<PAGE>

                                                                    EXHIBIT 10.1

                               ARTISTDIRECT, INC.
                         NOTICE OF GRANT OF STOCK OPTION

         Notice is hereby given of the following option grant (the "Option") to
purchase shares of the Common Stock of ARTISTdirect, Inc. (the "Corporation"):

         Optionee:  Robert Weingarten

         Grant Date:  March 29, 2004

         Vesting Commencement Date:  March 29, 2004

         Exercise Price:  $0.50 per share

         Number of Option Shares:  120,000 shares

         Expiration Date:  March 29, 2011

         Type of Option:         Incentive Stock Option
                           -----
                             X   Non-Statutory Stock Option
                           -----

         Date Exercisable:  Immediately Exercisable.

         Vesting Schedule: Although the Option is immediately exercisable, one
hundred percent (100%) of the Option Shares shall initially be unvested and
subject to repurchase by the Corporation at the Exercise Price paid per share.
Optionee shall acquire a vested interest in, and the Corporation's repurchase
right shall accordingly lapse with respect to, the remaining Option Shares in a
series of thirty-six (36) successive equal monthly installments upon Optionee's
completion of each month of Service over the thirty-six (36)-month period
measured from the Vesting Commencement Date. Notwithstanding the foregoing, the
Option Shares are subject to accelerated vesting as specifically provided for in
the attached Stock Option Agreement and Stock Purchase Agreement. Except as set
forth in Section 6 of the Stock Option Agreement attached hereto as Exhibit A or
in Section D.6 of the Stock Purchase Agreement attached hereto as Exhibit B, in
no other event shall any additional Option Shares vest after Optionee's
cessation of Service.

         REPURCHASE RIGHTS. OPTIONEE HEREBY AGREES THAT CERTAIN OPTION SHARES
ACQUIRED UPON THE EXERCISE OF THE OPTION SHALL BE SUBJECT TO CERTAIN REPURCHASE
RIGHTS EXERCISABLE BY THE CORPORATION AND ITS ASSIGNS. THE TERMS OF SUCH RIGHTS
ARE SPECIFIED IN THE ATTACHED STOCK PURCHASE AGREEMENT.

<PAGE>

         Optionee and the Corporation hereby agree to be bound by all the terms
and conditions of the Option as set forth in the Stock Option Agreement and
Stock Purchase Agreement attached hereto as Exhibits A and B, respectively.

         All capitalized terms in this Notice shall have the meaning assigned to
them in this Notice or in the attached Stock Option Agreement or Stock Purchase
Agreement.

DATED:  March 29, 2004

                                         ARTISTDIRECT, INC.



                                         By:
                                             -----------------------------------
                                         Name: Jonathan Diamond
                                         Title: President


                                         By:
                                             -----------------------------------
                                         Optionee:  Robert Weingarten

                                         Address:
                                                  ------------------------------

                                                  ------------------------------

                                                  ------------------------------



ATTACHMENTS:
EXHIBIT A - NON-STATUTORY STOCK OPTION AGREEMENT
EXHIBIT B - STOCK PURCHASE AGREEMENT

<PAGE>

                                    EXHIBIT A

                             STOCK OPTION AGREEMENT


                               ARTISTDIRECT, INC.
                      NON-STATUTORY STOCK OPTION AGREEMENT

                                    RECITALS

         A. The Board, including a majority of the independent directors (as
defined in Nasdaq Marketplace Rule 4200(a)(14)), of the Corporation and the
Board's Compensation Committee, comprised of a majority of independent
directors, have approved a stock option grant to Optionee as an inducement
material to Optionee's entering into employment with the Corporation.

         B. Optionee has not previously been an Employee or director of the
Corporation, and the option evidenced by this Agreement (the "Option") is
granted to Optionee in order to attract and retain Optionee to serve the
Corporation in the capacity of Chief Financial Officer.

         C. The Option is granted to Optionee in consideration of the services
Optionee is to render the Corporation and not for any capital-raising purposes
or in connection with any capital-raising activities.

         D. The Option is intended to be a Non-Statutory Option which does NOT
satisfy the requirements of Section 422 of the Code.

         E. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.

         NOW, THEREFORE, it is hereby agreed as follows:

         1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as of
the Grant Date, an Option to purchase up to the number of Option Shares
specified in the Grant Notice attached hereto. The Option Shares shall be
purchasable at any time or from time to time during the Option term specified in
Paragraph 2 at the Exercise Price.

         2. OPTION TERM. The Option shall have a term of seven (7) years
measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraphs 5 or 6.

         3. LIMITED TRANSFERABILITY. The Option shall be neither transferable
nor assignable by Optionee other than by will or by the laws of descent and
distribution following Optionee's death and may be exercised, during Optionee's
lifetime, only by Optionee or as otherwise set forth herein. However, the Option
may, in connection with the Optionee's estate plan, be assigned in whole or in
part during Optionee's lifetime to one or more members of the Optionee's
immediate family or to a trust established for the exclusive benefit of one or
more such

<PAGE>

family members. The assigned portion shall be exercisable only by the person or
persons who acquire a proprietary interest in the Option pursuant to such
assignment or as set forth herein. The terms applicable to the assigned portion
shall be the same as those in effect for the Option immediately prior to such
assignment and shall be set forth in such documents issued to the assignee as
the Board may deem appropriate.

         4. DATES OF EXERCISE. The Option shall be immediately exercisable for
all of the Option Shares, and shall remain exercisable for all of the Option
Shares as to which it has not been exercised until the Expiration Date or sooner
termination of the Option term under Paragraphs 5 or 6.

         5. CESSATION OF SERVICE. The Option term specified in Paragraph 2 shall
terminate (and the Option shall cease to be outstanding) prior to the Expiration
Date in accordance with the following provisions:

                 (a) Should Optionee cease Service by reason of an Involuntary
Termination or Permanent Disability, then Optionee's right to exercise the
Option shall lapse, and the Option shall cease to be outstanding, upon the
expiration of the twelve (12)-month period measured from the date of Optionee's
cessation of Service. In no event, however, shall the Option be exercisable at
any time after the Expiration Date. In the event that such Permanent Disability
prevents Optionee from personally exercising the Option, the Option may be
exercised by Optionee's personal authorized representative to the same extent
that Optionee could otherwise exercise the Option.

