Document:

fluid_8k-ex1003.htm

    Exhibit
      10.3

     

    
      SECURITY
        AGREEMENT

       

      THIS
        SECURITY AGREEMENT, dated as of  October 17, 2007 (this “Security
        Agreement”), is made by Fluid Media Networks, Inc., a Nevada
        corporation  (“Fluid”) and Trusonic, Inc., a Delaware corporation
        (“Trusonic”) (collectively, Fluid and Trusonic shall be referred to herein as
        the “Grantors”), in favor of those persons listed on the signature pages
        attached hereto (each, a “Secured Party,” and collectively, the “Secured
        Parties”).

      

       

      RECITALS

       

      WHEREAS,
        concurrently with this Security Agreement, a stock purchase agreement (the
        “Stock Purchase Agreement”) is entered into by and among Fluid, Trusonic and the
        Secured Parties;

      

      WHEREAS,
        pursuant to the Stock Purchase Agreement, Fluid is purchasing all of the
        issued
        and outstanding shares of capital stock of Trusonic held by the Secured Parties
        (“Shares”);

      

      WHEREAS,
        Fluid has issued to each Secured Party one or more Secured Promissory Notes
        (each, a “Note,” and collectively, the “Notes”), of even date herewith, as
        partial payment for the Shares, to be secured by the Collateral (as defined
        below);  and

      

      WHEREAS,
        as a condition to the performance by Fluid of the conditions and obligations
        under the Note(s), Grantors are required to execute and deliver this Security
        Agreement.

      

      NOW,
        THEREFORE, for good and valuable consideration, the receipt and
        sufficiency of which are hereby acknowledged, Grantors and Secured Parties
        agree
        as follows:

      

       

      AGREEMENT

       

      ARTICLE
        I.  
Definitions.

       

      Section
        1.1.    Certain Terms. The following terms when used
        in this Security Agreement, including its preamble and recitals, shall have
        the
        following meanings (such definitions to be equally applicable to the singular
        and plural forms thereof):

       

      “Collateral”
        is defined in Section 2.1.

      

      “Event
        of Default” is defined in Section 5.1.

      

      “Fluid”
is
        defined in the
        recitals.

      

      “Grantors”
        is defined in the recitals.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      “Note
        Obligations” shall mean all indebtedness, obligations and liabilities of
        Grantor to the Secured Parties arising under or in connection with the Note(s),
        including, without limitation, principal and interest.

      

      “Note(s)”
        is defined in the recitals.

      

      “Person”
        means an individual, corporation, limited liability company, partnership,
        trust,
        unincorporated association, joint venture, joint-stock company, governmental
        authority or any other entity.

      

      “Secured
        Part(ies)” is defined in the recitals.

      

      “Security
        Agreement” is defined in the recitals.

      

      “Shares”
        is defined in the recitals.

      

      “Stock
        Purchase Agreement” is defined in the recitals.

      

      “Termination
        Date” means the date on which the Note Obligations have been paid in
        full.

      

      “Trusonic”
        is defined in the recitals.

      

      “UCC”
        means the California Uniform Commercial Code, as amended, including its preamble
        and recitals.

      

      UCC
        Definitions.  Unless otherwise defined herein or in the Note(s) or
        the context otherwise requires, terms for which meanings are provided in
        the UCC
        are used in this Security Agreement (whether or not capitalized herein),
        including its preamble and recitals, with such meanings.

       

      ARTICLE
        II.     Security
        Interest.

       

      Section
        2.1.  Grant of Security Interest.  Each of the
        Grantors hereby assigns, pledges, hypothecates, charges, mortgages, delivers
        and
        transfers to the Secured Parties, for their benefit, and hereby grants to
        the
        Secured Parties, for their benefit, a continuing security interest in all
        such
        Grantor’s right, title and interest in and to the following (as security for the
        performance of the Note Obligations):  all inventory, documents of
        title covering inventory, returned goods, rights as an unpaid seller, accounts,
        accounts receivable, money, deposits, deposit accounts, brokerage accounts,
        equipment, furniture, fixtures, machinery, contract rights, royalties,
        commissions, rights to payment, rights to refunds, tax refunds, general
        intangibles, chattel paper, copyrights, trademarks, trade names, patents,
        instruments, securities, equity interests, books, records, computer data,
        computer storage materials and goodwill, now owned or hereafter acquired,
        wherever located, in whatever form, and all proceeds and products thereof,
        and
        all substitutions, additions, accessions and replacements therefor or thereto
        (collectively the "Collateral").

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

       

      Section
        2.2.  Security for Obligations.  This Security
        Agreement and the Collateral in which the Secured Parties are granted a security
        interest hereunder by the Grantor secures the payment of all Note Obligations
        now or hereafter existing.

       

      Section
        2.3.   Security Interest Absolute, etc.  This
        Security Agreement shall in all respects be a continuing, absolute,
        unconditional and irrevocable grant of security interest, and shall remain
        in
        full force and effect until the Termination Date.  All rights of the
        Secured Parties and the security interests granted to the Secured Parties
        for
        their benefit hereunder, and all obligations of the Grantor hereunder, shall,
        in
        each case, be absolute, unconditional, final and irrevocable irrespective
        of:

       

      (a)
        the
        failure of the Secured Parties:

       

      (i)           to
        assert any claim or demand or to enforce any right or remedy against any
        obligor
        or any other Person, or

       

      (ii)           to
        exercise any right or remedy against any guarantor of, or Collateral securing,
        any Note Obligations.

       

      (b) any
        change in the time, manner or place of payment of, or in any other term of,
        all
        or any part of the Note Obligations, or any other extension, compromise or
        renewal of any Note Obligation;

       

      (c) any
        reduction, limitation, impairment or termination of any Note Obligations
        for any
        reason, including any claim of waiver, release, surrender, alteration or
        compromise, and shall not be subject to (and Grantor hereby waives any right
        to
        or claim of) any defense or setoff, counterclaim, recoupment or termination
        whatsoever by reason of the invalidity, illegality, nongenuineness,
        irregularity, compromise, unenforceability of, or any other event or occurrence
        affecting, any Note Obligations or otherwise;

       

      (d) any
        addition, exchange or release of any Collateral or of any Person that is
        (or
        will become) a guarantor of the Note Obligations, or any surrender or
        non-perfection of any Collateral, or any amendment to or waiver or release
        or
        addition to, or consent to or departure from, any other guaranty held by
        the
        Secured Parties securing any of the Note Obligations; or

       

      (e) any
        other circumstance which might otherwise constitute a defense available to,
        or a
        legal or equitable discharge of, any obligor, any surety or any
        guarantor.

       

      Section
        2.4.  Perfection; UCC Filing.  Upon the execution of
        this Security Agreement, the Secured Parties shall have the right to, and
        Grantors shall join in executing and paying the filing fees required to,
        file
        any and all necessary financing statements, amendments to existing financing
        statements and any other forms convenient or required, in the Secured Parties’
sold and absolute discretion, to perfect the security interest granted
        herein.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        III.    Representations and
        Warranties.

