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                                  Exhibit 10.7


                                 MUTUAL RELEASE

This Mutual Release (this "RELEASE"), dated as of May 17, 2002, is entered into
by and among National Lampoon Acquisition Group LLC, a California limited
liability company ("NLAG"), Daniel S. Laikin ("LAIKIN"), Paul Skjodt, Timothy S.
Durham, Samerian LLP, an Indiana limited liability partnership, Diamond
Investments, LLC, an Indiana limited liability company, Christopher R. Williams,
Helen C. Williams, DW Leasing Company, LLC, an Indiana limited liability
company, and Judy B. Laikin (each, a "NLAG PARTY", and, collectively, the "NLAG
PARTIES"), James P. Jimirro ("JIMIRRO") and J2 Communications, a California
corporation (the "COMPANY"). The NLAG Parties, Jimirro and the Company are each
referred to individually in this Release as a "PARTY" and, collectively, as the
"PARTIES."

1. DEFINITIONS Each of the following terms shall have the following meanings as
used herein:

        (a) "CLAIMS" shall mean all claims, debts, liabilities, losses, demands,
obligations, duties, liens, promises, acts, agreements, costs and expenses
(including but not limited to costs of investigation and defense and reasonable
attorneys' fees), damages (including actual, consequential and incidental
damages, diminution in value, punitive and other damages calculated as a
multiple of actual damages, penalties and fines), actions and causes of action,
of whatever kind or nature, including without limitation claims for injunctive
relief, whether arising under contract, tort, statute, regulation or by
operation of law.

        (b) "COMPANY ACTION" shall mean that certain action pending in United
States District Court for the Central District of California, Western Division,
entitled J2 Communications vs. Daniel S. Laikin; Judy B. Laikin; Sidney J.
Laikin; Paul Skjodt; Cynthia Skjodt; Christopher R. Williams; Helen C. Williams;
Diamond Investment, LLC, An Indiana Limited Liability Company; DW Leasing
Company, LLC; Samerian LLP; Carroll Edwards; Cooper L. Williams; Edward
Kowlowski; John Swinehart; Timothy Durham; Gregory Sarkisian; Gary Perel; Debra
Goldfarb; Hal Harlan; Errol Gerson; Charles Finkl; Reno R. Rolle; and Lenny
Young, Case No. CV 01-10282-RMT (JTLx).

        (c) "DRAFT LAIKIN COMPLAINT" shall mean the draft complaint captioned
"DANIEL S. LAIKIN, Plaintiff, vs. JAMES P. JIMIRRO, BRUCE P. VANN, JAMES
FELLOWS, JOHN DE SIMIO, GARY COWAN, J2 COMMUNICATIONS, a California corporation,
and DOES 1 though 10, inclusive, Defendants" transmitted by John C. Kirkland to
Bruce P. Vann via electronic mail on or about December 6, 2001.

        (d) "INFORMATION" shall mean any and all information relevant to the
Released Matters and the negotiation and execution of the Stock Purchase
Agreement and the documents that are exhibits thereto and the consummation of
the transactions contemplated thereby, including but not limited to the
following categories of

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information: (a) facts regarding the identification and description of documents
relevant to the matters and issues raised in the Released Matters and the
negotiation and execution of the Stock Purchase Agreement and the documents that
are exhibits thereto and the consummation of the transactions contemplated
thereby; (b) facts and other information and advice regarding the transactions,
events and claims raised in the Released Matters and the negotiation and
execution of the Stock Purchase Agreement and the documents that are exhibits
thereto and the consummation of the transactions contemplated thereby; (c)
information, documents, advice and other communications obtained, developed and
held by any of the Joint Advisors or NLAG Advisors (as applicable) in connection
with, or as a result of, any of the transactions, events and claims raised in
the Released Matters and the negotiation and execution of the Stock Purchase
Agreement and the documents that are exhibits thereto and the consummation of
the transactions contemplated thereby; (d) legal advice and other communications
from and to counsel, whether in writing or given orally, in relation to or
relevant to any of the Released Matters and the negotiation and execution of the
Stock Purchase Agreement and the documents that are exhibits thereto and the
consummation of the transactions contemplated thereby; and (e) all other
documents, writings, billing records, communications, data and workpapers,
whether in electronic form or otherwise in relation to or relevant to any of the
Released Matters and the negotiation and execution of the Stock Purchase
Agreement and the documents that are exhibits thereto and the consummation of
the transactions contemplated thereby. For the avoidance of doubt, the term
"documents" is used herein in its customary broad sense and includes (without
limitation) any kind of printed, recorded, written, graphic or photographic
matter (including tape recordings and computer data), however printed, produced,
reproduced, coded or stored, of any kind or description, whether or not sent or
received, including but not limited to reproductions, facsimiles, or drafts, and
also includes (without limitation) papers, books, accounts, correspondence,
reports, memoranda, e-mail, tapes, handwritten, typewritten, stenographic or
dictated notes, invoices, computer printouts, disks, computer disks, compact
disks, storage devices, digital storage devices, data or files saved on computer
hard drives or computer networks, tapes, data, telex messages, work papers,
telephone logs, diaries, desk calendars, and things similar to any of the
foregoing.

