{"id":43231,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/agreement-of-merger-jamtv-corp-and-tunes-network-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"agreement-of-merger-jamtv-corp-and-tunes-network-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/agreement-of-merger-jamtv-corp-and-tunes-network-inc.html","title":{"rendered":"Agreement of Merger &#8211; JAMtv Corp. and Tunes Network Inc."},"content":{"rendered":"<pre>\n                              AGREEMENT OF MERGER\n\n      THIS AGREEMENT OF MERGER (this \"Agreement\") is dated as of June 9, 1998 \namong JAMtv CORPORATION, a Delaware corporation (\"JAMtv\"), TUNES ACQUISITION \nCORP., a Delaware corporation and a wholly-owned subsidiary of JAMtv (\"Merger \nSub\"), and TUNES NETWORK, INC., a California corporation (\"Tunes\").\n\n                                    RECITAL\n\n      WHEREAS, the Boards of Directors of each of JAMtv, Tunes and Merger Sub \nhave approved the terms and conditions of the acquisition of Tunes by JAMtv \nto be effected by the merger of Tunes with and into Merger Sub, pursuant to \nthe terms and subject to the conditions of this Agreement, the Delaware \nGeneral Corporation Law (the \"DGCL\") and the California General Corporation \nLaw (the \"CGCL\").\n\n      NOW THEREFORE, in consideration of the premises and mutual covenants \nand agreements contained in this Agreement, JAMtv, Merger Sub and Tunes agree \nas follows:\n\n                                   SECTION 1\n                            THE MERGER; DEFINITIONS\n\n      1.1   MERGER.  Subject to the terms and conditions of this Agreement \nand of the Certificate of Merger in substantially the form attached hereto as \nEXHIBIT A (the \"Merger Certificate\"), Tunes shall be merged with and into \nMerger Sub (the \"Merger\") in accordance with the applicable provisions of the \nDGCL and the CGCL, and Merger Sub shall survive the Merger.  The Merger \nCertificate provides for the mode of consummating the Merger and the effects \nthereof.  The Merger Certificate shall be executed by the parties thereto \nconcurrently with the execution of this Agreement.\n\n      1.2   EFFECTIVE TIME OF THE MERGER.  Subject to the provisions of this \nAgreement and the Merger Certificate, the Merger Certificate, together with \nrequired certificates, if any, shall be duly filed in accordance with the \nDGCL and the CGCL simultaneous with or as soon as practicable following the \nClosing (as defined in Section 1.3 hereof).  The Merger shall become \neffective (the \"Effective Time\") as provided under the DGCL and the CGCL.\n\n      1.3   CLOSING.  Unless this Agreement shall have been terminated \npursuant to Section 8 hereof, the closing of the Merger (the \"Closing\") will \ntake place at 10:00 a.m. on June 15, 1998 (the \"Closing Date\"), or, if the \nclosing conditions contained in Section 6 hereof are not satisfied or waived \non or prior to such date, the first business day after satisfaction or waiver \nof all such conditions, at the offices of Freeborn &amp; Peters, 311 South Wacker \nDrive, Suite 3000, Chicago, Illinois 60606-6677.\n\n      1.4   EFFECT OF MERGER.  Subject to the terms and conditions of this \nAgreement and the Merger Certificate, at the Effective Time: (i) the separate \nexistence of Tunes shall cease and Tunes \n\n\n\n\nshall be merged with and into Merger Sub (Merger Sub and Tunes are each \nsometimes referred to as the \"Constituent Corporations,\" and Merger Sub, \nafter the Merger, is sometimes referred to as the \"Surviving Corporation\") \nand (ii) the Surviving Corporation shall possess all the rights, privileges, \nimmunities and franchises, of a public as well as of a private nature, of \neach of the Constituent Corporations; and all property, real, personal and \nmixed, and all debts due on whatever account, including subscriptions to \nshares, and all other choses in action, and all and every other interest of \nor belonging to or due to each of the Constituent Corporations shall be taken \nand deemed to be vested in the Surviving Corporation without further act or \ndeed; and the title to any real estate, or any interest therein, vested in \neither of the Constituent Corporations shall not revert or be in any way \nimpaired by reason of such merger or consolidation; and the Surviving \nCorporation shall thenceforth be responsible and liable for all the \nliabilities and obligations of each of the Constituent Corporations; and any \nclaim existing or action or proceeding pending by or against a Constituent \nCorporation may be prosecuted as if such merger or consolidation had not \ntaken place; and neither the rights of creditors nor any liens upon the \nproperty of any Constituent Corporation shall be impaired by the Merger.\n\n      1.5   CERTIFICATE OF INCORPORATION; BYLAWS; DIRECTORS; OFFICERS.  At \nthe Effective Time, (i) the Certificate of Incorporation of Merger Sub, \nsubstantially in the form attached hereto as EXHIBIT B, shall be the \nCertificate of Incorporation of the Surviving Corporation, until thereafter \nduly altered, amended or repealed as provided in the DGCL; (ii) the Bylaws of \nMerger Sub, as in effect immediately prior to the Effective Time, shall be \nthe Bylaws of the Surviving Corporation, until thereafter duly altered, \namended or repealed as provided in the DGCL or in the Certificate of \nIncorporation or Bylaws of the Surviving Corporation; (iii) Howard A. \nTullman, Neal Moszkowski, and Kamran Mohsenin shall be the initial directors \nof the Surviving Corporation and will hold office from the Effective Time \nuntil they first resign or their respective successors are duly elected or \nappointed and qualified in the manner provided in the Certificate of \nIncorporation and Bylaws of the Surviving Corporation, as such instruments \nmay be amended from time to time, either before or after the Effective Time, \nor as otherwise provided by law; and (iv) Howard A. Tullman, as Chief \nExecutive Officer, Kamran Mohsenin, as President, David Anderson, as \nExecutive Vice President, and Stuart Frankel, as Treasurer and Secretary, \nshall be the initial officers of the Surviving Corporation.\n\n      1.6   TAKING OF NECESSARY ACTION.  Prior to the Effective Time, the \nparties shall take, or cause to be taken, all such reasonable actions as may \nbe necessary or appropriate in order to effect, as expeditiously as \nreasonably practicable, the Merger.\n\n      1.7   TAX CONSEQUENCES.  For federal income tax purposes, the Merger is \nintended to constitute a reorganization within the meaning of Section 368 of \nthe Code.  The parties to this Agreement hereby adopt this Agreement as a \n\"plan of reorganization\" within the meaning of Sections 1.368-2(g) and \n1.368-3(a) of the United States Treasury Regulations.\n\n      1.8   DEFINITIONS.  As used in this Section 1 and elsewhere in this \nAgreement, the following terms shall have the following respective meanings:\n\n            \"AAA\" shall have the meaning set forth in Section 9.3 hereof.\n\n                                       2\n\n\n\n            \"Accounts Receivable\" shall have the meaning set forth in Section \n3.6 hereof.\n\n            \"Aggregate Closing Consideration\" shall mean the amount equal to \nthe aggregate consideration payable upon the Closing with respect to all \noutstanding shares of Tunes Common Stock, Tunes Options, and Convertible Debt \nthat an Investor has elected to convert into shares of Tunes Common Stock, as \ncalculated in accordance with the provisions of Sections 2.1, 2.2 and 2.3 \nhereof, as applicable, minus the aggregate of the Pro Rata Share of Total \nClosing Consideration attributable to all Dissenting Shares.\n\n            \"Applicable Deduction\" shall mean, with respect to each share of \nTunes Common Stock (including shares underlying Vested Tunes Options and \nConvertible Debt that an Investor has elected to convert into shares of Tunes \nCommon Stock), the amount equal to the product of (A) the Excess Liability \nAmount, if any, on the date of Closing, multiplied by (B) a fraction, the \nnumerator of which is the applicable Pro Rata Share of Cash Closing \nConsideration for such share, and the denominator of which is equal to \n$1,550,000 minus the aggregate of the Pro Rata Share of Cash Closing \nConsideration attributable to all Dissenting Shares.\n\n            \"Artists Guild\" shall have the meaning set forth in Section \n3.16(b) hereof.\n\n            \"Balance Sheet Date\" means June 30, 1998.\n\n            \"Cash Closing Consideration\" means $1,550,000, subject to \nreduction in accordance with the terms of this Agreement.\n\n            \"Closing\" shall have the meaning set forth in Section 1.3 hereof.\n\n            \"Closing Date\" shall have the meaning set forth in Section 1.3 \nhereof.\n\n            \"Closing Shares\" means the shares of JAMtv Common Stock to be \nissued by JAMtv at the Closing, which shall be the Initial Closing Shares as \nreduced in accordancd with Sections 2.9 and 2.10 of this Agreement, which \nshall be the Initial Closing Shares, subject to reduction in accordance with \nSection 2.7.5 of this Agreement.\n\n            \"COBRA\" shall have the meaning set forth in Section 3.11(m) \nhereof.\n\n            \"Code\" means the Internal Revenue Code of 1986, as amended.\n\n            \"Computer System\" shall have the meaning set forth in Section \n3.17 hereof.\n\n            \"Constituent Corporations\" shall have the meaning set forth in \nSection 1.4 hereof.\n\n            \"Contingent Shares\" shall have the meaning set forth in Section \n2.7(a) hereof.\n\n            \"Convertible Debt\" shall mean the indebtedness of Tunes that is \nconvertible into Tunes Common Stock.\n\n                                       3\n\n\n\n            \"Convertible Debt Instrument\" shall mean a Convertible Promissory \nNote or such other debt instrument which evidences Convertible Debt.\n\n            \"Copyrights\" shall have the meaning set forth in Section \n3.16(a)(2) hereof.\n\n            \"Damages\" shall have the meaning set forth in Section 7.1(a) \nhereof.\n\n            \"Dissenting Shares\" shall mean any shares of Tunes Common Stock \nheld by a holder who has properly exercised appraisal rights for such shares \nin accordance with the DGCL or the CGCL, as applicable, and who, as of the \nEffective Time, has not effectively withdrawn or lost such appraisal rights.\n\n            \"Earnest Money\" means the $200,000 cash deposit previously paid \nto Tunes by JAMtv, the receipt of which Tunes hereby acknowledges and which \ndeposit is refundable to JAMtv in accordance with Section 8 hereof.\n\n            \"Effective Time\" shall have the meaning set forth in Section 1.2 \nhereof.\n\n            \"Employee Bonus Payment\" shall have the meaning set forth in \nSection 5.15 hereof.\n\n            \"Environmental Laws\" shall have the meaning set forth in Section \n3.21(c) hereof.\n\n            \"ERISA\" shall have the meaning set forth in Section 3.11(a) \nhereof.\n\n            \"Escrow Agent\" shall have the meaning set forth in Section 6.2 \nhereof.\n\n            \"Escrow Agreement\" shall mean the Escrow Agreement substantially \nin the form attached as EXHIBIT C hereto.\n\n            \"Escrow Fund\" shall have the meaning set forth in Section 2.7 \nhereof.\n\n            \"Excess Liability Amount\" shall mean the amount by which the \nliabilities of Tunes which exist as of the Closing Date or otherwise areise \nout of or reelate to Tunes; conduct before the Closing Date (including all \namounts paid by JAMtv to Tunes before the Closing Date to enable Tunes to \nsatisfy such liabilities ) exceed $105,082.  The Excess Liability Amount as \nof May 31, 1998, is attached hereto as SCHEDULE 1.8, and, from time to time, \nshall be adjusted as of the Closing Date. \n\n            \"Exchange Agent\" shall have the meaning set forth in Section 2.8 \nhereof.\n\n            \"Financial Statements\" shall have the meaning set forth in \nSection 3.5 hereof.\n\n            \"Former Shareholders\" shall have the meaning set forth in Section \n7.8 hereof.\n\n            \"GAAP\" shall have the meaning set forth in Section 3.5 hereof.\n\n                                       4\n\n\n\n            \"Governmental Entity\" shall have the meaning set forth in Section \n3.4(c) hereof.\n\n            \"Hazardous Material\" shall have the meaning set forth in Section \n3.21(a) hereof.\n\n            \"Indemnification Deadline Date\" shall have the meaning set forth \nin Section 7.2(d) hereof.\n\n            \"Information Statement\" shall have the meaning set forth in \nSection 3.26 hereof.\n\n            \"Initial Closing Shares\" means 300,000 shares of JAMtv Common \nStock.\n\n            \"Intellectual Property Assets\" shall have the meaning set forth \nin Section 3.16(a) hereof.\n\n            \"IPO Shares\" shall have the meaning set forth in Section 2.7 \nhereof.\n\n            \"Investor\" shall mean each of the persons identified on SCHEDULE \n2.3 that is a holder of Convertible Debt in such amounts as are set forth on \nSCHEDULE 2.3.\n\n            \"JAMtv Audited Financial Statements\" shall have the meaning set \nforth in Section 4.6 hereof.\n\n            \"JAMtv Claim\" shall have the meaning set forth in Section 7.4(a) \nhereof.\n\n            \"JAMtv Certificate\"shall have the meaning set forth in Section \n7.4(a) hereof.\n\n            \"JAMtv Common Stock\" shall mean the common stock, $.01 par value \nper share, of JAMtv.\n\n            \"JAMtv Indemnified Person(s)\" shall have the meaning set forth in \nSection 7.1(a) hereof.\n\n            \"JAMtv Intellectual Property Assets\" shall have the meaning set \nforth in Section 4.12(a) hereof.\n\n            \"JAMtv Licenses\" shall the meaning set forth in Section 4.13 \nhereof.\n\n            \"JAMtv Returns\" shall have the meaning set forth in Section \n4.11(a) hereof.\n\n            \"JAMtv Preferred Stock\" shall have the meaning set forth in \nSection 4.2(a) hereof.\n\n            \"JAMtv Unaudited Balance Sheet\" shall have the meaning set forth \nin Section 4.6 hereof.\n\n                                       5\n\n\n\n            \"JAMtv Unaudited Financial Statements\"  shall have the meaning \nset forth in Section 4.6 hereof.\n\n            \"Licenses\" shall have the meaning set forth in Section 3.19 \nhereof.\n\n            \"Marks\" shall have the meaning set forth in Section 3.16(a)(1) \nhereof.\n\n            \"Material Adverse Effect\" shall mean any change, event or effect \nthat is materially adverse to the business, assets (including, without \nlimitation, intangible assets), liabilities, financial condition or results \nof operations of Tunes or any of its subsidiaries or JAMtv or any of its \nsubsidiaries, as the case may be, taken as a whole.\n\n            \"Material Interest\" shall have the meaning set forth in Section \n3.15 hereof.\n\n            \"Merger\" shall have the meaning set forth in Section 1.1 hereof.\n\n            \"Merger Certificate\" shall have the meaning set forth in Section \n1.1 hereof.\n\n            \"Microsoft\" means Microsoft Corporation, a Washington corporation.\n\n            \"Microsoft Deluxe CD Player\" means the Microsoft utility which \npermits a user to play standard audio CDs in a personal computer's CD player, \nwhich includes functionality of a CD player appliance, such as play, pause, \nand other standard functions, and the ability to query Tunes's website for \ninformation about the CD being played, such as title, artist, track names, \nlabel, release date and special menus with unique URLs that, when selected, \nlaunch the user's web browser to load relevant pages from Tunes's website.\n\n            \"Microsoft Windows 98 Plus Pack!\" means the software utility \nproduct that Microsoft bundles with its Windows 98 operating system.\n\n            \"Music Rights Holder\" shall have the meaning set forth in Section \n3.16(b) hereof.\n\n            \"Patents\" shall have the meaning set forth in Section 3.16(a)(4) \nhereof.\n\n            \"PBGC\" shall have the meaning set forth in Section 3.11(h) hereof.\n\n            \"Pending Claims\" shall have the meaning set forth in Section \n7.2(d) hereof.\n\n            \"Performance Rights Society\" shall have the meaning set forth in \nSection 3.16(b) hereof.\n\n            \"Performance Shares\" shall have the meaning set forth in Section \n2.7 hereof.\n\n            \"Permitted Liens\" shall have the meaning set forth in Section \n3.18(d) hereof.\n\n                                       6\n\n\n\n            \"Plans\" shall have the meaning set forth in Section 3.11(a) \nhereof.\n\n            \"Principal Shareholders\" shall have the meaning set forth in \nSection 5.4 hereof.\n\n            \"Pro Forma Balance Sheet\" shall have the meaning set forth in \nSection 3.5 hereof.\n\n            \"Projections\" shall have the meaning set forth in Section 3.5 \nhereof.\n\n            \"Pro Rata Share of Cash Closing Consideration\" shall mean, with \nrespect to each share of Tunes Common Stock issued and outstanding or \nunderlying the Vested Tunes Options and the Convertible Debt that an Investor \nhas elected to convert into shares of Tunes Common Stock, the amount of cash, \nif any, as is determined by dividing the amount of Cash Closing Consideration \nby the aggregate number of shares of Tunes Common Stock issued and \noutstanding or underlying the Vested Tunes Options and Convertible Debt that \nan Investor has elected to convert into shares of Tunes Common Stock prior to \nClosing. \n\n            \"Pro Rata Share of Total Closing Consideration\" shall mean, with \nrespect to each share of Tunes Common Stock issued and outstanding or \nunderlying the Vested Tunes Options and the Convertible Debt that an Investor \nhas elected to convert into shares of Tunes Common Stock, (i) the Pro Rata \nShare of Cash Closing Consideration plus (ii) such number of shares of JAMtv \nCommon Stock as shall reflect such Tunes shareholder's pro rata share of the \nClosing Shares.\n\n            \"Publicity Rights\" shall have the meaning set forth in Section \n3.16(a) hereof.\n\n            \"Related Person\" shall have the meaning set forth in Section 3.15 \nhereof.\n\n            \"Retention Amount\" shall have the meaning set forth in Section \n2.7 hereof.\n\n            \"Series A Preferred\" shall have the meaning set forth in Section \n4.2(a) hereof.\n\n            \"Series A-I Convertible Preferred Stock\" shall have the meaning \nset forth in Section 4.2(a) hereof.\n\n            \"Series A-II Convertible Preferred Stock\" shall have the meaning \nset forth in Section 4.2(a) hereof.\n\n            \"Series A-III Convertible Preferred Stock\" shall have the meaning \nset forth in Section 4.2(a) hereof.\n\n            \"Series B Preferred\" shall have the meaning set forth in Section \n4.2(a) hereof.\n\n            \"Series C Preferred\" shall have the meaning set forth in Section \n4.2(a) hereof.\n\n            \"Series D Preferred\" shall have the meaning set forth in Section \n4.2(a) hereof.\n\n                                       7\n\n\n\n            \"Shareholder Agreements\" shall have the meaning set forth in \nSection 5.4 hereof.\n\n            \"Shareholders' Agent\" shall have the meaning set forth in Section \n7.8(a) hereof.\n\n            \"Shareholders' Agent Certificate\" shall have the meaning set \nforth in Section 7.5 hereof.\n\n            \"Shareholders' Agent Expenses\" shall have the meaning set forth \nin Section 7.8(a) hereof.\n\n            \"Shareholders' Claim\" shall have the meaning set forth in Section \n7.5 hereof.\n\n            \"Surviving Corporation\" shall have the meaning set forth in \nSection 1.4 hereof.\n\n            \"Tax,\" \"Taxes\" and \"Taxable\" shall have the meaning set forth in \nSection 3.14(f) hereof.\n\n            \"Taxing Authority\" shall have the meaning set forth in Section \n3.14(f) hereof.\n\n            \"Total Consideration\" shall mean the aggregate value of the (i) \nAggregate Closing Consideration, (ii) aggregate of the Pro Rata Share of \nTotal Closing Consideration attributable to all Dissenting Shares, (iii) \nPerformance Shares, (iv) IPO Shares and (v) the Retention Amount.\n\n            \"Trade Secrets\" shall have the meaning set forth in Section \n3.16(a) hereof.\n\n            \"Tunes Common Stock\" shall mean the common stock, no par value, \nof Tunes.\n\n            \"Tunes Disclosure Schedule\" shall have the meaning set forth in \nSection 3 hereof.\n\n            \"Tunes Indemnified Person(s)\" shall have the meaning set forth in \nSection 7.1(b) hereof.\n\n            \"Tunes Third Party Consents\" shall have the meaning set forth in \nSection 3.4(b) hereof.\n\n            \"Tunes Options\" shall mean the outstanding options to purchase \nshares of Tunes Common Stock.\n\n            \"Tunes Returns\" shall have the meaning set forth in Section \n3.14(a) hereof.\n\n            \"Unaudited Balance Sheet\" shall have the meaning set forth in \nSection 3.5 hereof.\n\n            \"Unaudited Financial Statements\"  shall have the meaning set \nforth in Section 3.5 hereof.\n\n                                       8\n\n\n\n            \"Vested Tunes Options\" shall mean the Tunes Options that are \nvested and exercisable immediately prior to the Effective Time.\n\n                                   SECTION 2\n                  EFFECT OF THE MERGER ON THE CAPITAL STOCK OF\n                         THE CONSTITUENT CORPORATIONS;\n                    TUNES OPTIONS; SURRENDER OF CERTIFICATES\n\n      2.1   EFFECT ON CAPITAL STOCK OF TUNES.  At the Effective Time, subject \nand pursuant to the terms of this Agreement and the Merger Certificate, each \nissued and outstanding share of Tunes Common Stock shall, by virtue of the \nMerger and without any action on the part of the Constituent Corporations or \nthe holder thereof, be converted into the right to receive the Pro Rata Share \nof Total Closing Consideration for one share of Tunes Common Stock minus the \nApplicable Deduction.\n\n      2.2   EFFECT ON TUNES OPTIONS. At the Effective Time, subject and \npursuant to the terms of this Agreement and the Merger Certificate, the \nholder of each Vested Tunes Option shall be entitled to receive, for each \nshare of Tunes Common Stock underlying such Vested Tunes Option, the Pro Rata \nShare of Total Closing Consideration for one share of Tunes Common Stock \nminus the  Applicable Deduction.  At the Effective Time, all Tunes Options \nthat are not then vested and exercisable shall be cancelled.\n\n      2.3   EFFECT ON CONVERTIBLE DEBT OF TUNES.  At the Effective Time, the \nConvertible Debt, subject and pursuant to the terms of this Agreement and the \nMerger Certificate, shall be converted into the right to receive the number \nof shares of Tunes Common Stock underlying each Investor's Convertible Debt \nin accordance with SCHEDULE 2.3.  Accordingly, at the Effective Time, subject \nand pursuant to the terms of this Agreement and the Merger Certificate, each \nInvestor shall be entitled to receive, for each share of Tunes Common Stock \nunderlying such Investor's Convertible Debt, the Pro Rata Share of Total \nClosing Consideration for one share of Tunes Common Stock minus the \nApplicable Deduction.  At the Effective Time, the Convertible Debt shall be \ncancelled and deemed paid and satisfied in full pursuant to this Section 2.3.\n\n      2.4   CANCELLATION OF TUNES CAPITAL STOCK OWNED BY TUNES.  At the \nEffective Time, subject and pursuant to the terms of this Agreement and the \nMerger Certificate, all shares of Tunes capital stock that are owned directly \nor indirectly by Tunes or any subsidiary of Tunes shall, by virtue of the \nMerger and without any action on the part of Tunes or any subsidiary of \nTunes, be cancelled, and no consideration shall be delivered in exchange \ntherefor.\n\n      2.5   ADJUSTMENT.\n\n            (a)   Notwithstanding the provisions of Section 2.1, 2.2 and 2.3 \nhereof and the Merger Certificate, the Aggregate Closing Consideration shall \nnot exceed $4,550,000 (including the issuance of up to 300,000 shares of \nJAMtv Common Stock, valued at $10 per share).\n\n            (b)   If prior to the Effective Time and subject to Section 5.1 \nhereof, the outstanding shares of Tunes Common Stock shall be changed into a \ndifferent number of shares or \n\n                                       9\n\n\n\na different class of stock by reason of any reclassification, \nrecapitalization, exchange of shares, or if a stock split, stock combination \nor stock dividend thereon shall be declared with a record date within such \nperiod, or by the issuance of shares of Tunes Common Stock or Vested Tunes \nOptions, the Pro Rata Share of Total Closing Consideration with respect to \neach share of Tunes Common Stock, shall be correspondingly adjusted so that \nthe Aggregate Closing Consideration shall not exceed $4,550,000 (including \nthe issuance of up to 300,000 shares of JAMtv Common Stock, valued at $10 per \nshare).\n\n            (c)   The Total Consideration and the Pro Rata Share of Total \nClosing Consideration with respect to each share of Tunes Common Stock \n(including shares of underlying Tunes Common Stock issuable upon exercise of \nVested Tunes Options and conversion of Convertible Debt) are premised on \nthere being issued and outstanding (i) no more than 6,930,214 shares of Tunes \nCommon Stock; (ii) Vested Tunes Options to purchase 784,030 shares of Tunes \nCommon Stock; and (iii) no more than 1,693,093 shares of Tunes Common Stock \nissuable upon conversion of the Convertible Debt.  In the event that the \nactual number of such shares or options issued and outstanding, or, in the \ncase of the Convertible Debt, to be issued, differ from the number of such \nshares or options set forth in this Section 2.5(c), the Pro Rata Share of \nTotal Closing Consideration with respect to each share of Tunes Common Stock \nshall be correspondingly adjusted so that the Aggregate Closing Consideration \nshall not exceed $4,550,000 (including the issuance of up to 300,000 shares \nof JAMtv Common Stock, valued at $10 per share).\n\n            (d)   Except as otherwise provided in this Agreement, all shares \n(or rights to acquire shares) of Tunes capital stock other than Tunes Common \nStock shall be cancelled as of the Effective Time without consideration \nreceived in exchange therefor.\n\n      2.6   DISSENTERS' RIGHTS.  Any Dissenting Shares shall not be converted \ninto cash or stock but shall instead be converted into the right to receive \nsuch consideration as may be determined to be due with respect to such \nDissenting Shares pursuant to the DGCL or the CGCL, as applicable.  Tunes \nagrees that, except with the prior written consent of JAMtv, or as required \nunder the DGCL or the CGCL, as applicable, it will not voluntarily make any \npayment with respect to, or settle or offer to settle, any such purchase \ndemand to repurchase Tunes Common Stock.  If after the Effective Time any \nDissenting Shares shall lose their status as Dissenting Shares, JAMtv shall \ndeliver, upon surrender by the holder of such Dissenting Shares of a \ncertificate or certificates representing shares of Tunes Common Stock in \naccordance with Section 2.8(c) hereof, the consideration which the holder \nthereof would otherwise be entitled to receive under Sections2.1, 2.2 and 2.3 \nhereof.\n\n      2.7   ADDITIONAL MERGER CONSIDERATION.\n\n            (a)   Upon the Closing, in addition to the Aggregate Closing \nConsideration, JAMtv shall deposit (i) a certificate, executed by the Chief \nExecutive Officer and the Secretary of JAMtv certifying in accordance with \nthe Escrow Agreement that JAMtv shall issue and deliver: up to 50,000 shares \nof JAMtv Common Stock (the \"Performance Shares\") and up to 100,000 shares of \nJAMtv Common Stock (the \"IPO Shares\") (the Performance Shares and the IPO \nShares are referred to collectively as the \"Contingent Shares\") into the \nEscrow Fund; and (ii) $750,000 in immediately available funds (the \"Retention \nAmount\") into the Escrow Fund.  The Escrow Fund shall be \n\n                                       10\n\n\n\ngoverned by the terms set forth in this Agreement and in the Escrow \nAgreement.  The Performance Shares, the IPO Shares and the Retention Amount \nshall constitute the \"Escrow Fund.