       

      Section
        3.1.  In order to induce the Secured Parties to enter into and perform
        the Note Obligations, the Grantors represent and warrant to the Secured Parties
        that, as of the date of this Agreement:

       

      (a) Grantors,
        are applicable, are the legal and beneficial owner of such
        Collateral;

       

      (b) the
        granting of the security interest pursuant to the terms of this Security
        Agreement, together with the filing of appropriate financing statements,
        creates
        a valid and perfected first lien on and security interest in such Collateral
        in
        favor of the Secured Parties;

       

      (c) none
        of such Collateral is subject to any existing claim, lien, charge, security
        interest or other encumbrance of any kind whatsoever, except for the perfected
        first security interest therein granted to the Secured Parties hereby, and
        as
        otherwise permitted pursuant to the terms of this Security
        Agreement;

       

      (d) the
        execution of this Security Agreement, the compliance with its terms and the
        granting of the security interest set forth herein does not violate any contract
        between the Grantor and any other party; and

       

      (e) this
        Security Agreement does not violate any agreement, instrument, document,
        judgment, injunction or writ by which Grantor or its assets is
        bound.

       

       

      ARTICLE
        IV.    
Covenants.

       

      Section
        4.1.  Miscellaneous Covenants.

       

      (a) The
        Grantors shall, at their expense, make, procure, execute and deliver such
        financing statements and assignments of lien, or amendments thereof or
        supplements thereto, or other instruments, certificates and supplemental
        writings and assurances as the Secured Parties may from time to time reasonably
        require in order to comply with the UCC, or any other applicable law, and
        to
        preserve and protect the security interest granted herein.  In the
        event, for any reason, that the law of any jurisdiction other than the State
        of
        California becomes or is applicable to the Collateral, or any part thereof,
        or
        to any of the Note Obligations, the Grantors agree to execute and deliver
        all
        such instruments and to do all such other things as may be reasonably necessary
        or appropriate to preserve, protect and enforce the security interest granted
        herein under the law of such other jurisdiction, to at least the same extent
        as
        such security interest would be protected under the UCC.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      (b) Grantors
        hereby agree (i) to do all acts that may be necessary to maintain, preserve
        and
        protect the Collateral; (ii) not to use or permit any Collateral to be used
        unlawfully or in violation of this Security Agreement; (iii) to pay promptly
        when due all taxes, assessments, charges, encumbrances and liens now or
        hereafter imposed upon or affecting any Collateral, except to the extent
        that
        such items are being contested in good faith or are otherwise permitted pursuant
        to this Security Agreement; (iv) not to cause or permit any waste or unusual
        or
        unreasonable depreciation of the collateral; (v) not to surrender or lose
        possession (other than to the Secured Parties), sell, encumber, lease, rent
        or
        otherwise dispose of or transfer any Collateral or right or interest therein
        other than in the ordinary course of the Grantors’ business and, to keep the
        Collateral free and clear of all levis and security interests or other liens
        or
        charges except those expressly authorized by this Security Agreement; and
        (vi)
        to preserve and defend the rights of the Secured Parties hereunder against
        all
        claims of third parties.

       

      (c) At
        any time and from time to time upon the occurrence and during the continuance
        of
        an Event of Default (i) upon the request of the Secured Parties, the Debtor
        shall promptly, at its expense, deliver to the Secured Parties, with appropriate
        endorsement or assignment, all instruments, chattel paper, documents, checks,
        notes, drafts and other evidence of indebtedness, or other property in the
        nature of items of payment representing proceeds of any of the Collateral
        which
        are then in, or may thereafter come into, the Grantor’s possession, and (B) upon
        the request of the Secured Parties, the Grantors shall promptly, at their
        own
        expense, direct all parties obligated on any of the Collateral to make all
        payments due or to become due thereon directly to the Secured Parties or
        to such
        other entity as may be specified by the Secured Parties.

       

      (d) The
        Grantors shall perform, at its sole cost and expense, any and all steps,
        and
        shall pay the amount of all reasonable expenses necessary to obtain, preserve,
        perfect, defend and enforce the security interest granted herein, collect
        indebtedness under the accounts receivable, and preserve, defend, enforce
        and
        collect the Collateral.

       

      (e) The
        Grantor shall punctually pay the Note Obligations in accordance with the
        terms
        of the Notes and will promptly furnish the Secured Parties with any information
        or writings which the Secured Parties may reasonably request concerning the
        Collateral.

       

      (f) The
        Grantors shall promptly notify the Secured Parties of any claim, action or
        proceeding affecting title to any of the Collateral, which Collateral, together
        with all other Collateral subject to such claim, action or proceeding, has
        an
        aggregate value in excess of $10,000 and, at the request of the Secured Parties,
        appear in and defend, at the Grantor’s expense, any such action or
        proceeding.

       

      (g) Should
        the Collateral, or any part thereof, be in any manner converted into another
        type of property or money or other proceeds paid or delivered to the Grantors
        as
        a result of Grantors’ rights in the Collateral, then, in any such event, all
        such property, money or other proceeds shall become part of the Collateral,
        and
        the Grantors covenant to forthwith pay and deliver to the Secured Parties
        all of
        the same, which are acceptable for delivery and, at the same time, if the
        Secured Party deems it necessary and so requests, the Grantors will properly
        endorse or assign the same.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      Section
        4.2.  Further Encumbrances; Subordination.  Except as
        otherwise set forth in this Section 4.2, Grantors shall not, without the
        prior
        written consent of any Secured Party, enter into any agreement or execute
        any
        document or perform or permit the performance of any act that would result
        in,
        give rise to or create any senior or pari passu lien, claim, or
        encumbrance on such Secured Party’s Collateral (other than those created in
        favor of each of the Secured Parties).  Notwithstanding anything to
        the contrary contained in this Agreement, Fluid may, in its sole and absolute
        discretion, and from time to time, grant a security interest in the Collateral
        owned by Fluid that is senior to the security interest granted to Secured
        Parties hereunder; provided, however, that such security interest shall be
        granted only to secure bank or other financial institution debt, or any working
        capital facility, up to a maximum principal amount of Two Million Five Hundred
        Thousand Dollars ($2,500,000) in the aggregate.  In such event,
        Secured Parties agree to make any filings necessary, including any filing
        any
        termination statements under the UCC or otherwise, and execute any documents
        reasonably required, in order to effect the foregoing
        subordination.

       

      Section
        4.3.  Further Assurances, etc.  Each party agrees
        that, from time to time, at its own expense, it will promptly execute and
        deliver all further instruments and documents, and take all further action,
        that
        may be necessary or that may be reasonably required, in order to perfect,
        preserve, protect and subordinate any security interest granted or purported
        to
        be granted hereby or to enable such party to exercise and enforce his, her
        or
        its rights and remedies hereunder.

       

       

      ARTICLE
        V.    Events of
        Default.

       

      Section
        5.1.  Events of Default.  Each of the following
        occurrences shall constitute an event of default under this Security Agreement
        (herein called “Event of Default”): (a) an event of Default shall occur under
        the Note; or (b) Grantors shall fail to observe or perform any covenant or
        agreement contained herein.

