EXHIBIT
        10.1

       

      


      


      


      


      


      


      


      AMENDMENT
        NO. 1 TO ASSET PURCHASE AGREEMENT

       

      dated
        as of 

       

      July 20,
        2008

       

      by
        and among

       

      ZVUE
        CORPORATION,

       

      EBAUM’S
        WORLD, INC.

       

      and

       

      ERIC’S
        UNIVERSE, INC. 

       

      


       

      


      


      


      


      


      


      


      


      


      


      


      


      


      
        
           

        

        
           

          
            

          

        

        
           

        

      


       

      


      AMENDMENT
        NO. 1 TO ASSET
        PURCHASE AGREEMENT

       

      THIS
        AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT (the “Amendment
        No. 1”)
        is
        made and entered into as of July 20, 2008, by and among ZVUE Corporation
        (formerly known as Handheld Entertainment, Inc.), a Delaware corporation
        (“Parent”),
        eBaum’s World, Inc. (formerly known as EBW Acquisition, Inc.), a Delaware
        corporation and wholly-owned subsidiary of Parent (“Purchaser”),
        and
        Eric’s Universe, Inc. (formerly known as eBaum’s World, Inc.), a New York
        corporation (“Seller”).
        

       

      W
        I T
        N E S S E T H:

       

      WHEREAS,
        Parent, Purchaser and Seller entered into that certain Asset Purchase Agreement,
        dated as of August 1, 2007 (the “Asset
        Purchase Agreement”);
        and

       

      WHEREAS,
        Parent, Purchaser and Seller have agreed, upon the following terms and
        conditions, to amend the Asset Purchase Agreement as provided herein.


       

      NOW,
        THEREFORE, for good and valuable consideration, the receipt and sufficiency
        of
        which are hereby acknowledged, the parties hereto hereby agree as follows,
        intending to be legally bound:

       

      ARTICLE
        1

      DEFINITIONS

       

      1.01  Defined
        Terms; References. 
        Unless
        otherwise specifically defined herein, each term used herein that is defined
        in
        the Asset Purchase Agreement shall have the meaning assigned to such term
        in the
        Asset Purchase Agreement. 

       

      ARTICLE
        2

      AMENDMENTS
        TO ASSET PURCHASE AGREEMENT

       

      1.02  Purchase
        Price Provisions. 
        Section 1.08 of the Asset Purchase Agreement is hereby amended by deleting
        it in its entirety and replacing it with the following:

       

      1.08.
        Purchase
        Price.
        The
        total purchase price for the Assets (the “Purchase
        Price”)
        shall
        be up to $57,530,000 (a portion of which will be in Parent Common Stock,
        valued as specified herein), of which (i) $15,000,000 in immediately
        available funds has been paid to Seller as provided in clause (a) below,
        (ii) $7,500,000 in Parent Common Stock (valued as provided herein) was
        delivered at Closing to La Salle National Bank Association (the “Escrow
        Agent”)
        as
        provided in clauses (b) and (c) below and shall thereafter be payable
        to Seller as provided in clauses (c) and (d) below,
        (iii) $833,334 in immediately available funds has been paid to Seller as
        provided in clause (e) below, (iv) up to an additional $1,050,000 shall be
        paid to Seller or its designees as provided in clause (e) below;
        (v) $480,000 in cash and shares of Parent Common Stock (valued as provided
        herein), as provided in Section 3.01 of this Amendment No. 1, and
        (vi) up to an additional $32,666,666 (a portion of which will be in Parent
        Common Stock, valued as specified herein) shall be contingent consideration,
        payable as provided in Section 1.09. The Purchase Price shall be payable
        and/or
        deliverable as follows:

       


      
        
           

        

        
          
          

          
            

          

        

        
           

        

      


      


       

      (a)  Seller
        hereby acknowledges and agrees that, on the Closing Date, an amount equal
        to
        (i) $14,250,000,
        was delivered to Seller in immediately available funds (the “Closing
        Cash Payment”);
        and
        (ii) the Deposit, reflecting $750,000 of the Purchase Price, was delivered
        by the escrow agent to Seller, as provided in Section 1.07;

       