        (e) "LERNER ACTION" shall mean that certain action pending in Superior
Court of the State of California for the County of Los Angeles, entitled
Lawrence D. Lerner v. J2 Communications and Does 1 through 10 inclusive, Case
No. 01K-23006.

        (f) "LETTER AGREEMENT" shall mean the letter agreement, dated March 5,
2001, among the Company, Jimirro, Laikin and Paul Skjodt.

        (g) "JOINT ADVISORS" shall mean the law firms of Kelly, Lytton & Vann
LLP, Latham & Watkins and Gibson, Dunn & Crutcher LLP and the investment banking
firm of Batchelder & Partners, LP.

        (h) "NASDAQ DELISTING" shall mean the delisting of the Company's common
stock from trading on the Nasdaq Small Cap Market on or about March 22, 2002 and
all other matters related to the trading (or lack thereof) of the Company's
securities on the public
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markets or any securities exchange.

        (i) "NLAG ACTION" shall mean that certain action pending in Superior
Court of the State of California for the County of Los Angeles, entitled
National Lampoon Acquisition Group, LLC, Daniel Laikin and Paul Skjodt v. J2
Communications, James P. Jimirro, et al., Case No. BC 262021.

        (j) "NLAG ACTION CROSS-COMPLAINT" shall mean the cross-complaint filed
by the Company and Jimirro in response to the NLAG Action.

        (k) "NLAG ADVISORS" shall mean law firms of Leagre Chandler & Millard,
LLP, Greenberg Traurig, LLP and the investment banking firm of GTH Capital.

        (l) "PROXY SOLICITATION" shall mean the proxy solicitation commenced by
Laikin on or about August 11, 2000.

        (m) "RELATED PERSONS" shall mean, with respect to any Party to this
Release, such Party's respective past and present successors, assigns, heirs,
representatives, partners, members, affiliates, agents, employees, servants,
executors, administrators, accountants, attorneys, family members and
investigators, in any and all capacities and, as the case may be, controlling
and/or controlled persons, stockholders, owners, officers, directors, insurers,
subsidiaries (whether or not wholly-owned) and divisions, if any, of such Party,
and each of such entity's respective past and present successors, assigns,
heirs, representatives, partners, members, affiliates, agents, employees,
servants, executors, administrators, accountants, attorneys and investigators,
and, as the case may be, the controlling and/or controlled persons,
stockholders, owners, officers, directors, insurers, subsidiaries (whether or
not wholly-owned) and divisions, if any, of such entity; provided, however,
that, for purposes of Sections 2(c), 2(f), 3(c), 3(f), 4(c) and 4(f), "NLAG
Party's Related Persons" shall not include the law firm of Greenberg Traurig,
LLP or the investment banking firm of GTH Capital, Inc. or their partners or
employees.

        (n) "RELEASED MATTERS" shall mean any and all matters related to, which
were asserted under, or which could have been asserted under, the: (i) the
Company and its subsidiaries (including, without limitation, with respect to any
individual, in respect of any such individual's relationship in all capacities
to the Company and any of its subsidiaries); (ii) the Letter Agreement; (iii)
the Proxy Solicitation; (iv) the Draft Laikin Complaint; (v) the NLAG Action;
(vi) the Lerner Action (vii) the Company Action; (viii) the NLAG Action
Cross-Complaint (ix) the Nasdaq Delisting; and (x) the purchase, sale, voting or
ownership, beneficial or otherwise, of any shares of capital stock of the
Company; but excluding the Stock Purchase Agreement Transactions.

