Document:

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                                                                 EXHIBIT 10.25

PANDESIC AGREEMENT
ORDER FORM

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CONTRACT DATE:    April 15, 1999                CONTRACT NUMBER:
              -----------------------                           ---------------------------
MERCHANT INFORMATION
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<S>                                             <C>
COMPANY NAME:    ARTISTdirect, LLC              CONTACT NAME:  PASCAL DESMARETS
              -----------------------                         -----------------------------
BILLING ADDRESS: 17835 VENTURA BLVD.            PHONE:  818-758-8700
                 --------------------                  ------------------------------------
SUITE 310                                       FAX:    818-758-8722
-------------------------------------                --------------------------------------
ENCINO, CA 91316                                E-MAIL: PASCAL.DESMARETS@ARTISTDIRECT.COM
-------------------------------------                   -----------------------------------
BILLING CONTACT: BOB MORSE                      TECHNICAL CONTACT:  MORGAN PORTER
                ---------------------                             -------------------------
PHONE: 818-758-8700                             PHONE:  818-758-8700
       ------------------------------                  ------------------------------------
FAX:   818-758-8722                               FAX:  818-758-8722
     --------------------------------                  ------------------------------------
E-MAIL:  BOB.MORSE@ARTISTDIRECT.COM            E-MAIL: MORGAN.PORTER@ARTISTDIRECT.COM
        -----------------------------                  ------------------------------------
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Merchant hereby orders the Pandesic E-Business Solution Service from PANDESIC
LLC ("PANDESIC"). This Order Form and Exhibit A to this Order Form Additional
Services is subject to the Terms and Conditions and the Pandesic reference
documents referred to herein (collectively, the "Agreement"). This Agreement is
valid when accepted by an authorized representative of PANDESIC.

The Pandesic E-Business Solution Service consists of (i) the installation,
implementation, hosting and administration of Merchant's e-commerce web site
(the "Hosting Services") on computers and system software (the "Pandesic
Equipment") operated by PANDESIC or its hosting partner (the "Hosting Partner"),
and (ii) licenses of associated Pandesic and third party ("Supplier")
application software (the "Software") for such purposes.

Other services provided hereunder include (i) training on the operation of the
Pandesic E-Business Solution Service, and (ii) maintenance and support services
(the "Maintenance Services"), all as described from time to time in PANDESIC
reference documents. The Pandesic E-Business Solution Service and the other
services are referred to collectively as the "Services."

MERCHANT HAS READ AND AGREES TO BE BOUND BY THE TERMS AND CONDITIONS OF THIS
AGREEMENT. MERCHANT AND PANDESIC AGREE THAT THE TERMS AND CONDITIONS OF THIS
AGREEMENT REPLACE AND SUPERSEDE ALL PROPOSALS, WRITTEN OR ORAL, AS WELL AS OTHER
COMMUNICATIONS BETWEEN MERCHANT AND PANDESIC RELATING TO THIS AGREEMENT.

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ACCEPTANCE
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<S>                                             <C>
ACCEPTED BY MERCHANT:                            ACCEPTED BY PANDESIC LLC:

SIGNATURE: /s/  Marc P. Geiger                   SIGNATURE: /s/  Peter Wolcott
          ---------------------------                      --------------------------------

PRINT NAME:   Marc P. Geiger                     PRINT NAME:   Peter Wolcott
           --------------------------                       -------------------------------
TITLE:  CHIEF EXECUTIVE OFFICER                 TITLE:   President
       ------------------------------                   -----------------------------------
DATE:   April 15, 1999                           DATE:   5/2/99
       ------------------------------                   -----------------------------------
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PANDESIC AGREEMENT
RATE SHEET

INITIAL SET-UP CHARGE

-     Merchant shall pay an initial set-up charge of [***], payable within
      [***] days of acceptance of this Agreement.

MONTHLY TRANSACTION FEES

-     The Monthly Base Fee shall be [***].

-     Monthly Transaction Fees will be calculated using the Monthly Base
      Fee plus a percentage of monthly revenue (defined as [***] generated
      by the sale or other distribution of products

-     Monthly Transaction Fees commence upon the Technical Installation
      (the date that the Pandesic software is loaded on the servers and the
      servers are ready to accept Merchant's configuration and functional
      installation of its products), at the site of Pandesic's Hosting
      Partner ("Digex").

FEE SCHEDULE

Monthly Transaction Fee shall be determined in accordance with the following
table:

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<S>                            <C>                       <C>
MERCHANT MONTHLY SALES         MONTHLY TRANSACTION FEE
From             To            Base Fee                  Incremental Transaction %
---------------------          ------------------------  -------------------------
[***]           [***]          [***]                     [***]
[***]           [***]          [***]                     [***]
</TABLE>

For example, a merchant that transacts [***] of monthly gross sales and [***] of
freight revenue would be responsible for a Monthly Transaction Fee of [***].

Monthly Base Fee for [***] in Monthly Sales        [***]
[***]                                              [***]
Total owed to Pandesic                             [***]

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

[***] Confidential treatment has been requested for the bracketed portion.  The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.

                                     Page 1
<PAGE>   3

Pandesic Agreement
Rate Sheet

ACCEPTANCE

ACCEPTED BY MERCHANT:                      ACCEPTED BY PANDESIC LLC:

SIGNATURE: /s/  Marc P. Geiger             SIGNATURE: /s/  Peter Wolcott
          ------------------------------             ---------------------------

PRINT NAME:   Marc P. Geiger               PRINT NAME:   Peter Wolcott
           -----------------------------              --------------------------
TITLE:  CHIEF EXECUTIVE OFFICER            TITLE:  President
       ---------------------------------          ------------------------------
DATE:   April 15, 1999                     DATE:   5/2/99
       ---------------------------------          ------------------------------

                                     Page 2
<PAGE>   4
PANDESIC AGREEMENT
TERMS AND CONDITIONS

The following terms and conditions (these "Terms") govern the provisions by
Pandesic LLC ("Pandesic") of the Services described on the Pandesic E-Business
Solution Service Order Form ("Order Form") to the company ("Merchant")
identified on the Order Form.

1.      OBLIGATIONS OF PANDESIC

          1.1     Pandesic will provide, deploy, support and maintain the
                  Pandesic E-Business Solution Service.

          1.2     Pandesic hereby grants to Merchant a non-exclusive and
                  non-assignable license to use the Software in the United
                  States for the purpose of conducting business over the
                  Internet throughout the world.

2.      OBLIGATIONS OF MERCHANT

          2.1     Merchant shall comply with all of the terms of this Agreement,
                  including but not limited to, the Acceptable Use Policy (the
                  "Use Policy"), as the Use Policy may be modified from time to
                  time during the term of this Agreement

          2.2     Merchant may use the Services for the purpose of conducting
                  electronic commerce activities, as well as processing third
                  party data, solely in connection with products and services
                  offered via Merchant's website. Subject to the foregoing
                  Merchant shall not offer, for a fee or free of charge,
                  services consisting of the processing of data through the use
                  of the Services for, or for the benefit of, any person other
                  than Merchant.

3.      PAYMENT

          3.1     Merchant shall pay the fees set out in the Rate Sheet,
                  attached hereto.

          3.2     All payments shall be made in U.S. Dollars. In all cases,
                  payments are due upon receipt by Merchant of the applicable
                  monthly invoices.

          3.3     Payments and any additional charges, including, but not
                  limited to, any early cancellation charges, accrued interest
                  and late fees shall be invoiced in arrears and shall appear on
                  the monthly invoices for Services or separate invoices, as
                  determined by Pandesic in its sole discretion.

          3.4     In addition to any other remedies that may be available to
                  Pandesic under this Agreement (including, but not limited to,
                  those in connection with the termination of this Agreement
                  pursuant to Section 13 below) or applicable law, invoices that
                  are not paid in full thirty (30) days after receipt by
                  Merchant (a "Payment Default") will be subject to interest
                  charges of the lesser of one and one-half percent (1.5%) per
                  month or portion thereof and the highest amount permitted by
                  law, which interest shall accrue daily.

          3.5     Subject to Section 13.3 of this Agreement, Merchant shall be
                  liable for all amounts owed to Pandesic pursuant to this
                  Agreement, irrespective of the termination of this Agreement
                  Merchant also shall pay to Pandesic all expenses incurred by
                  Pandesic in exercising any of its rights under this Agreement
                  or applicable law with respect to the collection of a Payment
                  Default, including, but not limited to, reasonable attorneys'
                  fees and the fees of any collection agency retained by
                  Pandesic.

          3.6     Merchant shall be liable for, and shall reimburse Pandesic and
                  indemnify and hold Pandesic harmless from all local, state,
                  federal and non-United States taxes or similar assessments or
                  charges (including any interest and penalties imposed
                  thereon), other than taxes based on the net income of
                  Pandesic, arising out of or relating to this Agreement or the
                  provision of the Services hereunder.

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PANDESIC AGREEMENT
TERMS AND CONDITIONS

4.      MAINTENANCE

          4.1     Pandesic designates time periods ("Scheduled Maintenance
                  Windows") during which it may limit or suspend the
                  availability of the Pandesic Equipment and/or Software
                  involved in providing its Services (an "Outage") to perform
                  necessary maintenance or updates. Scheduled Maintenance
                  Windows currently are each Tuesday and Friday between the
                  hours of 4:00 a.m. and 8:00 a.m. and the third Saturday of
                  each month between the hours of 4:00 a.m. and 12 noon Pacific
                  Standard Time.

          4.2     If planned maintenance has the possibility of making the
                  Pandesic Equipment used by Merchant inaccessible to the
                  Internet during a Scheduled Maintenance Window, Pandesic will
                  provide not less than twenty-four (24) hours prior electronic
                  mail or other notice to Merchant of the Scheduled Maintenance
                  Window during which the Outage is planned.

          4.3     In addition, Pandesic reserves the right to perform any
                  required maintenance work or updates outside of the Scheduled
                  Maintenance Window with a minimum of seven (7) days prior
                  notice to Merchant. Pandesic also may perform at any time any
                  maintenance or updates it believes is necessary to preserve
                  the integrity of Pandesic's network and services offered
                  regardless of whether it has provided any notice to Merchant
                  thereof. Pandesic shall perform any upgrades to the Software
                  at times mutually acceptable to both parties.

          4.4     Merchant agrees that Pandesic, its Hosting Partner and its
                  third party service providers shall have access to its
                  internet commerce system and web site for the purposes
                  contemplated in this Agreement.

5.      CONFIDENTIALITY

          5.1     In the course of business dealing, both parties will be
                  releasing valuable trade secrets and other confidential
                  information to the other including, in Pandesic's case,
                  information about the Services and Software provided by
                  Pandesic, Hosting Partner and Suppliers, and in Merchant's
                  case, its customer business data. Each party recognizes that
                  such information constitutes valuable trade secrets of the
                  other.

          5.2     Accordingly, each party agrees that (i) the provisions of this
                  Agreement (ii) any information whatsoever with respect to the
                  Services and the Software, (iii) the course of dealing between
                  Pandesic and Merchant hereunder, (iv) Merchant's data, and (v)
                  all other non-public information (whether technical or
                  otherwise) made available or disclosed to such party (the
                  "recipient") by the other (the "disclosing party")
                  (collectively, the "Confidential Information") shall be
                  treated by recipient on a confidential basis and shall not be
                  reproduced, reduced to writing, or disclosed to any employee
                  or contractor except as necessary to provide or use the
                  Services, or to any other person or entity without the prior
                  written consent of disclosing party.

          5.3     Upon termination of this Agreement, any documentation
                  reflecting any Confidential Information of the other party
                  shall be returned promptly to such party. Disclosure of
                  information pursuant to applicable statutes or regulations
                  (collectively, 'Laws') shall be excepted from the provisions
                  of this Section 5; provided, however, that prior to any
                  disclosure by the recipient pursuant to any Laws, recipient
                  will assert the confidential nature of the Confidential
                  Information and will cooperate fully with the disclosing
                  party, at the disclosing party's expense, in protecting
                  against any such disclosure including, but not limited to,
                  obtaining a protective order or similar order narrowing the
                  scope of such disclosure of the Confidential Information. In
                  the event such protection is not obtained, the recipient shall
                  disclose the Confidential Information only to the extent
                  necessary to comply with the Laws.

6.      PROPRIETARY RIGHTS INDEMNIFICATION

          6.1     Merchant agrees to indemnify and hold harmless Pandesic, all
                  individuals or entities controlling, controlled by or under
                  common control with Pandesic (each, a "Pandesic Affiliate"),
                  Hosting Partner, and the officers, directors and employees of
                  Pandesic, Pandesic Affiliates and Hosting Partner (an
                  "Indemnified Party") against any losses, claims, damages,
                  liabilities, penalties, actions,

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PANDESIC AGREEMENT
TERMS AND CONDITIONS

                  proceedings or judgments (collectively "Losses") to which an
                  Indemnified Party may become subject related to or arising out
                  of any infringement or misappropriation or alleged
                  infringement or misappropriation of any United States
                  copyright, trade secret or other proprietary right related to
                  any hardware or software (other than the Pandesic Equipment
                  and the Software) utilized by Merchant in connection with any
                  of the Services or to any Merchant data distributed via the
                  Pandesic E-Business Solution Service and will reimburse such
                  Indemnified Party for all legal and other direct expenses,
                  including reasonable attorneys' fees incurred by such
                  Indemnified Party in connection with investigating, defending
                  or settling any Loss, whether or not in connection with
                  pending or threatened litigation in which such Indemnified
                  Party is a party.

          6.2     Pandesic agrees to indemnify and hold harmless Merchant
                  against any Losses to which Merchant may become subject,
                  related to or arising out of any infringement or
                  misappropriation or alleged infringement or misappropriation
                  of any United States patent, copyright, trade secret or other
                  proprietary right related to the Pandesic Equipment or the
                  Software and will reimburse Merchant for all legal and other
                  direct expenses, including reasonable attorneys' fees incurred
                  by Merchant in connection with investigating, defending or
                  settling any Loss, whether or not in connection with pending
                  or threatened litigation in which Merchant is a party. This
                  indemnification does not relate to the Merchant data or
                  matters that arise from Merchant data or conduct. The
                  provisions of this Agreement relating to indemnification shall
                  survive termination of this Agreement.

          6.3     In the event of any claim of infringement or misappropriation
                  under paragraph 6.2 above, Pandesic shall use its best
                  efforts, at its option and expense to either (i) procure for
                  Merchant the right to continue using the Pandesic Equipment or
                  the Software, (ii) replace such Pandesic Equipment or Software
                  with non-infringing equipment or software, or (iii) modify the
                  same so as to make it non-infringing, and thereafter, (iv)
                  terminate the Agreement as to the infringing Pandesic
                  Equipment or Software and refund to Merchant any of the unused
                  portion of the fees paid for Services prior to such
                  termination.

7.      INDEMNIFICATION

          7.1     In addition to other indemnification provided herein,
                  including without limitation Indemnification provided in
                  Section 8.3 of this Agreement from the date of any such breach
                  of warranty, notwithstanding any cure period, and except as to
                  matters covered by paragraph 6.2 above, Merchant agrees to
                  indemnify and hold harmless Pandesic, Pandesic Affiliates,
                  Hosting Partner, and the officers, directors and employees of
                  Pandesic, Pandesic Affiliates, and Hosting Partner (each an
                  "Indemnified Party") against any Losses to which an
                  Indemnified Party may become subject and which Losses arise
                  out of, or relate to Merchants breach of this Agreement in
                  connection with Its use of the Services under or related to
                  this Agreement, and will reimburse an Indemnified Party for
                  all legal and other expenses, including reasonable attorneys'
                  fees Incurred by such Indemnified Party in connection with
                  investigating, defending or settling any Loss whether or not
                  in connection with pending or threatened litigation in which
                  such Indemnified Party is a party.

8.      OTHER MERCHANT ASSURANCES

          8.1     During any time period when Merchant is provided access to any
                  facilities, hardware or other property owned or leased by, or
                  otherwise under the control of Pandesic or Hosting Partner
                  (collectively "Pandesic Property") pursuant to this Agreement
                  Merchant shall (i)maintain insurance, with Pandesic and
                  Hosting Partner as a named payee, covering any damage or
                  destruction to Pandesic Property (collectively "'Damage"); (i)
                  reimburse Pandesic for all expenses incurred by Pandesic in
                  replacing or repairing, as the case may be, any Damage caused
                  by Merchant, other than normal wear and tear on Pandesic
                  Property.

          8.2     Merchant shall not attempt to copy, modify, alter,
                  disassemble, decompile, translate or convert Into human
                  readable form, or reverse engineer, all or any part of the
                  Software and shall not use the Software to develop any
                  derivative works or any functionally compatible or competitive
                  software, except to the extent permitted under applicable law.
                  However, Merchant may create interfaces to the Software or
                  modify the provided interfaces to permit interfacing with
                  Merchant's legacy database systems solely for Merchant's use
                  in connection with the Services provided pursuant to this
                  Agreement. Merchant shall not. separate the Software into its
                  component parts, nor

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PANDESIC AGREEMENT
TERMS AND CONDITIONS

                  incorporate any component files into any product, nor shall it
                  remove any proprietary, trademark or copyright markings or
                  confidentiality legends within the Software.

