Document:

Employment Agr - Kovacevic

    Exhibit
      10.12

    

    March
      9,
      2007

    

    Dragan
      Kovacevic

    

    Re:
      Offer
      of Employment

    
      
        

      

    

    

    Dear
      Dragan:

     

    We
      are
      pleased to inform you that after careful consideration, FLUID AUDIO NETWORK,
      INC., has decided to make you this offer of employment. This letter sets
      forth the terms of the offer which, if you accept, will govern your employment.

    

    Position;
      Duties.
      Your
      position will be Chief Technology Officer, reporting to the Chief Executive
      Officer of the Company.
      Your
      duties and responsibilities will be
      as
      designated by the Company. Your title may be modified to Chief Information
      Officer or a comparable title.

    

    Full
      Time Employment.
      The
      employment term will begin no later than May 1, 2007.

    

    Compensation.
      Your
      compensation will be $142,500.00 a year, paid twice monthly
      consistent with the Company's payroll practices. You will be eligible for
a
      bonus
      of up to 25% of your annual compensation, the terms of which will be mutually
      determined within 60 days following your start date. Your package will include
      participation in the health and other benefit plans of the Company pursuant
      to
      their terms as may be amended by the Company from time to time. You
      will
      be entitled to two-weeks' paid vacation (equivalent of 10 business days)
for
      each
      year of full employment. In addition, you will be granted 100,000 stock
      options.

     

    You
      will
      also receive reimbursement for relocation, up to $3,000.

    

    Employment
      at Will.
      Our
      employment relationship is terminable at will, which means
      that either you or the Company may terminate your employment at any time,
      and
      for any reason or for no reason. In the event that your employment with Fluid
      Audio Network, Inc. is terminated without cause, you will receive a severance
      payment in the amount equal to three months of your annual salary; by
      accepting this three month severance package, you agree to provide transitional
      management support during the three month period following your
      termination.

    

    
      
        
        

      

      
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    Confidentiality
      and Invention Assignment Agreement.
      You will
      be subject to the Company's Proprietary Information and Inventions Agreement,
      which you may
      have
      already signed or is enclosed with this letter and must be signed and returned
      by you before any employment relationship will be effective.

    

    Certain
      Acts.
      During
      employment with the Company, you will not do anything to compete
      with the Company's present or contemplated business, nor will you plan
or
      organize any competitive business
      activity.
      You will
      not enter into any agreement,
      which conflicts with your duties or obligations to the Company. You will
      not
      during your employment or within one (1) year after it ends, without the
      Company's express written consent, directly or indirectly solicit or encourage
      any employee,
      agent, independent contractor, supplier, customer, consultant or any
other
      person or company to terminate or alter a relationship with the
      Company.

    

    No
      Inconsistent Obligations.
      You
      represent that you are aware of no obligations
      legal or otherwise, inconsistent with the terms of this Agreement or
with
      your
      undertaking employment with the Company. You will not disclose to the
      Company, or use, or induce the Company to use, any proprietary information
      or
      trade
      secrets of others. You represent and warrant that you have returned all
      proprietary and confidential information belonging to all prior
      employers.

    

    Miscellaneous.
      Upon
      your acceptance, this letter will contain the entire agreement
      and understanding between you and the Company and supersedes any
      prior
      or contemporaneous agreements, understandings, term sheets, communications,
      offers, representations, warranties, or commitments by or on behalf
      of
      the Company (oral or written). The terms of your employment may in the
      future be amended, but only by writing and which is signed by both you and,
      on
      behalf
      of the Company, by a duly authorized executive officer. In making this
offer,
      we
      are relying on the information you have provided us about your background and
      experience, including any information provided us in any Employment
      Application that you may have submitted to us. The language in this
      letter will be construed as to its fair meaning and not strictly for or against
      either
      of
      us. The party prevailing in any dispute between us shall be awarded reasonable
      attorney's fees and cost from the non-prevailing party. In the event a
dispute
      does arise, this letter, including the validity, interpretation, construction
      and
      performance of this letter, shall be governed by and construed in accordance
      with
      the
      substantive laws of the State of California. Jurisdiction for resolution of
      any
      disputes shall be solely in Los Angeles, California.

