Document:

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                                                                   EXHIBIT 10.21

                               ARTISTdirect, INC.
                        1999 EMPLOYEE STOCK PURCHASE PLAN

        I.      PURPOSE OF THE PLAN

                This Employee Stock Purchase Plan is intended to promote the
interests of ARTISTdirect Inc., a Delaware corporation, by providing eligible
employees with the opportunity to acquire a proprietary interest in the
Corporation through participation in a payroll deduction based employee stock
purchase plan designed to qualify under Section 423 of the Code.

               Capitalized terms herein shall have the meanings assigned to such
terms in the attached Appendix.

        II.     ADMINISTRATION OF THE PLAN

                The Plan Administrator shall have full authority to interpret
and construe any provision of the Plan and to adopt such rules and regulations
for administering the Plan as it may deem necessary in order to comply with the
requirements of Code Section 423. Decisions of the Plan Administrator shall be
final and binding on all parties having an interest in the Plan.

        III.    STOCK SUBJECT TO PLAN

                A. The stock purchasable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock, including shares of Common
Stock purchased on the open market. The number of shares of Common Stock
initially reserved for issuance over the term of the Plan shall be limited to
Two Million (2,000,000) shares.

                B. The number of shares of Common Stock available for issuance
under the Plan shall automatically increase on the first trading day of January
each calendar year during the term of the Plan, beginning with calendar year
2001, by an amount equal to one percent (1%) of the total number of shares of
Common Stock outstanding on the last trading day in December of the immediately
preceding calendar year, but in no event shall any such annual increase exceed
Four Million (4,000,000) shares.

                C. Should any change be made to the Common Stock by reason of
any stock split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding Common Stock as a
class without the Corporation's receipt of consideration, appropriate
adjustments shall be made to (i) the maximum number and class of securities
issuable under the Plan, (ii) the maximum number and class of securities
purchasable per Participant on any one Purchase Date, (iii) the maximum number
and class of securities purchasable in total by all Participants on any one
Purchase Date, (iv) the maximum number and/or class of securities by which the
share reserve is to increase automatically each

<PAGE>   2

calendar year pursuant to the provisions of Section III.B of this Article One
and (v) the number and class of securities and the price per share in effect
under each outstanding purchase right in order to prevent the dilution or
enlargement of benefits thereunder.

        IV.     OFFERING PERIODS

                A. Shares of Common Stock shall be offered for purchase under
the Plan through a series of successive offering periods until such time as (i)
the maximum number of shares of Common Stock available for issuance under the
Plan shall have been purchased or (ii) the Plan shall have been sooner
terminated.

                B. Each offering period shall be of such duration (not to exceed
twenty-four (24) months) as determined by the Plan Administrator prior to the
start date of such offering period. However, the initial offering period shall
commence at the Effective Time and terminate on the last business day in April
2002. The next offering period shall commence on the first business day in
May 2002, and subsequent offering periods shall commence as designated by
the Plan Administrator.

                C. Each offering period shall be comprised of a series of one or
more successive Purchase Intervals. Purchase Intervals shall run from the first
business day in May to the last business day in October each year and from the
first business day in November each year to the last business day in April in
the following year. However, the first Purchase Interval in effect under the
initial offering period shall commence at the Effective Time and terminate on
the last business day in April 2000.

        V.      ELIGIBILITY

                A. Each individual who is an Eligible Employee on the start date
of any offering period under the Plan may enter that offering period on such
start date or on any subsequent Semi-Annual Entry Date within that offering
period, provided he or she remains an Eligible Employee.

                B. Each individual who first becomes an Eligible Employee after
the start date of an offering period may enter that offering period on any
subsequent Semi-Annual Entry Date within that offering period on which he or she
is an Eligible Employee.

                C. The date an individual enters an offering period shall be
designated his or her Entry Date for purposes of that offering period.

                D. To participate in the Plan for a particular offering period,
the Eligible Employee must complete the enrollment forms prescribed by the Plan
Administrator (including a stock purchase agreement and a payroll deduction
authorization) and file such forms with the Plan Administrator (or its
designate) on or before his or her scheduled Entry Date.

