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                                                                     EXHIBIT 4.5

                                [FORM OF WARRANT]

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISEABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.

                               ARTISTDIRECT, INC.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.: ___________
Number of Shares of Common Stock:_____________
Date of Issuance: July 28, 2005 ("ISSUANCE DATE")

            ARTISTdirect, Inc., a Delaware corporation (the "COMPANY"), hereby
certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, [DKR Soundshore Oasis Holding Fund Ltd.] [CCM
Master Qualified Fund Ltd.] [Randy Saaf] [Octavio Herrera] [Michael Rapp]
[Philip Wagenheim] [Karl Brenza] [Jeffrey Meshel] [Broadband Capital Management
LLC] [JLF Investors] [Longview Investors], the registered holder hereof or its
permitted assigns (the "HOLDER"), is entitled, subject to the terms set forth
below, to purchase from the Company, at the Exercise Price (as defined below)
then in effect, upon surrender of this Warrant to Purchase Common Stock
(including any Warrants to Purchase Common Stock issued in exchange, transfer or
replacement hereof, the "WARRANT"), at any time or times on or after the date
that the Company files the Certificate of Amendment to its Certificate of
Incorporation effecting the Share Increase (as defined in the Securities
Purchase Agreement (as defined below)) (the "INITIAL EXERCISABILITY DATE"), but
not after 11:59 p.m., New York Time, on the Expiration Date (as defined below),
______________(1) fully paid nonassessable shares of Common Stock (as defined
below) (the "WARRANT SHARES"). Except as

----------------------
(1) INSERT NUMBER OF SHARES EQUAL TO 8.25% OF (x) THE PRINCIPAL AMOUNT OF NOTES
ISSUED TO THE HOLDER PURSUANT TO THE SECURITIES PURCHASE AGREEMENT DIVIDED BY
(Y) THE CONVERSION PRICE (AS DEFINED IN THE SPA SECURITIES).

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otherwise defined herein, capitalized terms in this Warrant shall have the
meanings set forth in Section 16. This Warrant is one of the Warrants to
purchase Common Stock (the "SPA WARRANTS") issued pursuant to Section 1 of that
certain Securities Purchase Agreement, dated as of July 28, 2005 (the
"SUBSCRIPTION DATE"), by and among the Company and the investors (the "BUYERS")
referred to therein (the "SECURITIES PURCHASE AGREEMENT").

            1. EXERCISE OF WARRANT.

                  (a) Mechanics of Exercise. Subject to the terms and conditions
hereof (including, without limitation, the limitations set forth in Section
1(f)), this Warrant may be exercised by the Holder on any day on or after the
Initial Exercisability Date, in whole or in part, by (i) delivery of a written
notice, in the form attached hereto as Exhibit A (the "EXERCISE NOTICE"), of the
Holder's election to exercise this Warrant and (ii) (A) payment to the Company
of an amount equal to the applicable Exercise Price multiplied by the number of
Warrant Shares as to which this Warrant is being exercised (the "AGGREGATE
EXERCISE PRICE") in cash or wire transfer of immediately available funds or (B)
by notifying the Company that this Warrant is being exercised pursuant to a
Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required
to deliver the original Warrant in order to effect an exercise hereunder.
Execution and delivery of the Exercise Notice with respect to less than all of
the Warrant Shares shall have the same effect as cancellation of the original
Warrant and issuance of a new Warrant evidencing the right to purchase the
remaining number of Warrant Shares. On or before the first Business Day
following the date on which the Company has received each of the Exercise Notice
and the Aggregate Exercise Price (or notice of a Cashless Exercise) (the
"EXERCISE DELIVERY DOCUMENTS"), the Company shall transmit by facsimile an
acknowledgment of confirmation of receipt of the Exercise Delivery Documents to
the Holder and the Company's transfer agent (the "TRANSFER AGENT"). On or before
the third Business Day following the date on which the Company has received all
of the Exercise Delivery Documents (the "SHARE DELIVERY DATE"), the Company
shall (X) provided that the Transfer Agent is participating in The Depository
Trust Company ("DTC") Deposit Withdrawal Agent Commission Program ("DWAC"),
credit such aggregate number of shares of Common Stock to which the Holder is
entitled pursuant to such exercise to the Holder's or its designee's balance
account with DTC through DWAC, or (Y) if the Transfer Agent is not participating
in the DTC DWAC Program, issue and dispatch by overnight courier to the address
as specified in the Exercise Notice, a certificate, registered in the Company's
share register in the name of the Holder or its designee, for the number of
shares of Common Stock to which the Holder is entitled pursuant to such
exercise. Upon delivery of the Exercise Notice and Aggregate Exercise Price
referred to in clause (ii)(A) above or notification to the Company of a Cashless
Exercise referred to in Section 1(d), the Holder shall be deemed for all
corporate purposes to have become the holder of record of the Warrant Shares
with respect to which this Warrant has been exercised, irrespective of the date
of delivery of the certificates evidencing such Warrant Shares. If this Warrant
is submitted in connection with any exercise pursuant to this Section 1(a) and
the number of Warrant Shares represented by this Warrant submitted for exercise
is greater than the number of Warrant Shares being acquired upon an exercise,
then the Company shall as soon as practicable and in no event later than three
(3) Business Days after any exercise and at its own expense, issue a new Warrant
(in accordance with Section 7(d)) representing the right to purchase the number
of Warrant Shares purchasable immediately prior to such exercise under this
Warrant, less the number of Warrant Shares with respect to which this Warrant is
exercised. No fractional shares of

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Common Stock are to be issued upon the exercise of this Warrant, but rather the
number of shares of Common Stock to be issued shall be rounded up to the nearest
whole number. The Company shall pay any and all taxes which may be payable with
respect to the issuance and delivery of Warrant Shares upon exercise of this
Warrant.

                  (b) Exercise Price. For purposes of this Warrant, "EXERCISE
PRICE" means $1.55, subject to adjustment as provided herein.