       

      Section
        5.2.  Remedies upon Event of Default.  Grantors
        hereby irrevocably appoint the Secured Parties as their respective
        attorney-in-fact to do (but the Secured Parties shall not be obligated to
        and
        shall incur no liability to Grantors or any third party for failure to do
        so),
        with full irrevocable power and authority in the place and stead of Grantors
        and
        in the name of the Grantors or in the name of Secured Parties, from time
        to time
        after the occurrence of and during the continuance of an Event of Default,
        in
        the Secured Parties discretion, for the purpose of carrying out  any
        act which such Grantor is obligated by this Security Agreement to do, and
        to
        exercise such rights and powers as Grantors might exercise with respect to
        the
        Collateral, including, without limitation any one or more of the following
        rights and remedies:

       

      (a) exercise
        and enforce any or all rights and remedies available upon default to a secured
        party under the UCC, including but not limited to the right to take possession
        of such Collateral, proceeding without judicial process or by judicial process
        (without a prior hearing or notice thereof, which the Grantors hereby expressly
        waive), and the right to sell, lease or otherwise dispose of any or all of
        such
        Collateral, and in connection therewith, the Secured Parties may require
        the
        Grantors to make such Collateral available to the Secured Parties at a place
        to
        be designated by the Secured Parties which is reasonably convenient to both
        parties, and if notice to the Grantors of any intended disposition of Collateral
        or any other intended action is required by law in a particular instance,
        such
        notice shall be deemed commercially reasonable if given (in the manner specified
        in Section 6.3), at least ten (10) calendar days prior to the date
        of intended disposition or other action, and any such disposition of such
        Collateral may be made by way of one or more contracts and at such disposition
        it shall not be necessary to exhibit the Collateral;

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      (b) take
        all actions reasonably necessary to take possession of the Collateral, and
        shall
        not be liable to the Grantors for damages to, or destruction of, property
        in
        connection therewith, and shall in no way be liable to the Grantors for any
        consequential damages (or whatsoever be deemed the proximate cause thereof)
        of
        any kind;

       

      (c) apply
        by appropriate judicial proceedings for appointment of a receiver for the
        Collateral, or any part thereof, and the Grantors hereby expressly consents
        to
        any such appointment;

       

      (d) notify
        any or all parties obligated on any of the Collateral to make all payments
        due
        or to become due thereon directly to the Secured Parties, or such other person
        or officer as the Secured Parties may require, whereupon the power and authority
        of the Grantors to collect the same in the ordinary course of its business
        shall
        be deemed to be immediately revoked and terminated, and with or without such
        general notification, the Secured Parties may take or bring all steps, actions,
        suits or proceedings reasonably deemed by the Secured Parties as necessary
        or
        desirable to effect possession or collection of the Collateral, may make
        allowance or adjustments related to the Collateral, may compromise any claims
        related to the Collateral, may remove from the Grantors’ premises all documents,
        instruments, records, files or other items relating to the Collateral and
        may
        administer, collect and dispose of the Collateral; provided, however, that
        the
        Secured Parties shall not be liable for its failure to collect or for its
        failure to exercise diligence in the collection, possession of all or any
        part
        of the Collateral or of sums due or paid thereon, nor shall it be under any
        obligation whatsoever to anyone by virtue of this Security Agreement;
        and

       

      (e) issue
        a receipt to any person obligated to pay any amounts on account of any
        Collateral, which shall be a full and complete release, discharge and
        acquittance to such person to the extent of any amount so paid to the Secured
        Parties; and the Secured Parties may, and is hereby authorized and empowered
        on
        behalf of the Grantors, and is hereby granted an irrevocable power of attorney,
        which grant is coupled with an interest, to endorse the name of the Grantors
        upon any check, draft, instrument, receipt, instruction or other document
        or
        items, including all items evidencing payment upon any account receivable
        or
        other indebtedness constituting Collateral.

       

      The
        Grantors hereby ratify all that said attorney shall lawfully do or cause
        to be
        done by virtue hereof.  This power of attorney is coupled with an
        interest and shall be irrevocable.  The powers conferred upon the
        Secured Parties are solely to protect the Secured Parties’ interest in the
        Collateral and shall not impose any duty upon the Secured Parties to exercise
        any such powers. The Secured Parties shall be entitled to apply the proceeds
        of
        any sale, liquidation, foreclosure or other disposition of or realization
        from
        the Collateral and the payments received by the Secured Parties with respect
        to
        any of the Collateral, first to the payment of all the Secured Parties’
reasonable expenses, including reasonable attorneys’ fees and legal expenses,
        incurred in holding and preparing the Collateral, or any part thereof, for
        sale
        or other disposition, in arranging for such sale or other disposition, and
        in
        actually selling the same, next, to payment of the Obligations, in such order
        of
        application as the Secured Party may determine.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        VI.  
 Miscellaneous.

       

      Section
        6.1.  Binding on Successors, Transferees and Assigns;
        Assignment.  This Security Agreement shall remain in full force
        and effect until the Termination Date has occurred, shall be binding upon
        the
        Grantor and its successors, transferees and assigns, and shall inure to the
        benefit of and be enforceable by the Secured Parties and their successors,
        transferees and assigns.

       

      Section
        6.2.  Amendments, etc.  No amendment to or waiver of
        any provision of this Security Agreement, nor consent to any departure by
        Grantor from its obligations under this Security Agreement, shall in any
        event
        be effective unless the same shall be in writing and signed by the Secured
        Party
        to be bound thereby and the Grantor.

       

      Section
        6.3.  Notices.  Any notice or other communication
        required or permitted to be given hereunder shall be in writing and shall
        be
        mailed by certified mail, return receipt requested (or by the most nearly
        comparable method if mailed from or to a location outside of the United States
        of America) or by Federal Express, Express Mail, or mail nationally recognized
        overnight delivery or courier service, or delivered in person or by facsimile,
        or similar telecommunications equipment, against receipt therefor at the
        address
        of such party set forth in this Section (or to such other address as the
        party
        shall have furnished in writing in accordance with the provisions of this
        Section 6.3).

       

      Secured
        Party:[see
        address as set forth on signatures pages hereto]

      

      

      Grantor:                  Fluid
        Media Networks, Inc.

      5813
        Uplander Way, Unit
        #A

      Culver
        City, CA 
90230-6607

      Attention:

      Facsimile:

      

      Such
        addresses may be changed by notice given as provided in this
        subsection.  Notices shall be effective upon the date of receipt;
        provided,  however, that a notice sent via telecopier shall be deemed
        effective upon the date indicated on proof of transmittal; notice sent via
        overnight delivery shall be deemed effective two (2) business days after
        deposit
        with such delivery service; and notice sent by U.S. certified mail shall
        be
        deemed effective five (5) business days after deposit with the U.S.
        mail.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      Section
        6.4.  Termination; Release of Liens.  Upon the
        Termination Date, the security interests granted herein shall automatically
        terminate with respect to the Collateral.  Upon any such termination,
        each Secured Party will promptly deliver to the Grantor all Collateral, if
        any,
        held by such Secured Party, and execute and deliver to the Grantor such
        documents as the Grantor shall reasonably request to evidence such termination,
        including without limitation any termination statements required under the
        UCC
        or otherwise. Following the Termination Date, the Secured Parties hereby
        irrevocably appoint Grantor as their attorney-in-fact, with full authority
        in
        the place and stead of the Secured Parties and in the name of each of them,
        following the Termination Date to take any action and to execute any instrument
        which the Grantor may deem necessary or advisable to accomplish the termination
        of this Security Agreement with respect to the Collateral.