          8.3     Merchant shall not use the Services in any manner which
                  violates any law or regulation, is for a fraudulent purpose,
                  contravenes public policy, or may cause Pandesic or its
                  Suppliers to be subject to prosecution or legal action.
                  Merchant shall only use the Services to process sales
                  transactions which, to the best of its knowledge, are genuine
                  and do not arise out of fraudulent or illegal activities in
                  the sale of goods, information or services. Merchant agrees,
                  represents and warrants that Merchant's web site shall not
                  contain any content or materials that infringe on the rights
                  of any other party or violate any applicable law or regulation
                  or any proprietary, contract, moral, privacy or other third
                  party right, or which would expose Pandesic, its Hosting
                  Partner or its Suppliers to any civil or criminal liability or
                  otherwise would affect Pandesic's or its Hosting Partner's
                  business; provided however, that in the event of any such
                  Infringement, Merchant shall have a period of fifteen (15)
                  business days from any such infringement to take any steps
                  required to cure any such breach of the warranty provided
                  herein with respect to such content or materials. Merchant
                  shall indemnify and save Pandesic, Pandesic Affiliates,
                  Hosting Partner, and the officers, directors and employees of
                  Pandesic harmless (each an "Indemnified Party") against any
                  claim, liabilities and costs by which an Indemnified Party may
                  become subject to and which arise out of, or relate to any
                  content contained on Merchants web site or which result from
                  the use of the Services in contravention of this section.
                  Merchant shall (a) acquire all authorizations necessary in
                  respect of any hyperlinks by its commerce web site, and upon
                  reasonable request by Pandesic, (b) provide Pandesic and its
                  Hosting Partner with accurate information concerning
                  descriptive claims, warranties, guarantees, nature of its
                  business and the addresses where its business is conducted.

          8.4     Merchant appoints Pandesic as its agent to accept customer
                  relationships with certain of its Suppliers (such as
                  Cybercash) as more fully described In the reference documents.

9.      USE OF MERCHANT'S NAME

          9.1     Pandesic shall be permitted to use Merchant's name in a manner
                  mutually agreed to by the parties and in compliance with any
                  trademark usage guidelines provided by Merchant to Pandesic,
                  in connection with proposals to prospective merchants and
                  otherwise in print and in electronic form for marketing or
                  other purposes, including, but not limited to, use in
                  connection with (i) compliance with applicable laws or
                  regulations; and (ii) the protection of any rights relating to
                  Pandesic or its business.

10.     USE OF PANDESIC'S NAME

          10.1    Merchant may use the name "PANDESIC" in connection with the
                  Services or otherwise only with the prior written consent of
                  Pandesic. Pandesic shall be permitted to place an image of its
                  logo on Merchant's web site in order to identify Pandesic as
                  the e-business solution provider to Merchant. The parties
                  shall jointly agree the size and location of such logo.

          10.2    Except as set forth herein, neither party shall have the right
                  to use or display the trademarks of the other party (including
                  with respect to consent of Pandesic, Pandesic's Hosting
                  Partner and Suppliers) in connection with the Services or
                  otherwise without prior written consent of the other party.

11.     USE OF PANDESIC'S NAME

          11.1    Subject to Section 4, Pandesic will use its reasonable
                  commercial best efforts to assure that the Services will be
                  available twenty-four (24) hours a day, seven (7) days a week.
                  If the Services are unavailable for more than a total of 4
                  hours in any week, other than as a result of the maintenance
                  activities described in Section 4, Merchant's sole and
                  exclusive remedy shall be that, in the event the Fees are
                  below the Monthly Base Fee in the month of availability, the
                  fees shall be waived on a pro rata basis for the period of
                  unavailability.

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PANDESIC AGREEMENT
TERMS AND CONDITIONS

          11.2    For purposes of this Agreement, a week shall be considered to
                  run from Sunday to Saturday and the Services shall be deemed
                  to be unavailable if (i) the system network is incapable of
                  transmitting data (subject to Section 15 below); or (ii)
                  Pandesic's standard hardware; software, or operating system is
                  functioning in a manner that prevents http, ftp, or mail
                  access to the Internet server or the software is unable to
                  process standard functions of the Pandesic E-Business Solution
                  Service ("Unavailability").

          11.3    Notwithstanding the foregoing, Pandesic shall not be in breach
                  of this warranty for any period of unavailability which
                  results from Merchant' s action or inaction, including, but
                  not limited to, Merchants use of Merchant owned, non-standard,
                  or unsupported hardware and/or software installed by the
                  Merchant (or by Pandesic at the Merchant's request).

          11.4    Pandesic warrants that the Maintenance Services will be
                  performed in accordance with generally accepted industry
                  standards for comparable services. Merchant's sole and
                  exclusive remedy for any breach of the foregoing warranty
                  shall be to provide Pandesic with notice of such nonconformity
                  within thirty (30) days of the defective performance and
                  Pandesic shall re-perform such Maintenance Services.

                  11.5   YEAR 2000 COMPLIANCE

                  11.5.1 The Pandesic-owned portion of the Software shall be
                         Year 2000 Compliant as of September 30, 1999.

                  11.5.2 In this regard, "Year 2000 Compliant" shall mean that
                         the software shall continue to function before, during
                         and after January 1, 2000 without error related to, or
                         the product of, date data which represents or
                         references different centuries, and, more specifically,
                         (a) correctly manages and manipulates data involving
                         dates, including single-century formulae and
                         multi-century formulae, (b) correctly identifies the
                         year 2000 as a leap year, (c) does not include any
                         information other than a specific date, and (d) uses
                         four digits to indicate the year in storage, use and
                         communication of all date data date-related functions.

                  11.5.3 The Software also includes third party Software. In
                         some cases, the Year 2000 capabilities of such third
                         party Software are unwarranted by the Suppliers of such
                         Software. Pandesic shall test the third party Software
                         for Year 2000 Compliance and shall use its reasonable
                         commercial best efforts to cause such Software to be
                         made Year 2000 Compliant by their Suppliers.

                  11.5.4 Provided that Pandesic takes reasonable steps to test
                         the third party Software as provided in Section 11.5.3
                         of this Agreement, Pandesic is not responsible for
                         errors resulting from third-party systems or devices,
                         which directly access the database and overwrite the
                         database date fields or from the improper integration
                         of non-Year 2000 Compliant systems by Merchant.

          11.6    EXCEPT AS SET FORTH HEREIN, PANDESIC, HOSTING PARTNER AND
                  SUPPLIERS DISCLAIM ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR
                  STATUTORY, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES
                  OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

          11.7    PANDESIC DOES NOT WARRANT THE ACCURACY OF THE TAX DATA AND
                  OTHER TAX CALCULATIONS MADE BY THE SOFTWARE. MERCHANT BEARS
                  FULL RESPONSIBILITY FOR THE DETERMINATION OF THE ACCURACY AND
                  APPLICABILITY OF THE OUTPUT FROM THE SOFTWARE AND ACKNOWLEDGES
                  AND UNDERSTANDS THAT TAX CALCULATIONS OFTEN INVOLVE
                  INTERPRETATIONS AND THAT THE DATA OF MANY JURISDICTIONS CAN
                  CHANGE RAPIDLY. MERCHANT UNDERSTANDS THAT PANDESIC IS

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PANDESIC AGREEMENT
TERMS AND CONDITIONS

    NOT PROVIDING SPECIFIC TAX, LEGAL, ACCOUNTING OR OTHER EXPERT ADVICE AND
    MERCHANT SHOULD OBTAIN THE ADVICE OF QUALIFIED PROFESSIONALS IN THE AREA.

12.     LIMITATION OF LIABILITY

          12.1    NEITHER MERCHANT NOR PANDESIC, HOSTING PARTNER AND SUPPLIERS
                  SHALL BE LIABLE FOR (i) ANY INDIRECT, INCIDENTAL, SPECIAL,
                  CONSEQUENTIAL OR EXEMPLARY DAMAGES, OR FOR ANY LOSS OF
                  PROFITS, LOSS OF REVENUE OR BUSINESS INTERRUPTION OR LOSS OF
                  BUSINESS INFORMATION RESULTING FROM THE SERVICES, THE PANDESIC
                  EQUIPMENT OR THE SOFTWARE EVEN IF PANDESIC OR MERCHANT HAS
                  BEEN ADVISED OF THE POSSIBILITY THEREOF OR (II) ANY LOSS OF
                  DATA RESULTING FROM DELAYS, NON-DELIVERIES, MIS-DELIVERIES OR
                  SERVICE INTERRUPTIONS CAUSED BY PANDESIC OR MERCHANT. In no
                  event shall Merchant or Pandesic's aggregate cumulative
                  liability for any damages whatsoever to Merchant or Pandesic,
                  their employees, officers, directors, agents or contractors
                  arising out of or related to this Agreement exceed the amount
                  paid by Merchant or Pandesic, during the term, with respect to
                  the Services.

          12.2    Neither Pandesic nor any of its officers, directors,
                  employees, contractors or agents shall be liable for any
                  damage or destruction of equipment or other materials
                  belonging to, leased by, or otherwise under the control of
                  Merchant, whether or not any such equipment or Materials are
                  at any time located in facilities owned or operated by
                  Pandesic, except where such damage or destruction is a direct
                  result of the gross negligence, recklessness or willful
                  misconduct of Pandesic or any of its officers, directors,
                  employees, contractors and agents.

          12.3    The limitations of liability provided in this section shall
                  inure to the benefit of Merchant and Pandesic, Pandesic
                  Affiliates, Hosting Partner, Suppliers and to all of the
                  respective officers, directors, employees and agents of
                  Merchant and Pandesic and such other entities ("Limited
                  Liability Parties").

          12.4    The limitations of liability in this Agreement shall apply
                  whether (i) the action in which recovery is sought is based in
                  contract, tort (including, but not limited to, negligence or
                  strict liability), statute or otherwise; or (ii) a Limited
                  Liability Party is alleged to be liable jointly with one or
                  more parties or otherwise.

13.     TERM AND TERMINATION

          13.1    The initial term of this Agreement shall commence on the
                  Contract Date and shall continue for twenty-four (24) months
                  from the date that the Pandesic software is loaded on the
                  servers and the servers are ready to accept Merchant's
                  configuration and functional installation of its products,
                  ("Technical Installation"), following which it shall
                  automatically renew for successive twenty-four (24)-month
                  terms at the charges in effect at the commencement of each
                  such terms, unless written notice of non-renewal by either
                  party is delivered to the other party at least ninety (90)
                  days prior to the end of the then-current term.

          13.2    TERMINATION BY PANDESIC

                  13.2.1 In addition to any other rights it may have under this
                         Agreement or applicable law, Pandesic may, at its
                         option, immediately terminate this Agreement, upon (i)
                         a Payment Default, which is not cured within fifteen
                         (15) business days of notice of such default (ii)
                         Merchants failure to comply with any other material
                         obligation of Merchant under this Agreement including,
                         but not limited to, its failure to comply with any of
                         the terms of the Use Policy, which is not cured within
                         fifteen (15) business days of notice of such default
                         (iii) Merchant ceasing to do business in the normal
                         course, becoming or being declared insolvent or
                         bankrupt, being the subject of any proceeding relating
                         to liquidation or insolvency which is not dismissed
                         ninety (90) calendar days or making an assignment for
                         the benefit of its creditors, (iv) any attempt that is
                         prohibited under this Agreement by Merchant to derive
                         any source code from the Software, (v) breach of

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PANDESIC AGREEMENT
TERMS AND CONDITIONS

                         Merchant's obligations under Section 5 hereto, or (vi)
                         Pandesic, Hosting Partner or any Supplier becomes the
                         subject of an investigation by a law enforcement agency
                         not withdrawn within ninety (90) days or threatened
                         with prosecution as a result of Merchant's use of the
                         Services.

                  13.2.2 Pandesic may, at its option, terminate this Agreement
                         and retain the initial set-up charge paid by Merchant
                         in the event that Merchant does not complete its
                         pre-work obligations to permit deployment of the
                         Pandesic E-Business Solution Service by Pandesic within
                         six (6) months of the Contract Date.

                  13.3   TERMINATION BY MERCHANT

                  13.3.1 Merchant may terminate this Agreement in the event of a
                         material breach by Pandesic of its obligations under
                         this Agreement which breach is not cured within fifteen
                         (15) business days after written notice thereof is
                         received by Pandesic (a "Permissible Termination")
                         other than breaches that have defined remedies
                         associated therewith. In the event of a Permissible
                         Termination, Merchant shall pay a pro-rated Monthly
                         Transaction Fee based on the number of days Pandesic
                         provided Services prior to the date of termination of
                         this Agreement by Merchant under this Section 13.3, if
                         the level of Fees for such month would fall within the
                         Monthly Base Fee.

                  13.3.2 If Merchant terminates this Agreement other than in a
                         Permissible Termination, Merchant agrees that it would
                         be impractical and/or extremely difficult to fix or
                         establish the actual damage sustained by Pandesic as a
                         result of such termination and agrees that Merchant
                         shall pay to Pandesic as liquidated damages an amount
                         equal to [***].

                  13.3.3 Merchant may also terminate this Agreement in the event
                         that Pandesic (i) becomes insolvent, or files or has
                         filed against it any proceeding in bankruptcy or for
                         reorganization under any federal bankruptcy law or
                         similar state law, or has any receiver appointed for
                         all or a substantial part of Pandesic's assets or
                         business, or makes any assignment for the benefit of
                         its creditors, or enters into any other proceeding for
                         debt relief and such proceeding is not dismissed within
                         ninety (90) days after it has begun; or (ii) ceases to
                         do business or institutes any proceedings for the
                         liquidation or winding up of its business or for the
                         termination of its corporate charter. Within thirty
                         (30) days of termination by Merchant pursuant to (i) or
                         (ii) above, Pandesic shall provide the Source Code and
                         the compiled executables to Merchant. For purposes of
                         this Section 13.3.3 only, Source Code shall be defined
                         as one copy of the source code and related documents
                         which pertain to the Pandesic-owned portion of the
                         Software only, without updates. In the event that the
                         Source Code is released to Merchant pursuant to (i) or
                         (ii) above, Pandesic hereby grants Merchant the
                         royalty-free right to use such Source Code solely for
                         the purpose of maintaining its object code version of
                         the Pandesic-owned portion of the Software as of the
                         date this Agreement terminates in accordance with this
                         Section 13 of this Agreement and for no other reason
                         whatsoever.

          13.4    Upon termination of this Agreement, Pandesic and Merchant
                  shall have no obligations to each other except as provided in
                  this Agreement. Upon termination of this Agreement, Merchant
                  shall (i) pay all amounts due and owing to Pandesic, (ii)
                  remove from Pandesic's and Hosting Partner's premises all
                  property owned by Merchant in respect of the Services
                  provided, and (iii) return to Pandesic all equipment,
                  documentation, software, access keys and any other property
                  provided to Merchant by Pandesic under this Agreement. Any
                  property of Merchant not removed from Pandesic's and Hosting
                  Partner's premises. Within ten (10) days after such
                  termination shall become the property of Pandesic, which may,
                  among other things, dispose of such property without the
                  payment of any compensation to Merchant. Pandesic shall return
                  to Merchant all of its data residing on the Pandesic Equipment
                  provided, however, that in the event that Merchant gives
                  Pandesic written notice that Merchant can not immediately
                  provide for the receipt of Merchants data residing on the
                  Pandesic Equipment, this Agreement will continue in effect
                  until such data is

--------------------------
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confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.

                                     Page 7
<PAGE>   11
PANDESIC AGREEMENT
TERMS AND CONDITIONS

                  returned, Pandesic agrees to continue to host such data for up
                  to sixty (60) days from the date of such notice, and Merchant
                  agrees to continue to pay Pandesic and provided for in this
                  Agreement The rights and obligations of the parties hereto
                  which by their nature would continue beyond the termination or
                  cancellation of this Agreement (Including, without limitation,
                  those relating to confidentiality, payment of charges,
                  limitations of liability and indemnification) shall survive
                  any such termination or cancellation.

14.     DISPUTE RESOLUTION

          14.1    If a dispute or difference of any kind whatsoever (a
                  "Dispute") shall arise between Pandesic and Merchant in
                  connection with, relating to or arising out of this Agreement,
                  including the interpretation, performance, non-performance, or
                  termination hereof, the parties shall attempt to settle such
                  Dispute in the first instance by mutual discussions. If such
                  Dispute has not been resolved within thirty (30) days by
                  mutual discussions, the parties shall endeavor to settle the
                  Dispute by mediation under the Mediation Rules of the American
                  Arbitration Association prior to any recourse to arbitration
                  pursuant to Section 14.2 below.

