Document:

Amendment No. 1 to Employment Agreement

 Exhibit 10.14 
  
 EMPLOYMENT AGREEMENT 
  

This Employment Agreement (the “Agreement”) is entered into as of September 13, 2005, and shall become effective on the closing
of the Merger (as defined below) (the “Effective Date”), between Digital Music Group, Inc., a Delaware corporation with its principal offices located at 1545 River Park Drive, Suite 210 Sacramento, CA 95815 (the
“Company”), and Anders Brown, a resident of Washington (the “Executive”). 
  
 In consideration of the promises and the terms and conditions set forth in this Agreement, the parties agree as follows: 
  
 1. Position. On the Effective Date and during the term of this
Agreement, Company will employ Executive, and Executive will serve Company as the Company’s Chief Operating Officer and will have such responsibilities and authority as may from time to time be assigned to Executive by the Company’s Chief
Executive Officer and the Board of Directors of the Company. Executive will report directly to the Chief Executive Officer. 
  
 2. Duties. Beginning on the Effective Date, Executive will have day-to-day responsibility for the Company’s operations, including
responsibility for music content processing and managing the Company’s sales and marketing efforts and shall also serve the Company in such capacities and with such duties and responsibilities as the Chief Executive Officer of the Company and
the Board of Directors of the Company may from time to time determine. Executive will comply with and be bound by Company’s operating policies, procedures, and practices from time to time in effect during Executive’s employment. Executive
will perform his duties under this Agreement at Executive’s home in Seattle, Washington. Executive hereby represents and warrants that he is free to enter into and fully perform this Agreement and the agreements referred to herein without
breach of any agreement or contract to which he is a party or by which he is bound. 
  
 3. Exclusive Service. Beginning on the Effective Date, Executive shall devote his full time and efforts exclusively to this employment and apply all his skill and experience to the performance of his
duties and advancing the Company’s interests in accordance with Executive’s experience and skills. In addition, Executive will not engage in any consulting activity except with the prior written approval of Company, or at the direction of
Company, and Executive will otherwise do nothing inconsistent with the performance of his duties hereunder. 
  
 4. Term of Agreement. This Agreement will commence on the Effective Date, and will continue until the earlier of two (2) years after the
Effective Date or when terminated pursuant to Section 7 hereof. 

 5. Compensation and Benefits. 
  
 5.1 Base Salary. Upon the closing of the
merger of Digital Musicworks International, Inc. with and into the Company (the “Merger”), the Company shall begin paying Executive an initial minimum salary of one hundred and thirty thousand dollars ($130,000) per year (“Base
Salary”). At such time, Executive’s salary will be payable as earned in accordance with Company’s customary payroll practice. The parties agree this salary shall be applicable only to periods starting immediately after the Effective
Date and that no compensation will begin to accrue or be due or payable until immediately after the Effective Date. 
  
 5.2 Additional Benefits. Beginning on the Effective Date, Executive will be eligible to participate in Company’s
employee benefit plans of general application, including without limitation those plans covering pension and profit sharing, executive bonuses, stock purchases, and those plans covering life, health, and dental insurance in accordance with the rules
established for individual participation in any such plan and applicable law. Once Executive is eligible for health and dental insurance coverage hereunder, Executive’s spouse and dependents shall also be eligible for such coverage at
Company’s sole expense. In addition, beginning on the Effective Date, Executive will receive such other benefits, including vacation, holidays and sick leave, as the Company generally provides to its employees holding similar positions as that
of Executive.  
  
 5.3 Cash
Bonus. Subject to the terms of the Company’s bonus plan once created and as amended from time to time (the “Plan”), Executive will earn bonuses, payable as required under the Plan, but not until such time as the Compensation
Committee of the Board of Directors of the Company determines the targets and milestones to be met each year. Such bonuses will be between 30% and 50% of Executive’s salary if Executive’s performance is below the targets for the period in
question but exceeds certain defined milestones, 50% to be paid if performance meets or exceeds the targets for such period and 75% if performance exceeds the targets for such period in accordance with additional defined milestones, provided that
such bonuses are approved by the Compensation Committee of the Company in accordance with its charter and applicable law. 
  
 5.4 Expenses. The Company will reimburse Executive for all reasonable and necessary expenses incurred by Executive in
connection with the Company’s business, provided that such expenses are deductible to the Company, are in accordance with the Company’s applicable policy and are properly documented and accounted for in accordance with the requirements of
the Internal Revenue Service. 
  
 5.5
Vacation. Executive will be entitled to paid vacation as set forth in the Company’s policies and/or employee manual (as they may be applicable to the Company’s officers and key employees), as approved by the Board of Directors.

  
 6. Proprietary Rights. Executive hereby agrees
to execute, on the Effective Date, an Employee Invention Assignment and Confidentiality Agreement with the Company in substantially the form attached hereto as Exhibit A. 
  

 2 

 7. Termination. 
  
 7.1 Events of Termination. Executive’s employment with the Company shall terminate upon
any one of the following: 
  
 (a) the
Company’s determination made in good faith that it is terminating Executive for “cause” as defined under Section 7.2 below (“Termination for Cause”) provided, that if the “Cause” for
termination is a curable failure by Executive to properly perform his assigned duties (as determined in good faith by the Board of Directors of the Company), then the Company will give Executive written notice of such failure (a “Cause
Notice”), and if Executive fails to cure such failure to the reasonable satisfaction of the Board of Directors within sixty (60) days after the Company gives the Cause Notice, then the Company may immediately terminate Executive’s
employment, and such termination will be conclusively deemed to be for “cause” hereunder; or 
  
 (b) the effective date of a written notice sent to Company from Executive stating that Executive is electing to terminate his employment
with the Company for “good reason” as defined under Section 7.3 below (“Termination for Good Reason”); or 
  
 (c) thirty (30) days after the effective date of a written notice sent to Executive stating that the Company is terminating his
employment, without cause, which notice can be given by the Company at any time after the Effective Date at the Company’s sole discretion, for any reason or for no reason (“Termination Without Cause”); or 
  
 (d) the effective date of a written notice sent to the
Company from Executive stating that Executive is electing to terminate his employment with the Company (“Voluntary Termination”). 
  
 7.2 “Cause” Defined. For purposes of this Agreement, “cause” for Executive’s termination shall be
as defined as set forth in Executive’s Restricted Stock Purchase Agreement with the Company dated August 26, 2005. 
  
 7.3 “Good Reason” Defined. For purposes of this Agreement, Executive’s “good reason” to terminate
his employment with the Company shall be as defined as set forth in Executive’s Restricted Stock Purchase Agreement with the Company dated August 26, 2005. 
  

8. Effect of Termination. 
  
 8.1 Termination for Cause or Voluntary Termination. In the event of any termination of this Agreement pursuant to Sections
7.1(a) or 7.1(d), the Company shall pay Executive the compensation and benefits otherwise payable to Executive under Section 5 through the date of termination. Executive’s rights under the Company’s benefit plans of general application
shall be determined under the provisions of those plans. 
  
 8.2 Termination Without Cause or for Good Reason. In the event of any termination of this Agreement pursuant to Section 7.1(b) or 7.1(c), 
  
 (a) the Company shall pay Executive the compensation and benefits otherwise payable to Executive under
Section 5 through the date of termination, and 
  
 (b) for a period of six (6) months after the Effective Date, the Company shall continue to pay Executive his base salary under Section 5.1 above at Executive’s then-current salary, his benefits under Section 5.2 and any bonus due to
Executive pursuant to Section 5.3, less applicable withholding taxes, payable on the Company’s normal payroll dates 

  

 3 

 
during that period, provided, however, that if Executive secures other employment during the period that Section 5.1, Section 5.2 and 5.3
remains in effect pursuant to this Section 8.2, the Company will be entitled to set off, dollar for dollar, whatever is earned in such employment against the amount owed to Executive hereunder; provided, that if the total amount of the
benefits available to Executive under this Section 8.2, either alone or together with other payments which Executive has the right to receive from the Company, would constitute a “parachute payment” as defined in Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”), then the Company shall pay to Executive at the time of termination an additional amount such that the net amount retained by Executive, after deduction of the excise tax
imposed by Section 4999 of the Code and any federal, state and local income tax and excise tax imposed on such additional amount, shall be equal to the amount payable to the Executive under this Section 8.2 as originally determined prior to the
deduction of the excise tax, and 
  
 (c)
Executive’s rights under the Company’s benefit plans of general application shall be determined under the provisions of those plans. 
  