                                       2.
<PAGE>   3

        VI.     PAYROLL DEDUCTIONS

                A. The payroll deduction authorized by the Participant for
purposes of acquiring shares of Common Stock during an offering period may be
any multiple of one percent (1%) of the Cash Earnings paid to the Participant
during each Purchase Interval within that offering period, up to a maximum of
fifteen percent (15%). The deduction rate so authorized shall continue in effect
throughout the offering period, except to the extent such rate is changed in
accordance with the following guidelines:

                        (i) The Participant may, at any time during the offering
        period, reduce his or her rate of payroll deduction to become effective
        as soon as possible after filing the appropriate form with the Plan
        Administrator. The Participant may not, however, effect more than one
        (1) such reduction per Purchase Interval.

                        (ii) The Participant may, prior to the commencement of
        any new Purchase Interval within the offering period, increase the rate
        of his or her payroll deduction by filing the appropriate form with the
        Plan Administrator. The new rate (which may not exceed the fifteen
        percent (15%) maximum) shall become effective on the start date of the
        first Purchase Interval following the filing of such form.

                B. Payroll deductions shall begin on the first pay day
administratively feasible following the Participant's Entry Date into the
offering period and shall (unless sooner terminated by the Participant) continue
through the pay day ending with or immediately prior to the last day of that
offering period. The amounts so collected shall be credited to the Participant's
book account under the Plan, but no interest shall be paid on the balance from
time to time outstanding in such account. The amounts collected from the
Participant shall not be required to be held in any segregated account or trust
fund and may be commingled with the general assets of the Corporation and used
for general corporate purposes.

                C. Payroll deductions shall automatically cease upon the
termination of the Participant's purchase right in accordance with the
provisions of the Plan.

                D. The Participant's acquisition of Common Stock under the Plan
on any Purchase Date shall neither limit nor require the Participant's
acquisition of Common Stock on any subsequent Purchase Date, whether within the
same or a different offering period.

        VII.    PURCHASE RIGHTS

                A. GRANT OF PURCHASE RIGHTS. A Participant shall be granted a
separate purchase right for each offering period in which he or she
participates. The purchase right shall be granted on the Participant's Entry
Date into the offering period and shall provide the Participant with the right
to purchase shares of Common Stock, in a series of successive

                                       3.
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installments over the remainder of such offering period, upon the terms set
forth below. The Participant shall execute a stock purchase agreement embodying
such terms and such other provisions (not inconsistent with the Plan) as the
Plan Administrator may deem advisable.

                Under no circumstances shall purchase rights be granted under
the Plan to any Eligible Employee if such individual would, immediately after
the grant, own (within the meaning of Code Section 424(d)) or hold outstanding
options or other rights to purchase, stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Corporation or any Corporate Affiliate.

                B. EXERCISE OF THE PURCHASE RIGHT. Each purchase right shall be
automatically exercised in installments on each successive Purchase Date within
the offering period, and shares of Common Stock shall accordingly be purchased
on behalf of each Participant on each such Purchase Date. The purchase shall be
effected by applying the Participant's payroll deductions for the Purchase
Interval ending on such Purchase Date to the purchase of whole shares of Common
Stock at the purchase price in effect for the Participant for that Purchase
Date.

                C. PURCHASE PRICE. The purchase price per share at which Common
Stock will be purchased on the Participant's behalf on each Purchase Date within
the offering period shall be equal to eighty-five percent (85%) of the lower of
(i) the Fair Market Value per share of Common Stock on the Participant's Entry
Date into that offering period or (ii) the Fair Market Value per share of Common
Stock on that Purchase Date. However, for any Participant whose Entry Date
occurs after the start date of the offering period, the clause (i) amount shall
not be less than the Fair Market Value per share of Common Stock on such start
date.

                D. NUMBER OF PURCHASABLE SHARES. The number of shares of Common
Stock purchasable by a Participant on each Purchase Date during the offering
period shall be the number of whole shares obtained by dividing the amount
collected from the Participant through payroll deductions during the Purchase
Interval ending with that Purchase Date by the purchase price in effect for the
Participant for that Purchase Date. However, the maximum number of shares of
Common Stock purchasable per Participant on any one Purchase Date shall not
exceed Three Thousand (3,000) shares, subject to periodic adjustments in the
event of certain changes in the Corporation's capitalization. In addition, the
maximum number of shares of Common Stock purchasable in total by all
Participants on any one Purchase Date shall not exceed One Million (1,000,000)
shares, subject to periodic adjustments in the event of certain changes in the
Corporation's capitalization. However, the Plan Administrator shall have the
discretionary authority, exercisable prior to the start of any offering period
under the Plan, to increase or decrease the limitations to be in effect for the
number of shares purchasable per Participant and in total by all Participants on
each Purchase Date within that offering period.