    

    
      
        
        

      

      
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    If
      these
      terms are acceptable, please sign in the space provided below and return
      this letter to us. Again, we're very excited to have you join the
      Company.

    

    
      	
              Dated:
                March 09, 2007

            	 	
              Fluid
                Audio Network, Inc.

            
	 	 	 
	 	
              By:

            	
              /s/
                Justin Beckett 
                

              

            
	 	 	
              Justin
                Beckett

              CEO

            
	 	 	 
	
              Dated:
                March 09, 2007

            	 	
              /s/
                Dragan Kovacevic 
                

              

            
	 	 	
              Dragan
                Kovacevic

            

    

    

     

     

     

    3Option - Torbert

    Exhibit
      10.13

     

    FLUID
      MEDIA NETWORKS, INC.

    NOTICE
      OF STOCK OPTION GRANT 

     

    Optionee's
      Name and Address:

    

    Hank
      Torbert

    __________________

    __________________

     

                    
      You have been granted an option to purchase Common Stock of Fluid Media
      Networks, Inc. (the "Company") as follows:

     

    
      	Grant Number: 	50,000 
	 	 
	Exercise Price Per Share: 	$2.00 
	 	 
	Total Number of Shares Granted: 	50,000 Shares 
	 	 
	Date of Grant: 	February 1, 2007 
	 	 
	Type of Option: 	___ Incentive Stock Option 
	 	   X  Nonstatutory
              Stock Option 
	 	 
	Term/Expiration Date: 	January 31,
              2009  

    

     

     Vesting
      Schedule:

    

    A
      total
      of 50,000 shares subject to the Option (as defined in the accompanying Stock
      Option Agreement of which this  Notice of Stock Option Grant forms a part)
      shall vest on the Date of Grant. 

     

    Termination
      Period:    
Subject
      to the terms hereof, this option grant and all the rights hereunder, to the
      extent such rights have not been exercised, shall terminate on January 31,
      2012
      (the “Expiration Date”).

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    General
      Terms:                    
      This
      option grant is subject to the terms and conditions set forth in this Notice
      of
      Stock Option Grant and the accompanying Stock Option Agreement.

    

    By
      your
      signature and the signature of the Company's representative below, you and
      the
      Company agree that this option grant is governed by the terms and conditions
      of
      this Notice of Stock Option Grant and the accompanying Stock Option Agreement,
      all of which are attached and made a part of this document.

     

    
      	OPTIONEE: 	FLUID MEDIA NETWORKS, INC. 
	 	 
	_____________________________	By:  /s/ Justin F.
              Beckett                                 
                      
	Signature 	
                     Justin
                F.
                Beckett

            
	 	       President 
	_____________________________ 	 
	Print Name 	 

    

         

    
      
        
        

      

      
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    FLUID
      MEDIA NETWORKS, INC.

    

    STOCK
      OPTION AGREEMENT

     

    1.    Grant
      of Option.
      Fluid
      Media Networks, Inc., a Nevada corporation (the "Company"),
      hereby
      grants to Hank Torbert (“Optionee”)
      named
      in the Notice of Stock Option Grant, an option (the "Option")
      to
      purchase the total number of shares (the "Shares")
      of
      common stock of the Company (“Common
      Stock”)
      set
      forth in the Notice of Stock Option Grant (the “Notice
      of Grant”),
      at the
      exercise price per share set forth in the Notice of Stock Option Grant (the
      "Exercise
      Price")
      subject
      to the terms, definitions and provisions set forth herein. 

     

    2.    Exercise
      of Option.
      This
      Option shall be exercisable during its term in accordance with the vesting
      schedule set out in the Notice of Grant as follows:

    

    (i)    Right
      to Exercise.

    

    (a)    This
      Option may not be exercised for a fraction of a share.

    

    (b)    In
      the
      event of Optionee's death, Disability or other termination of service on the
      Company’s board of directors, the exercisability of the Option is governed by
      Section 7 below, subject to the limitation contained in subsection 2(i)(c)
      below.

    

    (c)    In
      no
      event may this Option be exercised after the date of expiration of the term
      of
      this Option as set forth in the Notice of Grant.