                  (b) Should Optionee cease Service on or prior to March 29,
2006 for any reason other than (i) an Involuntary Termination, (ii) a
termination for Cause or (iii) Optionee's death or Permanent Disability, then
Optionee's right to exercise the Option shall lapse, and the Option shall cease
to be outstanding, upon the earlier of (x) the expiration of the ninety (90)-day
period measured from the date of Optionee's cessation of Service or (y) the
Expiration Date.

                  (c) Should Optionee cease Service after March 29, 2006 for any
reason other than (i) an Involuntary Termination, (ii) a termination for Cause
or (iii) Optionee's death or Permanent Disability, then Optionee's right to
exercise the Option shall lapse, and the Option shall cease to be outstanding,
upon the earlier of (x) the expiration of the twelve (12)-month period measured
from the date of Optionee's cessation of Service or (y) the Expiration Date.

                  (d) Should Optionee's Service be terminated for Cause, then
the Option shall terminate immediately and cease to be outstanding.

                  (e) Should Optionee cease Service by reason of his death, then
the personal representative of Optionee's estate or the person or persons to
whom the Option is transferred pursuant to Optionee's will or in accordance with
the laws of descent and distribution or, if the Option has been transferred to a
trust in accordance with the terms herein, the trustee of such trust, shall have
the right to exercise the Option. Such right shall lapse, and the Option shall
cease to be outstanding, upon the earlier of (i) the expiration of the twelve
(12)-month period measured from the date of Optionee's death or (ii) the
Expiration Date.

<PAGE>

                 (f) During the applicable post-Service exercise period, the
Option may not be exercised in the aggregate for more than the number of Option
Shares that are vested at the time of Optionee's cessation of Service, except
that, if Optionee ceases Service by reason of an Involuntary Termination,
Optionee thereupon shall be deemed to be fully vested in all of the Option
Shares. Upon the expiration of the applicable post-Service exercise period or
(if earlier) upon the Expiration Date, the Option shall terminate and cease to
be outstanding for any vested Option Shares for which the Option has not been
exercised. However, the Option shall, immediately upon Optionee's cessation of
Service for any reason, terminate and cease to be outstanding with respect to
any Option Shares in which Optionee is not at that time vested (under the first
sentence of this paragraph 5(f) or otherwise).

         6. CORPORATE TRANSACTION

                 (a) The Option, to the extent outstanding at the time of a
Corporate Transaction, shall automatically accelerate immediately prior to the
effective date of such Corporate Transaction so that all of the Option Shares
shall be deemed to be fully vested. No such acceleration of vesting of the
Option shall occur, however, if and to the extent: (i) the Option is, in
connection with the Corporate Transaction, to be assumed by the surviving or
successor entity (or parent thereof) or (ii) the Option is to be replaced with a
cash incentive program of the surviving or successor entity (or parent thereof)
which provides Optionee with substantially equivalent economic benefits by
preserving the spread existing at the time of the Corporate Transaction on the
Option Shares for which the Option is not otherwise at that time vested (the
excess of the Fair Market Value of those Option Shares over the aggregate
Exercise Price payable for such shares) and provides for subsequent payout in
accordance with the same Option vesting schedule set forth in the Grant Notice.

                 (b) Immediately following a Corporate Transaction, this Option
shall terminate and cease to be outstanding, except to the extent assumed by the
surviving or successor entity (or parent thereof) in connection with the
Corporate Transaction.

                 (c) If the Option is assumed in connection with a Corporate
Transaction, then the Option shall be appropriately adjusted, immediately after
such Corporate Transaction, to apply to the number and class of securities which
would have been issuable to Optionee in consummation of such Corporate
Transaction had the Option been exercised immediately prior to such Corporate
Transaction, and appropriate adjustments shall also be made to the Exercise
Price per share to provide that the aggregate Exercise Price shall remain the
same as before such Corporate Transaction.

                 (d) To the extent the Option is to be assumed by the surviving
or successor entity (or parent thereof) in connection with a Corporate
Transaction, or a substitute option is issued to the Optionee as provided above,
vesting of the Option shall not accelerate upon the occurrence of that Corporate
Transaction, and the Option shall accordingly continue, over Optionee's period
of Service after the Corporate Transaction, to vest in one or more installments
in accordance with the provisions of the Grant Notice, subject to acceleration
upon an Involuntary Termination as provided in Paragraph 5(f) above.

<PAGE>

                 (e) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.

            7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, in order to reflect such change and thereby preclude a dilution
or enlargement of benefits hereunder appropriate adjustments shall be made to
(i) the number and/or class of securities subject to the Option and (ii) the
Exercise Price, but no change shall be made in the aggregate Exercise Price.

            8. STOCKHOLDER RIGHTS. The holder of the Option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the Option, paid the Exercise Price and become a holder of record
of the purchased shares.

            9. MANNER OF EXERCISING OPTION.

                  (a) In order to exercise the Option with respect to all or any
part of the Option Shares for which the Option is at the time exercisable,
Optionee (or any other person or persons exercising the Option) must take the
following actions:

                        (i) Execute and deliver to the Corporation a Notice of
Exercise for the number of Option Shares for which the Option is exercised.