 9. Executive Solicitation. So long as Executive is an employee of the Company and for one (1) year thereafter, Executive shall not, directly
or indirectly, either for himself or for any other person or entity, directly or indirectly, solicit, induce or attempt to induce any employee of the Company to terminate his or her employment with the Company. 
  
 10. Miscellaneous. 
  
 10.1 Arbitration. Executive and the Company
shall submit to mandatory binding arbitration in any controversy or claim arising out of, or relating to, this Agreement or any breach hereof, provided, however, that the Company retains its right to, and shall not be prohibited,
limited or in any other way restricted from, seeking or obtaining equitable relief from a court having jurisdiction over the parties. Such arbitration shall be conducted in accordance with the commercial arbitration rules of the American Arbitration
Association in effect at that time, and judgment upon the determination or award rendered by the arbitrator may be entered in any court having jurisdiction thereof. 
  
 10.2 Severability. If any provision of this Agreement shall be found by any arbitrator or
court of competent jurisdiction to be invalid or unenforceable, then the parties hereby waive such provision to the extent that it is found to be invalid or unenforceable and to the extent that to do so would not deprive one of the parties of the
substantial benefit of its bargain. Such provision shall, to the extent allowable by law and the preceding sentence, be modified by such arbitrator or court so that it becomes enforceable and, as modified, shall be enforced as any other provision
hereof, all the other provisions continuing in full force and effect. 
  
 10.3 Remedies. The Company and Executive acknowledge that the service to be provided by Executive is of a special, unique, unusual, extraordinary and intellectual character, which gives it peculiar value
the loss of which cannot be reasonably or adequately compensated in damages in an action at law. Accordingly, Executive hereby consents and agrees that for any breach or violation by Executive of any of the provisions of this Agreement including,
without limitation, Section 3, a restraining order and/or injunction may be issued against Executive, in addition to any other rights and remedies the Company may have, at law or equity, including without limitation the recovery of money damages.

  

 4 

 10.4 No Waiver. The failure by either party at any time to require
performance or compliance by the other of any of its obligations or agreements shall in no way affect the right to require such performance or compliance at any time thereafter. The waiver by either party of a breach of any provision hereof shall
not be taken or held to be a waiver of any preceding or succeeding breach of such provision or as a waiver of the provision itself. No waiver of any kind shall be effective or binding, unless it is in writing and is signed by the party against whom
such waiver is sought to be enforced. 
  
 10.5
Assignment. This Agreement and all rights hereunder are personal to Executive and may not be transferred or assigned by Executive at any time. The Company may assign its rights, together with its obligations hereunder, to any parent,
subsidiary, affiliate or successor, or in connection with any sale, transfer or other disposition of all or substantially all of its business and assets, provided, however, that any such assignee assumes the Company’s obligations
hereunder. 
  
 10.6 Withholding.
All sums payable to Executive hereunder shall be reduced by all federal, state, local and other withholding and similar taxes and payments required by applicable law. 
  
 10.7 Entire Agreement. This Agreement constitutes the entire and only agreement between the
parties relating to employment of Executive with the Company, and this Agreement supersedes and cancels any and all previous contracts, arrangements or understandings with respect thereto. 
  
 10.8 Amendment. This Agreement may be amended,
modified, superseded, cancelled, renewed or extended only by an agreement in writing executed by both parties hereto. 
  
 10.9 Notices. All notices and other communications required or permitted under this Agreement shall be in writing and hand
delivered, sent by telecopier, sent by certified first class mail, postage pre-paid, or sent by nationally recognized express courier service. Such notices and other communications shall be effective upon receipt if hand delivered or sent by
telecopier, five (5) days after mailing if sent by mail, and one (l) day after dispatch if sent by express courier, to the following addresses, or such other addresses as any party shall notify the other parties: 
  

			
	 If to the Company:
	  	Digital Music Group, Inc.
	 	  	1545 River Park Drive, Suite 210
	 	  	Sacramento, CA 95815
		
	 Phone:
	  	916-239-6010
		
	 Fax:
	  	916-239-6018
		
	 Attention:
	  	Chief Executive Officer
		
	 If to Executive:
	  	Anders Brown
	 	  	________________________________
	 	  	________________________________
		
	 Phone:
	  	________________________________
		
	 Fax:
	  	________________________________

  

 5 

 10.10 Binding Nature. This Agreement shall be binding upon, and inure to
the benefit of, the successors and personal representatives of the respective parties hereto. 
  
 10.11 Headings. The headings contained in this Agreement are for reference purposes only and shall in no way affect the
meaning or interpretation of this Agreement. In this Agreement, the singular includes the plural, the plural included the singular, the masculine gender includes both male and female referents, and the word “or” is used in the inclusive
sense. 
  
 10.12 Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which, taken together, constitute one and the same agreement. 
  
 10.13 Governing Law. This Agreement and the rights and obligations of the parties hereto shall
be construed in accordance with the laws of the State of California, without giving effect to the principles of conflict of laws. 
  
 IN WITNESS WHEREOF, the Company and Executive have executed this Agreement as of the date first above written. 
  

									
	“COMPANY”	 	 	 	“EXECUTIVE”
			
	/s/    STEVE
COLMAR        	 	 	 	/s/    ANDERS
BROWN        
					
	 By:
	 	Steve Colmar	 	 	 	 By:
	 	Anders Brown

  

 6 

 DIGITAL MUSIC GROUP, INC. 

 
 EXHIBIT A 
 TO EMPLOYMENT AGREEMENT 
 BETWEEN DIGITAL MUSIC GROUP, INC AND 

ANDERS BROWN DATED SEPTEMBER 13, 2005 
  
 As a condition of my employment with DIGITAL MUSIC GROUP, INC., its subsidiaries, affiliates,
successors or assigns (together the “Company”), and in consideration of my employment with the Company and my receipt of the compensation now and hereafter paid to me by Company, I agree to the following: 
  
 1. At-Will Employment. I UNDERSTAND AND ACKNOWLEDGE THAT MY
EMPLOYMENT WITH THE COMPANY IS SUBJECT TO THAT CERTAIN EMPLOYMENT AGREEMENT DATED SEPTEMBER 13, 2005, AND TO WHICH THIS EXHIBIT A IS ATTACHED. I ACKNOWLEDGE THAT THIS EMPLOYMENT RELATIONSHIP MAY BE TERMINATED AT ANY TIME, WITH OR WITHOUT GOOD CAUSE
OR FOR ANY OR NO CAUSE, AT THE OPTION EITHER OF THE COMPANY OR MYSELF, WITH OR WITHOUT NOTICE SUBJECT TO THE TERMS AND CONDITIONS OF SAID EMPLOYMENT AGREEMENT. 
  

2. Confidential Information. 
  
 (a) Company Information. I agree at all times during the term of my employment and thereafter, to hold in strictest
confidence, and not to use, except for the benefit of the Company, or to disclose to any person, firm or corporation without written authorization of the Board of Directors of the Company, any Confidential Information of the Company. I understand
that “Confidential Information” means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, customer lists and customers
(including, but not limited to, customers of the Company on whom I called or with whom I became acquainted during the term of my employment), markets, software, developments, inventions, processes, formulas, technology, designs, drawings,
engineering, hardware configuration information, marketing, finances or other business information disclosed to me by the Company either directly or indirectly in writing, orally or by drawings or observation of parts or equipment. I further
understand that Confidential Information does not include any of the foregoing items which has become publicly known and made generally available through no wrongful act of mine or of others who were under confidentiality obligations as to the item
or items involved or improvements or new versions thereof. 
  
