Document:

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                                                                   EXHIBIT 10.29

                                                            [EXECUTIVE TEMPLATE]

                         AMERICAN COMMERCIAL LINES INC.

                       NONQUALIFIED STOCK OPTION AGREEMENT

         THIS STOCK OPTION AGREEMENT (this "Agreement") is made as of this _____
day of ________________, 20_____ (the "Grant Date") between American Commercial
Lines Inc., a Delaware corporation (the "Company"), and [______________] (the
"Optionee"). Capitalized terms used herein that are not otherwise defined shall
have the meaning ascribed to them in the American Commercial Lines Inc. 2005
Stock Incentive Plan (the "Plan").

                              W I T N E S S E T H:

         WHEREAS, the Company desires to provide the Optionee with the
opportunity to purchase shares of its common stock, par value $0.01 per share
("Common Stock"), in accordance with the terms of the Plan; and

         WHEREAS, the Optionee wishes to acquire the right to purchase shares of
Common Stock granted hereby.

         NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter contained, the parties hereto mutually
covenant and agree as follows:

         1.       GRANT OF OPTION. The Company hereby grants to the Optionee the
option to purchase all or part of an aggregate of [____________] shares of
Common Stock, on the terms and conditions set forth in the Plan, subject to the
vesting, exercise and other requirements set forth in this Agreement, to the
extent not inconsistent with the Plan (the "Option").

         2.       PURCHASE PRICE. The per share purchase price of the shares of
Common Stock issuable upon exercise of the Option shall be $[________], which
the Committee has determined is equal to 100% of the Fair Market Value (as
defined in the Plan) of a share of Common Stock on the Grant Date.

         3.       NONQUALIFIED STOCK OPTION. The Option is not intended to
qualify as an incentive stock option under Section 422 of the Internal Revenue
Code of 1986, as amended.

         4.       TERM. The term of the Option shall expire as of the earliest
of the following:

                  (a)      the date that is ten (10) years from the Grant Date;

                  (b)      to the extent the Option is vested on the date of
such termination, the date that is one (1) day following the date that the
Optionee's employment with the Company, or any Subsidiary or Affiliate, is
terminated for Cause, as defined [in the Plan] [in the Employment Agreement
between the Optionee and the Optionee (the "Employment Agreement")];

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                  (c)      to the extent the Option is vested on the date of
such termination, the date that is ninety (90) days after the Optionee's
employment with the Company, or any Subsidiary or Affiliate, is terminated other
than (i) for Cause or (ii) upon the Optionee's death, Disability or Retirement,
as defined in the Plan;

                  (d)      to the extent the Option is vested on the date of
such termination, the date that is twelve (12) months after the Optionee's
employment with the Company, or any Subsidiary or Affiliate, is terminated as a
result of the Optionee's Disability, as defined in the Plan;

                  (e)      to the extent the Option is vested on the date of
such death, the date that is twelve (12) months after the Optionee dies while
employed by the Company, or any Subsidiary or Affiliate; or

                  (f)      to the extent the Option is vested on the date of
such Retirement, the date that is twelve (12) months after the date the
Optionee's employment with the Company, or any Subsidiary or Affiliate, is
terminated as a result of the Optionee's Retirement, as defined in the Plan
(provided that if the Optionee dies within such twelve (12) month period, any
such unexercised Option shall continue to be exercisable for twelve (12) months
from the date of such death).

In the event of termination of the Optionee's employment for Cause, the Optionee
shall forfeit all rights hereunder with respect to any vested and non-vested
Options as of the date of such termination. Subject to the foregoing terms of
this Section 4, if the Optionee's employment terminates for any reason other
than Cause, the Optionee shall forfeit all rights hereunder with respect to any
non-vested Options as of the date of such termination, including the right to
purchase shares of Common Stock under the Option.

         5.       VESTING.

                  (a)      Subject to any forfeiture provisions in this
Agreement or in the Plan, the Optionee shall become vested in the Options
granted hereunder as follows:

<TABLE>
<CAPTION>
        PERCENTAGE VESTED:                      VESTING DATE:
        -----------------                       ------------
        <S>                                     <C>
              33%                               1st Anniversary of Grant Date
              33%                               2nd Anniversary of Grant Date
              34%                               3rd Anniversary of Grant Date
</TABLE>

                  (b)      Notwithstanding the vesting schedule contained in
Section 5(a) hereof, in the event of a "Change in Control", then the Optionee
shall become 100% vested in the Option following such "Change in Control" of the
Company. For purposes of this Agreement, a "Change in Control" shall mean the
occurrence of any of the following events, each of which shall be determined
independently of the others: (i) any "Person" (as hereinafter defined), other
than a holder of at least 10% of the outstanding voting power of the Company as
of the date of this Agreement, becomes a "beneficial owner" (as such term is
used in Rule 13d-3 promulgated

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under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of a
majority of the stock of the Company entitled to vote in the election of
directors of the Company; (ii) individuals who are Continuing Directors of the
Company (as hereinafter defined) cease to constitute a majority of the members
of the Board; (iii) stockholders of the Company adopt and consummate a plan of
complete or substantial liquidation or an agreement providing for the
distribution of all or substantially all of the assets of the Company; (iv) the
Company is a party to a merger, consolidation, other form of business
combination or a sale of all or substantially all of its assets, with an
unaffiliated third party, unless the business of the Company following
consummation of such merger, consolidation or other business combination is
continued following any such transaction by a resulting entity (which may be,
but need not be, the Company) and the stockholders of the Company immediately
prior to such transaction hold, directly or indirectly, at least a majority of
the voting power of the resulting entity; provided, however, that a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) shall not constitute a Change in Control; (v) there is a
Change in Control of the Company of a nature that is reported in response to
item 5.01 of Current Report on Form 8-K or any similar item, schedule or form
under the Exchange Act, as in effect at the time of the change, whether or not
the Company is then subject to such reporting requirements; provided, however,
that for purposes of this Agreement a Change in Control shall not be deemed to
occur if the Person or Persons deemed to have acquired control is a holder of at
least 10% of the outstanding voting power of the Company as of the date of this
Agreement; or (vi) the Company consummates a transaction which constitutes a
"Rule 13e-3 transaction" (as such term is defined in Rule 13e-3 of the Exchange
Act) prior to the termination or expiration of this Agreement.

                  (c)      In the event of a Rule 13e-3 transaction, then
effective coincident with the consummation of such Rule 13e-3 transaction, all
non-vested Options issued hereunder shall immediately vest and be exercisable by
Optionee notwithstanding the vesting schedules set forth in Section 5(a) hereof;
provided, however, that notwithstanding the foregoing, in connection with the
consummation of such Change in Control or Rule 13e-3 transaction, all such
non-vested Options then held by Optionee shall be deemed to vest and become
exercisable at such time in order to permit Optionee to participate in such
transaction.