                  (c) Company's Failure to Timely Deliver Securities. If the
Company shall fail for any reason or for no reason to issue to the Holder within
five (5) Business Days of receipt of the Exercise Delivery Documents, a
certificate for the number of shares of Common Stock to which the Holder is
entitled and register such shares of Common Stock on the Company's share
register or to credit the Holder's balance account with DTC for such number of
shares of Common Stock to which the Holder is entitled upon the Holder's
exercise of this Warrant, then, in addition to all other remedies available to
the Holder, the Company shall pay in cash to the Holder on each day after such
fifth (5th) Business Day that the issuance of such shares of Common Stock is not
timely effected an amount equal to 0.5% of the product of (A) the sum of the
number of shares of Common Stock not issued to the Holder on a timely basis and
to which the Holder is entitled and (B) the Closing Sale Price of the shares of
Common Stock on the trading day immediately preceding the last possible date
which the Company could have issued such shares of Common Stock to the Holder
without violating Section 1(a). In addition to the foregoing, if within three
(3) Trading Days after the Company's receipt of the facsimile copy of a Exercise
Notice, the Company shall fail to issue and deliver a certificate to the Holder
and register such shares of Common Stock on the Company's share register or
credit the Holder's balance account with DTC for the number of shares of Common
Stock to which the Holder is entitled upon such holder's exercise hereunder, and
if on or after such Trading Day the Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Holder of shares of Common Stock issuable upon such exercise that
the Holder anticipated receiving from the Company (a "BUY-IN"), then the Company
shall, within three (3) Business Days after the Holder's request and in the
Holder's discretion, either (i) pay cash to the Holder in an amount equal to the
Holder's total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased (the "BUY-IN PRICE"), at which point the
Company's obligation to deliver such certificate (and to issue such shares of
Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver
to the Holder a certificate or certificates representing such shares of Common
Stock and pay cash to the Holder in an amount equal to the excess (if any) of
the Buy-In Price over the product of (A) such number of shares of Common Stock,
times (B) the Closing Bid Price on the date of exercise.

                  (d) Cashless Exercise. Notwithstanding anything contained
herein to the contrary, if at any time after the earlier of the Effectiveness
Deadline or Effective Date, a Registration Statement (as defined in the
Registration Rights Agreement) covering the Warrant Shares that are the subject
of the Exercise Notice (the "UNAVAILABLE WARRANT SHARES") is not available for
the resale of such Unavailable Warrant Shares, the Holder may, in its sole
discretion, exercise this Warrant in whole or in part and, in lieu of making the
cash payment otherwise contemplated to be made to the Company upon such exercise
in payment of the Aggregate Exercise Price, elect instead to receive upon such
exercise the "Net Number" of shares of Common Stock determined according to the
following formula (a "CASHLESS EXERCISE"):

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                                   (A x B) - (A x C)
                      Net Number = -----------------
                                          B

                      For purposes of the foregoing formula:

            A= the total number of shares with respect to which this Warrant is
            then being exercised.

            B= the Closing Sale Price of the shares of Common Stock (as reported
            by Bloomberg) on the date immediately preceding the date of the
            Exercise Notice.

            C= the Exercise Price then in effect for the applicable Warrant
            Shares at the time of such exercise.

                  (e) Disputes. In the case of a dispute as to the determination
of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the Holder the number of Warrant Shares that are
not disputed and resolve such dispute in accordance with Section 13.

                  (f) [Limitations on Exercises.

                        (1) Beneficial Ownership Limitation. The Company shall
not effect the exercise of this Warrant pursuant to Section 1(d) or otherwise,
and the Holder shall not have the right to exercise this Warrant, to the extent
that after giving effect to such exercise, such Person (together with such
Person's affiliates) would beneficially own in excess of 4.99% [9.99% IN THE
CASE OF CCM AND JLF INVESTORS WARRANT] (the "MAXIMUM PERCENTAGE") of the shares
of Common Stock outstanding immediately after giving effect to such exercise.
For purposes of the foregoing sentence, the aggregate number of shares of Common
Stock beneficially owned by such Person and its affiliates shall include the
number of shares of Common Stock issuable upon exercise of this Warrant with
respect to which the determination of such sentence is being made, but shall
exclude shares of Common Stock which would be issuable upon (i) exercise of the
remaining, unexercised portion of this Warrant beneficially owned by such Person
and its affiliates and (ii) exercise or conversion of the unexercised or
unconverted portion of any other securities of the Company beneficially owned by
such Person and its affiliates (including, without limitation, any convertible
notes or convertible preferred stock or warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained herein. Except as
set forth in the preceding sentence, for purposes of this paragraph, beneficial
ownership shall be calculated in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended. For purposes of this Warrant, in determining
the number of outstanding shares of Common Stock, the Holder may rely on the
number of outstanding shares of Common Stock as reflected in (1) the Company's
most recent Form 10-KSB, Form 10-QSB, Current Report on Form 8-K or other public
filing with the Securities and Exchange Commission, as the case may be, (2) a
more recent public announcement by the Company or (3) any other notice by the
Company or the Transfer Agent setting forth the number of shares of Common Stock
outstanding. For any reason at any time, upon the written or oral request of the
Holder, the Company shall within two (2) Business Days confirm orally and in
writing to the Holder the number of shares of Common Stock then outstanding. In
any case, the number of

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outstanding shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company, including the SPA
Securities and the SPA Warrants, by the Holder and its affiliates since the date
as of which such number of outstanding shares of Common Stock was reported. [By
written notice to the Company, the Holder may increase or decrease the Maximum
Percentage to any other percentage specified in such notice; provided that (i)
any such increase will not be effective until the sixty-first (61st) day after
such notice is delivered to the Company, and (ii) any such increase or decrease
will apply only to the Holder and not to any other holder of SPA Warrants. [LAST
SENTENCE NOT TO BE INCLUDED IN BROADBAND WARRANTS]] [FOR OASIS, CCM, JLF AND
BROADBAND GROUP WARRANTS ONLY]

                        (2) Holder may not exercise any portion of this Warrant
until the Certificate of Amendment to the Company's Certificate of Incorporation
effecting the Share Increase has been filed with the Delaware Secretary of
State.

