EMPLOYMENT AGREEMENT



        This EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as

this 2nd day of October 2000, by and between EUPHONIX, INC., a California

corporation (the "Company"), having its principal place of business located at

220 Portage Avenue, Palo Alto, CA 94306, and STEVE VINING ("Vining"), an

individual residing at 17053 Palisades Circle, Pacific Palisades, California

90272.



                              W I T N E S S E T H:



        WHEREAS, the Company is a leading supplier of computer controlled

professional audio production systems (the "Existing Business");



        WHEREAS, the Company desires to expand its Existing Business by

developing a Internet delivery format for music and other content that is

intended to be played in so-called "true CD/DVD-A quality" (the "New Business");



        WHEREAS, the parties acknowledge that Vining has experience in or

related to tile business of tile Company and associated services and that

Vining's abilities and services are unique and essential to the prospects of the

Company; and



        WHEREAS, in light of the foregoing, the Company desires to employ Vining

as its Chief Executive Officer and Vining desires to accept such employment.



        NOW, THEREFORE, in consideration of the mutual covenants and

representations herein contained and the initial benefits derived herefrom, the

parties hereto, intending to be legally bound, covenant and agree as follows:



        1.     Employment of Vining; Duties and Status.



               (a) Position and Reporting. The Company hereby engages Vining as

a full-time executive employee to hold the office of Chief Executive Officer of

the Company for the period (the "Employment Period") specified in Section 3(a),

reporting only to the Company's Board of Directors, and Vining accepts such

employment, oil the terms and conditions set forth in this Agreement,



               (b) Employment. Throughout the Employment Period, Vining shall

perform and discharge well and faithfully the duties which may be assigned to

him from time to time by the Company's Board of Directors, provided such duties

are consistent with the role of a Chief Executive Officer. Vining agrees to

diligently and professionally develop the Company's Existing Business and New

Business (collectively, tile "Company Business"), its processes, systems, and

intellectual property. Vining shall devote a substantial portion of his working

time, attention and energies to the Company Business and shall not during the

Employment Period be engaged (whether or not during normal business hours) in

any other business or professional activity, whether or riot such activity is

pursued for gain, profit or other pecuniary advantage, that substantially

conflicts with, or materially interferes with the performance of his duties

hereunder. Notwithstanding



<PAGE>   2





anything to the contrary, Vining shall be entitled to (i) serve on the board of

directors of no more than 4 corporations provided that such corporations are not

materially engaged in and do not become materially engaged in any material

aspect of the Company Business, (ii) engage in such civic and charitable

activities that do not materially interfere with the performance of his duties

set forth hereunder, (iii) own, operate, and participate in the business and

activities of Norwegian Palms Incorporated ("Nor Palms"), and (iv) accept such

additional office or offices to which he may be appointed by the Company,

provided that the performance of the duties of such office or offices shall

generally be consistent with the scope of the duties provided for in Section

1(a) hereof.



               (c) Proprietary Rights Agreement. Vining agrees to execute the

Employee Proprietary Information and Inventions Agreement (the "Proprietary

Rights Agreement"), attached hereto as Exhibit A, and to comply with the

provisions thereof.



               (d) New Business. The Company agrees to diligently and actively

pursue the. New Business and activities associated therewith, In this regard,

the Company covenants and agrees to use best efforts to obtain capital for use

in the Now Business.



               (e) Key Officers. The parties acknowledge and agree that Vining

shall be the most senior officer and employee within the Company and that all

employees of the Company (including, without limitation, the Company's

President, Chief Operating Officer, Chief Financial Officer, Chief Marketing

Officer, and Chief Technical Officer) shall report to Vining. Vining shall have

the reasonable discretion, which shall be exercised in the Company's best

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