                  (d)      For purposes of this Section 5, "Continuing
Directors" shall mean the members of the Board on the Grant Date, provided that
any person becoming a member of the Board subsequent to such date whose election
or nomination for election was supported by at least a majority of the directors
who then comprised the Continuing Directors shall be considered to be a
Continuing Director; and the term "Person" is used as such term is used Sections
13(d) and 14(d) of the Exchange Act.

                  (e)      [Notwithstanding the vesting schedule contained in
Section 5(a) hereof, in the event of a termination of employment by the Optionee
with Good Reason (as defined in the Employment Agreement), by the Company
without Cause (as defined in the Employment Agreement), or due to death or due
to Disability, then the Optionee shall become 100% vested in the Option as of
the date of such termination.]

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         6.       EXERCISE. The Optionee shall not be entitled to exercise the
Option until it is vested. Subject to the provisions of Section 4, the Option
may be exercised only while the Optionee is employed by the Company or an
Affiliate or Subsidiary of the Company. In no event shall the Option be
exercisable after the expiration date of the Option.

         7.       NONTRANSFERABILITY. The Option shall not be transferable or
assignable other than by will or the laws of descent and distribution, or
pursuant to a qualified domestic relations order as described in Section 206(d)
of the Employee Retirement Income Security Act of 1974, as amended, subject to
Article 3. Any other attempt to assign, transfer, pledge, hypothecate, dispose
of or subject the Option to execution, attachment or similar process shall be
null and void and without effect. The Option may be exercised during the
lifetime of the Optionee only by the Optionee, his guardian or his legal
representative, or by an alternate payee pursuant to a qualified domestic
relations order.

         8.       METHOD OF EXERCISING OPTIONS.

                  (a)      Subject to the terms and conditions of this
Agreement, the Option may be exercised by written notice delivered to the
Company or its designated representative in the manner and at the address for
notices set forth in Section 11 hereof. Such notice shall state that the Option
is being exercised thereby and shall specify the number of shares of Common
Stock involved. The notice shall be signed by the person or persons exercising
the Option and shall be accompanied by payment in full of the Option price for
such shares of Common Stock, such payment to be made in (i) cash, as described
in Section 8(c) of the Plan; (ii) subject to Section 8(c) of the Plan, that
number of Mature Shares of unrestricted Common Stock, or vested Restricted
Stock, which has an aggregate Fair Market Value as of the date of exercise equal
to the aggregate exercise price for all of the shares of Common Stock subject to
such exercise; (iii) shares of Common Stock which would otherwise be delivered
pursuant to the exercise of the Option having an aggregate Fair Market Value,
determined as of the date of exercise, equal to the amount necessary to satisfy
such obligation, provided that the Committee determines that such withholding of
shares does not cause the Company to recognize an increased compensation expense
under applicable accounting principles; (iv) a combination of methods (i), (ii)
and (iii); (v) to the extent permitted by applicable law, pursuant to
independently-arranged broker assisted "cashless" exercise with third party
brokers unrelated to the Company; or (vi) other means authorized by the
Committee in accordance with Section 8(c) of the Plan. If the tender or
withholding of shares of Common Stock as payment of the Option price would
result in the issuance of fractional shares of Common Stock, the Company shall
instead return the balance in cash or by check to the Optionee. If the Option is
exercised by any person or persons other than the Optionee, the notice described
in this Section 8(a) shall be accompanied by appropriate proof (as determined by
the Committee) of the right of such person or persons to exercise the Option
under the terms of the Plan and this Agreement. The Company shall issue and
deliver, in the name of the person or persons exercising the Option, a
certificate or certificates representing such shares as soon as practicable
after notice and payment are received and the exercise is approved.

                  (b)      The Option may be exercised in accordance with the
terms of the Plan and this Agreement with respect to any whole number of shares
subject to the Option, but in no event

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may an Option be exercised as to fewer than one hundred (100) shares at any one
time, or the remaining shares covered by the Option if less than two hundred
(200).

                  (c)      The Optionee shall have no rights of a stockholder
with respect to shares of Common Stock to be acquired by the exercise of the
Option until the date of issuance of a certificate or certificates representing
such shares. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued. All shares of Common Stock
purchased upon the exercise of the Option as provided herein shall be fully paid
and non-assessable.

                  (d)      The Optionee agrees that no later than the date as of
which an amount first becomes includible in his gross income for federal income
tax purposes with respect to the Option, the Optionee shall pay to the Company,
or make arrangements satisfactory to the Company regarding the payment of, any
federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount. Withholding obligations may be settled
with Common Stock, including Common Stock that is acquired upon exercise of the
Option, having an aggregate Fair Market Value not in excess of the amount
determined by applying the minimum statutory withholding rate. The obligations
of the Company under this Agreement and the Plan shall be conditional on such
payment or arrangements, and the Company, its Affiliates and Subsidiaries shall,
to the extent permitted by law, have the right to deduct any such taxes from any
payment otherwise due to the Employee.

         9.       ADJUSTMENT UPON CHANGES IN CAPITALIZATION. Subject to any
required action by the stockholders of the Company and the terms of the Plan,
if, during the term of this Agreement, there shall be any increase or decrease
in the number of issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the
Common Stock or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company (as
defined in Section 14 of the Plan), the Committee may, in its sole discretion,
make an appropriate and equitable adjustment in the aggregate number, kind and
option price of shares subject to this Option; provided, however, that in no
event shall the Option price be adjusted below the par value of a share of
Common Stock, nor shall any fraction of a share be issued upon the exercise of
the Option.

         10.      CONDITIONS UPON ISSUANCE OF OPTION. As a condition to the
exercise of the Option, the Company may require the Optionee to (i) represent
and warrant at the time of any such exercise that the Common Stock is being
purchased only for investment and without any present intention to sell or
distribute such shares if, in the opinion of legal counsel for the Company, such
a representation is required by any relevant provision of law; and (ii) enter
into a lock-up or similar agreement with the Company with respect to such shares
prohibiting, for up to ninety (90) days, the disposition of such shares.

         11.      NOTICES. Each notice relating to this Agreement shall be in
writing and shall be sufficiently given if delivered by registered or certified
mail, or by a nationally recognized overnight delivery service, with postage or
charges prepaid, to the address hereinafter provided in this Section 11. Any
such notice or communication given by first-class mail shall be deemed to

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have been given two business days after the date so mailed, and such notice or
communication given by overnight delivery service shall be deemed to have been
given one business day after the date so sent, provided such notice or
communication arrives at its destination. Each notice to the Company shall be
addressed to it at its offices at 1701 East Market Street, Jeffersonville,
Indiana 47130 (attention: Senior Vice President, Law and Administration), with a
copy to the Chairman of the Compensation Committee of the Company or to such
other designee of the Company. Each notice to the Optionee or other person or
persons then entitled to exercise the Option shall be addressed to the Optionee
or such other person or persons at the Optionee's address shown on the signature
page hereof.