      (b)  Seller
        hereby acknowledges and agrees that, as of the Amendment Date, 663,529
        Par B Shares have been released from escrow and delivered to Seller, and
        1,327,076 Par B Shares are held in escrow by the Escrow Agent, pursuant to
        the Purchase Price Escrow Agreement, which Par B Shares cumulatively
        represent $5,000,000 of the Purchase Price; 

       

      (c)  Seller
        hereby acknowledges and agrees that, on the Closing Date, 1,635,056 shares
        of
        Parent Common Stock (the “Par C
        Shares”),
        which
        represent $2,500,000 of the Purchase Price, were delivered to the Escrow
        Agent.
        The Par C Shares were issued in the name of the Escrow Agent as of the
        Closing, are being held by the Escrow Agent, and shall be voted as directed
        by
        the Parent. The Par C Shares shall be delivered to Seller as
        follows:

       

      	(i)  	
              one
                third (1/3) promptly after it is determined on any date on or prior
                to
                October 31, 2010, that the Designated Website Businesses have achieved
                at
                least $6,000,000 in gross revenue over the immediately preceding
                four
                consecutive calendar quarters but not including any quarter earlier
                than
                the third quarter of 2008;

            


       

      	(ii)  	
              one
                third (1/3) promptly after it is determined on any date on or prior
                to
                October 31, 2010, that the Designated Website Businesses have achieved
                at
                least $7,000,000 in Net Revenue over the immediately preceding four
                consecutive calendar quarters but not including any quarter earlier
                than
                the third quarter of 2008; and 

            


       

      	(iii)  	
              one
                third (1/3) on October 31, 2012.

            


       

      If
        at any
        time the Purchaser is managing different websites than those listed on Schedule
        1.09(a) as of the date hereof, then the gross revenue amounts in clause (i)
        and/or the Net Revenue amounts in clause (ii) above shall be adjusted, by
        good
        faith negotiation between the parties, to reflect the equitable effect of
        such
        modification. The parties hereto shall execute a Joint Instruction to the
        Escrow
        Agent within five (5) Business Days following the satisfaction of a condition
        set forth in clauses (i), (ii) and/or (iii) above instructing it in such
        circumstances to deliver such shares to Seller.
        

       


      
        
           

        

        
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      (d)  after
        Closing, to Seller from the Escrow Agent pursuant to the Purchase Price Escrow
        Agreement, the Par B Shares, in twenty-three (23) installments. The
        first such payment was made on or about the last Business Day of the second
        full
        calendar month following the month in which the Closing Date occurred in
        an
        amount equal to one-twelfth of the Par B Shares. As of the Amendment Date,
        six (6) additional subsequent monthly installments each equal to one
        twenty-fourth of the Par B Shares have been paid on or about the last Business
        Day of each subsequent calendar month, and such payments shall be followed
        by
        sixteen (16) equal monthly installments to be paid on the last Business Day
        of each calendar month beginning on the earlier of: (A) the last Business
        Day of
        January, 2009; or (B) the last Business Day of the month after the month
        in
        which the Purchaser determines that it has earned $3,000,000 in Net Revenue
        over
        the immediately preceding two consecutive calendar quarters; provided,
        that
        (i) Purchaser’s obligation to make payments and effect deliveries pursuant
        to this section shall be subject to Purchaser’s right to withhold and/or set off
        against such payments or deliveries pursuant to Section 1.13 or a Claim
        made against the Bauman Guaranty pursuant to Section 1.12, and
        (ii) Seller may not dispose of or otherwise transfer any Par B Shares
        it may receive for a period of ninety (90) days following the
        Closing;

       

