rights, options, warrants and other
      convertible or exchangeable securities are exchanged, converted or exercised
      in lull, whether or not the same arc "in the money" into shares of Common Stock,
      including
      all Anti-Dilution Securities and any securities issued in connection with a
      stock split, stock
      dividend or recapitalization of such Anti-Dilution Securities.

     

    h. "Holder"
      means
      the
      Consultant and/or any transferee in respect of the Shares
      and the Anti-dilution Securities, as the context requires.

     

    i. "Immediate
      Family" means
      spouse, lineal descendant or antecedent, father.
      mother, brother or sister.

     

    j. "Permitted
      Transfer" means
      any
      transfer of any or all of the Shares or the Anti-dilution
      Securities during the lifetime or on the death of the holder by will or
      intestacy to the
      Immediate Family of such holder a trust for the benefit of the Immediate Family
      of such holder.

     

    k. "Qualified
      IPO" means
      the
      closing of: (i) a bona fide registered firm commitment
      underwritten public offering of shares of Common Stock by a nationally
      recognized investment
      bank on a major stock exchange in the United States, Canada or United Kingdom
      (including
      the NASDAQ National Market); (ii) such other transaction which results in the
      listing of
      the
      Common Stock on a major stock exchange in the United States, Canada or United
      Kingdom.

     

    1.
      "Securities
      Act" means
      the
      Securities Act of 1933, as amended.

     

    m.
      "Shares"
      means
      the
      Common Stock received by Consultant pursuant to Section
      2.

     

    n.
      "Stockholders
      Agreement" has
      the
      meaning set forth in Section 3.c.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    o.
      "Third
      Party
      Offer" means
      a
      bona fidc offer from arty person or entity dealing
      at arm's length with Beckett to purchase all, but not less than all, of the
      capital stock of the
      Company owned or controlled by Justin Beckett,

     

    Section
      2. Price
      and Number of Shares. Consultant
      hereby purchases Forty Nine and Five
      Hundred Seventy Nine Thousandths (49.579) shares of the Company's Common Stock
      (the "Shares"),
      at a price per share of S0.01.

     

    Section
      3. Covenants.

     

    a. Co-Sale
      Rights. Except
      for Permitted Transfers (in which event the holdings
      of the transferees of such Permitted Transfer shall be attributed to Consultant
      or Beckett,
      as the case may be,•for the purposes of this section), in the event of the sale
      of Common Stock
      (or
      Common Stock Equivalents) of the Company by Justin Beckett or an entity in
      which
Justin
      Beckett owns more than fifty percent (50%) of the issued and outstanding voting
      securities (collectively,
      "Beckett"),
      such
      that
      subsequent to such sale Beckett shall own less than sixty-six and
      two-thirds percent (66 2/3%) of the number of shares of capital stock of the
      Company owned by
      Beckett immediately prior to such sale, then Consultant shall be entitled to
      sell the same pro rata
      portion of Shares held by Consultant, including options, on the same terms,
      conditions and per
      share
      price as sold by Beckett. Similarly, if Beckett sells shares of capital stock
      of
      the Company
      held by Beckett pursuant to a Third Party Offer which is conditional or
      otherwise dependent
      upon the purchase of all or any portion of shares of capital stock owned or
      controlled by
      Consultant, Beckett may require Consultant to sell all or any portion of the
      capital stock of the Company
      owned or controlled by Consultant pursuant to and in accordance with the terms
      of the Third
      Party Offer. Notwithstanding any of the foregoing, the provisions of this
      section shall not apply
      to
      any sales of capital stock of the Company held by Beckett in connection with
      the
employment,
      engagement or compensation of directors, officers, employees, agents or
representatives
      of the Company or its affiliates and subsidiaries.