          14.2    If such Dispute cannot be settled within thirty (30) days
                  after submission to mediation pursuant to Section 14.1 above
                  (the "Mediation Period"), such Dispute shall be settled by an
                  arbitral tribunal (the "Tribunal") under the Arbitration Rules
                  of the American Arbitration Association (the "Arbitration
                  Rules"). Each party shall appoint an arbitrator within thirty
                  (30) days after the expiration of the Mediation Period, which
                  arbitrators shall then jointly appoint a third arbitrator
                  within thirty (30) days after the appointment of the first two
                  arbitrators, to act as president of the Tribunal. Arbitrators
                  not so appointed shall be appointed pursuant to the
                  Arbitration Rules. The costs of the arbitration shall be borne
                  by the parties as determined by the Tribunal. The award
                  rendered in any arbitration commenced hereunder shall be final
                  and conclusive and judgment thereon may be entered in any
                  court having jurisdiction for its enforcement. Neither party
                  shall (i) appeal to any court from the decision of the
                  Tribunal; or (ii) have any right to commence or maintain any
                  suit or legal proceeding concerning a Dispute until such
                  Dispute has been determined in accordance with the arbitration
                  procedure provided for herein, and then only for enforcement
                  of the award rendered in such arbitration.

          14.3    Notwithstanding the foregoing, nothing in Sections 14.1 or
                  14.2 shall be deemed as preventing either party from seeking
                  injunctive relief from the courts pursuant to Section 14.4
                  below. All mediation and arbitration proceedings -pursuant to
                  this Agreement shall take place in Santa Clara County,
                  California.

          14.4    Notwithstanding the foregoing, each party acknowledges that
                  violation of Section 5.2 will cause irreparable harm to the
                  other not adequately compensable by monetary damages. In
                  addition to other relief, each party agrees that injunctive
                  relief shall be available to the other in the event of such
                  violations without necessity of posting bond to prevent any
                  actual or threatened violation of such section.

15.     GENERAL

          15.1    Neither Merchant nor Pandesic shall be deemed to be in default
                  of any provision of this Agreement or be liable for any delay,
                  failure of performance of obligations or interruption of the
                  provision of Services under this Agreement resulting, directly
                  or indirectly, from any (i) weather conditions, natural
                  disasters or other acts of God, (ii) action of any
                  governmental or military authority, (iii) failure caused by
                  telecommunication or other Internet provider (but not
                  including Hosting Partner), or (iv) any other force or
                  occurrence beyond its control, including any termination of
                  the agreement between Pandesic and the Hosting Partner.

          15.2    Hosting Partner and Suppliers are third-party beneficiaries to
                  this Agreement to the extent that this Agreement contains
                  provisions which relate to Merchants use of Hosting Partner's
                  services or the Supplier Software. Such provisions are made
                  for the benefit of such third parties and are enforceable by
                  them in addition to Pandesic.

                                     Page 8

<PAGE>   12
PANDESIC AGREEMENT
TERMS AND CONDITIONS

          15.3    Unless otherwise specified herein, any notices or other
                  communications required or permitted hereunder shall be
                  sufficiently given if in writing and delivered personally or
                  sent by facsimile transmission, email, internationally
                  recognized overnight courier, registered or certified mail
                  (postage prepaid with return receipt requested), to the
                  address or facsimile number of Merchant as set forth in the
                  Order Form or Pandesic as set forth below. In addition to the
                  obligations set forth herein, in the event that Pandesic sends
                  to Merchant any notice or other communication of Merchants
                  material breach of this Agreement, Pandesic shall provide any
                  such notice to Michelle Katz, Esq., Lenard and Gonzales, 1900
                  Avenue of the Stars, 25th Floor, Los Angeles, CA 90067. Such
                  notices or other communications shall be deemed received (i)
                  on the date delivered, if delivered personally, (ii) on the
                  date that return confirmation is received, if sent by
                  facsimile; (iii) on the business day after being sent by an
                  internationally recognized overnight air courier, or (iv) five
                  (5) days after being sent, if sent by first class registered
                  mail, return receipt requested.

                      Pandesic LLC
                      990 Almanor Avenue
                      Sunnyvale, California 94086
                      Attention: Director of Law & Corporate Affairs
                      Facsimile Number (408) 616-1920

          15.4    Any claims arising out of or related to this Agreement must be
                  brought no later than one year after it has accrued.

          15.5    Nothing in this Agreement or in the course of dealing between
                  Pandesic and Merchant pursuant hereto shall be deemed to
                  create between Pandesic and Merchant (including their
                  respective directors, officers, employees and agents) a
                  partnership, joint venture, association, employment
                  relationship or any other relationship other than that of
                  independent contractors with respect to each other.

          15.6    This Agreement shall be governed by and construed in
                  accordance with the laws of the State of California without
                  regard to choice of law provisions that would cause the
                  application of the law of another jurisdiction.

          15.7    Failure by either Pandesic or Merchant to enforce any of the
                  provisions of this Agreement or any rights with respect hereto
                  shall not be considered to be waiver of such provisions or
                  rights, or to in any way affect the validity of this
                  Agreement.

          15.8    If one or more of the provisions contained in this Agreement
                  are found to be invalid, illegal or unenforceable in any
                  respect the validity, legality and enforceability of the
                  remaining provisions shall not be affected.

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

          15.10   Pandesic may change its Hosting Partner at any time in its
                  sole discretion.

          15.11   Upon reasonable notice and in a manner which does not unduly
                  interfere with Merchants operations, Pandesic shall have the
                  right to audit and inspect Merchant's use of the Pandesic
                  E-Business Solution Service and the sales records associated
                  therewith in order to verify compliance with the terms of this
                  Agreement In the event there is a discrepancy of [***], or
                  more in the accounts, Merchant shall be responsible for and
                  shall pay the reasonable costs of such audit to Pandesic.

          15.12   Pandesic, as part of its E-Business Solutions Services
                  provides certain equipment to Merchant for use in connection
                  with the said Services. Merchant holds such equipment subject
                  and subordinate to the rights of Pandesic. Merchant will keep
                  such equipment free from any liens or encumbrances whatsoever
                  and will indemnify and hold Pandesic harmless from it failure
                  to do so. Merchant will

--------------------------
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                                     Page 9
<PAGE>   13
PANDESIC AGREEMENT
TERMS AND CONDITIONS

                  use commercially reasonable efforts to maintain such equipment
                  in good operating order, protect such from deterioration other
                  than normal wear and tear and will not use such for any
                  purposes other than contemplated herein.

          15.13   This Agreement constitutes the entire agreement of the parties
                  and supersedes all oral negotiations and prior writings with
                  respect thereto. Except as set forth in Section 13 above, this
                  Agreement may not be amended, modified or terminated unless it
                  is in writing signed by both parties hereto.

                                    Page 10
<PAGE>   14
PANDESIC AGREEMENT
TERMS AND CONDITIONS

ACCEPTANCE

ACCEPTED BY MERCHANT:                     ACCEPTED BY PANDESIC LLC:

SIGNATURE:  /s/  Marc P. Geiger           SIGNATURE:  /s/  Peter Wolcott
        ------------------------------           ------------------------------
PRINT NAME:   Marc P. Geiger              PRINT NAME:   Peter Wolcott
        ------------------------------           ------------------------------
TITLE:   CHIEF EXECUTIVE OFFICER          TITLE:   President
        ------------------------------           ------------------------------
DATE:   April 15, 1999                    DATE:   5/2/99
        ------------------------------           ------------------------------

                                    Page 11

<PAGE>   15
                                    EXHIBIT A
                               ADDITIONAL SERVICES
                   Artist Direct/Ultimate Band List (UBL.com)

        Per discussions between Pascal Desmarets and Harold Hughes and Rob
        Vickery held on April 14, 1999 at Artist Direct headquarters on behalf
        of Merchant and Pandesic, respectively, Merchant and Pandesic agree to
        the following:

1.      Pandesic agrees to make a standalone FI/CO instance and such services as
        the parties mutually agree available to Merchant for the duration of the
        agreement. Merchant agrees to make an expert (or any equivalent
        consultant services) in the FI/CO modules of SAP R/3 available to
        Pandesic for the term of the FI/CO installation project.

2.      Pandesic will operate Artist Direct and UBL stores on the same
        installation of Pandesic 3.0.

3.      Pandesic will use its best efforts to deploy initial Artist Direct
        stores within 6 weeks of the date of technical install. Pandesic will
        make best efforts to condense this effort to 4 weeks but makes no
        commitments that any such deployment will be made in less than 6 weeks
        from the date of technical install.

4.      Pandesic will commit to Cybersource fraud detection and payment
        integration for Romeo. Transaction fees associated with all Cybersource
        services will be the complete responsibility of Merchant.

5.      Pandesic will deliver procurement functionality as part of the Romeo
        release. Until the Romeo release, Merchant will utilize the procurement
        processes utilized by DVD Express.

6.      Fulfillment with Alliance Entertainment is completely the responsibility
        of Merchant. Should Pandesic be required to provide any personnel for
        implementation and/or testing, these personnel will be billable at
        [***]. Pandesic will ensure that the fulfillment API functions as
        documented.

7.      Wholesale Orders - Pandesic will provide a "work around" to handle
        multiple shipments/line item. Pandesic will use its best efforts to
        provide the functionality within R/3 for Romeo to handle multiple
        shipments/line item.

8.      Pandesic will allow Merchant to use the I/Pro Agent on Pandesic servers
        provided that any such use does not negatively impact Pandesic services.

--------------------------
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                                                                  EXHIBIT 10.26

                           ADNM MERCHANDISER AGREEMENT

THIS AGREEMENT, dated as of April 1, 1999, between Giant Merchandising
("Merchandiser"), 5655 Union Pacific Avenue, Commerce, CA 90022, and
ARTISTdirect New Media, LLC ("ADNM"), 17835 Ventura Blvd., Suite 310, Encino, CA
91316, is being entered into in light of the following:

        A. Merchandiser is in the business of acquiring the right to use the
names, photographs and other likenesses, biographical material and other
personal identification (collectively, "Personal Identification") of musical
artists in connection with the manufacture and sale of merchandise and the
licensing of such rights to third parties.

        B. ADNM is in the business of developing and operating Internet retail
storefronts for musical artists ("Artist Stores") that, among other things, sell
merchandise containing the Personal Identification of the applicable artist.

        C. Merchandiser and ADNM are entering into this Agreement in order to
set forth the terms and conditions upon which Merchandiser has agreed to
accommodate ADNM in respect of developing and opening new Artist Stores
featuring Merchandiser Artists (as defined below) and in the operation thereof.

        NOW, THEREFORE, in consideration of the foregoing and the mutual
benefits contained herein, the parties hereto agree as follows:

        1. Term: The term of this Agreement (the "Term") shall be four (4) years
commencing on the date of this Agreement.

        2. Signing Procedures:

           (a) As used herein, "Merchandiser Artist" shall mean, individually
and collectively, each and every musical recording artist in respect of which
Merchandiser from time to time has the exclusive right to manufacture
merchandise utilizing such artist's Personal Identification and to sell such
merchandise for distribution through retail channels, including to retailers who
solely or primarily sell merchandise via the Internet (collectively, the
"Rights"). Merchandiser represents and warrants that attached hereto as Exhibit
A is a true and complete list of Merchandiser Artists as of the execution of
this Agreement, as well as the territory of the Rights in respect of each such
Merchandiser Artist.

           (b) During the Term, Merchandiser agrees that, promptly upon
Merchandiser entering into an agreement to obtain Rights in respect of a
Merchandiser Artist, Merchandiser shall notify ADNM of the applicable artist
name(s) as well as the territory of the Rights. Upon Merchandiser's entering
into such agreement, the applicable Merchandiser Artist shall be deemed added to
said Exhibit A.

           (c) Merchandiser agrees to promptly notify ADNM if any of the
information on said Exhibit A should change during the Term, or if the Rights in
respect of a particular Merchandiser Artist shall have terminated and/or the
"sell-off" provisions

                                       1
<PAGE>   2

of Merchandiser's agreement with the applicable Merchandiser Artist have
become operative (after which such artist shall be deemed deleted from said
Exhibit A.)

           (d) Said Exhibit A indicates with an asterisk (*) those Merchandiser
Artists in respect of which ADNM desires to enter into a Store Agreement as of
the execution of this Agreement. ADNM shall have the right from time to time
during the Term to notify Merchandiser that it desires to enter into a Store
Agreement with any other Merchandiser Artists. Each such Merchandiser Artist
shall be referred to herein as an "Accepted Artist." ADNM and Merchandiser shall
use their collective commercially reasonable efforts to cause the applicable
Merchandiser Artist to enter into an agreement with ADNM (each such agreement,
along with any extensions or renewals thereof, is sometimes referred to herein
as a "Store Agreement") substantially in the form attached hereto as Exhibit B.
ADNM agrees to provide Merchandiser with copies of each such Store Agreement
promptly after the complete execution thereof during the Term.

           (e) Merchandiser acknowledges that, prior to the execution hereof,
ADNM entered into a Store Agreement with respect to the Merchandiser Artist
professionally known as [***] and that all Merchandiser Product sold under said
Store Agreement after the date hereof ("[***] Merchandise") shall be subject to
the terms of this Agreement, except as set forth below in this paragraph 2(e).
ADNM agrees to use best efforts to cause [***] to agree that the License Fee (as
defined in paragraph 6 below) shall be payable to Merchandiser hereunder (rather
than to [***]) in respect of all [***] Merchandise. In the event [***]
nevertheless refuses to so agree, ADNM shall pay Merchandiser the following
product consignment charges in respect of all [***] Merchandise, computed as if
the License Fee had been actually paid to Merchandiser hereunder, as follows:
(i) an amount equal to that portion of the otherwise applicable License Fee that
Merchandiser would have been entitled to retain for its sole account under its
agreement with [***] (e.g., as opposed to any portion thereof that Merchandiser
would be obligated to credit to [***] royalty account), plus (ii) the amount
of the Consignment Charge, if any, that would have been applicable under
paragraph 6(c) below.

           3. Product Supply:

           (a) As used herein:

               (i) "Merchandiser Product" means all merchandise containing the
Personal Identification of a Merchandiser Artist and sold pursuant to a Store
Agreement (whether through the applicable Artist Store or the UBL Store), that
is provided by or on behalf of Merchandiser or a Sublicensee pursuant to the
Merchandiser Terms;

               (ii) "Artist Product" means all merchandise and other products or
services sold pursuant to a Store Agreement (whether through the applicable
Artist Store or the UBL Store) other than Merchandiser Product (e.g., records,
concert tickets, advertisement space, and merchandise supplied by a Sublicensee
other than pursuant to the Merchandiser Terms); and

----------------
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confidential redacted portion has been omitted and filed separately with the
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                                       2
<PAGE>   3

               (iii) "Merchandiser Terms" means that payment for the applicable
merchandise shall not become due until the date [***] after the applicable
merchandise has arrived at ADNM's fulfillment center(s) (the "Center"), it being
understood that ADNM shall have the right to return any such merchandise to
Merchandiser for a full credit within said [***] period (provided the applicable
returned merchandise arrives at Merchandiser's warehouse no later than [***]
after the expiration of said [***] period). For purposes of this paragraph
3(a)(iii), merchandise shall be deemed to have "arrived at the Center" at such
time as the vehicle delivering such merchandise arrives at the Center,
regardless of the date on which such merchandise is unloaded.

           (b) During the term of each Store Agreement (but only as long as
Merchandiser has the Rights in respect of the applicable Merchandiser Artist),
Merchandiser agrees to sell merchandise manufactured by or under the control of
Merchandiser to ADNM for resale under the applicable Store Agreement upon the
following terms:

               (i) All such sales shall be subject to the Merchandiser Terms.

               (ii) All such sales shall be at Merchandiser's standard wholesale
prices (i.e., the prices that Merchandiser generally charges its other wholesale
customers, subject to Merchandiser's customary volume discounts). Merchandiser
represents and warrants that attached hereto as Exhibit C are Merchandiser's
standard wholesale prices as of the execution of this Agreement. Merchandiser
shall notify ADNM of any changes to its standard wholesale prices, which changes
shall only apply to Merchandiser Product ordered by ADNM after its receipt of
such notice from Merchandiser. Notwithstanding the foregoing, the parties agree
and acknowledge that Merchandiser may not have standard wholesale prices for
certain Collectibles (as defined in paragraph 6(b)(v) below), in which case the
wholesale price shall be reasonably determined by Merchandiser.

               (iii) ADNM and Merchandiser shall in their good faith business
judgment mutually determine on an item-by-item basis the applicable minimum and
maximum inventory levels to be carried by ADNM, and Merchandiser agrees to use
commercially reasonable efforts to ship merchandise on a timely basis consistent
therewith.

               (iv) ADNM shall pay all costs (including all associated freight
and insurance costs) of shipping the products to the Center and returning any
unsold merchandise from the Center to Merchandiser's warehouse.

           (c) Merchandiser shall use reasonable efforts to cause each person or
entity who manufactures and distributes merchandise under license from
Merchandiser (a "Sublicensee") to sell merchandise to ADNM hereunder upon the
foregoing terms (e.g., in accordance with the Merchandiser Terms and at no more
than the

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confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.