    

    (ii)   Method
      of Exercise.
      This
      Option shall be exercisable by written notice (in the form attached as
Exhibit
      A)
      which
      shall state the election to exercise the Option, the number of Shares in respect
      of which the Option is being exercised, and such other representations and
      agreements as to the holder's investment intent with respect to such shares
      of
      Common Stock as may be required by the Company. Such written notice shall be
      signed by the Optionee and shall be delivered in person or by certified mail
      to
      the Secretary of the Company. The written notice shall be accompanied by payment
      of the Exercise Price.

    

    No
      Shares
      will be issued pursuant to the exercise of an Option unless such issuance and
      such exercise shall comply with all relevant provisions of law and the
      requirements of any stock exchange upon which the Shares may then be listed.
      Assuming such compliance, for income tax purposes the Shares shall be considered
      transferred to the Optionee on the date on which the Option is exercised with
      respect to such Shares.

    

    3.    Optionee's
      Representations.
      As a
      condition to the exercise of all or any portion of this Option, the Company
      may
      require Optionee to make such representations and furnish such information
      as it
      may consider appropriate in connection with the issuance or delivery of the
      shares of Common Stock in compliance with applicable law or otherwise, including
      without limitation, representing and warranting at the time of any such exercise
      that the Shares are being purchased only for investment and without any present
      intention to sell or distribute the Shares. 

    

    
      
        
        

      

      
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    4.    Method
      of Payment.
      Payment
      of the Exercise Price shall be by any of the following, or a combination
      thereof, at the election of the Optionee:

    

    i.    cash;
      or

    

    ii.   check;
      or

    

    iii.         
      promissory
      note or other evidence of indebtedness (and any security agreement thereunder)
      satisfactory to the Company; or

    

    iv.   delivery
      of shares of Common Stock of the Company already owned by Optionee having a
      total Fair Market Value (as defined below) on the date of such delivery equal
      to
      the Exercise Price; or

    

    iv.   delivery
      of a properly executed exercise notice together with such other documentation
      as
      the Company and the broker, if applicable, shall require to effect an exercise
      of the Option and delivery to the Company of the sale or loan proceeds required
      to pay the exercise price; or

    

    v.    authorizing
      the Company to retain shares of Common Stock which would otherwise be issuable
      upon exercise of the Option having a total Fair Market Value (as defined below)
      on the date of delivery equal to the Option Price.

    

    Nothing
      herein shall be construed to limit the form of payment that the Company may
      elect to accept as payment for all or any portion of the Exercise Price. Any
      amounts owed to the Company or an Affiliate (as defined below) by the Optionee
      of whatever nature may be offset by the Company from the value of any shares
      of
      Common Stock, cash or other thing of value under this Option to be transferred
      to the Optionee, and no shares of Common Stock, cash or other thing of value
      under this Option shall be transferred unless and until all disputes between
      the
      Company and the Optionee have been fully and finally resolved and the Optionee
      has waived all claims to such against the Company or an Affiliate (as defined
      below).

    

    5.    Company
      Loan or Guarantee.
      Upon
      the exercise of any Option and subject to this Option and the discretion of
      the
      Company, the Company may at the request of the Optionee:

    

    i.    lend
      to
      the Optionee, an amount equal to such portion of the Exercise Price as the
      Company may determine; or

    

    ii.   guarantee
      a loan obtained by the Optionee from a third-party for the purpose of tendering
      the Exercise Price.

    

    The
      terms
      and conditions of any loan or guarantee, including the term, interest rate,
      whether the loan is with recourse against the Optionee and any security interest
      thereunder, shall be determined by the Company, except that no extension of
      credit or guarantee shall obligate the Company for an amount to exceed the
      lesser of (i) the aggregate Fair Market Value (as defined below) per share
      of
      the Common Stock on the date of exercise, less the par value of the shares
      of
      Common Stock to be purchased upon the exercise of the Option, and (ii) the
      amount permitted under applicable laws or the regulations and rules of the
      Federal Reserve Board and any other governmental agency having
      jurisdiction.

    

    
      
        
        

      

      
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    6.    Restrictions
      on Exercise.
      This
      Option may be exercised only within the terms set out in the Notice of Grant
      and
      this Stock Option Agreement. This Option may not be exercised if the issuance
      of
      such Shares upon such exercise or the method of payment of consideration for
      such shares would constitute a violation of any applicable federal or state
      securities or other law or regulation, including any rule under Part 207 of
      Title 12 of the Code of Federal Regulations as promulgated by the Federal
      Reserve Board. 