                                       4.
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                E. EXCESS PAYROLL DEDUCTIONS. Any payroll deductions not applied
to the purchase of shares of Common Stock on any Purchase Date because they are
not sufficient to purchase a whole share of Common Stock shall be held for the
purchase of Common Stock on the next Purchase Date. However, any payroll
deductions not applied to the purchase of Common Stock by reason of the
limitation on the maximum number of shares purchasable per Participant or in
total by all Participants on the Purchase Date shall be promptly refunded.

                F. TERMINATION OF PURCHASE RIGHT. The following provisions shall
govern the termination of outstanding purchase rights:

                        (i) A Participant may, at any time prior to the next
        scheduled Purchase Date in the offering period, terminate his or her
        outstanding purchase right by filing the appropriate form with the Plan
        Administrator (or its designate), and no further payroll deductions
        shall be collected from the Participant with respect to the terminated
        purchase right. Any payroll deductions collected during the Purchase
        Interval in which such termination occurs shall, at the Participant's
        election, be immediately refunded or held for the purchase of shares on
        the next Purchase Date. If no such election is made at the time such
        purchase right is terminated, then the payroll deductions collected with
        respect to the terminated right shall be refunded as soon as possible.

                        (ii) The termination of such purchase right shall be
        irrevocable, and the Participant may not subsequently rejoin the
        offering period for which the terminated purchase right was granted. In
        order to resume participation in any subsequent offering period, such
        individual must re-enroll in the Plan (by making a timely filing of the
        prescribed enrollment forms) on or before his or her scheduled Entry
        Date into that offering period.

                        (iii) Should the Participant cease to remain an Eligible
        Employee for any reason (including death, disability or change in
        status) while his or her purchase right remains outstanding, then that
        purchase right shall immediately terminate, and all of the Participant's
        payroll deductions for the Purchase Interval in which the purchase right
        so terminates shall be immediately refunded. However, should the
        Participant cease to remain in active service by reason of an approved
        unpaid leave of absence, then the Participant shall have the right,
        exercisable up until the last business day of the Purchase Interval in
        which such leave commences, to (a) withdraw all the payroll deductions
        collected to date on his or her behalf for that Purchase Interval or (b)
        have such funds held for the purchase of shares on his or her behalf on
        the next scheduled Purchase Date. In no event, however, shall any
        further payroll deductions be collected on the Participant's behalf
        during such leave. Upon the Participant's return to active service (x)
        within ninety (90) days following the commencement of such leave or (y)
        prior to the expiration of any longer period for which such
        Participant's right to reemployment with the Corporation is guaranteed
        by statute or contract, his or her payroll deductions under the Plan
        shall automatically resume at the rate in

                                       5.
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        effect at the time the leave began, unless the Participant withdraws
        from the Plan prior to his or her return. An individual who returns to
        active employment following a leave of absence which exceeds in duration
        the applicable (x) or (y) time period will be treated as a new Employee
        for purposes of subsequent participation in the Plan and must
        accordingly re-enroll in the Plan (by making a timely filing of the
        prescribed enrollment forms) on or before his or her scheduled Entry
        Date into the offering period.

                G. CHANGE IN CONTROL. Each outstanding purchase right shall
automatically be exercised, immediately prior to the effective date of any
Change in Control, by applying the payroll deductions of each Participant for
the Purchase Interval in which such Change in Control occurs to the purchase of
whole shares of Common Stock at a purchase price per share equal to eighty-five
percent (85%) of the lower of (i) the Fair Market Value per share of Common
Stock on the Participant's Entry Date into the offering period in which such
Change in Control occurs or (ii) the Fair Market Value per share of Common Stock
immediately prior to the effective date of such Change in Control. However, for
any Participant whose Entry Date occurs after the start date of the offering
period, the clause (i) amount shall not be less than the Fair Market Value per
share of Common Stock on such start date. In addition, the applicable limitation
on the number of shares of Common Stock purchasable per Participant shall
continue to apply to any such purchase, but not the limitation applicable to the
maximum number of shares of Common Stock purchasable in total by all
Participants.