                                       3
<PAGE>   4

Sublicensee's standard wholesale prices). If a Sublicensee is unwilling
to do so, Merchandiser may elect (in its discretion) to purchase the applicable
merchandise from such Sublicensee and sell same to ADNM pursuant to the
Merchandiser Terms.

           (d) For the avoidance of doubt, Merchandiser agrees and acknowledges
that Artist Product will be sold on the Artist Stores and the UBL Store
and that no License Fee shall be payable to Merchandiser in respect of any
Artist Product.

           (e) After the expiration of the [***] period described in paragraph
3(a)(iii) above, ADNM shall have the right to return (not for credit) to
Merchandiser any unsold merchandise hereunder. Merchandiser agrees to use its
commercially reasonably efforts to promptly sell such returned product at
liquidation prices (subject to Merchandiser's commercially reasonable efforts to
maximize the liquidation proceeds) and to remit to ADNM, within [***] after each
such sale, [***] of the net proceeds thereof. As used in this paragraph 3(e),
the term "net proceeds" shall mean the gross amount payable or credited to
Merchandiser from such sales, less Merchandiser's verifiable direct third party
out-of-pocket costs in connection with such sales.

        4. UBL Store: Merchandiser agrees and acknowledges that ADNM may elect
to make available for sale on an Internet on-line store (the "UBL Store")
operated by a company affiliated with ADNM certain items of Merchandiser Product
offered for sale through an Artist Store. ADNM agrees that its books and records
shall clearly distinguish Merchandiser Product sold through an Artist Store from
Merchandiser Product sold through the UBL Store, and ADNM shall, for the
avoidance of doubt, at no time credit a sale that took place through an Artist
Store as a sale through the UBL Store.

        5. Grant of Rights: With respect to each Store Agreement (and subject to
the terms and conditions set forth therein), Merchandiser shall be deemed to
have granted to ADNM, in consideration for the License Fee, the following
rights, but only insofar as Merchandiser has such Rights and for the territory
Merchandiser has such Rights, during the term of such Store Agreement (but only
as long as Merchandiser has the Rights in respect of the applicable Merchandiser
Artist): (a) the exclusive right and license to develop and operate the only
"official" Internet store for the applicable Merchandiser Artist, and (b) the
non-exclusive (subject to paragraph 11 below) right and license to utilize such
Merchandiser Artist's Personal Identification in connection with the applicable
Artist Store. Notwithstanding the foregoing, ADNM acknowledges that such uses of
the Merchandiser Artist's Personal Identification may be subject to the approval
of the applicable Merchandiser Artist under Merchandiser's agreement with such
Merchandiser Artist; in this regard, Merchandiser hereby authorizes ADNM to seek
to obtain such approvals directly from the applicable Merchandiser Artist.

        6. License Fee:

           (a) In consideration for the rights licensed pursuant to paragraph 5
above and Merchandiser's agreement to supply Merchandiser Product to ADNM

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confidential redacted portion has been omitted and filed separately with the
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                                       4
<PAGE>   5

pursuant to the Merchandiser Terms, ADNM agrees to pay Merchandiser a License
Fee with respect to all Merchandiser Product sold at any time (including after
the Term).

           (b) As used herein:

               (i) "License Fee" shall mean, subject to paragraph 6(c) below,
the amount by which the following amounts exceed the wholesale purchase price
payable by ADNM for all applicable Merchandiser Product, provided that the
License Fee otherwise payable shall be further reduced by any third party
marketing and rights clearance costs incurred by ADNM, with the approval of
Merchandiser (which approval may be withheld by Merchandiser for any reason) and
the applicable Merchandiser Artist, and attributable to Merchandiser Product (it
being understood that any such costs not specifically attributable to
Merchandiser Product shall be allocated reasonably by ADNM between Merchandiser
and the applicable Merchandiser Artist, taking into account whether the
applicable costs related to Merchandiser Product and/or Artist Product:

               (A) [***] of the Adjusted Gross Merchandiser Product Revenue with
respect to Merchandiser Product (other than Collectibles) sold through an Artist
Store and with respect to Collectibles sold through the UBL Store (or through
any other source other than an Artist Store);

               (B) [***] of the Adjusted Gross Merchandiser Product Revenue with
respect to Merchandiser Product (other than Collectibles) sold through the UBL
Store (or through any other source other than an Artist Store); and

               (C) [***] of the Adjusted Gross Merchandiser Product Revenue with
respect to Collectibles sold through an Artist Store.

           (ii) "Adjusted Gross Merchandiser Product Revenue" shall mean Gross
Merchandiser Product Revenue less the Deductible Amounts.

           (iii) "Gross Merchandiser Product Revenue" shall mean the amount
actually received by ADNM (including shipping and handling revenues) in respect
of Merchandiser Product.

           (iv) "Deductible Amounts" shall mean all of the following costs paid
by ADNM and specifically attributable to Merchandiser Product: all amounts paid
under paragraph 3(b)(iv) above; all actual packaging and shipping costs paid to
third parties (not to exceed the associated shipping and handling revenues
referred to in paragraph 6(b)(iii) above); all third party fulfillment fees and
related charges; sales, use and value-added taxes actually paid; credit card
fees; and any credits for returns, rebates, cancellations and exchanges. ADNM
shall not deduct any fulfillment fees or related charges to the extent they
exceed such amounts as Merchandiser has approved; Merchandiser hereby
pre-approves the applicable amounts set forth on Exhibit D attached hereto. To
the extent ADNM is unable to identify a particular item of cost as being
attributable to either Merchandiser Product or Artist Product, only a portion
thereof shall be deemed a "Deductible Amount" hereunder, such portion to be
determined reasonably by ADNM, taking into account the total amount of Gross
Merchandiser Product Revenues as compared to the total amount of other
applicable revenues during the applicable accounting period. Notwithstanding
anything to the contrary contained herein, as between ADNM and Merchandiser,
ADNM shall be solely responsible for all customer bad debts in respect of
Merchandiser Product shipped by ADNM (or its designee), including all associated
Deductible Amounts.

           (v) "Collectibles" means any single item of Merchandiser Product
bearing a wholesale price in excess of [***].

           (c) Within ten (10) business days after the date ADNM notifies
Merchandiser of each new Accepted Artist pursuant to paragraph 2(d) above (or
within ten (10) business days after the complete execution of this Agreement, in
respect of any

----------------
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confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.

                                       5
<PAGE>   6
Accepted Artist indicated on Exhibit A as of the execution hereof), Merchandiser
shall have the right to notify ADNM of the percentage of the applicable License
Fees hereunder that Merchandiser is obligated to pay to, or credit to the
account of, the applicable Accepted Artist or its furnishing company (the
"Artist Percentage"), if such Artist Percentage exceeds [***]. In such event,
notwithstanding anything to the contrary contained herein, ADNM shall pay to
Merchandiser a product consignment charge (the "Consignment Charge") equal to
[***] of the Adjusted Gross Merchandiser Product Revenue with respect to such
Accepted Artist for each [***] by which such Artist Percentage exceeds [***].
For purposes of illustration, in the event that Merchandiser has properly
notified ADNM that the Artist Percentage with respect to a particular Accepted
Artist equals [***], then with respect to such Accepted Artist, ADNM shall pay
to Merchandiser a Consignment Charge equal to [***] of the Adjusted Gross
Merchandiser Product Revenue with respect to such Accepted Artist. For the
avoidance of doubt, no Consignment Charge shall be applicable with respect to
any Merchandiser Artist for which Merchandiser does not timely notify ADNM of
the Artist Percentage as provided in this paragraph 6(c).

           (d) Attached hereto as Exhibit E are certain example computations of
the License Fee.

        7. Artist Store Advertising Revenues. In respect of any amounts received
by ADNM during the Term in consideration of the placement of hyperlinks, banners
and other advertisements contained on an Artist Store ("Artist Store Advertising
Revenues"), ADNM agrees to pay Merchandiser [***] of the amount by which such
Artist Store Advertising Revenues exceed all agent commissions related thereto.
The parties acknowledge that all such hyperlinks, banners and other
advertisements may be subject to the approval of the applicable Accepted Artist.

        8. Artist Store Customer Databases. During the Term, subject to the
consent of the applicable Merchandiser Artist, ADNM shall provide Merchandiser
with customer database information from the Artist Stores, [***] , to be used by
Merchandiser solely for purposes of promoting the Artist Stores and
Merchandiser's business in connection with the applicable Merchandiser Artist to
which the database relates. Merchandiser specifically acknowledges and agrees
that it shall have no right to sell, distribute, sublicense or otherwise dispose
of the customer database information provided to Merchandiser hereunder or any
portion thereof.

        9. ARTISTdirect Warrant. In further consideration of Merchandiser's
entering into and fully performing its obligations under this Agreement, and in
exchange for the payment by Merchandiser to ARTISTdirect, LLC ("AD") of one
dollar ($1.00), upon the consummation of the transaction that currently is
contemplated to occur whereby AD will become the beneficial owner of one hundred
percent (100%) of the outstanding membership interests of The Ultimate Band
List, LLC (the "Rollup"), ADNM shall cause AD to grant to Merchandiser a warrant
to acquire Common Units of ARTISTdirect, LLC

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[***]  Confidential treatment has been requested for the bracketed portion.  The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.

                                       6
<PAGE>   7
representing approximately two percent (2%) of AD's outstanding membership
interests for an aggregate exercise price not to exceed One Million Seven
Hundred Twenty-Four Thousand Dollars ($1,724,000) which warrant shall be subject
to the terms generally set forth in Exhibit F attached hereto; provided,
however, that if the Rollup shall not occur prior to July 31, 1999, then ADNM
shall then cause AD to grant to Merchandiser a warrant substantially in the form
of Exhibit F attached hereto.

        10. Accountings:

           (a) ADNM shall compute the License Fee, any Consignment Charges and
Merchandiser's applicable share of any Artist Store Advertising Revenues,
payable to Merchandiser and render an accounting statement to Merchandiser
within thirty (30) days after March 31, June 30, September 30 and December 31
for the three-month period preceding March 31, June 30, September 30 or December
31, as the case may be. Each such statement shall include an itemized breakdown
of the sources of the applicable revenue, Deductible Amounts and all other
reductions in computing the License Fee and share of Artist Store Advertising
Revenues, and shall be accompanied by the payment of the amounts, if any, earned
by Merchandiser during the accounting period to which the statement relates.

           (b) Merchandiser or a certified public accountant on Merchandiser's
behalf may, at ADNM's offices and at Merchandiser's expense, examine ADNM's
books and records relevant to the calculation of the License Fee solely for the
purposes of verifying the accuracy of statements rendered by ADNM to
Merchandiser. Such books and records may be examined as aforesaid only (i)
during ADNM's normal business hours, (ii) upon reasonable notice to ADNM, and
(iii) within two years after the date a statement is due hereunder. Further,
Merchandiser shall not have the right to examine such books and records more
frequently than once in any twelve month period or more than once with respect
to any particular statement. Each statement shall be deemed final and binding
upon Merchandiser as an account stated and shall not be subject to any claim or
objection by Merchandiser (A) unless Merchandiser notifies ADNM of
Merchandiser's specific written objection to the applicable statement, stating
the basis thereof in reasonable detail within two (2) years after the date such
statement is due hereunder, and (B) unless, within said two (2)-year period,
Merchandiser make proper service of process upon ADNM in a suit instituted in a
court of proper jurisdiction.

        11. Exclusivity: Insofar as ADNM is concerned, Merchandiser shall have
the right to sell and authorize others to sell merchandise containing a
Merchandiser Artist's Personal Identification over the Internet. However, during
the Term, Merchandiser shall not, without ADNM's consent, develop or maintain a
web site, or license or otherwise authorize any other web site provider to
develop or maintain a web site, that is identified solely with a single
Merchandiser Artist (e.g., a web site that is the "official" merchandise web
site for a Merchandiser Artist). The foregoing is not intended to prohibit
Merchandiser from operating a web site relating to multiple artists, with
certain pages or sections thereof devoted solely or primarily to a particular
Merchandiser Artist, and to

                                       7
<PAGE>   8

sell merchandise on such web site; provided the appearance of such web site is
not designed so as to give the consumer the impression that the merchandise is
being purchased directly from the Merchandiser Artist, rather than from
Merchandiser (or its licensee). [For the avoidance of doubt, the operation of
any such web site by Merchandiser shall not in any way affect ADNM's rights
hereunder or otherwise to develop and operate the "official" web site of the
applicable Artist (e.g., an Artist Store).]

        12. Tour Merchandising and Sublicensing Rights: During the Term and for
a period of one (1) year thereafter, ADNM agrees that it and its affiliates
shall refrain from seeking from any artist (a) tour merchandising rights, or (b)
the right to sublicense merchandising rights to third parties, or (c) the right
to manufacture merchandise containing such artist's Personal Identification.

        13. First Opportunity to Manufacture Merchandise for Outside Artists: As
used herein, the term "Outside Artist" shall mean an artist who is not a
Merchandiser Artist, who is then subject to a store agreement with ADNM, and who
is not then subject to an agreement pursuant to which the Rights with respect to
such artist are held by a third party (e.g., another merchandising company).
During the Term, ADNM shall not arrange for the manufacture of merchandise
containing the Personal Identification of an Outside Artist with anyone other
than Merchandiser without first affording Merchandiser the opportunity to
manufacture such merchandise. In such event, ADNM and Merchandiser shall
negotiate in good faith the terms pursuant to which Merchandiser will
manufacture and supply such merchandise to ADNM. If ADNM and Merchandiser are
unable to agree on such terms, then, insofar as Merchandiser is concerned, ADNM
may make an arrangement with anyone else to manufacture and supply such
merchandise. Notwithstanding the foregoing, Merchandiser agrees and
acknowledges that the applicable Outside Artist shall not be bound by the
foregoing and shall, accordingly, have the right, insofar as Merchandiser is
concerned, to cause anyone else to manufacture and supply to ADNM such
merchandise. For the avoidence of doubt, no License Fee shall be payable under
this Agreement with respect to any merchandise containing the Personal
Identification of an Outside Artist.

        14. Representations and Warranties; Indemnity:

           (a) Each party hereto represents and warrants that: (i) it has the
full right, power and authority to enter into and to perform this Agreement;
(ii) it is not under any restriction or obligation that may or will impair such
party's full performance of this Agreement; and (iii) it shall not at any time
do or authorize any person or entity to do anything inconsistent with, or
anything that might diminish, impair or interfere with any of the other party's
rights hereunder.

           (b) Merchandiser agrees to indemnify and hold ADNM and its members,
employees, attorneys, agents, successors, affiliates, assigns and licensees
harmless against any claim, liability, cost and expenses (including attorneys'
and accountants' fees reasonably incurred) in connection with any breach or
alleged breach of this Agreement by Merchandiser. In this regard, ADNM shall not
settle any claim without first notifying Merchandiser of the terms of any
proposed settlement and obtaining Merchandiser's consent thereto.

           (c) ADNM agrees to indemnify and hold Merchandiser and its members,
employees, attorneys, agents, successors, affiliates, assigns and licensees
harmless against any claim, liability, cost and expenses (including attorneys'
and accountants' fees reasonably incurred) in connection with any breach or
alleged breach of this Agreement by ADNM and/or in connection with the breach by
ADNM of any Store Agreement. In this regard, Merchandiser shall not settle any
claim without first notifying ADNM of the terms of any proposed settlement and
obtaining ADNM's consent thereto.

           (d) Merchandiser acknowledges that ADNM is making no representations
and warranties concerning anticipated success of the Stores, the amount of
compensation payable to Merchandiser hereunder, and/or the current or future
value of ADNM or the warrants described in paragraph 8 above. Likewise, ADNM

                                       8
<PAGE>   9
acknowledges that Merchandiser is making no representations and warranties
concerning anticipated success of the Stores or the amount of compensation
payable to ADNM with respect thereto.

        15. Notices; Approvals:

           (a) All notices and payments to either party hereto shall be sent to
such party's address first mentioned herein, or such other address as a party
hereto may hereafter designate by notice to the other. All notices sent under
this Agreement must be in writing to be effective, and must be sent by a third
party messenger, by air courier service with a written acknowledgment of
receipt, by registered or certified mail, return receipt requested, or through a
telegraph office. The date of personal delivery, of mailing or faxing, or the
date of delivery to a telegraph office, as the case may be, of any such notice
shall be deemed the date of the giving thereof (except, with respect to notices
of change of address, the date of which will be the date of receipt by the
receiving party). Until ADNM notifies Merchandiser otherwise, a copy of all
notices hereunder to ADNM shall be simultaneously sent as aforesaid to Lenard &
Gonzalez LLP, 1900 Avenue of the Stars, 25th Floor, Los Angeles, CA 90067;
Attention: Allen D. Lenard, Esq. Until Merchandiser notifies ADNM otherwise, a
copy of all notices hereunder to Merchandiser shall be simultaneously sent as
aforesaid to Warner Music Group Inc., 3400 Riverside Drive, 6th Floor, Burbank,
CA 91505; Attention: Legal Department.