\"\n\n            (b)   The Performance Shares and the IPO Shares, as the case may \nbe, shall be issued and disbursed to the Former Shareholders of Tunes, if at \nall, as follows:\n\n                  (1)   with respect to the Performance Shares, in the amounts\n      set forth on SCHEDULE 2.7 attached hereto, and on the terms and conditions\n      set forth in Section 2.7(d) hereof, the Escrow Agreement and the \n      \"earn-out\" schedule set forth on SCHEDULE 2.7;\n\n                  (2)   with respect to the IPO Shares, in the amounts set forth\n      on SCHEDULE 2.7 attached hereto, and on the terms and conditions set forth\n      in the Escrow Agreement, upon the closing of a firmly underwritten initial\n      public offering of JAMtv Common Stock (or within three months thereafter)\n      which results in an aggregate market value of JAMtv in any of the amounts\n      set forth in SCHEDULE 2.7.\n\n            (c)   The Retention Amount shall be disbursed to the Former \nShareholders of Tunes, if at all, on the terms and conditions set forth in \nSection 7.9 hereof and the Escrow Agreement.\n\n            (d)   The issuance and disbursement of the Performance Shares \nshall be subject to the following:\n\n                  (1)   JAMtv shall calculate, and deliver notice of such\n      calculation to the Shareholders' Agent, on or before August 1, 1999\n      (or as soon as practicable thereafter) the number of Performance\n      Shares to be disbursed from the Escrow Fund to the Shareholders'\n      Agent  in accordance with this Section 2.7 and SCHEDULE 2.7 (the\n      \"Performance Share Calculation\").\n\n                  (2)   JAMtv shall maintain separate books and records\n      for Tunes in accordance with generally accepted accounting\n      principles in order to make the Performance Share Calculation.\n\n                  (3)   The Shareholders' Agent will be entitled to audit\n      the Performance Share Calculation in accordance with this\n      subsection.  The Shareholders' Agent may, within ten (10) business\n      days after its receipt of the Performance Share Calculation from\n      JAMtv, request in writing that JAMtv deliver to the Shareholder's\n      Agent within ten (10) business days of such written request the\n      books and records reasonably necessary for the Shareholder's Agent\n      or its accountant to confirm the Performance Share Calculation.  If\n      the Shareholders' Agent does not request such books and records\n      pursuant to this subsection or if within ten (10) business days\n      after receipt of such books and records JAMtv does not receive from\n      the Shareholders' Agent a written notice of objection to the\n      Performance Share Calculation, JAMtv shall deposit into the Escrow\n      Fund the Performance Shares subject to the Performance Share\n      Calculation and shall deliver instructions to the \n\n                                       11\n\n\n\n      Escrow Agent for disbursement of the Performance Shares to the \n      Shareholders' Agent in accordance with the Escrow Agreement and the \n      Performance Share Calculation.  If the Shareholders' Agent requests \n      such books and records and, within ten (10) business days after receipt \n      of such books and records, the Shareholders' Agent objects in writing \n      to the Performance Share Calculation, then JAMtv and the Shareholders' \n      Agent shall attempt in good faith to mutually agree upon the \n      Performance Share Calculation.  If, within fifteen (15) business days \n      after receipt by the Shareholders' Agent of such books and records, \n      JAMtv and the Shareholder's Agent have not agreed upon the Performance \n      Share Calculation, then JAMtv and the Shareholder's Agent shall \n      mutually designate a nationally recognized accounting firm to \n      independently calculate the Performance Share Calculation, or if JAMtv \n      and the Shareholder's Agent do not mutually designate such accounting \n      firm, then each of JAMtv and the Shareholders' Agent shall appoint one \n      nationally recognized accounting firm, which accounting firms shall \n      designate a third nationally recognized accounting firm which shall \n      resolve the dispute regarding the Performance Share Calculation.  If \n      either JAMtv or the Shareholders' Agent shall fail to select a \n      nationally recognized firm in accordance with the provisions of this \n      subsection within thirty (30) days after notice by the other party that \n      such selection should be made, and such other party has selected a \n      nationally recognized accounting firm pursuant to the provisions \n      hereof, such dispute shall be referred to the accounting firm selected \n      by such party. The decision of such accounting firm shall be conclusive \n      and binding on both parties.  Each of JAMtv and the Shareholders' Agent \n      shall pay the costs and expenses of its accounting firm and the \n      Shareholders' Agent shall pay the costs of its accounting firm and the \n      independent accounting firm, if any, designated to resolve any dispute \n      hereunder (the \"Independent Accountant\"); provided, however, that if a \n      dispute arises that is resolved by the Independent Accountant and the \n      amount of the Performance Shares as calculated by the Independent \n      Accountant exceeds by more than twenty-five percent (25%) JAMtv's \n      Performance Share Calculation, JAMtv shall pay the reasonable costs and \n      expenses of the Shareholders' Agent and the Independent Accountant for \n      such review.  If there is no dispute regarding the Performance Share \n      Calculation and JAMtv does not instruct the Escrow Agent to deliver the \n      Performance Shares within ten (10) days of August 1, 1999, or such \n      later date as JAMtv delivers the Performance Share Calculation in \n      accordance with this Section 2.7(d)(3), then, provided that shares of \n      JAMtv Common Stock are then publicly traded, interest shall accrue \n      thereafter on the market value of such Performance Shares at the rate \n      per annum equal to the Prime Rate as listed in the Money Rates section \n      of the WALL STREET JOURNAL plus three percent (3%) (the \"Default \n      Rate\").  In the event there is a dispute regarding the Performance \n      Share Calculation, then, provided that shares of JAMtv Common Stock are \n      then publicly traded, the Former Shareholders shall be entitled to \n      receive interest from the Due Date at the Default Rate on the market \n      value of the number of Performance Shares determined to be due to the \n      Former Shareholders if such amount exceeds by twenty- five percent \n      (25%) the market value of the shares included in the Performance Share \n      Calculation.\n\n                                       12\n\n\n\n                  (4)   If Microsoft shall fail to make the Microsoft\n      Deluxe CD Player generally available to consumers as part of the\n      Windows 98 Plus Pack! on or before June 30, 1999 or if Tunes shall\n      otherwise breach its warranty made pursuant to Section 3.32 hereof,\n      then the amount of Performance Shares disbursable pursuant to the\n      Performance Share Calculation shall be subject to reduction by an\n      amount equal to the lesser of (i) 25,000 shares or (ii) the\n      Performance Share Calculation.\n\n            (e)   During the period from and after the Effective Time and \nuntil June 30, 1999:  (i) JAMtv shall conduct its business in conformity with \nsound business practices, (ii) if JAMtv (A) sells fifty percent (50%) or more \nof its assets, (B) sells more than fifty percent (50%) of its common stock to \na single acquiror or group of related acquirors in a single transaction or \n(C) merges into another company and JAMtv immediately prior to such merger \ndoes not own in excess of fifty percent (50%) of the shares of capital stock \nof the surviving company, JAMtv will cause such sale or merger to be subject \nto the assumption by the buyer or surviving company of all of JAMtv's \nobligations under this Agreement, and (iii) JAMtv shall not take any \nvoluntary action for the intended purpose of preventing the Principal \nShareholders from earning their Performance Shares or avoiding or seeking to \navoid the observance or performance of JAMtv's obligations under this Section \n2.7, and shall at all times deal in good faith with the Principal \nShareholders in connection with JAMtv's obligations hereunder.\n\n            (f)   If between the Effective Time and June 30, 1999, JAMtv \ncommences a voluntary case under the federal bankruptcy laws or a petition is \nfiled against JAMtv under the federal bankruptcy laws and is not dismissed \nwithin ninety (90) days of such filing, the Former Shareholders may seek \ntreatment as unsecured creditors of JAMtv in the related bankruptcy \nproceedings with respect to the Performance Shares the Former Shareholders \nare entitled to receive hereunder, if any, as of such filing.\n\n      2.8   SURRENDER OF TUNES CERTIFICATES; ISSUANCE OF JAMTV CERTIFICATES.\n\n            (a)   EXCHANGE AGENT.  Prior to the Closing Date, JAMtv shall \nappoint American National Bank and Trust Company of Chicago or such other \nthird party as shall be reasonably satisfactory to Tunes to act as exchange \nagent (the \"Exchange Agent\") in the Merger.  In the alternative, JAMtv may, \nat its sole option, act as Exchange Agent.\n\n            (b)   JAMTV TO PROVIDE THE AGGREGATE CLOSING CONSIDERATION.  At \nthe Effective Time, JAMtv shall deposit with the Exchange Agent for exchange \nin accordance with Sections 2.1, 2.2 and 2.3 hereof and the Merger \nCertificate, through such reasonable procedures as JAMtv may adopt, the \nAggregate Closing Consideration.\n\n            (c)   EXCHANGE PROCEDURES.  Prior to the Closing Date, Tunes \nshall mail to each holder of record of certificate(s) or other documents \nwhich represent Tunes Common Stock (the \"Certificates\"), as well as to \nholders of Vested Tunes Options and Convertible Debt, to be converted into \ncash and stock pursuant to Sections 2.1, 2.2 and 2.3 hereof and the Merger \nCertificate:  (i) a letter of transmittal (which shall specify that, with \nrespect to the Certificates, delivery shall be effected, and risk of loss and \ntitle to the Certificates shall pass, only upon delivery of the Certificates \n\n                                       13\n\n\n\nto the Exchange Agent and shall be in such form and have such other \nprovisions as JAMtv may reasonably specify); and (ii) instructions for use in \neffecting the surrender of the Certificates, Vested Tunes Option and \nConvertible Debt Instruments in exchange for cash and JAMtv Common Stock.  \nUpon surrender of a Certificate, Vested Tunes Option or Convertible Debt \nInstrument for cancellation to the Exchange Agent or to such other agent or \nagents as may be appointed by JAMtv, together with such letter of \ntransmittal, duly executed, the holder of such Certificate, Vested Tunes \nOption or Convertible Debt Instrument shall be entitled to receive in \nexchange therefor that portion of the Aggregate Closing Consideration with \nrespect to the Tunes Common Stock, Vested Tunes Options and Convertible Debt \nproperly covered by such Certificate, Vested Tunes Option or Convertible Debt \nInstrument, as the case may be, as to which such holder is entitled pursuant \nto Sections 2.1, 2.2 and 2.3 hereof and the Merger Certificate.  \nCertificates, Vested Tunes Options and Convertible Debt Instruments so \nsurrendered pursuant to this Section 2.8 shall forthwith be cancelled (if not \notherwise cancelled or terminated in accordance with their terms).  The \nportion of the Pro Rata Cash Closing Consideration to which such holder is \nentitled shall be payable in cash or by a check drawn on a United States bank \nin United States dollars in immediately available funds, and shall not accrue \nor otherwise bear interest; provided that persons entitled to receive more \nthan $1.0 million shall be entitled to obtain a wire transfer of immediately \navailable funds of the Pro Rata Cash Closing Consideration payable to such \npersons from the Exchange Agent immediately after the Effective Time. In the \nevent of a transfer of ownership of Tunes Common Stock which is not \nregistered on the transfer records of Tunes, the appropriate amount of cash \nand shares of JAMtv Common Stock may be delivered to a transferee if the \nCertificate representing such transferred security is presented to the \nExchange Agent and accompanied by all documents required to evidence and \neffect such transfer and to evidence that any applicable stock transfer taxes \nhave been paid.  Until surrendered as contemplated by this Section 2.8, each \nCertificate, Vested Tunes Option or Convertible Debt Instrument shall be \ndeemed at any time after the Effective Time to represent solely the right to \nreceive upon such surrender that portion of the Aggregate Closing \nConsideration (without interest and subject to applicable withholding, \nescheat, and other laws) to which such holder is entitled.\n\n            (d)   NO FURTHER OWNERSHIP RIGHTS IN CAPITAL STOCK OF TUNES.  The \namounts paid in respect of Tunes Common Stock, Vested Tunes Options and \nConvertible Debt in accordance with the terms of this Agreement and the \nMerger Certificate shall be deemed to have been delivered in full \nsatisfaction of all rights pertaining thereto, and following the Effective \nTime, holders of the Certificate, Vested Tunes Options and Convertible Debt \nshall have no further rights to, or ownership in, shares of Tunes capital \nstock or rights to acquire Tunes capital stock.  There shall be no further \nregistration of transfers on the stock transfer books of the Surviving \nCorporation of the shares of Tunes capital stock which were outstanding \nimmediately prior to the Effective Time.  If, after the Effective time, \nCertificates, Vested Tunes Options and Convertible Debt Instruments are \npresented to the Surviving Corporation for any reason, they shall be \ncancelled and exchanged in accordance with the terms of this Agreement and \nthe Merger Certificate.\n\n            (e)   DISSENTING SHARES.  The provisions of this Section 2.8 \nshall also apply to Dissenting Shares that lose their status as such, except \nthat the obligations of JAMtv under this Section 2.8 shall commence on the \ndate of loss of such status.\n\n                                       14\n\n\n\n            (f)   ISSUANCE OF JAMTV CERTIFICATES.  The certificates \nrepresenting the Closing Shares shall contain the follow legend:\n\n      \"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A\n      TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF\n      1933 (AS THEN IN EFFECT), AND IN RELIANCE UPON THE HOLDER'S\n      REPRESENTATION THAT SUCH SECURITIES WERE BEING ACQUIRED FOR\n      INVESTMENT AND NOT FOR RESALE.  NO TRANSFER OF SUCH SECURITIES MAY\n      BE MADE ON THE BOOKS OF THE COMPANY UNLESS ACCOMPANIED BY AN OPINION\n      OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH TRANSFER MAY BE\n      EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 (AS\n      AMENDED) OR THAT SUCH SECURITIES HAVE BEEN SO REGISTERED UNDER A\n      REGISTRATION STATEMENT WHICH IS IN EFFECT AT THE DATE OF SUCH\n      TRANSFER.\n\n      THE SALE, ASSIGNMENT, PLEDGE, ENCUMBRANCE OR OTHER TRANSFER OF THE\n      SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE\n      PROVISIONS OF A STOCKHOLDERS' AGREEMENT, DATED AS OF JUNE 2, 1997,\n      AS AMENDED, AMONG THE COMPANY AND THE STOCKHOLDERS NAMED ON THE\n      SIGNATURE PAGES THERETO, A COPY OF WHICH  IS ON FILE AT THE\n      PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY.\"\n\n      2.9   EXCESS LIABILITY AMOUNT.  Immediately prior to the Closing Date, \nthe Excess Liability Amoutn shall be calculated by Tunes, consistent with \npast practice, as of the Closing date( the \"Closing ELA\").  If the Closing \nELA amount is greater than $1,550,000, then, at JAMtv's option, the amount of \nsuch difference shall be (i) deducted from the Retention Amoutn and set-off \nby JAMtv pursuant to Section 7.3 of this Agreement, and (ii) divided by ten \n(which is the deemed fair market value of a share of JAMtv Common Stock), \nwith the result that the quotient obtaine shall be the number of shares of \nJAMtv Common Stock which may be deducted by JAMtv from the Initial Closing \nShares and added to the Retention Amount.  For example, if Closing ELA equals \n$2,000,000, then (x) the difference between Closing ELA and $1,550,000 is \n$450,000, (y) 450,000 divided by 10 is 45,000, and (z) 45,000 shares may be \ndeducted from the Initial Closing shares and added to the Retention Amount \nfor distribution in accordance with Section 7 of this Agreement.  \n\n      2.10  DEDUCTION OF SPECIAL HOLDBACK SHARES.  At the closing, JAMtv \nshall dduct 100,000 shares (the \"Special Holdback Shares\") from the Initial \nClosing Shares to secure the indemnity obligations of Tunes and the Former \nShareholders as provided in Section 7 of this Agreement.\n\n                                       15\n\n\n\n                                    SECTION 3\n                     REPRESENTATIONS AND WARRANTIES OF TUNES\n\n      Except as disclosed on the Disclosure Schedule of even date herewith \nand delivered to JAMtv concurrently with the execution of this Agreement, \nwhich identifies any exception to the representations and warranties set \nforth in this Section 3 (the \"Tunes Disclosure Schedule\"), Tunes hereby \nrepresents and warrants to JAMtv and Merger Sub as of the Closing Date as \nfollows:\n\n      3.1   ORGANIZATION; GOOD STANDING; AND CORPORATE POWER.  Tunes is a \ncorporation duly organized, validly existing and in good standing under the \nlaws of the State of California and has all requisite corporate power and \nauthority to own, operate and lease its properties and to carry on its \nbusiness as now being conducted.  Tunes is duly qualified as a foreign \ncorporation and is in good standing in each jurisdiction in which the failure \nto so qualify would have a Material Adverse Effect.  SCHEDULE 3.1 sets forth \na true and complete list of the jurisdictions where Tunes is qualified as a \nforeign corporation.  Tunes has delivered to JAMtv complete and correct \ncopies of its Articles of Incorporation and Bylaws, in each case as amended \nto the date hereof, and has delivered or made available to JAMtv copies of \nits corporate minute books which include all minutes of Tunes's directors' \nand shareholders' meetings and a ledger reflecting the record ownership of \nall outstanding shares of Tunes capital stock.\n\n      3.2   CAPITAL STRUCTURE.\n\n            (a)   The entire authorized capital stock of Tunes consists of \n10,000,000 shares of Tunes Common Stock, no par value, of which 6,930,214 are \nissued and outstanding, 784,030 shares of which are issuable upon the \nexercise of Vested Tunes Options, and 1,693,093 shares of which are issuable \nupon the conversion of the Convertible Debt.  There are no treasury shares of \ncapital stock of Tunes.  Other than as required by applicable federal and \nstate securities laws, no legend or other reference to any purported \nencumbrance appears upon any certificate representing equity securities of \nTunes.  All outstanding shares of Tunes Common Stock are, and any shares of \nTunes Common Stock issuable upon exercise of any Vested Tunes Option or any \nConvertible Debt would be, duly authorized, validly issued, fully paid and \nnonassessable.  None of the Tunes Common Stock is subject to any preemptive \nrights, whether created by statute, Tunes's Articles of Incorporation or \nBylaws, agreement or otherwise.\n\n            (b)   Other than as described in this Section 3.2, there are no \nissued or outstanding shares of capital stock of Tunes, and there are no \noptions, warrants, calls, conversion rights, commitments or agreements of any \ncharacter (whether oral, written, express, or implied) to which Tunes is a \nparty or by which Tunes may be bound that do or may obligate Tunes to issue, \ndeliver or sell, or cause to be issued, delivered or sold, additional shares \nof Tunes capital stock or that do or may obligate Tunes to grant, extend or \nenter into any such option, warrant, call, conversion right, commitment or \nagreement. There are no outstanding agreements, contracts, obligations, \npromises, commitments, indentures, plans, instruments, arrangements, \nundertakings or understandings (whether oral, written, express or implied) to \nwhich Tunes is a party or is bound or which affects or relates to the voting, \nissuance, purchase, redemption, repurchase or transfer of any capital stock \nof \n\n                                       16\n\n\n\nTunes or any other securities of Tunes, except as set forth in this Section \n3.2 or as contemplated by Section 5.4 hereof.  Other than as provided by this \nAgreement, Tunes has not, and prior to the Effective Time will not, become \nparty to or subject to any contract or obligation wherein any person has a \nright or option to purchase or acquire any rights in any additional capital \nstock or securities of Tunes.  None of the outstanding equity securities or \nother securities of Tunes was issued in violation of any law, rule or \nregulation, including, without limitation, state and federal securities laws. \n Tunes does not own, and does not have any contract to acquire, any equity \nsecurities or other securities of any person or entity (including any \nsubsidiary) or any direct or indirect equity or ownership interest in any \nother business.\n\n            (c)   SCHEDULE 3.2 contains (i) a complete and accurate list of, \nand the number of shares owned by each of the record holders of, all \noutstanding Tunes Common Stock, (ii) a complete and accurate list of all \nTunes Options, the number of Tunes Options owned by each of the record \nholders of all outstanding Tunes Options, the number of shares and kind of \nstock issuable upon the exercise of Vested Tunes Options with respect to each \nholder thereof, and the exercise price for such Vested Tunes Options with \nrespect to each holder thereof, and (iii) a complete and accurate list of all \noutstanding Convertible Debt the amount of Convertible Debt owned by each of \nthe record holders of all outstanding Convertible Debt, the number of shares \nand kind of stock issuable upon the conversion of the Convertible Debt with \nrespect to each holder thereof, and the conversion price for such Convertible \nDebt with respect to each holder thereof.  SCHEDULE 3.2 contains a complete \nand accurate list of the name, address, and citizenship of each holder of \nTunes Common Stock, Tunes Options, and Convertible Debt.  The shareholders \nnamed on SCHEDULE 3.2 are all of the record and beneficial owners and holders \nof Tunes Common Stock, and such stock is free and clear of all liens and \nencumbrances.  The option holders named on SCHEDULE 3.2 are all of the record \nand beneficial owners and holders of Tunes Options, and such options are free \nand clear of all liens and encumbrances.  The holders of Convertible Debt \nnamed on SCHEDULE 3.2 are all of the record and beneficial owners and holders \nof Convertible Debt, and such Convertible Debt is free and clear of all liens \nand encumbrances.\n\n            (d)   The Pro Rata share of Merger Consideration with respect to \neach share of Tunes Common Stock (including shares underlying Vested Tunes \nOptions and Convertible Debt), as adjusted, if required in accordance with \nthe terms of this Agreement, has been calculated in accordance with and \nsatisfies the terms and conditions of the dividend, conversion and \nliquidation provisions of Tunes's Articles of Incorporation as in effect \nimmediately prior to the Effective Time.\n\n            (e)   The aggregate exercise price of the Vested Tunes Options is \n$78,403, which shall be payable to Tunes by the holders of Vested Tunes \nOptions in accordance with SCHEDULE 3.2(e).  The Tunes Options (including the \nVested Tunes Options) shall terminate in accordance with their terms as of \nthe Effective Time; provided, however, that the holders of Vested Tunes \nOptions shall be entitled to the consideration set forth in Section 2.2 \nhereof.\n\n            (f)   The aggregate amount of the Convertible Debt is $630,000.  \nThe Convertible Debt shall be cancelled and deemed satisfied and paid in full \nas of the Effective Date; provided, however, that the Investors shall be \nentitled to the consideration set forth in Section 2.3 hereof.\n\n                                       17\n\n\n\n      3.3   CORPORATE NAME; PRIOR TRANSACTIONS; SUBSIDIARIES.  Tunes has not \nduring its existence been known by or used any other corporate or fictitious \nname other than \"Surf Communications, Inc.\" or been a party to any merger or \nconsolidation, or acquired all or substantially all of the assets of any \nperson or entity, or acquired any of its property outside of the ordinary \ncourse of business.  Tunes has no subsidiaries or affiliated companies and \ndoes not otherwise own or control directly or indirectly, any equity interest \nor debt in any corporation (including any non-profit corporation), general or \nlimited partnership, limited liability company, joint venture, estate, trust, \nassociation, organization, labor union, governmental authority, or other \nentity.\n\n      3.4   AUTHORITY; VALIDITY; NO CONFLICT; CONSENTS.\n\n            (a)   Tunes has all requisite corporate power and authority to \nenter into this Agreement and the Merger Certificate and, subject to approval \nof this Agreement and the Merger Certificate by the shareholders of Tunes, to \nperform its obligations hereunder and thereunder, and to consummate the \ntransactions contemplated hereby and thereby.  The execution and delivery of \nthis Agreement and the Merger Certificate, the performance by Tunes of its \nobligations hereunder and thereunder and the consummation of the transactions \ncontemplated hereby and thereby have been duly and validly authorized by all \nnecessary corporate action on the part of Tunes, including, without \nlimitation, the approval by the Board of Directors and the shareholders of \nTunes.  This Agreement is, and the Merger Certificate, when delivered by the \nparties thereto, will be, legal, valid and binding obligations of Tunes and \nits shareholders enforceable against Tunes and its shareholders in accordance \nwith their respective terms, except as enforcement may be limited by \nbankruptcy, insolvency, or other similar laws affecting the enforcement of \ncreditors' rights generally and except that the availability of equitable \nremedies is subject to the discretion of the court before which any \nproceeding therefor may be brought. The only vote of the holders of any class \nor series of Tunes capital stock necessary to approve this Agreement and the \nMerger Certificate and the transactions contemplated hereby and thereby is \nthe affirmative vote of a majority of the outstanding shares of Tunes Common \nStock voting separately as a class.\n\n            (b)   The execution and delivery of this Agreement does not, and \nthe execution and delivery of the Merger Certificate and the consummation of \nthe transactions contemplated hereby and thereby will not, conflict with or \nresult in any violation of any statute, law, rule, regulation, judgment, \norder, decree, or ordinance applicable to Tunes or its properties or assets, \nor conflict with or result in any breach or default (with or without notice \nor lapse of time, or both) under, or give rise to a right of termination, \ncancellation or acceleration of any obligation or to loss of a material \nbenefit under, or result in the creation of a lien or encumbrance on any of \nthe material properties or assets of Tunes pursuant to (i) any provision of \nthe Articles of Incorporation or Bylaws of Tunes or (ii) any material \nagreement, contract, obligation, promise, commitment, mortgage, indenture, \nplan, lease, instrument, permit, concession, franchise, arrangement, license, \nundertaking or understanding (whether oral, written, express or implied) to \nwhich Tunes is a party or by which Tunes or any of its property or assets may \nbe bound or affected.  SCHEDULE 3.4 lists all consents, waivers, and \napprovals under any agreement, contract, obligation, promise, commitment, \nmortgage, indenture, plan, lease, instrument, permit, concession, franchise, \nlicense, undertaking or understanding (whether oral, written, express or \nimplied) to which Tunes is a party or by which Tunes or any of its property \n\n                                       18\n\n\n\nor assets may be bound or affected which are required to be obtained in \nconnection with the consummation of the transactions contemplated hereby and \nby the Merger Certificate (\"Tunes Third Party Consents\").