 (b) Former Employer Information. I agree that I will not, during my employment with the Company, improperly use or disclose any proprietary information or trade secrets of any former or concurrent
employer or other person or entity and that I will not bring onto the premises of the Company any unpublished document or proprietary information belonging to any such employer, person or entity unless consented to in writing by such employer,
person or entity. 

 (c) Third Party Information. I recognize that the Company has received and
in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. I agree to
hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out my work for the Company consistent with the Company’s
agreement with such third party. 
  
 3. Inventions.

  
 (a) Inventions Retained and
Licensed. I have attached hereto, as Exhibit A, a list describing all inventions, original works of authorship, developments, improvements, and trade secrets which were made by me prior to my employment with the Company (collectively
referred to as “Prior Inventions”), which belong to me, which relate to the Company’s proposed business, products or research and development, and which are not assigned to the Company hereunder; or, if no such list is
attached, I represent that there are no such Prior Inventions. If in the course of my employment with the Company, I incorporate into a Company product, process or machine a Prior Invention owned by me or in which I have an interest, the Company is
hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use and sell such Prior Invention as part of or in connection with such product, process or machine. 
  
 (b) Assignment of Inventions. I agree that I
will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all my right, title, and interest in and to any and all inventions,
original works of authorship, developments, concepts, improvements, designs, discoveries, ideas, trademarks or trade secrets, whether or not patentable or registrable under copyright or similar laws, which I may solely or jointly conceive or develop
or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time I am in the employ of the Company (collectively referred to as “Inventions”), except as provided in Section 3(f) below. I
further acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of and during the period of my employment with the Company and which are protectible by copyright are “works made
for hire,” as that term is defined in the United States Copyright Act. I understand and agree that the decision whether or not to commercialize or market any invention developed by me solely or jointly with others is within the Company’s
sole discretion and for the Company’s sole benefit and that no royalty will be due to me as a result of the Company’s efforts to commercialize or market any such invention. 
  
 (c) Inventions Assigned to the United States. I agree to assign to the United States
government all my right, title, and interest in and to any and all Inventions whenever such full title is required to be in the United States by a contract between the Company and the United States or any of its agencies. 
  
 (d) Maintenance of Records. I agree to keep
and maintain adequate and current written records of all Inventions made by me (solely or jointly with others) during the term of my employment with the Company. The records will be in the form of notes, sketches, drawings, and 

  

 -2- 

 
any other format that may be specified by the Company. The records will be available to and remain the sole property of the Company at all times. 

 
 (e) Patent and Copyright Registrations. I
agree to assist the Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating
thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which the Company
shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any
copyrights, patents, mask work rights or other intellectual property rights relating thereto. I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after
the termination of this Agreement. If the Company is unable because of my mental or physical incapacity or for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents or copyright
registrations covering Inventions or original works of authorship assigned to the Company as above, then I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for
and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if
executed by me. 
  
 (f) Exception to
Assignments. I understand that the provisions of this Agreement requiring assignment of Inventions to the Company do not apply to any invention which qualifies fully under the provisions of California Labor Code Section 2870 (attached hereto
as Exhibit B). I will advise the Company promptly in writing of any inventions that I believe meet the criteria in California Labor Code Section 2870 and not otherwise disclosed on Exhibit A. 
  
 4. Conflicting Employment. I agree that, during the term of my
employment with the Company, I will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved during the term of my employment, nor
will I engage in any other activities that conflict with my obligations to the Company. 
  
 5. Returning Company Documents. I agree that, at the time of leaving the employ of the Company, I will deliver to the Company (and will not keep in my possession, recreate or deliver to anyone else) any
and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items developed by me pursuant
to my employment with the Company or otherwise belonging to the Company, its successors or assigns, including, without limitation, those records maintained pursuant to paragraph 3(d). In the event of the termination of my employment, I agree to sign
and deliver the “Termination Certification” attached hereto as Exhibit C. 
  

 -3- 

 6. Notification of New Employer. In the event that I leave the employ of the Company, I
hereby grant consent to notification by the Company to my new employer about my rights and obligations under this Agreement. 
  
 7. Solicitation of Employees. I agree that for a period of twelve (12) months immediately following the termination of my relationship with
the Company for any reason, whether with or without cause, I shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company’s employees to leave their employment, or take away such employees, or attempt to
solicit, induce, recruit, encourage or take away employees of the Company, either for myself or for any other person or entity. 
  
 8. Conflict of Interest Guidelines. I agree to diligently adhere to the Conflict of Interest Guidelines attached as Exhibit D hereto.

  
 9. Representations. I agree to execute any
proper oath or verify any proper document required to carry out the terms of this Agreement. I represent that my performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by
me in confidence or in trust prior to my employment by the Company. I have not entered into, and I agree I will not enter into, any oral or written agreement in conflict herewith. 
  
 10. Arbitration and Equitable Relief. 
  
 (a) I agree that any and all past or present disputes with anyone (including the Company and any employee,
officer, director, shareholder or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from my employment with the Company or the termination of my employment with the Company shall be subject
to binding arbitration held in Sacramento County, California, under the Arbitration Rules set forth in California Code of Civil Procedure Section 1280 through 1294.2, including section 1283.05 (the “Rules”) and pursuant to
California law. A copy of the Rules is attached to this Agreement as Exhibit A. 
  
 (b) Disputes which I agree to arbitrate include any potential claims of harassment, discrimination or wrongful termination and any
statutory claims. I understand that this Agreement to arbitrate, the Rules and California law also apply to any disputes which the Company may have with me. 
  
 (c) I agree that any arbitration will be held before an arbitrator from a list provided by JAMS (Judicial Arbitration and Mediation
Service) Endispute. To initiate arbitration, I may either contact the Company’s Human Resources Department for a form or contact JAMS directly. To choose an arbitrator, each party to the arbitration will select five names from the list, and
beginning with me, will alternatively strike names from the list until a single arbitrator is remaining who is available to decide the dispute. I understand that the Company will pay for any administrative or hearing fees charged by the arbitrator
or JAMS. 
  

 -4- 

 (d) I agree that the arbitrator shall have the power to decide any motions brought by any
party to the arbitration, including motions requesting that a judgment be awarded on any claims raised in arbitration. I also agree that the arbitrator shall have the power to award any remedies, including attorneys’ fees and costs, available
under applicable law. 
  
 (e) In addition to the
right under the Rules to petition the court to confirm, correct or vacate the arbitrator’s award, I agree that any party to the arbitration may appeal the arbitrator’s award in any appropriate court on any grounds which would exist for an
appeal of a decision of a trial court sitting without a jury. 
  
 (f) In addition to the right under the Rules to petition the court for provisional relief, I agree that any party may petition the court for injunctive relief, in lieu of or in addition to arbitration proceedings,
under any circumstances where an injunction (including a temporary restraining order) would be appropriate under state or federal law. 
  
 (g) I understand that this Agreement does not prohibit me from pursuing an administrative claim with a local, state or federal
administrative body such as the Department of Fair Employment and Housing, the Equal Employment Opportunity Commission or the workers’ compensation board. 
  

11. General Provisions. 
  
 (a) Governing Law; Consent to Personal Jurisdiction. This Agreement will be governed by the laws of the State of California.
I hereby expressly consent to the personal jurisdiction of the state and federal courts located in California for any lawsuit filed there against me by the Company arising from or relating to this Agreement. 
  
 (b) Entire Agreement. This Agreement sets
forth the entire agreement and understanding between the Company and me relating to the subject matter herein and supersedes all prior discussions between us. No modification of or amendment to this Agreement, nor any waiver of any rights under this
Agreement, will be effective unless in writing signed by the party to be charged. Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement. 
  
 (c) Severability. If one or more of the
provisions in this Agreement are deemed void by law, then the remaining provisions will continue in full force and effect. 
  