           (b) No failure by a party hereto to perform any of its obligations
hereunder shall be deemed a breach of this Agreement, unless the party claiming
a breach has given the other party hereto notice of such alleged breach in
reasonable detail and such alleged breach is not cured within fifteen (15)
business days [ten (10) business days for non-payments] after the giving of such
notice, provided this sentence shall not apply to breaches incapable of being
cured (e.g., representations and warranties).

           (c) No consent or approval under this Agreement shall be unreasonably
withheld or delayed. With respect to consents and approvals required under this
Agreement, the applicable party may elect to request such consent by notice to
the other. If the party whose consent or approval is required does not respond
to such notice within ten (10) business days thereafter, the party seeking to
obtain such consent or approval may give the other party a second notice making
such request, and the applicable party's consent or approval shall be deemed
granted unless it notifies the other party to the contrary, stating in
reasonable detail the basis thereof, within ten (10) business days after such
second notice.

        16. Miscellaneous:

           (a) All references to "this Agreement," "hereof," "herein" and words
of similar connotation include all exhibits attached hereto, unless specified
otherwise. This Agreement is intended by the parties hereto as a final
expression of their understanding and agreement with respect to the subject
matter hereof and as a complete and exclusive statement of the terms thereof;
this Agreement supersedes all prior and contemporaneous negotiations,
understandings, and agreements between the parties

                                       9

<PAGE>   10
hereto with respect to the subject matter hereof. The parties acknowledge and
agree that neither party hereto has made any representations or promises in
connection with this Agreement or the subject matter hereof not contained
herein. Nothing in this Agreement shall be construed to require the commission
of any act contrary to law, and wherever there is a conflict between any
provisions of this Agreement and any statute, law, ordinance, order or
regulation contrary to which the parties hereto have no legal right to contract,
such statute, law, ordinance, order or regulation shall prevail; provided that,
in such event, (a) the provision of this Agreement so affected shall be limited
only to the extent necessary to permit the compliance with the minimum legal
requirements, (b) no other provisions of this Agreement shall be affected
thereby, and (c) all such other provisions shall remain in full force and
effect. The parties hereto shall negotiate in good faith to replace any invalid,
illegal or unenforceable provision (the "Invalid Provision") with a valid
provision, the effect of which comes as close as possible to that of the Invalid
Provision. This Agreement cannot be canceled, modified, amended or waived, in
part or in full, in any manner except by an instrument in writing signed by the
party to be charged. No waiver by ADNM, whether expressed or implied, of any
provision of this Agreement or default hereunder shall affect ADNM's right to
thereafter enforce such provision or to exercise the right or remedy set forth
in this Agreement in the event of any other default, whether or not similar.
Words in the singular number shall include the plural, and vice versa. Whenever
examples are used in this Agreement with the words "including," "for example,"
"e.g.," "such as," "etc." or any derivation thereof, such examples are intended
to be illustrative and not in limitation thereof. The paragraph headings herein
are used solely for convenience and shall not be used in the interpretation or
construction of this Agreement.

(b) In entering into this Agreement and providing services pursuant hereto,
Merchandiser and ADNM each have and shall have the status of independent
contractors. Nothing herein contained shall contemplate or constitute either
party being an agent or employee of the other party, and nothing herein shall
constitute a partnership, joint venture or fiduciary relationship between the
parties.

(c) Neither party hereto shall, without the prior written consent of the other
party, assign this Agreement, in whole or in part, to any person or entity other
than a subsidiary, affiliated or controlling entity, or to any person or entity
owning or acquiring a substantial portion of the stock or assets of such party
hereto.

(d) This Agreement shall be deemed to have been entered into in the State of
California and the validity, interpretation and legal affect of this Agreement
shall be governed by the laws of the State of California applicable to contracts
entered into and performed entirely within the State of California. The courts
located in the County of Los Angeles, California (state and federal), only, will
have jurisdiction of any controversy regarding this Agreement; any action or
other proceeding which involves such a controversy will be brought in those
courts, in California and not elsewhere.

ARTISTdirect New Media, LLC                       GIANT MERCHANDISING

                                       10
<PAGE>   11

By: ______/s/  Marc P. Geiger________       By: ________/s/  [Illegible]_______
   (an authorized signatory)                      (an authorized signatory)

                                       11
<PAGE>   12

                                    EXHIBIT A

                             MERCHANDISER'S ARTISTS

           Artist                       Agreement                    Territory
-----------------------------------------------------------------------------

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

<TABLE>
<CAPTION>
GIANT MERCHANDISING
Music Roster
<S>                                                <C>
Bryan Adams                                        Presidents of the United States
Aerosmith                                            of America
Bad Religion                                       Rage Against the Machine
Bauhaus                                            Rancid
Clint Black                                        Red Hot Chili Peppers
Bush                                               Savage Garden
Candlebox                                          Smashing Pumpkins
The Chieftains                                     Social Distortion
Kurt Cobain                                        Speedealer
C.O.C. (Corrosion of Conformity)                   Sponge
Crystal Method                                     Testament
Days of the New                                    Third Eye Blind
Def Leppard                                        Tool
Deftones                                           The Vandals
Bryan Ferry                                        Veruca Salt
Flaming Lips                                       The Wallflowers
Fu Manchu                                          Weezer
Goldfinger
Green Day
Don Henley
Lauryn Hill
Hole
Hootie & The Blowfish
Korn
Lenny Kravitz
L7
Limp Bizkit
Love And Rockets
Marcy Playground
Matchbox 20
Megadeth
Metallica
Mudhoney
My Life With The Thrill Kill Kult
Mike Ness
The Offspring
Orgy
Porno For Pyros
</TABLE>

                                       12
<PAGE>   13

                                    EXHIBIT B

                             ON-LINE STORE AGREEMENT

THIS AGREEMENT, dated as of ____________, 19__, by and between ARTISTdirect New
Media, LLC ("ADNM"), 17835 Ventura Blvd., Suite 310, Encino, CA 91316, and
[Company Name] ("you"), c/o __________________________ is being entered into in
consideration of the mutual benefits and covenants contained in this Agreement.

1. PURPOSE: Subject to your approval rights in this Agreement, ADNM will
develop, maintain and operate an Internet web site for you relating to the
musical group professionally known as "[ArtistName]" ("Artist") and the members
of Artist, to be known as "The Official [ArtistName] Superstore" (the "Store").
The Store will provide Internet and other online access for online and offline
distribution of products and services ("Product"). It is intended that the
Product will include records, digital downloads (subject to the consent of
Artist's record company), merchandise, tickets, tour memorabilia, collectible
items and special or limited edition items not available from any other source,
and special bundled packages including any or all of the foregoing items.

2. TERM: The term of this Agreement (the "Term") shall commence on the date set
forth above and shall extend for an initial contract period ending five (5)
years after the official launch of the Store. After the initial contract period,
the Term shall automatically continue for additional one (1) year contract
periods, subject to the following sentence. At any time between sixty (60) and
thirty (30) days prior to the expiration of any contract period of the Term,
either party may by notice to the other terminate the Term effective as of the
end of the then-current contract period.

3.      MERCHANDISER AGREEMENTS.

               (a) You are presently party to an agreement (the
"Artist/Merchandiser Agreement") with Winterland Concessions Company
("Merchandiser") pursuant to which you have granted Merchandiser the exclusive
right to manufacture (and license the manufacture of) merchandise bearing the
name, likenesses, biographical material and other personal identification of
Artist (collectively, "Personal Identification") for sale through retail
channels, including the right to sell such merchandise to retailers who solely
or primarily sell merchandise via the Internet (the "Rights").

               (b) ADNM represents and warrants that it is party to an agreement
with Merchandiser pursuant to which Merchandiser has (i) granted to ADNM any
consents and licenses that may be required from Merchandiser as a result of the
Artist/Merchandiser Agreement in connection with the sale of Product hereunder,
and (ii) agreed to supply (or cause the supply of) merchandise on a consignment
basis to ADNM for resale on the Store (the "ADNM/Merchandiser Agreement"). You
acknowledge that certain Product items may be manufactured by or under the
control of Merchandiser's sublicensees, and that Merchandiser may or may not be
able to offer such Product items to ADNM on a consignment basis. All Product
supplied to ADNM by Merchandiser (or its sublicensees) on a consignment basis is
sometimes

                                       13
<PAGE>   14

referred to herein as "Merchandiser Product"; all other Product is sometimes
referred to herein as "Artist Product."

               (c) If you (or Artist) enter into any agreement during the Term
(of this Agreement) pursuant to which you grant the Rights to any third party,
you shall cause such third party to grant to ADNM any consents and licenses that
may be required from such third party in connection with the sales of Product
hereunder. For the avoidance of doubt, no termination or expiration of the
Artist/Merchandiser Agreement or of the ADNM/Merchandiser Agreement shall affect
the Term (of this Agreement) or the rights granted to ADNM hereunder.
Accordingly, the only effect of either such termination or expiration will be
that the terms of this Agreement relating to Merchandiser Product will no longer
apply, and the terms of this Agreement relating to Artist Product will
thereafter apply to all Product hereunder.

4.      DEVELOPMENT; HOSTING; CUSTOMER SERVICE:

               (a) ADNM will design and develop the Store, including the source
code, the Product catalog, and the commerce system, and will be solely
responsible for the costs of such design and development. You shall have the
right to approve the design of the Store, including its "look and feel." The
parties hereto agree to use commercially reasonable best efforts (i) to cause
the beta version of the Store to be completed within 60 days after the complete
execution of this Agreement, and (ii) to officially launch the Store within 90
days after such execution.

               (b) During the Term, ADNM will host (i.e., provide the server
for) and maintain the Store, including by providing periodic source code
programming updates and improvements in accordance with your reasonable
requests. In this regard, ADNM will use its commercially reasonable best efforts
to correct any material "bug" or defect as soon as reasonably possible after
ADNM becomes aware of such material "bug" or defect.

               (c) ADNM shall handle all customer orders and inquiries, provide
all necessary credit card accounting and processing services and develop
payment, delivery and refund policies. To effect the foregoing, ADNM shall also
provide an on-line and toll-free telephone service center that will take orders
and respond to customer inquiries. On-line inquiries will be responded to within
24 hours of receipt and the telephone service will be operational Mondays
through Fridays from 9:00 a.m. to 7:00 p.m. Pacific Time (excluding holidays)
and will enable customers who prefer not to place orders on-line to place orders
by facsimile or telephone.

               (d) Unless you and ADNM agree otherwise in writing, ADNM (or its
designee) shall process orders received from the Store and arrange to have the
ordered Product shipped to the customer (subject to Product availability).

5.      PRODUCT SUPPLY AND INVENTORY:

               (a) You will have the right to approve the Products that are to
be sold through the Store and the retail price of each Product item.

               (b) You and ADNM agree to cooperate with each other and use their
commercially reasonable best efforts to make the necessary arrangements with the
manufacturers, distributors and providers of Product ("Suppliers"), on mutually
acceptable terms, to ensure the

                                       14
<PAGE>   15

timely supply of Product in sufficient quantities to fulfill Store customer
orders. You will be responsible for purchasing all Product from the Suppliers
and paying all related costs (including directly associated freight and
insurance costs) ("Product Costs"). If ADNM should nevertheless pay any Product
Costs on your behalf (which ADNM is not obligated to do), all such Product Costs
will be deducted from any and all monies otherwise payable to you hereunder and,
to the extent ADNM is at any time unable to do so, you agree to promptly
reimburse ADNM for the excess upon demand. In order to assist you with regard to
the foregoing, ADNM will provide inventory management services, taking into
account such inventory levels as you and ADNM may have mutually approved.

        As between you and ADNM, you shall own and be solely responsible for all
Artist Product inventory. However, ADNM shall maintain (or cause the applicable
fulfillment center to maintain) at all times during the Term insurance to
protect you and ADNM from losses related to Artist Product inventory damaged or
otherwise lost while in the fulfillment center's possession. The coverage terms
of the insurance policy currently in effect are set forth on Exhibit 1 attached
to this Agreement.

               (c) Upon the expiration of the Term, all Artist Product inventory
for which you have paid the Product Costs shall be shipped, at your sole cost
and expense, to a location designated or approved by you, which inventory shall
be free and clear of any encumbrances by ADNM or any third party deriving rights
through ADNM.

6.      PRODUCT SALES AND STORE REVENUES:

        (a) Merchandiser Product: Attached hereto as Exhibit 2 is an extract of
the ADNM/Merchandiser Agreement setting forth the license fee payable by ADNM to
Merchandiser in respect of Merchandiser Product sold hereunder. Company
acknowledges and agrees that it shall look solely to Merchandiser, and not to
ADNM, with respect to all monies due Company and/or Artist in respect of
Merchandiser Product sold hereunder.

        (b) Artist Product:

        (i) Upon ADNM's receipt of a verified order for a particular item of
Artist Product, ADNM shall purchase such item of Product from you. Upon such
purchase, title to such Product shall pass to ADNM and, as between you and ADNM,
ADNM will thereafter be responsible for the inventory of such Product item.

        (ii) ADNM shall pay you a purchase price equal to [***] of the "Gross
Artist Product Revenue," which means the amount actually received by ADNM in
respect of Artist Product sold through the Store, less all related Deductible
Amounts. The term "Deductible Amounts" means all shipping and handling charges;
third party fulfillment fees and related charges; sales, use and value-added
taxes; credit card and other third party service fees; and any credits for
returns, rebates, cancellations and exchanges. A schedule setting forth the
fulfillment fees charged by the fulfillment center as of the date hereof is set
forth on Exhibit 1 attached hereto.

        (iii) Notwithstanding anything to the contrary contained herein, as
between ADNM and you, [***] shall be solely responsible for all Product Costs
and Deductible Amounts

----------------
[***]  Confidential treatment has been requested for the bracketed portion.  The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.

                                       15
<PAGE>   16

associated with customer bad debts in respect of Product hereunder shipped by
ADNM (or its designee).

        (c) Records: Notwithstanding paragraphs 5(c) and 6(b) above,
phonorecords that are supplied by ADNM's designated fulfillment center for sale
through the Store ("Records") shall be purchased by ADNM directly from such
fulfillment center, and ADNM (or the fulfillment center) shall be solely
responsible for all related Product Costs (subject to the next sentence) and
inventory. ADNM shall pay you [***] of the "Net Record Revenue, which means all
Gross Record Revenue less all Product Costs incurred for Records. The term
"Gross Record Revenue" means the amount actually received by ADNM in respect of
Records sold through the Store, less all related Deductible Amounts.

        (d) UBL Store: ADNM may elect to make certain items of Product available
for sale on an Internet on-line store (the "UBL Store") operated by a company
affiliated with ADNM (the "UBL Affiliate"). To the extent any merchandise
offered for sale on the UBL Store is readily available in the Store inventory,
ADNM agrees to cause the UBL Affiliate to utilize such inventory to fulfill
orders for such merchandise placed on the UBL Store, rather than order such
merchandise from any third party source. However, for the avoidance of doubt, no
merchandise or other products (e.g. Records) that are obtained by the UBL
Affiliate from third party sources (i.e., other than from the Store's inventory)
and sold on the Store shall be deemed to constitute Product subject to this
Agreement. ADNM shall account to you pursuant to the terms of this Agreement
with respect to all Artist Product sold through the UBL Store, except that ADNM
(or the UBL Affiliate) shall purchase such Product for a price equal to [***] of
the applicable Gross Artist Product Revenue shall be computed "at the source"
(i.e., based upon the amount actually received by the UBL Affiliate, rather than
the amount actually received by ADNM), and shall be deemed received by ADNM for
purposes of paragraph 6(g) below within 30 days after it is received by the UBL
Affiliate.

        (e) Database: As between ADNM and you, you will own the customer
database as specifically identified with the Store (the "Database"). However,
ADNM will have the exclusive right during the Term, subject to your consent in
each instance, to administer and license any third party uses of the Database,
and to collect all monies relating thereto accrued during the Term, regardless
of when payable, ADNM shall pay you [***] of the "Gross Database Revenue," which
means the amount actually received by ADNM in respect of sales and other
exploitations of the Database, less all related Deductible Amounts.

        (f) Other Revenues: The term "Gross Exploitation Revenue" means the
amount actually received by ADNM in respect of activities contemplated in this
Agreement and not set forth above in this paragraph 6 including, for example,
income in respect of advertising contained on the Store (e.g., hyperlinks to,
and banners and other advertisements for, other Internet web sites), less all
agent commissions and other related Deductible Amounts. You shall have the right
to approve all such advertising and other activities. ADNM shall pay
Merchandiser [***] of the Gross Exploitation Revenue received by ADNM during the
term of the Artist/Merchandiser Agreement (and you agree to look solely to
Merchandiser, and not to ADNM, with respect to all monies, due you and/or Artist
in respect of such Gross Exploitation Revenue) and shall pay you [***] of the
Gross Exploitation Revenue received by ADNM after the expiration of the term or
the Artist/Merchandiser Agreement.

        (g) Accounting: The term "Gross Income" means, individually and
collectively, Gross Artist Product, Revenue Gross Record Revenue, Gross Database
Revenue and Gross Exploitation Revenue. ADNM shall compute your share of Gross
Income and render statements thereof to you within 60 days after March 31, June
30, September 30 and December 31 for the preceding three-

----------------
[***]  Confidential treatment has been requested for the bracketed portion.  The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.