         12.      LIMITATIONS. Nothing contained in this Agreement shall be
construed as conferring upon the Optionee the right to continue as an Employee,
or shall affect the right of the Company, in its sole discretion, to terminate
the Optionee's employment at any time, with or without cause.

         13.      INCORPORATION OF THE PLAN. Notwithstanding the terms and
conditions contained herein, this Agreement shall be subject to and governed by
all the terms and conditions of the Plan, which is hereby incorporated by
reference. In the event of any discrepancy or inconsistency between the terms
and conditions of this Agreement and of the Plan, the terms and conditions of
the Plan shall control.

         14.      INTERPRETATION. The interpretation and construction of any
terms or conditions of the Plan, or of this Agreement or other matters related
to the Plan by the Committee, shall be final and conclusive.

         15.      SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement or the application
thereof to any party or circumstance shall be prohibited by or be invalid under
applicable law, then such provision shall be ineffective to the minimal extent
of such provision or the remaining provisions of this Agreement or the
application of such provision to other parties or circumstances.

         16.      ENFORCEABILITY. This Agreement shall be binding upon the
Optionee and such Optionee's estate, personal representative and beneficiaries.

         17.      PRONOUNS, SINGULAR/PLURAL. Any use of any masculine pronoun
shall include the feminine and vice-versa, and any use of a singular shall
include the plural or vice-versa, as the context and facts may require.

         18.      COUNTERPART EXECUTION. This Agreement may be executed in
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute the entire document.

                                    * * * * *

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by
its officer thereunto duly authorized, and the Optionee has executed this
Agreement all as of the day and year first above written.

                                        AMERICAN COMMERCIAL LINES INC.

                                        By:
                                           ---------------------------
                                        Its:
                                            --------------------------

                                        OPTIONEE:  [____________]

                                        OPTIONEE'S ADDRESS:

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

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

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

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                                                                     EXHIBIT 4.1

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

                          COMMON STOCK PURCHASE WARRANT

                  To Purchase 100,000 Shares of Common Stock of

                               ARTISTdirect, Inc.

            THIS COMMON STOCK PURCHASE WARRANT (the "Warrant") certifies that,
for value received, DKR SoundShore Oasis Holding Fund Ltd. (the "Holder"), is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time (i) on or after the first to occur
of (A) September 30, 2005, if the acquisition target, which is mutually
acceptable to ARTISTdirect, Inc., a Delaware corporation (the "Company") and the
Holder (the "Acquisition Candidate"), has not executed a definitive purchase
agreement with any person or entity on or prior to such date, (B) the date that
the Company notifies the Holder that the Acquisition Candidate has executed a
definitive purchase agreement with a party other than (1) the Company or (2) the
Holder or its affiliates (which shall include for this purpose only, any party
that submits a competing bid to acquire the Acquisition Candidate and such party
receives financing to fund all or any portion of such acquisition from the
Holder or any of its affiliate funds) or (C) the date that the Company announces
that the Company and the Acquisition Candidate have executed a definitive
purchase agreement, which acquisition is not to any extent financed by or on
behalf of the Holder or its affiliates (the first to occur of (i)(A), (i)(B) or
(i)(C) is referred to as the "Initial Exercise Date") and (ii) on or prior to
the earlier of (A) the occurrence of a Fundamental Transaction (as defined
below) and (B) the close of business on the fifth anniversary of the Initial
Exercise Date (the "Termination Date") but not thereafter, to subscribe for and
purchase from the Company up to 100,000 shares (the "Warrant Shares") of Common
Stock, par value $0.01 per share, of the Company (the "Common Stock"). The
purchase price of one share of Common Stock under this Warrant shall be equal to
the Exercise Price, as defined in Section 1(b). The Company shall notify the
Holder of the triggering

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of the Initial Exercise Date within two (2) trading days and such notice shall
be in accordance with Section 4(j) below.

      Section 1.  Exercise.

            a)    Exercise of Warrant. Exercise of the purchase rights
      represented by this Warrant may be made, in whole or in part, at any time
      or times on or after the Initial Exercise Date and on or before the
      Termination Date by delivery to the Company of a duly executed original or
      facsimile copy of the Notice of Exercise Form annexed hereto (or such
      other office or agency of the Company as it may designate by notice in
      writing to the registered Holder at the address of such Holder appearing
      on the books of the Company); provided, however, within five (5) trading
      days of the date said Notice of Exercise is delivered to the Company, the
      Holder shall have surrendered this Warrant to the Company and the Company
      shall have received full payment of the aggregate Exercise Price for
      shares thereby purchased by wire transfer of immediately available funds
      or cashier's check drawn on a United States bank (unless exercised by
      means of a "cashless exercise" in accordance with Section 1(c) below).

            b)    Exercise Price. The exercise price of the Common Stock under
      this Warrant shall be $1.00 per share, subject to adjustment hereunder
      (the "Exercise Price").

            c)    Cashless Exercise. If at any time after one (1) year from the
      date of issuance of this Warrant there is no effective registration
      statement filed with the Securities and Exchange Commission ("SEC") under
      the Securities Act of 1933, as amended (the "Securities Act") registering,
      or no current prospectus available for, the resale of the Warrant Shares
      by the Holder, then this Warrant may also be exercised at such time by
      means of a "cashless exercise" in which the Holder shall be entitled to
      receive a certificate for the number of Warrant Shares equal to the
      quotient obtained by dividing [(A-B) (X)] by (A), where:

            (A) = the average closing price of the Common Stock over the five
                  (5) trading days immediately preceding the date of such
                  election (the "Closing Price"), as such closing price is
                  reported on the Over-the-Counter Bulletin Board, or if the
                  Company's Common Stock ceases trading on the Over-the-Counter
                  Bulletin Board, such other national securities trading market
                  in which the primary trading of the Common Stock of the
                  Company occurs;

            (B) = the Exercise Price of this Warrant, as adjusted; and

            (X) = the number of Warrant Shares then issuable upon exercise of
                  this Warrant in accordance with the terms of this Warrant by
                  means of a cash exercise rather than a cashless exercise;

      provided, however, that the Holder's ability to exercise all or any
      portion of this Warrant by means of a "cashless exercise" shall be
      postponed if, within the twenty (20) trading days preceding the date of
      such election, Holder or any of its affiliates has traded, placed

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      any order for or bid upon any shares of the Company's Common Stock on the
      open market with the intent or expectation of manipulating the price of
      the Company's Common Stock.