    

    7.    Termination
      of Relationship.
      In the
      event of termination of Optionee's service on the Company’s board of directors,
      Optionee may exercise this Option during the periods set forth
      below:

    

    i.    Termination
      for Any Reason Except Death or Disability.
      If
      Optionee’s service on the Company’s board of directors is terminated for any
      reason other than for death or Disability, the Option, to the extent that it
      would have been exercisable by the Optionee on the date of such termination,
      may
      be exercised by Optionee no later than thirty days after such date; provided,
      however,
      the
      Option shall not be exercisable after the Expiration Date.

    

    ii.   Termination
      by Reason of Death or Disability.
      If
      Optionee’s service on the Company’s board of directors is terminated due to
      death or Disability of the Optionee, the Option, to the extent that it is
      exercisable on the date of such death or Disability commences (as determined
      in
      good faith by the Company), may be exercised by Optionee (or Optionee’s estate
      or legal representative) no later than 180 days after the date of such death
      or
      Disability commencement date; provided,
      however,
      the
      Option shall not be exercisable after the Expiration Date.

    

    To
      the
      extent that Optionee was not entitled to exercise this Option at such date
      of
      termination, or if Optionee does not exercise this Option within the time
      specified herein, the Option shall terminate.

    

    8.    Anti-Dilution.
      In the
      event of any Company stock dividend, stock split, combination or exchange of
      shares, recapitalization or other change in the capital structure of the
      Company, corporate separation or division of the Company (including, but not
      limited to, a split-up, spin-off, split-off or distribution to Company
      shareholders other than a normal cash dividend), sale by the Company of all
      or a
      substantial portion of its assets (measured on either a stand-alone or
      consolidated basis), reorganization, rights offering, a partial or complete
      liquidation, or any other corporate transaction, Company share offering or
      event
      involving the Company and having an effect similar to any of the foregoing,
      then
      the Company shall adjust or substitute, as the case may be, the number of shares
      of Common Stock covered by this Option, the exercise price per share of this
      Option, and any other characteristics or terms of this Option as the Company
      shall deem necessary or appropriate to reflect equitably the effects of such
      changes to the Optionee; provided, however, that the Company may limit any
      such
      adjustment so as to maintain the deductibility of the Options under Section
      162(m) of the Internal Revenue Code of 1986, as amended, and that any fractional
      shares resulting from such adjustment shall be eliminated by rounding to the
      next lower whole number of shares with appropriate payment for such fractional
      share as shall reasonably be determined by the Company.

    

    
      
        
        

      

      
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    9.    Non-Transferability
      of Option.
      This
      Option may not be transferred, assigned, alienated or encumbered in any manner
      by the Optionee otherwise than by will or by the laws of descent or distribution
      and may be exercised during the lifetime of Optionee only by him. The terms
      of
      this Option shall be binding upon the executors, committees, heirs, successors
      and assigns of Optionee. This Option shall not be subject to claims of
      Optionee’s creditors. 

    

    10.         
      Tax
      Consequences.
      The
      exercise of this Option, and the subsequent sale or disposition of Shares thus
      acquired, shall have income tax consequences for the Optionee, and it is
      Optionee's responsibility to determine any such income tax
      liability.

    

    11.         
      Purchase
      by the Company.
      If the
      Optionee exercises any option under this Plan and accepts service on the board
      of directors or any other similar service of a competing enterprise within
      twelve (12) months of such exercise, the Company shall have the right to
      repurchase any Shares issued upon such exercise at the Exercise
      Price.
      A
      competing enterprise means any natural person, corporation, firm, joint venture,
      partnership, limited liability company, trust, unincorporated organization,
      government or any department, political subdivision or agency of a government
      which competes, directly or indirectly, with the Company’s business as an online
      music network.