                        (ii) Pay the aggregate Exercise Price for the purchased
shares in one or more of the following forms:

                             (A) cash or check made payable to the Corporation;

                             (B) shares of Common Stock held by Optionee (or any
                                 other person or persons exercising the Option)
                                 for the requisite period necessary to avoid a
                                 charge to the Corporation's earnings for
                                 financial reporting purposes and valued at Fair
                                 Market Value on the Exercise Date; or

                             (C) through a special sale and remittance procedure
                                 pursuant to which optionee (or any other person
                                 or persons exercising the Option) shall
                                 concurrently provide irrevocable instructions
                                 (a) to a brokerage firm, not arranged by and
                                 not having any pre-existing business
                                 relationship with the Corporation, to effect
                                 the immediate sale of all or some of the
                                 purchased shares and remit to the Corporation,
                                 out of the sale proceeds available on the
                                 settlement date, not later than three (3) days
                                 after the Exercise Date, sufficient funds to
                                 cover the aggregate Exercise Price payable for
                                 the purchased shares plus all applicable
                                 federal, state and local income and employment
                                 taxes required to be withheld by the
                                 Corporation by reason of such exercise and (b)
                                 to the Corporation to deliver the certificates
                                 for the purchased shares directly to such
                                 brokerage firm in order to complete the sale

<PAGE>

                             (D) through a "cashless exercise" in which the
                                 optionee may elect to receive shares equal to
                                 the value (as determined below) of this option
                                 (or the portion thereof being cancelled) by
                                 surrender of this option at the principal
                                 office of the Corporation together with the
                                 properly endorsed form in which event the
                                 Corporation shall issue to the holder a number
                                 of shares of Common Stock computed using the
                                 following formula:

                                 X=Y (A-B)
                                   -------
                                      A

                     Where X=     the number of shares of Common Stock to be
                                  issued to the optionee

                           Y=     the number of shares of Common Stock
                                  purchasable under the option or, if only a
                                  portion of the option is being exercised, the
                                  portion of the option being exercised (at the
                                  date of such calculation)

                           A=     the market value of one share of the
                                  Corporation's Common Stock (at the date of
                                  such calculation as determined by the closing
                                  price of the Common Stock on the date
                                  immediately prior to the Exercise Date)

                           B=     Purchase Price (as adjusted to the date of
                                  such calculation)


                  Except to the extent the sale and remittance procedure or the
cashless exercise procedure is utilized in connection with the Option exercise,
payment of the Exercise Price must accompany the Notice of Exercise.

                        (iii) Furnish to the Corporation appropriate
documentation that the person or persons exercising the Option (if other than
Optionee) have the right to exercise the Option.

                        (iv) Execute and deliver to the Corporation such written
representations as may be requested by the Corporation in order for it to comply
with the applicable requirements of federal and state securities laws.

                        (v) Make appropriate arrangements with the Corporation
(or Parent or Subsidiary employing or retaining Optionee) for the satisfaction
of all federal, state and local income and employment tax withholding
requirements applicable to the Option exercise.

                  (b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising the Option) a certificate for the purchased Option Shares.

                  (c) In no event may the Option be exercised for any fractional
shares.

<PAGE>

            10. LOCK-UP. Optionee agrees that prior to the one-year anniversary
of the commencement of his employment with the Corporation (or any earlier date
upon which Optionee's Service ceases by reason of an Involuntary Termination),
he will not sell, make any short sale of, hedge, loan, hypothecate, pledge,
grant any option for the purchase of, or otherwise dispose of or transfer for
value or otherwise agree to engage in any of the foregoing transactions with
respect to the Option Shares without the written consent of the Corporation's
Board.

            11. COMPLIANCE WITH LAWS AND REGULATIONS.

                  (a) The exercise of the Option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange (or the Nasdaq Stock Market or
other national market, if applicable, or the Over-The-Counter Bulletin Board) on
which the Common Stock may be listed for trading at the time of such exercise
and issuance. The Corporation and Optionee shall use reasonable efforts to
comply with all such requirements of law and applicable regulations.

                  (b) The inability of the Corporation to obtain approval from
any regulatory body having authority deemed by the Corporation to be necessary
to the lawful issuance and sale of any Common Stock pursuant to the Option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such
approvals.

            12. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided
in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Corporation and its successors and assigns
and Optionee, Optionee's assigns and the legal representatives, heirs and
legatees of Optionee's estate.

            13. GOVERNING LAW. The interpretation, performance and enforcement
of this Agreement shall be governed by the laws of the State of California
without resort to that State's conflict-of-laws rules.

            14. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.

            15. REGISTRATION RIGHTS. The Corporation shall file a registration
statement on S-8 relating to the Option Shares and shall file any and all
amendments to such registration statement in order that the Optionee may sell or
otherwise transfer the Option Shares upon exercise to the fullest extent
permitted under applicable federal and state securities laws.

<PAGE>

                                    EXHIBIT 1

                               NOTICE OF EXERCISE

         I hereby notify ARTISTdirect, Inc. (the "Corporation") that I elect to
purchase ______________ shares of the Corporation's Common Stock (the "Purchased
Shares") at the option exercise price of $_____________________________ per
share (the "Exercise Price") pursuant to that certain option (the "Option")
granted to me on ________________________________, 20_____.

         Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure or cashless exercise procedure specified in my agreement to
effect payment of the Exercise Price.

____________________, 20_____
Date

                                                   -----------------------------
                                                   Optionee


                                                   Address:

                                                   -----------------------------

                                                   -----------------------------

                                                   -----------------------------


Print name in exact manner it is to
appear on the stock certificate:
                                  ---------------------------------
Address to which certificate is to be
sent, if different from address above:
                                       ---------------------------------

                                       ---------------------------------

Social Security Number:
                        ---------------------
Employee Number:
                 ---------------------

<PAGE>

                                    APPENDIX

         The following definitions shall be in effect under the Agreement:

         A. AGREEMENT shall mean this Stock Option Agreement.

         B. BOARD shall mean the Corporation's Board of Directors.

         C. CAUSE shall mean Optionee is terminated because Optionee shall have
(i) been convicted of, or pleaded nolo contendere to, any felony or lesser crime
involving fraud, embezzlement or misappropriation of the property of the
Corporation or any of its Subsidiaries; (ii) engaged in gross negligence or
willful misconduct in the performance of Optionee's duties hereunder that has
resulted in material injury to the Corporation; (iii) materially and willfully
breached any material provision hereof; or (iv) misappropriated for his own
purpose and benefit any material property of Corporation or any Subsidiary or
misappropriated for his own purpose and benefit, in violation of his fiduciary
obligation to the Corporation, any material opportunity of the Corporation or
any Subsidiary. Notwithstanding anything to the contrary contained herein, none
of the events or circumstances described in clauses (ii), (iii) or (iv) above
shall constitute "Cause" for purposes of this Agreement unless the Corporation
gives Optionee written notice delineating the claimed event or circumstance and
setting forth the Corporation's intention to terminate Optionee's employment if
such claimed event or circumstance is not capable of remedy or is not duly
remedied within thirty (30) days following such notice, if capable of remedy,
and Optionee fails to remedy such event or circumstance within such thirty
(30)-day period.