            2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The
Exercise Price and the number of Warrant Shares shall be adjusted from time to
time as follows:

                  (a) Adjustment upon Issuance of shares of Common Stock. If at
any time after the Subscription Date, the Company issues or sells, or in
accordance with this Section 2(a) is deemed to have issued or sold, any shares
of Common Stock (including the issuance or sale of shares of Common Stock owned
or held by or for the account of the Company, but excluding shares of Common
Stock deemed to have been issued or sold by the Company in connection with any
Excluded Security (as defined in the SPA Securities)) for a consideration per
share (the "NEW SECURITIES ISSUANCE PRICE") less than a price (the "APPLICABLE
PRICE") equal to $2.25 (but greater than the Exercise Price in effect
immediately prior to such issue or sale) (the foregoing a "DILUTIVE ISSUANCE"),
then immediately after such Dilutive Issuance, the Exercise Price then in effect
shall be reduced to an amount (rounded to the nearest cent) equal to the product
of (A) the Exercise Price in effect immediately prior to such Dilutive Issuance
and (B) the quotient determined by dividing (1) the sum of (I) the product
derived by multiplying the Exercise Price in effect immediately prior to such
Dilutive Issuance and the number of shares of Common Stock Deemed Outstanding
immediately prior to such Dilutive Issuance plus (II) the consideration, if any,
received by the Company upon such Dilutive Issuance, by (2) the product derived
by multiplying (I) the Conversion Price in effect immediately prior to such
Dilutive Issuance by (II) the number of shares of Common Stock Deemed
Outstanding immediately after such Dilutive Issuance. If and whenever prior to
the first anniversary of the Effective Date (as defined in the Registration
Rights Agreement), the Company issues or sells, or in accordance with this
Section 2 is deemed to have issued or sold, any shares of Common Stock
(including the issuance or sale of shares of Common Stock owned or held by or
for the account of the Company, but excluding shares of Common Stock deemed to
have been issued by the Company in connection with any Excluded Securities for a
New Issuance Price that is less than the Exercise Price in effect immediately
prior to such issue or sale or deemed issuance or sale, then immediately after
such issue or sale, the Exercise Price then in effect shall be reduced to an
amount equal to such New Securities Issuance Price. Upon each such adjustment of
the Exercise Price pursuant to the immediately preceding sentence, the number of
Warrant Shares shall be adjusted to the number of shares of Common Stock
determined by multiplying the Exercise Price

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in effect immediately prior to such adjustment by the number of Warrant Shares
acquirable upon exercise of this Warrant immediately prior to such adjustment
and dividing the product thereof by the Exercise Price resulting from such
adjustment. For purposes of determining the adjusted Exercise Price under this
Section 2(a), the following shall be applicable:

                  (i) Issuance of Options. If the Company in any manner grants
                  any Options and the lowest price per share for which one share
                  of Common Stock is issuable upon the exercise of any such
                  Option or upon conversion, exercise or exchange of any
                  Convertible Securities issuable upon exercise of any such
                  Option is less than the Applicable Price or the Exercise Price
                  in effect immediately prior to such issue or sale, then such
                  share of Common Stock shall be deemed to be outstanding and to
                  have been issued and sold by the Company at the time of the
                  granting or sale of such Option for such price per share. For
                  purposes of this Section 2(a)(i), the "lowest price per share
                  for which one share of Common Stock is issuable upon exercise
                  of such Options or upon conversion, exercise or exchange of
                  such Convertible Securities" shall be equal to the sum of the
                  lowest amounts of consideration (if any) received or
                  receivable by the Company with respect to any one share of
                  Common Stock upon the granting or sale of the Option, upon
                  exercise of the Option and upon conversion, exercise or
                  exchange of any Convertible Security issuable upon exercise of
                  such Option. No further adjustment of the Exercise Price or
                  number of Warrant Shares shall be made upon the actual
                  issuance of such shares of Common Stock or of such Convertible
                  Securities upon the exercise of such Options or upon the
                  actual issuance of such shares of Common Stock upon
                  conversion, exercise or exchange of such Convertible
                  Securities.

                  (ii) Issuance of Convertible Securities. If the Company in any
                  manner issues or sells any Convertible Securities and the
                  lowest price per share for which one share of Common Stock is
                  issuable upon the conversion, exercise or exchange thereof is
                  less than the Applicable Price or the Exercise Price in effect
                  immediately prior to such issue or sale, then such share of
                  Common Stock shall be deemed to be outstanding and to have
                  been issued and sold by the Company at the time of the
                  issuance or sale of such Convertible Securities for such price
                  per share. For the purposes of this Section 2(a)(ii), the
                  "lowest price per share for which one share of Common Stock is
                  issuable upon the conversion, exercise or exchange" shall be
                  equal to the sum of the lowest amounts of consideration (if
                  any) received or receivable by the Company with respect to one
                  share of Common Stock upon the issuance or sale of the
                  Convertible Security and upon conversion, exercise or exchange
                  of such Convertible Security. No further adjustment of the
                  Exercise Price or number of Warrant Shares shall be made upon
                  the actual issuance of such shares of Common Stock upon
                  conversion, exercise or exchange of such Convertible
                  Securities, and if any such issue or sale of such Convertible
                  Securities is made upon exercise of any Options for which
                  adjustment of this Warrant has been or

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                  is to be made pursuant to other provisions of this Section
                  2(a), no further adjustment of the Exercise Price or number of
                  Warrant Shares shall be made by reason of such issue or sale.