    

    12.         
      Cashing
      Out of Option.
      On
      receipt of written notice of exercise, the Company may elect to cash out all
      or
      part of the portion of any Option by paying the Optionee an amount, in cash
      or
      Common Stock, equal to the excess of the Fair Market Value (as defined below)
      of
      the Common Stock that is subject to the Option over the Exercise Price times
      the
      number of shares of Common Stock subject to the Option on the effective date
      of
      such cash out.

    

    13.         
      Limited
      Transfer During Offering.
      In the
      event there is an effective registration statement under the Securities Act
      of
      1933, as amended, pursuant to which shares of Common Stock shall be offered
      for
      sale in an underwritten offering, the Optionee shall not, during the period
      requested by the underwriters managing the registered public offering, effect
      any public sale or distribution of shares received directly or indirectly
      pursuant to this Option.

     

    14.         
      Restrictions
      on Shares.
      The
      Company shall not be required to issue or deliver any certificates for shares
      of
      Common Stock, cash or other property prior to (i) the listing of such shares
      on
      any stock exchange (or other public market) on which the Common Stock may then
      be listed (or regularly traded), (ii) the completion of any registration or
      qualification of such shares under federal or state law, or any ruling or
      regulation of any government body which the Company determines to be necessary
      or advisable, and (iii) the satisfaction of any applicable withholding
      obligation in order for the Company or an Affiliate (as defined below) to obtain
      a deduction with respect to the exercise of an Option. The Company may cause
      any
      certificate for any share of Common Stock to be delivered to be properly marked
      with a legend or other notation reflecting the limitations on transfer of such
      Common Stock as provided in this Option or as the Company may otherwise require.
      Fractional shares shall not be delivered, but shall be rounded to the next
      lower
      whole number of shares, with appropriate payment made with respect to such
      fractional shares. 

     

    
      
        
        

      

      
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    15.   Impact
      of Event.
      In the
      event of a Change in Control (as defined below):

     

    
      	 	
              (i)

            	
              All
                outstanding repurchase rights of the Company with respect to the
                Option
                shall terminate; and

            

    

     

    
      	 	
              (ii)

            	
              The
                Option shall be subject to any agreement of merger or reorganization
                that
                effects such Change in Control, which agreement shall provide
                for:

            

    

     

    (a)    The
      continuation of the Option by the Company, if the Company is a surviving
      corporation;

     

    (b)    The
      assumption of the Option by the surviving corporation or its parent or
      subsidiary;

     

    (c)    The
      substitution by the surviving corporation or its parent or subsidiary of
      equivalent awards for the Option; or

     

    (d)    Settlement
      of each Share subject to the Option for the Change in Control Price (less the
      per share exercise price).

     

    
      	 	
              (iii)

            	
              In
                the absence of any agreement of merger or reorganization effecting
                such
                Change in Control, each Share subject to the Option shall be settled
                for
                the Change in Control Price (less the per share exercise
                price).

            

    

     

    16.   Shareholder
      Rights.
      Optionee shall not have any rights of a shareholder as to shares of Common
      Stock
      subject to the Option until, after proper exercise of the Option or other action
      required, such shares shall have been recorded on the Company’s official
      shareholder records as having been issued and transferred. Upon exercise of
      the
      Option or any portion thereof, the Company
      will have a reasonable time in which to issue the Shares, and Optionee will
      not
      be treated as a shareholder for any purpose whatsoever prior to such issuance.
      No adjustment shall be made for cash dividends or other rights for which the
      record date is prior to the date such shares are recorded as issued and
      transferred in the Company’s official shareholder records, except as provided
      herein.

     

    17.  Certain
      Definitions.

    

    i.    “Affiliate”
means
      any individual, corporation, partnership, association, limited liability
      company, joint-stock company, trust, unincorporated association or other entity
      (other than the Company) that directly, or indirectly through one or more
      intermediaries, controls, is controlled by, or is under common control with,
      the
      Company including, without limitation, any member of an affiliated group of
      which the Company is a common parent corporation as provided in Section 1504
      of
      the Code.