      (e)  All
        payments under this Section 1.08(e) shall be designated as “Performance
        Earn Out Cash Payments.”
Seller
        hereby acknowledges and agrees that, as of the Amendment Date, it has received
        two (2) payments, in an aggregate amount equal to $833,334. Three (3) additional
        payments of up to $350,000 each shall be paid to Seller (in cash or unregistered
        shares of Parent Common Stock at the Parent’s election, with any such shares
        valued based upon the VWAP for the last ten (10) trading days of the period
        after the date on which the applicable Performance Earn Out Cash Payment
        shall
        have been deemed earned and payable) with the first payment due within
        forty-five (45) days following December 31, 2008, the second payment due
        within
        forty-five (45) days following June 30, 2009 and the third payment due within
        forty-five (45) days following December 31, 2009. Notwithstanding the foregoing,
        (i) Purchaser’s obligation to make payments pursuant to this subsection (e)
        shall be subject to and conditioned upon successful achievement of the
        applicable “Targets”
        specified in Schedule 1.08(e), (ii) no amounts will be paid unless and until
        the
        applicable Target has been successfully achieved not later than June 30,
        2010;
        and (iii) in the event any Target is not successfully achieved for the period
        for which it is scheduled on Schedule 1.08(e), payment of the related amount
        shall be suspended until such time, if any, as the Target is met, but any
        payment for which any applicable Target has not been met by June 30, 2010,
        shall
        be forfeited; 

       

      (f)  Up
        to $32,666,666 in additional consideration (all or a portion of which shall
        be payable in Parent Common Stock, valued as specified herein) shall be paid
        to
        Seller pursuant to Section 1.09; and

       

      (g)  The
        Seller and the Purchaser agree to renegotiate the Targets in good faith prior
        to
        September 30, 2008, and to amend Schedule 1.08(e) to reflect any revised
        Targets
        agreed to by each of them, but the existing Targets shall remain in effect
        until
        any such revised Targets are so agreed by the parties in writing. 

       


      
        
           

        

        
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      2.02  Earn
        Out Provisions. Section 1.09
        of the Asset Purchase Agreement is hereby amended by deleting it in its entirety
        and replacing it with the following:

       

      1.09
        Earn
        Out.
        

       

      (a)  As
        partial consideration for the Assets, Purchaser shall pay and deliver to
        Seller
        the Annual Earn Out Payment for each year in the Earn Out Period (collectively,
        the “Earn
        Out Payments”),
        payable in additional amounts of cash, promissory notes and/or shares of
        Parent
        Common Stock as provided herein, up to a maximum aggregate amount intended
        to
        represent $32,666,666 in value, dependent upon the operating and financial
        performance of the Business during calendar years 2008, 2009, 2010, 2011,
        and
        2012 (collectively, the “Earn
        Out Period”)
        (refer
        to Schedule 1.09 for an illustrative example). The “Annual
        Earn Out Payment”
for
        each calendar year in the Earn Out Period shall be an amount equal to
        (x) the Earn Out Period Valuation, calculated as of the date that is the
        last day of each such calendar year, minus (y) the Cumulative
        Consideration, calculated as of the calculation date of the Annual Earn Out
        Payment. 

       

      (b)  Each
        Annual Earn Out Payment shall be payable by Purchaser to Seller on any date
        (the
“Earn
        Out Payment Date”)
        designated by Purchaser that falls within one hundred twenty (120) days
        after the end of each calendar year of the Earn Out Period, subject, in each
        case, to the following: 

       

      	(i)  	
              an
                amount equal to forty percent (40%) of the Annual Earn Out Payment
                payable
                on such Earn Out Payment Date shall be paid to Seller in cash in
                immediately available funds; provided,
                that, if Purchaser, in its reasonable discretion, determines that
                (x) the amount of such cash payment of the Annual Earn Out Payment is
                greater than fifty percent (50%) of Purchaser’s Net Current Assets,
                calculated as of the Earn Out Payment Date, or (y) paying the cash
                portion of the Annual Earn Out Payment would materially adversely
                impact
                Purchaser’s financial condition, then: (A) an amount equal to twenty
                percent (20%) of the Annual Earn Out Payment payable on such Earn
                Out
                Payment Date shall be paid to Seller in cash in immediately available
                funds, and (B) on such Earn Out Payment Date, Purchaser shall issue a
                promissory note (the “Earn
                Out Promissory Note”)
                in favor of Seller for an amount equal to twenty percent (20%) of
                the
                Annual Earn Out Payment payable on such Earn Out Payment Date. The
                Earn
                Out Promissory Note shall be issued in form and substance satisfactory
                to
                Seller, in substantially the form of Exhibit P; and
                

            


       

      
        	 	
                (ii)

              	
                an
                  amount equal to sixty percent (60%) of the Annual Earn Out Payment
                  payable
                  on such Earn Out Payment Date shall be paid to Seller by delivery
                  of that
                  number of shares of Parent Common Stock as are necessary such that
                  the
                  value of shares in Parent Common Stock delivered to Seller is equal
                  to
                  sixty percent (60%) of such Annual Earn Out Payment; provided,
                  that, Purchaser shall value such shares at the VWAP over the ten (10)
                  trading days immediately preceding the final day of each Earn Out
                  Period.