        (o) "STOCK PURCHASE AGREEMENT" shall mean the Preferred Stock and
Warrant Purchase Agreement, dated as of April 25, 2002, as amended by the First
Amendment to Preferred Stock and Warrant Purchase Agreement dated May 17, 2002,
by and among the Company, NLAG and the other parties set forth on the schedule
of purchasers attached thereto, including, without limitation, the schedules and
exhibits thereto.
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        (p) "STOCK PURCHASE AGREEMENT TRANSACTIONS" shall mean the transactions
contemplated by the Stock Purchase Agreement but excluding, for the avoidance of
doubt, the transactions contemplated by this Release.

2. RELEASES.

        (a) For good and valuable consideration, the adequacy of which is hereby
acknowledged, each NLAG Party hereby knowingly and voluntarily, on behalf of
such NLAG Party and each such NLAG Party's Related Persons (it being expressly
understood and agreed that for all purposes hereunder the Company shall be
deemed not to be an NLAG Party Related Person), forever relieves, releases, and
discharges the Company and each Company Related Person (it being expressly
understood and agreed that for all purposes hereunder Jimirro shall be deemed
not to be a Company Related Person) from any and all Claims which any NLAG Party
and any NLAG Related Person now has, has ever had or may hereafter have against
the Company and each Company Related Person on account of or arising out of any
and all matters, causes or events occurring prior to and including the date
hereof and relating in any way to the Released Matters.

        (b) For good and valuable consideration, the adequacy of which is hereby
acknowledged, each NLAG Party hereby knowingly and voluntarily, on behalf of
such NLAG Party and each such NLAG Party's Related Persons, forever relieves,
releases, and discharges Jimirro and each Jimirro Related Person from any and
all Claims which any NLAG Party and any NLAG Related Person now has, has ever
had or may hereafter have against Jimirro and each Jimirro Related Persons on
account of or arising out of any and all matters, causes or events occurring
prior to and including the date hereof and relating in any way to the Released
Matters.

        (c) For good and valuable consideration, the adequacy of which is hereby
acknowledged, the Company hereby knowingly and voluntarily, on behalf of itself
and each Company Related Person, forever relieves, releases, and discharges each
NLAG Party and each such NLAG Party's Related Persons from any and all Claims
which the Company and any Company Related Person now has, has ever had or may
hereafter have against such NLAG Party and each such NLAG Party's Related
Persons on account of or arising out of any and all matters, causes or events
occurring prior to and including the date hereof and relating in any way to the
Released Matters.

        (d) For good and valuable consideration, the adequacy of which is hereby
acknowledged, the Company hereby knowingly and voluntarily, on behalf of itself
and each Company Related Person, forever relieves, releases, and discharges
Jimirro and each Jimirro Related Person from any and all Claims which the
Company and any Company Related Person now has, has ever had or may hereafter
have against Jimirro and each Jimirro Related Person on account of or arising
out of any and all matters, causes or events occurring prior to and including
the date hereof and relating in any way to the Released Matters, but excluding
Claims on account of or arising out of that certain promissory note of Jimirro
dated July 14, 1986.


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        (e) For good and valuable consideration, the adequacy of which is hereby
acknowledged, the Company hereby knowingly and voluntarily forever relieves,
releases, and discharges each Company Related Person (other than the Company's
stockholders, owners and employees in their respective capacities as such) from
any and all Claims which the Company and any other Company Related Person now
has, has ever had or may hereafter have against such Company Related Person on
account of or arising out of any and all matters, causes or events occurring
prior to and including the date hereof and relating in any way to the Released
Matters.

        (f) For good and valuable consideration, the adequacy of which is hereby
acknowledged, Jimirro hereby knowingly and voluntarily, on behalf of himself and
each Jimirro Related Person, forever relieves, releases, and discharges each
NLAG Party and each such NLAG Party's Related Persons from any and all Claims
which Jimirro and any Jimirro Related Person now has, has ever had or may
hereafter have against each NLAG Party and each such NLAG Party's Related
Persons on account of or arising out of any and all matters, causes or events
occurring prior to and including the date hereof and relating in any way to the
Released Matters.

