Contribution Agreement, Dated October 29, 1999

Exhibit 2


CONTRIBUTION AGREEMENT


CONTRIBUTION AGREEMENT, dated as of October 29, 1999, by and between CDBEAT.COM, INC., a Delaware corporation ("CDBeat"), and CAKEWALK LLC, a Delaware limited liability company ("Cakewalk").


WHEREAS, Cakewalk is the owner of certain assets utilized in connection with the development, creation, ownership and exploitation of recorded music, record production, music publishing, CD-ROM, music-related merchandising and music video production (the "Business");


WHEREAS, Cakewalk desires to contribute and assign, and CDBeat desires to acquire, substantially all of the assets and liabilities relating to the Business in exchange for 90% of the issued and outstanding voting shares of the common stock, par value $.001, of CDBeat (the "CDBeat Stock") in a transaction intended to qualify under ss. 351 of the Code, upon and subject to the terms and conditions hereinafter set forth;


WHEREAS, Dylan LLC ("Dylan") has entered into that certain subscription agreement, dated the date hereof, with Cakewalk (the "Dylan Subscription Agreement"), attached hereto as Exhibit A, pursuant to which Dylan has subscribed for a membership interest in Cakewalk; and


WHEREAS, certain terms used herein have the meanings set forth in Article IX,


NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants hereinafter set forth, the parties hereto agree as follows:


ARTICLE I


TRANSFER AND ACQUISITION


Section 1.1 Assets to be Transferred and Acquired.


(a) Subject to Section 1.1(b) hereof and to the other terms and conditions
of this Agreement, at the Closing (as hereinafter defined), Cakewalk
will contribute, assign, transfer and convey to CDBeat, free and clear
of all Liens (other than Permitted Liens), and CDBeat shall acquire
from Cakewalk, all of the tangible and intangible assets used, held for
use or useful in the Business (collectively, the "Assets") including:


(i) the membership interests of Cakewalk in Cakewalk BRE LLC;


(ii) all of the capital stock of Cakewalk Productions, Inc. and Cakewalk Productions II, Inc.;


(iii) all of Cakewalk's rights, title and interest in and to property, plant and equipment;


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(iv) all of Cakewalk's rights in, to and under the Intellectual Property
Rights, whether or not used in the Business, and all of Cakewalk's
books, records and computer programs relating thereto;


(v) all of Cakewalk's rights in, to and under the goodwill of the Business;


(vi) Cakewalk's rights under all Contracts and all prepaid expenses, claims
and other prepayments, including security deposits and other retentions
held by third parties, with respect to the Contracts as of the Closing
Date;


(vii) all of Cakewalk's rights under all governmental licenses, certificates,
permits and approvals (the "Permits"), if any, relating to or necessary
to the lawful conduct of the Business as of the Closing Date, to the
extent such Permits are transferable;


(viii) all warranties, Claims, causes of action, guarantees or similar rights
of Cakewalk pertaining to the Assets;


(ix) cash on hand, cash equivalents, investments (including, without
limitation, stock, debt instruments, options and other instruments and
securities) and bank deposits of Cakewalk as of the Closing Date
including, without limitation, the moneys received by Cakewalk from
Dylan under the Dylan Subscription Agreement;


(x) all of the accounts receivable of Cakewalk as of the Closing Date as
well as all reserve amounts with licensors and distributors;


(xi) all of Cakewalk's rights under any insurance policies; and


(xii) all books and records relating to the Business and the Assets (whether
kept or maintained by Cakewalk or any third party) including, without
limitation, copies of lists of customers and suppliers; records with
respect to costs and equipment; business development plans; advertising
materials, catalogues, correspondence, mailing lists, photographs,
sales materials and records; purchasing materials and records;
personnel records with respect to employees of the Business; media
materials and plates; sales order files; ledgers and other books of
account of Cakewalk; plans, specifications, surveys, appraisals,
reports and other materials relating to the Assets; other records
required to continue the Business as heretofore and now being conducted
by Cakewalk; and all software programs, computer printouts, databases
and related items used in the Business.