                                       16
<PAGE>   17

month period. ADNM shall deduct from your share of Gross Income all chargeable
amounts under this Agreement. Each such statement shall include an itemized
breakdown of the sources of the applicable revenue and shall be accompanied by
the payment of the amount of monies, if any, earned by you during the accounting
period to which the statement relates. ADNM shall be entitled from time to time
to withhold from payments otherwise due reserves against anticipated returns,
rebates, credits, cancellations and exchanges, provided that such reserves shall
be liquidated within two accounting periods following their establishment. You
or a certified public accountant on your behalf may, at ADNM's offices and at
your expense, examine ADNM's books and records relevant to the calculation of
your share of Gross Income solely for the purposes of verifying the accuracy of
statements rendered by ADNM to you. Such books and records may be examined as
aforesaid only (i) during ADNM's normal business hours, (ii) upon reasonable
notice to ADNM, and (iii) within two years after the date a statement is due
hereunder. Further, you shall not have the right to examine such books and
records more frequently than once in any twelve month period or more than once
with respect to any particular statement. Each statement shall be deemed final
and binding upon you as an account stated and shall not be subject to any claim
or objection by you (A) unless you notify ADNM of your specific written
objection to the applicable statement, stating the basis thereof in reasonable
detail within two years after the date such statement is due hereunder, and (B)
unless, within said two year period, you make proper service of process upon
ADNM in a suit instituted in a court of proper jurisdiction.

7.      MARKETING.

        (a) During the Term, ADNM shall cause the Ultimate Band List Internet
web site, located at www.ubl.com (the "UBL"), to contain a featured hyperlink
to, and prominently placed advertising for, the Store. Also, ADNM may include on
the Store a featured hyperlink to, and prominently placed advertising for the
UBL at no charge to the UBL Affiliate or ADNM. Other marketing activities in
respect of the Store shall be subject to your approval, and may involve the
development of strategic relationships with, for example, other Internet web
sites and/or Artist's record you to create Store hyperlinks. Any third party
marketing costs incurred with your approval shall be deducted from any monies
otherwise payable to you hereunder (except to the extent deducted from monies
otherwise payable by ADNM to Merchandiser, it being understood that all
marketing costs shall be subject to allocation by ADNM, in ADNM's reasonable
business judgment, between you and Merchandiser taking into account whether the
applicable costs related to Merchandiser Product and/or Artist Product).

        (b) You agree to use your commercially reasonable best efforts to:

            (i) Keep ADNM apprised of Artist's professional activities (e.g.,
                touring and recording) and provide ADNM reasonable access to
                Artist's professional relationships (e.g., with tour promoters
                and record labels);

                                       17
<PAGE>   18

               (i) Cause the URL of the Store to be included on all
advertisements for Artist records released during the Term or for concerts to be
performed during the Term, and on the liner notes of Artist's records and
concert programs;

               (ii) Cause on-line events and/or sites featuring Artist or any
member of Artist (e.g., the official Internet web site of Artist's fan club, any
official Internet web site relating to any member of Artist, any on-line "chats"
featuring Artist or any member(s) of Artist, cybercasts of Artist's live
performances, interviews or other audiovisal programs featuring Artist or any
member(s) of Artist) to prominently feature, on both the front and main event
page(s), a hyperlink to, and banner advertising for, the Store; and

               (iii) Subject to Artist's other professional commitments, cause
Artist to be reasonably available during the Term for on-line "chats" hosted by
the Store.

8.      Ownership; Grant of Rights; Post-Term Rights:

        (a) Artist Content: As between you and ADNM, any and all artwork,
trademarks, logos, graphics, video, sound recordings, musical compositions,
text, data and other materials supplied by you to ADNM in connection with this
Agreement, as well as the URL and the domain name or names assigned to the Store
and/or the Artist Site (collectively, the "Artist Content"), shall remain your
sole and exclusive property. You hereby grant to ADNM during the Term and
throughout the universe (the "Territory") a non-exclusive, royalty-free license
to use, copy, modify (with your prior consent), distribute, publicly perform and
display and otherwise exploit the Artist Content in connection with the
development, maintenance and operation of the Store and/or the Artist Site and
the advertising and promotion of the Store and/or the Artist Site and of ADNM in
connection with the Store and/or the Artist Site.

        (b) Developed Content: As between you and ADNM, any and all text,
graphics, audio, video, artwork and designs created by ADNM or its employees or
agents during the Term for use solely on the Store and/or the Artist Site,
including any additions to or modifications of Artist Content made by ADNM or
its employees or agents, (collectively, the "Developed Content"), shall be your
sole and exclusive property. All Developed Content shall be deemed included in
the license granted by you under paragraph 8(a) above.

        (c) ADNM Content: As between you and ADNM, any and all commerce
technology, HTML formatting code, source and object code, programming code and
software, as well as all text, graphics, audio, video, artwork and designs
provided by ADNM in connection with this Agreement which does not constitute
Developed Content (collectively, the "ADNM Content") shall be ADNM's sole and
exclusive property. Notwithstanding the foregoing, upon the expiration of the
Term and provided you are not in breach of this Agreement, ADNM shall grant to
you a perpetual non-exclusive license throughout the Territory to use, modify,
publicly perform and display all ADNM Content used in the Store and owned and
controlled by ADNM, solely in connection with operating and maintaining the
Store. In consideration of such license, if you elect to so utilize any such
ADNM Content in connection with the Store after the Term,

                                       18
<PAGE>   19

you agree to pay, or cause your licensee to pay, ADNM a royalty equal to [***]
of the gross revenues earned in connection with the Store after the expiration
of the Term, but only for as long as you continue to use any such ADNM Content.
In this regard, you shall account in the same fashion and within the same time
periods, and ADNM shall be accorded the same examination rights and be subject
to the same limitations and restrictions, as apply with respect to your
accountings under paragraph 6(g) above. Nothing contained in this Agreement
shall impose upon ADNM any obligation whatsoever to provide you with updates,
hosting, maintenance or support with respect to the Store or such ADNM Content
after the expiration of the Term. You shall not be entitled to use any name,
trademark or service mark of ADNM or its affiliates in any manner whatsoever
without obtaining the prior written consent of ADNM or the applicable affiliate
of ADNM.

        (c) Artist Identification: You hereby grant to ADNM the non-exclusive
right during the Term throughout the Territory to use the names of Artist and
Artist's tours, and the names and approved photographs and other approved
likenesses of the members of Artist, on the Store and in advertisements and
promotions of the Store and of ADNM in connection with the Store. In this
regard, at no cost to ADNM, you agree to provide ADNM with all photographs,
graphics, logos and similar items reasonably required by ADNM to create the
Store and readily available to you promptly following ADNM's request.

        (d) Inducement Terms and Guarantee: You shall cause the members of
Artist to execute the Inducement Terms and Guarantee attached to this Agreement
as Exhibit 3 concurrently with the execution of this Agreement.

        9. THIRD PARTY CLEARANCES: You shall obtain all necessary third-party
clearances in connection with all Artist Content and Product (including the
payment of any associated fees, royalties and other costs). Without limiting the
generality of the foregoing, with respect to all uses of musical compositions,
sound recordings and audiovisual productions in connection with the Store, you
agree to grant or cause Artist and/or any applicable third parties (e.g., music
publishers, record companies and performing rights societies) to grant to ADNM
any and all required rights. However, ADNM shall not use any particular sound
recording, musical composition or audiovisual production on the Store, or
provide access to any feature or service on the Store which entails the public
performance of music (e.g., live audio streaming), except at your request or
with your approval. If ADNM nevertheless shall pay, with your approval, any
third party clearance cost relating to the Store (which ADNM is not obligated to
do), all such amounts shall be deducted from any and all monies otherwise
payable to you under this Agreement (except to the extent deducted from monies
otherwise payable by ADNM to Merchandiser, it being understood that such costs
shall be subject to allocation by ADNM, in ADNM's reasonable business judgment,
between you and Merchandiser taking into account whether the applicable costs
related to Merchandiser Product and/or Artist Product).

10.     REPRESENTATIONS AND WARRANTIES: INDEMNITY:

----------------
[***]  Confidential treatment has been requested for the bracketed portion.  The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.

                                       19
<PAGE>   20

(a)     You represent and warrant as follows:

        (i) You have the full right, power and authority to enter into and to
perform this Agreement and to grant to ADNM all rights and licenses set forth in
this Agreement. Neither you nor Artist are under any restriction or obligation
which may or will impair your full performance of this Agreement. No Artist
Content or the exploitation or use thereof or the sale of any Product shall
violate or infringe upon any common law or statutory rights of any party,
including contractual rights, copyrights, and rights of privacy or publicity or
shall defame any person or entity; and

        (ii) ADNM shall have the exclusive right during the Term throughout the
Territory to develop and operate the only "official" Artist on-line store (i.e.,
the only Internet web site authorized by Artist with respect to products
relating primarily to Artist and/or any members of Artist. Accordingly, during
the Term, neither you, Artist nor any member of Artist shall grant any other
person or entity the right to develop and/or operate a web site that (A)
pertains primarily to Artist and/or one or more members of Artist and (B) sells
products using the mane of Artist and/or the names and likenesses of members of
Artist.

        (b) You agree to indemnify and hold ADNM and its members, employees,
attorneys, agents, successors, assigns and licensees harmless against any claim,
liability, cost and expenses (including attorneys' and accountants' fees
reasonably incurred) in connection with any breach or alleged breach of this
Agreement by you. In this regard, ADNM shall not settle any claim without first
notifying you of the terms of any proposed settlement and obtaining your consent
thereto, provided you post within ten days after such notice, a bond,
satisfactory to ADNM in its reasonable discretion, to assure ADNM of
reimbursement for all damages, liabilities, costs and expenses (including legal
expenses and counsel fees reasonably incurred) that ADNM, in its reasonable
business judgment, incur as a result of such a claim. If you fail to post such a
bond, you shall be deemed to have consented to ADNM's settlement. You shall,
upon demand, pay the person or entity being indemnified hereunder for any
payment made or required to be made by such person or entity at any time
(including after the Term) in respect of any liability, damage, or expense to
which the foregoing indemnity relates. Without waiving any right or remedy
available to ADNM, if any such claim is made, ADNM shall have the right to
withhold monies otherwise payable to you under this Agreement in an amount
reasonably related to such claim and to deduct therefrom payments required under
this paragraph. ADNM shall not withhold monies otherwise payable to you after
you post a bond meeting the above-described conditions.

        (c) You acknowledge that ADNM is making no representations and
warranties concerning anticipated success of the Store and/or the amount of
compensation payable to you hereunder. You warrant, represent and agree that
neither you nor Artist nor any third party shall make any claim, nor shall any
liability be imposed upon ADNM based upon any claim, that more sales could have
been made or better business could have been done in connection with the Store
than was actually made or done. You agree that ADNM shall not be liable for any
special, consequential, incidental or indirect damages in connection with or
arising out of this Agreement, however caused, under any theory of liability.

11.     NOTICES; APPROVALS:

                                       20
<PAGE>   21

        (a) All notices, accounting statements and payments to either party
shall be sent to such party's address first mentioned in this Agreement, or such
other address as a party to this Agreement may hereafter designate by notice to
the other. All notices sent under this Agreement must be in writing to be
effective, and, except for statements and payments, must be sent by a third
party messenger, by air courier service with a written acknowledgment of
receipt, by registered or certified mail, return receipt requested, or through a
telegraph office. The date of personal delivery, of mailing or faxing, or the
date of delivery to a telegraph office, as the case may be, of any such notice
shall be deemed the date of the giving thereof (except, with respect to notices
of change of address, the date of which will be the date of receipt by the
receiving party). Until ADNM notifies you otherwise, a copy of all notices
hereunder to ADNM shall be simultaneously sent as aforesaid to Lenard & Gonzalez
LLP, 1900 Avenue of the Stars, 25th Floor, Los Angeles, CA 90067; Attention:
Allen D. Lenard, Esq.

        (b) No failure by any party to this Agreement to perform any of its
obligations hereunder shall be deemed a breach of this Agreement, unless the
other party has given notice of such alleged breach in reasonable detail and
such alleged breach is not cured within 30 days after the giving of such notice.

        (c) No consent or approval under this Agreement shall be unreasonably
withheld or delayed. ADNM may elect to request a consent or approval by notice
to you, or may send you a notice reflecting the availability of a test site of
the Store embodying the materials for which approval is sought. In each
instance, your consent or approval shall be deemed granted unless you notify
ADNM to the contrary within five (5) business days after ADNM sends the
aforesaid notice to you. No inadvertent failure by ADNM to obtain your consent
or approval shall be deemed a breach by ADNM of this Agreement, provided ADNM
shall use reasonable efforts to rectify such failure on a prospective basis
following receipt of notice from you specifying such failure. Notwithstanding
the provisions of paragraph 11(a) above, any notice described in this paragraph
11(c) may be sent by telecopier or electronic mail.

12.     MISCELLANEOUS:

           (a) This Agreement is intended by the parties hereto as a final
expression of their understanding and agreement with respect to the subject
matter hereof and as a complete and exclusive statement of the terms thereof;
this Agreement supersedes all prior and contemporaneous negotiations,
understandings, and agreements between the parties hereto with respect to the
subject matter hereof. The parties acknowledge and agree that neither party
hereto has made any representations or promises in connection with this
Agreement or the subject matter hereof not contained herein. The parties hereto
shall negotiate in good faith to replace any invalid, illegal or unenforceable
provision (the "Invalid Provision") with a valid provision, the effect of which
comes as close as possible to that of the Invalid Provision. This Agreement
cannot be canceled, modified, amended or waived, in part or in full, in any
manner except by an instrument in writing signed by the party to be charged. No
waiver by either party hereto, whether expressed or implied, of any provision of
this Agreement or default hereunder shall affect such party's right to
thereafter enforce such provision or to exercise the right or remedy set forth
in this Agreement in the event of any other default, whether or not similar.
Words in the singular number shall include the plural, and vice versa. Whenever
examples are used in this Agreement with the words "including," "for example,"
"e.g.," "such as," "etc." or any derivation thereof, such

                                       21
<PAGE>   22

examples are intended to be illustrative and not in limitation thereof. The
paragraph headings herein are used solely for convenience and shall not be used
in the interpretation or construction of this Agreement. All exhibits attached
hereto are incorporated into this Agreement by reference.

           (b) In entering into this Agreement and providing services pursuant
hereto, you and ADNM each have and shall have the status of independent
contractors. Nothing herein contained shall contemplate or constitute either
party being an agent or employee of the other party, and nothing herein shall
constitute a partnership, joint venture or fiduciary relationship between the
parties.

           (c) This Agreement shall be deemed to have been entered into in the
State of California and the validity, interpretation and legal affect of this
Agreement shall be governed by the laws of the State of California applicable to
contracts entered into and performed entirely within the State of California.
The courts located in California (state and federal), only, will have
jurisdiction of any controversy regarding this Agreement; any action or other
proceeding which involves such a controversy will be brought in those courts, in
California and not elsewhere.

ARTISTDIRECT NEW MEDIA, LLC                          COMPANY NAME
A CALIFORNIA LIMITED LIABILITY COMPANY               A             CORPORATION
                                                      --------------

   By :  ARTISTdirect, LLC
   Its:  Member

   By :  /s/ Marc Geiger                             By:
         ------------------------------                 -----------------------
         Marc Geiger                                 Its:
   Its:  Co-Chief Executive Officer                     -----------------------

   By :
         ------------------------------
         Don Muller
   Its:  Co-Chief Executive Officer

                                       22
<PAGE>   23

                                    EXHIBIT 1

                          SCHEDULE OF FULFILLMENT FEES
<TABLE>
<CAPTION>
               Item Retail Price                                 Fulfillment Fee
               -----------------                                 ---------------
<S>            <C>                                               <C>
                     [***]                                            [***]
                     [***]                                            [***]
                     [***]                                            [***]
                     [***]                                            [***]

           In addition, the following packaging costs are applicable:

                    Box Size                                     Packaging Cost
                    --------                                     --------------
                     [***]                                            [***]
                     [***]                                            [***]
                     [***]                                            [***]
</TABLE>

                         SCHEDULE OF INSURANCE COVERAGE

               ADNM currently carries property insurance with respect to all
inventory at the fulfillment center, covering up to $1,000,000 in damages
(subject to adjustments from time to time in accordance with then-current
inventory value), with a $5,000 deductible (except with respect to wind damage,
for which the deductible is $100,000). ADNM shall cause you to be named an
additional insured under said policy and provide you with a certificate of
insurance to such effect.

----------------
[***]  Confidential treatment has been requested for the bracketed portion.  The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.

                                       12
<PAGE>   24

                                    EXHIBIT 2

                   [ADNM/MERCHANDISE AGREEMENT - LICENSE FEE]

        6. License Fee:

           (a) In consideration for the rights licensed pursuant to paragraph 5
above and Merchandiser's agreement to supply Merchandiser Product to ADNM
pursuant to the Merchandiser Terms, ADNM agrees to pay Merchandiser a License
Fee with respect to all Merchandiser Product sold at any time (including after
the Term).