 (d) Successors and Assigns. This Agreement will be binding upon my heirs, executors, administrators and other legal
representatives and will be for the benefit of the Company, its successors, and its assigns. 
  
 12. I acknowledge and agree to each of the following items: 
  
 (a) I am executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else; and 
  

 -5- 

 (b) I have carefully read this Agreement and the Rules. I have asked any questions needed
for me to understand the terms, consequences and binding effect of this Agreement and fully understand them, including that I am waiving my right to a jury trial by signing below; and 
  
 (c) I sought the advice of an attorney of my choice if I wanted to before signing this Agreement.

  

					
			
	Date: September 23, 2005	 	 	 	 /s/ Anders Brown

	 	 	 	 	 Signature

			
	  	 	 	 	 Anders Brown

	 	 	 	 	 Name

  
 Witness 
  

 -6- 

  
 EXHIBIT A 

 
 LIST OF PRIOR INVENTIONS 
 AND ORIGINAL WORKS OF AUTHORSHIP 
  

					
	 Title

	  	 Date

	  	 Identifying Number or Brief Description

	 	  	 	  	 
	 	  	 	  	 
	 	  	 	  	 
	 	  	 	  	 
	 	  	 	  	 
	 	  	 	  	 
	 	  	 	  	 
	 	  	 	  	 
	 	  	 	  	 
	 	  	 	  	 
	 	  	 	  	 
	 	  	 	  	 
	 	  	 	  	 
	 	  	 	  	 
	 	  	 	  	 
	 	  	 	  	 
	 	  	 	  	 

  

	x	No inventions or improvements 

  

	 ̈	Additional Sheets Attached 

  
 Signature of Employee: /s/    ANDERS BROWN         
  
 Print Name of Employee:     Anders
Brown         
  
 Date: 9/23/05

  
 EXHIBIT B 

 
 CALIFORNIA LABOR CODE SECTION 2870 
 INVENTION ON OWN TIME EXEMPTION FROM AGREEMENT 
  
 “(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions
that either: 
  
 (1) Relate at the time of
conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or 
  
 (2) Result from any work performed by the employee for the employer. 
  
 (b) To the extent a provision in an employment agreement purports to require
an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.” 

  
 EXHIBIT C 

 
 DIGITAL MUSIC GROUP,
INC. 
  
 TERMINATION CERTIFICATION

  
 This is to certify that I do not have in my possession,
nor have I failed to return, any devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned
items belonging to DIGITAL MUSIC GROUP, INC., its subsidiaries, affiliates, successors or assigns (together, the “Company”). 
  
 I further certify that I have complied with all the terms of the
Company’s At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement signed by me, including the reporting of any inventions and original works of authorship (as defined therein), conceived or made by me
(solely or jointly with others) covered by that agreement. 
  
 I
further agree that, in compliance with the At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement, I will preserve as confidential all trade secrets, confidential knowledge, data or other proprietary information
relating to products, processes, know-how, designs, formulas, developmental or experimental work, computer programs, data bases, other original works of authorship, customer lists, business plans, financial information or other subject matter
pertaining to any business of the Company or any of its employees, clients, consultants or licensees. 
  
 I further agree that for twelve (12) months from this date, I will not hire any employees of the Company and I will not solicit, induce, recruit or
encourage any of the Company’s employees to leave their employment. 
  
 Date:

  

	
	
	 
	 (Employee’s Signature)

  

	
	
	 
	 (Type/Print Employee’s Name)

  
 EXHIBIT D 

 
 DIGITAL MUSIC GROUP,
INC. 
  
 CONFLICT OF INTEREST GUIDELINES

  
 It is the policy of DIGITAL
MUSIC GROUP, INC. to conduct its affairs in strict compliance with the letter and spirit of the law and to adhere to the highest principles of business ethics. Accordingly, all officers, employees and
independent contractors must avoid activities which are in conflict, or give the appearance of being in conflict, with these principles and with the interests of the Company. The following are potentially compromising situations which must be
avoided. Any exceptions must be reported to the President and written approval for continuation must be obtained. 
  
 1. Revealing confidential information to outsiders or misusing confidential information. Unauthorized divulging of information is a violation of this
policy whether or not for personal gain and whether or not harm to the Company is intended. (The At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement elaborates on this principle and is a binding agreement.)

  
 2. Accepting or offering substantial gifts, excessive
entertainment, favors or payments which may be deemed to constitute undue influence or otherwise be improper or embarrassing to the Company. 
  
 3. Participating in civic or professional organizations that might involve divulging confidential information of the Company. 
  
 4. Initiating or approving personnel actions affecting reward or punishment
of employees or applicants where there is a family relationship or is or appears to be a personal or social involvement. 
  
 5. Initiating or approving any form of personal or social harassment of employees. 
  
 6. Investing or holding outside directorship in suppliers, customers, or competing companies, including financial
speculations, where such investment or directorship might influence in any manner a decision or course of action of the Company. 
  
 7. Borrowing from or lending to employees, customers or suppliers. 
  
 8. Acquiring real estate of interest to the Company. 
  
 9. Improperly using or disclosing to the Company any proprietary information or trade secrets of any former or concurrent
employer or other person or entity with whom obligations of confidentiality exist. 

 10. Unlawfully discussing prices, costs, customers, sales or markets with competing companies or their
employees. 
  
 11. Making any unlawful agreement with distributors
with respect to prices. 
  
 12. Improperly using or authorizing
the use of any inventions which are the subject of patent claims of any other person or entity. 
  
 13. Engaging in any conduct which is not in the best interest of the Company. 
  
 Each officer, employee and independent contractor must take every necessary action to ensure compliance with these
guidelines and to bring problem areas to the attention of higher management for review. Violations of this conflict of interest policy may result in discharge without warning. 

 AMENDMENT NO. 1 
 TO 
 EMPLOYMENT AGREEMENT 
 This Amendment No. 1 (this “Amendment”) is entered into as of September 10, 2006 between Digital Music Group, Inc., a Delaware
corporation (“DMGI”) and Anders Brown, a resident of Washington (“Executive”), to amend certain provisions of the Employment Agreement (the “Agreement”) dated as of September 13, 2005, by and
between DMGI and Executive. 
 In consideration of the promises and the terms and conditions set forth in this Amendment, the parties agree
as follows: 
 1. Amendment. Section 8.2(b) of the Agreement is deleted in its entirety and replaced with the following:

 “(b) for a period of six (6) months after the Effective Date, the Company shall continue to pay Executive his base salary under
Section 5.1 above at Executive’s then-current salary, his benefits under Section 5.2 and any bonus due to Executive pursuant to Section 5.3, less applicable withholding taxes, payable on the Company’s normal payroll dates
during that period; provided, that if the total amount of the benefits available to Executive under this Section 8.2, either alone or together with other payments which Executive has the right to receive from the Company, would
constitute a “parachute payment” as defined in Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), then the Company shall pay to Executive at the time of termination an additional amount such
that the net amount retained by Executive, after deduction of the excise tax imposed by Section 4999 of the Code and any federal, state and local income tax and excise tax imposed on such additional amount, shall be equal to the amount payable
to the Executive under this Section 8.2 as originally determined prior to the deduction of the excise tax, and” 
 2.
Miscellaneous. 
 2.1 Entire Agreement. The Amendment, as amended by this Amendment constitutes the entire agreement
between the parties relating to employment of Executive with DMGI. 
 2.2 Amendment. This Amendment may not be amended or
modified, except by an agreement in writing executed by both parties hereto and approved by the Board of Directors of DMGI or its Compensation Committee. 
 2.3 Binding Nature. This Amendment shall be binding upon, and inure to the benefit of, the successors and personal representatives of the respective parties hereto. 
 2.4 Counterparts. This Amendment may be executed in two or more counterparts, including by facsimile, each of which shall be deemed to be
an original but all of which, taken together, constitute one and the same agreement. 
  