              


      

       

       

      
        
           

        

        
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      (c)  Within
        ninety (90) days after the end of each calendar year of the Earn Out Period,
        Purchaser shall deliver to Seller a written statement setting forth in
        sufficient detail the calculation and supporting details thereof of the Annual
        Earn Out Payment, if any, for such calendar year (the “Earn
        Out Statement”).
        If
        Seller does not object in writing to the calculation of the Annual Earn Out
        Payment, if any, for such calendar year within twenty (20) days after
        Seller’s receipt of the applicable Earn Out Statement, the calculation set forth
        in such Earn Out Statement shall be deemed final and conclusive. In the event
        that Seller objects in writing to the calculation of the Annual Earn Out
        Payment, if any, set forth in an Earn Out Statement within such twenty
        (20) day period, Purchaser and Seller shall promptly meet and endeavor to
        reach agreement as to the calculation. If Purchaser and Seller reach agreement
        on the calculation, it will become final and conclusive. If Purchaser and
        Seller
        are unable to reach agreement within ten (10) days after delivery of
        Seller’s written objection to an Earn Out Statement, then an Independent
        Registered Public Accounting Firm will promptly be retained to undertake
        a
        review of such Earn Out Statement and to determine the calculation of the
        Annual
        Earn Out Payment, if any, which determination will be made as quickly as
        possible. In resolving any disputed item, the Independent Registered Public
        Accounting Firm may not assign a value or amount to such item greater than
        the
        greatest value or amount for such item claimed by either party or lower than
        the
        lowest value or amount for such item claimed by either party, in each case
        as
        presented to the Independent Registered Public Accounting Firm. The
        determination of the Independent Registered Public Accounting Firm will be
        final
        and binding, and payment of the Annual Earn Out Payment, if any, based on
        such
        calculation will be made by Purchaser within ten (10) days after its
        determination by the Independent Registered Public Accounting Firm. The fees
        and
        expenses of the Independent Registered Public Accounting Firm shall be borne
        by
        Purchaser if the Independent Registered Public Accounting Firm determines
        that
        any payment set forth in the Earn Out Statement should be adjusted by five
        percent (5%) or more; otherwise, such fees shall be borne by Seller. The
        revised
        Earn Out Statement delivered by the Independent Registered Public Accounting
        Firm shall be final and binding upon Purchaser and Seller and shall not be
        subject to challenge or appeal by either party.

       

      (d) In
        the
        event that any Earn Out Payments payable in cash are not timely paid, such
        amounts shall bear interest at the rate of 1.5% per month for a maximum of
        nine
        (9) months, and one-half of one percent (0.5%) per month thereafter or, if
        lesser, the maximum amount permitted by law. 

       

      (e) In
        the
        event that, prior to the expiration of the Earn Out Period, (i) all or
        substantially all of the assets of Purchaser are sold, transferred or assigned,
        (ii) fifty percent (50%) or more of the voting capital stock of Purchaser
        is
        sold, transferred or assigned to an unaffiliated third party in a single
        transaction or a series of transactions, (iii) Purchaser is merged with or
        into
        another entity such that Purchaser is not the surviving entity nor the owner
        of
        greater than fifty percent (50%) of the voting equity interests of such
        surviving entity, (iv) Purchaser materially changes the operation of, or
        ceases
        to conduct, the Business in substantially the same manner as conducted as
        of the
        date of this Agreement, (v) the Parent Common Stock is delisted from the
        NASDAQ
        Stock Market, and not listed on a recognized national stock exchange or
        over-the-counter market within sixty (60) days, or is the subject of any
        delisting notice or action which is not dismissed or discharged within sixty
        (60) days, or (vi) the Purchaser terminates the employment of Eric Bauman
        without “Cause,” as that term is defined in his Employment Agreement (any of the
        foregoing, an “Acceleration
        Event”),
        then
        an amount equal to $32,666,666 less the Cumulative Consideration previously
        paid
        shall become immediately due and payable to Seller. In such event, the number
        of
        shares of Parent Common Stock to be delivered in satisfaction of such unpaid
        Earn Out Payments shall be equal to (A) the amount of such unpaid Earn Out
        Payments to be paid in shares of Parent Common Stock, divided by (B) the
        closing
        price of the Parent Common Stock on the NASDAQ Stock Market (or such other
        securities exchange or trading market where the Parent Common Stock is then
        traded) on the day immediately preceding the day on which the Acceleration
        Event
        is publicly announced.