     

    b. Anti-Dilution
      Protection. Upon
      the
      expiration of the Anti-Dilution Period, the
      Company covenants and agrees to issue to Consultant such number of shares of
      Common Stock
      such that the percentage of capital stock of the Company held or controlled
      by
      Consultant (calculated
      to four (4) decimal places, on a Fully Diluted Basis) immediately following
      the
expiration
      of the Anti-Dilution Period (or with respect to a Change of Control, immediately
      prior to
      such
      Change of Control) shall equal five percent (5%) (the "Anti-Dilution Right").
      The Anti-Di
      lution
      Period shall commence March 1, 2006, and expire upon the earlier to occur of:
      (i) August
      1,
      2010; (ii) the consummation of three rounds of equity financing each with gross
      proceeds
      to the Company equal to or in excess of Five Hundred Thousand Dollars
      (5500,000.00), including
      a Quail lied IPO or subsequent public offering, (each, a "Financing"); or (iii)
      the consummation
      of a Change of Control. Notwithstanding anything herein to the contrary, if
      the
Anti-Dilution
      Securities when issued to the Consultant are not freely tradable by the
      Consultant (either
      by virtue of a lack of a public market, as a result of contractual restrictions
      or otherwise), the
      Consultant may elect at his sole option to postpone the issuance of the
      Anti-Dilution Securities
      until the earlier of (i) a Change of Control (ii) such time as the Anti-Dilution
      Securities arc
      freely tradable, or (iii) such other time as chosen by Consultant; provided,
      however, that any postponement
      by Consultant pursuant to this Section 3.b shall not result in an extension
      of
      the Anti-Dilution
      Period nor the issuance of any additional securities.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    c.
      Restrictions
      on Transfer. Consultant
      acknowledges and agrees that in addition
      to the limitations set forth herein, the Shares and the Anti-dilution Securities
      shall become
      subject to certain transfer restrictions set forth in that certain Stockholders
      Agreement to be
      made
      by and among the Company (the "Stockholders Agreement"), Consultant and certain
      other
      stockholders of the Company. Consultant agrees that he shall not transfer any
      of
      the Shares or
      the
      Anti-dilution Securities except in accordance with the terms and conditions
      set
      forth herein and
      in
      the Stockholders Agreement and hereby agrees to be bound by the terms of the
      Stockholders
      Agreement. Consultant further agrees to be bound by restrictions on transfer,
      if
any,
      generally governing shares of the Company's capital stock held by the executive
      officers of the
      Company, from time to time, including, without limitation, those set forth
      herein, in the Stockholders
      Agreement and in any other agreement affecting the Shares or the Anti-dilution
      Securities
      generally.

     

    Section
      4. Consultant's
      Representations. In
      connection with the purchase of the Shares and
      the
      receipt of the Anti-dilution Securities, Consultant represents to the Company
      as
      follows:

     

    a. Purchase
      for Own Account. Consultant
      is aware of the Company's business
      affairs and financial condition and has acquired sufficient information about
      the Company
      to reach an informed and knowledgeable decision to acquire the Shares and the
      Anti-dilution
      Securities. Consultant is purchasing the Shares and otherwise acquiring the
      Anti-dilution
      Securities for investment for his own account only and not with a view to,
      or
      for resale in
      connection with, any "distribution" thereof within the meaning of the Securities
      Act.

     

    b. No
      Registration. Consultant
      understands
      that the
      Shares and the Anti-dilution
      Securities have not been and will not be registered under the Securities Act
      by
      reason of a
      specific exemption therefrom, which exemption depends upon, among other things,
      the bona lide
      nature of Consultant's investment intent as expressed herein.

     

    c. Restricted
      Securities. Consultant
      understands that the Shares and the Anti-dilution
      Securities are "restricted securities" under applicable U.S. federal and state
      securities laws
      and
      that, pursuant to these laws, Consultant must hold the Shares and the
      Anti-dilution Securities
      indefinitely unless they are registered with the Securities and Exchange
Commission
      and
      qualified by state authorities, or unless an exemption from such registration
      and qualification requirements
      is available. Consultant acknowledges that the Company has no obligation to
      register
      or qualify the Shares or the Anti-dilution Securities for resale. Consultant
      further acknowledges
      that if an exemption from registration or qualification is available, it may
      be
conditioned
      on various requirements including, but not limited to, the time and manner
      of
      sale, the holding period for the Shares and the Anti-dilution Securities, and
      requirements relating to the
      Company which are outside of the Consultant's control, and which the Company
      is
      under no obligation
      and may not be able to satisfy.