 - 1 - 

 2.5 Governing Law. This Amendment and the rights and obligations of the parties hereto
shall be construed in accordance with the laws of the State of California, without giving effect to the principles of conflict of laws. 
 IN
WITNESS WHEREOF, DMGI and Executive have executed this Amendment as of the date first above written. 
  

							
	“DMGI”	 		 	“EXECUTIVE”
				
	By:	 	 /s/ Mitchell Koulouris
	 		 	 /s/ ANDERS BROWN

	Name:	 	Mitchell Koulouris	 		 	Anders Brown
	Title:	 	Chief Executive Officer	 		 	

  

 - 2 -Amendment No. 1 to Employment Agreement

 Exhibit 10.17 
 EMPLOYMENT AGREEMENT 
 This Employment Agreement (the “Agreement”) is entered
into as of March 22, 2006 (the “Effective Date”), between Digital Music Group, Inc., a Delaware corporation (“DMGI”), and Karen B. Davis, a resident of California (the “Executive”). 

In consideration of the promises and the terms and conditions set forth in this Agreement, the parties agree as follows: 
 1. Position and Duties. During the term of this Agreement, DMGI will employ Executive, and Executive will serve DMGI as its Chief Financial
Officer and Secretary. As such, Executive shall have such responsibilities, duties and authority as reasonably accorded to and expected of a Chief Financial Officer and Secretary. This will include day-to-day responsibility for financial matters
involving DMGI, including ultimate responsibility for staffing of and managing the personnel within the finance, treasury, taxation, accounting, information systems and investor relations functions and for establishing and monitoring the corporate
internal control environment and external and internal financial and tax reporting by DMGI. It will also include maintaining professional relationships and serving as a principal contact with commercial lenders, investment bankers, investors and the
investment community, and external auditors of DMGI, and maintaining corporate records, including the Minute Book for meetings of the Board of Directors. Additional or different duties, titles or positions may from time to time be assigned to or
taken from Executive by the Chief Executive Officer and/or the Board of Directors of DMGI, provided that any such changes are consistent and compatible with Executive’s experience, background and managerial skills; refer to Sections 7.5 and 8.4
hereof for additional rights of the Executive in the event of such a change in her title, duties or responsibilities. Executive will report directly to the Chief Executive Officer of DMGI and will also have certain reporting responsibilities to and
interaction with the Chairman of DMGI’s Audit Committee and the Chairman of DMGI’s Board of Directors. 
 2. Performance of
Duties. Executive will be based at and perform her duties under this Agreement primarily at the corporate offices of DMGI. Executive hereby represents and warrants that she is free to enter into and fully perform this Agreement and the
agreements referred to herein without breach of any agreement or contract to which she is a party or by which she is bound. Executive hereby further represents and warrants that she has provided DMGI with copies of any employment, confidentiality,
non-competition or non-solicitation agreements currently binding upon her. 
 3. Exclusive Service. Executive shall devote her
full time and efforts (from a business perspective) exclusively to this employment and apply all her skills, effort and experience to the performance of her duties and advancing DMGI’s interests. Executive shall not be engaged in any other
business activity pursued for salary, fees, profit, gain or other pecuniary advantage if such activity interferes with Executive’s duties and responsibilities hereunder. Executive will not engage in any professional consulting activity nor
serve on any corporate boards except with the prior written approval of DMGI’s Board of Directors, or at the direction of DMGI’s Board of Directors, and Executive will otherwise refrain from engaging in any activities inconsistent or in
conflict with the performance of her duties hereunder. However, the foregoing limitations shall not be construed as prohibiting Executive from making personal 

  

 1 

 
investments in a passive form or manner that will not require her services in the operation or affairs of the companies or enterprises in which such
investments are made. 
 4. Compliance with Policies. DMGI has established policies, procedures and practices, and Executive
will comply with and be bound by all such policies, procedures and practices from time to time in effect during Executive’s employment. Executive will be employed in a position of leadership within DMGI and will be expected to faithfully adhere
to, execute and fulfill all corporate policies established by DMGI, now and in the future, in addition to monitoring compliance with such policies by other officers, employees and directors, particularly DMGI’s Code of Business Conduct. 

 5. Confidential or Proprietary Information and Inventions. 
 5.1 Company Information. Executive agrees at all times during the term of her employment and thereafter, to hold in
strictest confidence and not to use, except for the benefit of DMGI, or to disclose to any person, firm or corporation (except within the scope of her employment) without written authorization of the Chief Executive Officer or Chairman of the Board
of Directors of DMGI, any Confidential Information of DMGI. Executive understands that “Confidential Information” means any DMGI financial or operating information, contents of music libraries, data bases, technical data, trade
secrets or know-how, including, but not limited to, research, product plans, products and processes, services, customer lists, channel partner lists, target acquisition lists and customers, channel partners and target acquisitions (including, but
not limited to, customers, channel partners and target acquisitions of DMGI on whom Executive called or with whom Executive became acquainted during the term of her employment), market data, software, inventions, music processing techniques,
formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, financial reports or other business information disclosed to Executive by DMGI or prepared by Executive during her employment by DMGI, either
directly or indirectly, in writing, orally, by drawings, or by observation of documents, technology or equipment. DMGI and Executive acknowledge that Confidential Information does not include any of the foregoing items which have become publicly
known and made generally available through no wrongful act of Executive’s or of others who were under confidentiality obligations as to the item or items involved. 
 5.2 Third Party Information. Executive recognizes that DMGI has received and in the future will receive from third
parties (including, but not limited to, vendors, customers, channel partners and acquisition targets) their confidential or proprietary information subject to a duty on DMGI’s part to maintain the confidentiality of such information and to use
it only for certain limited purposes. Executive agree to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out her
work for DMGI consistent with DMGI’s agreement with such third party. 
 5.3 No Prior Inventions. Executive
represents that, as of the Effective Date of this Agreement, she has no inventions, original works of authorship, developments, improvements or trade secrets which were made by her prior to her employment with DMGI, which relate to DMGI’s
business, operations, digitization processes, music library or research and development. 
  

 2 

 5.4 Future Inventions. DMGI shall own all right, title and interest
(including patent rights, copyrights, trade secret rights, mask work rights, sui generis database rights and all other intellectual and industrial property rights of any sort) to any and all inventions (whether or not patentable), works of
authorship, mask works, designs, know-how, ideas and information made or conceived or reduced to practice, in the whole or in part, by Executive during the term of her employment with DMGI to and only to the fullest extent allowed by California
Labor Code Section 2870 (attached hereto as Exhibit A) (collectively referred to herein as “Inventions”). Executive agrees that she will promptly make full written disclosure to DMGI, will hold in trust for the sole right and
benefit of DMGI, and hereby assign to DMGI or its designee, all her right, title, and interest in and to any and all Inventions, except as provided in Section 5.7 below. To the extent allowed by law, this section includes all right of
paternity, integrity, disclosure and withdrawal and any other rights that may be known as or referred to as “moral rights” or the like. To the extent Executive retains any such moral rights under applicable law, Executive hereby ratifies
and consents to any action that may be taken with respect to such moral rights by or authorized by DMGI and agrees not to assert any moral rights with respect thereto. Executive will confirm any such ratifications, consents and agreements from time
to time as requested by DMGI. 
 5.5 Maintenance of Records. Executive agrees to keep and maintain adequate and
current written records of all Inventions made by her (solely or jointly with others) during the term of her employment with DMGI. The records will be in the form of notes, sketches, drawings and any other format that may be specified by DMGI. The
records will be available to and remain the sole property of DMGI at all times. 
 5.6 Patent and Copyright
Registrations. Executive agrees to assist DMGI, or its designee, at DMGI’s expense, in every proper way to secure DMGI’s rights in any Inventions and any copyrights, patents, mask work rights or other intellectual property rights
relating thereto in any and all countries, including the disclosure to DMGI of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which DMGI shall
reasonably deem necessary in order to apply for and obtain such rights and in order to assign and convey to DMGI, its successors, assigns and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights,
patents, mask work rights or other intellectual property rights relating thereto. Executive further agrees that her obligation to execute or cause to be executed, when it is in her power to do so, any such instrument or papers shall continue after
the termination of this Agreement. If DMGI is unable because of her mental or physical incapacity or for any other reason to secure her signature to apply for or to pursue any application for any United States or foreign patents or copyright
registrations covering Inventions or original works of authorship assigned to DMGI as above, then Executive hereby irrevocably designates and appoints DMGI and its duly authorized officers and agents as her agent and attorney in fact, to act for and
in her behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the processing and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if
executed by Executive. 
 5.7 Exception to Assignments. Executive understands that the provisions of this
Agreement requiring assignment of Inventions to DMGI do not apply to any invention which 

  

 3 

 
qualifies fully under the provisions of California Labor Code Section 2870. Executive will advise DMGI promptly in writing of any Inventions that
Executive believes meet the criteria in California Labor Code Section 2870. 
 6. Compensation and Benefits. 