                The Corporation shall use its best efforts to provide at least
ten (10)-days prior written notice of the occurrence of any Change in Control,
and Participants shall, following the receipt of such notice, have the right to
terminate their outstanding purchase rights prior to the effective date of the
Change in Control.

                H. PRORATION OF PURCHASE RIGHTS. Should the total number of
shares of Common Stock to be purchased pursuant to outstanding purchase rights
on any particular date exceed the number of shares then available for issuance
under the Plan, the Plan Administrator shall make a pro-rata allocation of the
available shares on a uniform and nondiscriminatory basis, and the payroll
deductions of each Participant, to the extent in excess of the aggregate
purchase price payable for the Common Stock pro-rated to such individual, shall
be refunded.

                I. ASSIGNABILITY. The purchase right shall be exercisable only
by the Participant and shall not be assignable or transferable by the
Participant.

                J. STOCKHOLDER RIGHTS. A Participant shall have no stockholder
rights with respect to the shares subject to his or her outstanding purchase
right until the shares are purchased on the Participant's behalf in accordance
with the provisions of the Plan and the Participant has become a holder of
record of the purchased shares.

                                       6.
<PAGE>   7

        VIII.   ACCRUAL LIMITATIONS

                A. No Participant shall be entitled to accrue rights to acquire
Common Stock pursuant to any purchase right outstanding under this Plan if and
to the extent such accrual, when aggregated with (i) rights to purchase Common
Stock accrued under any other purchase right granted under this Plan and (ii)
similar rights accrued under other employee stock purchase plans (within the
meaning of Code Section 423) of the Corporation or any Corporate Affiliate,
would otherwise permit such Participant to purchase more than Twenty-Five
Thousand Dollars ($25,000.00) worth of stock of the Corporation or any Corporate
Affiliate (determined on the basis of the Fair Market Value per share on the
date or dates such rights are granted) for each calendar year such rights are at
any time outstanding.

                B. For purposes of applying such accrual limitations to the
purchase rights granted under the Plan, the following provisions shall be in
effect:

                        (i) The right to acquire Common Stock under each
        outstanding purchase right shall accrue in a series of installments on
        each successive Purchase Date during the offering period on which such
        right remains outstanding.

                        (ii) No right to acquire Common Stock under any
        outstanding purchase right shall accrue to the extent the Participant
        has already accrued in the same calendar year the right to acquire
        Common Stock under one or more other purchase rights at a rate equal to
        Twenty-Five Thousand Dollars ($25,000.00) worth of Common Stock
        (determined on the basis of the Fair Market Value per share on the date
        or dates of grant) for each calendar year such rights were at any time
        outstanding.

                C. If by reason of such accrual limitations, any purchase right
of a Participant does not accrue for a particular Purchase Interval, then the
payroll deductions which the Participant made during that Purchase Interval with
respect to such purchase right shall be promptly refunded.

                D. In the event there is any conflict between the provisions of
this Article and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article shall be controlling.

        IX.     EFFECTIVE DATE AND TERM OF THE PLAN

        A. The Plan was adopted by the Board on October 13, 1999 and shall
become effective at the Effective Time, provided no purchase rights granted
under the Plan shall be exercised, and no shares of Common Stock shall be issued
hereunder, until (i) the Plan shall have been approved by the stockholders of
the Corporation and (ii) the Corporation shall have complied with all applicable
requirements of the 1933 Act (including the registration of the shares of Common
Stock issuable under the Plan on a Form S-8 registration statement filed with
the Securities and Exchange Commission), all applicable listing requirements of
any stock

                                       7.
<PAGE>   8

exchange (or the Nasdaq National Market, if applicable) on which the Common
Stock is listed for trading and all other applicable requirements established by
law or regulation. In the event such stockholder approval is not obtained, or
such compliance is not effected, within twelve (12) months after the date on
which the Plan is adopted by the Board, the Plan shall terminate and have no
further force or effect, and all sums collected from Participants during the
initial offering period hereunder shall be refunded.

                B. Unless sooner terminated by the Board, the Plan shall
terminate upon the earliest of (i) the last business day in October 2009, (ii)
the date on which all shares available for issuance under the Plan shall have
been sold pursuant to purchase rights exercised under the Plan or (iii) the date
on which all purchase rights are exercised in connection with a Change in
Control. No further purchase rights shall be granted or exercised, and no
further payroll deductions shall be collected, under the Plan following such
termination.