\n\n            (c)   No consent, approval, order or authorization of, or \nregistration, declaration or filing with, any court, administrative agency, \ncommission, regulatory authority or other governmental authority or \ninstrumentality, whether domestic or foreign (a \"Governmental Entity\"), is \nrequired by Tunes in connection with the execution and delivery of this \nAgreement and the Merger Certificate by Tunes or the consummation by Tunes of \nthe transactions contemplated hereby or thereby, except for the filing of (i) \nthe Merger Certificate and officers' certificates with the Delaware Secretary \nof State and the California Secretary of State in such form as is required \nby, and executed in accordance with, the applicable provisions of the DGCL \nand the CGCL and (ii) appropriate documents with the relevant approvals, \nauthorizations, registrations or qualifications as may be required under \nfederal and state securities or \"Blue Sky\" laws in connection with the Merger.\n\n      3.5   FINANCIAL STATEMENTS.  Tunes has furnished or made available to \nJAMtv its financial statements for each of the fiscal years ended on December \n31, 1996 and December 31, 1997, including balance sheets of Tunes, and the \nrelated statements of operations and cash flow (collectively, the \"Financial \nStatements\"), and the related management letters, if any, and Tunes's \nunaudited financial statements as at March 31, 1998, including an unaudited \nbalance sheet of Tunes (the \"Unaudited Balance Sheet\") as at March 31, 1998 \nand the related unaudited statements of operations and cash flow (the \n\"Unaudited Financial Statements\").  Tunes has furnished or made available to \nJAMtv the pro forma balance sheet of Tunes as at June 30, 1998 (the \"Pro \nForma Balance Sheet\").  The Financial Statements, the Unaudited Balance \nSheet, and the Unaudited Financial Statements are collectively referred to as \nthe \"Financial Statements.\"  Tunes has furnished or made available to JAMtv \nthe projections dated June 30, 1998 of Tunes's monthly financial condition, \nresults of operations, and cash flow through June 30, 1998 (the \n\"Projections\"), and the Projections represent Tunes's best estimate of its \nfuture financial performance for the periods set forth therein.  The \nProjections have been prepared on the basis of the assumptions set forth \ntherein, which Tunes believes are fair and reasonable in light of current and \nreasonably foreseeable business conditions. The Financial Statements have \nbeen prepared in accordance with generally accepted accounting principles \n(\"GAAP\") consistency applied and fairly present the financial position of \nTunes as at the dates thereof and the results of their operations and cash \nflows for the periods then ended and the Pro Forma Balance Sheet presents \nfairly and accurately Tunes's financial condition as at such date as if the \ntransactions contemplated by this Agreement had occurred on such date and the \nClosing Date had been such date, and has been prepared in accordance with \nGAAP, except that the Unaudited Financial Statements prepared since the \nBalance Sheet Date and the Pro Forma Balance Sheet do not contain the \nfootnote disclosure required by GAAP and may not include the same refinement \nof estimates and accruals as are contained in the Audited Financial \nStatements.  Since January 1, 1996, there has been no change in Tunes's \naccounting policies, except as described in notes to the Financial Statements.\n\n      3.6   RECEIVABLES.  All accounts receivable of Tunes that are reflected \non the Balance Sheet or the Unaudited Balance Sheet or on the accounting \nrecords of Tunes as of the Effective Time (collectively, the \"Accounts \nReceivable\") represent or will represent valid obligations arising from \n\n                                       19\n\n\n\nsales actually made or services actually performed in the ordinary course of \nbusiness of Tunes.  The Accounts Receivable have been collected or are \ncollectible in the book amounts thereof, less an amount not in excess of the \nallowance for doubtful accounts provided for in the Financial Statements, in \nthe case of Accounts Receivable reflected in the Financial Statements, and \nless allowances for doubtful accounts and warranty returns determined in \naccordance with the past practices of Tunes, in the case of Accounts \nReceivable arising after the Balance Sheet Date. Allowances for doubtful \naccounts and warranty returns are adequate and have been prepared in \naccordance with GAAP consistently applied and in accordance with the past \npractices of Tunes.  No Account Receivable is subject to any material claim \nof offset, recoupment, set off or counterclaim and Tunes has no knowledge of \nany specific facts or circumstances (whether asserted or unasserted) that \ncould give rise to any such claim.  No material amount of Accounts Receivable \nare contingent upon the performance by Tunes of any obligation or contract \nother than normal warranty performance.   SCHEDULE 3.6 sets forth an aging of \nAccounts Receivable of Tunes and its subsidiaries in the aggregate and by \ncustomer (0-30 days, 31-60 days, 61-90 days and greater than 90 days), and \nindicates for each category the respective amounts of allowances for doubtful \naccounts and warranty returns and the amounts of Accounts Receivable within \neach category which are subject to warranty claims in the aggregate.\n\n      3.7   COMPLIANCE WITH LAW; CHARTER DOCUMENTS; AND ORDERS.  Tunes is in \ncompliance, and has conducted its business so as to comply, with all laws, \nrules and regulations, judgments, decrees or orders of any Governmental \nEntity applicable to its operations or with respect to which compliance is a \ncondition of engaging in the business thereof, except to the extent that \nfailure to comply, individually or in the aggregate, has not had and would \nnot be reasonably expected to have a Material Adverse Effect.  There are no \njudgments or orders, injunctions, decrees, stipulations or awards (whether \nrendered by a court or administrative agency or by arbitration) against Tunes \nor against any of its properties or businesses.    To the best of Tunes' \nknowledge, no officer, director, agent, or employee of Tunes is subject to \nany order that prohibits such officer, director, agent, or employee from \nengaging in or continuing any conduct, activity, or practice relating to the \nbusiness of Tunes.  SCHEDULE 3.7 contains a summary of any violation of, or \nconflict with, any applicable statute, law, rule, regulation, ruling, order, \njudgment or decree, including any of the foregoing relating to Environmental \nLaws, occurring within the last four (4) years.  Tunes is not, nor has it \nreceived notice that it is or would be with the passage of time, in violation \nof any provision of its Articles of Incorporation, Bylaws or resolutions, or \nin default or violation of any term, condition or provision of any judgment, \ndecree, order, injunction or stipulation applicable to Tunes, its business or \nproperties.\n\n      3.8   LITIGATION.  Except as disclosed on SCHEDULE 3.8, there is no \naction, suit, proceeding, claim, arbitration or investigation pending by or \nagainst Tunes or any of its subsidiaries, any director, officer, employee or \nshareholder of Tunes or any of its subsidiaries relating to or affecting \nTunes' or any subsidiary's business, properties or capital stock, or which in \nany manner challenges or seeks to prevent, enjoin, alter or delay any of the \ntransactions contemplated hereby by or against Tunes, any director, officer, \nemployee or shareholder of Tunes relating to or affecting Tunes's business, \nits properties or its capital stock (including, without limitation, any \nclaims by any Performance Rights Society (as defined in Section 3.16), \nArtists Guild (as defined in Section 3.16), or any other Music Rights Holder \n(as defined in Section 3.16), for the payment of any fees or royalties for \nthe \n\n                                       20\n\n\n\nreproduction, creation of derivative works, distribution, public performance \n(including digital performance), or public display of any Intellectual \nProperty Assets), or which in any manner challenges or seeks to prevent, \nenjoin, alter or delay any of the transactions contemplated hereby.  To the \nbest of Tunes's knowledge, except as set forth on SCHEDULE 3.8, no such \naction, suit, proceeding, claim, arbitration or investigation has been \nthreatened and no event has occurred or circumstance exists that may give \nrise to or serve as a basis for the commencement of any such action, suit, \nproceeding, claim, arbitration or investigation.  SCHEDULE 3.8 sets forth \nwith respect to each pending action, suit, proceeding, claim, arbitration or \ninvestigation to which Tunes is a party, the forum, the parties thereto, a \ndescription of the subject matter thereof and the amount of damages claimed.\n\n      3.9   NO MATERIAL ADVERSE EFFECT.  Except as set forth on SCHEDULE 3.9 \nhereto, since the Balance Sheet Date, Tunes has conducted its business in the \nordinary course and there has not occurred:\n\n            (a)   Any Material Adverse Effect;\n\n            (b)   Any amendments or changes in the Articles of Incorporation \nor Bylaws of Tunes;\n\n            (c)   Any damage, destruction or loss, whether covered by \ninsurance or not, materially and adversely affecting any of the properties or \nbusinesses of Tunes;\n\n            (d)   Any issuance, redemption, repurchase or other acquisition \nof shares of capital stock of Tunes (other than in the ordinary course under \nemployee benefit plans), or any declaration, setting aside or payment of any \ndividend or other distribution (whether in cash, stock or property) with \nrespect to the capital stock of Tunes;\n\n            (e)   Any increase in or modification of the compensation or \nbenefits payable or to become payable by Tunes to any of its directors or \nemployees, except in the ordinary course of business consistent with past \npractice;\n\n            (f)   Any increase in or modification of any bonus, pension, \ninsurance or other employee benefit plan, payment or arrangement (including, \nbut not limited to, the granting of stock options, restricted stock awards or \nstock appreciation rights) made to, for or with any of its employees, except \nin the ordinary course of business consistent with past practice;\n\n            (g)   Any sale of the property or assets of Tunes individually in \nexcess of $5,000 or in the aggregate in excess of $10,000 other than \ninventory sales in the ordinary course of business consistent with past \npractice;\n\n            (h)   Any alteration in any term of any outstanding debt or \ncapital stock of Tunes;\n\n            (i)   Any (i) incurrence, assumption or guarantee by Tunes of any \ndebt for borrowed money; (ii) issuance or sale of any securities convertible \ninto or exchangeable for debt \n\n                                       21\n\n\n\nsecurities of Tunes; or (iii) issuance or sale of options or other rights to \nacquire from Tunes, directly or indirectly, debt securities of Tunes or any \nsecurities convertible into or exchangeable for any such debt securities;\n\n            (j)   Any creation or assumption by Tunes of any mortgage, \npledge, security interest or lien or other encumbrance on any asset;\n\n            (k)   Any making of any loan, advance or capital contribution to, \nor investment in, any person other than (A) travel loans or advances made in \nthe ordinary course of business of Tunes and (B) other loans and advances in \nan aggregate amount which does not exceed $10,000 outstanding at any time;\n\n            (l)   Any entry into, amendment of, relinquishment, termination, \ncancellation or nonrenewal by Tunes or any other party of any contract, \nlease, commitment, license, permit, or other right or obligation to which \nTunes is a party or by which any of its assets is bound, other than in the \nordinary course of business consistent with past practice;\n\n            (m)   Any amendment of, relinquishment, termination, \ncancellation, nonrenewal, default, or notice of default by Tunes or any other \nparty of any agreement, contract, obligation, promise, commitment, mortgage, \nindenture, plan, lease, instrument, permit, concession, right, franchise, \narrangement, license, undertaking or understanding (whether oral, written, \nexpress or implied) which is described or disclosed in Section 3.12 hereof.\n\n            (n)   Any sale, lease, disposition, transfer, license, grant, \nloss, abandonment, or termination of a right under the Intellectual Property \nAssets (as defined in Section 3.16 hereof) other than nonexclusive licenses \ngranted in the ordinary course of business consistent with past practice;\n\n            (o)   Any strike, walkout, work slowdown or labor dispute other \nthan routine individual grievances, or any activity or proceeding by a labor \nunion or representative thereof to organize any employees of Tunes;\n\n            (p)   Any change in its accounting methods; or\n\n            (q)   Any agreement or arrangement made by Tunes to take any \naction which, if taken prior to the date hereof, would have made any \nrepresentation or warranty set forth in this Section 3.9 untrue or incorrect \nas of the date when made.\n\n      3.10  ABSENCE OF UNDISCLOSED LIABILITIES.  Tunes has no liabilities or \nobligations (whether absolute, accrued or contingent or otherwise) except \nliabilities or obligations (i) adequately provided for in the Financial \nStatements (ii) incurred in the ordinary course of business consistent with \npast practice and which are not, individually or in the aggregate, material \nto Tunes.\n\n                                       22\n\n\n\n      3.11  EMPLOYEE BENEFIT PLANS.\n\n            (a)   SCHEDULE 3.11 contains a list of all plans, agreements or \narrangements relating to deferred compensation, pension, profit sharing, \nmoney purchase or other retirement benefits, membership interests purchase, \nmembership interests grant, membership interests option, membership interests \nappreciation rights, and other equity-based compensation or benefits, salary, \nbonus, commission, incentive, severance, parachute or change in control \npayments or benefits, health and welfare benefits, life, disability or other \ninsurance benefits, layoff or unemployment benefits, or any other employee \nbenefits or fringe benefits maintained or contributed to by Tunes, or under \nwhich Tunes has any liabilities or obligations including, but not limited, to \nany employee benefit plan within the meaning of Section 3(3) of the \nEmployment Retirement Income Security Act of 1974, as amended (\"ERISA\") \n(individually, a \"Plan\" and, collectively, the \"Plans\").  For purposes of \nthis Section 3.11, references to Tunes include any entity affiliated with \nTunes under Sections 414(b), (c) and (m) of the Code or Section 4001(b) of \nERISA (excluding any foreign affiliate of Tunes).  Tunes is not required to \ncontribute to, and has no liability under or with respect to, any \nmultiemployer plan within the meaning of Section 4001(a)(3) of ERISA.  Tunes \nhas previously delivered to JAMtv true and complete copies of (i) each \nwritten Plan, including all amendments to date, (ii) the most recent Form \n5500 and schedules thereto for each Plan required to file the same, (iii) \nwhere applicable, trust or other funding agreements or policies under each \nPlan, (iv) where applicable, investment management or other service \nagreements in respect of each Plan, (v) where applicable, the most recent \nactuarial reports and financial statements relating to each Plan, (vi) where \napplicable, the most recent determination letter from the Internal Revenue \nService regarding each Plan intended to be qualified under Section 401(a) of \nthe Code, (vii) summary plan descriptions and any other material employee \ncommunications with respect to each Plan and (viii) all employment or \npersonal handbooks, policies or manuals.\n\n            (b)   All material obligations of Tunes existing on or prior to \nthe date hereof, whether arising by operation of law, by contract or by past \ncustom, for payments to trusts or other funds or to any governmental agency \nor to or in respect of any Plan have been paid, or adequate accruals for such \npayments have been made by Tunes on its books of account.\n\n            (c)   Each Plan has been administered and operated in all \nmaterial respects in accordance with its terms and applicable law.  Each Plan \nintended to be \"qualified\" within the meaning of Section 401(a) of the Code \nhas received a determination letter or notification letter to the effect that \nit is so qualified and each related trust is exempt from tax under Section \n501(a) of the Code.  Except for required contributions, benefit accruals, and \nadministrative expenses, no material liability under ERISA or the Code or the \nterms of a Plan has been incurred or, based upon existing facts, may \nreasonably be expected to be incurred by Tunes with respect to any Plan \nexcept for any such liabilities that have been fully settled and discharged.  \nNone of the Plans, nor any trust created thereunder, has engaged in any \nnon-exempt material \"prohibited transaction\" as such term is defined in \nSection 4975 of the Code and Section 406 of ERISA, which involves Tunes.\n\n            (d)   Each of the Plans is, and in administering each of the \nPlans, Tunes is, in material compliance with all applicable laws including, \nwithout limitation, ERISA and the Code.  Tunes has not incurred any liability \nunder Title IV of ERISA, Section 412 of the Code or Section \n\n                                       23\n\n\n\n302 of ERISA, with respect to any employee benefit plan subject to any of \nthose provisions, and there exist no facts, conditions or circumstances which \nwould make it reasonable to anticipate that Tunes will incur any such \nliability.\n\n            (e)   The projected benefit obligation, within the meaning of \nStatement of Financial Accounting Standards No. 87 of the Financial \nAccounting Standards Board, under each Plan which is subject to Title IV of \nERISA, determined on the basis of actuarial assumptions ordinarily used under \nsuch Plan as of the most recent actuarial valuation date for such Plan and as \nof December 31, 1997, does not exceed the current value of all of the assets \nof such Plan.\n\n            (f)   All reports relating to the Plans required to be filed with \nor furnished to any governmental body, agency or court, Plan participants or \nbeneficiaries prior to the date hereof have been timely filed or furnished in \naccordance with applicable law.\n\n            (g)   There are no actions, suits or claims pending (other than \nroutine claims for benefits), or, to Tunes's knowledge, threatened against \nany of the Plans or against the assets of any of such Plans.\n\n            (h)   Tunes has not (i) experienced any reportable event within \nthe meaning of ERISA or other event or condition which presents a material \nrisk of the termination of any pension Plan by the Pension Benefit Guaranty \nCorporation (\"PBGC\"); (ii) had any tax imposed on it by the Internal Revenue \nService for any violation under Section 4975 of the Code; and (iii) engaged \nin any transaction which could reasonably be expected to subject Tunes or any \nPlan to any liability for any tax under Section 4975 of the Code.\n\n            (i)   There is no matter involving any Plan maintained or \nestablished for employees of Tunes which is pending before the Internal \nRevenue Service, the Department of Labor or any other governmental agency or \ncourt.\n\n            (j)   As to any Plan subject to Title IV of ERISA, (i) there has \nbeen no reportable event within the meaning of Section 4043 of ERISA; (ii) no \nnotice of intent to terminate the Plan has been given under Section 4041 of \nERISA; (iii) no proceeding has been instituted under Section 4042 of ERISA to \nterminate any Plan; (iv) no liability to the PBGC has been incurred (other \nthan PBGC insurance premiums); and (v) as to any Plan intended to be \nqualified under Section 401 of the Code, there has been no termination or \npartial termination of any such Plan within the meaning of Section 411(d)(3) \nof the Code.\n\n            (k)   No act, omission or transaction has occurred which could \nreasonably be expected to result in imposition on Tunes of (i) a breach of \nfiduciary duty liability under Section 409 of ERISA, or (ii) a civil penalty \nassessed pursuant to subsections (c), (i) or (l) of Section 502 of ERISA.\n\n            (l)   Each Plan which is a \"welfare plan\" (as defined in Section \n(3)(1) of ERISA) is either (i) unfunded or (ii) funded through insurance \ncontracts.\n\n                                       24\n\n\n\n            (m)   Tunes does not provide medical or life insurance benefits \nto or in respect of employees beyond the date of retirement or other \ntermination of employment, other than as required under the Consolidated \nOmnibus Budget Reconciliation Act of 1985, as amended (\"COBRA\"), or other \napplicable law, nor does it have any current or projected liability for any \nunfunded post-retirement medical or life insurance benefits in respect of any \nemployee or former employee.\n\n            (n)   No employer securities, employer real property or other \nemployer property is included in the assets of any Plan.\n\n            (o)   Tunes is not a party to any written or oral deferred or \nincentive compensation, employment, severance, consulting or other similar \ncontract, arrangement or policy or labor contracts or collective bargaining \nagreements relating to its employees that could reasonably be expected to \nresult in any Material Adverse Effect.\n\n            (p)    No Plan (including any agreement with any employee or \nformer employee) provides for benefits by reason of severance or change in \ncontrol, except as may be required by COBRA.  The consummation of the \ntransactions contemplated under this Agreement will not cause the payment \n(including without limitation severance, unemployment compensation, golden \nparachute, bonus or otherwise), acceleration (other than the acceleration of \ncertain of the Tunes Options as described in SCHEDULE 3.2), vesting or \nfunding of any compensation, benefit or other entitlement with respect to any \nemployee, consultant, officer or director of Tunes under any Plan  (other \nthan the acceleration of certain of the Tunes Options as described in \nSCHEDULE 3.2) and will not materially increase any benefits otherwise payable \nunder any Plan.\n\n      3.12  MATERIAL CONTRACTS AND COMMITMENTS.\n\n            (a)   SCHEDULE 3.12 lists and describes every agreement, \ncontract, obligation, promise, commitment, mortgage, indenture, plan, lease, \ninstrument, permit, concession, franchise, arrangement, license, undertaking \nor understanding (whether oral, written, express or implied) to which Tunes \nis a party or by which it or any of its assets are or are purportedly bound \nand which:\n\n                  (1)   involves performance of services or delivery of goods or\n      materials by Tunes of an amount or value in excess of $10,000;\n\n                  (2)   involves performance of services or delivery of goods or\n      materials to Tunes of an amount or value in excess of $10,000;\n\n                  (3)   was not entered into in the ordinary course of business\n      and that involves expenditures or receipts of Tunes in excess of $5,000;\n\n                  (4)   evidences a lease, rental or occupancy agreement,\n      license, installment or conditional sale agreement, or otherwise affecting\n      the ownership of, leasing of, title to, use of, or any leasehold or other\n      interest in, any real or personal property;\n\n                                       25\n\n\n\n                  (5)   relates to (including, without limitation, by way of\n      license or restriction on use or transfer) Intellectual Property Assets\n      (except for any license implied by the sale of a product and perpetual,\n      paid-up licenses for commonly available software programs with a value of\n      less than $500 under which Tunes is the licensee), including, without\n      limitation, any which relates to (i) the All-Music Guide or similar\n      resource, (ii) the so-called Rating and Recommendation Engine or RARE,\n      (iii) automated music encoding, (iv) CD cataloging and imaging, (v)\n      streaming music delivery, (vi) music databases, (vii) order fulfillment or\n      customer support, (viii) CGI technology, (ix) music search engines, (x)\n      performance, reproduction, or display rights in musical compositions,\n      sound recordings, artwork (including album art, liner notes, and other\n      collateral works), charts, music databases, or other Copyrights,\n      including, without limitation, those with or relating to any Performance\n      Rights Society, Artists Guild, or other Music Rights Holder, or (xi)\n      current or former officers, directors, employees, consultants, or\n      contractors regarding the appropriation or the non-disclosure of any of\n      the Intellectual Property Assets;\n\n                  (6)   relates to a collective bargaining arrangement or other\n      arrangement to or with any labor union or other employee representative of\n      a group of employees;\n\n                  (7)   radio station affiliates;\n\n                  (8)   evidences any joint venture or partnership;\n\n                  (9)   involves any sharing of revenues (including, without\n      limitation, any advertising revenues), profits, losses, costs, or\n      liabilities of Tunes with any other person or entity or of any other\n      person or entity with Tunes;\n\n                  (10)  involves any barter or in-kind exchange for goods or\n      services;\n\n                  (11)  involves the supply or fulfillment of sales of CDs,\n      other sound recordings, or related merchandise to customers or users;\n\n                  (12)  contains any covenants that in any material way purport\n      to restrict the business activity of Tunes or any affiliate of Tunes or\n      limit the freedom of Tunes or any affiliate of Tunes to engage in any line\n      of business or to compete with any person or entity or to enter into or\n      perform the transactions contemplated by this Agreement;\n\n                  (13)  provides for payments or commissions to or by any person\n      or entity based on sales, purchases, or profits, other than direct\n      payments for goods;\n\n                  (14)  evidences a power of attorney that is currently\n      effective and outstanding;\n\n                  (15)  relates to capital expenditures which, by its terms,\n      provides for an aggregate balance payable thereunder since December 31,\n      1996 in excess of $10,000 thereunder;\n\n                                       26\n\n\n\n                  (16)  evidences a warranty, guaranty, and or other similar\n      undertaking with respect to contractual performance extended by Tunes\n      other than in the ordinary course of business; or\n\n                  (17)  evidences any amendment, supplement, modification or\n      waiver (whether oral or written) in respect of any of the foregoing.\n\n            (b)   Tunes has delivered to JAMtv true and complete copies of \n(or, if oral, descriptions of) each of the following agreements, together \nwith any amendment, supplement, modification or waiver (whether oral or \nwritten) thereof, between Tunes and each of the following parties:\n\n                  (1)   that certain Terms Sheet for Internet Movie Database\n      Soundtrack Mini-Store between Internet Movie Database, Ltd. and Tunes\n      dated August 18, 1997;\n\n                  (2)   that certain Microsoft Corporation CD Merchant Agreement\n      between Microsoft Corporation and Tunes dated as of February 6, 1998, a\n      true and complete copy of which is attached hereto as EXHIBIT H;\n\n                  (3)   that certain License and Service Agreement between\n      MATRIX Software, Inc. and Tunes dated May 9, 1996;\n\n                  (4)   that certain Terms Sheet for Co-Marketing Agreement\n      between Radio &amp; Records, Inc. and Tunes dated July 22, 1997; and\n\n                  (5)   that certain Software License Agreement between David\n      Anderson and Tunes dated as of September 1, 1995.