                  (iii) Change in Option Price or Rate of Conversion. If the
                  purchase price provided for in any Options, the additional
                  consideration, if any, payable upon the issue, conversion,
                  exercise or exchange of any Convertible Securities, or the
                  rate at which any Convertible Securities are convertible into
                  or exercisable or exchangeable for shares of Common Stock
                  increases or decreases at any time, the Exercise Price and the
                  number of Warrant Shares in effect at the time of such
                  increase or decrease shall be adjusted to the Exercise Price
                  and the number of Warrant Shares which would have been in
                  effect at such time had such Options or Convertible Securities
                  provided for such increased or decreased purchase price,
                  additional consideration or increased or decreased conversion
                  rate, as the case may be, at the time initially granted,
                  issued or sold. For purposes of this Section 2(a)(iii), if the
                  terms of any Option or Convertible Security that was
                  outstanding as of the date of issuance of this Warrant are
                  increased or decreased in the manner described in the
                  immediately preceding sentence, then such Option or
                  Convertible Security and the shares of Common Stock deemed
                  issuable upon exercise, conversion or exchange thereof shall
                  be deemed to have been issued as of the date of such increase
                  or decrease. No adjustment pursuant to this Section 2(a)(iii)
                  shall be made if such adjustment would result in an increase
                  of the Exercise Price then in effect or a decrease in the
                  number of Warrant Shares.

                  (iv) Calculation of Consideration Received. In case any Option
                  is issued in connection with the issue or sale of other
                  securities of the Company, together comprising one integrated
                  transaction in which no specific consideration is allocated to
                  such Options by the parties thereto, the Options will be
                  deemed to have been issued for a consideration of $0.01. If
                  any shares of Common Stock, Options or Convertible Securities
                  are issued or sold or deemed to have been issued or sold for
                  cash, the consideration received therefor will be deemed to be
                  the net amount received by the Company therefor. If any shares
                  of Common Stock, Options or Convertible Securities are issued
                  or sold for a consideration other than cash, the amount of
                  such consideration received by the Company will be the fair
                  value of such consideration, except where such consideration
                  consists of securities, in which case the amount of
                  consideration received by the Company will be the Closing Sale
                  Price of such security on the date of receipt. If any shares
                  of Common Stock, Options or Convertible Securities are issued
                  to the owners of the non-surviving entity in connection with
                  any merger in which the Company is the surviving entity, the
                  amount of consideration therefor will be deemed to be the fair
                  value of such portion of the net assets and business of the
                  non-surviving entity as is attributable to such shares of
                  Common Stock,

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                  Options or Convertible Securities, as the case may be. The
                  fair value of any consideration other than cash or securities
                  will be determined jointly by the Company and the Required
                  Holders. If such parties are unable to reach agreement within
                  ten (10) days after the occurrence of an event requiring
                  valuation (the "VALUATION EVENT"), the fair value of such
                  consideration will be determined within five (5) Business Days
                  after the tenth day following the Valuation Event by an
                  independent, reputable appraiser jointly selected by the
                  Company and the Required Holders. The determination of such
                  appraiser shall be final and binding upon all parties absent
                  manifest error and the fees and expenses of such appraiser
                  shall be borne by the Company.

                  (v) Record Date. If the Company takes a record of the holders
                  of shares of Common Stock for the purpose of entitling them
                  (A) to receive a dividend or other distribution payable in
                  shares of Common Stock, Options or in Convertible Securities
                  or (B) to subscribe for or purchase shares of Common Stock,
                  Options or Convertible Securities, then such record date will
                  be deemed to be the date of the issue or sale of the shares of
                  Common Stock deemed to have been issued or sold upon the
                  declaration of such dividend or the making of such other
                  distribution or the date of the granting of such right of
                  subscription or purchase, as the case may be.

                  (b) Adjustment upon Subdivision or Combination of Common
Stock. If the Company at any time on or after the Subscription Date subdivides
(by any stock split, stock dividend, recapitalization or otherwise) one or more
classes of its outstanding shares of Common Stock into a greater number of
shares, the Exercise Price in effect immediately prior to such subdivision will
be proportionately reduced and the number of Warrant Shares will be
proportionately increased. If the Company at any time on or after the
Subscription Date combines (by combination, reverse stock split or otherwise)
one or more classes of its outstanding shares of Common Stock into a smaller
number of shares, the Exercise Price in effect immediately prior to such
combination will be proportionately increased and the number of Warrant Shares
will be proportionately decreased. Any adjustment under this Section 2(b) shall
become effective at the close of business on the date the subdivision or
combination becomes effective.

                  (c) Other Events. If any event occurs of the type contemplated
by the provisions of this Section 2 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Company's Board of Directors will make an appropriate adjustment in the Exercise
Price and the number of Warrant Shares so as to protect the rights of the
Holder; provided that no such adjustment pursuant to this Section 2(c) will
increase the Exercise Price or decrease the number of Warrant Shares as
otherwise determined pursuant to this Section 2.

            3. RIGHTS UPON DISTRIBUTION OF ASSETS. If the Company shall declare
or make any dividend or other distribution of its assets (or rights to acquire
its assets) to holders of shares of Common Stock, by way of return of capital or
otherwise (including, without

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limitation, any distribution of cash, stock or other securities, property or
options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (a
"DISTRIBUTION"), at any time after the issuance of this Warrant, then, in each
such case:

                  (a) any Exercise Price in effect immediately prior to the
close of business on the record date fixed for the determination of holders of
shares of Common Stock entitled to receive the Distribution shall be reduced,
effective as of the close of business on such record date, to a price determined
by multiplying such Exercise Price by a fraction of which (i) the numerator
shall be the Closing Bid Price of the shares of Common Stock on the trading day
immediately preceding such record date minus the value of the Distribution (as
determined in good faith by the Company's Board of Directors) applicable to one
share of Common Stock, and (ii) the denominator shall be the Closing Bid Price
of the shares of Common Stock on the trading day immediately preceding such
record date; and

                  (b) the number of Warrant Shares shall be increased to a
number of shares equal to the number of shares of Common Stock obtainable
immediately prior to the close of business on the record date fixed for the
determination of holders of shares of Common Stock entitled to receive the
Distribution multiplied by the reciprocal of the fraction set forth in the
immediately preceding paragraph (a); provided that in the event that the
Distribution is of shares of Common Stock (or common equity) ("OTHER SHARES OF
COMMON EQUITY") of a company whose shares of common equity are traded on a
national securities exchange or a national automated quotation system, then the
Holder may elect to receive a warrant to purchase Other Shares of Common Equity
in lieu of an increase in the number of Warrant Shares, the terms of which shall
be identical to those of this Warrant, except that such warrant shall be
exercisable into the number of shares of Other Shares of Common Equity that
would have been payable to the Holder pursuant to the Distribution had the
Holder exercised this Warrant immediately prior to such record date and with an
aggregate exercise price equal to the product of the amount by which the
exercise price of this Warrant was decreased with respect to the Distribution
pursuant to the terms of the immediately preceding paragraph (a) and the number
of Warrant Shares calculated in accordance with the first part of this paragraph
(b).