         D. CODE shall mean the Internal Revenue Code of 1986, as amended.

         E. COMMON STOCK shall mean the Corporation's common stock.

         F. CORPORATE TRANSACTION shall mean any of the following transactions
effecting a change in control or ownership of the Corporation:

            (i) a stockholder-approved merger or consolidation in which the
Corporation is merged into or consolidated with any other corporation or entity
and immediately following consummation of the transaction the persons who held
the Corporation's capital stock immediately prior to such transaction hold less
than an aggregate of fifty percent (50%) of the total combined voting power of
the surviving entity's outstanding securities, or

            (ii) a stockholder-approved sale, transfer or other disposition of
all or substantially all of the Corporation's assets, or

            (iii) the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that directly
or indirectly controls, is controlled by, or is under common control with, the
Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended) of securities possessing more than
fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly to
the Corporation's stockholders.

<PAGE>

         G. CORPORATION shall mean ARTISTdirect, Inc., a Delaware corporation.

         H. EMPLOYEE shall mean the Optionee in his capacity as an employee of
the Corporation (or any Parent or Subsidiary), subject to the control and
direction of the employer entity as to both the work to be performed and the
manner and method of performance.

         I. EXERCISE DATE shall mean the date on which the Option shall have
been exercised in accordance with Paragraph 9 of the Agreement.

         J. EXERCISE PRICE shall mean the exercise price per share as specified
in the Grant Notice.

         K. EXPIRATION DATE shall mean the date on which the Option expires as
specified in the Grant Notice.

         L. FAIR MARKET VALUE per share of Common Stock on any relevant date,
for purposes of Paragraph 9 only, shall be determined in accordance with the
following provisions:

            (i) If the Common Stock is at the time traded on the Nasdaq National
or SmallCap Markets, then the Fair Market Value shall be the average of the high
and low selling prices per share of Common Stock on the date in question, as
such prices are reported by the National Association of Securities Dealers on
the Nasdaq National or SmallCap Markets (or, if not listed on such market, any
other national market) and published in The Wall Street Journal. If there are no
selling prices quoted for the Common Stock on the date in question, then the
Fair Market Value shall be the average of the high and low selling prices on the
last preceding date for which such quotations exist.

            (ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the average high and low selling
prices per share of Common Stock on the date in question on the Stock Exchange
determined by the Compensation Committee to be the primary market for the Common
Stock, as such prices are officially quoted in the composite tape of
transactions on such exchange and published in The Wall Street Journal. If there
are no selling prices quoted for the Common Stock on the date in question, then
the Fair Market Value shall be the average of the high and low selling prices on
the last preceding date for which such quotations exist.

            (iii) If the Common Stock is at the time traded on the
over-the-counter market, then the Fair Market Value shall be the average of the
closing bid prices over the 30-day period prior to the date in question, as such
prices are reported on the Over The Counter Bulletin Board.

            (iv) If the Common Stock is not at the time traded on the
over-the-counter market, a Stock Exchange or the Nasdaq National or SmallCap
Markets, then the Fair Market Value shall be as determined in good faith by the
Corporation's Board of Directors.

<PAGE>

         M. GOOD REASON shall mean the occurrence of any of the following: (i) a
material and substantial reduction in Optionee's title, responsibilities or
duties (including, but not limited to, any such reduction following a change in
control of the Corporation); (ii) a reassignment of Optionee to a geographic
location in excess of thirty-five (35) miles from the Corporation's current
principal offices; or (iii) a material breach by the Corporation of any of its
obligations to Optionee hereunder, including, but not limited to, the
Corporation's failure to timely make any payment due to Optionee hereunder.
Notwithstanding anything to the contrary contained herein, none of the foregoing
events or circumstances shall constitute "Good Reason" for purposes of this
Agreement unless Optionee gives the Corporation written notice delineating the
claimed event or circumstance and setting forth Optionee's intention to
terminate his employment if such claimed event or circumstance is not capable of
remedy or is not duly remedied within a reasonable period following such notice
(not to exceed thirty (30) days), if capable of remedy, and the Corporation
fails to remedy such event or circumstance within such reasonable period.

         N. GRANT DATE shall mean the date of grant of the Option as specified
in the Grant Notice.

         O. GRANT NOTICE shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the Option evidenced hereby.

         P. INVOLUNTARY TERMINATION shall mean the termination of Optionee's
Service by reason of:

            (i) Optionee's involuntary dismissal or discharge by the Corporation
for reasons other than (X) for Cause or (Y) by reason of death or Permanent
Disability, or

            (ii) Optionee's voluntary resignation for Good Reason.

         Q. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.

         R. NOTICE OF EXERCISE shall mean the written notice of exercise in the
form attached hereto as Exhibit 1.

         S. OPTION SHARES shall mean the number of shares of Common Stock
subject to the Option as specified in the Grant Notice.

         T. OPTIONEE shall mean the person to whom the Option is granted as
specified in the Grant Notice.

         U. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

<PAGE>

         V. PERMANENT DISABILITY shall mean the inability of Optionee to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or has lasted
or can be expected to last for a continuous period of twelve (12) months or
more.