        X.      AMENDMENT OF THE PLAN

                A. The Board may alter, amend, suspend or terminate the Plan at
any time to become effective immediately following the close of any Purchase
Interval. However, the Plan may be amended or terminated immediately upon Board
action, if and to the extent necessary to assure that the Corporation will not
recognize, for financial reporting purposes, any compensation expense in
connection with the shares of Common Stock offered for purchase under the Plan,
should the financial accounting rules applicable to the Plan at the Effective
Time be subsequently revised so as to require the Corporation to recognize
compensation expense in the absence of such amendment or termination.

                B. In no event may the Board effect any of the following
amendments or revisions to the Plan without the approval of the Corporation's
stockholders: (i) increase the number of shares of Common Stock issuable under
the Plan, except for permissible adjustments in the event of certain changes in
the Corporation's capitalization, (ii) alter the purchase price formula so as to
reduce the purchase price payable for the shares of Common Stock purchasable
under the Plan or (iii) modify the eligibility requirements for participation in
the Plan.

        XI.     GENERAL PROVISIONS

                A. All costs and expenses incurred in the administration of the
Plan shall be paid by the Corporation; however, each Plan Participant shall bear
all costs and expenses incurred by such individual in the sale or other
disposition of any shares purchased under the Plan.

                B. Nothing in the Plan shall confer upon the Participant any
right to continue in the employ of the Corporation or any Corporate Affiliate
for any period of specific duration or interfere with or otherwise restrict in
any way the rights of the Corporation (or any Corporate Affiliate employing such
person) or of the Participant, which rights are hereby expressly reserved by
each, to terminate such person's employment at any time for any reason, with or
without cause.

                                       8.
<PAGE>   9

                C. The provisions of the Plan shall be governed by the laws of
the State of California without resort to that State's conflict-of-laws rules.

                                       9.
<PAGE>   10

                                   SCHEDULE A

                          CORPORATIONS PARTICIPATING IN
                          EMPLOYEE STOCK PURCHASE PLAN
                            AS OF THE EFFECTIVE TIME

                               ARTISTdirect, Inc.

<PAGE>   11

                                    APPENDIX

                The following definitions shall be in effect under the Plan:

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

                B. CASH EARNINGS shall mean (i) the regular base salary paid to
a Participant by one or more Participating Companies during such individual's
period of participation in one or more offering periods under the Plan and (ii)
any overtime payments, bonuses, commissions, profit-sharing distributions and
other incentive-type payments received during such period. Cash Earnings shall
be calculated before deduction of (A) any income or employment tax withholdings
or (B) any contributions made by the Participant to any Code Section 401(k)
salary deferral plan or Code Section 125 cafeteria benefit program now or
hereafter established by the Corporation or any Corporate Affiliate. Cash
Earnings shall not include any contributions made on the Participant's behalf by
the Corporation or any Corporate Affiliate to any employee benefit or welfare
plan now or hereafter established (other than Code Section 401(k) or Code
Section 125 contributions deducted from such Cash Earnings).

                C. CHANGE IN CONTROL shall mean a change in ownership of the
Corporation pursuant to any of the following transactions:

                        (i) a merger or consolidation in which securities
        possessing more than fifty percent (50%) of the total combined voting
        power of the Corporation's outstanding securities are transferred to a
        person or persons different from the persons holding those securities
        immediately prior to such transaction, or

                        (ii) the sale, transfer or other disposition of all or
        substantially all of the assets of the Corporation in complete
        liquidation or dissolution of the Corporation, or

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

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

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

                                      A-1
<PAGE>   12

                E. CORPORATE AFFILIATE shall mean any parent or subsidiary
corporation of the Corporation (as determined in accordance with Code Section
424), whether now existing or subsequently established.

                F. CORPORATION shall mean ARTISTdirect, Inc., a Delaware
corporation, and any corporate successor to all or substantially all of the
assets or voting stock of ARTISTdirect, Inc. which shall by appropriate action
adopt the Plan.