       

      Section
        6.5.  Headings.  The various headings of this
        Security Agreement are inserted for convenience only and shall not affect
        the
        meaning or interpretation of this Security Agreement or any provisions
        thereof.

       

      Section
        6.6.  Severability.  Any provision of this Security
        Agreement, which is prohibited or unenforceable in any jurisdiction, shall,
        as
        to such provision and such jurisdiction, be ineffective to the extent of
        such
        prohibition or unenforceability without invalidating the remaining provisions
        of
        this Security Agreement or affecting the validity or enforceability of such
        provision in any other jurisdiction.

       

      Section
        6.7.  Governing Law; Jurisdiction and Venue.  THIS
        SECURITY AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED
        BY
        THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, EXCEPT TO THE EXTENT THAT THE
        VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
        HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS
        OF A
        JURISDICTION OTHER THAN THE STATE OF CALIFORNIA.   Any
        controversy, dispute or claim of any nature whatsoever arising out of, in
        connection with or in relation to this Security Agreement or the transaction
        contemplated herein will be resolved by final and binding arbitration in
        accordance with the Streamlined Rules of and by a retired judge at JAMS,
        Inc. in
        Los Angeles and all parties hereto consent to the personal jurisdiction of
        the
        State of California for such arbitration and enforcement of any award by
        JAMS.  The prevailing party in any dispute will be entitled to recover
        all reasonable attorney’s fees, costs and expenses in addition to other
        allowable costs.

       

      Section
        6.8.  Entire Agreement. The Stock Purchase Agreement, this
        Security Agreement and the Note(s) constitute the entire understanding among
        the
        parties hereto with respect to the subject matter hereof and thereof and
        supersede any prior or contemporaneous agreements, written or oral, with
        respect
        thereto.

       

      Section
        6.9.  Counterparts.  This Security Agreement may be
        executed by the parties hereto in several counterparts, each of which shall
        be
        deemed to be an original and all of which shall constitute together but one
        and
        the same agreement.

       

      Section
        6.10.  Power of Attorney.  Each Secured Party hereby
        irrevocably makes, constitutes and appoints Joseph J. Tebo the true and lawful
        attorney-in-fact of such Secured Party, with full power and authority, in
        the
        name and on behalf of each Secured Party, with respect to all matters arising
        out of or in connection with this Security Agreement.  This power of
        attorney and all authority conferred hereby shall be coupled with an interest
        and irrevocable and shall not be terminated by any act of any Secured Party
        or
        by operation of law, whether by the bankruptcy, dissolution, liquidation,
        death,
        disability or incapacity of a Secured Party or by the occurrence of any other
        event or events.

       

      

       

      [Signature
        Page to follow]

       

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, each of the parties
        hereto has this Security Agreement as of the date first above
        written.

      

      
        

        

        
          	 	 
	 	
                  GRANTORS:

                
	 	 
	 	 
	 	
                  Fluid
                    Media Networks, Inc., a Nevada corporation

                
	 	 
	 	
                  By:
                    /s/ Justin F. Beckett            

                
	 	 
	 	
                  Name:
                    Justin Beckett

                
	 	 
	 	
                  Title:
                    CEO

                
	 	 
	 	
                  Trusonic,
                    Inc., a Delaware corporation

                
	 	 
	 	
                  By:
                    /s/ Justin F. Beckett            

                
	 	 
	 	
                  Name:
                    Justin Beckett

                
	 	 
	 	
                  Its:
                    

                
	 	 
	 	
                  SECURED
                    PARTIES:

                

        

        

        
          	
                  ALCOY
                    INVESTMENTS, LLC, a

                  California
                    limited liability company

                   

                  By: /s/
                    Victor Vilplana            

                  Name:
                    Victor Vilplana

                  Its: Managing
                    Member

                  Address:    

                	 	
                   

                   

                   

                  /s/
                    Catherine Eikel            

                  CATHERINE
                    EIKEL

                   

                  Address:    

                   

                   

                
	 	 	 
	
                  /s/
                    Clement J. O'Neill            

                  CLEMENT
                    J. O’NEILL, Trustee of the O’Neill Family Trust dated July 4,
                    1995

                   

                  Address:    

                   

                   

                	 	
                  
                    /s/
                      Daniel K. O'Neill            

                    DANIEL
                      K. O’NEILL, Trustee of the Daniel K. O’Neill Trust dated May 1,
                      1995

                  

                   

                  Address:                          

                
	 	 	 

        

         

         

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

        
 

        
          	 	 	 
	
                  
                    /s/
                      Todd Felton            

                    TODD
                      FELTON

                  

                   

                  Address:   
                    4503 Hawley Rd.

                  San
                    Diego, CA 92116

                	 	
                  
                    /s/
                      Kenneth Elsberry            

                    KENNETH
                      ELSBERRY

                     

                  

                  Address:    7180
                    Encelia Dr.

                  La
                    Jolla, CA 92037

                  San
                    Diego, CA 92116

                
	 	 	 
	
                  GRIFFEN,
                    LLC

                   

                  By: 
                    /s/ Thomas R. Lafleur            

                  Name:  Thomas
                    R. Lafleur

                  Its:  President

                   

                  Address:   

                   

                   

                	 	
                  
                     

                     

                    /s/
                      James J. Tebo            

                    JAMES
                      J. TEBO

                  

                   

                  Address:    

                
	 	 	 
	
                  
                    /s/
                      Jean Cote            

                    JEAN
                      COTE

                  

                   

                  
                    /s/
                      Randa Cote            

                    RANDA
                      COTE

                  

                   

                  Address:  

                   

                   

                	 	
                  
                    /s/
                      Joseph J. Tebo            

                    JOSEPH
                      J. TEBO, Trustee of the Tebo Family Trust dated September 30,
                      1994

                  

                   

                  Address:    

                
	 	 	 
	
                  
                    /s/
                      David McAnulty         

                    DAVID
                      McANULTY

                  

                   

                  Address:   

                	 	
                  
                    /s/
                      Catherine Mullican        

                    CATHERINE
                      MULLICAN

                  

                   

                  Address:    

                   

                   

                
	 	 	 
	
                  
                    /s/
                      Derrick Oien            

                    DERRICK
                      OIEN

                  

                   

                  Address:    

                   

                   

                	 	
                  
                    /s/
                      Robert Eikel            

                    ROBERT
                      EIKEL

                  

                   

                  Address:    

                
	 	 	 

        

         

         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

        
 

        
          	 	 	 
	
                  
                    /s/
                      Neil T. Hadfield            

                    NEIL
                      T. HADFIELD, Co-Trustee of the Neil T. Hadfield & Margaret A. Jackson
                      Trust U/A/D 8/25/98

                  

                   

                  
                    /s/
                      Margaret A. Jackson        

                    MARGARET
                      A. JACKSON, Co-Trustee of the Neil T. Hadfield & Margaret A. Jackson
                      Trust U/A/D 8/25/98

                  

                   

                  Address:   

                   

                   

                	 	
                  
                    /s/
                      Robert E. Eikel            

                    ROBERT
                      E. EIKEL, Trustee of the Robert and Mary Eikel Trust dated
                      2/25/98

                  

                   

                  Address:    

                
	 	 	 
	
                  
                    /s/
                      Scott Annett            

                    SCOTT
                      ANNETT

                  

                   

                  Address:    