         W. SERVICE shall mean the Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or an independent consultant.

         X. STOCK EXCHANGE shall mean the American Stock Exchange or the New
York Stock Exchange.

         Y. SUBSIDIARY shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.

<PAGE>

                                    EXHIBIT B

                            STOCK PURCHASE AGREEMENT


                               ARTISTDIRECT, INC.

                            STOCK PURCHASE AGREEMENT

         AGREEMENT made this _____ day of ___________________, _____ by and
between ARTISTdirect, Inc., a Delaware corporation, and Robert Weingarten,
Optionee.

         All capitalized terms in this Agreement shall have the meaning assigned
to them in this Agreement or in the attached Appendix.

         A. EXERCISE OF OPTION

            1. EXERCISE. Optionee hereby purchases from the Corporation, and the
Corporation hereby sells to Optionee ____________ shares of Common Stock (the
"Purchased Shares") pursuant to that certain option (the "Option") granted
Optionee on March 29, 2003 (the "Grant Date") to purchase up to 120,000 shares
of Common Stock (the "Option Shares") at the exercise price of $0.50 per share
(the "Exercise Price").

            2. PAYMENT. Concurrently with the delivery of this Agreement to the
Corporation, Optionee shall pay the aggregate Exercise Price for the Purchased
Shares in accordance with the provisions of the Option Agreement and shall
deliver whatever additional documents may be required by the Option Agreement as
a condition for exercise.

            3. STOCKHOLDER RIGHTS. Until such time as the Corporation exercises
the Repurchase Right with respect to any Purchased Shares, Optionee (or any
successor in interest) shall have all the rights of a stockholder (including
voting, dividend and liquidation rights) with respect to those Purchased Shares,
subject, however, to the transfer restrictions of Articles B and C below.

         B. SECURITIES LAW COMPLIANCE

            1. RESTRICTED SECURITIES. While the Purchased Shares have been
registered under the 1933 Act, Optionee hereby confirms that Optionee has been
informed that the Purchased Shares are control securities under the 1933 Act
because Optionee is an affiliate of the Corporation and accordingly, the
Purchased Shares may not be resold or transferred except in compliance with the
federal securities laws.

            2. RESTRICTIONS ON DISPOSITION OF PURCHASED SHARES. Optionee shall
make no disposition of the Purchased Shares (other than a Permitted Transfer)
unless and until Optionee shall have complied with all requirements of this
Agreement applicable to the disposition of the Purchased Shares.

<PAGE>

         The Corporation shall not be required (i) to transfer on its books any
Purchased Shares which have been sold or transferred in violation of the
provisions of this Agreement or (ii) to treat as the owner of the Purchased
Shares, or otherwise to accord voting, dividend or liquidation rights to, any
transferee to whom the Purchased Shares have been transferred in contravention
of this Agreement.

         3. RESTRICTIVE LEGENDS. The stock certificates for the Purchased Shares
shall be endorsed with one or more of the following restrictive legends (to the
extent applicable):

         (a) "The shares represented by this certificate are "control"
securities under the Securities Act of 1933 because the holder is an affiliate
of the Corporation. The shares may not be sold or offered for sale in the
absence of satisfactory assurances to the Corporation that such sale or offer
complies with all applicable federal and state securities laws."

         (b) "The shares represented by this certificate are subject to certain
repurchase rights and other restrictions on transfer granted to the Corporation
and accordingly may not be sold, assigned, transferred, encumbered, or in any
manner disposed of except in conformity with the terms of a written agreement
dated ____________, 20____ between the Corporation and the registered holder of
the shares (or the predecessor in interest to the shares). A copy of such
agreement is maintained at the Corporation's principal corporate offices."

Upon request by Optionee, the Corporation agrees to remove the legends above, in
each case, when the applicable restrictions or repurchase rights have lapsed and
are no longer applicable.

         C. TRANSFER RESTRICTIONS

            1. RESTRICTION ON TRANSFER. Except for any Permitted Transfer,
Optionee shall not transfer, assign, encumber or otherwise dispose of any of the
Purchased Shares which are subject to the Repurchase Right.

            2. TRANSFEREE OBLIGATIONS. Each person (other than the Corporation)
to whom the Purchased Shares are transferred by means of a Permitted Transfer
must, as a condition precedent to the validity of such transfer, acknowledge in
writing to the Corporation that such person is bound by the provisions of this
Agreement and that the transferred shares are subject to the Repurchase Right to
the same extent such shares would be so subject if retained by Optionee.

            3. LOCK-UP. Optionee agrees that prior to the one-year anniversary
of the commencement of his employment with the Corporation (or any earlier date
upon which Optionee's Service ceases by reason of an Involuntary Termination),
he will not sell, make any short sale of, hedge, loan, hypothecate, pledge,
grant any option for the purchase of, or otherwise dispose of or transfer for
value or otherwise agree to engage in any of the foregoing transactions with
respect to the Purchased Shares without the written consent of the Corporation's
Board.

<PAGE>

      D. REPURCHASE RIGHT

            1. GRANT. The Corporation is hereby granted the right (the
"Repurchase Right"), exercisable at any time during the sixty (60)-day period
following the date Optionee ceases for any reason to remain in Service or (if
later) during the sixty (60)-day period following the execution date of this
Agreement, to repurchase at the Exercise Price any or all of the Purchased
Shares in which Optionee is not, at the time of his cessation of Service, vested
in accordance with the Vesting Schedule applicable to those shares or the
special vesting acceleration provisions of Paragraph D.6 of this Agreement (such
shares to be hereinafter referred to as the "Unvested Shares").