            4. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

                  (a) Purchase Rights. In addition to any adjustments pursuant
to Section 2 above, if at any time the Company grants, issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any class of
shares of Common Stock (the "PURCHASE RIGHTS"), then the Holder will be entitled
to acquire or receive, upon the terms applicable to such Purchase Rights, the
aggregate Purchase Rights which the Holder could have acquired if the Holder had
held the number of shares of Common Stock acquirable upon complete exercise of
this Warrant (without regard to any limitations on the exercise of this Warrant)
immediately before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken, the date as of
which the record holders of shares of Common Stock are to be determined for the
grant, issue or sale of such Purchase Rights.

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                  (b) Fundamental Transactions. The Company shall not enter into
or be party to a Fundamental Transaction unless (i) the Successor Entity assumes
in writing all of the obligations of the Company under this Warrant and the
other Transaction Documents in accordance with the provisions of this Section
(4)(b) pursuant to written agreements in form and substance satisfactory to the
Required Holders and approved by the Required Holders prior to such Fundamental
Transaction, including agreements to deliver to each holder of Warrants in
exchange for such Warrants a security of the Successor Entity evidenced by a
written instrument substantially similar in form and substance to this Warrant,
including, without limitation, an adjusted exercise price equal to the value for
the shares of Common Stock reflected by the terms of such Fundamental
Transaction, and exercisable for a corresponding number of shares of capital
stock equivalent to the shares of Common Stock acquirable and receivable upon
exercise of this Warrant (without regard to any limitations on the exercise of
this Warrant) prior to such Fundamental Transaction, and satisfactory to the
Required Holders and (ii) the Successor Entity (including its Parent Entity) is
a publicly traded corporation whose common stock is quoted on or listed for
trading on an Eligible Market. Upon the occurrence of any Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so
that from and after the date of such Fundamental Transaction, the provisions of
this Warrant referring to the "Company" shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and shall assume
all of the obligations of the Company under this Warrant with the same effect as
if such Successor Entity had been named as the Company herein. Upon consummation
of the Fundamental Transaction, the Successor Entity shall deliver to the Holder
confirmation that there shall be issued upon exercise of this Warrant at any
time after the consummation of the Fundamental Transaction, in lieu of the
shares of the Common Stock (or other securities, cash, assets or other property)
purchasable upon the exercise of the Warrant prior to such Fundamental
Transaction, such shares of stock, securities, cash, assets or any other
property whatsoever (including warrants or other purchase or subscription
rights) which the Holder would have been entitled to receive upon the happening
of such Fundamental Transaction had this Warrant been converted immediately
prior to such Fundamental Transaction, as adjusted in accordance with the
provisions of this Warrant. In addition to and not in substitution for any other
rights hereunder, prior to the consummation of any Fundamental Transaction
pursuant to which holders of shares of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for shares of Common
Stock (a "CORPORATE EVENT"), the Company shall make appropriate provision to
insure that the Holder will thereafter have the right to receive upon an
exercise of this Warrant at any time after the consummation of the Fundamental
Transaction but prior to the Expiration Date, in lieu of the shares of the
Common Stock (or other securities, cash, assets or other property) purchasable
upon the exercise of the Warrant prior to such Fundamental Transaction, such
shares of stock, securities, cash, assets or any other property whatsoever
(including warrants or other purchase or subscription rights) which the Holder
would have been entitled to receive upon the happening of such Fundamental
Transaction had the Warrant been exercised immediately prior to such Fundamental
Transaction. Provision made pursuant to the preceding sentence shall be in a
form and substance reasonably satisfactory to the Required Holders. The
provisions of this Section shall apply similarly and equally to successive
Fundamental Transactions and Corporate Events and shall be applied without
regard to any limitations on the exercise of this Warrant.

                                     - 10 -
<PAGE>

            5. COMPANY'S RIGHT OF MANDATORY EXERCISE.

                  (a) Mandatory Exercise. If at any time following the Issuance
Date (i) a Mandatory Exercise Triggering Event occurs and (ii) on each day
during the period commencing on the Mandatory Exercise Notice Date and ending on
the Mandatory Exercise Date (each, as defined below), the Equity Conditions are
satisfied or waived in writing by the Holder, the Company shall have the right
to require the Holder to exercise all or any outstanding portion of this Warrant
as designated in the Mandatory Exercise Notice (the "MANDATORY EXERCISE AMOUNT")
into fully paid, validly issued and nonassessable shares of Common Stock in
accordance with Section 1 hereof (including, without limitation, the Holder's
right to exercise any portion of this Warrant pursuant to the cashless exercise
provisions as set forth in Section 1(d)) at the then applicable Exercise Price
as of the Mandatory Exercise Date (as defined below) (a "MANDATORY EXERCISE").
The Company may exercise its right to require exercise under this Section 5(a)
by delivering within not more than three (3) Trading Days following the end of
such Mandatory Exercise Measuring Period a written notice thereof by facsimile
and overnight courier to all, but not less than all, of the holders of the SPA
Warrants and the Transfer Agent (the "MANDATORY EXERCISE NOTICE" and the date
all of the holders received such notice is referred to as the "MANDATORY
EXERCISE NOTICE DATE"). The Mandatory Exercise Notice shall be irrevocable.
Notwithstanding the foregoing, the Company may only elect to pursue Mandatory
Exercise simultaneously with an election to pursue mandatory conversion of the
SPA Securities and the warrants issued pursuant to the Senior Loan Documents (as
defined in the Securities Purchase Agreement).