        (g) For good and valuable consideration, the adequacy of which is hereby
acknowledged, Jimirro hereby knowingly and voluntarily, on behalf of himself and
each Jimirro Related Person, forever relieves, releases, and discharges the
Company (except with respect to the obligations set forth on Schedule A hereto)
and each Company Related Person from any and all Claims which Jimirro and any
Jimirro Related Person now has, has ever had or may hereafter have against the
Company (except with respect to the obligations set forth on Schedule A hereto)
and each Company Related Person on account of or arising out of any and all
matters, causes or events occurring prior to and including the date hereof and
relating in any way to the Released Matters.

3. LITIGATION.

        (a) Each NLAG Party hereby knowingly, voluntarily and irrevocably
covenants that each NLAG Party and each such NLAG Party's Related Persons shall
(i) refrain from, directly or indirectly (including without limitation by
derivative action as a shareholder of the Company), asserting any claim or
demand, or commencing, instituting, causing to be commenced or supporting, any
claim, litigation, action or proceeding of any kind against the Company or any
Company Related Person, based upon any matter relieved, released or discharged
hereby, and (ii) not directly or indirectly cause the Company or any other
entity or individual to commence, or to assist the Company or any such other
entity or individual in the commencement of, any derivative action based on any
Claims which the Company now has, has ever had or may hereafter have against any
Company Related Person on account of or arising out of any matter relieved,
released or discharged hereby, and, if such an action referred to in either
clause (i) or (ii) has been or is commenced, such NLAG Party will not support
such action and will use such NLAG Party's best efforts to cause such action to
be dismissed with prejudice and withdrawn and, in the case of a derivative
action, to cause the actions that are the subject thereof to be ratified and
approved by the stockholders of the Company.
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        (b) Each NLAG Party hereby knowingly, voluntarily and irrevocably
covenants that each NLAG Party and each such NLAG Party's Related Persons shall
(i) refrain from, directly or indirectly (including without limitation by
derivative action as a shareholder of the Company), asserting any claim or
demand, or commencing, instituting, causing to be commenced or supporting, any
claim, litigation, action or proceeding of any kind against Jimirro or any
Jimirro Related Person, based upon any matter relieved, released or discharged
hereby, and (ii) not directly or indirectly cause the Company or any other
entity or individual to commence, or to assist the Company or any such other
entity or individual in the commencement of, any derivative action based on any
Claims which the Company now has, has ever had or may hereafter have against
Jimirro and any Jimirro Related Person on account of or arising out of any
matter relieved, released or discharged hereby, and, if such an action referred
to in either clause (i) or (ii) has been or is commenced, such NLAG Party will
not support such action and will use such NLAG Party's best efforts to cause
such action to be dismissed with prejudice and withdrawn and, in the case of a
derivative action, to cause the actions that are the subject thereof to be
ratified and approved by the stockholders of the Company.

        (c) The Company hereby knowingly, voluntarily and irrevocably covenants
that the Company and each Company Related Persons shall (i) refrain from,
directly or indirectly (including without limitation by derivative action as a
shareholder of the Company), asserting any claim or demand, or commencing,
instituting, causing to be commenced or supporting, any claim, litigation,
action or proceeding of any kind against any NLAG Party or any such NLAG Party's
Related Persons, based upon any matter relieved, released or discharged hereby,
and (ii) not directly or indirectly cause the Company or any other entity or
individual to commence, or to assist the Company or any such other entity or
individual in the commencement of, any derivative action based on any Claims
which the Company now has, has ever had or may hereafter have against any NLAG
Party or any such NLAG Party's Related Persons on account of or arising out of
any matter relieved, released or discharged hereby, and, if such an action
referred to in either clause (i) or (ii) has been or is commenced, the Company
will not support such action and will use its best efforts to cause such action
to be dismissed with prejudice and withdrawn and, in the case of a derivative
action, to cause the actions that are the subject thereof to be ratified and
approved by the stockholders of the Company.

        (d) The Company hereby knowingly, voluntarily and irrevocably covenants
that the Company and each Company Related Persons shall (i) refrain from,
directly or indirectly (including without limitation by derivative action as a
shareholder of the Company), asserting any claim or demand, or commencing,
instituting, causing to be commenced or supporting, anyclaim, litigation, action
or proceeding of any kind against Jimirro or any Jimirro Related Person, based
upon any matter relieved, released or discharged hereby, and (ii) not directly
or indirectly cause the Company or any other entity or individual to commence,
or to assist the Company or any such other entity or individual in the
commencement of, any derivative action based on any Claims which the Company now
has, has ever had or may hereafter have against Jimirro or any Jimirro Related
Person on account of or arising out of any matter relieved, released or
discharged hereby, and, if such an action referred to in either clause (i) or
(ii) has been or is

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commenced, the Company will not support such action and will use its best
efforts to cause such action to be dismissed with prejudice and withdrawn and,
in the case of a derivative action, to cause the actions that are the subject
thereof to be ratified and approved by the stockholders of the Company.