            Notwithstanding anything herein to the contrary (but subject to
      Section 1(d)), on the Termination Date, this Warrant shall be
      automatically exercised via cashless exercise pursuant to this Section
      1(c), so long as the Exercise Price is less than the Closing Price.

            d)    Exercise Limitations; Holder's Restrictions. The Holder shall
      not have the right to exercise any portion of this Warrant, pursuant to
      Section 1(c) or otherwise, to the extent that after giving effect to such
      issuance after exercise, the Holder (together with such Holder's
      affiliates), as set forth on the applicable Notice of Exercise, would
      beneficially own in excess of 4.99% of the number of shares of the Common
      Stock outstanding immediately after giving effect to such issuance. For
      purposes of the foregoing sentence, the number of shares of Common Stock
      beneficially owned by the Holder and its affiliates shall include the
      number of shares of Common Stock issuable upon exercise of this Warrant
      with respect to which the determination of such sentence is being made,
      but shall exclude the number of shares of Common Stock which would be
      issuable upon (A) exercise of the remaining, non-exercised portion of this
      Warrant beneficially owned by such Holder or any of its affiliates and (B)
      exercise or conversion of the unexercised or non-converted portion of any
      other securities of the Company (including, without limitation, any other
      Warrants) subject to a limitation on conversion or exercise analogous to
      the limitation contained herein beneficially owned by such Holder or any
      of its affiliates. Except as set forth in the preceding sentence, for
      purposes of this Section 1(d), beneficial ownership shall be calculated in
      accordance with Section 13(d) of the Exchange Act of 1934, as amended (the
      "Exchange Act"), it being acknowledged by a Holder that the Company is not
      representing to such Holder that such calculation is in compliance with
      Section 13(d) of the Exchange Act and such Holder is solely responsible
      for any schedules required to be filed in accordance therewith and any
      other obligations of Holder arising thereunder or under any other state or
      federal securities or "blue sky" laws or regulations. To the extent that
      the limitation contained in this Section 1(d) applies, the determination
      of whether this Warrant is exercisable (in relation to other securities
      owned by such Holder) and of which a portion of this Warrant is
      exercisable shall be in the sole discretion of Holder, and the submission
      of a Notice of Exercise shall be deemed to be each Holder's determination
      of whether this Warrant is exercisable (in relation to other securities
      owned by such Holder) and of which portion of this Warrant is exercisable,
      in each case subject to such aggregate percentage limitation, and the
      Company shall have no obligation to verify or confirm the accuracy of such
      determination. For purposes of this Section 1(d), in determining the
      number of outstanding shares of Common Stock, the Holder may rely on the
      number of outstanding shares of Common Stock as reflected in the later of
      (x) the Company's most recent Form 10-Q or Form 10-K, as the case may be,
      (y) a more recent public announcement or filing with the SEC by the
      Company or (z) any other notice by the Company or the Company's transfer
      agent setting forth the number of shares of Common Stock outstanding. Upon
      delivery of written notice of a Holder, the Company shall within two (2)
      trading days confirm in writing to such Holder the number of shares of
      Common Stock then

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      outstanding. In any case, the number of outstanding shares of Common Stock
      shall be determined after giving effect to the conversion or exercise of
      securities of the Company, including this Warrant, by such Holder or its
      affiliates since the date as of which such number of outstanding shares of
      Common Stock was reported. Further, the Holder shall not have the right to
      exercise any portion of this Warrant while such Holder (or any of such
      Holder's affiliates) is in possession of material, confidential and
      non-public information regarding the Company; including, but not limited
      to, information regarding any pending financing or strategic transactions.

            e)    Mechanics of Exercise.

                        i.    Authorization of Warrant Shares. The Company
                  covenants that all Warrant Shares which may be issued upon the
                  exercise of the purchase rights represented by this Warrant
                  will, upon exercise of the purchase rights represented by this
                  Warrant, be duly authorized, validly issued, fully paid and
                  nonassessable and free from all taxes, liens and charges in
                  respect of the issue thereof (other than taxes in respect of
                  any transfer occurring contemporaneously with such issue).

                        ii.   Delivery of Certificates Upon Exercise.
                  Certificates for shares purchased hereunder shall be
                  transmitted by the transfer agent of the Company to the Holder
                  by crediting the account of the Holder's prime broker
                  registered on the books of the Depository Trust Company
                  through its Deposit Withdrawal Agent Commission ("DWAC")
                  system, if the Company is a participant in such system, and
                  otherwise by physical delivery of the certificate to the
                  address specified by the Holder in the Notice of Exercise
                  within five (5) trading days from the delivery to the Company
                  of the Notice of Exercise Form, surrender of this Warrant and
                  payment of the aggregate Exercise Price as set forth above
                  ("Warrant Share Delivery Date"). This Warrant shall be deemed
                  to have been exercised on the date the Exercise Price is
                  received by the Company. The Warrant Shares shall be deemed to
                  have been issued, and Holder or any other person so designated
                  to be named therein shall be deemed to have become a holder of
                  record of such shares for all purposes, as of the date the
                  Warrant has been exercised by payment to the Company of the
                  Exercise Price and all taxes required to be paid by the
                  Holder, if any, pursuant to Section 1(e)(vii) prior to the
                  issuance of such shares, have been paid.

                        iii.  Delivery of New Warrants Upon Exercise. If this
                  Warrant is exercised in part, the Company shall, at the time
                  of delivery of the certificate or certificates representing
                  Warrant Shares, deliver to Holder a new Warrant evidencing the
                  rights of Holder to purchase the remaining unpurchased Warrant
                  Shares called for by this Warrant, which new Warrant shall in
                  all other respects, be identical with this Warrant.

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<PAGE>

                        iv.   Rescission Rights. If the Company fails to cause
                  its transfer agent to transmit to the Holder or its nominee a
                  certificate or certificates representing the Warrant Shares
                  pursuant to this Section 1(e)(iv) by the Warrant Share
                  Delivery Date, then the Holder will have the right to rescind
                  such exercise.

                        v.    Compensation for Buy-In on Failure to Timely
                  Deliver Certificates Upon Exercise. In addition to any other
                  rights available to the Holder, if the Company fails to cause
                  its transfer agent to transmit to the Holder, or its nominee,
                  one or more certificates representing the Warrant Shares
                  pursuant to an exercise on or before the Warrant Share
                  Delivery Date, and if after such date the Holder is required
                  by its broker to purchase (in an open market transaction or
                  otherwise) shares of Common Stock to deliver in satisfaction
                  of a sale by the Holder of the Warrant Shares which the Holder
                  in good faith anticipated receiving upon such exercise (a
                  "Buy-In"), then the Company shall (1) pay in cash to ------
                  the Holder the amount by which (x) the Holder's total purchase
                  price (including brokerage commissions, if any) for the shares
                  of Common Stock so purchased exceeds (y) the amount obtained
                  by multiplying (A) the number of Warrant Shares that the
                  Company was required to deliver to the Holder in connection
                  with the exercise at issue times (B) the price at which the
                  sell order giving rise to such purchase obligation was
                  executed, and (2) at the option of the Holder, either
                  reinstate the portion of the Warrant and equivalent number of
                  Warrant Shares for which such exercise was not honored or
                  deliver to the Holder the number of shares of Common Stock
                  that would have been issued had the Company timely complied
                  with its exercise and delivery obligations hereunder. For
                  example, if the Holder purchases Common Stock having a total
                  purchase price of $11,000 to cover a Buy-In with respect to an
                  attempted exercise of shares of Common Stock with an aggregate
                  sale price giving rise to such purchase obligation of $10,000,
                  under clause (1) of the immediately preceding sentence the
                  Company shall be required to pay the Holder $1,000. The Holder
                  shall provide the Company written notice indicating the
                  amounts payable to the Holder in respect of the Buy-In,
                  together with applicable confirmations and other evidence
                  reasonably requested by the Company. Nothing herein shall
                  limit a Holder's right to pursue any other remedies available
                  to it hereunder, at law or in equity including, without
                  limitation, a decree of specific performance and/or injunctive
                  relief with respect to the Company's failure to timely deliver
                  certificates representing shares of Common Stock upon exercise
                  of the Warrant as required pursuant to the terms hereof.