                   

                   

                	 	
                  
                    /s/
                      Scott Bjerke            

                    SCOTT
                      BJERKE

                  

                   

                  Address:   

                
	 	 	 
	
                  
                    /s/
                      Michelle Lazenby            

                    SHELLEY
                      LAZENBY

                  

                   

                  
                    /s/
                      Jeff Lazenby                

                    JEFF
                      LAZENBY

                  

                   

                  Address:    

                   

                   

                	 	
                  
                    /s/
                      Danny Sterne            

                    DANNY
                      STERNE

                  

                   

                  Address:   

                
	 	 	 
	
                  
                    /s/
                      Tim Ward                

                    TIMOTHY
                      WARD

                  

                   

                  Address:   

                   

                   

                	 	
                  
                    /s/
                      Eric Wennas            

                    ERIC
                      WENNAS

                  

                   

                  Address:    

                
	 	 	 
	
                  
                    /s/
                      Dave Whitaker            

                    DAVE
                      WHITAKER

                  

                   

                  Address:    

                	 	 

        

        
 

        12Exhibit 4.2  

REGISTRATION RIGHTS AGREEMENT  

        This REGISTRATION RIGHTS AGREEMENT (as amended, modified and/or supplemented from time to time, this "Agreement")
is dated as of            , 2007, by and among Del Frisco's Restaurant Group, Inc., a Delaware corporation (together with its successors, the
"Company"), and LSF5 COI Holdings, LLC, a Delaware limited liability company ("LSF"). 

RECITALS  

        WHEREAS, prior to the consummation of the anticipated initial public offering of the Company's Common Stock, LSF has acquired a number of shares of the Company's
Common Stock; and 

        WHEREAS,
in order to provide LSF with registration rights, the Company and LSF desire to enter into this Agreement to document the registration rights set forth in this Agreement. 

        NOW,
THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows: 

AGREEMENT  

        1.    Definitions.    As used herein, the following terms shall have the following meanings. 

        "Affiliate" means, as to any Person, any other Person that directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (including, with its correlative meanings, "controlled by" and "under common control with") means possession, directly or indirectly,
of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise). 

        "Agreement" has the meaning set forth in the introductory paragraph hereof. 

        "Board of Directors" means the Company's Board of Directors. 

        "Common Stock" means shares of the Company's common stock, par value $.001 per share. For purposes of this Agreement, a Person will be
deemed to be a holder or owner of Common Stock whenever such Person has the right (other than pursuant to this Agreement) to acquire directly or indirectly such Common Stock (directly or upon
conversion, exchange or exercise in connection with a transfer of securities or otherwise, but disregarding any restrictions or limitations with respect to the exercise of such right, including
whether or not such right to acquire has vested or is unvested), whether or not such acquisition has actually been effected. 

        "Demand Registration" means a registration under the Securities Act requested in accordance with  Section 2(a). 

        "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. 

        "Holder" means LSF only, or if LSF is not the holder of a majority of the Registrable Securities outstanding at any time, the holders of a
majority of the Registrable Securities outstanding at such time. 

        "Person" means an individual, a partnership, a partner, a corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof. 

        "Piggyback Registration" has the meaning set forth in Section 3(a). 

        "Public Offering" means the initial public offering registered under the Securities Act of the Company's Common Stock. 

 

        "Registrable Securities" means (i) any Common Stock held by LSF prior to the Public Offering and any Common Stock or other equity
securities of the Company subsequently acquired by LSF, and (ii) any securities issued or issuable directly or indirectly with respect to the securities referred to in clause (i) above
by way of dividend, distribution, recapitalization, merger, consolidation or other reorganization, including a recapitalization or exchange. In addition, as to any particular Registrable Securities,
such securities shall cease to be Registrable Securities after they have (A) been distributed to the public pursuant to an offering registered under the Securities Act, (B) been sold to
the public through a broker, dealer or market maker in compliance with Rule 144 of the regulations promulgated under the Securities Act (or any similar rule then in force), or (C) ceased
to be outstanding. 

        "Registration Expenses" means (i) all expenses incident to the Company's performance of or compliance with this Agreement,
including, without limitation, all registration and filing fees, fees and expenses of compliance with securities or blue sky laws, printing expenses, messenger and delivery expenses, fees and
disbursements of counsel for the Company and all independent certified public accountants, underwriters (excluding discounts and commissions) and other Persons retained by the Company, transfer taxes,
fees of transfer agents and registrars and fees of the National Association of Securities Dealers, Inc. and (ii) the reasonable fees and disbursements of (A) one counsel for the
holders of Registrable Securities (which counsel shall be chosen by the holders of a majority of the Registrable Securities proposed to be registered in the applicable registration), and
(B) one counsel for the Holder if its counsel is not the counsel chosen pursuant to immediately preceding clause (A). 

        "Rule 144" means Rule 144 under the Securities Act (or any similar rule then in force). 

        "SEC" means the Securities and Exchange Commission. 

        "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder. 

        "Subsidiary" means, with respect to any Person, any corporation, limited liability company, partnership, association or other business
entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or
(ii) if a limited liability company, partnership, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association or other business entity if such Person or Persons shall be allocated a majority of limited liability company, partnership,
association or other business entity gains or losses or shall be or control the managing director, general partner or similar controlling Person of such limited liability company, partnership,
association or other business entity. 

        2.    Demand Registrations.    

        (a)    Requests for Registration.    Subject to the remaining provisions of this Agreement (including the limitations
set forth in Section 2(b)), commencing 180 days following the closing of the Public Offering, the Holder may from time to time and at any
time request registration, whether underwritten or otherwise, under the Securities Act of all or part of the Registrable Securities held by such Holder. Each such request for a Demand Registration
shall specify the approximate number of Registrable Securities requested to be registered. Within 10 days after receipt of any such request for a Demand Registration, the Company will give
written notice of such requested registration to all other holders of Registrable Securities, if any, and will include (subject to Sections 2(c) and  8) in
such registration all Registrable Securities with respect to which 

2

 

the
Company has received written requests for inclusion therein within 30 days after the receipt by such holders of the Company's notice. 

        (b)    Limitations.    The Holder will be entitled, in accordance with the provisions of this Agreement, to request an
unlimited number of Demand Registrations with respect to the Registrable Securities held by such Holders in which the Company will pay all Registration Expenses. Regardless of whether any Demand
Registration becomes effective or counts as one of the permitted Demand Registrations, the Company will pay all Registration Expenses incurred in connection with any registration initiated as a Demand
Registration. 

        (c)    Priority on Demand Registrations.    The Company will not include in any Demand Registration any securities
that are not Registrable Securities without the prior written consent of the Holders initially requesting such registration. If a Demand Registration is an underwritten offering and the managing
underwriters advise the Company in writing that in their opinion the number of Registrable Securities and, if permitted hereunder, other securities requested to be included in such offering, exceeds
the number of Registrable Securities and other securities, if any, that can be sold therein without adversely
affecting the marketability of the offering, the Company will include in such registration (i) first, the number of Registrable Securities
requested to be included in such registration pro rata, if necessary, among the Holders based on the number of Registrable Securities requested to be included therein by each such Holder and
(ii) second, subject to the first sentence of this Section 2(c), any other securities of
the Company requested to be included in such registration pro rata, if necessary, on the basis of the number of such other securities requested to be included therein by each such holder. 