\n\n            (c)   Each agreement, contract, obligation, promise, commitment, \nmortgage, indenture, plan, lease, instrument, permit, concession, franchise, \narrangement, license, undertaking or understanding (whether oral, written, \nexpress or implied) listed on or attached to SCHEDULE 3.12 is valid and \nbinding on Tunes, and is in full force and effect, and neither Tunes nor any \nother party thereto, has breached, any material provision of, or is in \nmaterial default under the terms thereof.  No such agreement, contract, \nobligation, promise, commitment, mortgage, indenture, plan, lease, \ninstrument, permit, concession, franchise, arrangement, license, undertaking \nor understanding (whether oral, written, express or implied) contains any \nmaterial liquidated damages, penalty or similar provision.  Tunes does not \nintend to cancel, withdraw, modify or amend any such agreement, contract, \nobligation, promise, commitment, mortgage, indenture, plan, lease, \ninstrument, permit, concession, franchise, arrangement, license, undertaking \nor understanding (whether oral, written, express or implied) and Tunes has \nnot been notified by any other party that any party to any such agreement, \ncontract, obligation, promise, commitment, mortgage, indenture, plan, lease, \ninstrument, permit, concession, franchise, arrangement, license, undertaking \nor understanding (whether oral, written, express or implied) intends to \ncancel, withdraw, modify or amend such agreement, contract, obligation, \npromise, commitment, mortgage, indenture, plan, lease, instrument, permit, \nconcession, \n\n                                       27\n\n\n\nfranchise, arrangement, license, undertaking or understanding (whether oral, \nwritten, express or implied).\n\n      3.13  INDEBTEDNESS.  Tunes is not obligated as a borrower, guarantor or \naccommodation party with respect to any indebtedness for borrowed money other \nthan as disclosed in the Financial Statements.  Tunes is not a lender with \nrespect to any indebtedness for borrowed money other than as disclosed in the \nFinancial Statements.\n\n      3.14  TAXES.\n\n            (a)   All Tax Returns, statements, reports and forms (including \nestimated tax returns and reports and information returns and reports) \nrequired to be filed with any Taxing Authority with respect to any Taxable \nperiod ending on or before the Effective Time, by or on behalf of Tunes \n(collectively, the \"Tunes Returns\"), have been or will be filed when due \n(including any extension of such due date), and all amounts shown due thereon \nor before the Effective Time have been or will be paid on or before such \ndate.  The Unaudited Balance Sheet (i) fully accrued all actual and \ncontingent liabilities for Taxes with respect to all periods through the \nBalance Sheet Date and Tunes has not and will not incur any Tax liability in \nexcess of the amount reflected on the Unaudited Balance Sheet with respect to \nsuch periods, and (ii) properly accrues in accordance with GAAP all \nliabilities for Taxes payable following the Balance Sheet Date with respect \nto all transactions and events occurred on or prior to such date.  All \ninformation set forth in the notes to the Financial Statements relating to \nTax matters is true, complete and accurate in all material respects.\n\n            (b)   No material Tax liability has been incurred since the \nBalance Sheet Date other than in the ordinary course of business and adequate \nprovision has been or will be made for all Tax liability incurred since that \ndate in accordance with GAAP on at least a quarterly basis.  Tunes has \nwithheld and paid to the applicable financial institution or Taxing Authority \nall amounts required to be withheld.  Except as set forth on SCHEDULE 3.14, \nall Tunes Returns filed with respect to Taxable years of Tunes through the \nTaxable year ended December 31, 1997, in the case of the United States, have \nbeen examined and closed or are Tunes Returns with respect to which the \napplicable period for assessment under applicable law, after giving effect to \nextensions or waivers, has expired. Neither Tunes nor any member of any \naffiliated or combined group of which Tunes has been a member has granted any \ncurrently effective extension or wavier of the limitation period applicable \nto any Tunes Returns.\n\n            (c)   There is no material claim, audit, action, suit, \nproceeding, or investigation now pending or, to the knowledge of Tunes, \nthreatened against or with respect to Tunes in respect of any Tax or \nassessment.  No notice of deficiency or similar document of any Tax Authority \nhas been received by Tunes, and there are no liabilities for Taxes (including \nliabilities for interest, additions to Tax and penalties thereon and related \nexpenses) with respect to the issues that have been raised (and are currently \npending) by any Tax authority that could, if determined adversely to Tunes, \nmaterially and adversely affect the liability of Tunes for Taxes.  Neither \nTunes, nor any person on behalf of Tunes, has entered into nor will it enter \ninto any agreement or consent pursuant to Section 341(f) of the Code.  There \nare no liens for Taxes upon the assets of Tunes except liens for current \nTaxes not yet due.  Except as may be required as a result of the Merger, \nTunes has not been or will\n\n                                       28\n\n\n\nbe required to include any material adjustment in Taxable income for any Tax \nperiod (or portion thereof) ending on or after the Closing pursuant to \nSection 481 or 263A of the Code or any comparable provision under state or \nforeign tax laws as a result of transactions, events or accounting methods \nemployed prior to the closing.\n\n            (d)   There is no contract, agreement, plan or arrangement, \nincluding, but not limited to, the provisions of this Agreement, covering any \nemployee or independent contractor or former employee or independent \ncontractor of Tunes that, individually or collectively, could give rise to \nthe payment of any amount that would not be deductible pursuant to Section \n280G, 162 or 404 of the Code, other than as may apply with respect to the \nacceleration of stock option vesting as described on SCHEDULE 3.2.  Other \nthan pursuant to this Agreement, Tunes is not a party to or bound by (or will \nprior to the Effective Time become a party to or bound by) any Tax indemnity, \nTax sharing or Tax allocation agreement (whether written, unwritten or \narising under operation of federal law as a result of being a member of a \ngroup filing consolidated tax returns, under option of certain state laws as \na result of being a member of a unitary group, or under comparable laws of \nother states or foreign jurisdictions) which includes a party other than \nTunes.  None of the assets of Tunes (i) is property that Tunes is required to \ntreat as owned by any other person pursuant to the so-called \"safe harbor \nlease\" provisions of former Section 168(f)(8) of the Code, (ii) directly or \nindirectly secures any debt the interest on which is tax exempt under Section \n103(a) of the Code or (iii) is \"tax exempt use property\" within the meaning \nof Section 168(h) of the Code. Tunes has not participated in (nor will prior \nto the Effective Time participate in) an international boycott within the \nmeaning of Section 999 of the Code. Tunes has previously provided or made \navailable to JAMtv true and correct copies of all material Tax Returns, and, \nas reasonably requested by JAMtv, prior to or following the date hereof, \ninformation statements, reports, work papers, Tax opinions and memoranda and \nother Tax data and documents.\n\n            (e)   SCHEDULE 3.14 lists (i) any foreign Tax holidays that Tunes \nhas in any jurisdiction, including the nature, amount and lengths of such Tax \nholiday, (ii) any intercompany transfer pricing agreements or other \narrangements that have been established by Tunes in any foreign jurisdiction, \nand (iii) any expatriate tax programs or policies affecting Tunes.\n\n            (f)   For purposes of this Agreement, the following terms have \nthe following meanings: \"Tax\" (and, with correlative meaning, \"Taxes\" and \n\"Taxable\") means (i) any net income, alternative or add-on minimum tax, gross \nincome, gross receipts, sales, use, ad valorem, transfer, franchise, profits, \nlicense, withholding, payroll, employment, excise, severance, stamp, \noccupation, premium, property, environmental or windfall profit tax, custom, \nduty or other tax governmental fee or other like assessment or charge of any \nkind whatsoever, together with any interest or any penalty, addition to tax \nor additional amount imposed by any Governmental Entity (a \"Taxing \nAuthority\") responsible for the imposition of any such tax (domestic or \nforeign), (ii) any liability for the payment of any amounts of the type \ndescribed in clause (i) as a result of being a member of an affiliated, \nconsolidated, combined or unitary group for any Taxable period and (iii) any \nliability for the payment of any amounts of the type described in clause (i) \nor (ii) as a result of any express or implied obligation to indemnify any \nother person.\n\n                                       29\n\n\n\n      3.15  RELATED TRANSACTIONS.   No shareholder of Tunes or any Related \nPerson of any shareholder or of Tunes has, or since January 1, 1996 has had, \nany interest in any property (whether real, personal, or mixed and whether \ntangible or intangible), used in or pertaining to Tunes's business, except \nfor rights as a shareholder, and except for rights under any Plan.  No \nshareholder of Tunes or any Related Person of any shareholder or of Tunes is, \nor since January 1, 1996 has owned (of record or as a beneficial owner) an \nequity interest or any other financial or profit interest in, a Person that \nhas (i) had business dealings or a material financial interest in any \ntransaction with Tunes, or (ii) engaged in competition with Tunes with \nrespect to any line of the products or services of Tunes in any market \npresently served by Tunes.  No shareholder of Tunes or any Related Person of \nany shareholder of Tunes is a party to any contract with, or has any claim or \nright against, Tunes.\n\n      \"Related Person\" means, (i) with respect to an individual, (a) each \nother member of such individual's family; (b) any Person that is directly or \nindirectly controlled by such individual or one or more members of such \nindividual's family; (c) any Person in which such individual or members of \nsuch individual's family hold (individually or in the aggregate) a Material \nInterest; and (d) any Person with respect to which such individual or one or \nmore members of such individual's family serves as a director, officer, \npartner, executor, or trustee (or in a similar capacity); and (ii) with \nrespect to a specified Person other than an individual, (a) any Person that \ndirectly or indirectly controls, is directly or indirectly controlled by, or \nis directly or indirectly under common control with such specified Person; \n(b) any Person that holds a Material Interest in such specified Person; (c) \neach Person that serves as a director, officer, partner, executor, or trustee \nof such specified Person (or in a similar capacity); (d) any Person in which \nsuch specified Person holds a Material Interest; (e) any Person with respect \nto which such specified Person serves as a general partner or a trustee (or \nin a similar capacity); and (f) any Related Person of any individual \ndescribed in clause (b) or (c). \"Material Interest\" means direct or indirect \nbeneficial ownership of voting securities or other voting interests \nrepresenting at least 5% of the outstanding voting power of a Person or \nequity securities or other equity interests representing at least 5% of the \noutstanding equity securities or equity interests in a Person.\n\n      3.16  INTELLECTUAL PROPERTY ASSETS.\n\n            (a)   INTELLECTUAL PROPERTY ASSETS.  \"Intellectual Property \nAssets\" means all of the following, whether owned, used, or licensed (as \nlicensee or licensor) by Tunes, and all rights corresponding thereto \nthroughout the world, in any form and on any medium now known or hereafter \ndeveloped and all embodiments thereof, whether tangible, intangible, printed, \nrecorded, digitized, fixed, stored, electronic, or otherwise:\n\n                  (1)   Tunes's corporate name, the uniform resource locator\n      \"www.tunes.com,\" all fictitious business names, trade names, brand names,\n      trade dress, logos, trademarks, service marks, trademark registrations,\n      service mark registrations, applications for registration and the goodwill\n      symbolized by the foregoing and connected therewith (collectively,\n      \"Marks\");\n\n                                       30\n\n\n\n                  (2)   (A) all copyrights, whether or not published,  protected\n      or registered under the Copyright Act of 1909 or the Copyright Act of 1976\n      (as either shall be amended from time to time, and any predecessor or\n      successor statute thereto), applications for registration of copyrights,\n      all works of authorship, and all secondary and subsidiary rights therein;\n      (B) art, audiovisual works, animations, compilations, collective works,\n      computer software and programs, data, databases, designs, emblems, films,\n      film clips, graphics, images, illustrations, likenesses, literary works,\n      logos, motion pictures, musical compositions, music videos, performances,\n      photographs, pictorial works, song lyrics, sound clips, sound recordings,\n      scripts, screenplays, video recordings, and all other copyrightable\n      subject matter; (C) all renewals, derivative works, enhancements,\n      improvements, modifications, updates, new releases or other revisions\n      thereof; and (D) publication rights, display rights, attribution rights,\n      integrity rights, performance rights (including digital performance\n      rights), mechanical rights, synchronization rights, publishing rights,\n      approval rights, reproduction rights, rights to create derivative works,\n      distribution rights, or moral rights (collectively, \"Copyrights\");\n\n                  (3)   all publicity rights or privacy rights (or waivers or\n      quitclaims thereof) of any person or entity related thereto (\"Publicity\n      Rights\");\n\n                  (4)   patents, patent applications and extensions,\n      continuations and renewals thereof and inventions and discoveries that may\n      be patentable (collectively, \"Patents\"); and\n\n                  (5)   all know-how, trade secrets, confidential information,\n      customer lists, software, technical information, data, process technology,\n      plans, drawings, and blue prints (collectively, \"Trade Secrets\").\n\n            (b)   CERTAIN OTHER DEFINED TERMS.  The following capitalized \nterms used in this Agreement relating to Intellectual Property Assets shall \nhave the following meanings:\n\n            \"Performance Rights Society\" means any performance rights\n      society or clearinghouse concerning the performance, reproduction,\n      display, or distribution of Copyrights, including, without\n      limitation, American Society of Composers, Authors and Publishers\n      (ASCAP), Broadcast Music, Inc. (BMI), Recording Industry Association\n      of America (RIAA), The Society of European Stage Authors and\n      Composers (SESAC), and The Harry Fox Agency (HFA).\n\n            \"Artists Guild\" means any guild, union, or collective\n      bargaining entity representing artists, performers, or other talent,\n      including, without limitation, American Federation of Musicians,\n      Songwriters Guild, American Federation of Television and Radio\n      Artists, American Society of Media Photographers, Graphic Artists\n      Guild, Writers Guild of America, and Screen Actors Guild.\n\n            \"Music Rights Holder\" means any record label, music publisher,\n      songwriter, artist, photographer, or any other holder of any rights\n      in any sound recording, musical \n\n                                       31\n\n\n\n      composition, artwork (including album art, liner notes, and other \n      collateral works), chart, music database or other Copyright.\n\n            (c)   MARKS.  SCHEDULE 3.16 contains a complete and accurate list \n(including, without limitation, identifying registration numbers, \nregistration dates, application numbers, and filing dates) and summary \ndescription of all Marks.\n\n            (d)   COPYRIGHTS.  SCHEDULE 3.16 sets forth a complete and \naccurate list of all Copyrights, including, without limitation, (i) rights in \nthe All-Music Guide or similar resources; (ii) computer software (including, \nwithout limitation, software for the so-called Rating and Recommendation \nEngine or RARE, automated music encoding, compact disk cataloging and \nimaging, order fulfillment or customer support, CGI technology, and music \nsearch engines); (iii) compact disk catalogues, tables of contents (TOCs), \nand other music databases, and (iv) performance, reproduction, or display \nrights in musical compositions, sound recordings, artwork (including album \nart, liner notes, and other collateral works), charts, and music databases, \nincluding, without limitation, rights relating to any Performance Rights \nSociety, Artists Guild, or other Music Rights Holder.\n\n            (e)   PUBLICITY RIGHTS.   SCHEDULE 3.16 contains a complete and \naccurate list of all Publicity Rights.\n\n            (f)   PATENTS.  SCHEDULE 3.16 contains a complete and accurate \nlist (including identifying numbers and dates of filing and issuance) and \nsummary description of all Patents.\n\n            (g)   TRADE SECRETS.  The documentation relating to each Trade \nSecret is current, accurate, and sufficient in detail and content to identify \nand explain it and to allow its full and proper use without reliance on the \nknowledge or memory of any individual.  Tunes has taken all reasonable \nprecautions to protect the secrecy, confidentiality, and value of its Trade \nSecrets.\n\n            (h)   INTELLECTUAL PROPERTY ASSETS NECESSARY FOR THE BUSINESS.\n\n                  (1)   Tunes owns, or is licensed or otherwise entitled to\n      exercise all rights in Intellectual Property Assets employed in the\n      operation of the business of Tunes as currently conducted or as currently\n      proposed to be conducted including, without limitation, (i) rights in the\n      All-Music Guide or similar resources; (ii) computer software (including,\n      without limitation, software for the so-called Rating and Recommendation\n      Engine or RARE, automated music encoding, compact disk cataloging and\n      imaging, order fulfillment or customer support, CGI technology, and music\n      search engines); (iii) compact disk catalogues, tables of contents (TOCs),\n      and other music databases, (iv) performance, reproduction, or display\n      rights in musical compositions, sound recordings, artwork (including album\n      art, liner notes, and other collateral works), charts, and music\n      databases, including, without limitation, rights relating to any\n      Performance Rights Society, Artists Guild, or other Music Rights Holder;\n      and (v) the musical compositions, sound recordings, artwork (including\n      album art, liner notes, and other collateral works), charts, music\n      databases, and computer software code employed at the web site\n      \"www.tunes.com.\"  Tunes is the owner of all right, title, and \n\n                                       32\n\n\n\n      interest in and to each of the Intellectual Property Assets, free and \n      clear of all material liens, security interests, charges, encumbrances, \n      equities, and other adverse claims, and has the right to use all of the \n      Intellectual Property Assets without payment to any third party \n      (including, without limitation, any Performance Rights Society, Artists \n      Guild, or other Music Rights Holder).\n\n                  (2)   All of the former and current employees and officers of\n      Tunes (including, without limitation, Kamran Mohsenin and David Anderson)\n      have executed valid and binding agreements with Tunes which assign to\n      Tunes all rights to all Intellectual Property Assets created or discovered\n      by such employee or officer in the course of employment with Tunes.  No\n      employee, officer, or director of Tunes has entered into any contract,\n      obligation, promise, commitment, undertaking or understanding (whether\n      oral, written, express or implied) that restricts or limits in any way the\n      scope or type of work in which such employee, officer, or director may be\n      engaged or requires such employee, officer, or director to transfer,\n      assign, or disclose information concerning his or her work to any party\n      other than Tunes.\n\n            (i)   INTELLECTUAL PROPERTY AGREEMENTS.  A complete and accurate \nlist of every contract, obligation, promise, commitment, mortgage, indenture, \nplan, lease, instrument, permit, concession, franchise, arrangement, license, \nundertaking or understanding (whether oral, written, express or implied) \nrelating to the Intellectual Property Assets to which Tunes is a party or by \nwhich Tunes is bound (except for any license implied by the sale of a product \nand perpetual, paid-up licenses for commonly available software programs with \na value of less than $500 under which Tunes is the licensee) is set forth on \nSCHEDULE 3.12.  There are no outstanding and, to the best of Tunes's \nknowledge, no threatened disputes with respect to any such contract, \nobligation, promise, commitment, mortgage, indenture, plan, lease, \ninstrument, permit, concession, franchise, arrangement, license, undertaking \nor understanding (whether oral, written, express or implied) (including, \nwithout limitation, any claims by any Performance Rights Society, Artists \nGuild, or any other Music Rights Holder, for the payment of any fees or \nroyalties for the reproduction, creation of derivative works, distribution, \npublic performance (including digital performance), or public display of any \nIntellectual Property Asset).\n\n            (j)   COMPLIANCE WITH LEGAL AND CONTRACTUAL REQUIREMENTS.  Tunes \nhas all Copyright, computer software and other Intellectual Property Asset \nlicenses, and has paid all royalties and fees with respect thereto required \nto be paid prior to the date of this Agreement, necessary to operate its \nbusiness in compliance with all laws, rules and regulations, and all material \ncontractual requirements to which it or its properties is subject (including, \nwithout limitation, any fees or royalties for the reproduction, creation of \nderivative works, distribution, public performance (including digital \nperformance), or public display of any Intellectual Property Asset required \nby any Performance Rights Society, Artists Guild, or any other Music Rights \nHolder).  Without limiting the foregoing, Tunes has not been subject to a \ncomputer software audit and no software audit of Tunes is pending.\n\n            (k)   CLAIMS AGAINST INTELLECTUAL PROPERTY ASSETS.  No claims \nwith respect to the Intellectual Property Assets have been asserted or, to \nthe best knowledge of Tunes, threatened, by \n\n                                       33\n\n\n\nany person or entity (including, without limitation, by any Performance \nRights Society, Artists Guild, or other Music Rights Holder):  (i) to the \neffect that any business of Tunes as currently conducted or proposed to be \nconducted infringes on or misappropriates any Intellectual Property Assets in \nwhich a third party has any rights or (ii) challenging the ownership, \nvalidity or effectiveness of any of the Intellectual Property Assets.  All \nIntellectual Property Assets are valid and subsisting assets of Tunes.  There \nis no material unauthorized use, infringement or misappropriation of any of \nthe Intellectual Property Assets by any third party, including any employee.  \nExcept as set forth in the Tunes Disclosure Schedule, Tunes is not obligated \nto and has not agreed or committed to indemnify any other person or entity \nagainst any charge or infringement relating to any Intellectual Property \nAssets.  No employee or officer of Tunes is in violation of any term of any \nemployment contract, patent disclosure agreement or any other contract, \nagreement, arrangement, or understanding (whether written or oral) relating \nto the relationship of any such employee or officer with Tunes or any other \nparty (including prior employers) because of the nature of the business \nconducted or proposed to be conducted by Tunes.\n\n      3.17  YEAR 2000 COMPLIANT.  Except as set forth in the Tunes Disclosure \nSchedule, all computers or computer related hardware or software which are \nowned by Tunes (the \"Computer System\") are Year 2000 compliant.  \"Year 2000 \ncompliant\" means that the Computer System (a) allows for the input of all \ndates in a four-digit format; (b) provides date output in a four-digit \nformat; (c) accommodates same century and multi-century date related formulas \nand calculations (including leap year calculations); (d) functions and will \nfunction accurately and without interruption before, during and after January \n1, 2000; and (e) responds to two-digit date input in a way that resolves any \nambiguity as to century as disclosed in the System Specifications.\n\n      3.18  TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES; CONDITION \nOF PROPERTY.\n\n            (a)   TITLE TO PROPERTY.   Tunes has good and marketable title, \nor valid leasehold rights (in the case of leased property), to all real \nproperty and all personal property (including, without limitation, the \nIntellectual Property Assets) purported to be owned, leased, or licensed by \nit or used in the operation of its business, free and clear of all liens, \nsecurity interests, claims and encumbrances of any nature, other than the \nPermitted Liens.  SCHEDULE 3.18 sets forth a complete and accurate list of \nthe following:  (i) all real property leased or used by Tunes in the conduct \nof its business, (ii) Tunes's catalogue of compact disks, albums, tapes, \nartwork (including album art, liner notes, and other collateral works), and \nall other tangible embodiments of copyrightable materials (which Tunes \nrepresents and warrants are not subject to return to any third party), and \n(iii) all other tangible personal property (and intangible personal property, \nto the extent not otherwise disclosed on the other Schedules hereto relating \nto Intellectual Property Assets) owned, leased, or licensed by Tunes or used \nin connection with its business, including without limitation, all inventory, \nmachinery, equipment, furniture, supplies, vehicles, office equipment and \nother tangible personal property used in conducting its business, and all \nleases of equipment or other personal property used in the conduct of its \nbusiness, to the extent such personal property has a value in excess of \n$5,000 individually or $25,000 in the aggregate.\n\n            (b)   LEASE TERMS.  SCHEDULE 3.18 sets forth with respect to each \nlease to which Tunes is a party, the commencement date, termination date, \nrenewal options, if any, and annual base \n\n                                       34\n\n\n\nrents.  Tunes has delivered, prior to the Closing Date, copies of all leases, \nand all amendments thereto, for real property leased or used by Tunes in the \nconduct of the Business.  Tunes has furnished or made available to JAMtv, \ncopies of all engineering, geologic and environmental reports prepared by or \nfor Tunes, if any, with respect to the real property leased or used by Tunes. \n Tunes does not own any fee interest in real property.\n\n            (c)   CONDITION.  