       

       

      
        
           

        

        
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      2.03  Pledge.  Section 1.10
        of the Asset Purchase Agreement is hereby amended by deleting it in its entirety
        and replacing it with the following:

       

      1.10
        Pledge.
        In
        order to secure to Seller any payments of Par B Shares, Par C Shares,
        Performance Earn Out Cash Payments, Earn Out Payments, and any payments under
        the Earn Out Promissory Note, whether or not earned, which may be or become
        due
        to Seller (the “Protected
        Payments”),
        Parent shall grant to Seller a pledge of all of the issued and outstanding
        capital stock of Purchaser, specified in the Pledge Agreement executed as
        of
        October 31, 2007, which shall remain in effect for the period during which
        the
        Protected Payments remain unissued or unpaid. A form of the Pledge Agreement
        appears as Exhibit 1.10(a) hereto. Parent shall have the right at any time
        to replace the pledge of Purchaser capital stock with a cash escrow account
        to
        be held by the Escrow Agent, in an amount equal to the then remaining balance
        of
        the Protected Payments; a form of escrow agreement pursuant to which such
        cash
        escrow would be held is attached hereto as Exhibit 1.10(b) (the
“Protected
        Payments Escrow Agreement”).
        Any
        Protected Payments not made when due shall bear interest thereon at the rate
        of
        one and one-half percent (1.5%) per month up to a maximum of nine (9) months,
        and one-half percent (0.5%) per month thereafter or, if lesser, the maximum
        amount permitted by law, from the date such payment was otherwise due until
        the
        date such payment is made in full.

       

      2.04  First
        Year Revenues.
        Section 4.07 of the Asset Purchase Agreement is hereby amended by deleting
        it in its entirety. 

       

      2.05  Definitions.

       

      (a) Section 10.12
        of the Asset Purchase Agreement is hereby amended by adding the following
        definitions, in alphabetical order:

       

      
        
           

        

        
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      “Amendment
        Date”
shall
        mean July 20, 2008.

       

      “Amendment
        No. 1”
shall
        mean that certain Amendment No. 1 to the Asset Purchase Agreement, dated as
        of the Amendment Date, entered into by Seller, Purchaser and Parent.


       

      “Annual
        Earn Out Cash Flow”
means,
        with respect to any period, an amount equal to (a) Net Income of the
        Designated Website Businesses for such period, plus (b) the amount of all
        depreciation and amortization expenses and stock-based compensation expenses
        related to the Designated Website Businesses, but only to the extent deducted
        in
        the determination of Net Income of the Designated Website Businesses for
        such
        period, minus (c) the amounts spent by the Designated Website
        Businesses for equipment, fixed assets, real property or improvements or
        for
        replacements or substitutions therefore or additions thereto, in connection
        with
        the operation of the Designated Website Businesses, and which are or would
        be
        set forth as additions to the Designated Website Businesses’ property in the
        Designated Website Businesses’ financial statements, and minus (d) the
        aggregate amount of any accounts receivable of the Designated Website Businesses
        that are older than seventy five (75) days. 

       

      “Annual
        Earn Out Payment”
shall
        have the meaning assigned to such term in Section 1.09.