        (d)    Restrictions on Demand Registrations.    The Company may postpone for no more than 90 days in each
360-day period the filing or the effectiveness of a registration statement for a Demand Registration if both the Company's Board of Directors (in its reasonable good faith judgment) and
the Holder determine that such Demand Registration might reasonably be expected to have an adverse effect on any proposal or plan to engage in, or to cause the Company to disclose confidential
information regarding, any acquisition or disposal of stock or assets or any merger, consolidation, tender offer, financing or similar transaction (it being understood and agreed that the Company may
postpone the filing or effectiveness of a registration statement for a longer period of time, in any event not to exceed 120 days, if both the Company's Board of Directors (in its reasonable
good faith judgment) and the Holder reasonably determine that it is advisable to do so in order to ensure compliance with applicable state liquor laws; and it being further understood and agreed that
the Company shall use its commercially reasonable efforts to limit the number of days of such postponement); provided, that, in such event, the Holder
will be entitled to withdraw such request and, if such request is withdrawn, such Demand Registration will not count as a Demand Registration and the Company will pay all Registration Expenses in
connection with such registration. 

        (e)    Selection of Underwriters.    In the case of a Demand Registration for an underwritten offering, the Company
will have the right to select the investment banker(s) and manager(s) to administer the offering, which investment banker(s) and manager(s) shall be nationally recognized and reasonably acceptable to
the holders of a majority of the Registrable Securities initially requesting such registration. 

        (f)    Other Registration Rights.    Except for the rights provided in this Agreement, the Company will not grant to
any Persons the right to request the Company to register any of its equity securities or any securities convertible or exchangeable into or exercisable for such securities without the prior written
consent of the Holders. 

3

 

        3.    Piggyback Registrations.    

        (a)    Right to Piggyback.    Whenever the Company proposes to make a primary offering of its equity securities or
securities convertible or exchangeable into such securities and to register such securities under the Securities Act (other than (i) pursuant to a Demand Registration to which the provisions of  Section 2 shall apply, (ii) a registration statement on Form S-8 or S-4 or any successor form or
(iii) in connection with a registration the primary purpose of which is to register debt securities), and the registration form to be used may be used for the registration of Registrable
Securities (a "Piggyback Registration"), the Company will give prompt written notice to the Holder of its intention to effect such a registration. The
Company shall include in any such registration by it all Registrable Securities with respect to which it has received written requests for inclusion therein within 30 days after the receipt by
such holders of the Company's notice. 

        (b)    Piggyback Expenses.    The Registration Expenses of the holders of Registrable Securities will be paid by the
Company in all Piggyback Registrations involving Registrable Securities, regardless of whether any such registration becomes effective. 

        (c)    Priority on Piggyback Registrations.    If a Piggyback Registration is an underwritten offering and the
managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number that can be sold in such offering
without adversely affecting the marketability of the offering, the Company will include in such registration (i) first, the securities that the
Company proposes to sell, (ii) second, the number of Registrable Securities requested to be included in such registration pro rata, if necessary,
among the holders of Registrable Securities based on the number of Registrable Securities requested to be included therein by each such Holder, and
(iii) third, subject to Section 2(f), any other securities of the Company requested to be
included in such registration pro rata, if necessary, on the basis of the number of such other securities requested to be included therein by each such Holder. 

        (d)    Selection of Underwriters.    If any Piggyback Registration is an underwritten offering, the Company will have
the right to select the investment banker(s) and manager(s) to administer the offering, which investment banker(s) and manager(s) shall be nationally recognized and reasonably acceptable to the
Holder. 

        (e)    Other Registrations.    If the Company has previously filed a registration statement with respect to the
Registrable Securities pursuant to this Section 3, and if such previous registration has not been withdrawn or abandoned, the Company shall not
file or cause to be effected any other registration of any of its equity securities or securities convertible or exchangeable into or exercisable for its equity securities under the Securities Act
(except on Forms S-4 or S-8 or any successor forms), whether on its own behalf or at the request of any Holder or holders of such securities, until a period of at least six
months has elapsed from the effective date of such previous registration, unless the Holder has otherwise agreed. 

        4.    Holdback Agreements.    

        (a)   To
the extent not inconsistent with applicable law, the Holder hereby agrees not to effect any public sale or distribution (including, without limitation, sales pursuant
to Rule 144) of equity securities of the Company or any securities convertible into or exchangeable or exercisable for such securities, during the seven days prior to and the 90-day
period beginning on the effective date of any Demand Registration or Piggyback Registration for a public offering to be underwritten on a firm commitment basis in which the Registrable Securities are
included (except as part of such underwritten registration) if the Holder has received written notice of such registration at least five days prior to such effective date, unless (i) the
underwriters managing the registered public offering otherwise agree and (ii) the Holder otherwise agrees. 

4

 

        (b)   the
Company agrees: (i) not to effect any public sale or distribution of its equity securities, or any securities convertible into or exchangeable or exercisable
for such securities, during the seven days prior to and during the 90-day period beginning on the effective date of any Demand Registration or Piggyback Registration for Registrable
Securities, in each case, to the extent involving a public offering to be underwritten on a firm commitment basis (except as part of such underwritten registration or pursuant to registrations on
Forms S-4 or S-8 or any successor forms), unless (A) the underwriters managing the registered public offering otherwise agree that such sale or distribution would not
negatively affect such Demand Registration or Piggyback Registration or (B) the Holder otherwise agrees that such sale or distribution would not negatively affect such Demand Registration or
Piggyback Registration; and (ii) to use its commercially reasonable efforts to cause each Holder, and each of the Company's or its Subsidiaries' directors and officers who hold, equity
securities of the Company or any securities convertible into or exchangeable or exercisable for such equity securities, purchased from the Company or any other Person at any time after the date hereof
(other than in a registered public offering) to agree not to effect any public sale or distribution (including sales pursuant to Rule 144) of any such securities during such period (except as
part of such underwritten registration, if otherwise permitted), unless (X) the underwriters managing the registered public offering otherwise agree that such sale or distribution would not
negatively affect such Demand Registration or Piggyback Registration or (Y) the Holder otherwise agrees that such sale or distribution would not negatively affect such Demand Registration or
Piggyback Registration. 