The machinery and equipment and other tangible \npersonal property  (and intangible personal property, to the extent not \notherwise comprising Intellectual Property Assets) owned, leased, or used by \nTunes is, taken as a whole, (i) adequate for the conduct of the business of \nTunes consistent with its past practice, (ii) suitable for the uses to which \nit is currently employed, (iii) in good operating condition, and (iv) not \nobsolete.\n\n            (d)   PERMITTED LIENS.  \"Permitted Liens\" shall mean:\n\n                  (i)   liens for taxes, assessments or governmental charges \nor levies on property of Tunes if the same shall not at the time be \ndelinquent or thereafter can be paid without penalty, or are being diligently \ncontested in good faith and by appropriate actions or proceedings and for \nwhich Tunes shall have set aside reserves on its books as required by GAAP \nand which are reflected on the Financial Statements;\n\n                  (iii) liens imposed by law, such as carrier's, \nwarehousemen's and mechanic's liens and other similar liens, which arise in \nthe ordinary course of business with respect to obligations not yet due or \nbeing contested in good faith by appropriate actions or proceedings and for \nwhich Tunes shall have set aside reserves on its books as required by GAAP \nand which are reflected on the Financial Statements;\n\n                  (iv)  liens arising out of pledges or deposits under \nworkmen's compensation laws, unemployment insurance, old age pensions, or \nother social security benefits other than any lien imposed by ERISA; and\n\n                  (vii) liens listed on any title report previously delivered \nto and accepted by Tunes and zoning restrictions, easements, licenses or \nother restrictions on the use of real property or other irregularities in \ntitle thereto so long as the same does not materially impair the use of such \nreal property in the operation by Tunes of its business.\n\n      3.19  GOVERNMENTAL AUTHORIZATIONS AND LICENSES.  Tunes is the holder of \nall material licenses, authorizations, permits, concessions, certificates and \nother franchises of any Governmental Entity required to operate its business \n(collectively, the \"Licenses\") and in compliance in all material respects \nwith the terms, conditions, limitations, restrictions, standards, \nprohibitions, requirements and obligations of such Licenses.  The Licenses \nare in full force and effect.  There is not now pending, nor  is there \nthreatened in writing, any action, suite, investigation or proceeding against \nTunes before any Governmental Entity with respect to the Licenses, nor is \nthere any issued or outstanding notice, order to complaint with respect to \nthe violation by Tunes of the terms of any License or any rule or regulation \napplicable thereto.\n\n                                       35\n\n\n\n      3.20  RESTRICTIONS ON BUSINESS ACTIVITIES.  There is no material \nagreement, judgment, injunction, order or decree binding upon Tunes which has \nor could reasonably be expected to have the effect of prohibiting or \nmaterially impairing any business practice of Tunes, any acquisition of \nproperty by Tunes or the conduct of business of Tunes as currently conducted \nor as currently proposed to be conducted.\n\n      3.21  ENVIRONMENTAL MATTERS.\n\n            (a)   No substance that is regulated by any Governmental Entity \nor that has been designated by any Governmental Entity to be radioactive, \ntoxic, hazardous or otherwise a danger to health or the environment (a \n\"Hazardous Material\") is present in, on or under any property that Tunes has \nat any time owned, operated, occupied or leased, which is reasonably likely \nto form the basis of a material claim, action, suit, proceeding hearing or \ninvestigation against Tunes.\n\n            (b)   Tunes does not and has not in the conduct of its business \ntransported, stored, used, manufactured, released or exposed its employees or \nany other person to any Hazardous Material (other than customary uses of \nhazardous materials for janitorial and office purposes in compliance with \napplicable law).\n\n            (c)   No permits, consents, waivers, exemptions, licenses, \napprovals and other authorizations are required to be obtained by it under \nthe laws of any Governmental Entity relating to land use, public and employee \nhealth and safety, pollution or protection of the environment (collectively, \n\"Environmental Laws\"). Tunes is in compliance in all material respects with \nall other limitations, restrictions, conditions, standards, prohibitions, \nrequirements, obligations, schedules and timetables contained in the \nEnvironmental Laws or contained in any regulation, code, plan, order, decree, \njudgment, notice or demand letter issued, entered, promulgated or approved \nthereunder.  Tunes has not received any notice and is not aware of any past \nor present condition or practice of the businesses conducted by Tunes which \nforms the basis of any material claim, action, suite, proceeding, hearing or \ninvestigation against Tunes, arising out of the manufacture, processing, \ndistribution, use, treatment, storage, spill, disposal, transport, or \nhandling, or the emission, discharge, release or threatened release into the \nenvironment, of any Hazardous Material by Tunes or any of its subsidiaries.\n\n      3.22  INSURANCE.  SCHEDULE 3.22 lists all insurance policies and \nfidelity bonds covering the assets, business, equipment, properties, \noperations, employees, officers and directors of Tunes, their termination \ndates and the amounts of coverage under each such policy and bond of Tunes.  \nWithin the last four (4) years, Tunes has not been refused any requested \ncoverage.  All premiums payable under all such policies and bonds have been \npaid and Tunes is otherwise in full compliance with the terms of such \npolicies and bonds (or other policies and bonds providing substantially \nsimilar insurance coverage).  Such policies of insurance and bonds are of the \ntype and in amounts customarily carried by persons conducting businesses \nsimilar to that of Tunes.  Tunes does not know of any threatened termination \nof or material premium increase with respect to, any of such policies.\n\n      3.23  LABOR MATTERS.  Tunes has not been, and is not, a party to any \ncollective bargaining or other labor Contract.  There has not been, there is \nnot presently pending or existing, and to \n\n                                       36\n\n\n\nTunes's knowledge there is not threatened, (a) any strike, slowdown, \npicketing, work stoppage, or employee grievance process, (b) any proceeding \nagainst or affecting Tunes relating to the alleged violation of any laws or \nregulations pertaining to labor relations or employment matters, including \nany charge or complaint filed by an employee or union with the National Labor \nRelations Board, the Equal Employment Opportunity Commission, or any \ncomparable governmental authority, organizational activity, or other labor or \nemployment dispute against or affecting Tunes or its premises, or (c) any \napplication for certification of a collective bargaining agent. To Tunes's \nknowledge no event has occurred or circumstance exists that could provide the \nbasis for any work stoppage or other labor dispute. There is no lockout of \nany employees by Tunes, and no such action is contemplated by Tunes.  Tunes \nhas complied in all material respects with all laws and regulations relating \nto employment, equal employment opportunity, nondiscrimination, immigration, \nwages, hours, benefits, collective bargaining, the payment of social security \nand similar taxes, occupational safety and health, and plant closing. Tunes \nis not liable for the payment of any compensation, damages, taxes, fines, \npenalties, or other amounts, however designated, for failure to comply with \nany of the foregoing laws and regulations.\n\n      3.24  EMPLOYEES.\n\n            (a)   SCHEDULE 3.24 contains a complete and accurate list of the \nfollowing information for each employee, officer, and director of Tunes, \nincluding, without limitation, each employee on leave of absence or layoff \nstatus:  name; title; current compensation and bonus paid or payable; \nvacation accrued; severance arrangements; and vested and unvested Tunes \nOptions held. \n\n            (b)   No director, officer or employee of Tunes is a party to, or \nis otherwise bound by, any agreement or arrangement, including any \nconfidentiality, noncompetition, or proprietary rights agreement, between \nsuch director or employee and any other Person that in any way adversely \naffects or will affect the performance of his duties as an employee, officer \nor director of Tunes or Merger Sub, or the ability of Tunes to conduct its \nbusiness.  To Tunes's knowledge, no director, officer, or employee of Tunes \nintends to terminate his employment with Tunes.\n\n            (c)   SCHEDULE 3.24 identifies each employee, officer or director \nof Tunes who was employed by Tunes within the past two years but is no longer \nemployed by Tunes, and contains a complete and accurate list of the following \ninformation for each retired employee, officer or director of Tunes, or their \ndependents, receiving benefits or scheduled to receive benefits from Tunes or \nthe Plans in the future: name, pension benefit, pension option election, \nretiree medical insurance coverage, retiree life insurance coverage, and \nother benefits.\n\n      3.25  QUESTIONABLE PAYMENTS.  Neither Tunes nor any director, officer \nor other employee of Tunes has: (i) made any payments or provided services or \nother favors in the United States of America or in any foreign country in \norder to obtain preferential treatment or consideration by any Governmental \nEntity with respect to any aspect of the business of Tunes; or (ii) made any \npolitical contributions which would not be lawful under the laws of the \nUnited States (including, without limitation, the Foreign Corrupt Practices \nAct) or the foreign country in which such payments were made.  Neither Tunes \nnor, any director, officer or other employee of Tunes has been the subject of \nany inquiry or investigation by any Governmental Entity in  connection with \npayments or benefits \n\n                                       37\n\n\n\nor other favors to or for the benefit of any governmental or armed services \nofficial, agent, representatives or employee with respect to any aspect of \nthe business of Tunes or with respect to any political contribution.\n\n      3.26  INFORMATION STATEMENT.  The information supplied or to be \nsupplied by Tunes for inclusion in the materials to be prepared for use in \nsoliciting approval of the Merger by Tunes's shareholders as described in \nSection 5.3 hereof and other solicitation materials relating to the Merger \n(the \"Information Statement\"), on the date on which Tunes mails such \nmaterials to its shareholders and at all times from such date up to and \nincluding the Effective Time complies or will comply in all respects with the \nCGCL, the DGCL, and the applicable federal and state securities law \nrequirements and will not contain any untrue statement of a material fact or \nomit to state a material fact necessary in order to make the statements made \ntherein, in the light of the circumstances under which they will be made, not \nmisleading; PROVIDED, HOWEVER, that Tunes makes no representation or warranty \nwith respect to any information that JAMtv may supply expressly for use in \nthe Information Statement.\n\n      3.27  ACCOUNTS PAYABLE.  All accounts payable of Tunes have been \nincurred in the ordinary course of business consistent with past practice.\n\n      3.28  SUPPLIERS AND CUSTOMERS.  There are no pending or, to Tunes's \nknowledge, threatened disputes between Tunes and any of its vendors, \nsuppliers, customers or other parties which in any way relate to the \noperation of Tunes's business, including, without limitation, with respect to \nany Performance Rights Society, Artists Guild, or other Music Rights Holder \nor with respect to any of the parties to the agreements attached to SCHEDULE \n3.12 hereto.\n\n      3.29  BANK ACCOUNTS.  SCHEDULE 3.29 hereto lists the names and \nlocations of all banks at which Tunes has an account and\/or safe deposit box, \nthe numbers of any such accounts and the names of all persons authorized to \ndraw thereon or to have access thereto.\n\n      3.30  BROKERS; FINDERS.  Tunes represents and warrants that no agent, \nbroker, investment banker or other firm or person is, or will be, entitled to \nany broker's or finder's fee or any similar commission or fee in connection \nwith any of the transactions contemplated by this Agreement or the Merger \nCertificate.\n\n      3.31  DISCLOSURE.  No representation or warranty made by Tunes in this \nAgreement, nor any financial statement, certificate, schedule or exhibit \nprepared and furnished or to be prepared and furnished by Tunes or its \nrepresentatives pursuant hereto contains or will contain any untrue statement \nof a material fact, or omits or will omit to state a material fact necessary \nto make the statements or facts contained herein or therein not misleading in \nlight of the circumstances under which they were furnished.  There is no \nevent, fact or condition that has caused a Material Adverse Effect, that has \nnot been set forth in this Agreement or the Tunes Disclosure Schedule, other \nthan general economic or competitive conditions.\n\n      3.32  MICROSOFT DELUXE CD PLAYER.  Tunes warrants that (i) the \nMicrosoft Deluxe CD Player shall have the ability to query Tunes's website \nfor information about the CD being played, \n\n                                       38\n\n\n\nsuch as title, artist, track names, label, release date and that certain \nspecial menus with unique URLs, when selected by the user, shall launch the \nuser's web browser to load relevant pages from Tunes's website and (ii) and \nthat Microsoft shall make the Microsoft Deluxe CD Player generally available \nto consumers as part of the Windows 98 Plus Pack! on or before June 30, 1999.\n\n      3.33  CLIPS MUSIC SYSTEM.  Attached hereto as SCHEDULE 3.33 is a true \nand complete copy of the Asset Purchase Agreement by and between Tunes and \nKamran Mohsenin, dated as of a date prior to the date hereof.  Such agreement \nconstitutes the entire agreement between the parties with respect to the sale \nby Tunes to Mr. Mohsenin of the assets constituting the \"CLIPS Music System\" \nas defined therein, and supersedes all prior agreements and understandings, \nboth written and oral (if any), among the parties with respect to the subject \nmatter thereof.\n\n      3.34  CDDB.  Attached hereto as SCHEDULE 3.34 is a draft of a License \nand Service Agreement between Tunes and CDDB, LLC with respect to the \n\"CDDB-DATABASE\" (as defined therein) owned by CDDB, LLC.  The transactions \ncontemplated by such draft agreement are material to the business of Tunes \nand failure to consummate such transactions upon terms and conditions no less \nfavorable to Tunes than those set forth in SCHEDULE 3.34 could have a \nMaterial Adverse Effect on Tunes.  Tunes hereby warrants that it shall \nconsummate such transactions on or before August 31, 1998 upon terms no less \nfavorable to Tunes than those set forth in SCHEDULE 3.34 (or, alternatively, \nshall consummate a transaction whereby Tunes or an affiliate of Tunes would \npurchase the business and substantially all of the assets of CDDB, LLC).\n\n      3.35  AMG.  SCHEDULE 3.35 attached hereto sets forth the material terms \nand conditions of a pending transaction which would grant to Tunes certain \nrights and benefits with respect to (i) general interest music guides \ncontaining, among other things, lists of artists, albums, ratings, reviews \nand other information, and general interest movie guides containing, among \nother things, lists of film stars, motion pictures, ratings, reviews and \nother information, which are published in electronic form under the trade \nnames \"All-Music Guide\" and the \"All Movie Guide,\" using the \"AMG\" and \n\"MATRIX\" logos and marks, and (ii) a database which provides information \nregarding the availability and pricing of record and video products.  The \ntransactions contemplated by SCHEDULE 3.35 are material to the business of \nTunes and failure to consummate such transactions upon terms and conditions \nno less favorable to Tunes than those set forth in SCHEDULE 3.35 could have a \nMaterial Adverse Effect on Tunes. Tunes hereby warrants that it shall \nconsummate such transactions on or before June 25, 1998 upon terms no less \nfavorable to Tunes than those set forth in SCHEDULE 3.35.\n\n                                   SECTION 4\n             REPRESENTATIONS AND WARRANTIES OF JAMTV AND MERGER SUB\n\n      JAMtv and Merger Sub each represent and warrant as follows such \nrepresentations and warranties to be true as of the Closing Date:\n\n      4.1   ORGANIZATION; GOOD STANDING; AND CORPORATE POWER. Each of JAMtv \nand Merger Sub is a corporation duly organized, validly existing and in good \nstanding under the laws of the State of Delaware and has all requisite \ncorporate power and authority to own, operate and lease its properties and to \ncarry on its business as now being conducted.  Each of JAMtv's subsidiaries \nare \n\n                                       39\n\n\n\nduly organized, validly existing and in good standing under the laws of the \nstate of incorporation and have all requisite corporate power and authority \nto own, operate and lease its properties and to carry on its business as now \nbeing conducted.  JAMtv has delivered to Tunes complete and correct copies of \nits Certificate of Incorporation and Bylaws, in each case as amended to the \ndate hereof, and has made available to Tunes a ledger reflecting the record \nownership of all outstanding shares of JAMtv capital stock.\n\n      4.2   CAPITAL STRUCTURE.\n\n            (a)   The authorized capital stock of JAMtv consists of (i) \n10,500,000 shares of common stock, par value $0.01 per share (the \"JAMtv \nCommon Stock\"); and (ii) 5,000,000 shares of preferred stock, par value $0.01 \nper share (the \"JAMtv Preferred Stock\"), issuable in series, of which \n2,500,000 shares are designated Series A Convertible Preferred Stock (the \n\"Series A Preferred\"), 500,000 shares are designated Series B Convertible \nPreferred Stock (the \"Series B Preferred\"), 533,340 shares are designated \nSeries C Convertible Preferred Stock (the \"Series C Preferred\") and 800,000 \nshares are designated Series D Convertible Preferred Stock (the \"Series D \nPreferred\").  There are issued and outstanding:  1,150,530 shares of JAMtv \nCommon Stock; 2,016,666 shares of Series A Preferred, of which 1,666,666 \nshares are designated \"Series A-I Convertible Preferred Stock,\" 200,000 \nshares are designated \"Series A-II Convertible Preferred Stock,\" and 150,000 \nshares are designated \"Series A-III Convertible Preferred Stock;\" 472,000 \nshares of Series B Preferred; 533,334 shares of Series C Preferred, and up to \n800,000 shares of Series D Preferred.  In addition, 1,300,000 shares of JAMtv \nCommon Stock have been reserved for issuance under the Stock Option Plan of \nJAMtv, and JAMtv has delivered to Straight Arrow Publishers Company, L.P. a \nwarrant for the purchase of 419,224 shares of JAMtv Common Stock at an \nexercise price of $3.00 per share, which number of shares is subject to \nincrease upon the occurrence of certain events so that the warrant holder is \nentitled to purchase shares of JAMtv Common Stock in an amount equal to \napproximately a ten percent ownership interest in JAMtv prior to certain \nevents including a public or private offering in which the net proceeds from \nthe sale are at least $15,000,000.  All outstanding shares of JAMtv Common \nStock and JAMtv Preferred Stock are validly issued, fully paid and \nnonassessable.  The Closing Shares, Performance Shares, and IPO Shares have \nbeen duly reserved for issuance, and when issued as provided by the terms of \nthis Agreement, will be duly authorized, validly issued, fully paid and \nnonassessable.  Except as disclosed on SCHEDULE 4.2 hereto, none of the JAMtv \nCommon Stock issued pursuant to this Agreement is subject to any preemptive \nrights, whether created by JAMtv's Certificate of Incorporation, Bylaws, or \nany agreement.\n\n            (b)   Other than as described in this Section 4.2 or as set forth \non SCHEDULE 4.2, there are no issued or outstanding shares of capital stock \nof JAMtv, and there are no options, warrants, calls, conversion rights, \ncommitments or agreements of any character (whether oral, written, express, \nor implied) to which JAMtv is a party or by which JAMtv may be bound that do \nor may obligate JAMtv to issue, deliver or sell, or cause to be issued, \ndelivered or sold, additional shares of JAMtv capital stock or that do or may \nobligate JAMtv to grant, extend or enter into any such option, warrant, call, \nconversion right, commitment or agreement. There are no outstanding \nagreements, contracts, obligations, promises, commitments, indentures, plans, \ninstruments, arrangements, undertakings or understandings (whether oral, \nwritten, express or implied) to which \n\n                                       40\n\n\n\nJAMtv is a party or is bound or which affects or relates to the voting, \nissuance, purchase, redemption, repurchase or transfer of any capital stock \nof JAMtv or any other securities of JAMtv, except as set forth in this \nSection 4.2 or as set forth on SCHEDULE 4.2.  Except as described on SCHEDULE \n4.2 hereto, to JAMtv's knowledge, none of the outstanding equity securities \nor other securities of JAMtv was issued in violation of any law, rule or \nregulation, including, without limitation, state and federal securities laws.\n\n      4.3   CORPORATE NAME; PRIOR TRANSACTIONS; SUBSIDIARIES.  Except as \ndisclosed on SCHEDULE 4.3, JAMtv has not during its existence been known by \nor used any other corporate or fictitious name or been a party to any merger \nor consolidation, or acquired all or substantially all of the assets of any \nperson or entity.  Except as disclosed on SCHEDULE 4.3 hereto and other than \nJAMtv Interactive Services Corporation and Merger Sub, JAMtv has no \nsubsidiaries, does not have any contract to acquire, and does not hold any \nequity securities or other securities of, any person or entity (including any \nsubsidiary).\n\n      4.4   AUTHORITY; VALIDITY; NO CONFLICT; CONSENTS.\n\n            (a)   JAMtv and Merger Sub have all requisite corporate power and \nauthority to enter into this Agreement and the Merger Certificate, to perform \nits obligations hereunder and thereunder, and to consummate the transactions \ncontemplated hereby and thereby.  The execution and delivery by JAMtv and by \nMerger Sub of this Agreement, and the execution and delivery by Merger Sub of \nthe Merger Certificate, the performance by JAMtv of its obligations hereunder \nand thereunder and the consummation of the transactions contemplated hereby \nand thereby have been duly authorized by all necessary corporate action on \nthe part of JAMtv and Merger Sub, including, without limitation, the approval \nby the Board of Directors of JAMtv.  This Agreement is, and the Merger \nCertificate when delivered by the parties thereto, will be, legal, valid and \nbinding obligations of each of JAMtv and Merger Sub enforceable against JAMtv \nand Merger Sub in accordance with their respective terms, except as \nenforcement may be limited by bankruptcy, insolvency, or other similar laws \naffecting the enforcement of creditors' rights generally and except that the \navailability of equitable remedies is subject to the discretion of the court \nbefore which any proceeding therefor may be brought.  Except as disclosed on \nSCHEDULE 4.4 hereto, no vote of the holders of any class or series of JAMtv \ncapital stock is necessary to approve this Agreement and the Merger \nCertificate and the transactions contemplated hereby and thereby.\n\n            (b)   The execution and delivery of this Agreement does not, and \nthe execution and delivery of the Merger Certificate and the consummation of \nthe transactions contemplated hereby and thereby will not other than as \ndescribed or provided in this Agreement, conflict with or result in any \nviolation of any material statute, law, rule, regulation, judgment, order, \ndegree or ordinance applicable to JAMtv or any of its subsidiaries or their \nrespective properties or assets, or conflict with or result in any breach or \ndefault (with or without notice or lapse of time, or both) under, or give \nrise to a right of termination, cancellation or acceleration of any \nobligation or loss of a material benefit under or result in the creation of a \nlien or encumbrance on any of the material properties or assets of JAMtv \npursuant to (i) any provision of the Certificate of Incorporation or Bylaws \nof JAMtv or any of its subsidiaries or (ii) any material agreement, contract, \nnote, obligation, promise, commitment, mortgage, indenture, plan, lease, \ninstrument, permit, concession, franchise, license, \n\n                                       41\n\n\n\nundertaking or understanding (whether oral, written, express or implied) to \nwhich JAMtv or any of its subsidiaries is a party or by which JAMtv or any of \nits subsidiaries or their respective properties or assets may be bound or \naffected.\n\n            (c)   No consent, approval, order or authorization of, or \nregistration, declaration or filing with, any Governmental Entity is required \nby JAMtv or Merger Sub in connection with the execution and delivery of this \nAgreement and the Merger Certificate by JAMtv and Merger Sub or the \nconsummation by JAMtv and Merger Sub of the transactions contemplated hereby \nor thereby, except for the filing of (i) the Merger Certificate and officers' \ncertificates with the Delaware Secretary of State and the California \nSecretary of State in such form as is required by, and executed in accordance \nwith, the applicable provisions of the DGCL and the CGCL, (ii) appropriate \ndocuments with the relevant authorities of other states in which JAMtv and \nMerger Sub are qualified to do business, and (iii) appropriate documents with \nthe relevant approvals, authorizations, registrations or qualifications as \nmay be required under federal and state securities or \"Blue Sky\" laws in \nconnection with the Merger.\n\n      4.5   FINANCIAL STATEMENTS.  JAMtv has furnished or made available to \nTunes its consolidated financial statements for the fiscal year ended on \nDecember 31, 1997, including balance sheets of JAMtv, and the related \nstatements of operations, cash flow and stockholders' equity (collectively, \nthe \"JAMtv Audited Financial Statements\"), and the related management \nletters, if any, and JAMtv's unaudited financial statements as at March 31, \n1998, including an unaudited balance sheet of JAMtv (the \"JAMtv Unaudited \nBalance Sheet\") as at March 31, 1998 and the related unaudited statements of \noperations and cash flow (the \"JAMtv Unaudited Financial Statements\").  The \nJAMtv Audited Financial Statements, the JAMtv Unaudited Balance Sheet, and \nthe JAMtv Unaudited Financial Statements are collectively referred to as the \n\"JAMtv Financial Statements.\" The JAMtv Financial Statements have been \nprepared in accordance with GAAP consistency applied and fairly present the \nfinancial position of JAMtv as at the dates, except that the Unaudited \nFinancial Statements prepared since the Balance Sheet Date do not contain the \nfootnote disclosure required by GAAP and may not include the same refinement \nof estimates and accruals as are contained in the JAMtv Financial Statements. \n Since its inception, there has been no change in JAMtv's accounting \npolicies, except as described in notes to the JAMtv Financial Statements.\n\n      4.6   COMPLIANCE WITH LAW; CHARTER DOCUMENTS; AND ORDERS.  JAMtv and \neach of its subsidiaries are in compliance, and have conducted their \nrespective businesses so as to comply, with all laws, rules and regulations, \njudgments, decrees or orders of any Governmental Entity applicable to their \nrespective operations or with respect to which compliance is a condition of \nengaging in the business thereof, except to the extent that failure to \ncomply, individually or in the aggregate, has not had and would not be \nreasonably expected to have a Material Adverse Effect.  