       

      “Cumulative
        Consideration”
means,
        as of any calculation date, an amount equal to (a) the aggregate of any and
        all amounts, whether in cash, promissory notes, shares, or otherwise, that
        Seller has received, or has irrevocably earned but not yet received, pursuant
        to, and in accordance with, the Agreement and this Amendment No. 1,
        including, but not limited to the Initial Consideration minus (b) the
        aggregate of any and all amounts, whether in cash, promissory notes, shares,
        or
        otherwise that Seller has received, or has irrevocably earned but not yet
        received, pursuant to, and in accordance with, the Agreement and this Amendment
        No. 1, as compensation for any services provided by Seller pursuant to, and
        in accordance, with the Agreement, including, but not limited to, salaries,
        bonuses, and other payments made pursuant to the Employment Agreements or
        any
        other similar document. For purposes of this calculation, any non-cash items
        shall have the value given to such non-cash items in accordance with the
        Agreement and this Amendment No. 1, and in no event shall such non-cash
        items be valued on any other basis. 

       

      “Designated
        Website Businesses”
means,
        collectively, (a) the Business, and (b) the other websites listed on
Schedule
        1.09(a).
        

       

      “Earn
        Out Period Valuation”
means,
        as of any calculation date, the sum of (a) with respect to, and including,
        the first $5,000,000 of Annual Earn Out Cash Flow calculated as of such date,
        an
        amount equal to the product of (x) the amount of Annual Earn Out Cash Flow,
        up to $5,000,000, multiplied by (y) seven (7), and (b) with respect to
        any amount of Annual Earn Out Cash Flow, calculated as of such date, that
        exceeds $5,000,000, an amount equal to the product of (x) the amount
        of any such excess, multiplied by (y) five (5). 

       


      
        
           

        

        
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      “Earn
        Out Promissory Note”
shall
        have the meaning assigned to such term in Section 1.09(b)(i).

       

      “Net
        Income”
means,
        with respect to any period, the net income (or loss) of the Designated Website
        Businesses for such period, after eliminating all offsetting debits and credits
        among the Designated Website Businesses; provided,
        that
        the following shall be excluded:

       

      (a) the
        income (or loss) of any Designated Website Business accrued prior to the
        date it
        becomes a Designated Website Business or is merged into or consolidated with
        any
        Designated Website Business, and the income (or loss) of any Designated Website
        Business, substantially all of the assets which have been acquired in any
        manner, realized by such Designated Website Business prior to the date of
        acquisition; 

       

      (b) the
        income (or loss) of any Person in which a Designated Website Business has
        an
        ownership interest, except to the extent that any such income has been actually
        received by such Designated Website Business in the form of cash dividends
        or
        similar cash distributions; 

       

      (c) any
        restoration to income of any contingency reserve, except to the extent that
        provision for such reserve was made out of income accrued during such period;
        

       

      (d) any
        aggregate net gain (but not any aggregate net loss) during such period arising
        from the sale, conversion, exchange, or other disposition of capital assets
        (such term to include, without limitation, (i) all non-current assets and,
        without duplication, (ii) the following, whether or not current: all fixed
        assets, whether tangible or intangible, all inventory sold in conjunction
        with
        the disposition of fixed assets, and all Securities); 

       

      (e) any
        gains
        resulting from any write-up of any assets (but not any loss resulting from
        any
        write-down of any assets); and

       

      (f) any
        gain
        arising from the acquisition of any Security, or the extinguishment of any
        indebtedness of any Designated Website Business; 

       

      provided,
        further,
        that,
        for purposes of this definition, Net Income shall be calculated based on
        the
        financial statements prepared by Purchaser’s independent accountants for each
        Designated Website Business that is listed on the most current
        Schedule 1.09(a), and shall include allocations of general administration
        and overhead costs and expenses for each such Designated Website Business.
        

       


      
        
           

        

        
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      “Net
        Revenue”
shall
        mean gross revenue of the Designated Website Businesses less commissions
        and
        fees paid to advertising agencies, networks, partners and/or content
        providers.

       

      “Security”
shall
        have the meaning assigned to such term in section 2(1) of the Securities
        Act. 

       

      “VWAP”
means,
        as of any calculation date, the Volume Weighted Average Price of the Parent
        Common Stock for the designated period, based on the value of such shares
        as it
        appears on the Bloomberg Screen of Purchaser on such date. 