            2. EXERCISE OF THE REPURCHASE RIGHT. The Repurchase Right shall be
exercisable by written notice delivered to each Owner of the Unvested Shares
prior to the expiration of the sixty (60)-day exercise period. The notice shall
indicate the number of Unvested Shares to be repurchased and the date on which
the repurchase is to be effected, such date to be not more than thirty (30) days
after the date of such notice. The stock certificates representing the Unvested
Shares to be repurchased shall be delivered to the Corporation on the closing
date specified for the repurchase. Concurrently with the receipt of such stock
certificates, the Corporation shall pay to Owner, in cash, an amount equal to
the Exercise Price previously paid for the Unvested Shares which are to be
repurchased from Owner. Notwithstanding the foregoing, in the event such stock
certificates are not delivered to the Corporation at the time the Exercise Price
is so paid, such Unvested Shares shall nonetheless be deemed cancelled as of the
time of such payment and the Corporation may take such action as is necessary,
including the imposition of stop transfer orders, with respect to such Unvested
Shares. The Corporation's right to exercise the Repurchase Right shall be
conditioned on the Corporation having taken all corporate action required to be
taken to exempt such repurchase from the provisions of Section 16(b) of the
Securities Exchange Act of 1934, as amended, pursuant to Rule 16b-3(e), or
successor rule, thereunder, and providing the Owner with satisfactory written
evidence thereof with its notice of exercise.

            3. TERMINATION OF THE REPURCHASE RIGHT. The Repurchase Right shall
terminate with respect to any Unvested Shares for which it is not timely
exercised under Paragraph D.2. In addition, the Repurchase Right shall terminate
and cease to be exercisable with respect to any and all Purchased Shares in
which Optionee vests in accordance with the Vesting Schedule or the special
acceleration provisions of Paragraph D.6 of this Agreement. All Purchased Shares
as to which the Repurchase Right lapses shall, however, remain subject to any
Lock-up restrictions set forth in Paragraph C.3 hereof.

            4. AGGREGATE VESTING LIMITATION. If the Option is exercised in more
than one increment so that Optionee is a party to one or more other Stock
Purchase Agreements (the "Prior Purchase Agreements") which are executed prior
to the date of this Agreement, then the total number of Purchased Shares as to
which Optionee shall be deemed to have a fully-vested interest under this
Agreement and all Prior Purchase Agreements shall not exceed in the aggregate
the number of Purchased Shares in which Optionee would otherwise at the time be
vested, in accordance with the Vesting Schedule or the special vesting
acceleration provisions of Paragraph D.6 of this Agreement, had all the
Purchased Shares (including those acquired under the Prior Purchase Agreements)
been acquired exclusively under this Agreement.

<PAGE>

            5. RECAPITALIZATION. Any new, substituted or additional securities
or other property (including cash paid other than as a regular cash dividend)
which is by reason of any Recapitalization distributed with respect to any of
the Purchased Shares shall be immediately subject to the Repurchase Right, but
only to the extent those Purchased Shares are at the time covered by such right.
Appropriate adjustments to reflect such distribution shall be made to the number
and/or class of Purchased Shares subject to this Agreement and to the price per
share to be paid upon the exercise of the Repurchase Right in order to reflect
the effect of any such Recapitalization upon the Corporation's capital
structure; provided, however, that the aggregate purchase price shall remain the
same.

            6. SPECIAL VESTING ACCELERATION.

            (a) If Optionee ceases Service by reason of any Involuntary
Termination, Optionee thereupon shall be deemed to be fully vested in all of the
Purchased Shares (and none of the Purchased Shares shall be subject to the
Repurchase Right).

            (b) If the Repurchase Right is NOT assigned to a surviving or
successor entity (or its parent) and is NOT otherwise continued in full force
and effect pursuant to the terms of a Corporate Transaction, then the Repurchase
Right shall terminate automatically in its entirety, and all the Purchased
Shares shall vest in full, immediately prior to the consummation of such
Corporate Transaction.

      E. SPECIAL TAX ELECTION

            The acquisition of the Purchased Shares may result in adverse tax
consequences which may be avoided or mitigated by filing an election under Code
Section 83(b). Such election must be filed within thirty (30) days after the
date of this Agreement. A description of the tax consequences applicable to the
acquisition of the Purchased Shares and the form for making the Code Section
83(b) election are set forth in Exhibit I. OPTIONEE SHOULD CONSULT WITH HIS TAX
ADVISOR TO DETERMINE THE TAX CONSEQUENCES OF ACQUIRING THE PURCHASED SHARES AND
THE ADVANTAGES AND DISADVANTAGES OF FILING THE CODE SECTION 83(b) ELECTION.
OPTIONEE ACKNOWLEDGES THAT IT IS OPTIONEE'S SOLE RESPONSIBILITY, AND NOT THE
CORPORATION'S, TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(b), EVEN IF
OPTIONEE REQUESTS THE CORPORATION OR ITS REPRESENTATIVES TO MAKE THIS FILING ON
HIS BEHALF.

      F. GENERAL PROVISIONS

            1. ASSIGNMENT. The Corporation may assign the Repurchase Right
(subject to its terms) to any person or entity selected by the Board, including
(without limitation) one or more stockholders of the Corporation.

            2. NOTICES. Any notice required to be given under this Agreement
shall be in writing and shall be deemed effective upon personal delivery, one
business day after being delivered to a reputable overnight courier service, or
upon deposit in the U.S. mail, registered or certified, postage prepaid and
properly addressed to the party entitled to such notice at the address indicated
below

<PAGE>

such party's signature line on this Agreement or at such other address as such
party may designate by ten (10) days advance written notice under this paragraph
to all other parties to this Agreement.

            3. NO WAIVER. The failure of the Corporation in any instance to
exercise the Repurchase Right shall not constitute a waiver of any other
repurchase rights that may subsequently arise under the provisions of this
Agreement or any other agreement between the Corporation and Optionee. No waiver
of any breach or condition of this Agreement shall be deemed to be a waiver of
any other or subsequent breach or condition, whether of like or different
nature.

            4. CANCELLATION OF SHARES. If the Corporation shall make available,
at the time and place and in the amount and form provided in this Agreement, the
consideration for the Purchased Shares to be repurchased in accordance with the
provisions of this Agreement, then from and after such time, the person from
whom such shares are to be repurchased shall no longer have any rights as a
holder of such shares (other than the right to receive payment of such
consideration in accordance with this Agreement). Such shares shall be deemed
purchased in accordance with the applicable provisions hereof, and the
Corporation shall be deemed the owner and holder of such shares, whether or not
the certificates therefor have been delivered as required by this Agreement.