           (b) As used herein:

               (i) "License Fee" shall mean, subject to paragraph 6(c) below,
the amount by which the following amounts exceed the wholesale purchase price
payable by ADNM for all applicable Merchandiser Product, provided that the
License Fee otherwise payable shall be further reduced by any third party
marketing and rights clearance costs incurred by ADNM, with the approval of
Merchandiser (which approval may be withheld by Merchandiser for any reason) and
the applicable Merchandiser Artist, and attributable to Merchandiser Product (it
being understood that any such costs not specifically attributable to
Merchandiser Product shall be allocated reasonably by ADNM between Merchandiser
and the applicable Merchandiser Artist, taking into account whether the
applicable costs related to Merchandiser Product and/or Artist Product):

               (A) [***] of the Adjusted Gross Merchandiser Product Revenue with
respect to Merchandiser Product (other than Collectibles) sold through an Artist
Store and with respect to Collectibles sold through the UBL Store (or through
any other source other than an Artist Store);

               (B) [***] of the Adjusted Gross Merchandiser Product Revenue with
respect to Merchandiser Product (other than Collectibles) sold through the UBL
Store (or through any other source other than an Artist Store); and

               (C) [***] of the Adjusted Gross Merchandiser Product Revenue with
respect to Collectibles sold through an Artist Store.

           (ii) "Adjusted Gross Merchandiser Product Revenue" shall mean Gross
Merchandiser Product Revenue less the Deductible Amounts.

           (iii) "Gross Merchandiser Product Revenue" shall mean the amount
actually received by ADNM (including shipping and handling revenues) in respect
of Merchandiser Product.

           (iv) "Deductible Amounts" shall mean all of the following costs paid
by ADNM and specifically attributable to Merchandiser Product: all amounts paid
under paragraph 3(b)(iv) above; all actual packaging and shipping costs paid to
third parties (not to exceed the associated shipping and handling revenues
referred to in paragraph 6(b)(iii) above); all third party fulfillment fees and
related charges; sales, use and value-added taxes actually paid; credit card
fees; and any credits for returns, rebates, cancellations and exchanges. ADNM
shall not deduct any fulfillment fees or related charges to the extent they
exceed such amounts as Merchandiser has approved; Merchandiser hereby
pre-approves the applicable amounts set forth on Exhibit D attached hereto. To
the extent ADNM is unable to identify a particular item of cost as being
attributable to either Merchandiser Product or Artist Product, only a portion
thereof shall be deemed a "Deductible Amount" hereunder, such portion to be
determined reasonably by ADNM, taking into account the total amount of Gross
Merchandiser Product Revenues as compared to the total amount of other
applicable revenues during the applicable accounting period. Notwithstanding
anything to the contrary contained herein, as between ADNM and Merchandiser,
[***] shall be solely responsible for all customer bad debts in respect of
Merchandiser Product shipped by ADNM (or its designee), including all associated
Deductible Amounts.

           (v) "Collectibles" means any single item of Merchandiser Product
bearing a wholesale price in excess of [***].

           (c) Within ten (10) business days after the date ADNM notifies
Merchandiser of each new Accepted Artist pursuant to paragraph 2(d) above (or
within ten (10) business days after the complete execution of this Agreement, in
respect of any Accepted Artist indicated on Exhibit A as of the execution
hereof), Merchandiser shall have the right to notify ADNM of the percentage of
the applicable License Fees hereunder that Merchandiser is obligated to pay to,
or credit to the account of, the applicable Accepted Artist or its furnishing
company (the "Artist Percentage"), if such Artist Percentage exceeds [***]. In
such event, notwithstanding anything to the contrary contained herein, ADNM
shall pay to Merchandiser a product consignment charge (the "Consignment
Charge") equal to [***] of the Adjusted Gross Merchandiser Product Revenue with
respect to such Accepted Artist for each [***] by which such Artist Percentage
exceeds [***]. For purposes of illustration, in the event that Merchandiser has
properly notified ADNM that the Artist Percentage with respect to a particular
Accepted Artist equals [***], then with respect to such Accepted Artist, ADNM
shall pay to Merchandiser a Consignment Charge equal to [***] of the Adjusted
Gross Merchandiser Product Revenue with respect to such Accepted Artist. For the
avoidance of doubt, no Consignment Charge shall be applicable with respect to
any Merchandiser Artist for which Merchandiser does not timely notify ADNM of
the Artist Percentage as provided in this paragraph 6(c).

           (d) Attached hereto as Exhibit E are certain example computations of
the License Fee.

 ----------------
[***]  Confidential treatment has been requested for the bracketed portion.  The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.

                                      13
<PAGE>   25

                                    EXHIBIT 3

                         INDUCEMENT TERMS AND GUARANTEE

               The undersigned hereby acknowledge that they have read and
understand all of the terms and conditions set forth in the agreement dated as
of ______ ___, 19__ (the "Agreement") by and between ARTISTdirect New Media, LLC
("ADNM") and CompanyName ("Company") to which these inducement Terms and
Guarantee are attached.

               In consideration of Company's execution and delivery of the
Agreement, the benefit of which runs to the undersigned, undersigned hereby
represent, warrant and agree, jointly and severally that:

               1. Company has the rights, insofar as the undersigned are
concerned, to enter into the Agreement and to assume all of the obligations,
warranties and undertakings to Company on the part of the undersigned contained
therein, and Company shall continue to have those rights until all of those
obligations, warranties and undertakings shall have been fully performed and
discharged.

               2. All of the representations, warranties and agreements on the
part of Company contained in the Agreement that concern Company and/or the
undersigned are and shall remain true and correct.

               3. The undersigned shall fully and to the best of their abilities
perform and discharge all of the obligations, warranties and undertakings
contained in the Agreement insofar as the same are required of the undersigned
and to the extent Company has undertaken to cause the performance and discharge
by the undersigned of those obligations and undertakings, and the undersigned
further guarantee the full and faithful performance of all other obligations of
Company under the Agreement, it being agreed and acknowledged that such
guarantee shall be applicable regardless of whether, for any reason whatsoever,
notwithstanding the provisions of paragraph 1 above, Company shall cease to have
the right to perform the obligations, warranties and undertakings to ADNM on the
part of Company contained in the Agreement.

               4. The undersigned agree to look solely to Company (and not to
ADNM) with respect to all monies payable to the undersigned in connection with
the Agreement.

               5. ADNM may, in its own name, institute any action or proceeding
against the undersigned to enforce its rights under the Agreement and/or this
agreement, and ADNM shall be entitled to equitable relief, including injunctive
relief, to enforce the provisions of said agreements, without the necessity of
first resorting to or exhausting any rights or remedies against Company.

Dated as of ______ ____, 19__

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

                                       1

<PAGE>   26

                                    EXHIBIT C

                  MERCHANDISER'S STANDARD WHOLESALE PRICE LIST

Giant Merchandising
Wholesale Price List
April 1, 1999

Music

<TABLE>
<CAPTION>
Description                    Color             Unit Price
--------------------------------------------------------------
<S>                            <C>               <C>
Basic 1-Sided                  White                [***]
Basic 1-Sided                  Lights               [***]
Basic 1-Sided                  Darks                [***]
Basic 1-Sided                  Black                [***]

Basic 2-Sided                  White                [***]
Basic 2-Sided                  Lights               [***]
Basic 2-Sided                  Darks                [***]
Basic 2-Sided                  Black                [***]

High Roy 1-Sided               White                [***]
High Roy 1-Sided               Lights               [***]
High Roy 1-Sided               Darks                [***]
High Roy 1-Sided               Black                [***]

High Roy 2-Sided               White                [***]
High Roy 2-Sided               Lights               [***]
High Roy 2-Sided               Darks                [***]
High Roy 2-Sided               Black                [***]
</TABLE>

----------------
[***]  Confidential treatment has been requested for the bracketed portion.  The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.

                                       1
<PAGE>   27
                                    EXHIBIT D

                                 FULFILLMENT FEE
<TABLE>
<CAPTION>
                   Item Retail Price                      Fulfillment Fee
                   -----------------                      ---------------
<S>                <C>                                    <C>
                         [***]                                 [***]
                         [***]                                 [***]
                         [***]                                 [***]
                         [***]                                 [***]

b.      In addition, the following packaging costs are applicable:

                        Box Size                           Packaging Cost

                         [***]                                 [***]
                         [***]                                 [***]
                         [***]                                 [***]
</TABLE>

----------------
[***]  Confidential treatment has been requested for the bracketed portion.  The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.

                                        1

<PAGE>   28

                                    EXHIBIT E

<TABLE>
<CAPTION>
<S>                                                  <C>
Example I - T-shirt L/XL U.S. Priority Mail

Retail Price (sales tax excluded)                      [***]
Shipping/handling charge                               [***]
                                                     -------------
Gross Merchandiser Product Revenue                     [***]
                                                     -------------

Shipping cost                                          [***]
Fulfillment fee/Packaging Cost                         [***]
Credit card fee [***]                                  [***]
                                                     -------------
Deductible Amounts                                     [***]
                                                     -------------

                                                     -------------
Adjusted GMPR                                          [***]
                                                     -------------

License Fee Base [***]                                 [***]
Wholesale price                                        [***]
                                                     -------------
License Fee                                            [***]
                                                     =============

Example II - Pocket Logo Mesh V Neck:  2nd Day Air

Retail Price (sales tax excluded)                      [***]
Shipping/handling charge                               [***]
                                                     -------------
Gross Merchandiser Product Revenue                     [***]
                                                     -------------

Shipping cost                                          [***]
Fulfillment fee/Packaging Cost                         [***]
Credit card fee [***]                                  [***]
                                                     -------------
Deductible Amounts                                     [***]
                                                     -------------

                                                     -------------
Adjusted GMPR                                          [***]
                                                     -------------

License Fee Base [***]                                 [***]
Wholesale price                                        [***]
                                                     -------------
License Fee                                            [***]
                                                     =============
</TABLE>

----------------
[***]  Confidential treatment has been requested for the bracketed portion.  The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.

                                       1
<PAGE>   29

                                    EXHIBIT F

                                ARTISTDIRECT, LLC

                    WARRANT TO PURCHASE 50,000 COMMON UNITS

                                                           WARRANT NO. 1999-1

THIS WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS
WARRANT MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS. THIS WARRANT IS FURTHER SUBJECT TO CERTAIN RESTRICTIONS
ON TRANSFER CONTAINED HEREIN AND IN THAT CERTAIN AMENDED AND RESTATED OPERATING
AGREEMENT OF ARTISTDIRECT, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, DATED
JULY 28, 1998, AS AMENDED.

                               WARRANT TO PURCHASE
                     LIMITED LIABILITY COMPANY COMMON UNITS

               This certifies that Giant Merchandising ("Merchandiser") is
entitled, on or after April 1 1999, to become a Member in ARTISTdirect, LLC, a
California limited liability company (the "Company"), on and subject to the
terms and conditions contained herein and in the "Operating Agreement" (as
defined below), with the number of Common Units in the Company set forth in
Section 1 below, in return for a capital contribution by Merchandiser to the
Company of cash consideration in an amount equal to Thirty-Four and 48/100
Dollars ($34.48) per Common Unit (subject to adjustment as hereinafter provided,
the "Warrant Price").

               Except as otherwise specifically provided herein, terms used but
not otherwise defined herein shall have those meanings as set forth in that
certain Amended and Restated Operating Agreement of ARTISTdirect, LLC, dated
July 28, 1998, as amended (the "Operating Agreement"). A true and correct copy
of the Operating Agreement is attached hereto.

               This Warrant is subject to the following terms and conditions:

1.      Common Units Subject to Warrant Vesting.

        (a) Definitions.

        (i) "ADNM" means ARTISTdirect New Media, LLC, a Subsidiary of the
Company;

                                       2
<PAGE>   30

               (ii)  "Determination Date" means April 30, 2003;

               (iii) "Merchandiser Agreement" means that certain Merchandiser
                      Agreement dated as of April 1, 1999 between ADNM and
                      Merchandiser;

               (iv)  "Artist Store," "Merchandiser Artist," "Merchandiser
                      Product," "Merchandiser Terms," "Personal Identification,"
                     "Rights," "Store Agreement," and "Sublicensee" each have
                      the meaning ascribed thereto in the Merchandiser
                      Agreement;

               (v)    "Qualifying Revenue" means the "Adjusted Gross
                      Merchandiser Product Revenue" (as defined in the
                      Merchandiser Agreement); provided, however, that, for
                      purposes of this Warrant:

                      (a) Qualifying Revenue shall not include any amounts
                      received in respect of any merchandise sold through the
                      UBL Store.

                      (b) if Merchandiser's Rights to a particular Merchandiser
                      Artist terminate during the term of the Merchandiser
                      Agreement, then Qualifying Revenue shall nonetheless be
                      computed by deeming Merchandiser Product to include all
                      merchandise containing the Personal Identification of that
                      Merchandiser Artist and sold after such termination
                      through the applicable Artist Store, regardless of whether
                      such merchandise is provided by or on behalf of
                      Merchandiser or a Sublicensee, and regardless of whether
                      such merchandise is provided pursuant to the Merchandiser
                      Terms.

               (vi)   "Highest Sales" means the greatest Qualifying Revenue
                      during any period of twelve (12) consecutive calendar
                      months during the term of the Merchandiser Agreement
                      (i.e., between April 1, 1999 and March 31, 2003).

        (b) This Warrant may be exercised with respect to:

                (i)   5,000 Common Units at any time on or before March 31,
                      2004; and

               (ii)   an additional 5,000 Common Units for each full Five
                      Hundred Thousand Dollars ($500,000) in Highest Sales in
                      excess of Five Hundred Thousand Dollars ($500,000);
                      provided that the number of additional Common Units that
                      may be acquired pursuant to this Section 1(b)(ii) shall be
                      subject to a maximum of 45,000 (i.e., for Highest Sales of
                      Five Million Dollars ($5,000,000 or more).

On or before the Determination Date, the Company shall notify Merchandiser of
the Highest Sales.

                                       3
<PAGE>   31

2.      Term. Except for the rights conferred upon the Company pursuant to
        Section 8 below, this Warrant, and Merchandiser's right to exercise this
        Warrant, shall terminate immediately upon the first to occur of the
        following:

        (a)    the close of business (i.e., 5:00 p.m., Los Angeles time) on
               April 30, 2008;

        (b)    the termination of the Merchandiser Agreement prior to the
               expiration of the full term thereof either i) by ADNM due to a
               material breach thereof by Merchandiser, which breach remains
               uncured for the period specified in Section 15(b) of the
               Merchandiser Agreement, or (ii) by Merchandiser other than due to
               a material breach thereof by ADNM, which breach remains uncured
               for the period specified in Section 15(b) of the Merchandiser
               Agreement; or

        (c)    the breach by Merchandiser of any material provision of this
               Warrant.

3.      Method of Exercise; Payment; Issuance of New Warrant; Transfer and
        Exchange. This Warrant may be exercised by Merchandiser, in whole or in
        part, by the surrender of this Warrant, properly endorsed, at the
        principal office of the Company at 17835 Ventura Blvd., Suite 310,
        Encino, CA 91316 (or at such other location within the State of
        California or the State of New York as the Company may advise
        Merchandiser in writing), and by (a) payment to the Company in cash or
        immediately available funds of the Warrant Price of the Common Units
        being purchased, and (b) delivery to the Company of a customary
        investment letter executed by Merchandiser, representing and warranting
        that the Common Units are being acquired for Merchandiser's own account,
        for investment purposes only, and not with a view to the distribution,
        resale or other distribution thereof in violation of applicable
        securities laws, and acknowledging the issuance and transfer of the
        Common Units are subject to the requirements of federal and state
        securities laws. Merchandiser, in lieu of exercising this Warrant for a
        specified number of Common Units (the "Exercised Units") and paying the
        aggregate exercise price therefor (the "Exercise Price"), may elect to
        receive a number of Common Units equal to the number of Exercised Units,
        minus a number of Common Units having an aggregate "Fair Market Value"
        (as defined below) equal to the Exercise Price. After any such election,
        the number of Common Units covered by this Warrant shall be deemed
        automatically reduced by the number of Exercised Shares. For purposes of
        this Warrant, "Fair Market Value" means (a) if the Common Units are then
        publicly traded, the closing sale price of the Common Units on its
        principal stock exchange or market system (or the average of the closing
        bid and asked prices, if closing sales prices are not reported) for the
        ten (10) consecutive trading days immediately prior to the date of any
        such "net exercise," or (b) in all other cases, as determined by the
        Managers in their sole, good faith discretion. In the event of any
        exercise, or any such "net exercise," of less than all of the rights
        represented by this Warrant, the Company shall issue to Merchandiser a
        new warrant evidencing the ability of Merchandiser to purchase the
        balance of the number of Common Units from the Company, and shall
        deliver such warrant to Merchandiser promptly following such partial
        exercise. The Company agrees that the Common Units issuable to
        Merchandiser upon exercise of this Warrant shall be issued to
        Merchandiser as of the close of business on the date on which all of the
        above-described conditions to exercise have be satisfied. Merchandiser
        hereby covenants and agrees that, upon

                                       4
<PAGE>   32

        Merchandiser's exercise of all or a portion of this Warrant and
        Merchandiser's making the applicable payment to the Company in respect
        thereof, Merchandiser and the Common Units issued to Merchandiser with
        respect to such exercise shall become subject to the terms and
        conditions of the Operating Agreement, including without limitation, the
        obligation to sell Common Units and the restrictions on transfer of
        Common Units contained therein. In this regard, Merchandiser
        acknowledges that it shall only become a Member and be entitled to the
        rights as a Member once Merchandiser validly exercises this Warrant in
        accordance with the terms hereof and executes a signature page to the
        Operating Agreement whereby it agrees to be bound by all of the terms
        thereof, excluding the non-competition covenant contained in Section
        3.10 thereof, from which Merchandiser shall be exempted.