6.1 Base Salary. Beginning on the Effective Date, DMGI shall pay Executive a base salary of one hundred and thirty
thousand dollars ($130,000) per year (“Base Salary”), payable as earned in accordance with DMGI’s customary payroll practice. On at least an annual basis, the Chief Executive Officer and the Compensation Committee of the Board
of Directors will review Executive’s performance and may make increases to such base salary if, in their sole discretion, any such increase is warranted. No reductions will be made to Executive’s base salary unless it is part of a
company-wide expense reduction plan authorized by the Board of Directors of DMGI, applying ratably to the base salaries of all executive officers and to the fees earned by directors; refer to Sections 7.5 and 8.4 hereof for additional rights of the
Executive in the event of such a company-wide reduction in base salaries. 
 6.2 Additional Benefits. Executive
will be eligible to participate in DMGI’s employee benefit plans of general application in effect from time to time, as amended, including without limitation, those plans covering pension and profit sharing, executive perquisites, stock
purchases, and those plans covering life, health, and dental insurance in accordance with the rules established for individual participation in any such plan and applicable law. Once Executive is eligible for health and dental insurance coverage
hereunder, Executive’s spouse and dependents shall also be eligible for such coverage in accordance with the terms of DMGI’s policies and plans and the contracts with third party providers. In addition, beginning on the Effective Date,
Executive will receive such other benefits, including vacation, holidays and sick leave, as DMGI generally provides to its senior officers. 
 6.3 Incentive Bonus Plan. Subject to the terms of DMGI’s management incentive bonus plan, once created and as amended from time to time (the “Bonus Plan”), Executive will be
eligible to earn cash bonuses on an annual basis, payable as determined under the Bonus Plan, but not until such time as the Compensation Committee of the Board of Directors of DMGI determines the targets, milestones, performance objectives and
measurement criteria to be met each fiscal year and approves the payment of specific cash bonuses after the end of each fiscal year based upon the objective calculations and discretionary judgments as called for in the Bonus Plan. 
 6.4 Equity Grants and Awards. On the Effective Date, Executive shall receive a grant under DMGI’s Amended and Restated
2005 Stock Plan (the “Stock Plan”) of (a) 15,000 shares of restricted common stock of DMGI, with 5,000 shares to vest on 6-month anniversary, 5,000 shares to vest on the first anniversary, and 5,000 shares to vest on the second
anniversary of the date this Agreement, and (b) options to purchase 75,000 shares of DMGI common stock at a price per share equal to the fair market value of DMGI’s common stock on the Effective Date, vesting over four (4) years with
25% of such option shares vesting on the first anniversary of the date this Agreement and thereafter 1/48th of such option shares vesting at the conclusion of each additional month of service for the next thirty-six (36) months, in each case in
accordance with the terms of the Stock Plan and the applicable award agreements thereunder. 

  

 4 

 
The equity awards described above will be conditional upon Executive entering into individual award agreements pursuant to and as required under the terms of
the Stock Plan. 
 6.5 Expenses. DMGI will reimburse Executive for all reasonable and necessary travel and other
expenses incurred by Executive in connection with DMGI’s business, provided that such expenses are in accordance with DMGI’s applicable expense reporting and reimbursement policy and are properly documented and accounted for in accordance
with the requirements of the Internal Revenue Service. 
 6.6 Vacation. Executive will be entitled to paid
vacation as set forth in DMGI’s policies and/or employee manual (as they may be applicable to DMGI’s executive officers and key employees), as approved by the Board of Directors. 
 7. Term and Termination. This Agreement will commence on the Effective Date and will continue until the earlier of two (2) years after
the Effective Date or when terminated pursuant to any one of the following: 
 7.1 Death. The death of Executive
shall immediately terminate this Agreement. 
 7.2 Disability. If, as a result of incapacity due to physical or
mental illness or injury, Executive shall have been absent from her full-time duties hereunder or unable to materially fulfill her full-time duties hereunder for three (3) consecutive months, then thirty (30) days after receiving written
notice (which notice may occur before or after the end of such three (3) month period, but which shall not be effective earlier than the last day of such three (3) month period), DMGI may terminate Executive’s employment hereunder
provided Executive is unable to resume her full-time duties at the conclusion of such notice period. Also, Executive may initiate termination of her employment under this Section 7.2 if her health should become impaired to an extent that makes
the continued performance of her duties hereunder hazardous to her physical or mental health, provided that Executive shall have furnished DMGI with a written statement from a qualified doctor to such effect and provided, further, that, at
DMGI’s request made within ten (10) days from the date of receipt of such written statement, Executive shall submit on a timely basis to an examination by a qualified doctor selected by DMGI who is acceptable to Executive or
Executive’s doctor (such acceptability will not be unreasonably withheld) and such doctor shall have concurred with the conclusion of Executive’s doctor. 
 7.3 For Cause. DMGI may determine, if such determination is made in good faith by its Board of Directors, that it will
terminate Executive’s employment under this Agreement for “cause,” which shall include: (a) Executive’s material and irreparable breach of this Agreement; (b) Executive’s gross negligence or gross insubordination
in the performance or intentional nonperformance (continuing for ten (10) days after receipt of written notice from DMGI of the need to cure) of any of Executive’s assigned duties and responsibilities hereunder; (c) Executive’s
willful dishonesty, fraud, misrepresentation or misconduct with respect to the business and affairs of DMGI which adversely affects the operations, reputation or business prospects of DMGI; (d) Executive’s willful, reckless or grossly
negligent violation of a material provision of DMGI’s Code of Business Conduct or other written corporate policy; (e) Executive’s willful or reckless violation of any federal, state or local law or regulation applicable to DMGI’s
business; (f) Executive’s conviction of any felony crime; (g) Executive entering a 

  