       

      (b)  The
        definitions of Initial Consideration, Par B Shares, and Purchase Price
        Escrow Agreement, set forth in Section 10.12 of the Asset Purchase
        Agreement, are each hereby amended by deleting it in its entirety and replacing
        it with the following: 

       

      “Initial
        Consideration”
shall
        have the meaning assigned to such term in Section 3.01 of this Amendment
        No. 1.

       

      “Par B
        Shares”
means
        such number of shares of Parent Common Stock representing $5,000,000 of value
        as
        of the Closing, as provided in Section 1.08(b).

       

      “Purchase
        Price Escrow Agreement”
means
        that certain escrow agreement entered into as of October 31, 2007
        by and
        among the Purchaser, the Seller and LaSalle Bank National Association, as
        escrow
        agent.

       

      (c)  The
        definitions of Annual Earn Out Amount, Annual Earn Out Payable, Base Year
        EBITDA, Cumulative Earn Out Potential, Cumulative Earn Out Value, Designated
        CPM, Earn Out Basis, First Guaranteed Revenue Period, First Year Revenues,
        Minimum Pro Forma Earn Out EBITDA, Pro Forma Earn Out EBITDA, Pro Forma Earn
        Out
        Net Revenue, Pro Forma Earn Out Operating Expenses, and Second Guaranteed
        Revenue Period, set forth in Section 10.12 of the Asset Purchase Agreement,
        are each hereby amended by deleting it in its entirety. 

       

      2.06  Earn
        Out Promissory Note.
        The
        Agreement is hereby amended by adding a new Exhibit P to the Agreement, in
        the form attached hereto as Annex A.

       

      2.07  Schedule
        1.08(e).
        Schedule 1.08(e) of the Agreement is hereby amended by deleting it in its
        entirety and replacing it with a new Schedule 1.08(e), as attached hereto as
        Annex B.

       

      2.08 Schedule 1.09.
        Schedule 1.09 of the Agreement is hereby amended by deleting
        it in its entirety and replacing it with a new Schedule 1.09, as attached
        hereto as Annex C.

       

       

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

       

      2.09  Schedule 1.09(a).
        The
        Agreement is hereby amended by adding a new Schedule 1.09(a) to the
        Agreement, in the form attached hereto as Annex D.

       

      ARTICLE
        3

       

      EFFECTIVENESS;
        WAIVERS

       

      3.01  Initial
        Consideration. 
        As
        consideration for the parties executing this Amendment No. 1 and as part of
        the Purchase Price (the “Initial
        Consideration”),
        Purchaser shall deliver:

       

      (a)  $400,000
        as follows:

       

      	(i)  	
              $250,000
                shall be paid to Seller in immediately available funds within two
                (2)
                Business Days of the date hereof; and 

            


       

      	(ii)  	
              $150,000
                shall be paid to Seller in immediately available funds in five (5)
                equal
                monthly installments of $30,000 each, with such payments commencing
                on
                August 20, 2008, with each subsequent payment made on the twentieth
                (20th)
                of each such successive month. 

            


       

      In
        the
        event of the sale by the Parent of its personal media player business for
        aggregate cash consideration in an amount not less than $2,000,000, the total
        amount of the outstanding installment payments to be paid pursuant to Section
        3.01(a)(ii) above shall be due and payable within five (5) Business Days
        of the
        closing of such sale. 

       

      (b)  Within
        two (2) Business Days of the date hereof, 250,000 shares
        of
        Parent Common Stock to Eric Bauman, which such shares of Parent Common Stock
        shall be deemed to have a value equal to $40,000; and 

       

      (c)  Within
        two (2) Business Days of the date hereof, 250,000 shares of Parent Common
        Stock
        to Neil Bauman, which such shares of Parent Common Stock shall be deemed
        to have
        a value equal to $40,000. 

       

      3.02  Waiver
        by Seller.
        Seller
        hereby waives, to the fullest extent permitted by law, any rights that it
        may
        have to claim and receive any amounts that were due and unpaid pursuant to
        the
        Agreement, prior to its amendment hereby, but that no longer remain due as
        a
        result of this Amendment No. 1.