                  (b) Pro Rata Exercise Requirement. If the Company elects to
cause an exercise of all or any outstanding portion of this Warrant pursuant to
Section 5(a), then it must simultaneously take the same action with respect to
all of the SPA Warrants. The Mandatory Exercise Notice shall state the Trading
Day selected for the Mandatory Exercise (the "MANDATORY EXERCISE DATE") in
accordance with Section 5(a), which Trading Day shall be at least twenty (20)
Business Days but not more than sixty (60) Business Days following the Mandatory
Exercise Notice Date. If the Company has elected a Mandatory Exercise, the
mechanics of exercise set forth in Section 1 shall apply, to the extent
applicable, as if the Company and the Transfer Agent had received from the
Holder on the Mandatory Exercise Date a Mandatory Exercise Notice with respect
to the Mandatory Exercise Amount being exercised pursuant to the Mandatory
Exercise.

            6. NONCIRCUMVENTION. The Company hereby covenants and agrees that
the Company will not, by amendment of its Certificate of Incorporation, Bylaws
or through any reorganization, transfer of assets, consolidation, merger, scheme
of arrangement, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, and will at all times in good faith carry out all the
provisions of this Warrant and take all action as may be required to protect the
rights of the Holder. Without limiting the generality of the foregoing, the
Company (i) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in
effect, (ii) shall take all such actions as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and
(iii) shall, so long as any of the SPA Warrants are outstanding, take all action
necessary to reserve and keep available out of its authorized and unissued
shares of Common Stock (including mailing the Information Statement (as defined
in the Securities Purchase Agreement) and filing the Certificate of Amendment to

                                     - 11 -
<PAGE>

effect the Share Increase in accordance with the terms of the Securities
Purchase Agreement), solely for the purpose of effecting the exercise of the SPA
Warrants, 130% of the number of shares of Common Stock as shall from time to
time be necessary to effect the exercise of the SPA Warrants then outstanding
(without regard to any limitations on exercise).

            7. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise
specifically provided herein, the Holder, solely in such Person's capacity as a
holder of this Warrant, shall not be entitled to vote or receive dividends or be
deemed the holder of share capital of the Company for any purpose, nor shall
anything contained in this Warrant be construed to confer upon the Holder,
solely in such Person's capacity as the Holder of this Warrant, any of the
rights of a stockholder of the Company or any right to vote, give or withhold
consent to any corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights, or
otherwise, prior to the issuance to the Holder of the Warrant Shares which such
Person is then entitled to receive upon the due exercise of this Warrant. In
addition, nothing contained in this Warrant shall be construed as imposing any
liabilities on the Holder to purchase any securities (upon exercise of this
Warrant or otherwise) or as a stockholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company.
Notwithstanding this Section 7, the Company shall provide the Holder with copies
of the same notices and other information given to the stockholders of the
Company generally, contemporaneously with the giving thereof to the
stockholders.

            8. REISSUANCE OF WARRANTS.

                  (a) Transfer of Warrant. If this Warrant is to be transferred,
the Holder shall surrender this Warrant to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Warrant (in
accordance with Section 8(d)), registered as the Holder may request,
representing the right to purchase the number of Warrant Shares being
transferred by the Holder and, if less then the total number of Warrant Shares
then underlying this Warrant is being transferred, a new Warrant (in accordance
with Section 8(d)) to the Holder representing the right to purchase the number
of Warrant Shares not being transferred.

                  (b) Lost, Stolen or Mutilated Warrant. Upon receipt by the
Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and, in the case of loss, theft or
destruction, of any indemnification undertaking by the Holder to the Company in
customary form and, in the case of mutilation, upon surrender and cancellation
of this Warrant, the Company shall execute and deliver to the Holder a new
Warrant (in accordance with Section 8(d)) representing the right to purchase the
Warrant Shares then underlying this Warrant.

                  (c) Exchangeable for Multiple Warrants. This Warrant is
exchangeable, upon the surrender hereof by the Holder at the principal office of
the Company, for a new Warrant or Warrants (in accordance with Section 8(d))
representing in the aggregate the right to purchase the number of Warrant Shares
then underlying this Warrant, and each such new Warrant will represent the right
to purchase such portion of such Warrant Shares as is

                                     - 12 -
<PAGE>

designated by the Holder at the time of such surrender; provided, however, that
no Warrants for fractional shares of Common Stock shall be given.

                  (d) Issuance of New Warrants. Whenever the Company is required
to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated
on the face of such new Warrant, the right to purchase the Warrant Shares then
underlying this Warrant (or in the case of a new Warrant being issued pursuant
to Section 8(a) or Section 8(c), the Warrant Shares designated by the Holder
which, when added to the number of shares of Common Stock underlying the other
new Warrants issued in connection with such issuance, does not exceed the number
of Warrant Shares then underlying this Warrant), (iii) shall have an issuance
date, as indicated on the face of such new Warrant which is the same as the
Issuance Date, and (iv) shall have the same rights and conditions as this
Warrant.

            9. NOTICES. Whenever notice is required to be given under this
Warrant, unless otherwise provided herein, such notice shall be given in
accordance with Section 9(f) of the Securities Purchase Agreement. The Company
shall provide the Holder with prompt written notice of all actions taken
pursuant to this Warrant, including in reasonable detail a description of such
action and the reason therefore. Without limiting the generality of the
foregoing, the Company will give written notice to the Holder (i) immediately
upon any adjustment of the Exercise Price, setting forth in reasonable detail,
and certifying, the calculation of such adjustment and (ii) at least fifteen
(15) days prior to the date on which the Company closes its books or takes a
record (A) with respect to any dividend or distribution upon the shares of
Common Stock, (B) with respect to any grants, issuances or sales of any Options,
Convertible Securities or rights to purchase stock, warrants, securities or
other property to holders of shares of Common Stock or (C) for determining
rights to vote with respect to any Fundamental Transaction, dissolution or
liquidation, provided in each case that such information shall be made known to
the public prior to or in conjunction with such notice being provided to the
Holder.

            10. AMENDMENT AND WAIVER. Except as otherwise provided herein, the
provisions of this Warrant may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if the Company has obtained the written consent of the Required
Holders; provided that no such action may increase the exercise price of any SPA
Warrants or decrease the number of shares or class of stock obtainable upon
exercise of any SPA Warrants without the written consent of the Holder. No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the SPA Warrants then outstanding.