      G. MISCELLANEOUS PROVISIONS

            1. OPTIONEE UNDERTAKING. Optionee hereby agrees to take whatever
additional action and execute whatever additional documents the Corporation may
deem necessary or advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on either Optionee or the Purchased Shares
pursuant to the provisions of this Agreement.

            2. AGREEMENT IS ENTIRE CONTRACT. This Agreement constitutes the
entire contract between the parties hereto with regard to the subject matter
hereof.

            3. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of California without resort to that
State's conflict-of-laws rules.

            4. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.

            5. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
inure to the benefit of, and be binding upon, the Corporation and its successors
and assigns and upon Optionee, Optionee's permitted assigns and the legal
representatives, heirs and legatees of Optionee's estate, whether or not any
such person shall have become a party to this Agreement and have agreed in
writing to join herein and be bound by the terms hereof.

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Stock Purchase
Agreement on the day and year first indicated above.

                                      ARTISTDIRECT, INC.

                                      By:
                                          --------------------------------------
                                      Title:
                                             -----------------------------------


                                      Address:

                                      ------------------------------------------

                                      ------------------------------------------

                                      ------------------------------------------


                                      By:
                                          --------------------------------------
                                      Optionee:  Robert N. Weingarten

                                      Address:

                                      ------------------------------------------

                                      ------------------------------------------

                                      ------------------------------------------

<PAGE>

                             SPOUSAL ACKNOWLEDGMENT

         The undersigned spouse of Optionee has read and hereby approves the
foregoing Stock Purchase Agreement. In consideration of the Corporation's
granting Optionee the right to acquire the Purchased Shares in accordance with
the terms of such Agreement, the undersigned hereby agrees to be irrevocably
bound by all the terms of such Agreement, including (without limitation) the
right of the Corporation (or its assigns) to purchase any Purchased Shares in
which Optionee is not vested at time of his cessation of Service.

                                                 OPTIONEE'S SPOUSE

                                      By:
                                          --------------------------------------
                                      Name:
                                            ------------------------------------

                                               Address:

                                               ---------------------------------

                                               ---------------------------------

                                               ---------------------------------

<PAGE>



                                    EXHIBIT I

                       FEDERAL INCOME TAX CONSEQUENCES AND
                           SECTION 83(b) TAX ELECTION

            FEDERAL INCOME TAX CONSEQUENCES AND SECTION 83(b) ELECTION FOR
EXERCISE OF NON-STATUTORY OPTION. If the Purchased Shares are acquired pursuant
to the exercise of a Non-Statutory Option, as specified in the Grant Notice,
then under Code Section 83, the excess of the fair market value of the Purchased
Shares on the date any forfeiture restrictions applicable to such shares lapse
over the Exercise Price paid for those shares will be reportable as ordinary
income on the lapse date. For this purpose, the term "forfeiture restrictions"
includes the right of the Corporation to repurchase the Purchased Shares
pursuant to the Repurchase Right. However, Optionee may elect under Code Section
83(b) to be taxed at the time the Purchased Shares are acquired, rather than
when and as such Purchased Shares cease to be subject to such forfeiture
restrictions. Such election must be filed with the Internal Revenue Service
within thirty (30) days after the date of the Agreement. Even if the fair market
value of the Purchased Shares on the date of the Agreement equals the Exercise
Price paid (and thus no tax is payable), the election must be made to avoid
adverse tax consequences in the future. The form for making this election is
attached as part of this exhibit. FAILURE TO MAKE THIS FILING WITHIN THE
APPLICABLE THIRTY (30)-DAY PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY
INCOME BY OPTIONEE AS THE FORFEITURE RESTRICTIONS LAPSE.

<PAGE>



                             SECTION 83(b) ELECTION

         This statement is being made under Section 83(b) of the Internal
Revenue Code, pursuant to Treas. Reg. Section 1.83-2.

      The taxpayer who performed the services is:

      Name:
      Address:
      Taxpayer Ident. No.:

      The property with respect to which the election is being made is
_____________ shares of the common stock of ARTISTdirect, Inc.

      The property was issued on ______________, _____.

      The taxable year in which the election is being made is the calendar year
_____.

      The property is subject to a repurchase right pursuant to which the issuer
has the right to acquire the property at the original purchase price if for any
reason taxpayer's service with the issuer terminates. The issuer's repurchase
right will lapse in a series of annual installments over a three (3)-year period
ending on ___________, 200__.

      The fair market value at the time of transfer (determined without regard
to any restriction other than a restriction which by its terms will never lapse)
is $__________per share.

      The amount paid for such property is $___________ per share.

      A copy of this statement was furnished to ARTISTdirect, Inc. for whom
taxpayer rendered the services underlying the transfer of property.

      This statement is executed on _________________, ______.



-------------------------------------    ---------------------------------------
Spouse (if any)                          Taxpayer

This election must be filed with the Internal Revenue Service Center with which
taxpayer files his or her federal income tax returns and must be made within
thirty (30) days after the execution date of the Stock Purchase Agreement. This
filing should be made by registered or certified mail, return receipt requested.
Optionee must retain two (2) copies of the completed form for filing with his or
her federal and state tax returns for the current tax year and an additional
copy for his or her records.