                H. EFFECTIVE TIME shall mean the time at which the Underwriting
Agreement is executed and the Common Stock priced for the initial public
offering of such Common Stock. Any Corporate Affiliate which becomes a
Participating Corporation after such Effective Time shall designate a subsequent
Effective Time with respect to its employee-Participants.

                I. ELIGIBLE EMPLOYEE shall mean any person who is employed by a
Participating Corporation on a basis under which he or she is regularly expected
to render more than twenty (20) hours of service per week for more than five (5)
months per calendar year for earnings considered wages under Code Section 3401
(a).

                J. ENTRY DATE shall mean the date an Eligible Employee first
commences participation in the offering period in effect under the Plan. The
earliest Entry Date under the Plan shall be the Effective Time.

                K. FAIR MARKET VALUE per share of Common Stock on any relevant
date shall be determined in accordance with the following provisions:

                        (i) If the Common Stock is at the time traded on the
        Nasdaq National Market, then the Fair Market Value shall be the closing
        selling price per share of Common Stock on the date in question, as such
        price is reported by the National Association of Securities Dealers on
        the Nasdaq National Market. If there is no closing selling price for the
        Common Stock on the date in question, then the Fair Market Value shall
        be the closing selling price on the last preceding date for which such
        quotation exists.

                        (ii) If the Common Stock is at the time listed on any
        Stock Exchange, then the Fair Market Value shall be the closing selling
        price per share of Common Stock on the date in question on the Stock
        Exchange determined by the Plan Administrator to be the primary market
        for the Common Stock, as such price is officially quoted in the
        composite tape of transactions on such exchange. If there is no closing
        selling price for the Common Stock on the date in question, then the
        Fair Market Value shall be the closing selling price on the last
        preceding date for which such quotation exists.

                        (iii) For purposes of the initial offering period which
        begins at the Effective Time, the Fair Market Value shall be deemed to
        be equal to the price per share at which the Common Stock is sold in the
        initial public offering pursuant to the Underwriting Agreement.

                                     A-2.
<PAGE>   13

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

                M. PARTICIPANT shall mean any Eligible Employee of a
Participating Corporation who is actively participating in the Plan.

                N. PARTICIPATING CORPORATION shall mean the Corporation and such
Corporate Affiliate or Affiliates as may be authorized from time to time by the
Board to extend the benefits of the Plan to their Eligible Employees. The
Participating Corporations in the Plan are listed in attached Schedule A.

                0. PLAN shall mean the Corporation's 1999 Employee Stock
Purchase Plan, as set forth in this document.

                P. PLAN ADMINISTRATOR shall mean the committee of two (2) or
more Board members appointed by the Board to administer the Plan.

                Q. PURCHASE DATE shall mean the last business day of each
Purchase Interval. The initial Purchase Date shall be April 28, 2000.

                R. PURCHASE INTERVAL shall mean each successive six (6)-month
period within the offering period at the end of which there shall be purchased
shares of Common Stock on behalf of each Participant.

                S. SEMI-ANNUAL ENTRY DATE shall mean the first business day in
May and November each year on which an Eligible Employee may first enter an
offering period.

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

                U. UNDERWRITING AGREEMENT shall mean the agreement between the
Corporation and the underwriter or underwriters managing the initial public
offering of the Common Stock.

                                     A-3.<PAGE>   1
                                                                 EXHIBIT 10.25

PANDESIC AGREEMENT
ORDER FORM

<TABLE>
<CAPTION>

CONTRACT DATE:    April 15, 1999                CONTRACT NUMBER:
              -----------------------                           ---------------------------
MERCHANT INFORMATION
-------------------------------------------------------------------------------------------
<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
        -----------------------------                  ------------------------------------
</TABLE>

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.

<TABLE>
<CAPTION>
ACCEPTANCE
-------------------------------------------------------------------------------------------
<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
       ------------------------------                   -----------------------------------
</TABLE>

                                     Page 1
<PAGE>   2

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:

<TABLE>
<CAPTION>
<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.

                                     Page 1
<PAGE>   5
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,

                                     Page 2
<PAGE>   6
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

                                     Page 3
<PAGE>   7
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 [***] 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.

--------------------------
[***] 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 4
<PAGE>   8
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

                                     Page 5

<PAGE>   9
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

                                     Page 6

<PAGE>   10
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

--------------------------
[***] 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 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

--------------------------
[***] 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 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.

--------------------------
[***] 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.

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