                        vi.   No Fractional Shares or Scrip. No fractional
                  shares or scrip representing fractional shares shall be issued
                  upon the exercise of this Warrant. As to any fraction of a
                  share which Holder would otherwise be entitled to purchase
                  upon such exercise, the Company shall pay a cash

                                      -5-
<PAGE>

                  adjustment in respect of such final fraction in an amount
                  equal to such fraction multiplied by the Exercise Price.

                        vii.  Charges, Taxes and Expenses. Issuance of
                  certificates for Warrant Shares shall be made without charge
                  to the Holder for any issue or other incidental expense in
                  respect of the issuance of such certificate, all of which
                  taxes (excluding any applicable transfer tax incidental
                  thereto) and expenses shall be paid by the Company, and such
                  certificates shall be issued in the name of the Holder or in
                  one or more such names as may be directed by the Holder;
                  provided, however, that in the event certificates for Warrant
                  Shares are to be issued in a name other than the name of the
                  Holder, this Warrant when surrendered for exercise shall be
                  accompanied by the Assignment Form attached hereto duly
                  executed by the Holder; and the Company may require, as a
                  condition thereto, the payment of a sum sufficient to
                  reimburse it for any expenses in respect of the issuance of
                  certificates for Warrant Shares, including, but not limited
                  to, any incidental expenses or taxes (including any applicable
                  transfer tax).

                        viii. Closing of Books. The Company will not close its
                  stockholder books or records in any manner which prevents the
                  timely exercise of this Warrant, pursuant to the terms hereof.

      Section 2.  Certain Adjustments.

            a)    Stock Dividends and Splits. If the Company, at any time while
      this Warrant is outstanding: (A) pays a stock dividend or otherwise makes
      one or more distributions on all shares of its Common Stock or any other
      equity or equity equivalent securities payable in shares of Common Stock
      (which, for avoidance of doubt, shall not include any shares of Common
      Stock issued by the Company pursuant to this Warrant), (B) sub-divides
      outstanding shares of Common Stock into a larger number of shares, (C)
      combines (including by way of reverse stock split) outstanding shares of
      Common Stock into a smaller number of shares, or (D) issues by
      reclassification of shares of Common Stock any shares of capital stock of
      the Company, then in each case the Exercise Price shall be multiplied by a
      fraction of which the numerator shall be the number of shares of Common
      Stock (excluding treasury shares, if any) outstanding immediately before
      such event and of which the denominator shall be the number of shares of
      Common Stock (excluding treasury shares, if any) outstanding immediately
      after such event and the number of shares issuable upon exercise of this
      Warrant shall be proportionately adjusted. Any adjustment made pursuant to
      this Section 2(a) shall become effective immediately after the record date
      for the determination of stockholders entitled to receive such dividend or
      distribution and shall become effective immediately after the effective
      date in the case of a sub-division, combination or reclassification.

                                      -6-
<PAGE>

            b)    Adjustment Due to Dilutive Issuance.

                        i.    Dilutive Issuances On or Prior to December 31,
      2005. If at any time on or prior to December 31, 2005, the Company or any
      subsidiary thereof, as applicable, while any portion of this Warrant is
      outstanding, shall sell, issue or grant any option or warrant to acquire
      its Common Stock, or reprice any outstanding options or warrants
      exercisable into Common Stock, or otherwise sell, issue or grant any
      securities at any time convertible, exchangeable or exercisable into
      Common Stock ("Common Stock Equivalents"), other than Excluded Stock (as
      defined below), at a price per share less than the Exercise Price in
      effect on the date of such issuance (or deemed issuance) of such shares of
      Common Stock or Common Stock Equivalents (such lower price, the "Base
      Share Price" and such issuances other than with respect to Excluded Stock
      collectively, a "Dilutive Issuance") then, the Exercise Price shall be
      reduced to equal the Base Share Price and the number of Warrant Shares
      issuable hereunder shall be increased such that the aggregate Exercise
      Price payable hereunder, after taking into account the decrease in the
      Exercise Price, shall be equal to the aggregate Exercise Price prior to
      such adjustment.

                        ii.   Dilutive Issuances Subsequent to December 31,
      2005. If at any time subsequent to December 31, 2005, the Company or any
      subsidiary thereof, as appropriate, makes a Dilutive Issuance while any
      portion of this Warrant is outstanding, then immediately upon the Dilutive
      Issuance, the Exercise Price will adjusted to a price equal to the
      quotient obtained by using the following formula:

                              A + B
                        Z = ----------
                                X

                  Where:

                  (A)= the product of (x) the total number of shares of Common
      Stock (excluding shares of Excluded Stock) outstanding immediately prior
      to such issuance multiplied by (y) the applicable Exercise Price in effect
      immediately prior to such issuance;

                  (B)= the consideration received by the Company upon such
      issuance; and

                  (X)= the total number of shares of Common Stock outstanding
      (excluding shares of Excluded Stock) immediately after the issuance of
      such Common Stock.

      Any such adjustments made pursuant to this Section 2(b) shall be made
      whenever such Common Stock or Common Stock Equivalents are issued. The
      Company shall notify the Holder in writing, no later than five (5)
      business days following the issuance of any Common Stock or Common Stock
      Equivalents subject to this section (such notice the "Dilutive Issuance
      Notice"). For purposes of clarification, whether or not the Company
      provides a Dilutive Issuance Notice pursuant to this Section 2(b), upon
      the occurrence of any Dilutive Issuance, after the date of such Dilutive
      Issuance, the Holder will be entitled

                                      -7-
<PAGE>

      to receive a number of Warrant Shares based upon the adjustments set forth
      above regardless of whether the Holder accurately provides notice
      describing the adjusted Exercise Price in the Notice of Exercise.