     

    d. Tax
      Consequences. Consultant
      understands that Consultant may suffer adverse
      tax consequences as a result of Consultant's purchase or disposition of the
      Shares or the Anti-dilution
      Securities, Consultant represents that Consultant
      has
      consulted any tax consultants Consultant
      deems advisable in connection the purchase or disposition of the Shares or
      the
      Anti-dilution
      Securities and that Consultant is not relying on the Company for any tax
      advice.

     

    Section
      5. Restrictive
      Legends and Stop-Transfer Orders.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    a.
      Legends.
      The
      certificate or certificates representing the Shares and the Anti-dilution
      Securities shall bear the following legends (as well as any legends required
      by
applicable
      state and federal corporate and securities laws):

     

    (i) THE
      SHARES REPRESENTED BY TI-US CERTIFICATE HAVE NOT
      BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED
      FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH,
      THE
      SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY
      BE
      EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED
      THERETO OR AN OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS
      NOT
      REQUIRED UNDER THE SECURITIES ACT OF 1933.

     

    (ii) THE
      SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
      TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A RESTRICTED STOCK
      PURCHASE AGREEMENT OR OTHER AGREEMENTS PURPORTING TO RESTRICT
      THE TRANSFER OF THE SHARES BETWEEN THE COMPANY AND THE STOCKHOLDER,
      A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

     

    (iii) Any
      other
      legend required to be placed thereon by the Commissioner of
      Corporations, or other similar officer of any other jurisdiction.

     

    b.
      Stop-Transfer
      Orders. Consultant
      agrees that, in order to ensure compliance
      with the restrictions referred to herein, the Company may issue appropriate
      "stop transfer"
      instructions to its transfer agent, if any, and that, if the Company transfers
      its own securities,
      it may make appropriate
      notations to
      the
      same effect in its own
      records.

     

    c.
      No
      Obligation
      to Transfer. The
      Company shall not be required (1) to transfer
      on its books any Shares or Anti-dilution Securities that have been sold or
      otherwise transferred in violation of this Agreement or (ii) to treat as the
      owner of such Shares or Anti-dilution
      Securities or to accord the right to vote or pay dividends to any Consultant
      or
      other transferee
      to whom such Shares or Anti-dilution Securities shall have been so
      transferred.

     

    Section
      6. No
      Employment Rights,
      Nothing
      in this Agreement shall affect in any manner
      whatsoever the right or power of the Company, or a parent or subsidiary of
      the
      Company, to
      terminate Consultant's employment
      or engagement, for any reason, with or without cause.

     

    Section
      7. Market
      Stand-off Agreement. In
      connection with a Qualified IPO and upon request
      of the Company or the
      underwriters
      managing such Qualified IPO of the Company's securities,
      Consultant agrees not to sell, make any short sale of, loan, grant any option
      for the purchase
      of, or otherwise dispose of any Shares or Anti-dilution Securities (other than
      those included
      in
      the
      registration) without
      the prior written consent of the Company or such underwriters,
      as the case may be, for such period of time (not to exceed the greater of 180
      days or such other period of time requested by the underwriters managing the
      Qualified 1PO, which shall in
      no
      event exceed the period of time applicable to Beckett) from the effective
date
      of
      such
registration
      as may be requested by the Company or such managing underwriters and to execute
      an
      agreement reflecting the foregoing as may be requested by the underwriters
      at
      the time of the Qualified
      IPQ.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Section
      8. Miscellaneous.

     

    a. Consent
      of Spouse. Consultant
      shall cause his spouse to execute the Consent
      of Spouse in the form attached hereto as Exhibit
      A.