        (e) The Company hereby knowingly, voluntarily and irrevocably covenants
that the Company and each Company Related Persons shall (i) refrain from,
directly or indirectly (including without limitation by derivative action as a
shareholder of the Company), asserting any claim or demand, or commencing,
instituting, causing to be commenced or supporting, any claim, litigation,
action or proceeding of any kind against any other Company Related Person (other
than the Company's stockholders, owners and employees in their respective
capacities as such), based upon any matter relieved, released or discharged
hereby, and (ii) not directly or indirectly cause the Company or any other
entity or individual to commence, or to assist the Company or any such other
entity or individual in the commencement of, any derivative action based on any
Claims which the Company now has, has ever had or may hereafter have against any
other Company Related Person (other than the Company's stockholders, owners and
employees in their respective capacities as such) on account of or arising out
of any matter relieved, released or discharged hereby, and, if such an action
referred to in either clause (i) or (ii) has been or is commenced, the Company
will not support such action and will use its best efforts to cause such action
to be dismissed with prejudice and withdrawn and, in the case of a derivative
action, to cause the actions that are the subject thereof to be ratified and
approved by the stockholders of the Company.

        (f) Jimirro hereby knowingly, voluntarily and irrevocably covenants that
Jimirro and each Jimirro Related Persons shall (i) refrain from, directly or
indirectly (including without limitation by derivative action as a shareholder
of the Company), asserting any claim or demand, or commencing, instituting,
causing to be commenced or supporting, any claim, litigation, action or
proceeding of any kind against any NLAG Party or any such NLAG Party's Related
Persons, based upon any matter relieved, released or discharged hereby, and (ii)
not directly or indirectly cause the Company or any other entity or individual
to commence, or to assist the Company or any such other entity or individual in
the commencement of, any derivative action based on any Claims which the Company
now has, has ever had or may hereafter have against any NLAG Party or any such
NLAG Party's Related Persons on account of or arising out of any matter
relieved, released or discharged hereby, and, if such an action referred to in
either clause (i) or (ii) has been or is commenced, Jimirro will not support
such action and will use its best efforts to cause such action to be dismissed
with prejudice and withdrawn and, in the case of a derivative action, to cause
the actions that are the subject thereof to be ratified and approved by the
stockholders of the Company.

        (g) Jimirro hereby knowingly, voluntarily and irrevocably covenants that
Jimirro and each Jimirro Related Persons shall (i) refrain from, directly or
indirectly (including without limitation by derivative action as a shareholder
of the Company), asserting any claim or demand, or commencing, instituting,
causing to be commenced or supporting, any claim, litigation, action or
proceeding of any kind against the Company or any

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Company Related Person, based upon any matter relieved, released or discharged
hereby, and (ii) not directly or indirectly cause the Company or any other
entity or individual to commence, or to assist the Company or any such other
entity or individual in the commencement of, any derivative action based on any
Claims which the Company now has, has ever had or may hereafter have against any
Company Related Person on account of or arising out of any matter relieved,
released or discharged hereby, and, if such an action referred to in either
clause (i) or (ii) has been or is commenced, Jimirro will not support such
action and will use its best efforts to cause such action to be dismissed with
prejudice and withdrawn and, in the case of a derivative action, to cause the
actions that are the subject thereof to be ratified and approved by the
stockholders of the Company.

        (h) Each of the Parties shall, and shall cause their respective Related
Persons to, immediately upon execution of this Release, file stipulated
dismissals, with prejudice, of, and withdraw, all actions among them including,
without limitation, the following:

        (i) the NLAG Action (including, for the avoidance of doubt, the NLAG
Action Cross-Complaint); and (ii) the Company Action.

4. INDEMNIFICATION.

        (a) Without in any way limiting any of the rights and remedies otherwise
available to the Company and any Company Related Person, each NLAG Party hereby
agrees to defend, indemnify and hold harmless the Company and each Company
Related Person from and against all Claims, including third party claims,
arising directly or indirectly from, or in connection with, the assertion by or
on behalf of such NLAG Party or any of such NLAG Party's Related Persons of any
Claim on account of or arising out of any matter relieved, released or
discharged hereby.