      For purposes of this Section 2(b), "Excluded Stock" shall mean shares of
      Common Stock or Common Stock Equivalents issued by the Company (i) prior
      to April 1, 2005, (ii) to employees, officers, directors and consultants
      of the Company in the ordinary course of business, (iii) under a
      Compensatory Benefit Plan (as defined in Rule 701 of the Securities Act of
      1933, as amended), (iv) with respect to which the provisions of Section
      2(a), 2(c) and/or 2(d) apply, (v) to the Holder or any of its affiliates,
      or (vi) upon conversion of any Common Stock Equivalents for which
      adjustment of the Exercise Price has previously been made pursuant to
      Section 2(b).

            c)    Pro Rata Distributions. If the Company, at any time prior to
      the Termination Date, shall distribute to all holders of Common Stock (and
      not to Holders of the Warrants) evidences of its indebtedness or assets
      (including cash and cash dividends) or rights or warrants to subscribe for
      or purchase any security other than the Common Stock (which shall be
      subject to Section 2(b)), then in each such case the Exercise Price shall
      be adjusted by multiplying the Exercise Price in effect immediately prior
      to the record date fixed for determination of stockholders entitled to
      receive such distribution by a fraction of which the denominator shall be
      the average closing price of the Common Stock over the ten (10) trading
      days immediately preceding the record date (as reported by the
      Over-the-Counter Bulletin Board, or if the Company's Common Stock ceases
      trading on the Over-the-Counter Bulletin Board, such other national
      securities trading market in which the primary trading of the Common Stock
      of the Company occurs), and of which the numerator shall be such average
      closing price of the Common Stock over the ten (10) trading days
      immediately preceding the record date (as reported by the Over-the-Counter
      Bulletin Board, or if the Company's Common Stock ceases trading on the
      Over-the-Counter Bulletin Board, such other national securities trading
      market in which the primary trading of the Common Stock of the Company
      occurs) less the then per share fair market value at such record date of
      the portion of such assets or evidence of indebtedness so distributed
      applicable to one outstanding share of the Common Stock as determined by
      the Board of Directors in good faith. In either case the adjustments shall
      be described in a statement provided to the Holder of the portion of
      assets or evidences of indebtedness so distributed or such subscription
      rights applicable to one share of Common Stock. Such adjustment shall be
      made whenever any such distribution is made and shall become effective
      immediately after the record date mentioned above.

            d)    Fundamental Transaction. If, at any time while this Warrant is
      outstanding, (A) the Company effects any merger or consolidation of the
      Company with or into another entity, (B) the Company effects any sale of
      all or substantially all of its assets in one or a series of related
      transactions, (C) any tender offer or exchange offer (whether by the
      Company or another person or entity) is completed pursuant to which
      holders of Common Stock are permitted to tender or exchange their shares
      for other securities, cash or property, or (D) the Company effects any
      reclassification of the Common Stock or any compulsory share exchange
      pursuant to which the Common Stock

                                      -8-
<PAGE>

      is effectively converted into or exchanged for other securities, cash or
      property (in any such case, a "Fundamental Transaction"), then, this
      Warrant shall be cancelled and shall no longer be in force or effect.

            e)    Calculations. All calculations under this Section 2 shall be
      made to the nearest cent or the nearest 1/100th of a share, as the case
      may be. For purposes of this Section 2, the number of shares of Common
      Stock deemed to be issued and outstanding as of a given date shall be the
      sum of the number of shares of Common Stock (excluding treasury shares, if
      any) issued and outstanding.

            f)    Voluntary Adjustment By Company. The Company may at any time
      during the term of the Warrant reduce the then current Exercise Price to
      any amount and for any period of time deemed appropriate by the Board of
      Directors of the Company (in its discretion).

            g)    Notice to Holders.

                        i.    Adjustment to Exercise Price. Whenever the
                  Exercise Price is adjusted pursuant to this Section 2, the
                  Company shall promptly mail to each Holder a notice setting
                  forth the Exercise Price after such adjustment and setting
                  forth a brief statement of the facts requiring such
                  adjustment.

                        ii.   Notice to Allow Exercise by Holder. If (A) the
                  Company shall declare a dividend (or any other distribution)
                  on the Common Stock; (B) the Company shall declare a special
                  non-recurring cash dividend on or a redemption of the Common
                  Stock; (C) the Company shall authorize the granting to all
                  holders of the Common Stock rights or warrants to subscribe
                  for or purchase any shares of capital stock of any class or of
                  any rights; (D) the approval of the stockholders of the
                  Company shall be required in connection with any
                  reclassification of the Common Stock, any consolidation or
                  merger to which the Company is a party, any sale or transfer
                  of all or substantially all of the assets of the Company, of
                  any compulsory share exchange whereby the Common Stock is
                  converted into other securities, cash or property; (E) the
                  Company shall authorize a Fundamental Transaction or the
                  voluntary or involuntary dissolution, liquidation or winding
                  up of the affairs of the Company; then, in each case, the
                  Company shall cause to be mailed to the Holder at its last
                  address as it shall appear upon the Warrant Register (as
                  defined below) of the Company, at least twenty (20) calendar
                  days prior to the applicable record or effective date
                  hereinafter specified, a notice stating (x) the date on which
                  a record is to be taken for the purpose of such dividend,
                  distribution, redemption, rights or warrants, or if a record
                  is not to be taken, the date as of which the holders of the
                  Common Stock of record to be entitled to such dividend,
                  distributions, redemption, rights or warrants are to be
                  determined or (y) the date on which such reclassification,
                  consolidation, merger, sale, transfer or share exchange is
                  expected to

                                      -9-
<PAGE>

                  become effective or close, and the date as of which it is
                  expected that holders of the Common Stock of record shall be
                  entitled to exchange their shares of the Common Stock for
                  securities, cash or other property deliverable upon such
                  reclassification, consolidation, merger, sale, transfer or
                  share exchange; provided, that the failure to mail such notice
                  or any defect therein or in the mailing thereof shall not
                  affect the validity of the corporate action required to be
                  specified in such notice. The Holder is entitled to exercise
                  this Warrant during the twenty (20) day period commencing on
                  the date of such notice to the effective date of the event
                  triggering such notice.

      Section 3.  Transfer of Warrant.

            a)    Transferability. Subject to compliance with any applicable
      securities laws and regulations and the conditions set forth in Sections
      3(d) and 4(a) hereof, this Warrant and all rights hereunder are
      transferable, in whole or in part, upon surrender of this Warrant at the
      principal office of the Company, together with a written assignment of
      this Warrant substantially in the form attached hereto duly executed by
      the Holder or its agent or attorney and funds sufficient to pay any
      transfer taxes payable upon the making of such transfer. Upon such
      surrender and, if required, such payment, the Company shall execute and
      deliver one or more new Warrants in the name of the assignee(s) and in the
      denomination(s) specified in such instrument of assignment, and shall
      issue to the assignor a new Warrant containing identical terms and
      conditions as this Warrant evidencing the portion of this Warrant not so
      assigned, and this Warrant shall promptly be cancelled. A Warrant, if
      properly assigned, may be exercised by a new holder for the purchase of
      Warrant Shares without having a new Warrant issued.

            b)    New Warrants. This Warrant may be divided or combined with
      other Warrants containing identical terms and conditions upon presentation
      hereof at the aforesaid office of the Company, together with a written
      notice specifying the names and denominations in which new Warrants are to
      be issued, signed by the Holder or its agent or attorney. Subject to
      compliance with Section 3(a), as to any transfer which may be involved in
      such division or combination, the Company shall execute and deliver one or
      more new Warrants in exchange for the Warrant(s) to be divided or combined
      in accordance with such notice.