 5 

 
plea of nolo contendere to any crime involving any act of moral turpitude; or (h) chronic alcohol abuse or illegal drug use by Executive
(“Termination for Cause”). 
 7.4 Without Cause. This Agreement may be terminated by DMGI
thirty (30) days after the effective date of a written notice sent to Executive stating that DMGI is terminating her employment, without cause, which notice can be given by DMGI at any time after the Effective Date at DMGI’s sole
discretion, for any reason or for no reason (“Termination Without Cause”). 
 7.5 For Good
Reason. Executive may elect to terminate her employment with DMGI on the effective date of a written notice sent to DMGI from Executive stating that she is terminating employment for “good reason,” which shall include:
(a) Executive’s position with DMGI is changed in a manner which materially reduces her level of responsibility or materially changes the overall nature of her duties and responsibilities or Executive is significantly demoted, in any case
so as to no longer be serving in a Chief Financial Officer capacity to DMGI, and the continuance thereof for a period of ten (10) days after written notice from Executive that she is unwilling to accept such changes in duties or
responsibilities; provided, however, that a reduction in position or responsibilities solely by virtue of DMGI being acquired and made part of a larger entity (as, for example, when the Chief Financial Officer remains as such following a change of
control but is not made the Chief Financial Officer of the acquiring corporation) will not constitute “good reason”; (b) Executive’s level of compensation (including base salary, fringe benefits and participation in
non-discretionary bonus programs under which awards are payable pursuant to objective financial or performance standards) is reduced by more than fifteen percent (15%) at any one time or in the aggregate over any twenty-four (24) month
period, without her consent; or (c) Executive is required to relocate her principal office of employment with DMGI by more than fifty (50) miles from the location at the Effective Date without her consent (“Termination for Good
Reason”). 
 7.6 Voluntary. This Agreement may be terminated by Executive on the effective date of a
written notice sent to DMGI from Executive stating that Executive is electing to terminate her employment with DMGI without “good reason” as defined in Section 7.5 hereof (“Voluntary Termination”). 
 8. Effect of Termination. 
 8.1 Termination as a Result of Death. In the event of any termination of this Agreement pursuant to Section 7.1 hereof, no severance compensation is due to Executive’s estate. 
 8.2 Termination as a Result of Disability. In the event of any termination of this Agreement pursuant to Section 7.2
hereof, Executive shall receive from DMGI in a lump-sum payment due within ten (10) business days of the effective date of termination, the base salary at the rate then in effect for whatever time period is remaining under the term of this
Agreement or for six (6) months, whichever amount is lesser. In the event of a disability termination pursuant to Section 7.2 hereof, Executive will not be eligible to receive any ongoing benefits subsequent to the effective date of
termination nor will there be any proration of any potential annual incentive bonus under Section 6.3 hereof for the fiscal year in which such termination occurs. 
  

 6 

 8.3 Termination for Cause or Voluntary Termination. In the event of any
termination of this Agreement pursuant to Sections 7.3 or 7.6 hereof, DMGI shall pay Executive the compensation and benefits otherwise payable to Executive under Section 6 hereof through the date of termination, except that there will be no
proration of any potential annual incentive bonus under Section 6.3 hereof for the fiscal year in which such termination occurs. 
 8.4 Termination Without Cause or for Good Reason. In the event of any termination of this Agreement pursuant to Sections 7.4 or 7.5 hereof: 
 (a) DMGI shall pay Executive the compensation and benefits otherwise payable to Executive under Section 6 through the date of
termination; and 
 (b) for a period of twelve (12) months after the effective date of termination, DMGI shall continue
to pay Executive her base salary under Section 6.1 hereof at Executive’s then-current salary and maintain her benefits under Section 6.2 hereof. If such benefits contemplated under Section 6.2 hereof cannot be maintained under
the provisions and eligibility of the specific plans (see Section 8.5 below), then DMGI shall pay during the post-termination period the cash equivalent of the benefit under any such plan. In addition, for the fiscal year of termination, DMGI
shall pay the pro rata portion of the annual incentive bonus otherwise due to Executive pursuant to Section 6.3 hereof, such pro rata bonus amount to be determined at the sole discretion of the Compensation Committee of the Board of Directors
based upon the targets, milestones, performance objectives and measurement criteria established for the fiscal year and DMGI’s and Executive’s, as the case may be, actual performance against such targets, milestones, performance objectives
and measurement criteria. In all cases, post-termination payments to Executive will be reduced for applicable withholding taxes and will be payable on DMGI’s normal payroll dates during that period, provided, however, that if Executive secures
other employment during the period that Sections 6.1, 6.2 and 6.3 hereof remain in effect pursuant to this Section 8.4, DMGI will be entitled to set off, dollar for dollar, whatever is earned in such employment against the amount owed to
Executive hereunder; provided, that if the total amount of the benefits available to Executive under this Section 8.4, either alone or together with other payments which Executive has the right to receive from DMGI, would constitute a
“parachute payment” as defined in Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), then DMGI shall pay to Executive at the time of termination an additional amount such that the net amount
retained by Executive, after deduction of the excise tax imposed by Section 4999 of the Code and any federal, state and local income tax and excise tax imposed on such additional amount, shall be equal to the amount payable to the Executive
under this Section 8.4 as originally determined prior to the deduction of the excise tax. Executive shall provide DMGI with prompt written notice of any other employment during the twelve (12) months after the effective date of
termination, together with the terms of compensation of such employment. 
 8.5 Rights under Stock Plan and Benefit
Plans. In the event of termination and the requirement for any benefits to be provided under this Section 8, Executive’s rights hereunder and under DMGI’s Stock Plan, which governs stock options and Restricted Stock awards,
and all other benefit plans of general application, including DMGI’s employee health and dental insurance coverage, shall be subject to and determined in accordance with the provisions and eligibility of those plans, the related award
agreements and the provisions of applicable law. 
  

 7 

 9. Return of DMGI Property. All records, documents, designs, patents, business plans,
financial information, manuals, correspondence, memoranda, data bases, lists and other property delivered to or compiled by Executive by or on behalf of DMGI or its representatives, vendors, customers, channel partners and acquisition targets which
pertain to the business of DMGI shall be and remain the property of DMGI and be subject at all times to its discretion and control. Upon termination of Executive’s employment for any reason, all such material which has been collected or
accumulated by Executive shall be delivered promptly to DMGI without request by it. 
 10. No Employee Solicitation. So long as
Executive is an employee of DMGI and for one (1) year thereafter, Executive shall not, directly or indirectly, either for herself or for any other person or entity, directly or indirectly, solicit, induce or attempt to induce any employee of
DMGI to terminate his or her employment with DMGI. 
 11. Miscellaneous. 
 11.1 Arbitration. Executive and DMGI agree that any unresolved dispute, controversy or claim arising out of, or relating to,
this Agreement or any alleged breach hereof shall be settled exclusively by binding arbitration, provided, however, that DMGI retains its right to, and shall not be prohibited, limited or in any other way restricted from, seeking or obtaining
equitable relief from a court having jurisdiction over the parties. Any such arbitration proceedings shall be conducted in Sacramento, California, in accordance with the commercial arbitration rules of the American Arbitration Association in effect
at that time. The arbitrator(s) shall not have the authority to add to, detract from or modify any provision hereof nor to award punitive damages to any injured party. The arbitrator(s) shall have the authority to order back-pay, severance
compensation, vesting of options or other restricted equity awards (or cash compensation in lieu of vesting), reimbursement of costs, including legal fees and other costs incurred to enforce this Agreement or to defend against charges brought
hereunder, and interest thereon in the event the arbitrator(s) determines that DMGI has breached this Agreement. The arbitrator(s) shall have the authority to order reimbursement of costs and any damages actually sustained by DMGI, including legal
fees and other costs incurred to enforce this Agreement or to defend against charges brought hereunder, and interest thereon in the event the arbitrator(s) determines that Executive has breached this Agreement. A decision by the arbitrator or a
majority of the members of an arbitration panel (not to exceed three (3) arbitrators) shall be final and binding, and judgment upon the determination or award rendered by the arbitrator(s) may be entered in any court having jurisdiction. The
direct expense of any arbitration proceeding shall initially be borne by DMGI, but the arbitrator(s) shall have the authority to reallocate such cost among the parties upon conclusion of the proceedings. 
 11.2 Severability. If any provision of this Agreement shall be found by any arbitrator or court of competent jurisdiction to
be invalid or unenforceable, then the parties hereby waive such provision to the extent that it is found to be invalid or unenforceable and to the extent that to do so would not deprive one of the parties of the substantial benefit of its bargain.
Such provision shall, to the extent allowable by law and the preceding sentence, be modified by such arbitrator or court so that it becomes enforceable and, as modified, shall be enforced as any other provision hereof, all the other provisions
continuing in full force and effect. 
  