<PAGE>

                                    APPENDIX

      The following definitions shall be in effect under the Agreement:

      A. AGREEMENT shall mean this Stock Purchase Agreement.

      B. BOARD shall mean the Corporation's Board of Directors.

      C. CAUSE shall mean Optionee is terminated because Optionee shall have (i)
been convicted of, or pleaded nolo contendere to, any felony or lesser crime
involving fraud, embezzlement or misappropriation of the property of the
Corporation or any of its Subsidiaries; (ii) engaged in gross negligence or
willful misconduct in the performance of Optionee's duties hereunder that has
resulted in material injury to the Corporation; (iii) materially and willfully
breached any material provision hereof; or (iv) misappropriated for his own
purpose and benefit any material property of Corporation or any Subsidiary or
misappropriated for his own purpose and benefit, in violation of his fiduciary
obligation to the Corporation, any material opportunity of the Corporation or
any Subsidiary. Notwithstanding anything to the contrary contained herein, none
of the events or circumstances described in clauses (ii), (iii) or (iv) above
shall constitute "Cause" for purposes of this Agreement unless the Corporation
gives Optionee written notice delineating the claimed event or circumstance and
setting forth the Corporation's intention to terminate Optionee's employment if
such claimed event or circumstance is not capable of remedy or is not duly
remedied within thirty (30) days following such notice, if capable of remedy,
and Optionee fails to remedy such event or circumstance within such thirty
(30)-day period.

      D. CODE shall mean the Internal Revenue Code of 1986, as amended.

      E. COMMON STOCK shall mean the Corporation's common stock.

      F. CORPORATE TRANSACTION shall mean any of the following transactions
effecting a change in control or ownership of the Corporation:

            (i) a stockholder-approved merger or consolidation in which the
Corporation is merged into or consolidated with any other corporation or entity
and immediately following consummation of the transaction the persons who held
the Corporation's capital stock immediately prior to such transaction hold less
than an aggregate of fifty percent (50%) of the total combined voting power of
the surviving entity's outstanding securities, or

            (ii) a stockholder-approved sale, transfer or other disposition of
all or substantially all of the Corporation's assets, or

            (iii) the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that directly
or indirectly controls, is controlled by, or is under common control with, the
Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended) of securities possessing more than
fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly to
the Corporation's stockholders.

<PAGE>

      G. CORPORATION shall mean ARTISTdirect, Inc., a Delaware corporation, and
any surviving or successor entity to all or substantially all of the assets or
voting stock of ARTISTdirect, Inc.

      H. EMPLOYEE shall mean the Optionee in his capacity as an employee of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.

      J. EXERCISE PRICE shall have the meaning assigned to such term in
Paragraph A.1.

      K. GOOD REASON shall mean the occurrence of any of the following: (i) a
material and substantial reduction in Optionee's title, responsibilities or
duties (including, but not limited to, any such reduction following a change in
control of the Corporation); (ii) a reassignment of Optionee to a geographic
location in excess of thirty-five (35) miles from the Corporation's current
principal offices; or (iii) a material breach by the Corporation of any of its
obligations to Optionee hereunder, including, but not limited to, the
Corporation's failure to timely make any payment due to Optionee hereunder.
Notwithstanding anything to the contrary contained herein, none of the foregoing
events or circumstances shall constitute "Good Reason" for purposes of this
Agreement unless Optionee gives the Corporation written notice delineating the
claimed event or circumstance and setting forth Optionee's intention to
terminate his employment if such claimed event or circumstance is not capable of
remedy or is not duly remedied within a reasonable period following such notice
(not to exceed thirty (30) days), if capable of remedy, and the Corporation
fails to remedy such event or circumstance within such reasonable period.

      L. GRANT DATE shall have the meaning assigned to such term in Paragraph
A.1.

      M. GRANT NOTICE shall mean the Notice of Grant of Stock Option pursuant to
which Optionee has been informed of the basic terms of the Option.

      N. INVOLUNTARY TERMINATION shall mean the termination of Optionee's
Service by reason of:

            (i) Optionee's involuntary dismissal or discharge by the Corporation
for reasons other than (X) for Cause or (Y) by reason of death or Permanent
Disability, or

            (ii) Optionee's voluntary resignation for Good Reason.

      O. 1933 ACT shall mean the Securities Act of 1933, as amended.

      P. NON-STATUTORY OPTION shall mean an option not intended to satisfy the
requirements of Code Section 422.

      Q. OPTION shall have the meaning assigned to such term in Paragraph A.1.

      R. OPTION AGREEMENT shall mean all agreements and other documents
evidencing the Option.

<PAGE>

      S. OPTIONEE shall mean the person to whom the Option is granted.

      T. OWNER shall mean Optionee and all subsequent holders of the Purchased
Shares who derive their chain of ownership through a Permitted Transfer from
Optionee.

      U. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

      V. PERMANENT DISABILITY shall mean the inability of Optionee to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or has lasted
or can be expected to last for a continuous period of twelve (12) months or
more.

      W. PERMITTED TRANSFER shall mean (i) a gratuitous transfer of the
Purchased Shares, provided and only if Optionee obtains the Corporation's prior
written consent to such transfer, (ii) a transfer of title to the Purchased
Shares effected pursuant to Optionee's will or the laws of inheritance following
Optionee's death, (iii) a transfer to the Corporation in pledge as security for
any purchase-money indebtedness incurred by Optionee in connection with the
acquisition of the Purchased Shares, or (iv) a transfer of the Purchased Shares
to a trust for the sole benefit of Optionee or his immediately family.

      X. PRIOR PURCHASE AGREEMENT shall have the meaning assigned to such term
in Paragraph D.4.

      Y. PURCHASED SHARES shall have the meaning assigned to such term in
Paragraph A.1.

      Z. RECAPITALIZATION shall mean any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the Corporation's outstanding Common Stock as a class without the
Corporation's receipt of consideration.

      AA. REPURCHASE RIGHT shall mean the right granted to the Corporation in
accordance with Article D.

      BB. SERVICE shall mean the Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or an independent consultant.

      CC. SUBSIDIARY shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

<PAGE>

      DD. VESTING SCHEDULE shall mean the vesting schedule specified in the
Grant Notice pursuant to which the Optionee is to vest in the Option Shares in a
series of installments over his period of Service; provided, the Option Shares
are subject to accelerated vesting pursuant to Section D.6 of the Agreement.

      EE. UNVESTED SHARES shall have the meaning assigned to such term in
Paragraph D.1.