            c)    Warrant Register. The Company shall register this Warrant,
      upon records to be maintained by the Company for that purpose (the
      "Warrant Register"), in the name of the record Holder hereof from time to
      time. The Company may deem and treat the registered Holder of this Warrant
      as the absolute owner hereof for the purpose of any exercise hereof or any
      distribution to the Holder, and for all other purposes, absent actual
      written notice to the contrary.

            d)    Transfer Restrictions. If, at the time of the surrender of
      this Warrant in connection with any transfer of this Warrant, the transfer
      of this Warrant shall not be registered pursuant to an effective
      registration statement filed with the SEC under the

                                      -10-
<PAGE>

      Securities Act and under applicable state securities or blue sky laws, the
      Company may require, as a condition of allowing such transfer (i) that the
      Holder or transferee of this Warrant, as the case may be, furnish to the
      Company a written opinion of counsel (which opinion shall be in form,
      substance and scope customary for opinions of counsel in comparable
      transactions) to the effect that such transfer may be made without
      registration under the Securities Act and under applicable state
      securities or blue sky laws, (ii) that the Holder or transferee execute
      and deliver to the Company an investment letter in form and substance
      acceptable to the Company and (iii) that the transferee be an "accredited
      investor" as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8)
      promulgated under the Securities Act or a qualified institutional buyer as
      defined in Rule 144A(a) under the Securities Act.

      Section 4.  Miscellaneous.

            a)    If at any time prior to the Termination Date there is not an
      effective registration statement filed with the SEC under the Securities
      Act covering all of the Warrant Shares and the Company shall determine to
      prepare and file with the SEC a registration statement relating to an
      offering for its own account or the account of others under the Securities
      Act of any of its equity securities, then the Company shall send to each
      Holder a written notice of such determination and, if within fifteen (15)
      days after the date of such notice, any such Holder shall so request in
      writing, the Company shall include in such registration statement all or
      any part of such Warrant Shares such holder requests to be registered;
      provided, however, that, (i) the Company shall not be required to register
      any Warrant Shares pursuant to this Section 4(a) that are eligible for
      resale pursuant to Rule 144(k) promulgated under the Securities Act or
      that are the subject of a then effective registration statement filed with
      the SEC under the Securities Act; or (ii) if managing underwriter of any
      offering by the Company, for its own account or the account of others, or
      the Company's Board of Directors, determines that marketing factors
      require limitation of the number of shares that may be included in a
      registration statement, the Company may, at its discretion, limit or
      exclude the Warrant Shares from such registration.

            b)    Title to Warrant. Prior to the Termination Date and subject to
      compliance with applicable laws and Section 4 of this Warrant, this
      Warrant and all rights hereunder are transferable, in whole or in part, at
      the office or agency of the Company by the Holder in person or by duly
      authorized attorney, upon surrender of this Warrant together with the
      Assignment Form annexed hereto properly endorsed. The transferee shall
      sign an investment letter in form and substance reasonably satisfactory to
      the Company.

            c)    No Rights as Stockholder Until Exercise. This Warrant does not
      entitle the Holder to any voting rights or other rights as a stockholder
      of the Company prior to the exercise hereof. Upon the surrender of this
      Warrant and the payment of the aggregate Exercise Price (or by means of a
      cashless exercise), the Warrant Shares so purchased shall be and be deemed
      to be issued to such Holder, or nominee, as the record owner of such
      shares as of the close of business on the later of the date of such
      surrender or payment.

                                      -11-
<PAGE>

            d)    Loss, Theft, Destruction or Mutilation of Warrant. The Company
      covenants that upon receipt by the Company of evidence reasonably
      satisfactory to it of the loss, theft, destruction or mutilation of this
      Warrant or any stock certificate relating to the Warrant Shares, and in
      case of loss, theft or destruction, of indemnity or security reasonably
      satisfactory to it (which, in the case of the Warrant, shall not include
      the posting of any bond), and upon surrender and cancellation of such
      Warrant or stock certificate, if mutilated, the Company will make and
      deliver a new Warrant or stock certificate of like tenor and dated as of
      such cancellation, in lieu of such Warrant or stock certificate.

            e)    Saturdays, Sundays, Holidays, etc. If the last or appointed
      day for the taking of any action or the expiration of any right required
      or granted herein shall be a Saturday, Sunday or a legal holiday, then
      such action may be taken or such right may be exercised on the next
      succeeding day not a Saturday, Sunday or legal holiday.

            f)    Authorized Shares.

            The Company covenants that during the period the Warrant is
      outstanding, it will reserve from its authorized and unissued Common Stock
      a sufficient number of shares to provide for the issuance of the Warrant
      Shares upon the exercise of any purchase rights under this Warrant. The
      Company further covenants that its issuance of this Warrant shall
      constitute the granting of full authority to its officers who are charged
      with the duty of executing stock certificates to execute and issue the
      necessary certificates for the Warrant Shares upon the exercise of the
      purchase rights under this Warrant. The Company will take all such
      reasonable action as may be necessary to assure that such Warrant Shares
      may be issued as provided herein without violation of any applicable law
      or regulation, or of any requirements of the trading market upon which the
      Common Stock may be listed; provided, however, that the Company shall have
      five (5) trading days to report the issuance of the Warrant Shares to the
      then applicable trading market.

            Except and to the extent as waived or consented to by the Holder,
      the Company shall not by any action, including, without limitation,
      amending its certificate of incorporation or through any reorganization,
      transfer of assets, consolidation, merger, dissolution, issue or sale of
      securities or any other voluntary action, avoid or seek to avoid the
      observance or performance of any of the terms of this Warrant, but will at
      all times in good faith assist in the carrying out of all such terms and
      in the taking of all such actions as may be necessary or appropriate to
      protect the rights of Holder as set forth in this Warrant against
      impairment. Without limiting the generality of the foregoing, the Company
      will (a) not increase the par value of any Warrant Shares above the amount
      payable therefor upon such exercise immediately prior to such increase in
      par value, (b) take all such action as may be necessary or appropriate in
      order that the Company may validly and legally issue fully paid and
      nonassessable Warrant Shares upon the exercise of this Warrant, and (c)
      use commercially reasonable efforts to obtain all such authorizations,
      exemptions or consents from any public regulatory body having jurisdiction
      thereof as may be necessary to enable the Company to perform its
      obligations under this Warrant.