       

      3.03 No
        Further Obligations.
        Each of
        the parties hereby acknowledges and agrees that none of the parties shall
        have
        any further obligations to make any adjustments or payments pursuant to,
        or in
        accordance with, Section 1.11 of the Agreement.

       

      ARTICLE
        4

      MISCELLANEOUS

       

      4.01  No
        Other Amendments;
        Ratification.
        Except
        as
        expressly amended herein, the terms of the Asset Purchase Agreement shall
        remain
        in full force and effect; and each of the parties hereby ratifies, confirms
        and
        agrees that the Asset Purchase Agreement shall remain in full force and effect,
        as amended hereby.

       

       

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

       

      4.02  Limitation
        on Agreements. The
        amendments set forth herein are limited precisely as written and shall not
        be
        deemed: (a) to be a consent under or waiver of any other terms or condition
        in the Asset Purchase Agreement, or (b) to prejudice any right or rights
        which the Seller, Parent or Purchaser now have or may have in the future
        under,
        or in connection with the Asset Purchase Agreement, as amended hereby, or
        any of
        the other documents referred to herein or therein. From and after the date
        of
        this Amendment No. 1, all references to the Asset Purchase Agreement shall
        be deemed to be references to the Asset Purchase Agreement, after giving
        effect
        to this Amendment No. 1, and each reference to “hereof”, “hereunder”, or
“hereby” and each other similar reference and each reference to “this Agreement”
and each other similar reference in the Asset Purchase Agreement shall from
        and
        after the date hereof refer to the Asset Purchase Agreement as amended
        hereby.

       

      4.03  Counterparts.
        This
        Amendment No. 1 may be executed in two or more counterparts, all of which
        when taken together shall be considered one and the same agreement and shall
        become effective when counterparts have been signed by each party hereto
        and
        delivered to all of the other parties, it being understood that all parties
        need
        not sign the same counterpart. In the event that any signature is delivered
        by
        facsimile transmission or by email delivery of a “.pdf” format data file, such
        signature shall create a valid and binding obligation of the party executing
        (or
        whose behalf such signature is executed) with the same force and effect as
        if
        such facsimile signature page were an original thereof.

       

      4.04  Governing
        Law. 
        This
        Amendment No. 1 shall be construed and enforced in accordance with and
        governed by the law of the State of New York without regard to any provision
        thereof that would allow or require the application of the law of any other
        jurisdiction. The parties hereby agree that any dispute between or among
        them
        arising out of or in connection with this Amendment No. 1 shall be
        adjudicated before the courts of the State of New York, New York County,
        or, if
        any party has or can acquire jurisdiction, before the United States District
        Court for the Southern District of New York, and they hereby submit to the
        jurisdiction of such courts (and the appropriate appellate courts), with
        respect
        to any action or legal proceeding commenced by any party, and irrevocably
        waive
        any objection they now or hereafter may have respecting the venue of any
        such
        action or proceeding brought in such courts or respecting the fact that such
        courts are an inconvenient forum, relating to or arising out of this Amendment
        No. 1, and consent to the service of process in any such action or legal
        proceeding by means of registered or certified mail, return receipt requested,
        in care of the address set forth above or such other address as the undersigned
        shall furnish in writing to the other. 

       

      (Remainder
        of this page left blank intentionally. Next page is signature
        page.)

       


      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      


      IN
        WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be
        duly executed by their respective authorized officers effective as of the
        day
        and year first above written but executed on the dates set forth
        below.

       

      


      PURCHASER:

      


      EBAUM’S
        WORLD, INC.

      


      By:
        /s/
        Jeff
        Oscodar               

      Name:
        Jeff Oscodar

      Title:
        President & CEO

      


      


      


      PARENT:

      


      ZVUE
        CORPORATION

      


      By:
        /s/
        Jeff
        Oscodar                

      Name:
        Jeff Oscodar

      Title:
        President & CEO

      


      


      


      SELLER:

      


      ERIC’S
        UNIVERSE, INC.

      


      By:
        /s/
        Eric
        Bauman                


      Name:
        Eric Bauman

      Title:
        President

       

      
        
           

        

        
          -12-