     

    
      
        
        

      

      
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    ii.    “Change
      in Control”
shall
      mean the happening of any of the following events:

     

    (a)    An
      acquisition by any individual, entity or group (within the meaning of Section
      13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) (a
      “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
      under the Securities Exchange Act of 1934, as amended) of 50% or more of either
      (1) the then outstanding shares of Common Stock of the Company (the “Outstanding
      Company Common Stock”) or (2) the combined voting power of the then outstanding
      voting securities of the Company entitled to vote generally in the election
      of
      directors (the “Outstanding Company Voting Securities”); excluding, however, the
      following: (1) any acquisition directly from the Company, other than an
      acquisition by virtue of the exercise of a conversion privilege unless the
      security being so converted was itself acquired directly from the Company,
      (2)
      any acquisition by the Company; (3) any acquisition by any employee benefit
      plan
      (or related trust) sponsored or maintained by the Company or any corporation
      controlled by the Company; (4) any acquisition by a Person who as of the date
      hereof was a shareholder of the Company; or (5) any acquisition by any Person
      pursuant to a transaction which complies with clauses (1), (2) (3) and (4)
      of
      subsection (c) of this definition; or

    

    (b)    Within
      any period of 24 consecutive months, a change in the composition of the board
      of
      directors of the Company such that the individuals who, immediately prior to
      such period, constituted the board (such board shall be hereinafter referred
      to
      as the “Incumbent Board”) cease for any reason to constitute at least a majority
      of the Company’s board of directors; provided, however, for purposes of this
      subsection (b), that any individual who becomes a member of the Company’s board
      of directors during such period, whose election, or nomination for election
      by
      the Company’s shareholders, was approved by a vote of at least a majority of
      those individuals who are members of the board and who were also members of
      the
      Incumbent Board (or deemed to be such pursuant to this proviso) shall be
      considered as though such individual were a member of the Incumbent Board;
      but,
      provided further, that any such individual whose initial assumption of office
      occurs as a result of either an actual or threatened election contest (as such
      terms are used in Rule 14a-11 of Regulation 14A promulgated under the Securities
      Exchange Act of 1934, as amended) or other actual or threatened solicitation
      of
      proxies or consents by or on behalf of a Person other than the board shall
      not
      be so considered as a member of the Incumbent Board; or

    

    
      
        
        

      

      
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    (c)    The
      approval by the shareholders of the Company of a reorganization, merger or
      consolidation or sale or other disposition of all or substantially all of the
      assets of the Company (“Corporate Transaction”); excluding, however, such a
      Corporate Transaction pursuant to which (1) all or substantially all of the
      individuals and entities who are the beneficial owners, respectively, of the
      Outstanding Company Common Stock and Outstanding Company Voting Securities
      immediately prior to such Corporate Transaction will beneficially own, directly
      or indirectly, more than 50% of, respectively, the outstanding shares of Common
      Stock, and the combined voting power of the then outstanding voting securities
      entitled to vote generally in the election of directors, as the case may be,
      of
      the corporation resulting from such Corporate Transaction (including, without
      limitation, a corporation which as a result of such transaction owns the Company
      or all or substantially all of the Company’s assets, either directly or through
      one or more subsidiaries) in substantially the same proportions as their
      ownership, immediately prior to such Corporate Transaction, of the Outstanding
      Company Common Stock and Outstanding Company Voting Securities, as the case
      may
      be, (2) no Person (other than the Company, any Person who was a shareholder
      of
      the Company as of the date hereof, any employee benefit plan (or related trust)
      sponsored or maintained by the Company, by any corporation controlled by the
      Company, or by such corporation resulting from such Corporate Transaction)
      will
      beneficially own, directly or indirectly, more than 25% of, respectively, the
      outstanding shares of common stock of the corporation resulting from such
      Corporate Transaction or the combined voting power of the outstanding voting
      securities of such corporation entitled to vote generally in the election of
      directors, except to the extent that such ownership existed with respect to
      the
      Company prior to the Corporate Transaction, and (3) individuals who were members
      of the Company’s board of directors immediately prior to the approval by the
      shareholders of the Corporation of such Corporate Transaction will constitute
      at
      least a majority of the members of the board of directors of the corporation
      resulting from such Corporate Transaction; or

    

    (d)    The
      approval by the shareholders of the Company of a complete liquidation or
      dissolution of the Company, other than to a corporation pursuant to a
      transaction which would comply with clauses (1), (2) and (3) of subsection
      (c)
      of this definition, assuming for this purpose that such transaction were a
      Corporate Transaction.