                                      -12-
<PAGE>

            g)    Jurisdiction. All questions concerning the construction,
      validity, enforcement and interpretation of this Warrant shall be
      determined in accordance with the laws of the State of New York.

            h)    Restrictions. THE HOLDER ACKNOWLEDGES THAT THE WARRANT SHARES
      ACQUIRED UPON THE EXERCISE OF THIS WARRANT, IF NOT REGISTERED, WILL HAVE
      RESTRICTIONS UPON RESALE IMPOSED BY APPLICABLE STATE AND FEDERAL
      SECURITIES LAWS AND REGULATIONS AND THE CERTIFICATES ISSUED HEREUNDER WILL
      CONTAIN CUSTOMARY RESTRICTIVE LEGENDS.

            i)    Non-waiver and Expenses. No course of dealing or any delay or
      failure to exercise any right hereunder on the part of Holder shall
      operate as a waiver of such right or otherwise prejudice Holder's rights,
      powers or remedies, notwithstanding the fact that all rights hereunder
      terminate on the Termination Date. If the Company willfully and knowingly
      fails to comply with any provision of this Warrant, which results in any
      material damages to the Holder, the Company shall pay to Holder such
      amounts as shall be sufficient to cover any costs and expenses including,
      but not limited to, reasonable attorneys' fees, including those of
      appellate proceedings, incurred by Holder in collecting any amounts due
      pursuant hereto or in otherwise enforcing any of its rights, powers or
      remedies hereunder.

            j)    Notices. Any notice, request or other document required or
      permitted to be given or delivered to the Holder by the Company shall be
      delivered via personal delivery, facsimile transmission or first class
      registered or certified mail at (a) 18 Church Street, Skandia House,
      Hamilton HM11, Bermuda or facsimile number 203-324-8489, or such other
      address or facsimile number as the Holder shall have furnished to the
      Company in writing or (b) if to the Company, at 10900 Wilshire Boulevard,
      Suite 1400, Los Angeles, California 90024 or facsimile number
      310-443-5361.

            k)    Limitation of Liability. No provision hereof, in the absence
      of any affirmative action by Holder to exercise this Warrant or purchase
      Warrant Shares, and no enumeration herein of the rights or privileges of
      Holder, shall give rise to any liability of Holder for the purchase price
      of any Common Stock or as a stockholder of the Company, whether such
      liability is asserted by the Company or by creditors of the Company.

            l)    Remedies. Holder, in addition to being entitled to exercise
      all rights granted by law, including recovery of damages, will be entitled
      to specific performance of its rights under this Warrant. The Company
      agrees that monetary damages would not be adequate compensation for any
      loss incurred by reason of a breach by it of the provisions of this
      Warrant and hereby agrees to waive the defense in any action for specific
      performance that a remedy at law would be adequate.

            m)    Successors and Assigns. Subject to applicable securities laws,
      this Warrant and the rights and obligations evidenced hereby shall inure
      to the benefit of and be binding upon the successors of the Company and
      the successors and permitted assigns of Holder. The provisions of this
      Warrant are intended to be for the benefit of all Holders

                                      -13-
<PAGE>

      from time to time of this Warrant and shall be enforceable by any such
      Holder of Warrant Shares.

            n)    Amendment. This Warrant may be modified or amended or the
      provisions hereof waived only by the written consent of the Company and
      the Holder.

            o)    Disclosure. The Company may disclose the terms of this Warrant
      to third parties, or file a copy of such Warrant as an exhibit to a filing
      with the SEC, to the extent the Company determines that it is required to
      do so under applicable federal securities laws or as required by the rules
      of the trading market in which the primary trading of the Common Stock of
      the Company occurs.

            p)    Severability. Wherever possible, each provision of this
      Warrant shall be interpreted in such manner as to be effective and valid
      under applicable law, but if any provision of this Warrant shall be
      prohibited by or invalid under applicable law, such provision shall be
      ineffective to the extent of such prohibition or invalidity, without
      invalidating the remainder of such provisions or the remaining provisions
      of this Warrant.

            q)    Headings. The headings used in this Warrant are for the
      convenience of reference only and shall not, for any purpose, be deemed a
      part of this Warrant.

            r)    Early Termination. The Holder acknowledges and agrees that if
      the Company consummates an acquisition of the Acquisition Candidate that
      is financed in part by or on behalf of the Holder or its affiliates this
      Warrant shall be, without additional consideration, immediately rescinded
      and treated as if it was never in force or effect.

            s)    Second of Two Warrants. In the event that the date that the
      Company announces that the Company and the Acquisition Candidate have
      executed a definitive purchase agreement, which acquisition is not to any
      extent financed by or on behalf of the Holder or its affiliates, then
      notwithstanding anything to the contrary set forth therein, that certain
      Warrant for 100,000 shares issued by the Company to Holder and dated on or
      about April 14, 2005, shall be, without additional consideration,
      immediately rescinded and treated as if it was never in force or effect.
      No termination of such other warrant shall limit or impair Holder's rights
      and the Company's obligations under this Warrant.

                              ********************

                                      -14-
<PAGE>

            IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its officer thereunto duly authorized.

Dated: May 23, 2005

                                   ARTISTDIRECT, INC.

                                   By: /s/ Robert N. Weingarten
                                       -----------------------------------------

                                   Name: Robert N. Weingarten
                                         ---------------------------------------

                                   Title: Chief Financial Officer
                                          --------------------------------------

                                      -15-
<PAGE>

                               NOTICE OF EXERCISE

To: ARTISTDIRECT, INC.

            (1) The undersigned hereby elects to purchase ________ Warrant
Shares of the Company pursuant to the terms of the attached Warrant (only if
exercised in full), and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.

            (2) Payment shall take the form of (check applicable box):

                  [ ] in lawful money of the United States; or

                  [ ] the cancellation of such number of Warrant Shares as is
                  necessary, in accordance with the formula set forth in
                  subsection 1(c), to exercise this Warrant with respect to the
                  maximum number of Warrant Shares purchasable pursuant to the
                  cashless exercise procedure set forth in subsection 1(c).

            (3) Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned or in such other name as is
specified below:

                  _____________________________

The Warrant Shares shall be delivered to the following:

                  _____________________________

                  _____________________________

                  _____________________________

            (4) Accredited Investor. The undersigned is an "accredited investor"
as defined in Regulation D promulgated under the Securities Act of 1933, as
amended.

            (5) The undersigned hereby represents and warrants to the Company
that within the twenty (20) trading days preceding the date hereof, neither the
undersigned or any of its affiliates has traded, placed any order for or bid
upon any shares of the Company's Common Stock on the open market with the intent
or expectation of manipulating the price of the Company's Common Stock.

[SIGNATURE OF HOLDER]

Name of Investing Entity: ______________________________________________________
Signature of Authorized Signatory of Investing Entity: _________________________
Name of Authorized Signatory: __________________________________________________
Title of Authorized Signatory: _________________________________________________
Date: __________________________________________________________________________

                                      -16-
<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

            FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

_______________________________________________ whose address is

________________________________________________________________.

________________________________________________________________

                                            Dated:  ______________,_______

                               Holder's Signature: _____________________________

                               Holder's Address:   _____________________________

                                                   _____________________________

Signature Guaranteed: ___________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.

                                      -17-

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