            11. GOVERNING LAW. This Warrant shall be governed by and construed
and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Warrant shall be governed by,
the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York.

            12. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be
jointly drafted by the Company and all the Buyers and shall not be construed
against any person

                                     - 13 -
<PAGE>

as the drafter hereof. The headings of this Warrant are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Warrant.

            13. DISPUTE RESOLUTION. In the case of a dispute as to the
determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall submit the disputed determinations or arithmetic
calculations via facsimile within two (2) Business Days of receipt of the
Exercise Notice giving rise to such dispute, as the case may be, to the Holder.
If the Holder and the Company are unable to agree upon such determination or
calculation of the Exercise Price or the Warrant Shares within three Business
Days of such disputed determination or arithmetic calculation being submitted to
the Holder, then the Company shall, within two Business Days submit via
facsimile (a) the disputed determination of the Exercise Price to an
independent, reputable investment bank selected by the Company and approved by
the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to
the Company's independent, outside accountant. The Company shall cause at its
expense the investment bank or the accountant, as the case may be, to perform
the determinations or calculations and notify the Company and the Holder of the
results no later than ten (10) Business Days from the time it receives the
disputed determinations or calculations. Such investment bank's or accountant's
determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error.

            14. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The
remedies provided in this Warrant shall be cumulative and in addition to all
other remedies available under this Warrant and the other Transaction Documents,
at law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right of the Holder right
to pursue actual damages for any failure by the Company to comply with the terms
of this Warrant. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder and that the remedy at law
for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the holder of this Warrant shall
be entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and
without any bond or other security being required.

            15. TRANSFER. This Warrant may be offered for sale, sold,
transferred or assigned without the consent of the Company, except as may
otherwise be required by Section 2(f) of the Securities Purchase Agreement.

            16. CERTAIN DEFINITIONS. For purposes of this Warrant, the following
terms shall have the following meanings:

                  (a) "BLOOMBERG" means Bloomberg Financial Markets.

                  (b) "BUSINESS DAY" means any day other than Saturday, Sunday
or other day on which commercial banks in The City of New York are authorized or
required by law to remain closed.

                                     - 14 -
<PAGE>

                  (c) "COMMON STOCK" means (i) the Company's shares of Common
Stock, par value $.01 per share, and (ii) any share capital into which such
Common Stock shall have been changed or any share capital resulting from a
reclassification of such Common Stock.

                  (d) "CLOSING BID PRICE" and "CLOSING SALE PRICE" means, for
any security as of any date, the last closing bid price and last closing trade
price, respectively, for such security on the Principal Market, as reported by
Bloomberg, or, if the Principal Market begins to operate on an extended hours
basis and does not designate the closing bid price or the closing trade price,
as the case may be, then the last bid price or last trade price, respectively,
of such security prior to 4:00:00 p.m., New York Time, as reported by Bloomberg,
or, if the Principal Market is not the principal securities exchange or trading
market for such security, the last closing bid price or last trade price,
respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if
the foregoing do not apply, the last closing bid price or last trade price,
respectively, of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid
price or last trade price, respectively, is reported for such security by
Bloomberg, the average of the bid prices, or the ask prices, respectively, of
any market makers for such security as reported in the "pink sheets" by Pink
Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid
Price or the Closing Sale Price cannot be calculated for a security on a
particular date on any of the foregoing bases, the Closing Bid Price or the
Closing Sale Price, as the case may be, of such security on such date shall be
the fair market value as mutually determined by the Company and the Holder. If
the Company and the Holder are unable to agree upon the fair market value of
such security, then such dispute shall be resolved pursuant to Section 13. All
such determinations to be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable
calculation period.

                  (e) "CONVERTIBLE SECURITIES" means any stock or securities
(other than Options) directly or indirectly convertible into or exercisable or
exchangeable for shares of Common Stock.

                  (f) "ELIGIBLE MARKET" means the Principal Market, The New York
Stock Exchange, Inc., the American Stock Exchange, the Nasdaq National Market or
The Nasdaq SmallCap Market.

                  (g) "EQUITY CONDITIONS" means each of the following
conditions: (i) during the period beginning on the date that is three (3) months
prior to the applicable date of determination and ending on and including the
applicable date of determination (the "EQUITY CONDITIONS MEASURING PERIOD"), the
Company shall have delivered shares of Common Stock upon any exercise or
conversion of the SPA Warrants or the Notes or any warrants issued pursuant to
the Senior Loan Documents; (ii) on each day of the Equity Conditions Measuring
Period, the Common Stock shall be listed on the Principal Market or an Eligible
Market and delisting or suspension by such market or exchange shall not have
been threatened either (A) in writing by such market or exchange or (B) by
falling below the minimum listing maintenance requirements of such market or
exchange; (iii) during each day of the Equity Conditions Measuring Period, there
shall not have occurred (x) the public announcement of a pending, proposed or
intended Fundamental Transaction which has not been abandoned, terminated or

                                     - 15 -
<PAGE>

consummated, (y) an event of default on any indebtedness of the Company or (z)
an event that with the passage of time or giving of notice, and assuming it were
not cured, would constitute an event of default on any indebtedness of the
Company; (iv) on each day of the Equity Conditions Measuring Period, the
registration statement or registration statements required pursuant to the
Registration Rights Agreement shall be effective and available for the sale of
all of the Registrable Securities in accordance with the terms of the
Registration Rights Agreement; (v) on each day of the Equity Conditions
Measuring Period and for the thirty Trading Days thereafter, the registration
statements required pursuant to the Registration Rights Agreement shall be or
shall be expected to be effective and available for the sale of all of the
Registrable Securities in accordance with the terms of the Registration Rights
Agreement; (vi) the Company otherwise shall have been in material compliance
with and shall not have breached (unless subsequently cured by the Company prior
to the first Trading Day of the Mandatory Exercise Measuring Period), in any
material respect, any material provision, covenant, representation or warranty
of the Transaction Documents (as defined in the Securities Purchase Agreement);
and (vii) the Company shall not be in violation of Section 3(d).