 8 

 11.3 Remedies. DMGI and Executive acknowledge that the service to be
provided by Executive is of a special, highly skilled, extraordinary and intellectual character, which gives it peculiar value the loss of which cannot be reasonably or adequately compensated in damages in an action at law. Accordingly, Executive
hereby consents and agrees that for any breach or violation by Executive of any of the provisions of this Agreement including, without limitation, Sections 3, 4, 5, 9 and 10 hereof, a restraining order and/or injunction may be issued against
Executive, in addition to any other rights and remedies DMGI may have, at law or equity, including without limitation the recovery of money damages. 
 11.4 No Waiver. The failure by either party at any time to require performance or compliance by the other of any of its obligations or agreements shall in no way affect the right to require such
performance or compliance at any time thereafter. The waiver by either party of a breach of any provision hereof shall not be taken or held to be a waiver of any preceding or succeeding breach of such provision or as a waiver of the provision
itself. No waiver of any kind shall be effective or binding, unless it is in writing and is signed by the party against whom such waiver is sought to be enforced. 
 11.5 Assignment. This Agreement and all rights hereunder are personal to Executive and may not be transferred or assigned by
Executive at any time. DMGI may assign its rights, together with its obligations hereunder, to any parent, subsidiary, affiliate or successor, or in connection with any sale, transfer or other disposition of all or substantially all of its business
and assets, provided, however, that any such assignee assumes DMGI’s obligations hereunder. 
 11.6
Withholding. All sums payable to Executive hereunder shall be reduced by all federal, state, local and other withholding and similar taxes and payments required by applicable law or by DMGI company policy and practice. 
 11.7 Entire Agreement. This Agreement constitutes the entire and only agreement between the parties relating to employment
of Executive with DMGI, and this Agreement supersedes and cancels any and all previous contracts, arrangements or understandings with respect thereto, whether verbal or in writing. 
 11.8 Amendment. This Agreement may not be amended or modified, except by an agreement in writing executed by both parties
hereto and approved by the Board of Directors of DMGI or its Compensation Committee. 
 11.9 Notices. All
notices and other communications required or permitted under this Agreement shall be in writing and hand delivered, sent by telecopier, sent by certified first class mail, postage pre-paid, or sent by nationally recognized express courier service.
Such notices and other communications shall be effective upon receipt if hand delivered or sent by telecopier, five (5) days after mailing if sent by mail, and one (l) day after dispatch if sent by express courier, to the following
addresses, or such other addresses as any party shall notify the other party: 
  

			
	 If to DMGI:
	  	 Digital Music Group, Inc.
 1545 River Park Drive,
Suite 210
 Sacramento, CA 95815

  

 9 

					
	 Phone:
	  	916-239-6010	  	
			
	 Fax:
	  	 916-239-6018
	  	
			
	 Attention:
	  	 Mitchell Koulouris, Chief Executive Officer
	  	
			
	 With copy to:
	  	 Chairman of the Board of DMGI
	  	
			
	 If to Executive:
	  	 Karen B. Davis
 15353 Clementia Circle
 Rancho Murieta, CA 95683
	  	
			
	 Phone:
	  	 916-354-4076
	  	
			
	 Fax:
	  	  	  	

 11.10 Binding Nature. This Agreement shall be binding upon, and
inure to the benefit of, the successors and personal representatives of the respective parties hereto. 
 11.11
Headings. The headings contained in this Agreement are for reference purposes only and shall in no way affect the meaning or interpretation of this Agreement. In this Agreement, the singular includes the plural, the plural included the
singular, the masculine gender includes both male and female referents and the word “or” is used in the inclusive sense. 
 11.12 Counterparts. This Agreement may be executed in two or more counterparts, including by facsimile, each of which shall be deemed to be an original but all of which, taken together, constitute one and the same agreement.

 11.13 Governing Law. This Agreement and the rights and obligations of the parties hereto shall be construed
in accordance with the laws of the State of California, without giving effect to the principles of conflict of laws. 
 IN WITNESS WHEREOF,
DMGI and Executive have executed this Agreement as of the date first above written. 
  

							
	“DMGI”	 		 	 “EXECUTIVE”

				
	By:	 	/s/ MITCHELL KOULOURIS	 		 	/s/ KAREN DAVIS
	Name:	 	Mitchell Koulouris	 		 	Karen B. Davis
	Title:	 	CEO	 		 	

  

 10 

 EXHIBIT A 
 CALIFORNIA LABOR CODE SECTION 2870 
 EMPLOYMENT AGREEMENTS; ASSIGNMENT OF RIGHTS

 “(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her
rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities or trade secret information except for those
inventions that either: 
 (1) Relate at the time of conception or reduction to practice of the invention to the
employer’s business, or actual or demonstrably anticipated research or development of the employer. 
 (2) Result from
any work performed by the employee for the employer. 
 (b) To the extent a provision in an employment agreement purports to require an
employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.” 
  

 11 

 AMENDMENT NO. 1 
 TO 
 EMPLOYMENT AGREEMENT 
 This Amendment No. 1 (this “Amendment”) is entered into as of September 10, 2006 between Digital Music Group, Inc., a Delaware
corporation (“DMGI”) and Karen B. Davis, a resident of California (“Executive”), to amend certain provisions of the Employment Agreement (the “Agreement”) dated as of March 22, 2006, by and
between DMGI and Executive. 
 In consideration of the promises and the terms and conditions set forth in this Amendment, the parties agree
as follows: 
 1. Amendment. Section 8.4(b) of the Agreement is deleted in its entirety and replaced with the following:

 “(b) for a period of twelve (12) months after the effective date of termination, DMGI shall continue to pay
Executive her base salary under Section 6.1 hereof at Executive’s then-current salary and maintain her benefits under Section 6.2 hereof. If such benefits contemplated under Section 6.2 hereof cannot be maintained under the
provisions and eligibility of the specific plans (see Section 8.5 below), then DMGI shall pay during the post-termination period the cash equivalent of the benefit under any such plan. In addition, for the fiscal year of termination, DMGI shall
pay the pro rata portion of the annual incentive bonus otherwise due to Executive pursuant to Section 6.3 hereof, such pro rata bonus amount to be determined at the sole discretion of the Compensation Committee of the Board of Directors based
upon the targets, milestones, performance objectives and measurement criteria established for the fiscal year and DMGI’s and Executive’s, as the case may be, actual performance against such targets, milestones, performance objectives and
measurement criteria. In all cases, post-termination payments to Executive will be reduced for applicable withholding taxes and will be payable on DMGI’s normal payroll dates during that period; provided, that if the total amount of the
benefits available to Executive under this Section 8.4, either alone or together with other payments which Executive has the right to receive from DMGI, would constitute a “parachute payment” as defined in Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”), then DMGI shall pay to Executive at the time of termination an additional amount such that the net amount retained by Executive, after deduction of the excise tax imposed by
Section 4999 of the Code and any federal, state and local income tax and excise tax imposed on such additional amount, shall be equal to the amount payable to the Executive under this Section 8.4 as originally determined prior to the
deduction of the excise tax.” 
 2. Miscellaneous. 
 2.1 Entire Agreement. The Amendment, as amended by this Amendment constitutes the entire agreement between the parties relating to
employment of Executive with DMGI. 
  

 - 1 - 

 2.2 Amendment. This Amendment may not be amended or modified, except by an agreement in
writing executed by both parties hereto and approved by the Board of Directors of DMGI or its Compensation Committee. 
 2.3 Binding
Nature. This Amendment shall be binding upon, and inure to the benefit of, the successors and personal representatives of the respective parties hereto. 
 2.4 Counterparts. This Amendment may be executed in two or more counterparts, including by facsimile, each of which shall be deemed to be an original but all of which, taken together, constitute one and
the same agreement. 
 2.5 Governing Law. This Amendment and the rights and obligations of the parties hereto shall be
construed in accordance with the laws of the State of California, without giving effect to the principles of conflict of laws. 
 IN WITNESS
WHEREOF, DMGI and Executive have executed this Amendment as of the date first above written. 
  

							
	“DMGI”	 		 	“EXECUTIVE”
				
	By:	 	 /s/ MITCHELL KOULOURIS
	 		 	 /s/ KAREN B. DAVIS

	Name:	 	Mitchell Koulouris	 		 	Karen B. Davis
	Title:	 	Chief Executive Officer	 		 	

  

 - 2 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}]]