        5.    Registration Procedures.    Whenever the Holder has requested that any Registrable Securities be registered
pursuant to this Agreement, the Company will use its reasonable best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of
disposition thereof, and pursuant thereto the Company will as expeditiously as possible: 

        (a)   prepare
and file with the SEC a registration statement with respect to such Registrable Securities and use its reasonable best efforts to cause such registration
statement to become effective (provided, that before filing a registration statement or prospectus or any amendments or supplements thereto, the Company
will furnish to the counsel selected by the Holder copies of all such documents proposed to be filed, which documents shall be subject to the review and comment of such counsel); 

        (b)   prepare
and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep
such registration statement effective for a period of not less than three years (or such shorter period of time as shall be necessary for the sale of the Registrable Securities) and comply with the
provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by
the sellers thereof set forth in such registration statement; 

        (c)   furnish
to each seller of Registrable Securities such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary prospectus) and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities
owned by such seller; 

        (d)   use
its reasonable best efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as any seller
reasonably requests and do any and all other acts and things that may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller (provided, that the Company will not be required to (i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this subsection, (ii) subject 

5

 

itself
to taxation in any such jurisdiction or (iii) consent to general service of process (i.e., service of process that is not limited solely
to securities law violations) in any such jurisdiction); 

        (e)   notify
each seller of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not
misleading or any representations or warranties of the Company contained in agreements contemplated by Section 5(h) cease to be true, and, at the
request of any such seller, the Company will promptly prepare and file, pursuant to Rule 424 under the Securities Act, a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein
not misleading; 

        (f)    cause
all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed or otherwise designated
for trading in the same manner as similar securities of the Company are then listed or designated or, if no such similar securities are then listed or designated, in a manner satisfactory to the
Holder; 

        (g)   provide
a transfer agent and registrar for all such Registrable Securities not later than the effective date of such registration statement; 

        (h)   enter
into such customary agreements (including underwriting agreements in customary form) and take all such other actions as the holders of a majority of the
Registrable Securities being sold or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (including, without limitation,
effecting a stock split or a combination of shares); 

        (j)    make
available for inspection by any seller of Registrable Securities, any underwriter participating in any disposition pursuant to such registration statement and any
attorney, accountant or other agent retained by any such seller or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the officers,
directors, employees and independent accountants of the Company to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such
registration statement; 

        (i)    otherwise
use its reasonable best efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at least twelve months beginning with the first day of the first full calendar quarter of the Company after the effective date of
the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder; 

        (j)    permit
any holder of Registrable Securities that, in such holder's sole and exclusive judgment, might be deemed to be an underwriter or a controlling person of the
Company to participate in the preparation of such registration or comparable statement and to require the insertion therein of material, furnished to the Company in writing, which in the reasonable
judgment of such holder and its counsel should be included; 

        (k)   in
the event of the issuance of any stop order suspending the effectiveness of a registration statement, or of any order suspending or preventing the use of any related
prospectus or suspending the qualification of any securities included in such registration statement for sale in any jurisdiction, or, in either case, the initiation or the threatening of any such
proceeding, use its reasonable best efforts promptly to obtain the withdrawal of such order; 

6

 

        (l)    use
its reasonable best efforts to cause such Registrable Securities covered by such registration statement to be registered with or approved by such other governmental
agencies or authorities as may
be necessary to enable the sellers thereof to consummate the disposition of such Registrable Securities; and 

        (m)  obtain
a "cold comfort" letter from the independent public accountants of the Company in customary form and covering such matters of the type customarily covered by
"cold comfort" letters as the holders of a majority of the Registrable Securities being sold reasonably request. 

If
any such registration or comparable statement refers to any Holder by name or otherwise as the Holder of any securities of the Company and if, in its sole and exclusive judgment, such Holder is or
might be deemed to be a controlling Person of the Company, such Holder shall have the right to require (i) the insertion therein of language, in form and substance satisfactory to such Holder
and presented to the Company in writing, to the effect that the holding by such Holder of such securities is not to be construed as a recommendation by such Holder of the investment quality of the
Company's securities covered thereby and that such holding does not imply that such Holder will assist in meeting any future financial requirements of the Company or (ii) in the event that such
reference to such Holder by name or otherwise is not required by the Securities Act or any similar federal statute then in force, the deletion of the reference to such Holder;  provided, that with
respect to this clause (ii) such Holder shall furnish to the Company such legal opinions as the Board of Directors shall
reasonably request to such effect, which opinion of counsel shall be reasonably satisfactory to the Company. 

        6.    Registration Expenses.    

        (a)   All
Registration Expenses shall be borne by the Company with respect to any primary registration, proposed or otherwise, of its securities (including as contemplated by  Section 2(b) with respect to any
and all Demand Registrations, whether or not any such Demand Registration becomes effective, and whether or not
all, some or none of the Registrable Securities are actually sold pursuant to the respective Demand Registration). 

        (b)   To
the extent Registration Expenses are not required to be paid by the Company pursuant to Section 2(b) or as
otherwise set forth herein, each holder of securities included in any registration hereunder shall pay those Registration Expenses specifically allocable to the registration of such holder's
securities so included, and any Registration Expenses not so allocable shall be borne by all sellers of securities included in such registration in proportion (based on the amount of securities
included in the registration) to the aggregate selling price of the securities to be so registered; provided, that in no event shall the Company be
required to pay for any underwriting discounts or commissions or any broker's fees or other similar selling fees attributable to the sale of Registrable Securities, which shall be borne by the holders
of the Registrable Securities so registered pro rata on the basis of the number of their shares so registered. 

        7.    Indemnification.    

        (a)   The
Company agrees to indemnify, to the extent permitted by law, each Holder and its Affiliates and their respective managers, members, partners, officers and directors
and each Person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses, joint or several, arising out of or based upon any
untrue or alleged untrue statement of material fact contained in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse such Holder, manager, member, director, officer or
controlling Person for any legal or other expenses reasonably incurred by such Holder, manager, member, director, officer or controlling Person in connection with the investigation or 

7

 

defense
of such loss, claim, damage, liability or expense, except insofar as the same are caused by or contained in any information furnished in writing to the Company by such Holder expressly for use
therein or by such Holder's failure to deliver a copy of the registration statement or prospectus or any amendments or supplements thereto after the Company has furnished such Holder with a sufficient
number of copies of the same. In connection with an underwritten offering, the Company will indemnify such underwriters, their officers and directors and each Person who controls such underwriters
(within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the Holders of Registrable Securities. 

        (b)   In
connection with any registration statement in which a Holder is participating, each such Holder will furnish to the Company in writing such information and affidavits
as the Company reasonably requests for use in connection with any such registration statement or prospectus and, to the extent permitted by law, will indemnify the Company in connection with any
registration of Registrable Securities, and its managers, members, directors and officers and each Person who controls the Company against any losses, claims, damages, liabilities and expenses, joint
or several, resulting from any untrue or alleged untrue statement of material fact contained in such registration statement, prospectus or preliminary prospectus or any amendment therefor supplement
thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue
statement or omission is contained in any information or affidavit so furnished in writing by such Holder expressly for use therein; provided, that the
obligation to indemnify will be individual (not joint and several) to each Holder and will be limited to the net amount of proceeds received by such Holder from the sale of Registrable Securities
pursuant to such registration statement. 

        (c)   Any
Person entitled to indemnification hereunder will (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks
indemnification and (ii) unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party will not be subject
to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not
to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel (plus one firm of local counsel in each applicable jurisdiction) for all parties
indemnified by such indemnifying party with respect to such
claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. 

        (d)   The
indemnification provided for under this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party
or any manager, member, officer, partner, director or controlling Person of such indemnified party and will survive the transfer of securities. 

        (e)   If
a court of competent jurisdiction holds that the foregoing indemnity is unavailable, then the indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages, liabilities or expenses (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying
party on the one hand and the indemnified party on the other or (ii) if the allocation provided by clause (i) above is not permitted by applicable law or provides a lesser sum to the
indemnified party than the amount hereinafter calculated, in such proportion as is appropriate to reflect not only the relative benefits received by the indemnifying party on the one hand and the
indemnified party on the other but also the relative fault of the indemnifying party and the indemnified party as well as any other 

8

 

relevant
equitable considerations. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by or on behalf of the indemnifying party or the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. Notwithstanding anything to the contrary in this  Section 7, no holder shall be required,
pursuant to this Section 7, to contribute any
amount in excess of the net proceeds received by such indemnifying party from the sale of securities in the offering to which the losses, claims, damages, liabilities or expenses of the indemnified
party relate. 