     

    b. Governing
      Law.This
      Agreement and all acts and transactions pursuant hereto
      and the rights
      and
      obligations of the parties hereto shall be governed, construed and interpreted
      in accordance with the laws of the State of California, without giving effect
      to
principles
      of conflicts of law.

     

    c. Adjustments.
      This
      Agreement, and the rights and obligations of the parties
      hereunder, shall be interpreted insofar as practicable to account for any stock
      combination,
      stock dividend, stock split, stock consolidation, stock redemptions or
      repurchases, recapitalization,
      or
      other
      similar transaction occurring after the effective date of this
      Agreement.

     

    d. Entire
      Agreement: Enforcement of Rights. This
      Agreement and the exhibits
      hereto sets forth the entire agreement and understanding of the parties relating
      to the subject
      matter herein and merges all prior discussions between them. No modification
      of
      or amendment
      to this Agreement, nor any waiver of any rights under this Agreement, shall
      be
effective
      unless in writing signed by the parties to this Agreement. The failure by either
      party to enforce
      any rights under this Agreement shall not be construed as a waiver of any
      rights
      of
      such party.

     

    e. Severability.
      If
      one or
      more provisions of this Agreement are held to be unenforceable
      under applicable law, the parties agree to renegotiate such provision in good
      faith. In
      the
      event that the parties cannot reach a mutually agreeable and enforceable
      replacement for such
      provision, then (i) such provision shall be excluded from this Agreement, (ii)
      the balance of the
      Agreement shall be interpreted as if such provision were so excluded and (iii)
      the balance of the
      Agreement shall be enforceable
      in accordance with
      its
      terms.

     

    f. Construction.This
      Agreement is the result of negotiations between and has
      been
      reviewed by each of the parties hereto and their respective counsel, if any;
      accordingly, this
      Agreement shall be deemed to be the product of all of the parties hereto, and
      no
      ambiguity shall
      be
      construed in favor of or against any one of the parties hereto.

     

    g. Notices.
      Any
      notice required or permitted by this Agreement shall be in writing
      and shall be deemed sufficient when delivered personally or sent by telegram
      or
      fax or forty-eight (48) hours after being deposited in the U.S. mail, as
      certified or registered mail, with postage
      prepaid, ana addressed to
      me
      party to
      be
      notinea at sucn party's actaress as set torte below
      or
      as subsequently modified by written notice.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    h. Counterparts.
      This
      Agreement may be executed in two or more counterparts,
      each of which shall be deemed an original and all of which together shall
      constitute one
      instrument. This Agreement may also be executed and delivered by facsimile
      signature and in
      two or
      more counterparts, each of which shall be deemed an original, but all of which
      together shall
      constitute one and the same instrument.

     

    i. Successors
      and Assigns.
      The
      rights and benefits of this Agreement shall inure
      to
      the benefit of, and be enforceable by the Company's successors and assigns.
      The
      rights and
      obligations of Consultant under this Agreement may only be assigned with the
      prior written consent
      of the Company, which consent may be unreasonably withheld.

     

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

     

    FLUID
      AUDIO NETWORK, INC. a
      Delaware corporation

     

    By:
      Justin
      Beckett              
  

    Name:
      [Justin Beckett]

    Title:
      [CEO]

     

    
      By: Robert
        Buch                

      Robert
        Buch

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
       
EXHIBIT
      A

    CONSENT
      OF SPOUSE

     

    I,
      heather Buch, spouse of Robert Buch, have read and hereby approve the foregoing
      Agreement. In
      consideration of the Company granting my spouse the right to receive the Shares
      and the Anti-dilution
      Securities under the terms set forth in the Agreement,
      I
      hereby
      agree to be irrevocably bound
      by
      the Agreement and further agree that any community property or other such
      interest shall
      be
      similarly bound by the Agreement. I hereby appoint my spouse as my
      attorney-in-fact with
      respect to any amendment or exercise of any n under
      the
      Agre ment.

    

    Heather
      Buch              

    Name:
      Heather Buch

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