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

       

    

    iii.    “Change
      in Control Price”
means
      the higher of (i) the highest reported sales price, regular way, of a share
      of
      Common Stock in any transaction reported on the New York Stock Exchange
      Composite Tape or other national securities exchange on which such shares are
      listed or on NASDAQ, as applicable, during the 30-day period prior to and
      including the date of a Change in Control, and (ii) if the Change in Control
      is
      the result of a tender or exchange offer or a Corporate Transaction, the highest
      price per share of stock paid in such tender or exchange offer or Corporate
      Transaction. To the extent that the consideration paid in any such transaction
      described above consists all or in part of securities or other non-cash
      consideration, the value of such securities or other non-cash consideration
      shall be determined in the sole discretion of the board of
      directors.

    

    iv.    “Disability”
means
      a
      mental or physical illness that renders Optionee totally and permanently
      incapable of performing the Optionee’s duties as a member of the Company’s board
      of directors. Notwithstanding the foregoing, a condition shall not qualify
      as a
      Disability if it is the result of (i) a willfully self-inflicted injury or
      willfully self-induced sickness; or (ii) an injury or disease contracted,
      suffered, or incurred, while participating in a criminal offense. The
      determination of Disability shall be made by the Company. The determination
      of
      Disability for purposes of this Stock Option Agreement shall not be construed
      to
      be an admission of disability for any other purpose.

    

    v.    “Fair
      Market Value”
shall
      mean the market price of Common Stock, determined by the Company as
      follows:

    

    (a)    If
      Common
      Stock is not publicly traded (as described in subsections (b), (c) and (d)
      below), the Fair Market Value shall be determined by the Company in good faith
      and in accordance with Section 260.140.50, Title 10 of the California Code
      of
      Regulations.

     

    (b)    If
      Common
      Stock was traded over the counter on the date in question but was not classified
      as a national market issue, then the Fair Market Value shall be equal to the
      mean between the last reported representative bid and asked prices quoted by
      the
      NASDAQ system for such date;

     

    (c)    If
      Common
      Stock was traded over the counter on the date in question and was classified
      as
      a national market issue, then the Fair Market Value shall be equal to the last
      transaction price quoted by the NASDAQ system for such date;

     

    (d)    If
      Common
      Stock was traded on a stock exchange on the date in question, then the Fair
      Market Value shall be equal to the closing price reported by the applicable
      composite transaction report for such date; and

     

    In
      all
      cases, the determination of Fair Market Value by the Company shall be conclusive
      and binding on all persons. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

       

    

    18.    Amendments
      and Termination.
      The
      Company may amend, alter or discontinue the Option at any time, but no
      amendment, alteration or discontinuation shall be made which would impair the
      rights of Optionee without Optionee’s consent, except such an amendment (a) made
      to avoid an expense charge to the Company or an Affiliate (as defined herein),
      (b) made to cause the Option to qualify for the exemption provided by Rule
      16b-3
      under the Securities Exchange Act of 1934, as amended, or (c) made to permit
      the
      Company or an Affiliate (as defined herein) a deduction under the Internal
      Revenue Code of 1986, as amended. In addition, no such amendment shall be made
      without the approval of the Company’s shareholders to the extent such approval
      is required by law or agreement. 

    

    [The
      remainder of the page is intentionally left blank.]

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      parties have executed this Stock Option Agreement on the dates set forth below
      to be effective as of February 1, 2007.

    

    
      	 	
              FLUID
                MEDIA NETWORKS, INC.

              a
                Nevada corporation 

            
	 	 
	 	By: /s/
              Justin F.
              Beckett                                           
              
	 	
                    
                Justin F. Beckett, President 

            
	 	Date: June 9,
              2007

    

    

    Optionee
      acknowledges and agrees that nothing in this Stock Option Agreement shall confer
      upon Optionee any right with respect to continuation of service on the Company’s
      board of directors. Optionee further acknowledges receipt of a copy of this
      Stock Option Agreement and represents that he is familiar with the terms and
      provisions hereof, and hereby accepts this Option subject to all of the terms
      and provisions hereof. Optionee has reviewed this Stock Option Agreement in
      its
      entirety, has had an opportunity to obtain the advice of counsel prior to
      executing this Stock Option Agreement and fully understands all provisions
      of
      the Option. Optionee hereby agrees to accept as binding, conclusive and final
      all decisions or interpretations of the Company upon any questions arising
      in
      connection with this Option.