        8.    Participation in Underwritten Registrations.    No Person may participate in any registration hereunder that is
underwritten unless such Person (a) agrees to sell such Person's securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to
approve such arrangements, (b) completes and executes all customary questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the
terms of such underwriting arrangements and this Agreement and (c) furnishes in writing to the Company such information regarding such Person, the plan of distribution of the Registrable
Securities and other information as the Company may from time to time reasonably request or as may be legally required in connection with such registration;  provided, that no holder of Registrable
Securities included in any underwritten registration shall be required to make any representations or warranties
to the Company or the underwriters (other than representations and warranties regarding such holder and such holder's intended method of distribution) or to undertake any indemnification obligations
to the Company or the underwriters with respect thereto (except as otherwise provided in Section 7); provided
further, that, with respect to the subject matter of Section 4(a), no holder of Registrable Securities shall be required
to undertake obligations under this Section 8 that are more onerous than the obligations of each holder of Registrable Securities under  Section 4(a). 

        9.    Rule 144 Reporting.    With a view to making available to the holders of Registrable Securities the
benefits of certain rules and regulations of the SEC that may permit the sale of the Registrable Securities to the public without registration, the Company agrees to use its reasonable best efforts
to: 

        (a)   make
and keep current public information available, within the meaning of Rule 144 or any similar or analogous rule promulgated under the Securities Act, at all
times after it has become subject to the reporting requirements of the Exchange Act; 

        (b)   file
with the SEC, in a timely manner, all reports and other documents required under the Securities Act and Exchange Act (after it has become subject to such reporting
requirements); and 

        (c)   so
long as any party hereto owns any Registrable Securities, furnish to such Person forthwith upon request a written statement as to its compliance with the reporting
requirements of said Rule 144 (at any time commencing 90 days after the effective date of the first registration filed by the Company for an offering of its securities to the general
public), the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements); a copy of its most recent annual or quarterly report; and such other reports
and documents as such Person may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any such securities without registration. 

        10.    Notices.    All notices, demands and other communications to be given or made under or by reason of provisions
under this Agreement (a) shall be in writing, and (b) shall be deemed to have been given or made (x) when delivered personally or via courier or a nationally recognized overnight
delivery service (delivery charges prepaid) or (y) when telecopied, with telephonic confirmation of 

9

 

receipt.
All such notices, demands and other communications shall be sent (i) in the case of any Stockholder, to the addresses or facsimile numbers as have been supplied in writing to the
Company and (ii) in the case of the Company, to Del Frisco's Restaurant Group, Inc., 224 E. Douglas, Suite 700, Wichita, Kansas 67202. 

        11.    Miscellaneous.    

        (a)    No Inconsistent Agreements.    Without the prior written consent of the Holders, the Company will not enter
into any agreement that is inconsistent with or violates or impairs the rights granted to the holders of Registrable Securities in this Agreement. 

        (b)    Remedies.    Any Person having rights under any provision of this Agreement will be entitled to enforce such
rights specifically to recover damages caused by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. The parties hereto agree and acknowledge that
money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that any party may in his, her or its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or other security) for specific performance and for other injunctive relief in order to enforce or prevent violation of the provisions of this
Agreement. 

        (c)    Amendments and Waivers.    Except as otherwise provided herein, no modification, amendment or waiver of any
provision of this Agreement shall be effective unless such modification, amendment or waiver is approved in writing by the Company and the Holder;  provided, that (i) no amendment that adversely
affects LSF in a manner different from any other Holder shall be effective against LSF without
LSF's written consent. The failure of any party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such
party thereafter to enforce each and every provision of this Agreement in accordance with its terms. 

        (d)    Successors and Assigns.    Except as otherwise expressly set forth herein, (x) all rights, covenants and
agreements in this Agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not,
and (y) whether or not any express assignment has been made, the provisions of this Agreement that are for the benefit of the Holders or purchasers of Registrable Securities are also for the
benefit of, and enforceable by, any subsequent holder of Registrable Securities so long such subsequent holder (i) acquired such Registrable Securities in a private transaction not registered
pursuant to the Securities Act and not pursuant to Rule 144, and (ii) agreed in writing to be bound by the terms hereof. 

        (e)    Severability.    Whenever possible, each provision of this Agreement shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision had never been contained herein, and to the fullest extent permitted by law a suitable and equitable provision will be substituted therefor in order to
carry out, so far as may be valid and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision. 

        (f)    Counterparts.    This Agreement may be executed simultaneously in two or more counterparts, any one of which
need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same Agreement. 

        (g)    Descriptive Headings.    The descriptive headings of this Agreement are inserted for convenience only and do
not constitute a part of this Agreement. 

10

 

        (h)    Entire Agreement.    This Agreement embodies the complete agreement and understanding among the parties hereto
with respect to the subject matter hereof and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, that may have related to the
subject matter hereof in any way. 

        (i)    Governing Law.    All issues and questions concerning the application, construction, validity, interpretation
and enforcement of this Agreement shall be governed by and construed in accordance with the domestic laws of the State of Texas, without giving effect to any choice of law or conflict of law provision
or rule (whether of the State of Texas or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Texas. 

        (j)    Jurisdiction and Venue.    ALL JUDICIAL PROCEEDINGS BROUGHT BY OR AGAINST THE COMPANY OR THE HOLDER WITH
RESPECT TO THIS AGREEMENT, ANY OTHER AGREEMENT CONTEMPLATED HEREBY OR ANY TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY SHALL BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE
STATE OF TEXAS LOCATED IN DALLAS COUNTY. BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY AND THE HOLDER ACCEPT FOR ITSELF, HIMSELF AND HERSELF AND IN CONNECTION WITH ITS, HIS OR HER
RESPECTIVE PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREE TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT. THE COMPANY AND THE HOLDER HEREBY WAIVE ANY CLAIM THAT SUCH JURISDICTION IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK OF VENUE. 

        (k)    Waiver of Jury Trial.    THE COMPANY AND THE HOLDER HEREBY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT OR THE VALIDITY, PROTECTION, INTERPRETATION OR ENFORCEMENT THEREOF. THE COMPANY AND
THE HOLDER AGREE THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND WOULD NOT ENTER INTO THIS AGREEMENT IF THIS SECTION WERE NOT PART OF THIS AGREEMENT. 

[Signature page follows.]

11

 

        IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed as of the date first above written. 

	 	 	DEL FRISCO'S RESTAURANT GROUP, INC.
	

 	
 	

By:	

 
	 	 	 	

	

 	
 	

Name:	

 
	 	 	 	

	

 	
 	

Title:	

 
	 	 	 	

	

 	
 	

LSF5 COI HOLDINGS, LLC
	

 	
 	

By:	

 
	 	 	 	

	

 	
 	

Name:	

 
	 	 	 	

	

 	
 	

Title:	

 
	 	 	 	

12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00131-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00131-of-00352.parquet"}]]