        (b) Without in any way limiting any of the rights and remedies otherwise
available to Jimirro and any Jimirro Related Person, each NLAG Party hereby
agrees to defend, indemnify and hold harmless Jimirro and each Jimirro Related
Person from and against all Claims, including third party claims, arising
directly or indirectly from, or in connection with, the assertion by or on
behalf of such NLAG Party or any of such NLAG Party's Related Persons of any
Claim on account of or arising out of any matter relieved, released or
discharged hereby. (c) Without in any way limiting any of the rights and
remedies otherwise available to each NLAG Party and any such NLAG Party's
Related Persons, the Company hereby agrees to defend, indemnify and hold
harmless each NLAG Party and each such NLAG Party's Related Persons from and
against all Claims, including third party claims, arising directly or indirectly
from, or in connection with, the assertion by or on behalf of the Company or any
Company Related Person of any Claim on account of or arising out of any matter
relieved, released or discharged hereby.

        (d) Without in any way limiting any of the rights and remedies otherwise
available to Jimirro and any Jimirro Related Persons, the Company hereby agrees
to defend, indemnify and hold harmless Jimirro and each Jimirro Related Person
from and against all Claims, including third party claims, arising directly or
indirectly from, or in

<PAGE>
connection with, the assertion by or on behalf of the Company or any Company
Related Person of any Claim on account of or arising out of any matter relieved,
released or discharged hereby.

        (e) Without in any way limiting any of the rights and remedies otherwise
available to any Company Related Person, the Company hereby agrees to defend,
indemnify and hold harmless each Company Related Person (other than the
Company's stockholders, owners and employees in their respective capacities as
such) from and against all Claims, including third party claims, arising
directly or indirectly from, or in connection with, the assertion by or on
behalf of the Company or any of the other Company Related Persons of any Claim
on account of or arising out of any matter relieved, released or discharged
hereby.

        (f) Without in any way limiting any of the rights and remedies otherwise
available to each NLAG Party and any such NLAG Party's Related Persons, Jimirro
hereby agrees to defend, indemnify and hold harmless each NLAG Party and each
such NLAG Party's Related Persons from and against all Claims, including third
party claims, arising directly or indirectly from, or in connection with, the
assertion by or on behalf of Jimirro or any Jimirro Related Persons of any Claim
on account of or arising out of any matter relieved, released or discharged
hereby.

        (g) Without in any way limiting any of the rights and remedies otherwise
available to the Company and any Company Related Person, Jimirro hereby agrees
to defend, indemnify and hold harmless the Company and each Company Related
Person from and against all Claims, including third party claims, arising
directly or indirectly from, or in connection with, the assertion by or on
behalf of Jimirro or any Jimirro Related Persons of any Claim on account of or
arising out of any matter relieved, released or discharged hereby.

        (h) A Party obligated to defend a person or entity in accordance with
(a) through (g) of this Section 4 shall defend the person or entity at the
Party's expense and the person or entity entitled to be defended shall have the
right to participate in the defense at the person's or entity's own expense.

        5. GENERAL RELEASE; WAIVER OF RIGHTS. These releases cover both claims
that the Parties and their respective Related Persons know about or suspect and
those that the Parties and their respective Related Persons may not know about
or suspect. Each of the Parties, on such Party's own behalf and on behalf of
such Party's Related Persons, expressly waives all rights afforded by any
statute (such as Section 1542 of the Civil Code of the State of California
("SECTION 1542")), or common law principles of the same or similar effect, which
limits the effect of a release with respect to unknown claims. Each of the
Parties, on such Party's own behalf and on behalf of each of such Party's
Related Persons, understand the significance of such release of unknown claims
and the waiver of statutory protection against a release of unknown claims (such
as under Section 1542). Section 1542 states as follows:
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        A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
        KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
        RELEASE WHICH, IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS
        SETTLEMENT WITH THE DEBTOR.

Notwithstanding the provisions of Section 1542, each Party, on such Party's own
behalf and on behalf of each of such Party's Related Persons, expressly
acknowledges that the releases set forth herein are intended to include all
claims released hereby, both known and unknown.