     

    
      	Date: June 9, 2007	    
              /s/ Hank
              Torbert                                                   
	 	Hank
              Torbert 

    

              

     

    CONSENT
      OF SPOUSE

    

    The
      undersigned spouse of Optionee has read and hereby approves the terms and
      conditions of this Stock Option Agreement. In consideration of the Company's
      granting her spouse the right to purchase Shares as set forth in this Stock
      Option Agreement, the undersigned hereby agrees to be irrevocably bound by
      the
      terms and conditions of this Stock Option Agreement and further agrees that
      any
      community property interest shall be similarly bound. The undersigned hereby
      appoints the undersigned's spouse as attorney-in-fact for the undersigned with
      respect to any amendment or exercise of rights under this Stock Option
      Agreement.

     

    
      
        	Date:_________ 	                                  
                                                                  
	 	Spouse of
                Optionee

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    FLUID
      MEDIA NETWORKS, INC.

    

    NOTICE
      AND CERTIFICATE OF OPTION EXERCISE

    

    Fluid
      Media Networks, Inc.

    ______________________

    ______________________

    Attention:
      Chief Financial Officer

     

    1.    Exercise
      of Option.
      Effective as of today, _____________________, _____, the undersigned (the
“Optionee”) hereby elects to purchase _________ shares (the “Shares”) of the
      Common Stock of Fluid Media Networks, Inc. (the “Company”) under and pursuant to
      the Stock Option Agreement dated _________, 2007 (the “Option Agreement”). The
      purchase price for the Shares shall be $______________, as required by the
      Option Agreement.

    

    2.            Delivery
      of Payment.
      Optionee
      herewith delivers to the Company the full purchase price for the Shares in
      the
      following form:

    

    
      	 	 	
              ____

            	
              Cash
                in the amount of $___________;

            

    

    

    
      	 	 	
              ____

            	
              Indebtedness
                or Note in the principal amount of
                $_____________;

            

    

    

    
      	 	
              ____

            	
              ____________
                shares of Common Stock; or

            

    

    

    
      	 	 	
              ____

            	
              Broker
                Exercise Notice.

            

    

    

    ____      Other
      (specify)

     

    3.    Representation
      of Optionee.
      Optionee
      acknowledges that Optionee has received, read and understood the Option
      Agreement and agrees to abide by and be bound by their terms and
      conditions.

    

    4.    Rights
      as Shareholder.
      Subject
      to the terms and conditions of the Option Agreement, Optionee shall have all
      of
      the rights of a shareholder of the Company with respect to the Shares from
      and
      after the date that Optionee delivers full payment of the Exercise Price until
      such time as Optionee disposes of the Shares.

    

    5.    Tax
      Consultation.
      Optionee
      understands that Optionee may suffer adverse tax consequences as a result of
      Optionee's purchase or disposition of the Shares. Optionee represents that
      Optionee has consulted with any tax consultants Optionee deems advisable in
      connection with the purchase or disposition of the Shares and that Optionee
      is
      not relying on the Company for any tax advice.

    

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

       

    

    6.    Entire
      Agreement; Governing Law.
      The
      Option Agreement is incorporated herein by reference. This Notice and
      Certificate of Option Exercise and the Option Agreement constitute the entire
      agreement of the parties and supersede in their entirety all prior undertakings
      and agreements of the Company and Optionee with respect to the subject matter
      hereof, and such agreement is governed by California law, except for that body
      of law pertaining to conflict of laws.

     

    
      	Submitted by: 	Accepted by: 
	 	 
	OPTIONEE: 	FLUID MEDIA NETWORKS, INC. 
	 	 
	______________________________ 	By: _____________________________  
	Signature 	 
	 	 
	______________________________ 	Its: _____________________________  
	Print Name 	 
	 	 
	______________________________ 	Date: ____________________________ 
	Social Security Number 	 
	 	 
	Date:
              ______________________________ 	 
	 	 
	Address: 	 
	______________________________  	 
	______________________________  	 
	______________________________  	 

    

     

    A-2

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