There are no \njudgments or orders, injunctions, decrees, stipulations or awards (whether \nrendered by a court or administrative agency or by arbitration) against JAMtv \nor against any of its properties or businesses.  To JAMtv's knowledge, no \nofficer, director, or employee of JAMtv or any subsidiary is subject to any \norder that prohibits such officer, director, or employee from engaging in or \ncontinuing any conduct, activity, or practice relating to the business of \nJAMtv or the respective subsidiary.  JAMtv nor any of its subsidiaries is \nnot, nor has it received notice that it is or would be with the passage of\n\n\n                                       42\n\n\n\ntime, in violation of any provision of its Certificate of Incorporation, \nBylaws or resolutions, or in default or violation of any term, condition or \nprovision of any judgment, decree, order, injunction or stipulation \napplicable to JAMtv or any subsidiary, its respective business or properties.\n\n      4.7   LITIGATION.  Except as disclosed on SCHEDULE 4.7, there is no \naction, suit, proceeding, claim, arbitration or investigation pending by or \nagainst JAMtv or any of its subsidiaries, any director, officer, employee or \nstockholder of JAMtv or any of its subsidiaries relating to or affecting \nJAMtv's or any subsidiary's business, properties or capital stock, or which \nin any manner challenges or seeks to prevent, enjoin, alter or delay any of \nthe transactions contemplated hereby.  Except as disclosed on SCHEDULE 4.7, \nto JAMtv's knowledge, no such action, suit, proceeding, claim, arbitration or \ninvestigation has been threatened and no event has occurred or circumstance \nexists that may give rise to or serve as a basis for the commencement of any \nsuch action, suit, proceeding, claim, arbitration or investigation. \n\n      4.8   NO MATERIAL ADVERSE EFFECT.  Except as set forth on SCHEDULE 4.8, \nsince the Balance Sheet Date, JAMtv and each of its subsidiaries has \nconducted its business in the ordinary course and there has not occurred:\n\n            (a)   Any Material Adverse Effect;\n\n            (b)   Any amendments or changes in the Certificate of \nIncorporation or Bylaws of JAMtv or any of its subsidiaries;\n\n            (c)   Any damage, destruction or loss, whether covered by \ninsurance or not, materially and adversely affecting any of the properties or \nbusinesses of JAMtv or any of its subsidiaries;\n\n            (d)   Any issuance, redemption, repurchase or other acquisition \nof shares of capital stock of JAMtv or any of its subsidiaries (other than in \nthe ordinary course under employee benefit plans), or any declaration, \nsetting aside or payment of any dividend or other distribution (whether in \ncash, stock or property) with respect to the capital stock of JAMtv or any of \nits subsidiaries;\n\n            (e)   Any alteration in any term of any outstanding debt or \ncapital stock of JAMtv or any of its subsidiaries;\n\n            (f)   Any (i) incurrence, assumption or guarantee by JAMtv or any \nof its subsidiaries of any debt for borrowed money; or (ii) issuance or sale \nof any securities convertible into or exchangeable for debt securities of \nJAMtv or any of its subsidiaries; or\n\n            (g)   Any sale, lease, disposition, transfer, license, grant, \nloss, abandonment, or termination of a right under the Intellectual Property \nAssets other than in the ordinary course of business consistent with past \npractice;\n\n            (h)   Any change in its accounting methods; or\n\n                                       43\n\n\n\n            (i)   Any agreement or arrangement made by JAMtv or any of its \nsubsidiaries to take any action which, if taken prior to the date hereof, \nwould have made any representation or warranty set forth in this Section 4.8 \nuntrue or incorrect as of the date when made.\n\n      4.9   ABSENCE OF UNDISCLOSED LIABILITIES.  To JAMtv's knowledge, \nneither JAMtv nor any of its subsidiaries has any liabilities or obligations \n(whether absolute, accrued or contingent or otherwise) except liabilities or \nobligations (i) adequately provided for in the JAMtv Financial Statements \n(ii) incurred in the ordinary course of business consistent with past \npractice and which are not, individually or in the aggregate, material to \nJAMtv or any of its subsidiaries.\n\n      4.10  INDEBTEDNESS. Neither JAMtv nor any of its subsidiaries is \nobligated as a borrower, guarantor or accommodation party with respect to any \nindebtedness for borrowed money other than as disclosed in the JAMtv \nFinancial Statements. Neither JAMtv nor any of its subsidiaries is a lender \nwith respect to any indebtedness for borrowed money other than as disclosed \nin the JAMtv Financial Statements.\n\n      4.11  TAXES.\n\n            (a)   All Tax Returns, statements, reports and forms (including \nestimated tax returns and reports and information returns and reports) \nrequired to be filed with any Taxing Authority with respect to any Taxable \nperiod ending on or before the Effective Time, by or on behalf of JAMtv or \nany of its subsidiaries (collectively, the \"JAMtv Returns\"), have been or \nwill be filed when due (including any extension of such due date), and all \namounts shown due thereon or before the Effective Time have been or will be \npaid on or before such date.  The JAMtv Unaudited Balance Sheet (i) fully \naccrues all actual and contingent liabilities for Taxes with respect to all \nperiods through the Balance Sheet Date and JAMtv or any of its subsidiaries \nhas not and will not incur any Tax liability in excess of the amount \nreflected on the JAMtv Unaudited Balance Sheet with respect to such periods, \nand (ii) properly accrues in accordance with GAAP all liabilities for Taxes \npayable following the Balance Sheet Date with respect to all transactions and \nevents that occurred on or prior to such date. All information set forth in \nthe notes to the JAMtv Financial Statements relating to Tax matters is true, \ncomplete and accurate in all material respects.\n\n            (b)   No material Tax liability has been incurred since the \nBalance Sheet Date other than in the ordinary course of business and adequate \nprovision has been or will be made for all Tax liability incurred since that \ndate in accordance with GAAP on at least a quarterly basis. JAMtv has \nwithheld and paid to the applicable financial institution or Taxing Authority \nall amounts required to be withheld. \n\n            (c)   There is no material claim, audit, action, suit, \nproceeding, or investigation now pending or, to the knowledge of JAMtv, \nthreatened against or with respect to JAMtv in respect of any Tax or \nassessment.  No notice of deficiency or similar document of any Tax Authority \nhas been received by JAMtv, and there are no liabilities for Taxes (including \nliabilities for interest, additions to Tax and penalties thereon and related \nexpenses) with respect to the issues that have been raised (and are currently \npending) by any Tax authority that could, if determined adversely to JAMtv, \nmaterially and adversely affect the liability of JAMtv for Taxes. Neither \nJAMtv, nor any person on \n\n                                       44\n\n\n\nbehalf of JAMtv, has entered into nor will it enter into any agreement or \nconsent pursuant to Section 341(f) of the Code.  There are no liens for Taxes \nupon the assets of JAMtv except liens for current Taxes not yet due.  Except \nas may be required as a result of the Merger, JAMtv has not been or will be \nrequired to include any material adjustment in Taxable income for any Tax \nperiod (or portion thereof) ending on or after the Closing pursuant to \nSection 481 or 263A of the Code or any comparable provision under state or \nforeign tax laws as a result of transactions, events or accounting methods \nemployed prior to the closing.\n\n      4.12  INTELLECTUAL PROPERTY ASSETS.\n\n            (a)   INTELLECTUAL PROPERTY ASSETS.  \"JAMtv Intellectual Property \nAssets\" means all of the following, whether owned, used, or licensed (as \nlicensee or licensor) by JAMtv, and all rights corresponding thereto \nthroughout the world, in any form and on any medium now known or hereafter \ndeveloped and all embodiments thereof, whether tangible, intangible, printed, \nrecorded, digitized, fixed, stored, electronic, or otherwise:\n\n                  (1)   JAMtv's corporate name, all fictitious business names,\n      trade names, brand names, trade dress, logos, trademarks, service marks,\n      trademark registrations, service mark registrations, applications for\n      registration and the goodwill symbolized by the foregoing and connected\n      therewith;\n\n                  (2)   (A) all copyrights, whether or not published, protected\n      or registered under the Copyright Act of 1909 or the Copyright Act of 1976\n      (as either shall be amended from time to time, and any predecessor or\n      successor statute thereto), applications for registration of copyrights,\n      all works of authorship, and all secondary and subsidiary rights therein;\n      (B) art, audiovisual works, animations, compilations, collective works,\n      computer software and programs, data, databases, designs, emblems, films,\n      film clips, graphics, images, illustrations, likenesses, literary works,\n      logos, motion pictures, musical compositions, music videos, performances,\n      photographs, pictorial works, song lyrics, sound clips, sound recordings,\n      scripts, screenplays, video recordings, and all other copyrightable\n      subject matter; (C) all renewals, derivative works, enhancements,\n      improvements, modifications, updates, new releases or other revisions\n      thereof; and (D) publication rights, display rights, attribution rights,\n      integrity rights, performance rights (including digital performance\n      rights), mechanical rights, synchronization rights, publishing rights,\n      approval rights, reproduction rights, rights to create derivative works,\n      distribution rights, or moral rights;\n\n                  (3)   all publicity rights or privacy rights (or waivers or\n      quitclaims thereof) of any person or entity related thereto;\n\n                  (4)   patents, patent applications and extensions,\n      continuations, counter-parts and renewals thereof and inventions and\n      discoveries that may be patentable; and\n\n                  (5)   all know-how, trade secrets, confidential information,\n      customer lists, software, technical information, data, process technology,\n      plans, drawings, and blue prints.\n\n                                       45\n\n\n\n            (b)   INTELLECTUAL PROPERTY ASSETS NECESSARY FOR THE BUSINESS. \nJAMtv owns, or is licensed or otherwise entitled to exercise, all rights in \nJAMtv Intellectual Property Assets employed in the operation of the business \nof JAMtv as currently conducted or as currently proposed to be conducted.\n\n            (c)   COMPLIANCE WITH LEGAL AND CONTRACTUAL REQUIREMENTS.  JAMtv \nowns or holds valid licenses to all JAMtv Intellectual Property Assets, and \nwith respect to each such license has paid all royalties and fees with \nrespect thereto required to be paid prior to the date of this Agreement, \nnecessary to operate its business in compliance with all laws, rules and \nregulations, and all material contractual requirements to which it or its \nproperties is subject. Except as disclosed on SCHEDULE 4.12 hereto, JAMtv has \nnot been subject to a computer software audit and, to JAMtv's knowledge no \nsoftware audit of JAMtv is pending.\n\n            (d)   CLAIMS AGAINST INTELLECTUAL PROPERTY ASSETS.  Except as \ndisclosed on SCHEDULE 4.12, no claims with respect to the JAMtv Intellectual \nProperty Assets have been asserted or, to the knowledge of JAMtv, threatened, \nby any person or entity:  (i) to the effect that any business of JAMtv as \ncurrently conducted or proposed to be conducted infringes on or \nmisappropriates any intellectual property rights or (ii) challenging the \nownership, validity or effectiveness of any of the JAMtv Intellectual \nProperty Assets.  All JAMtv Intellectual Property Assets are valid and \nsubsisting assets of JAMtv.  To JAMtv's knowledge, no officer of JAMtv is in \nviolation of any term of any employment contract, patent disclosure agreement \nor any other contract, agreement, arrangement, or understanding (whether \nwritten or oral) relating to the relationship of any such officer with JAMtv \nor any other party (including prior employers) because of the nature of the \nbusiness conducted or proposed to be conducted by JAMtv.\n\n      4.13  GOVERNMENTAL AUTHORIZATIONS AND LICENSES. JAMtv is the holder of \nall material licenses, authorizations, permits, concessions, certificates and \nother franchises of any Governmental Entity required to operate its business \n(collectively, the \"JAMtv Licenses\") and in compliance in all material \nrespects with the terms, conditions, limitations, restrictions, standards, \nprohibitions, requirements and obligations of such JAMtv Licenses.  The JAMtv \nLicenses are in full force and effect.  There is not now pending, nor to \nJAMtv's knowledge is there threatened in writing, any action, suite, \ninvestigation or proceeding against JAMtv before any Governmental Entity with \nrespect to the JAMtv Licenses, nor is there any issued or outstanding notice, \norder to complaint with respect to the violation by JAMtv of the terms of any \nJAMtv License or any rule or regulation applicable thereto.\n\n      4.14  RESTRICTIONS ON BUSINESS ACTIVITIES.  There is no material \nagreement, judgment, injunction, order or decree binding upon JAMtv which has \nor could reasonably be expected to have the effect of prohibiting or \nmaterially impairing any business practice of JAMtv, any acquisition of \nproperty by JAMtv or the conduct of business of JAMtv as currently conducted \nor as currently proposed to be conducted.\n\n      4.15  INFORMATION STATEMENT.  The information supplied or to be \nsupplied by JAMtv for inclusion in the Information Statement, on the date on \nwhich Tunes mails such materials to its \n\n                                       46\n\n\n\nshareholders and at all times from such date up to and including the \nEffective Time will not contain any untrue statement of a material fact or \nomit to state a material fact necessary in order to make the statements made \ntherein, in the light of the circumstances under which they will be made, not \nmisleading; PROVIDED, HOWEVER, that JAMtv makes no representation or warranty \nwith respect to any information that Tunes may supply expressly for use in \nthe Information Statement.\n\n      4.16  DISCLOSURE.  To JAMtv's knowledge, no representation or warranty \nmade by JAMtv in this Agreement, nor any financial statement, certificate, \nschedule or exhibit prepared and furnished or to be prepared and furnished by \nTunes or its representatives pursuant hereto contains or will contain any \nuntrue statement of a material fact, or omits or will omit to state a \nmaterial fact necessary to make the statements or facts contained herein or \ntherein not misleading in light of the circumstances under which they were \nfurnished.  To JAMtv's knowledge, there is no event, fact or condition that \nhas caused a Material Adverse Effect with respect to JAMtv, that has not been \nset forth in this Agreement or on the Schedules hereto, other than general \neconomic or competitive conditions.\n\n      4.17  BROKERS; FINDERS.  Each of JAMtv and Merger Sub represents, as to \nitself and, to the extent applicable, its subsidiaries, that no agent, \nbroker, investment banker or other firm or person is, or will be, entitled to \nany broker's or finder's fee or any similar commission or fee in connection \nwith any of the transactions contemplated by this Agreement or the Merger \nCertificate.\n\n                                   SECTION 5\n                  CONDUCT AND TRANSACTIONS PRIOR TO EFFECTIVE\n                          TIME; ADDITIONAL AGREEMENTS\n\n      5.1   CONDUCT OF BUSINESS OF TUNES.  During the period from the date of \nthis Agreement and continuing until the earlier of the termination of this \nAgreement or the Effective Time, Tunes shall carry on its business in the \nusual, regular and ordinary course in substantially the same manner as \nconducted prior to the date of this Agreement and, to the extent consistent \nwith such business, use all commercially reasonable efforts consistent with \npast practice and policies to preserve intact its present business \norganization, keep available the services of its present officers and \nemployees (except as otherwise contemplated by this Agreement) and preserve \nits relationships with customers, suppliers, distributors, licensors, \nlicenses, and others having business dealings with it, with the objective \nthat its goodwill and ongoing business shall be unimpaired at the Effective \nTime.  Tunes shall promptly notify JAMtv of any event or occurrence not in \nthe ordinary course of business of Tunes which comes to Tunes's attention and \nwhich has had, or could reasonably be expected to have, a Material Adverse \nEffect.  Except as expressly contemplated by this Agreement or disclosed in \nthe Tunes Disclosure Schedule, Tunes shall not, without the prior written \nconsent of JAMtv:\n\n            (a)   Declare or pay any dividends on or make any other \ndistributions (whether in cash, stock or property) in respect of any of its \ncapital stock, or split, combine or reclassify any of its capital stock or \nissue or authorize the issuance of any other securities in respect of, in \nlieu of or in substitution for shares of its capital stock, or repurchase or \notherwise acquire, directly or indirectly, any shares of its capital stock \nexcept from former employees, directors and consultants \n\n                                       47\n\n\n\nin accordance with written agreements providing for the repurchase of shares \nin connection with any termination of service to Tunes;\n\n            (b)   Issue, deliver or sell, authorize or propose the issuance, \ndelivery or sale of, or purchase or propose the purchase of, any shares of \nits capital stock or securities convertible into, or subscriptions, rights, \nwarrants or options to acquire, or other agreements or commitments of any \ncharacter obligating it to issue any such shares or other convertible \nsecurities or authorize or propose any change in its equity capitalization;\n\n            (c)   Accelerate, amend or change the period of exercisability of \noptions and warrants (except as would happen automatically pursuant to the \nterms of Tunes's stock option plan and related agreements existing on the \ndate of this Agreement);\n\n            (d)   Solicit approval for or effect any amendments to Tunes's \nArticles of Incorporation or Bylaws;\n\n            (e)   Acquire or agree to acquire by merging or consolidating \nwith, or by purchasing a substantial portion of the assets of, or by any \nother manner, any business or any corporation, partnership, association or \nother business organization or division thereof, or otherwise acquire or \nagree to acquire any assets which are material, individually or in the \naggregate, to Tunes;\n\n            (f)   Sell, lease, license, pledge or otherwise dispose of or \nencumber any of its properties or assets except in the ordinary course of \nbusiness consistent with past practice (including without limitation any \nindebtedness owed to it or any claims held by it);\n\n            (g)   Incur any indebtedness for borrowed money or guarantee any \nsuch indebtedness or issue or sell any debt securities or guarantee, endorse \nor otherwise become responsible for the obligations of others, or make loans \nor advances, other than in the ordinary course of business consistent with \npast practice;\n\n            (h)   Pay, discharge or satisfy any claim, liability or \nobligation (absolute, accrued, asserted or unasserted, contingent or \notherwise), other than the payment, discharge or satisfaction in the ordinary \ncourse of business consistent with past practice of liabilities reflected or \nreserved against in Tunes's Financial Statements or those incurred after the \nBalance Sheet Date in the ordinary course of business;\n\n            (i)   Adopt or amend any Plan; enter into or amend any \nemployment, severance or termination contract with or pay any special bonus \nor special renumeration, including without limitation, any severance or \ntermination pay to, any director, employee or consultant, or increase the \nsalaries or wage rates of its employees;\n\n            (j)   Commence a lawsuit other than for the routine collection \nfrom account debtors;\n\n                                       48\n\n\n\n            (k)   Transfer to any person or entitle any rights to the \nIntellectual Property Assets except in the ordinary course of business, or \nenter into or amend any agreements pursuant to which any other party is \ngranted marketing or other similar rights of any type or scope with respect \nto any products or palindrome except in the ordinary course of business;\n\n            (l)   Except in the ordinary course of business with prior notice \nto JAMtv, violate, amend or otherwise modify the terms of any of Tunes's \nmaterial contracts binding on Tunes set forth on the Tunes Disclosure \nSchedule;\n\n            (m)   Revalue any of its assets, including without limitation, \nwriting down the value of inventory or writing off notes of accounts \nreceivable other than in the ordinary course of business and consistent with \npast practice;\n\n            (n)   Make any material Tax election other than in the ordinary \ncourse of business and consistent with past practice, change any material Tax \nelection, adopt any material Tax accounting method other than in the ordinary \ncourse of business and consistent with past practice, change any material tax \naccounting method, file any material Tax return (other than any estimated tax \nreturns, payroll tax returns or sales tax returns) or any amendment to a \nmaterial Tax return, enter into any closing agreement, settle any Tax claim \nor assessment, or consent to any Tax claim or assessment, without the prior \nwritten or unwritten consent of JAMtv, which consent will not be reasonably \nwithheld;\n\n            (o)   Engage in any activities or transactions that are outside \nthe ordinary course of its business consistent with past practice;\n\n            (p)   Fail to pay or otherwise satisfy its monetary obligations \nas they become due, except as such as are being contested in good faith; or \nwaive or commit to waive any rights of substantial value or cancel or \nmaterially amend any insurance policy; or\n\n            (q)   Take, or agree (in writing or otherwise) to take, any of \nthe actions described in Sections 5.1(a) through (p) hereof, or any action \nwhich would make any of the representations or warranties of Tunes contained \nin this Agreement untrue or incorporate or result in any of the conditions to \nthe Merger set forth in Section 6 hereof not being satisfied.\n\n      5.2   ACCESS TO INFORMATION.  Each of Tunes and JAMtv shall afford the \nother and its respective accountants, counsel and other representatives, \nreasonable access during normal business hours and upon reasonable prior \nnotice during the period from the date of this Agreement until the earlier of \nthe Effective Time or the termination of this Agreement to (i) all of its \nrespective properties, books, contracts, commitments and records, and (ii) \nall other information concerning its business, properties and personnel as \nthe other party may reasonably request.  Each of Tunes and JAMtv will provide \nto the other and its respective accountants, counsel and other \nrepresentatives copies of internal financial statements promptly upon \nrequest.  No information or knowledge obtained in any investigation pursuant \nto this Section 5.2 shall affect or be deemed to modify any representation or \nwarranty contained herein or the conditions to the obligations of the parties \nto consummate the Merger.\n\n                                       49\n\n\n\n      5.3   TUNES SHAREHOLDERS' APPROVAL.  Tunes shall solicit shareholder \napproval by written consent in accordance with applicable law, for the \npurpose of obtaining the shareholder approval required in connection with the \ntransactions contemplated hereby and by the Merger Agreement, and shall use \ncommercially reasonable efforts to obtain such approval.  As soon as \npracticable after the execution of this Agreement, Tunes shall prepare and \ndistribute to its shareholders and holders of Tunes Options and Convertible \nDebt Instruments the written consent and the Information Statement for \npurposes of soliciting the approval of the shareholders of Tunes of this \nAgreement, the Merger Agreement and the transactions contemplated hereby and \nthereby.  Tunes shall cause the Information Statement to comply with \napplicable federal and state securities laws requirements, and the \nInformation Statement shall be subject to prior review and approval by JAMtv. \nThe Information Statement shall contain the unanimous recommendation of the \nBoard of Directors of Tunes that the Tunes shareholders approve the Merger \nand this Agreement and the conclusion of the Board of Directors that the \nterms and conditions of the Merger are fair and reasonable to the \nshareholders of Tunes.\n\n      5.4   SUPPORT OF MERGER BY CERTAIN SHAREHOLDERS.  Tunes shall use its \nbest efforts to cause all of its officers and directors to support the Merger \nand to take all actions and execute all documents reasonably requested by \nJAMtv to carry out the foregoing matters.  Concurrently with the execution of \nthis Agreement, Kamran Mohsenin, David Anderson, Jacob Maizel, and Pete \nDiMaria (the \"Principal Shareholders\") shall have entered into Shareholder \nAgreements with JAMtv in substantially the form attached as EXHIBIT D \n(collectively, the \"Shareholder Agreements\").\n\n      5.5   EXCLUSIVITY; ACQUISITION PROPOSALS.  Unless and until this \nAgreement shall have been terminated by either party pursuant to Section 8.1 \nhereof, and except (but only to the extent) required to comply with fiduciary \nduties under applicable law, Tunes shall not, directly or indirectly, through \nany officer, director, shareholder, employee, representative, agent or \notherwise, (i) solicit, initiate or encourage submission of proposals or \noffers from any person relating to (x) any acquisition of Tunes, or any \nequity securities or ten percent (10%) or more of the assets of Tunes, or any \nmerger, consolidation, business combination or similar transaction with \nTunes, or (y) any other material joint venture or other similar transaction \nor (ii) participate in any discussions or negotiations regarding, furnish to \nany other person any confidential information with respect to, or otherwise \ncooperate in any way with, or participate in, facilitate or encourage, any \neffort or attempt by any other person to do or seek any of the foregoing.  In \nthe event Tunes receives from any third party any offer or indication of \ninterest regarding any of the transactions referred to in the foregoing \nsentence, or any request for information about Tunes with respect to any of \nthe foregoing, then Tunes shall promptly communicate to JAMtv the material \nterms of each such offer, indication of interest, or request, including the \nidentity of the third party.\n\n      5.6   NOTIFICATION OF CERTAIN MATTERS.  Tunes shall give prompt notice \nto JAMtv, and JAMtv and Merger Sub shall give prompt notice to Tunes, of the \noccurrence, or pending or threatened occurrence or failure to occur, of any \nevent, which occurrence or failure to occur would be likely to cause (a) any \nrepresentation or warranty contained in this agreement to be untrue or \ninaccurate at any time from the date of this Agreement to the Effective Time, \nor (b) any material failure of Tunes or JAMtv and Merger Sub (as the case may \nbe), or of any officer, director, employee \n\n                                       50\n\n\n\nor agent thereof, to comply with or satisfy any covenant, condition or \nagreement to be complied with or satisfied by it under this Agreement.  Each \nparty shall use all reasonable efforts to prevent or promptly remedy such \nbreach or inaccuracy.\n\n      5.7   CONSENTS.  