6. FURTHER ASSURANCES. Subject to the terms and conditions herein provided, each
of the Parties agrees to use its best efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things necessary, proper, or
advisable under applicable laws and regulations, to consummate and make
effective the releases and other actions contemplated hereby, including
executing any further documentation to effectuate such releases, to obtain all
necessary waivers, consents, and approvals, and to effect all necessary
registrations and filings.

7. GOVERNING LAW; ENTIRE AGREEMENT; COUNTERPARTS. This Release shall be governed
by, and construed in accordance with, the internal law of the State of
California, without regard to conflicts of laws. This Release and the Stock
Purchase Agreement, including the schedules and exhibits thereto, constitute the
entire agreement among the parties with respect to the matters referred to
herein and therein and supersede any prior negotiations, understandings or
agreements with respect thereto. This Release may be executed in counterparts,
each of which shall be an original and all of which together shall constitute
one and the same instrument.

8. THIRD PARTY BENEFICIARIES. Each NLAG Related Person, each Company Related
Person and each Jimirro Related Person shall be deemed to be a third party
beneficiary of this Agreement.

9. ACKNOWLEDGEMENT OF JOINT DEFENSE.

        (a) Each of the Parties hereto agrees and acknowledges that, (i) prior
to the date hereof, Jimirro and the Company (acting through both its Board of
Directors and the Special Committee of the Board of Directors formed on August
18, 2000), on the one hand, and the various NLAG Parties, on the other hand,
were on opposing sides with respect to many of the Released Matters and certain
related matters, (ii) Jimirro and the Company (acting through both its Board of
Directors and the Special Committee of the Board of Directors) on the one hand,
and certain of the NLAG Parties, on the other hand, retained attorneys and other
advisors to assist them with respect to the Released Matters and certain related
matters and in the negotiation of the transactions contemplated by the Stock
Purchase Agreement and the documents that are exhibits thereto, (iii) the Joint
Advisors were engaged by the Company or Jimirro and the NLAG Advisors were
engaged by one or more of the NLAG Parties, (iv) in order for the transactions

<PAGE>
contemplated by the Stock Purchase Agreement and the documents that are exhibits
thereto to be consummated, it has been desirable for the Company, Jimirro and
the Joint Advisors to work cooperatively in connection with the Released Matters
and certain related matters and in the negotiation of such transactions, (v) in
order for the transactions contemplated by the Stock Purchase Agreement and the
documents that are exhibits thereto to be consummated, it has been desirable for
the NLAG Parties and the NLAG Advisors to work cooperatively in connection with
the Released Matters and certain related matters and in the negotiation of such
transactions, (vi) in connection with their engagements, the Joint Advisors have
shared Information amongst themselves and their respective clients which was and
is intended to be treated as confidential and not disclosed to any other person
or entity, (vii) in connection with their engagements, the NLAG Advisors have
shared Information amongst themselves and their respective clients which was and
is intended to be treated as confidential and not disclosed to any other person
or entity, and (viii) it is in the best interest of each of the Parties that all
such Information shared by Jimirro, the Company and the Joint Advisors, on the
one hand, and the NLAG Parties and the NLAG Advisors, on the other hand, in each
case in connection with the Released Matters and certain related matters and in
the negotiation of the transactions contemplated by the Stock Purchase Agreement
and the documents that are exhibits thereto remain confidential after the
consummation of such transactions and not disclosed other than internally among
such applicable group.

        (b) Each of the NLAG Parties hereto covenants and agrees, on its own
behalf and on behalf of its Related Persons (i) that the NLAG Parties and their
Related Persons shall not seek to obtain or to have disclosed any Information of
or shared between Jimirro, the Company and/or the Joint Advisors, or encourage,
assist, cause or permit any other person or entity to do so on their behalf or
otherwise take any steps designed to obtain access to such Information for
themselves, their Related Persons or the Company, and (ii) that the NLAG Parties
and their Related Persons shall at all times cooperate with the efforts of
Jimirro, the Company and the Joint Advisors, and shall use their commercially
reasonable efforts in the course of such cooperation, to cause the
confidentiality of all Information of or shared among Jimirro, the Company
and/or the Joint Advisors to be maintained.