4.      Due Authorization and Issuance. The Company covenants and agrees that
        any and all of the Common Units issued to Merchandiser in accordance
        with the terms hereof will, upon such issuance, be duly authorized,
        validly issued and free from all preemptive rights of any holder of
        Common Units in the Company, free and clear of all taxes, liens and
        charges with respect to such issuance. The Company further covenants and
        agrees that, during the period within which this Warrant may be
        exercised, the Company will take no action that would prohibit the
        issuance of Common Units required to be issued in accordance with the
        terms and conditions hereof on such exercise.

5.      Fractional Common Units. No fractional Common Units shall be issued in
        connection with any exercise hereunder but in lieu of such fractional
        Common Units, the Company shall make a cash payment therefor upon the
        basis of the fair market value of the Common Units, as determined by the
        Managers in their sole, good faith discretion.

6.      Certain Adjustments.

        (a)     If the outstanding Common Units are changed into or exchanged
                for a different number or kind of securities of the Company or a
                successor entity (including a "C-corporation" that becomes the
                successor or parent of the Company in connection with a roll-up
                or similar exchange transaction in connection with an initial
                public offering) through a capital reorganization or
                reclassification, or if the number of outstanding Common Units
                is changed through a split of Common Units, reverse split of
                Common Units or issuance of a Common Unit dividend, then a
                reasonable and appropriate adjustment shall be made by the
                Company in (i) the number or kind of Common Units that may be
                purchased pursuant to the exercise of this Warrant, and (ii) the
                number, exercise price, or kind of securities subject to this
                Warrant. Any such adjustment in this Warrant, however, shall be
                made without a change in the total price applicable to the
                unexercised portion of this Warrant but with a corresponding
                adjustment in the price for each Common Unit covered by this
                Warrant. In making such adjustments, or in determining that no
                such adjustments are necessary, the Company may rely upon the
                advice of counsel and accountants to the Company, and the
                reasonable determination of the Company shall be binding.

                                       5
<PAGE>   33

        (b)     Upon (i) the dissolution, liquidation, or sale of all or
                substantially all of the business, properties and assets of the
                Company, (ii) any reorganization, merger, consolidation, sale or
                exchange of securities in which the Company does not survive,
                (iii) any reorganization, merger, consolidation, sale or
                exchange of securities in which the Company does survive and any
                of the Company's members have the opportunity to receive cash,
                securities of another entity and/or other property in exchange
                for their Common Units (other than a "roll-up" or similar
                exchange transaction in connection with an initial public
                offering), or (iv) any acquisition by any person or group (as
                defined in Section 13(d) of the Securities Exchange Act of 1934,
                as amended), of beneficial ownership of more than fifty percent
                (50%) of the Company's then outstanding Common Units (each of
                the events described in clauses (i), (ii), (iii), or (iv) is
                referred to herein as an "Extraordinary Event"), this Warrant
                shall terminate unless it survives the Extraordinary Event
                pursuant to Section 6(d) below.

        (c)     Merchandiser shall have the right until ten (10) days before the
                effective date of any Extraordinary, Event to exercise, in whole
                or in part, this Warrant, but only to the extent to which it is
                exercisable pursuant to the provisions hereof. In this regard,
                the Company shall notify Merchandiser in writing of the
                Company's intent to engage in any Extraordinary Event on or
                before the date (the "Notice Date") that is no less than thirty
                (30) days before the effective date of such Extraordinary Event.
                In addition, notwithstanding anything to the contrary contained
                herein, if an Extraordinary Event shall occur during the term of
                the Merchandiser Agreement, then, solely for purposes of
                determining the extent to which this Warrant is exercisable in
                accordance with this Section 6(c), Highest Sales shall be
                determined either (i) with reference to each period of twelve
                (12) consecutive calendar months of the term of the Merchandiser
                Agreement prior to the Notice Date; or (ii) if fewer than twelve
                (12) months have elapsed since the commencement of the term of
                the Merchandiser Agreement, on an annualized basis.

        (d)     If an Extraordinary Event occurs during the term of the
                Merchandiser Agreement, then the Company shall be obligated to
                either, in its sole discretion: (i) cause this Warrant to
                survive such Extraordinary Event or (ii) cause the surviving
                entity (which may be the Company), or any other entity that,
                after giving effect to the Extraordinary Event, owns, directly
                or indirectly, fifty percent (50%) or more of the Company's then
                outstanding Common Units, to tender to Merchandiser a substitute
                warrant to purchase units or other equity interests in such
                entity containing terms and provisions substantially preserving,
                in the reasonable, good faith discretion of the Company, the
                rights and benefits of this Warrant to the extent then
                outstanding (a "Substitute Warrant"). If an Extraordinary Event
                occurs after the term of the Merchandiser Agreement, in its sole
                and absolute discretion, the Company may permit this Warrant to
                survive such Extraordinary Event. In addition, if an
                Extraordinary Event occurs after the term of the Merchandiser
                Agreement, in its sole and absolute discretion, the surviving
                entity (which may be the Company), or another entity, may, but
                shall not be so obligated, tender to Merchandiser a Substitute
                Warrant.

                                       6

<PAGE>   34

        (e)     The grant of this Warrant shall not affect in any way the right
                or power of the Company to make adjustments, reclassification or
                changes in its capital or business structures or to merge,
                consolidate, dissolve, or liquidate or to sell or transfer all
                or any part of its business or assets or undertake any other
                permitted limited liability company action.

        (f)     Upon the occurrence of each adjustment of this Warrant pursuant
                to this Section 6, the Company at its expense shall promptly
                compute such adjustment or readjustment in accordance with the
                terms hereof and furnish to Merchandiser a certificate setting
                forth such adjustment or readjustment and showing in detail the
                facts upon which such adjustment or readjustment is based. The
                Company shall, upon the written request of Merchandiser, furnish
                or cause to be furnished to Merchandiser a like certificate
                setting forth: (i) such adjustments and readjustments; (ii) the
                applicable Exercise Price at the time in effect; and (iii) the
                number of Common Units, if any, and the amount, if any, of other
                securities or property that at the time would be received upon
                the exercise of this Warrant.

        (g)     Other Action Affecting Common Units. The Company will not, by
                amendment of its Articles of Organization or the Operating
                Agreement, or through any reorganization, recapitalization,
                transfer of assets, consolidation, merger, dissolution, issue or
                sale of securities, dividend or other distribution of cash or
                property, or any other voluntary action, avoid or seek to avoid
                the rights granted to Merchandiser hereunder or the observance
                or performance of any of the terms to be observed or performed
                hereunder by the Company, but will at all times in good faith
                assist in the carrying out of all the provisions hereof, and in
                the taking of all such actions as may be necessary or
                appropriate in order to protect the rights of Merchandiser as
                set forth herein against impairment.

7.      Payment of Taxes. The Company will pay all taxes (other than taxes based
        upon income) and other governmental charges that may be imposed with
        respect to the issue or delivery of Common Units upon exercise of this
        Warrant.

8.      Drag-Along Obligation.

        (a)     Definition of Equity Securities. For purposes of this Warrant,
                "Equity Securities" shall mean all (i) Units, all rights,
                options or warrants to purchase Units, all securities of any
                type, whatsoever that are convertible into or exchangeable for
                Units, and all rights, options or warrants to purchase
                securities that are convertible into or exchangeable for Units
                and (ii) all shares, options, warrants, general or limited
                partnership interests, limited liability company membership
                interests, participations or other equivalents (regardless of
                how designated) of or in a corporation, partnership, limited
                liability company or equivalent entity that are issued in
                exchange for any of the items described in the preceding clause
                (ii).

        (b)     The Obligation. Notwithstanding anything to the contrary
                contained herein, if the Managers find an acquirer for all or
                any portion of their interest in the Company (whether such
                acquisition is by way of purchase of assets or Common Units,

                                       7
<PAGE>   35

                merger, recapitalization or other form of transaction, and
                including, without limitation, a roll-up transaction that is for
                the purpose of a reorganization among the Company and its
                Affiliates), then, at the request of the Managers, Merchandiser
                shall sell or otherwise transfer a corresponding portion of any
                Common Units (or successor Equity Securities) then held by
                Merchandiser to such acquirer on the same terms and conditions
                as apply to the sale or other transfer by the Managers. \
                Merchandiser further agrees timely to take such other actions as
                the Managers may reasonably request in connection with the
                approval of the consummation of such sale or other transfer,
                including, without limitation, voting in favor of such sale or
                other transfer and waiving any dissenters' rights, executing
                such agreements, powers of attorney, voting proxies or other
                documents and instruments as may be necessary or desirable to
                consummate such sale or other transfer, and, in the event that
                such sale or other transfer is structured as a recapitalization,
                transferring and retaining such portion of Common Units (or
                successor Equity Securities) and rights under this Warrant as
                may be requested by the Managers.

9.      Tag-along Right.

        (a)     Definition of Excluded Transferee. For purposes of this Warrant,
                "Excluded Transferee" shall mean: (i) Marc Geiger; (ii) Donald
                Muller; (iii) a spouse, descendant or parent of Marc Geiger or
                Donald Muller; (iv) a descendant of any Person listed in clauses
                (i), (ii) or (iii) above; (v) a trust for the sole benefit of
                any one or more of the Persons listed in clauses (i), (ii),
                (iii) or (iv) above; or (vi) any Affiliate of any Person listed
                in clauses (i), (ii), (iii), (iv) or (v) above.

        (b)     The Right. If Marc Geiger, Donald Muller, or any direct or
                indirect successor, assignee, heir, devisee, donee, legatee or
                transferee of either of them (each a "Transferor'), proposes
                alone or with others to Transfer, directly or indirectly, to any
                Person that is not an Excluded Transferee, any Equity Securities
                (each, a "Subject Interest') that represent a fully-diluted
                Percentage of thirty percent (30%) or more, in a single
                transaction or series of transactions, and the Common Units (or
                substitute Equity Securities) issued to Merchandiser pursuant to
                this (or any successor) Warrant (the "Securities") include (at
                such time or upon exercise, conversion or exchange) any Equity
                Securities of the same class as the Subject Interest (the
                "Subject Interest Class"), the would-be Transferor shall provide
                Merchandiser with not less than thirty (30) days' prior written
                notice of such proposed sale, which notice shall include all of
                the material terms and conditions of such proposed sale and
                which shall identify such purchaser (the "Sale Notice"), and
                Merchandiser shall have the option, exercisable by written
                notice to the Transferor within twenty (20) days after the
                receipt of the Sale Notice, to participate in such transaction
                pro rata with the Transferor at the same time as, and upon the
                same terms and conditions as (including all direct or indirect
                consideration) the Transferor Transfers his Equity Securities in
                the Company. Merchandiser may sell all or any portion of the
                Securities held by Merchandiser (or issuable to Merchandiser
                upon exercise, conversion or exchange of any of the Securities)
                that are of the class of Equity Securities that includes the
                Subject

                                       8
<PAGE>   36
                Interest Class (the "Merchandiser's Securities") equal to the
                product obtained by multiplying (i) the Subject Interest by (ii)
                a fraction, the numerator of which is Merchandiser's Securities
                and the denominator of which is the total number of Equity
                Securities of the Subject Interest Class then owned by the
                Transferor, Merchandiser, and any other Person that has
                tag-along rights with respect to the proposed Transfer by
                Transferor. To the extent Merchandiser, or any other Person that
                has tag-along rights with respect to the proposed Transfer by
                Transferor, shall exercise its tag-along right, the number of
                Equity Securities that the Transferor may Transfer in the
                transaction shall be correspondingly reduced.

        (c)     Expenses. In any transaction in which Merchandiser sells or
                otherwise disposes of any of the Merchandiser's Securities
                pursuant to this Section 9, Merchandiser shall bear its pro rata
                share of the reasonable expenses incurred by the Transferor in
                connection with the sale of the Subject Interest.

        (d)     Exempt Sales. The rights and obligations set forth in this
                Section 9 shall not apply to any sale of Equity Securities made
                in connection with or following an initial public offering of
                common stock of the corporate successor of the Company.

10.     Transferability of Warrant.

        (a)     Except as set forth in Section 10(b) below, this Warrant may not
                be sold, conveyed, transferred, alienated, donated, encumbered
                or otherwise disposed of by Merchandiser and, accordingly, any
                purported such transaction in violation of this Section 10 shall
                be void ab initio, of no force or effect.

        (b)     Notwithstanding Section 10(a) above, but subject to applicable
                securities laws, Merchandiser may transfer all, but not less
                than all, of this Warrant, to any Affiliate of Merchandiser,
                provided that no such transfer shall be effective until the
                transferee agrees in writing to be bound by all of the
                provisions of this Warrant, including Section 8 above.

11.     Investment Representation. Merchandiser represents and warrants to the
        Company that Merchandiser is acquiring this Warrant for Merchandiser's
        own account for investment and not with a view to, or for resale in
        connection with, any distribution thereof. Merchandiser acknowledges
        that this Warrant and the Common Units that may be purchased under this
        Warrant have not been registered under the Securities Act, by reason of
        a specific exemption from the registration provisions of the Securities
        Act that depends upon, among other things, the bona fide nature of the
        investment intent of Merchandiser as expressed herein.

12.     Amendment and Waiver; Successors. This Warrant may only be amended or
        supplemented, and any waiver or departure from the provisions hereof may
        only be given, with the consent of the Managers and Merchandiser. All of
        the covenants and provisions of this Warrant by or for the benefit of
        the Company and Merchandiser shall

                                       9
<PAGE>   37

bind and inure to the benefit of them and their respective permitted successors
and assigns hereunder.

13.     Notices. All notices required by this Warrant to Merchandiser shall be
        sent to Giant Merchandising, 5655 Union Pacific Avenue, Commerce, CA
        90022, or such other address as Merchandiser may hereafter designate by
        notice to the Company. All notices sent under this Agreement to the
        Company or the Managers shall be sent to the address indicated in
        Section 3 above. All notices required by this Warrant must be in writing
        to be effective, and must be sent by a third party messenger, by air
        courier service with a written acknowledgement of receipt, by registered
        or certified mail, return receipt requested, or through a telegraph
        office. The date of personal delivery, of mailing, or the date of
        delivery to a telegraph office, as the case may be, of any such notice
        shall be deemed the date of the giving thereof (except, with respect to
        notices of change of address, the date of which will be the date of
        receipt by the receiving party). Until the Company notifies Merchandiser
        otherwise, a copy of all notices hereunder to the Company shall be
        simultaneously sent as aforesaid to Lenard & Gonzalez LLP, 1900 Avenue
        of the Stars, 25th Floor, Los Angeles, CA 90067; Attention: Allen D.
        Lenard, Esq.

14.     Descriptive Headings and Governing Law. The descriptive headings of the
        several paragraphs of this Warrant are inserted for convenience only and
        do not constitute a part of this Warrant. This Warrant shall be
        construed and enforced in accordance with, and the rights of the parties
        shall be governed by, the laws of the State of California.

15.     Lost Warrant. The Managers and the Company represent and warrant to
        Merchandiser that upon receipt of evidence reasonably satisfactory to
        the Managers and the Company of the loss, theft, destruction, or
        mutilation of this Warrant and, in the case of any such loss, theft or
        destruction upon receipt of an indemnity reasonably satisfactory to the
        Managers and the Company, or in the case of any such mutilation upon
        surrender and cancellation of such Warrant, the Managers and the Company
        will make and deliver a new Warrant in lieu of the lost, stolen,
        destroyed or mutilated Warrant.

               IN WITNESS WHEREOF, Merchandiser, the Company and the Managers
have caused this Warrant to be duly executed and issued by their respective
officers thereunto duly authorized as of the 1st day of April, 1999.

"COMPANY"                                     "MERCHANDISER"

ARTISTdirect, LLC                             Giant Merchandising

By: /s/ Marc Geiger                           By:
   ---------------------------------              -----------------------------
Its:    Co-Chief Executive Officer                 (an authorized signatory)

                                       10

<PAGE>   38

"MANAGERS"

By: /s/ Marc Geiger
   --------------------------------------
   Marc Geiger

By:
   --------------------------------------
   Donald Muller

                                       11

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