Each of JAMtv and Tunes shall promptly apply for or \notherwise seek, and use all reasonable efforts to obtain, all consents and \napprovals required to be obtained by it for the consummation of the Merger \nand the transactions contemplated by this Agreement and to enable the \nSurviving Corporation to conduct and operate the business of Tunes \nsubstantially as presently conducted and as contemplated to be conducted.  \nTunes shall use its best efforts to obtain all Tunes Third Party Consents.\n\n      5.8   REASONABLE EFFORTS. \n\n            (a)   JAMtv, Merger Sub and Tunes shall each use its reasonable \nefforts to effect the transactions contemplated hereby and to fulfill and \ncause to be fulfilled the conditions to Closing under this Agreement.  Tunes \nshall take all reasonable actions necessary to comply promptly with all legal \nrequirements which may be imposed on Tunes with respect to the Merger and \nwill promptly cooperate with and furnish information to JAMtv in connection \nwith any such requirements imposed upon JAMtv, Merger Sub or any other \nsubsidiary of JAMtv in connection with the Merger.  Tunes shall take all \nreasonable actions to obtain (and to cooperate with JAMtv and its \nsubsidiaries in obtaining) any consent, authorization, order or approval of, \nor any exemption by, any governmental entity, required to be obtained or made \nby Tunes (or by JAMtv or its subsidiaries) in connection with the Merger or \nthe taking of any action contemplated thereby, by this Agreement or by the \nMerger Agreement, and to defend all lawsuits or other legal proceedings \nchallenging this Agreement or the Merger Agreement or the consummation of the \ntransactions contemplated hereby and thereby, to lift or rescind any \ninjunction or restraining order or other order adversely affecting the \nability of the parties to consummate the transactions contemplated hereby and \nthereby, and to effect all necessary registrations and filings and \nsubmissions or information required by any Governmental Entity, and to \nfulfill all conditions to this Agreement.\n\n            (b)   Each of JAMtv and Merger Sub shall take all reasonable \nactions necessary to comply promptly with all legal requirements which may be \nimposed on them with respect to the Merger and will promptly cooperate with \nand furnish information to Tunes in connection with any such requirement \nimposed upon Tunes in connection with the Merger.  JAMtv and Merger Sub shall \ntake all reasonable actions to obtain (and to cooperate with Tunes in \nobtaining) and consent, authorization, order or approval of, or exemption by, \nany Governmental Entity required to be obtained or made by JAMtv or any of \nits subsidiaries (or by Tunes) in connection with the Merger or the taking of \nany action contemplated by this Agreement or by the Merger Agreement, \nconsummation of the transactions contemplated hereby and by the Merger \nAgreement, to lift or rescind any injunction or restraining order or other \norder adversely affecting the ability of the parties to consummate the \ntransaction contemplated hereby and by the Merger Agreement, and to effect \nall necessary registrations and filings and submissions of information \nrequested by any Governmental Entity, and to fulfill all conditions to this \nAgreement.\n\n                                       51\n\n\n\n      5.9   PUBLIC ANNOUNCEMENTS.  Each party will consult in advance with \nthe other concerning the timing and content of any announcements, press \nreleases and public statements concerning the Merger and will not make any \nsuch announcement, release or statement without the other's consent.\n\n      5.10  EMPLOYEE HEALTH INSURANCE BENEFITS.  Employees of Tunes who \nbecome employees of JAMtv following the Merger shall continue to participate \nin the group health insurance plan of Tunes and shall be entitled to \nparticipate in any successor coverage which may be implemented by JAMtv.\n\n      5.11  POST-CLOSING EXECUTION OF PROPRIETARY RIGHTS AGREEMENTS.  \nPromptly following the Effective Time, the shareholders of Tunes who are \nemployed by JAMtv or Merger Sub shall exert their best efforts to cause all \nemployees of Tunes and Merger Sub to execute in favor of Merger Sub \nproprietary rights agreements substantially similar to JAMtv's existing \nemployee proprietary rights agreement.\n\n      5.12  JAMTV CAPITALIZATION.  During the period from the date of this \nAgreement and continuing until the earlier of the termination of this \nAgreement or the Effective Time, JAMtv shall not, without the prior written \nconsent of Tunes, issue, sell, or authorize the issuance or sale of any \nshares of its capital stock or securities convertible into its capital stock \nat a price per share less than $10.00 per share (or an equivalent price per \nshare after giving effect to any stock split or combination of JAMtv's \ncapital stock occurring during such period) other than pursuant to its \nemployee stock option plans.\n\n      5.13  SECURITIES AND BLUE SKY LAWS.  JAMtv and Tunes acknowledge that \nthe JAMtv Common Stock to be issued pursuant to this Agreement will not be \nregistered under the Securities Act and will be issued pursuant to Section 5 \nof the Securities Act.  Tunes and JAMtv shall use reasonable efforts to make \nappropriate filings in accordance with Section 5 of the Securities Act.  \nTunes and JAMtv shall use reasonable efforts to make appropriate filings and \nto obtain appropriate clearances under the securities and \"Blue Sky\" laws of \nthe states of residence of the holders of Tunes Common Stock, Vested Tunes \nOptions, and Convertible Debt listed on SCHEDULE 3.2 hereto.\n\n      5.14  TAX FREE REORGANIZATION.  JAMtv's sole obligation with respect to \nthe tax treatment of the Merger shall be to take such actions as are \nreasonably requested of Tunes so that the Merger is treated as a \n\"reorganization\" within the meaning of Section 368(a) of the Code and in \ncompliance with the record-keeping and filing requirements of Treasury \nRegulation Section 1.368-3.  No party shall knowingly take any action which \nwould cause the Merger to fail to qualify as a reorganization.\n\n      5.15  EMPLOYEE BONUS PAYMENT.  On the dates and subject to the terms \nand conditions precedent set forth on SCHEDULE 5.15 hereto, JAMtv shall pay \nto each of the Principal Shareholders his respective pro rata share of an \nemployment bonus up to an aggregate amount of $250,000 (the \"Employee Bonus \nPayment\").\n\n                                   SECTION 6\n                              CONDITIONS PRECEDENT\n\n                                       52\n\n\n\n      6.1   CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.  The \nrespective obligation of each party to effect the Merger shall be subject to \nthe satisfaction prior to the Closing of the following conditions:\n\n            (a)   LEGAL ACTION.  No temporary restraining order, preliminary \ninjunction or permanent injunction or other order preventing the consummation \nof the Merger or the transactions contemplated by this Agreement shall have \nbeen issued by any Governmental Entity and remain in effect, and no \nlitigation seeking the issuance of such an order or injunction, or seeking \nrelief against Tunes, the Surviving Corporation or JAMtv if the Merger is \nconsummated, shall be pending which, in the good faith judgment of Tunes's or \nJAMtv's Board of Directors (acting upon the written opinion of their \nrespective outside counsel) has a reasonable probability of resulting in such \norder, injunction or relief and such relief would have a Material Adverse \nEffect on such party.  In the event any such order or injunction shall have \nbeen issued, each party agrees to use commercially reasonable efforts to have \nany such order or injunction lifted.\n\n            (b)   STATUTES.  No action shall have been taken, and no statute, \nrule, resolution or order shall have been enacted, promulgated or issued or \ndeemed applicable to the Merger by any Governmental Entity which would (i) \nmake the consummation of the Merger illegal, (ii) prohibit JAMtv's or Merger \nSub's ownership or operation of all or a material portion of the business or \nassets of Tunes, or JAMtv and its subsidiaries taken as a whole, or compel \nJAMtv or Tunes to dispose of or hold separate all or a material portion of \nthe business of assets of Tunes or JAMtv and its subsidiaries taken as a \nwhole, as a result of the Merger, or (iii) render JAMtv, Merger Sub or Tunes \nunable to consummate the Merger.\n\n            (c)   SECURITIES LAWS.  JAMtv shall have received the filings and \nclearances required for the issuance of the JAMtv Common Stock hereunder with \nrespect to the securities and \"Blue Sky\" laws of the states of residence of \nthe holders of Tunes Common Stock, Vested Tunes Options, and Convertible Debt \nlisted on SCHEDULE 3.2 hereto, including, without limitation, the approval of \nthe California Commissioner of Corporations with respect thereto pursuant to \nSection 25121 of the California Corporate Securities Law of 1968, as amended, \nwithout the imposition of any conditions adverse to JAMtv or to the Tunes \nshareholders or which would require JAMtv to amend its Certificate of \nIncorporation or Bylaws.\n\n      6.2   ADDITIONAL CONDITIONS TO OBLIGATIONS OF JAMTV AND MERGER SUB.  \nThe obligations of JAMtv and Merger Sub to effect the Merger are subject to \nthe satisfaction of the following conditions, unless waived by JAMtv and \nMerger Sub:\n\n            (a)   REPRESENTATIONS AND WARRANTIES.  The representations and \nwarranties of Tunes set forth in this Agreement shall be true and correct in \nall material respects as of the date of this Agreement and as of the Closing \nDate. JAMtv shall have received a certificate signed by the chief executive \nofficer and the chief financial officer of Tunes to such effect on the \nClosing Date.\n\n            (b)   NO MATERIAL ADVERSE EFFECT.  There shall have been no \nMaterial Adverse Effect with respect to Tunes from the date of this Agreement \nthrough the Closing Date and JAMtv \n\n                                       53\n\n\n\nshall have received a certificate signed by the chief executive officer and \nthe chief financial officer of Tunes to such effect on the Closing Date.\n\n            (c)   OPINION OF COUNSEL TO TUNES.  JAMtv shall have received a \nwritten opinion dated as of the Closing Date of Pillsbury Madison &amp; Sutro \nLLP, counsel to Tunes, substantially to the effect set forth in EXHIBIT E.\n\n            (d)   PERFORMANCE OF OBLIGATIONS OF TUNES.  Tunes shall have \nperformed all obligations and covenants required to be performed by it under \nthis Agreement and the Merger Agreement prior to the Closing Date, and JAMtv \nshall have received a certificate signed by the chief executive officer and \nthe chief financial officer of Tunes to such effect on the Closing Date.\n\n            (e)   APPROVALS AND CONSENTS.  All authorizations, consents, \norders or approvals of, or declarations or filings with, any Governmental \nEntity necessary for the consummation of the transactions contemplated by \nthis Agreement shall have been filed, occurred or been obtained, and JAMtv \nshall have received duly executed copies of all Tunes Third Party Consents in \nform and substance reasonably satisfactory to JAMtv.\n\n            (f)   RESIGNATION OF DIRECTORS AND OFFICERS.  The directors of \nTunes in office immediately prior to the Effective Time shall have resigned \nas directors of Tunes effective as of the Effective Time and the officers of \nTunes in office immediately prior to the Effective Time, other than the \nofficers named in Section 1.5 hereof, shall have resigned as officers of \nTunes effective as of the Effective Time.\n\n            (g)   EMPLOYEE RETENTION.  JAMtv shall be reasonably satisfied \nthat a sufficient number of Tunes employees are ready, willing and able to \nremain with Tunes and JAMtv following the transaction to enable the continued \noperation of Tunes's business.\n\n            (h)   ESCROW AGREEMENT.  JAMtv, Tunes, the Shareholders' Agent \n(as defined in Section 7.7 hereof) and American National Bank and Trust \nCompany of Chicago as escrow agent (the \"Escrow Agent\") shall have executed \nthe Escrow Agreement.\n\n            (i)   SHAREHOLDER AGREEMENTS.  JAMtv shall have received an \nexecuted Shareholder Agreement from each of the Principal Shareholders and \nTunes and such agreement shall not have been breached by any Principal \nShareholder or Tunes.\n\n            (j)   JOINDER TO STOCKHOLDERS' AGREEMENT.  JAMtv shall have \nreceived an executed Joinder to Stockholders' Agreement in the form attached \nhereto as EXHIBIT F from each of the holders of Tunes Common Stock, Tunes \nOptions, and Convertible Debt receiving shares of capital stock of JAMtv in \nconnection with the Merger.\n\n            (k)   TUNES SHAREHOLDER APPROVAL.  Holders of at least two-thirds \n(2\/3) of the outstanding capital stock of Tunes shall have voted in favor of \napproving this Agreement and the Merger Agreement and the transactions \ncontemplated hereby and thereby.\n\n                                       54\n\n\n\n      6.3   ADDITIONAL CONDITIONS TO OBLIGATIONS OF TUNES.  The obligation of \nTunes to effect the Merger is subject to the satisfaction of the following \nconditions unless waived by Tunes:\n\n            (a)   REPRESENTATIONS AND WARRANTIES.  The representations and \nwarranties of JAMtv and Merger Sub set forth in this Agreement shall be true \nand correct in all material respects as of the date of this Agreement and as \nof the Closing Date.  Tunes shall have received a certificate signed by an \nofficer of JAMtv and Merger Sub to such effect.\n\n            (b)   NO MATERIAL ADVERSE EFFECT.  There shall have been no \nMaterial Adverse Effect with respect to JAMtv from the date of this Agreement \nthrough the Closing Date and Tunes shall have received a certificate signed \nby the chief executive officer of JAMtv to such effect on the Closing Date.\n\n            (c)   PERFORMANCE OF OBLIGATIONS OF JAMTV AND MERGER SUB.  JAMtv \nand Merger Sub shall have performed all obligations and covenants required to \nbe performed by them under this Agreement and the Merger Agreement prior to \nthe Closing Date, and Tunes shall have received a certificate signed by an \nofficer of JAMtv and Merger Sub to such effect.\n\n            (d)   OPINION OF COUNSEL TO JAMTV.  Tunes shall have received a \nwritten opinion dated as of the Closing Date of Freeborn &amp; Peters, counsel to \nJAMtv, substantially to the effect set forth in EXHIBIT G.\n\n            (e)   APPROVALS AND CONSENTS.  All authorizations, consents, \norders or approvals of, or declarations or filings with, any Governmental \nEntity necessary for the consummation of the transactions contemplated by \nthis Agreement shall have been filed, occurred or been obtained.\n\n            (f)   ESCROW AGREEMENT.  JAMtv, Tunes, the Shareholders' Agent \n(as defined in Section 7.7 hereof) and the Escrow Agent shall have executed \nthe Escrow Agreement.\n\n                                   SECTION 7\n                            INDEMNIFICATION; SET-OFF\n\n      7.1   INDEMNIFICATION.\n\n            (a)   Each of the Former Shareholders and Tunes jointly and \nseverally shall indemnify and hold harmless JAMtv and the Surviving \nCorporation, and the respective officers, directors, employees, shareholders, \nassigns and successors and the affiliates of the foregoing persons and \nentities (individually, a \"JAMtv Indemnified Person\" and collectively, the \n\"JAMtv Indemnified Persons;\" PROVIDED, HOWEVER, that the term \"JAMtv \nIndemnified Persons\" or \"JAMtv Indemnified Person\" does not refer to, and \nshall be exclusive of, respectively, the Former Shareholders and any Former \nShareholder), from and against and in respect of, and shall pay to the \nIndemnified Persons the amount of, any and all claims, demands, lawsuits, \nactions, causes of actions, administrative proceedings (including informal \nproceedings), losses, diminution in value, assessments, costs, damages, \npunitive damages, judgments, liabilities (including sums paid and costs and \nexpenses including, without limitation, reasonable legal fees and \ndisbursements) of every kind, nature and\n\n                                       55\n\n\n\ndescription, whether or not involving a third party claim (collectively, \n\"Damages\") that arise or result from or relate to, directly or indirectly, \n(i) any breach of any of the representations, warranties, and covenants given \nor made by Tunes in this Agreement or any certificate, document, or \ninstrument delivered by or on behalf of Tunes pursuant to this Agreement, \n(ii) any Excess Liability Amount to the extent not otherwise reflected in the \nAggregate Closing Consideration, and (iii) any claim by Charlene Steele \nVaughn, including, without limitation, the claims set forth in the complaint \nfiled with the Superior Court of the State of California in and for the \nCounty of Alameda by Charlene Steele Vaughn, as plaintiff, against Tunes, \nKamran Mohsenin and the Does described therein, as defendants (the \"Steele \nVaughn Claim\").\n\n            (b)   JAMtv shall indemnify and hold harmless the Former \nShareholders and their respective assigns (individually, a \"Tunes Indemnified \nPerson\" and collectively, the \"Tunes Indemnified Persons\"), from and against \nand in respect of any and all Damages that arise or result from or relate to, \ndirectly or indirectly, any breach of any of the representations, warranties, \nand covenants given or made by JAMtv in this Agreement or any certificate, \ndocument, or instrument delivered by or on behalf of JAMtv pursuant hereto.\n\n      7.2   LIMITATIONS AND EXPIRATION.  Notwithstanding the above:\n\n            (a)   There shall be no liability for indemnification under this \nSection 7 for any breach of a representation, warranty or covenant made by \nTunes in this Agreement unless and until the aggregate amount of all Damages \nexceeds $10,000; provided, however, that if the aggregate amount of such \nDamages exceeds $10,000, liability for Damages under this Section 7 shall be \nfor the full amount of such Damages, subject to the limitations set forth in \nthis Section 7.2.\n\n            (b)   From and after the Effective Time, the indemnification and \nset-off rights provided in this Section 7 shall be the exclusive remedy of \nJAMtv and the Surviving Corporation and the other JAMtv Indemnified Persons \nfor any breach of a representation, warranty or covenant made by Tunes in \nthis Agreement, EXCEPT (i) in the case of any breach of a representation or \nwarranty set forth in Sections 3.2 (capitalization), 3.18(a) (title), 3.34 \n(CDDB), and 3.35 (AMG) hereof, (ii) in the case of fraud by Tunes with \nrespect to any statement made by Tunes in this Agreement or in any \ncertificate delivered by Tunes pursuant to this Agreement, (iii) with respect \nto the Steele Vaughn Claim, and (iv) for any Excess Liability Amount, and in \neach such case, all of the Former Shareholders will be liable for all Damages \nwith respect thereto.\n\n            (c)   From and after the Effective Time, the total amount payable \nunder Section 7.1(b) hereof by JAMtv shall not exceed $500,000, except in the \ncase of fraud by JAMtv with respect to any statement made by JAMtv in this \nAgreement or in any certificate delivered by JAMtv pursuant to this \nAgreement, and in each such case, JAMtv will be liable for all Damages with \nrespect thereto; and\n\n            (d)   The indemnification obligations under this Section 7 shall \nterminate on the later of (i) twelve (12) months after the Effective Time \n(the \"Indemnification Deadline Date\"), provided, however, that the \nIndemnification Deadline Date shall be extended indefinitely with respect to \nthe representations and warranties set forth in Sections 3.2 (Tunes \ncapitalization), 3.17(a) \n\n                                       56\n\n\n\n(title), and 4.2 (JAMtv capitalization) hereof, the Excess Liability Amount, \nas provided in Section 7.1(a)(ii) hereof, and the Steele Vaughn Claim; or \n(ii) the final resolution of any and all JAMtv Claims and Shareholder Claims \n(as defined in Sections 7.4 and 7.5 hereof; hereafter, a \"Claim\" or \"Claims\") \nunder this Agreement pending as of the Indemnification Deadline Date \n(\"Pending Claims\"), provided, however, that with respect to the \nrepresentations and warranties set forth in Section 3.32 hereof (Microsoft \nDeluxe CD Player), the indemnification obligations shall terminate on the \nlater of four (4) years after the Effective Time or the final resolution of \nany and all Claims pending with respect thereto as of such time, and provided \nfurther, that from and after the Indemnification Deadline Date (or such later \ndate with respect to Section 3.32 hereof), such indemnification obligations \nshall survive only to the extent of such Pending Claims and all remaining \ncash and other property in the Escrow Fund (except as otherwise provided in \nthe Escrow Agreement) shall be released to the Shareholders' Agent and\/or \nJAMtv pursuant to the terms of the Escrow Agreement and Section 7.9 hereof.\n\n      7.3   JAMTV'S SET-OFF RIGHTS.  In order to satisfy any indemnification \nobligations to the JAMtv Indemnified Persons pursuant to this Agreement, each \nof the Former Shareholders hereby grants to JAMtv the right of set-off \nagainst the Retention Amount contained in the Escrow Fund.  Notwithstanding \nthe provisions of Section 7.1 hereof, JAMtv, Merger Sub, Tunes, and the \nFormer Shareholders hereby agree that the sole and exclusive remedy for the \nJAMtv Indemnified Persons hereunder for a breach of the warranty set forth in \nSection 3.32 (Microsoft Deluxe CD Player) hereof shall be (i) the reduction \nof the Performance Share Calculation in accordance with Section 2.7(d) hereof \nand (ii) a set-off of $250,000 in immediately available funds against the \nRetention Amount and that JAMtv shall be entitled to exercise such set-off \nrights on behalf of the JAMtv Indemnified Persons if the warranty under \nSection 3.32 is breached.\n\n      7.4   CLAIMS BY JAMTV. \n\n            (a)   Upon receipt by the Shareholders' Agent at any time prior \nto the Indemnification Deadline Date of a certificate signed by an officer of \nJAMtv (a \"JAMtv Certificate\") providing notice of any claim (a \"JAMtv Claim\") \nfor Damages and specifying in reasonable detail the date such Damages were \npaid, incurred or otherwise arose, and, if applicable, the nature of the \nbreach to which such Damages are related, JAMtv shall be entitled to exercise \nits set-off rights as provided in Section 7.3 hereof.\n\n            (b)   At the time of delivery of any JAMtv Certificate to the \nShareholders' Agent, a duplicate copy of such JAMtv Certificate shall be \ndelivered to the Escrow Agent, and for a period of thirty (30) days after \nsuch delivery, the Escrow Agent shall make no delivery of the cash or shares \nfrom the Escrow Fund in satisfaction of JAMtv's set-off rights unless the \nEscrow Agent shall have received written authorization from the Shareholders' \nAgent to make such delivery.  After the expiration of such thirty (30) day \nperiod, the Escrow Agent shall make delivery of the amount of Damages from \nthe Escrow Fund in accordance with Section 7.3 hereof, unless the \nShareholders' Agent shall have given notice to the Escrow Agent and to JAMtv \nprior to the expiration of such thirty (30) day period that the Shareholders' \nAgent disputes the JAMtv Claim set forth in the JAMtv Certificate, with the \nbasis for such dispute set forth in writing in reasonable detail. The deemed \nvalue at all times of the shares of JAMtv Common Stock which are subject to \nthe indemnity and set-off \n\n                                       57\n\n\n\nprovisions of this Section 7 shall be $10.00 per share, including for \npurposes of set-off as provided in Section 7.3 and disbursement to the Former \nShareholders of any remaining shares as provided in Section 7.9, subject to \nproportionate adjustment as a result of any JAMtv stock split, reverse stock \nsplit, recapitalization, or similar event (provided that there shall be no \nadjuctment upon the issuance of shares subject to warrants or options or upon \nthe conversion of any covertible seucrities of JAMtv). \n\n      7.5   CLAIMS BY FORMER SHAREHOLDERS.  Upon receipt by JAMtv at any time \nprior to the Indemnification Deadline Date of a certificate signed by the \nShareholders' Agent (a \"Shareholders' Agent Certificate\") providing notice of \nany claim (a \"Shareholders' Claim\") for Damages and specifying in reasonable \ndetail the date such Damages were paid, incurred or otherwise arose, and the \nnature of the breach to which such Damages are related, JAMtv shall deliver \nto the Shareholders' Agent, as promptly as practicable, an amount equal to \nsuch Damages as indemnity, unless, within thirty (30) days of the delivery of \nsuch Shareholders' Agent Certificate, JAMtv disputes the Shareholders' Claim \nset forth in such certificate, with the basis for such dispute set forth in \nwriting in reasonable detail.\n\n      7.6   CLAIMS BY THIRD PARTIES.  JAMtv will give notice to the \nShareholders' Agent and, prior to the Effective Time, Tunes promptly after \nJAMtv has actual knowledge of any claim from a third party, as to which \nindemnity may be sought, and will permit the Former Shareholders and Tunes \n(at their expense) to assume the defense of any claim or any litigation \nresulting therefrom; PROVIDED that (i) counsel for any Former Shareholder or \nTunes who shall conduct the defense of such claim or litigation shall be \nsatisfactory to JAMtv and (ii) the omission by JAMtv or any JAMtv Indemnified \nPerson to give notice as provided herein will not relieve any Former \nShareholder or Tunes of his or its indemnification obligations under this \nAgreement.  Neither JAMtv, the Surviving Corporation, nor any other JAMtv \nIndemnified Person shall be required to commence litigation or to take any \naction against any third party prior to making a claim for indemnification \nhereunder.  The Former Shareholders and Tunes, in the defense of any such \nclaim or litigation, will not, except with the written consent of JAMtv, \nconsent to the entry of any judgment or enter into any settlement.  If the \nFormer Shareholders or Tunes assume the defense of such claim or litigation, \n(i) it will be conclusively established for purposes of this Agreement that \nsuch claim is within the scope of and subject to indemnification; and (ii) no \ncompromise or settlement of such claims may be effected by the Former \nShareholders or Tunes without JAMtv's consent. Notwithstanding the foregoing, \na JAMtv Indemnified Person will have the right at all times to take over and \nassume control of the defense, settlement, negotiations or lawsuit relating \nto any claim or demand, including, without limitation, in the event that (i) \na Former Shareholder is also a party to such claim or litigation and JAMtv \ndetermines in good faith that joint representation would be inappropriate or \n(ii) a Former Shareholder fails to provide reasonable assurance to JAMtv of \nits financial capacity to defend such claim or litigation and to provide \nindemnification with respect to such claim or litigation.  In the event that \nthe Former Shareholders or Tunes do not accept the defense of any matter as \nabove provided, a JAMtv Indemnified Person will have the full right to defend \nagainst any such claim or demand, and will be entitled to settle or agree to \npay in full such claim or demand, in its sole discretion.  In any event, the \nFormer Shareholders and Tunes will cooperate in the defense of such action \nand the records of each Former Shareholder and Tunes shall be available to \nJAMtv and the other JAMtv Indemnified Persons with respect to such defense.\n\n                                       58\n\n\n\n      7.7   RESOLUTION OF CONFLICTS; ARBITRATION.\n\n            (a)   In case the Shareholders' Agent or JAMtv, as applicable, shall\nobject in writing to any Claim made in any JAMtv Officer's Certificate as\ndescribed in Section 7.5 hereof, or in any Former Shareholders' Agent\nCertificate as described in Section 7.6 hereof, JAMtv or the Shareholders'\nAgent, as applicable, shall have thirty (30) days to respond in a written\nstatement to such objection.  If after such thirty (30)-day period there remains\na dispute as to any claims, the Shareholders' Agent and JAMtv shall attempt in\ngood faith for sixty (60) days thereafter to agree upon the rights of the\nrespective parties with respect to each of such claims.  If the Shareholders'\nAgent and JAMtv should so agree, a memorandum setting forth such agreement shall\nbe prepared and signed by both parties and, if in settlement of a JAMtv Claim,\nshall be furnished to the Escrow Agent.  The Escrow Agent shall be entitled to\nrely on any such memorandum and shall make the distributions from the Escrow\nFund only in accordance with the terms hereof or of the Escrow Agreement.\n\n            (b)   If no such agreement can be reached after good faith\nnegotiation, either JAMtv or the Shareholders' Agent may, by written notice to\nthe other, demand arbitration of the matter in accordance with Section 9.3\nhereof, unless the amount of the damage or loss is at issue in pending\nlitigation with a third party, in which event arbitration shall not be commenced\nuntil such amount is ascertained or both parties agree to arbitration.  The\ndecision of the arbitrators as to the validity and amount of any Claim in such\nJAMtv Officer's Certificate or Former Shareholders' Agent Certificate shall be\nbinding and conclusive upon the parties to this Agreement, and, notwithstanding\nanything in Section 7.7 hereof, the Escrow Agent shall be entitled to act in\naccordance with such decision and make or withhold payments out of the Escrow\nFund in accordance therewith.\n\n      7.8   SHAREHOLDERS' AGENT.\n\n            (a)   One person appointed by the holders of capital stock of Tunes\noutstanding immediately prior to the Effective Time (including stock issuable\nupon the exercise of Vested Tunes Options and Convertible Debt) (the \"Former\nShareholders\") shall be constituted and appointed as agent (the \"Shareholders'\nAgent\") for and on behalf of the Former Shareholders to give and receive notices\nand communications, to authorize delivery to any Indemnified Person of amounts\nin the Escrow Fund in satisfaction of claims, to object to such deliveries, to\nagree to, negotiate, enter into settlements and compromises of, and demand\narbitration and comply with orders of courts and awards of arbitrators with\nrespect to, such claims, and to take all actions necessary or appropriate in the\njudgment of the Shareholders' Agent for the accomplishment of the foregoing. \nSuch agency may be changed by the holders of a majority in interest of the\nEscrow Fund from time to time upon not less than ten (10) days' prior written\nnotice to JAMtv.  No bond shall be required of the Shareholders' Agent, and the\nShareholders' Agent shall receive no compensation for its services, except for\npayment of expenses, including fees of counsel, reasonably incurred by the\nShareholders' Agent in connection with the performance of its duties under the\nEscrow Agreement (the \"Shareholders' Agent Expenses\").  The Shareholders' Agent\nExpenses may be satisfied from the Escrow Fund, but only to the extent of funds\nremaining in the Escrow Fund following the satisfaction of all Claims and any\nand all Pending Claims and the payment of all fees and related \n\n                                       59\n\n\n\nexpenses of the Escrow Agent, all pursuant to the terms and provisions of the \nEscrow Agreement. Notices or communications to or from the Shareholders' \nAgent shall constitute notice to or from each of the Former Shareholders.\n\n            (b)   The Shareholders' Agent shall not be liable for any act \ndone or omitted hereunder as Shareholders' Agent while acting in good faith, \nand any act done or omitted pursuant to the advise of counsel shall be \nconclusive evidence of such good faith.  The Former Shareholders shall \nseverally indemnify the Shareholders' Agent and hold such agent harmless \nagainst any loss, liability or expense incurred without bad faith on the part \nof the Shareholders' Agent and arising out of or in connection with the \nacceptance or administration of such agents' duties hereunder.\n\n            (c)   The Shareholders' Agent shall have reasonable access to \ninformation about Tunes and the reasonable assistance of Tunes's officers and \nemployees of Tunes for purposes of performing its duties and exercising its \nrights hereunder, provided that the Shareholders' Agent shall treat \nconfidentially and not disclose any non-public information from or about \nTunes to anyone other than JAMtv and its officers, directors, employees and \nagents (and except on a need-to-know basis to individuals who agree to treat \nsuch information confidentially).\n\n            (d)   The Shareholders' Agent or its representatives shall be \nentitled to participate in any proceeding, or objection or defense thereto, \ninvolving a claim by a third party for which indemnification could be sought \nunder Section 7.1(a) hereof; provided, however, that nothing herein shall \nentitle the Shareholders' Agent to control the defense of any such third \nparty claim; and provided further that the settlement of any claim that would \nresult in a Claim upon the Escrow Fund shall be subject to the approval of \nthe Shareholders' Agent, which approval shall not be unreasonably withheld.\n\n            (e)   A decision, act, consent or instruction of the \nShareholders' Agent, taken in the manner set forth in the Escrow Agreement, \nshall constitute a decision of all Former Shareholders and shall be final, \nbinding and conclusive upon each such Former Shareholders, and the Escrow \nAgent and JAMtv may rely upon any decision, act, consent or instruction of \nthe Shareholders' Agent taken in such manner as being the decision, act, \nconsent or instruction of each and every such Former Shareholders.  The \nEscrow Agent and JAMtv are hereby relieved from any liability to any person \nfor any acts done by them in accordance with such decision, act, consent or \ninstruction of the Shareholders' Agent taken in such manner.\n\n      7.9   DISTRIBUTION OF THE RETENTION AMOUNT.  The Retention Amount (or \nsuch lesser amount as shall remain after payment of any Claims) shall be \ndisbursed as provided pursuant to this Section 7.9 and the Escrow Agreement, \nas follows:\n\n      (i)   Upon the final resolution of the Steele Vaughn Claim, but no \nearlier than the Closing Date, the Escrow Agent (or JAMtv if such resolution \noccurs on or prior to the Closing) shall disburse $250,000 of the Retention \nAmount together with accrued interest, if any, as provided in the Escrow \nAgreement, to the Shareholders' Agent (or the Exchange Agent, as applicable) \nfor the benefit of the Former Shareholders (or the holders of the \nCertificates, Vested Tunes Options, and Convertible Debt, as applicable);\n\n                                       60\n\n\n\n      (ii)  If, on the later of the Indemnification Deadline Date or such \ndate as any Pending Claims are finally resolved (the \"Release Date\"), the \nSteele Vaughn Claim has been finally resolved and the Microsoft Deluxe CD \nPlayer has become generally available to Consumers as part of the Windows 98 \nPlus Pack!, then the Escrow Agent shall disburse the Retention Amount (or \nsuch lesser amount as shall remain after payment of any Claims hereunder or \nother permitted disbursements), together with accrued interest as provided in \nthe Escrow Agreement, to the Shareholders' Agent for the benefit of the \nFormer Shareholders;\n\n      (iii) If, on the Release Date, the Steele Vaughn Claim has been finally \nresolved but the  Microsoft Deluxe CD Player has not become generally \navailable to consumers as part of the Windows 98 Plus Pack!, then the Escrow \nAgent shall disburse:  (x) all but $250,000 of the Retention Amount, together \nwith accrued interest as provided in the Escrow Agreement, to the \nShareholders' Agent for the benefit of the Former Shareholders; and (y) the \nremaining $250,000 to JAMtv, unless  $250,000 or less remains after payment \nof any Claims hereunder, in which case the Escrow Agent shall disburse to \nJAMtv all of the remaining Retention Amount;\n\n      (iv)  If, on the Release Date, the Steele Vaughn Claim has not been \nfinally resolved, then the Escrow Agent shall not disburse the Retention \nAmount (or any portion of such amount) until such date as the Steele Vaughn \nClaim has been finally resolved.\n\nAny disbursement to the Former Shareholders of cash constituting the \nRetention Amount shall be made by the Shareholders' Agent, together with \naccrued interest as provided in the Escrow Agreement, to each of the Former \nShareholders as follows: each Former Shareholder shall be entitled to receive \nan amount equal to the product of the cash portion of the Retention Amount \n(plus accrued interest as provided in the Escrow Agreement) minus the \naggregate amount of cash payable in satisfaction of Claims hereunder \n(including, without limitation, the Microsoft Set-Off, if any), multiplied by \nthe applicable pro rata share of the cash portion of the Retention Amount \nwhich is attributable to such Former Shareholder.  Any disbursement to the \nFomer Shareholders of shares constituting the Retention Amoutn shall be made \nby the Shareholders' Agent to each of the Former Shareholders as provided in \nthe Escrow Agreement.  \n\n      7.10  SURVIVAL OF REPRESENTATIONS, WARRANTIES.  For the purposes of \nasserting Claims under this Section 7, all representations and warranties \nmade by Tunes or JAMtv in, or pursuant to this Agreement or in any document \ndelivered on behalf of Tunes or JAMtv pursuant hereto, will survive the \nClosing and will remain in effect until the later of (i) the Indemnification \nDeadline Date or (ii) the resolution of any and all Pending Claims, provided \nthat from and after the Indemnification Deadline Date, such indemnification \nobligations shall survive only to the extent of such Pending Claims, except \nthat the representations and warranties contained in Sections 3.2 (Tunes \ncapitalization), 3.17(a) (title), and 4.2 (JAMtv capitalization) hereof shall \nsurvive indefinitely, and the representations and warranties contained in \nSection 3.32 (Microsoft Deluxe CD Player) shall survive for four (4) years \nfrom the Effective Date. \n\n      7.11  SPECIAL HOLDBACK SHARES.  The Special Holdback Shares shall \nsecure the indemnity obligations of Tunes and the Former Shareholders as \nprovided in this Section 7.  In order to satisfy any such obligations, the \nFormer Shareholders hereby grant to JAMtv the right of set-off against the \n\n                                       61\n\n\n\nSpecial Holdback Shares.  JAMtv shall have until June 30, 1999 (the \"Speical \nRelease Date\") in order to make a JAMtv Claim with respect to the Special \nHoldback Shares.  On the Special Release Date or such later date as any \npending JAMtv Claim is finally resolved, JAMtv shall issue certificates \nevidencing the Speical Holdback Shares to the Form Shareholders (such \nissuance to be pro rata, consistent with the terms of this Agreement), and \ndeliver such certificates to the Shareholder's Agent for an on behalf of the \nFormer Shareholders.\n\n                                   SECTION 8\n                                  TERMINATION\n\n      8.1   TERMINATION.\n\n            (a)   This Agreement may be terminated at any time prior to the \nEffective Time, whether before or after approval of the Merger by the \nshareholders of Tunes:\n\n                  (1)   by mutual agreement of the Boards of Directors of JAMtv\n      and Tunes;\n\n                  (2)   by JAMtv on or after the sixth (6th) business day\n      following delivery of notice thereof to Tunes, if there has been a breach\n      by Tunes of any representation, warranty, covenant or agreement set forth\n      in this Agreement on the part of Tunes that remains uncured as of such\n      sixth (6th) business day;\n\n                  (3)   by Tunes on or after the sixth (6th) business day\n      following delivery of notice thereof to JAMtv, if there has been a breach\n      by JAMtv or Merger Sub of any representation, warranty, covenant or\n      agreement set forth in this Agreement on the part of JAMtv or Merger Sub\n      that remains uncured as of such sixth (6th) business day;\n\n                  (4)   by JAMtv or Tunes, if the Merger shall not have been\n      consummated on or before September 30, 1998;\n\n                  (5)   by JAMtv or Tunes if the required approval of the\n      shareholders of Tunes contemplated by this Agreement shall not have been\n      obtained by reason of the failure to obtain the required vote in\n      accordance with applicable law; or\n\n                  (6)   by JAMtv or Tunes if any permanent injunction or other\n      order of a court or other competent authority preventing the Merger shall\n      have become final and nonappealable.\n\n            (b)   Where action is taken to terminate this Agreement pursuant \nto this Section 8.1, it shall be sufficient for such action to be authorized \nby the Board of Directors of the party taking such action.\n\n      8.2   EXPENSES.  Whether or not the Merger is consummated, all costs \nand expenses incurred in connection with this Agreement, the Merger \nCertificate and the transactions contemplated hereby and thereby shall be \npaid, in the case of costs and expenses incurred by JAMtv, \n\n                                       62\n\n\n\nby JAMtv, and in the case of costs and expenses incurred by Tunes, by the \nTunes shareholders or Former Shareholders, as applicable.\n\n      8.3   PROCEDURE AND EFFECT OF TERMINATION.  In the event of termination \nof this Agreement as provided in this Section 8, the terminating party shall \nprovide written notice of such termination to the other party and the \nprovisions of this Agreement shall forthwith become void, except that the \nagreements contained or referred to in Sections 3.30 (brokers, finders),  \n4.15 (brokers, finders), 5.9 (public announcements), 8 (termination) and 9 \n(general provisions) hereof shall survive.  Notwithstanding the foregoing, \nthe event of termination of this Agreement by any party hereto, nothing \nherein shall limit the remedies at law or in equity of any party with respect \nto any breaches hereof by any other party.  Upon termination of this \nAgreement, Tunes shall return all of the Earnest Money to JAMtv in \nimmediately available funds.  Notwithstanding the foregoing and Section 8.2 \nhereof, if this Agreement shall be terminated by reason other than under \nparagraphs (2) or (5) of Section 8.1(a) hereof, then Tunes shall be entitled \nto retain a portion of the Earnest Money equal to the amount of reasonable \ncosts and expenses incurred by Tunes in connection with this Agreement, up to \na maximum of $20,000.\n\n                                   SECTION 9\n                               GENERAL PROVISIONS\n\n      9.1   AMENDMENT.  This Agreement may be amended by the parties hereto \nat any time prior to the Effective Time, by action taken by their respective \nBoards of Directors, at any time before or after approval of the Merger by \nthe shareholders of Tunes; provided that following approval of the Merger by \nthe shareholders of Tunes, no amendment shall be made which by law requires \nthe further approval of such shareholders without first obtaining such \nfurther approval.  This Agreement may not be amended except by an instrument \nin writing signed on behalf of each of the parties hereto.\n\n      9.2   EXTENSION; WAIVER.  At any time prior to the Effective Time, each \nof Tunes and JAMtv, by action taken by its Board of Directors, may, to the \nextent legally allowed, (i) extend the time for the performance of any of the \nobligations or other acts of the other, (ii) waive any inaccuracies in the \nrepresentations and warranties made to it contained herein or in any document \ndelivered pursuant hereto and (iii) waive compliance with any of the \nagreements or conditions for the benefit of it contained herein.  Any \nagreement on the part of a party hereto to any such extension or waiver shall \nbe valid only if set forth in an instrument in writing signed on behalf of \nsuch party.\n\n      9.3   ARBITRATION.  All disputes or controversies (whether of law or \nfact) of any nature whatsoever arising from or relating to this Agreement and \nthe transactions contemplated hereby shall be decided by arbitration by the \nAmerican Arbitration Association (the \"AAA\") in accordance with the rules and \nregulations of the AAA.\n\n            The arbitrators shall be selected as follows: JAMtv and the \nShareholders' Agent shall, within 60 days of the date of demand by either \nparty for arbitration, each select one independent, qualified arbitrator and \nthe two arbitrators so selected shall select the third arbitrator within \nsixty (60) days after their appointment as party arbitrators.  Each party \nreserves the right to object to any \n\n                                       63\n\n\n\nindividual arbitrator who shall be employed by or affiliated with a competing \norganization.  In the event objection is made, the AAA shall resolve any \ndispute regarding the propriety of an individual arbitrator acting in that \ncapacity.  The parties shall each bear the expenses of the arbitrator chosen \nby it, and shall bear one-half the expenses of the independent arbitrator. \nHearings in the proceeding shall commence within one hundred twenty (120) \ndays of the selection of the neutral arbitrator.\n\n            Arbitration shall take place in Cook County, Illinois.  At the \nrequest of either party, arbitration proceedings will be conducted \nconfidentially; in such case all documents, testimony and records shall be \nreceived, heard and maintained by the arbitrators in confidence under seal, \navailable for the inspection only by the Association, the Shareholders' Agent \nand JAMtv and their respective attorneys and their respective experts who \nshall agree in advance and in writing to receive all such information \nconfidentially and to maintain such information in confidence.  The \narbitrators, who shall act by majority vote, shall be able to decree any and \nall relief of an equitable and legal nature, including but not limited to, \nsuch relief as a temporary restraining order, a temporary and\/or a permanent \ninjunction, and shall also be able to award damages, with or without an \naccounting and costs.  The decree or award rendered by the arbitrators may be \nentered as a final and binding judgment in any court having jurisdiction \nthereof.\n\n            Reasonable notice of time and place of arbitration shall be given \nto all persons, other than the parties, as shall be required by law, in which \ncase such persons or those authorized representatives shall have the right to \nattend and\/or participate in all the arbitration hearings in such manner as \nthe law shall require.\n\n      9.4   NOTICES.  All notices and other communications hereunder shall be \nin writing and all be deemed given if delivered personally or mailed by \nregistered or certified mail (return receipt requested) or set by facsimile, \nconfirmation received, to the parties at the following addresses and \nfacsimile numbers (or at such other address or number for a party as shall be \nspecified by like notice):\n\n            (a)   If to JAMtv or Merger Sub, to:\n\n                  JAMtv Corporation\n                  640 North LaSalle Street, Suite 560\n                  Chicago, Illinois  60610\n                  Attn:  Howard A. Tullman\n                  Facsimile No.:  (312) 642-0616\n                  Telephone No.:  (312) 642-7560\n\n                                       64\n\n\n\n                  with a copy to:\n\n                  Freeborn &amp; Peters\n                  311 South Wacker Drive\n                  Suite 3000\n                  Chicago, Illinois  60606-6677\n                  Attn: Michael E. Shabat\n                  Facsimile No.:  (312) 360-6520\n                  Telephone No.:  (312) 360-6559\n\n            (b)   if to Tunes, to:\n\n                  Tunes Network, Inc.\n                  1802 Fifth Street\n                  Berkeley, California 94710\n                  Attn: Kamran Mohsenin\n                  Facsimile No.:  (510) 649-4706\n                  Telephone No.: (510) 649-4700\n\n                  with copies to (but only up until the Effective Time):\n\n                  Pillsbury Madison &amp; Sutro LLP\n                  2550 Hanover Street\n                  Palo Alto, California 94304\n                  Attn: Katharine A. Martin\n                  Facsimile No.: (650) 233-4545\n                  Telephone No.: (650 ) 233-4586\n\n      9.5   PUBLIC ANNOUNCEMENTS.  Each party will consult in advance with \nthe other concerning the timing and content of any announcements, press \nreleases and public statements concerning the Merger and will not make any \nsuch announcement, release or statement without the other's consent.\n\n      9.6   INTERPRETATION.  When a reference is made in this Agreement to \nSections, Schedules or Exhibits, such references shall be to a Section of or \nSchedule or Exhibit to this Agreement unless otherwise indicated.  The words \n\"include,\" \"includes\" and \"including\" when used herein shall be deemed in \neach case to be followed by the words \"without limitation.\"  The table of \ncontents and headings contained in this Agreement are for reference purposes \nonly and shall not affect in any way the meaning or interpretation of this \nAgreement.\n\n      9.7   COUNTERPARTS.  This Agreement may be executed in one or more \ncounterparts, all of which shall be considered one and the same agreement and \nshall become effective when one or more counterparts have been signed by each \nof the parties and delivered to the other party.\n\n                                       65\n\n\n\n      9.8   ENTIRE AGREEMENT.  This Agreement (including the Exhibits and the \nSchedules attached hereto) and the documents and instruments and other \nagreements among the parties delivered pursuant hereto constitute the entire \nagreement among the parties with respect to the subject matter hereof and \nsupersede all prior agreements and understandings, both written and oral, \namong the parties with respect to the subject matter hereof (including the \nletter dated March 21, 1998 from Tunes to JAMtv and the Outline of \nTransaction attached thereto) and are not intended to confer upon any other \nperson any rights or remedies hereunder except as otherwise expressly \nprovided herein.\n\n      9.9   NO TRANSFER.  This Agreement and the rights and obligations set \nforth herein may not be transferred or assigned by operation of law or \notherwise without the consent of each party hereto, PROVIDED that Merger Sub \nmay assign all or any portion of its rights hereunder to any other \nnewly-formed, wholly-owned subsidiary of JAMtv.  This Agreement is binding \nupon and will inure to the benefit of the parties hereto and their respective \nsuccessors and permitted assigns.\n\n      9.10  SEVERABILITY.  If any provision of this Agreement, or the \napplication thereof, will for any reason and to any extent be invalid or \nunenforceable, the remainder of this Agreement and application of such \nprovision to other persons or circumstances will be interpreted so as \nreasonably to effect the intent of the parties hereto.  The parties further \nagree to replace such void or unenforceable provision of this Agreement with \na valid and enforceable provision that will achieve, to the extent possible, \nthe economic, business and other purposes of the void or unenforceable \nprovision.\n\n      9.11  OTHER REMEDIES.  Except as otherwise provided herein, any and all \nremedies herein expressly conferred upon a party will be deemed cumulative \nwith and not exclusive of any other remedy conferred hereby or by law or \nequity on such party; and the exercise of any one remedy will not preclude \nthe exercise of any other.\n\n      9.12  FURTHER ASSURANCES.  Each party agrees to cooperate fully with \nthe other parties and to execute such further instruments, documents and \nagreements and to give such further written assurance as may be reasonably \nrequested by any other party to evidence and reflect the transactions \ndescribed herein and contemplated hereby and to carry into effect the intents \nand purposes of this Agreement.\n\n      9.13  ABSENCE OF THIRD-PARTY BENEFICIARY RIGHTS.  Except as set forth \nin Section 7 hereof, no provision of this Agreement is intended, nor will be \ninterpreted, to provide or to create any third party beneficiary rights or \nany other rights of any kind in any client, customer, affiliate, shareholder, \nemployee, partner or any party hereto or any other person or entity, and all \nprovisions hereof will be personal solely between the parties to this \nAgreement.\n\n      9.14  MUTUAL DRAFTING.  This Agreement is the joint product of JAMtv \nand Tunes, and each provision of this Agreement has been subject to the \nmutual consultation, negotiation and agreement of JAMtv and Tunes, and shall \nnot be construed for or against any party hereto.\n\n                                       66\n\n\n\n      9.15  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, \nINCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF \nILLINOIS (WITHOUT GIVING EFFECT TO ITS CHOICE OF LAW PRINCIPLES).\n\n      9.16  JURISDICTION; VENUE.  Each of the parties hereto hereby \nirrevocably submits to the exclusive jurisdiction of any Illinois state court \nor federal court sitting in the State of Illinois over any action or \nproceeding arising out of or relating to this Agreement and the transactions \ncontemplated hereby and each of the parties hereto hereby irrevocably agrees \nthat all claims in respect of such action or proceeding may be heard and \ndetermined in such Illinois state or federal court.  Each of the parties \nhereto hereby irrevocably waives, to the fullest extent legally possible, the \ndefense of an inconvenient forum to the maintenance of such action or \nproceeding.  Each of the parties hereto irrevocably consents to the service \nof any and all process in any such action or proceeding by the mailing of \ncopies of such process to such party at his, her or its address set forth in \nthis Agreement.  Each of the parties hereto agrees that a final judgment in \nany such action or proceeding shall be conclusive and may be enforced in \nother jurisdictions by suit on the judgment or in any other manner provided \nby law.\n\n\n\n            ((Signature Page of Agreement of Merger Immediately Follows)) \n\n\n\n\n                                       67\n\n\n\n                   ((Signature Page of Agreement of Merger))\n\n      IN WITNESS WHEREOF, JAMtv, Merger Sub and Tunes have caused this \nAgreement to be signed by their respective officers, thereunto duly \nauthorized, all as of the date first written above.\n\n                                       JAMtv CORPORATION \n\n\n                                       By:  \/s\/ Howard A. Tullman\n                                           ----------------------------------\n                                             Name: Howard A. Tullman\n                                             Title: Chief Executive Officer\n\n\n                                       TUNES ACQUISITION CORP.\n\n\n                                       By:  \/s\/ Howard A. Tullman\n                                           ----------------------------------\n                                             Name: Howard A. Tullman\n                                             Title: Chief Executive Officer\n\n\n\n                                       TUNES NETWORK, INC.\n\n\n                                       By:  \/s\/ Kamran Mohsenin\n                                           ----------------------------------\n                                             Name: Kamran Mohsenin\n                                             Title: Chief Executive Officer\n\n\n\n\n                                       68\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[9129],"corporate_contracts_industries":[],"corporate_contracts_types":[9622,9626],"class_list":["post-43231","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-tunescom-inc","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43231","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43231"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43231"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43231"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43231"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}