        (c) Each of Jimirro and the Company covenants and agrees, on its own
behalf and on behalf of its Related Persons (i) that neither they nor their
Related Persons shall seek to obtain or to have disclosed any Information of or
shared between the NLAG Parties and/or the NLAG Advisors, or encourage, assist,
cause or permit any other person or entity to do so on their behalf or otherwise
take any steps designed to obtain access to such Information for themselves or
their Related Persons, and (ii) that they and their Related Persons shall at all
times cooperate with the efforts of the NLAG Parties and the NLAG Advisors, and
shall use their commercially reasonable efforts in the course of such
cooperation, to cause the confidentiality of all Information of or shared among
the NLAG Parties and/or the NLAG Advisors to be maintained.

        (d) Each of the Parties hereto agrees and acknowledges, on its own
behalf and on behalf of its Related Persons, that for the purposes of this
Section 9, from and after the

<PAGE>
date hereof, the Company will be considered and treated as a third party and at
and after such time the prior written consent of each of James P. Jimirro, and
each of the Joint Advisors shall be required for any disclosure of Information
by any of Jimirro, the Company or the Joint Advisors to the Company (from and
after the date hereof) or any member of the Board of Directors of the Company or
to any officer, employee, agent, affiliate or representative of the Company.
From and after the date hereof, the Company will at all times take all actions
that may be desirable or required to cause the confidentiality of all
Information of or shared among Jimirro, the Company and/or the Joint Advisors to
be maintained and will not permit the disclosure of any such Information other
than in conformity with this Section 9(d). Each of the Parties hereby agrees, on
its own behalf and on behalf of its Related Persons, that the failure of Jimirro
or any of the Joint Advisors to provide any such consent will not be a breach of
any duty owed by any of such persons to any other person.



                                      * * *
<PAGE>
        IN WITNESS WHEREOF, the parties have caused this Release to be executed
as of the date first set forth above.


                             NATIONAL LAMPOON ACQUISITION GROUP LLC


                             By:
                                -------------------------------------------
                             Name: Daniel S. Laikin
                             Title: Managing Member



                             ----------------------------------------------
                             DANIEL S. LAIKIN


                             ----------------------------------------------
                             PAUL SKJODT


                             ----------------------------------------------
                             TIMOTHY S. DURHAM


                             SAMERIAN LLP


                             By:
                                -------------------------------------------
                             Name: Paul Skjodt
                             Title: General Partner


                             By:
                                -------------------------------------------
                             Name: Cindy Skjodt
                             Title: General Partner

                             DIAMOND INVESTMENTS, LLC


                             By:
                                -------------------------------------------
                             Name: Timothy S. Durham
                             Title: Managing Member
<PAGE>


                             ----------------------------------------------
                             CHRISTOPHER R. WILLIAMS


                             ----------------------------------------------
                             HELEN C. WILLIAMS


                             DW LEASING COMPANY, LLC


                             By:
                                -------------------------------------------
                             Name: Timothy S. Durham
                             Title: Managing Member


                             ----------------------------------------------
                             JUDY B. LAIKIN


                             ----------------------------------------------
                             JAMES P. JIMIRRO


                             J2 COMMUNICATIONS


                             By:
                                -------------------------------------------
                             Name: James P. Jimirro
                             Title: President

<PAGE>
                                   SCHEDULE A

                 SCHEDULE OF EXCLUDED MATTERS FROM SECTIONS 2(g)


1.      The Stock Purchase Agreement Transactions.

2.      All salary and compensation earned by Jimirro since the date of the end
        of the last pay period of Jimirro immediately preceding the date of
        execution of this Release, provided that One Million One Hundred
        Thousand Dollars ($1,100,000) shall have been duly paid to Jimirro in
        connection with the Stock Purchase Agreement Transactions.

3.      The obligation of the Company to pay to the Internal Revenue Service,
        any State tax collection authority and/or any other relevant entity or
        authority all amounts withheld from Jimirro's salary or compensation in
        respect of (a) Federal and/or State taxes, (b) Social Security, (c)
        Federal Medicare, (d) any State Disability Insurance and (e) any other
        required withholdings.

4.      All amounts in respect of accrued vacation, holiday and/or sick leave of
        Jimirro.

5.      All and any rights to indemnification of Jimirro by the Company pursuant
        to (a) the Jimirro Indemnity Agreement (as defined in the Stock Purchase
        Agreement), (b) the Company's Articles of Incorporation and bylaws and
        (c) applicable law.

6.      All rights of Jimirro under all outstanding stock option agreements that
        survive the Closing.