(b) The Assets shall exclude all corporate records of Cakewalk including,
without limitation, the member ledger of Cakewalk and the minute books
regarding meetings of the members, managers and manager committees of
Cakewalk (the "Excluded Assets").


Section 1.2 Assumed Liabilities.


(a) At the Closing, CDBeat shall assume all liabilities and obligations
(including contingent liabilities and obligations) of Cakewalk


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pertaining to or arising out of the ownership of the Assets and the
operation of the Business, whether incurred or existing on or prior to
the Closing Date or arising thereafter, including, but not limited to:


(i) All Liabilities of Cakewalk relating to the ownership of the Assets or
operation of the Business;


(ii) All Liabilities in respect of borrowed moneys;


(iii) All accounts payable relating to the Business;


(iv) Liabilities and obligations under Contracts;


(v) Liabilities and obligations with respect to any Claims, arising out of
ownership of the Assets or the operation of the Business;


(vi) Liabilities and obligations to persons employed by Cakewalk (or any of
such employee's beneficiaries, heirs or assignees) arising out of such
employee's employment by Cakewalk; and


(vii) All liabilities of Cakewalk under the Dylan Subscription Agreement
including the tax indemnity.


All such duties, responsibilities, obligations or Liabilities described in this Section 1.2 being referred to herein as "Assumed Liabilities."


(b) Notwithstanding the provisions of Section 1.2(a), except as set forth
in (vii) CDBeat shall not assume, and Cakewalk shall retain, any income
Tax Liability of Cakewalk.


Section 1.3 Consideration. In consideration for the contribution, assignment,
transfer and conveyance by Cakewalk to CDBeat of the Assets, at the
Closing, CDBeat shall issue 17,592,957 shares, being such number of
shares of CDBeat Stock as shall equal, after giving effect to such
issuance, the conversion of CDBeat's outstanding shares of Preferred
Stock and the cancellation of certain other shares all as hereinafter
described, 90% of the issued and outstanding common stock of CDBeat.


Section 1.4 Closing. Subject to the terms and conditions of this Agreement, the
sale and purchase of the Assets contemplated hereby (the "Closing")
shall take at the offices of Baer Marks & Upham LLP, 805 Third Avenue,
New York, New York 10022, at 10:00 a.m., local time on November 5,
1999, or at such other date, time or place as the parties may agree
(the "Closing Date").


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ARTICLE II


REPRESENTATIONS AND
WARRANTIES OF CAKEWALK


Cakewalk represents and warrants to CDBeat that:


Section 2.1 Authority Relative to this Agreement. Cakewalk has full power,
capacity and authority to execute and deliver this Agreement and each
other Transaction Document to which it is or, at the Closing, will be a
party and to consummate the transactions contemplated hereby and
thereby (the "Contemplated Transactions"). The execution and delivery
of this Agreement and the consummation of the Contemplated Transactions
to which Cakewalk is or, at the Closing, will be a party have been duly
and validly authorized by Cakewalk, and no other proceedings on the
part of Cakewalk (or any other person) are necessary to authorize the
execution and delivery by Cakewalk of this Agreement or the
consummation of the Contemplated Transactions to which Cakewalk is or,
at the Closing, will be a party. This Agreement has been and, at the
Closing, the other Transaction Documents to which Cakewalk is a party
will have been, duly and validly executed and delivered by Cakewalk,
and (assuming the valid execution and delivery thereof by the other
parties thereto) constitute or will at the Closing constitute, as the
case may be, the legal, valid and binding agreements of Cakewalk
enforceable against Cakewalk in accordance with their respective terms,
except as such obligations and their enforceability may be limited by
applicable bankruptcy and other similar laws affecting the enforcement
of creditors' rights generally and except that the availability of
equitable remedies is subject to the discretion of the court before
which any proceeding therefor may be brought (whether at law or in
equity).


Section 2.2 No Conflicts; Consents. The execution, delivery and performance by
Cakewalk of this Agreement and each other Transaction Document to which
it is or will be a party or the consummation of the Contemplated
Transactions does not and will not (i) violate any provision of the
Articles of Organization or the Amended and Restated Operating
Agreement (or comparable instruments) of Cakewalk; (ii) except for any
filings that may be required by applicable securities laws, require
Cakewalk or any other Affiliate of Cakewalk to obtain any material
consent, approval or action of or waiver from, or make any filing with,
or give any notice to, any Governmental Body or any other person,
except as set forth on Schedule 2.2 ("Cakewalk Required Consents");
(iii) if Cakewalk Required Consents are obtained prior to Closing,
violate, conflict with or result in a breach or default under (after
the giving of notice or the passage of time or both), or permit the
termination of, any Contract of a type required to be listed on
Schedule 2.8 to which Cakewalk is a party or by which it or any of its
assets may be bound or subject, or result in the creation of any Lien
upon the Assets pursuant to the terms of any such Contract; (iv) if
Cakewalk Required Consents are obtained prior to Closing, violate any
Law or Order of any Governmental Body against, or binding upon,
Cakewalk or upon the Assets or the Business; or (v) if Cakewalk
Required Consents are obtained prior to Closing, violate or result in
the revocation or suspension of any Permit, except where (A) the
failure to obtain any Cakewalk Required Consent, or (B) any violation,
breach or default that would not reasonably be expected to have a
Material Adverse Effect.


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Section 2.3 Corporate Existence and Power. Cakewalk is a limited liability
company duly organized, validly existing and in good standing under the
laws of the State of Delaware, and has all requisite powers and all
material Permits required to carry on the Business as now conducted.
Except for Cakewalk BRE LLC, a New York limited liability company,
Cakewalk Productions, Inc., a New York corporation, and Cakewalk
Productions II, Inc., a New York corporation, Cakewalk does not have
any Subsidiaries or own any equity interest or equity investment in any
other person.


Section 2.4 Charter Documents and Corporate Records. (a) Cakewalk has
heretofore delivered to CDBeat true and complete copies of the Articles
of Organization and Amended and Restated Operating Agreement of
Cakewalk as in effect on the date hereof.


(b) All financial, business and accounting books, ledgers, accounts and
official and other records relating to Cakewalk and the Business have
been properly and accurately kept and completed in all material
respects, and there are no material inaccuracies or discrepancies
contained or reflected therein.


Section 2.5 Financial Information. Cakewalk has previously furnished to CDBeat
true and complete copies of (i) Cakewalk's audited financial statements
(the "Audited Statements") at and for the year ended December 31, 1998,
(ii) the audited balance sheet of Cakewalk at December 31, 1997
(collectively with the Audited Statements, the "Annual Statements"),
and (iii) Cakewalk's unaudited balance sheet, income statements, and
cash flows at and for the period ended March 31, 1999 (with the Annual
Statements, the "Financial Statements"). Each delivered financial
statement has been prepared in accordance with GAAP consistently
applied and presents fairly in all material respects the financial
condition, results of operations and cash flows of Cakewalk as of its
date and the period covered thereby.


Section 2.6 Subsequent Events. Except as contemplated by this Agreement or
disclosed in Schedule 2.6, none of the following has occurred since the
date of the most recent Financial Statements: (a) any event that had,
or is reasonably likely to have, a Material Adverse Effect on Cakewalk;
(b) any change by Cakewalk in its accounting methods, practices, or
principles, except as required to comply with applicable Law or a
change in GAAP; (c) any commitment or transaction by Cakewalk that had,
or is reasonably likely to have, a Material Adverse Effect on Cakewalk
and was not in the usual and ordinary course of business; (d) any
distributions in respect of, or redemption of, membership interests; or
(e) any event, action, or condition that (i) constitutes an agreement
by Cakewalk to do anything described in clauses (a)-(d) above, or (ii)
if it had occurred before the date of this Agreement, would have made
any representation or warranty by Cakewalk in this Agreement inaccurate
in any material respect.


Section 2.7 The Assets. Cakewalk has good and marketable title to the Assets,
free and clear of all Liens, except for (i) liens set forth on Schedule
2.7, (ii) mechanic's, materialmen's, and similar liens, (iii) liens
arising under worker's compensation, unemployment insurance, social
security, retirement, and similar legislation, (iv) liens, easements,
covenants, restrictions and other similar encumbrances of record listed
on Schedule 2.7, and (v) liens for Taxes not yet due and payable, in
each case arising in the ordinary course of business of Cakewalk and
not material to Cakewalk (collectively, "Permitted Liens").


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Section 2.8 Contracts. (a) Schedule 2.8 sets forth an accurate and complete
list of all Contracts material to the Business. True and correct copies
of all written Contracts listed on such Schedule and summaries of the
material provisions of all oral Contracts so listed have been made
available to CDBeat.


(b) All Contracts listed on Schedule 2.8 are valid, subsisting, in full
force and effect and binding upon Cakewalk, as the case may be, and, to
the knowledge of Cakewalk, the other parties thereto in accordance with
their terms. Cakewalk is not in default (or alleged default) under any
such Contract in any material respect, nor, to the knowledge of
Cakewalk, is any other party thereto in default thereunder in
any material respect, and, to Cakewalk's knowledge, there is no
condition that with notice or the lapse of time or both would
constitute a material default (or give rise to a termination right)
under any such Contract. To the knowledge of Cakewalk, none of the
other parties to any Contract intends to terminate or materially alter
the provisions thereof by reason of the Contemplated Transactions
or otherwise. Except as set forth on Schedule 2.2, no approval or
consent of any person is required in order for the Contracts to
continue in full force and effect after the Closing.


Section 2.9 Claims and Proceedings. Except as set forth on Schedule 2.9, there
are no outstanding Orders of any Governmental Body against or involving
Cakewalk, the Assets or the Business. Except as set forth on Schedule
2.9, there are no material actions, suits, claims or counterclaims or
legal, administrative, governmental, arbitral or other proceedings or
investigations (if the defense thereof or Liabilities in respect
thereof are not covered by insurance) (collectively, "Claims"), pending
or to the knowledge of Cakewalk threatened on the date hereof, against
or involving Cakewalk, the Assets or the Business. Except as set forth
on Schedule 2.9, at the Closing there will be no such Claims pending
or, to the knowledge of Cakewalk, threatened, other than Claims that,
individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect. Except as set forth on Schedule 2.9, to
the knowledge of Cakewalk, on the date hereof, there is no fact, event
or circumstances that would give rise to any such Claim.


Section 2.10 Compliance with Laws. Cakewalk is not in violation in any material
respect of any order, judgment, injunction, award, citation, decree,
consent decree or writ (collectively, "Orders"), or any material law,
statute, code, ordinance, rule, regulation or other requirement
(collectively, "Laws"), of any government or political subdivision
thereof, whether federal, state, local or foreign, or any agency or
instrumentality of any such government or political subdivision, or any
court or arbitrator (collectively, "Governmental Bodies") affecting the
Assets or the Business, except for violations which would not
reasonably be expected to have a Material Adverse Effect.


Section 2.11 Finders' Fees. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act
on behalf of Cakewalk who might be entitled to any fee or commission
from Cakewalk upon consummation of the Contemplated Transactions.


Section 2.12 Investment Intent. Cakewalk is acquiring the CDBeat Shares for its
members own account for investment and not with a view towards resale,
transfer or distribution in a manner that would be in violation of
applicable securities laws, but subject, nevertheless, to any
requirement of law that the disposition of Cakewalk's property shall at
all times be within Cakewalk's control, and without prejudice to


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Cakewalk's or its members right at all times to sell or otherwise
dispose of all or any part of such securities under a registration
under the Securities Act or under an exemption from said registration
available under the Securities Act.


Section 2.13 Tax Matters. Since its inception, Cakewalk has been treated as a
partnership for Federal Income tax purposes, has filed all Tax Returns
required to be filed by it and has paid the Taxes reflected thereon.


ARTICLE III


REPRESENTATIONS AND WARRANTIES
OF CDBEAT


CDBeat represents and warrants to Cakewalk that: Section 3.1 Authority Relative to this Agreement. CDBeat has full power,
capacity and authority to execute and deliver this Agreement and each
other Transaction Document to which it is or, at the Closing, will be a
party and to consummate the Contemplated Transactions. The execution
and delivery of this Agreement and the consummation of the Contemplated
Transactions to which CDBeat is or, at the Closing, will be a party
have been duly and validly authorized and approved by the board of
directors of CDBeat and no other corporate proceedings on the part of
CDBeat are necessary to authorize the execution and delivery by CDBeat
of this Agreement or the consummation of the Contemplated Transactions
to which it is or, at the Closing, will be a party. This Agreement has
been and, at the Closing, the other Transaction Documents to which
CDBeat is a party will have been duly and validly executed and
delivered by CDBeat and (assuming the valid execution and delivery
thereof by the other parties thereto) constitutes or will at the
Closing constitute the legal, valid and binding agreement of CDBeat,
enforceable against CDBeat in accordance with their respective terms,
except as such obligations and their enforceability may be limited by
applicable bankruptcy and other similar laws affecting the enforcement
of creditors' rights generally and except that the availability of
equitable remedies is subject to the discretion of the court before
which any proceeding therefor may be brought (whether at law or in
equity).


Section 3.2 No Conflicts; Consents. The execution, delivery and performance by
CDBeat of this Agreement and each other Transaction Document to which
it is or, at the Closing, will be a party and the consummation of the
Contemplated Transactions to which it is or, at the Closing, will be a
party do not and will not (i) violate any provision of the Certificate
of Incorporation or By-laws of CDBeat; (ii) except for any filings that
may be required to be made under applicable securities laws, require
CDBeat to obtain any material consent, approval or action of or waiver
from, or make any filing with, or give any notice to, any Governmental
Body or any other person, and except as set forth in Schedule 3.2
("CDBeat Required Consents"); (iii) if CDBeat Required Consents are
obtained prior to the Closing, violate, conflict with or result in the
breach or default under (after the giving of notice or the passage of
time); or permit the termination of, any material Contract to which
CDBeat is a party or by which CDBeat or its assets may be bound or
subject; or (iv) if CDBeat Required Consents are obtained prior to the
Closing, violate any Law or Order of any Governmental Body against, or


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binding upon, CDBeat or upon its assets or business, except where any
such violation would not reasonably be expected to have a Material
Adverse Effect.


Section 3.3 Corporate Existence and Power. CDBeat is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate powers and all
material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.


Section 3.4 Charter Documents and Corporate Records. (a) CDBeat has heretofore
delivered to Cakewalk true and complete copies of the Certificate of
Incorporation and By-laws of CDBeat as in effect on the date hereof.


(b) All financial, business and accounting books, ledgers, accounts and
official and other records relating to CDBeat have been properly and
accurately kept and completed in all material respects, and there are
no material inaccuracies or discrepancies contained or reflected
therein.


Section 3.5 Capitalization. The authorized capital stock of CDBeat consists of
(i) 20,000,000 shares of its common stock, par value $.001 (the "Common
Stock"), and (ii) 10,000,000 shares of convertible preferred stock (the
"Preferred Stock"), which has been designated as "Series A", "Series B"
and "Series C." As of the date hereof, the issued and outstanding
capital stock of CDBeat consists of (A) 4,504,197 shares of Common
Stock, (B) 8.75 shares of "Series A" Preferred Stock, and (C) 50,000
shares of "Series C" Preferred Stock. There are currently no shares of
"Series B" Preferred Stock issued and outstanding. In addition, as of
the date hereof not including the Atlantis Warrant, CDBeat has reserved
up to 190,516 shares of Common Stock for issuance upon exercise of
presently outstanding warrants and options. Except as set forth on
Schedule 3.5, CDBeat does not, and at the Closing CDBeat will not, have
outstanding any capital stock or other securities or any rights,
warrants, or options to acquire securities of CDBeat or any convertible
or exchangeable securities other than pursuant to this Agreement.
Except as set forth on Schedule 3.5, no person has or, at the Closing
will have, any right to purchase or otherwise acquire any securities of
CDBeat. Except as set forth on Schedule 3.5, there are, and at Closing
will be, no outstanding obligations of CDBeat to repurchase, redeem or
otherwise acquire any securities of CDBeat.



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