MP3.COM, INC.
                                 P.O. Box 910091
                               San Diego, CA 92191


May 26, 1999

Gregory P. Kostello
12851 Via Latina
Del Mar, CA  92014


RE:     EMPLOYMENT TERMS

Dear Greg:

MP3.com, Inc., a Delaware corporation, (the "Company") is pleased to offer you
the position of Director of Product Analysis, on the following terms.

You will serve as Director of Product Analysis and will be responsible for such
duties as are normally associated with such position or as otherwise determined
by the President or Chief Financial Officer of the Company. You will report to
Paul Ouyang, the Chief Financial Officer and Executive Vice President of the
Company. You will work at our facility located in San Diego. Of course, the
Company may change your position, duties, and work location from time to time as
it deems necessary.

Your compensation will be $4,615.38 paid bi-weekly, less payroll deductions and
all required withholdings. You will be eligible for standard benefits, such as
medical insurance, sick leave, vacations and holidays, according to standard
Company policy as may be adopted by the Company from time to time. Details about
these benefits will be provided in an Employee Handbook and in Summary Plan
Descriptions, which will be prepared by the Company and made available for your
review in due course. The Company may modify your compensation and benefits from
time to time as it deems necessary.

Upon commencement of employment with the Company pursuant to this letter (the
"Commencement Date"), and subject to the approval by the Company's Board of
Directors, you will be granted an Incentive Stock Option to purchase 40,000
shares of the Common Stock of the Company under the Company's 1998 Equity
Incentive Plan (the "Plan"). The exercise price per share of the Incentive Stock
Option will be equal to the fair market value of the Common Stock on the date
you commence your employment with the Company, as determined in good faith by
the Company's Board of Directors.

The shares of Common Stock subject to your Incentive Stock Option will be
subject to vesting over four years so long as you continue to be employed with
the Company,


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according to the following schedule: 25% of such shares will vest as of the one
year anniversary of the Commencement Date; an additional one forty-eighth
(1/48th) of such shares will vest as of the end of each monthly period
thereafter.

The specific terms and conditions of your Incentive Stock Option will be set
forth in an Incentive Stock Option Agreement between you and the Company. Such
agreement shall be in substantially the form approved by the Board of Directors
of the Company for use with the Plan, and will be executed after you commence
your employment with the Company pursuant to this letter.

As a Company employee, you will be expected to abide by Company rules and
regulations, and acknowledge in writing that you have read the Company's
Employee Handbook (once it has been made available to you). As a condition of
employment, you will be required to sign and comply with a Proprietary
Information and Inventions Agreement, a copy of which is attached hereto as
Exhibit A, which, among other things, prohibits unauthorized use or disclosure
of Company proprietary information.

Normal working hours are from 8:30 a.m. to 5:30 p.m., Monday through Friday. As
an exempt salaried employee, you will be expected to work additional hours as
required by the nature of your work assignments.

You may terminate your employment with the Company at any time and for any
reason whatsoever simply by notifying the Company in writing no later than two
weeks prior to the date of such termination. Likewise, the Company may terminate
your employment at any time and for any reason whatsoever, with or without cause
or advance notice. This at-will employment relationship cannot be changed except
in a writing signed by a Company officer.

The employment terms in this letter supersede any other agreements or promises
made to you by anyone, whether oral or written, and comprise the final, complete
and exclusive agreement between you and the Company. As required by law, this
offer is subject to satisfactory proof of your right to work in the United
States.

Please sign and date this letter, and return it to me as soon as possible if you
wish to accept employment at the Company under the terms described above. If you
accept our offer, we would like you to start on June 14, 1999.


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We look forward to your favorable reply and to a productive and enjoyable work
relationship.


Sincerely,

MP3.COM, INC.


By:     /s/ DELON DOTSON
   --------------------------------------------------------
        Delon Dotson, Executive Vice President, Engineering

ACCEPTED BY:



      /s/ GREGORY P. KOSTELLO
----------------------------------------
        Gregory P. Kostello



      June 11, 1999
----------------------------------------
        Date



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                                    EXHIBIT A

                PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

Source: OneCLE Business Contracts.