                  (h) "EXPIRATION DATE" means the date sixty (60) months after
the Issuance Date or, if such date falls on a day other than a Business Day or
on which trading does not take place on the Principal Market (a "HOLIDAY"), the
next date that is not a Holiday.

                  (i) "FUNDAMENTAL TRANSACTION" means that the Company shall,
directly or indirectly, in one or more related transactions, (i) consolidate or
merge with or into (whether or not the Company is the surviving corporation)
another Person, or (ii) sell, assign, transfer, convey or otherwise dispose of
all or substantially all of the properties or assets of the Company to another
Person, or (iii) allow another Person to make a purchase, tender or exchange
offer that is accepted by the holders of more than the 50% of either the
outstanding shares of Common Stock (not including any shares of Common Stock
held by the Person or Persons making or party to, or associated or affiliated
with the Persons making or party to, such purchase, tender or exchange offer),
or (iv) consummate a stock purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or
scheme of arrangement) with another Person whereby such other Person acquires
more than the 50% of the outstanding shares of Common Stock (not including any
shares of Common Stock held by the other Person or other Persons making or party
to, or associated or affiliated with the other Persons making or party to, such
stock purchase agreement or other business combination), or (v) reorganize,
recapitalize or reclassify its Common Stock.

                  (j) "MANDATORY EXERCISE TRIGGERING EVENT" means (A) the
Closing Sale Price of the Common Stock equals or exceeds $2.32 (subject to
appropriate adjustments for stock splits, stock dividends, stock combinations
and other similar transactions after the Issuance Date) for each of any fifteen
(15) consecutive Trading Days (the "MANDATORY EXERCISE MEASURING PERIOD") (with
a minimum trading volume of 200,000 shares of Common Stock on each such Trading
Day); or (B) the Closing Sale Price of the Common Stock equals or exceeds $3.10
(subject to appropriate adjustment for stock splits, stock dividends, stock
combinations and other similar transactions after the Issuance Date) on each
Trading Day during the Mandatory Conversion Period (with a minimum trading
volume of 200,000 shares of Common Stock on each such Trading Day); or (C)
completion of an Equity Financing.

                                     - 16 -
<PAGE>

                  (k) "OPTIONS" means any rights, warrants or options to
subscribe for or purchase shares of Common Stock or Convertible Securities.

                  (l) "PARENT ENTITY" of a Person means an entity that, directly
or indirectly, controls the applicable Person and whose common stock or
equivalent equity security is quoted or listed on an Eligible Market, or, if
there is more than one such Person or Parent Entity, the Person or Parent Entity
with the largest public market capitalization as of the date of consummation of
the Fundamental Transaction.

                  (m) "PERSON" means an individual, a limited liability company,
a partnership, a joint venture, a corporation, a trust, an unincorporated
organization, any other entity and a government or any department or agency
thereof.

                  (n) "PRINCIPAL MARKET" means the OTC Bulletin Board.

                  (o) "REGISTRATION RIGHTS AGREEMENT" means that certain
registration rights agreement by and among the Company and the Buyers.

                  (p) "REQUIRED HOLDERS" means the holders of the SPA Warrants
representing at least a majority of shares of Common Stock underlying the SPA
Warrants then outstanding.

                  (q) "SPA SECURITIES" means the Notes issued pursuant to the
Securities Purchase Agreement.

                  (r) "SUCCESSOR ENTITY" means the Person (or, if so elected by
the Required Holders, the Parent Entity) formed by, resulting from or surviving
any Fundamental Transaction or the Person (or, if so elected by the Required
Holders, the Parent Entity) with which such Fundamental Transaction shall have
been entered into.

                  (s) "TRADING DAY" has the meaning ascribed thereto in the SPA
Securities.

                            [SIGNATURE PAGE FOLLOWS]

                                     - 17 -
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common
Stock to be duly executed as of the Issuance Date set out above.

                                             ARTISTDIRECT INC.

                                             By:___________________________
                                             Name:
                                             Title:

<PAGE>

                                 EXERCISE NOTICE

            TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
                        WARRANT TO PURCHASE COMMON STOCK

                               ARTISTDIRECT, INC.

      The undersigned holder hereby exercises the right to purchase
_________________ of the shares of Common Stock ("WARRANT SHARES") of
ARTISTdirect, Inc., a Delaware corporation (the "COMPANY"), evidenced by the
attached Warrant to Purchase Common Stock (the "WARRANT"). Capitalized terms
used herein and not otherwise defined shall have the respective meanings set
forth in the Warrant.

      1. Form of Exercise Price. The Holder intends that payment of the Exercise
Price shall be made as:

                  ____________ a "Cash Exercise" with respect to ______________
                               Warrant Shares; and/or

                  ____________ a "Cashless Exercise" with respect to __________
                               Warrant Shares.

      2. Payment of Exercise Price. In the event that the holder has elected a
Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of
$___________________ to the Company in accordance with the terms of the Warrant.

      3. [The undersigned hereby certifies to the Company that the Company's
issuance of the amount set forth above in accordance with Section 1(a) of the
Warrant will not directly result in the undersigned (together with the
undersigned's affiliates) beneficially owning in excess of 4.99% [9.99% in the
case of CCM and JFL Warrants] of the number of shares of Common Stock
outstanding immediately after giving effect to such exercise, calculated in
accordance with Section 1(f) of the Warrant.] [FOR OASIS, JFL AND CCM WARRANTS
ONLY]

      4. Delivery of Warrant Shares. The Company shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.

Date: _______________ __, ______

______________________________________
   Name of Registered Holder

By: _____________________________
    Name:
    Title:

<PAGE>

                                 ACKNOWLEDGMENT

      The Company hereby acknowledges this Exercise Notice and hereby directs
American Stock Transfer & Trust Company to issue the above indicated number of
shares of Common Stock in accordance with the Transfer Agent Instructions dated
July 28', 2005 from the Company and acknowledged and agreed to by American Stock
Transfer & Trust Company.

                                             ARTISTDIRECT, INC.

                                             By:_________________________
                                                Name:
                                                Title: