Document:

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                                                                    EXHIBIT 10.8

                                                                  EXECUTION COPY

                           THIRD AMENDED AND RESTATED
                          REGISTRATION RIGHTS AGREEMENT

                          Dated as of November 12, 1999

                                      Among

                               ARTISTDIRECT, INC.
                                       and
                     CHASE VENTURE CAPITAL ASSOCIATES, L.P.
                                       and
                      CASSANDRA/ARTISTDIRECT PARTNERS, LLC
                                       and
                          CCP/PSILOS ARTISTDIRECT, LLC
                                       and
                               CCP/PSILOS UBL, LLC
                                       and
                           FLATIRON FUND 1998/99, LLC
                                       and
                            FLATIRON ASSOCIATES, LLC
                                       and
                         SPINNAKER TECHNOLOGY FUND, L.P.
                                       and
                          SPINNAKER FOUNDERS FUND, L.P.
                                       and
                          SPINNAKER CLIPPER FUND, L.P.
                                       and
                           PSILOS GROUP PARTNERS L.P.
                                       and
                       TORONTO DOMINION INVESTMENTS, INC.
                                       and
                       CONSTELLATION VENTURE CAPITAL, L.P.
                                       and
                       CONSTELLATION VENTURES (BVI), INC.
                                       and
                                   RICK RUBIN
                                       and
                                   MARK DI DIA
                                       and
                               BRUCE E. VAN DALSEM
                                       and
                               HENRY D. GRADSTEIN
                                       and
                           MEADOWLANE ENTERPRISES LTD.
                                       and
                           UNIVERSAL MUSIC GROUP, INC.

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        This THIRD AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT is made
and entered into as of November 12, 1999, by and among ARTISTDIRECT, INC, a
Delaware corporation ("AD"), CHASE VENTURE CAPITAL ASSOCIATES, a California
limited partnership, CASSANDRA/ARTISTDIRECT PARTNERS, LLC, a Delaware limited
liability company, CCP/PSILOS ARTISTDIRECT, LLC, a Delaware limited liability
company, CCP/PSILOS UBL, LLC, a Delaware limited liability company, FLATIRON
FUND 1998/99 LLC, a Delaware limited liability company, FLATIRON ASSOCIATES,
LLC, a Delaware limited liability company, SPINNAKER TECHNOLOGY FUND, L.P., a
Delaware limited partnership, SPINNAKER FOUNDERS FUND, L.P., a Delaware limited
partnership, SPINNAKER CLIPPER FUND, L.P., a Delaware limited partnership,
PSILOS GROUP PARTNERS L.P., a Delaware limited partnership, TORONTO DOMINION
INVESTMENTS, INC., a Delaware corporation, CONSTELLATION VENTURE CAPITAL, L.P.,
a Delaware limited partnership, CONSTELLATION VENTURES (BVI), INC., a British
Virgin Islands corporation, MEADOWLANE ENTERPRISES LTD. ("Meadowlane") and
UNIVERSAL MUSIC GROUP, INC., a California corporation ("Universal") (the
foregoing entities, collectively and with the exception of AD, the "Investor
Securityholders"), MARK DI DIA, an individual ("Di Dia"), BRUCE E. VAN DALSEM,
an individual ("Van Dalsem"), HENRY D. GRADSTEIN, an individual ("Gradstein"),
and RICK RUBIN an individual ("Rubin"; each of the Investor Securityholders, Di
Dia, Van Dalsem, Gradstein and Rubin, a "Securityholder" and collectively, the
"Securityholders"), MARC P. GEIGER, an individual residing at 3378 Alginet
Drive, Encino, California 91436 ("Geiger"), and DONALD MULLER, an individual
residing a 20324 Howard Court, Woodland Hills, California 91364 ("Muller").

        The Securityholders are the purchasers and holders, as the case may be,
of certain Registrable Securities (as defined below) issued by the Company. The
Company and the Securityholders deem it to be in their respective best interests
to set forth the rights of the Securityholders in connection with public
offerings and sales of the Registrable Securities.

        Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed them in the Stockholders Agreement.

        NOW, THEREFORE, in consideration of the premises and mutual covenants
and obligations hereinafter set forth, the Company and each of the parties
hereto, intending legally to be bound, hereby agree as follows.

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        SECTION 1. DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings:

        "Affiliate" of any Person means any other Person who either directly or
indirectly is in Control of, is Controlled by, or is under common Control with
such Person; provided, that for purposes of this definition, an investment
entity shall be deemed to be Controlled by its investing manager, investment
advisor or general partner or by reason of contract or otherwise.

        "Business Day" shall mean any Monday, Tuesday, Wednesday, Thursday or
Friday that is not a day on which banking institutions in the City of New York
are authorized by law, regulation or executive order to close.

        "Capital Stock" shall mean any and all shares, interests, participation
rights or other equivalents (however designated) of capital stock of the
Company, and any and all rights, warrants and options to purchase any of the
foregoing.

        "Company" shall mean AD and any successor to AD by way of merger,
consolidation, share exchange, or other reorganization or recombination.

        "Consent Letter" shall mean that certain letter dated the date hereof,
among the Company and the Series C Preferred Stockholders, regarding the Series
C Preferred Stockholders' consent to the issuance of additional shares of Series
C Preferred Stock.

        "Control" shall mean the power to direct the affairs of an entity by
reason of ownership of equity securities, by contract, or otherwise.

        "Current Registration Statement" shall mean the Company's Registration
Statement on Form S-1 initially filed with the Securities and Exchange
Commission on September 22, 1999 (file number 333-87547), as amended from time
to time.

        "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended (or any similar successor federal statute), and the rules and
regulations thereunder, as the same are in effect from time to time.

        "First Issue AD Securities" shall mean the common stock issued or
issuable upon conversion of the 5,850,519 shares of Series A Preferred Stock
issued to Constellation Venture Capital, L.P. and Constellation Ventures (BVI),
Inc. pursuant to the Merger Agreement. The amount of First Issue AD Securities
shall not be adjusted to include any securities issued or issuable in connection
with any Preferred Return thereon.

        "Founders" shall mean Geiger and Muller.

        "Holder" shall mean any Person that owns Registrable Securities, and
including such successors and assigns as acquire Registrable Securities,
directly or indirectly, from such Person; provided, however, that for purposes
of Sections 3, 4 and 10, the term "Holder" shall not include the Founders,
including such successors and assigns as acquire Registrable Securities,

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directly or indirectly, from the Founders. For purposes of this Agreement, the
Company may deem the registered holder of a Registrable Security as the Holder
thereof.

        "Investor Securityholders" has the meaning set forth in the preamble.

        "Meadowlane Requisite Share Number" shall mean a number of Registrable
Securities representing (on an as converted basis) not less than the lesser of
(A) 25% of the aggregate shares of the Registrable Securities held by Meadowlane
as of the date of any such determination (calculated on a fully diluted basis)
or (B) $5 million in fair market value of Registrable Securities, as reasonably
determined by the Board of Directors of the Company.

        "Merger Agreement" shall mean that certain Merger Agreement dated as of
October 6, 1999 by and between the Company and ARTISTdirect, LLC.

        "Person" shall mean any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, entity or
government (whether federal, state, county, city, municipal or otherwise,
including, any instrumentality, division, agency, body or department thereof).

        "Prospectus" shall mean the prospectus included in any Registration
Statement, as amended or supplemented by a prospectus supplement with respect to
the terms of the offering of any portion of the Registrable Securities covered
by such Registration Statement and by all other amendments and supplements to
the prospectus, including post-effective amendments and all material
incorporated by reference in such prospectus.

        "Registrable Class" shall mean the class of Capital Stock which includes
the Registrable Securities.

        "Registrable Securities" shall mean (i) the common stock issuable upon
conversion of the Company's Series A Preferred Stock, Series B Preferred Stock
and Series C Preferred Stock, (ii) the shares of common stock issued pursuant to
the Merger Agreement (including any such shares which were transferred to Di
Dia, Van Dalsem and Gradstein prior to the date hereof), (iii) any shares of
common stock acquired from time to time (A) from the Company pursuant to Section
2.1 of the Stockholders Agreement or (B) pursuant to Section 5.5 of the
Stockholders Agreement, (iv) any shares of Common Stock acquired from the
Company in connection with a Roll-up Transaction (as defined in that certain
Memorandum of Understanding dated as of the date hereof between the Company and
Universal and/or its Affiliates), (v) any common stock of the Company issued as
(or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend, split or reverse split, combination,
recapitalization, reclassification, merger or consolidation, exchange, or other
distribution with respect to, or in exchange for or in replacement of, the
shares referenced in (i), (ii), (iii) and (iv) above, excluding in all cases,
however, any Registrable Securities sold by a Holder in a transaction in which
such Holder's rights under this Agreement are not assigned. Notwithstanding the
foregoing, common stock or other securities shall only be treated as Registrable
Securities if and so long as they have not been (A) sold to or through a broker
or

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dealer or underwriter in a registered public distribution, or (B) sold in a
transaction exempt from the registration and prospectus delivery requirements of
the Securities Act under Section 4(1) thereof (including Rule 144 promulgated
thereunder) so that all transfer restrictions, and restrictive legends with
respect thereto, if any, are removed upon the consummation of such sale.

        "Registration Expenses" shall have the definition set forth in Section 7
hereof.

        "Registration Statement" shall mean any registration statement which
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus included therein, all amendments and
supplements to such Registration Statement, including post-effective amendments,
all exhibits and all material incorporated by reference in such Registration
Statement.

        "Requisite Share Number" shall mean (i) in the case of a demand made for
an initial public offering of the Company, a number of Registrable Securities
representing (on an as converted basis) not less than either the lesser of (A)
5% of the aggregate shares of the Registrable Class outstanding as of the date
of any such determination (calculated on a fully diluted basis) or (B) $5
million in fair market value of Registrable Securities, as reasonably determined
by the Board of Directors of the Company, or (ii) in the case of a demand made
for an offering after an initial public offering of the Company a number of
Registrable Securities (A) described in clause (i)(B) above or (B) such lesser
number of Registrable Securities as constitutes, in the aggregate, not less than
2% of the total number of shares of the Registrable Class then outstanding
(calculated on a fully diluted basis), provided, that such number includes all
Registrable Securities then owned by the Securityholders (or issued in
connection with any dividend, split or reverse split, combination,
recapitalization, reclassification, merger or consolidation, exchange or
distribution in respect of the interests issued thereunder).

        "Rescission Offer Registration" shall mean (i) any registration
statement of the type contemplated under the caption "Rescission Offer" in the
current version of the Company's Registration Statement or Form S-1 (a copy of
which is attached as Exhibit A hereto) and (ii) any other registration
statement, in each case of (i) and (ii), solely covering shares issued or
issuable to employees, artists and their managers and advisors.

        "Rule 144" shall mean Rule 144 promulgated under the Securities Act, as
amended from time to time, or any similar successor rule thereto that may be
promulgated by the SEC.

        "Rule 144A" shall mean Rule 144A promulgated under the Securities Act,
as amended from time to time, or any similar successor rule thereto that may be
promulgated by the SEC.

        "Rule 415" shall mean Rule 415 promulgated under the Securities Act, as
amended from time to time, or any similar successor rule thereto that may be
promulgated by the SEC.

        "SEC" shall mean the Securities and Exchange Commission, or any other
federal

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agency at the time administering the Securities Act.

        "Securities Act" shall mean the Securities Act of 1933, as amended (or
any similar successor federal statute), and the rules and regulations
thereunder, as the same are in effect from time to time.

        "Series C Preferred Stockholder" shall mean Meadowlane and Universal and
any of their permitted transferees pursuant to Section 5.5 of the Stockholders
Agreement and to whom such transferees are assigned rights hereunder pursuant to
Section 15 hereunder.

        "Series C Requisite Share Number" shall mean a number of Registrable
Securities representing (on an as converted basis) not less than the lesser of
(A) 10% of the aggregate shares of the Registrable Securities held by the Series
C Preferred Stockholders as of the date of any such determination (calculated on
a fully diluted basis) or (B) $5 million in fair market value of Registrable
Securities, as reasonably determined by the Board of Directors of the Company.

        "Shelf Registration" shall mean the registration of Registrable
Securities for sale on a continuous or delayed basis pursuant to Rule 415.

        "Shelf Registration Statement" shall mean a Registration Statement filed
in connection with a Shelf Registration.

        "Stockholders Agreement" shall mean that certain Amended and Restated
Stockholders Agreement dated as of the date hereof, among the Company and
certain of its stockholders.

        "Underwritten Offering" shall mean a registered offering in which
securities of the Company are sold to an underwriter for resale to the general
public.

        SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT. The securities entitled
to the benefits of this Agreement are the Registrable Securities. This Agreement
will terminate with respect to any Holder after the earlier of (i) ten years
following the consummation of an initial public offering of the Registrable
Class of the Company or (ii) such time as Rule 144 or another similar exemption
under the Securities Act is available for the sale of all of such Holder's
Registrable Securities without restriction as to volume.

        SECTION 3. DEMAND REGISTRATION.

        (a) Demand Registrations.

            (i) Securityholders' Demand. Upon the written request of a
Securityholder or Securityholders (other than a Series C Preferred Stockholder,
which shall not be entitled to initiate a registration effected pursuant this
Section 3(a)(i)) of a majority of the Registrable Securities (the "Initiating
Holders"), requesting that the Company effect the registration under the
Securities Act, at any time after the earlier of (A) May 18, 2004 or (B) the
expiration or earlier termination of any lockup period required by the managing
underwriter or

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underwriters of the initial public offering of the securities of the Company
(which such period shall not exceed 180 days), of Registrable Securities and
securities of the same class as the Registrable Securities (which shall be
treated as Registrable Securities pursuant to this Agreement in connection with
such offering) constituting not less than the Requisite Share Number; provided,
however, that to the extent the Initiating Holders hold Registrable Securities
constituting less than the Requisite Share Number, the Initiating Holders shall
offer to the Founders the first opportunity to include a "pro rata portion" (as
defined below) of their respective securities of the same class as the
Registrable Securities in any demand registration effected pursuant to this
Section 3(a)(i) in order to meet the Requisite Share Numbers, and specifying the
intended method of disposition thereof (which may, if the Company is eligible to
register common stock on Form S-3 or any similar form, include a continuous or
delayed offering pursuant to a Shelf Registration Statement), the Company will
use its best efforts to effect, as expeditiously as possible, the registration
under the Securities Act of such Registrable Securities; provided, however, that
the Company shall not be obligated to (X) effect more than an aggregate of four
demand registrations pursuant to this Section 3(a)(i) or (Y) register any
Registrable Securities pursuant to this Section 3(a)(i) for a period of 6 months
following the date on which a Registration Statement filed in respect of any
previous demand registration under Section 3(a), if any, was declared effective;
provided further, that the Company's delay right set forth in the foregoing
proviso shall not apply to any registration request pursuant to this Section
3(a)(i) delivered to the Company within 60 days of the expiration of the
applicable lock-up period described in clauses (i)(A) and (i)(B) above.

            For the purposes of this Section 3(a)(i) the term "pro rata portion"
shall mean Donald Muller's or Marc Geiger's pro rata portion of the difference
between (i) the number of shares of Registrable Securities with respect to which
(based on their respective share ownership) the Initiating Holders made their
demand and (ii) the Requisite Share Number.

        Upon receipt of any request for registration pursuant to this Section
3(a)(i) from any Holders of Registrable Securities, the Company shall promptly
give written notice of such request to all other Holders (including the Series C
Preferred Stockholders). The Company shall include in the requested registration
all Registrable Securities requested to be included by such of the other Holders
who shall make such request by written notice to the Company delivered within 10
Business Days of their receipt of the Company's notice. If the Company shall
receive a request for inclusion in the registration of the Registrable
Securities of additional Holders, it shall promptly so inform the Initiating
Holders.

        The Initiating Holders holding a majority of the Registrable Securities
requested to be registered pursuant to this Section 3(a)(i) may, at any time
prior to the effective date of the Registration Statement relating to such
registration, revoke such request by providing a written notice to the Company
revoking such request; provided, however, that the Registration Expenses with
respect to (i) the first such revoked request shall be borne by the Company,
(ii) the second such revoked request shall be borne by the Initiating Holders
and any other holder that indicated it would be including its securities in such
demand registration and (iii) the third such revoked request and any request
made thereafter shall be borne by the Initiating Holders or at the election of
the Initiating Holders, shall be borne by the Company; provided, however, that
upon making any such election to cause the Company to bear such Registration
Expenses, the amount of

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demand registrations that the Company shall be obligated to effect pursuant to
this Section 3(a)(i) shall be reduced by one.

            (ii) Series C Preferred Demand. Upon the written request of one or
more Series C Preferred Stockholders requesting that the Company effect the
registration under the Securities Act, at any time after the earlier of (A) May
18, 2004 or (B) the one-year anniversary of the consummation of the initial
public offering of the securities of the Company, of Registrable Securities
constituting the Series C Requisite Share Number, and specifying the intended
method of disposition thereof (which may, if the Company is eligible to register
common stock on Form S-3 or any similar form, include a continuous or delayed
offering pursuant to a Shelf Registration Statement), the Company will use its
best efforts to effect, as expeditiously as possible, the registration under the
Securities Act of such Registrable Securities; provided, however, that the
Company shall not be obligated (X) to effect more than three demand
registrations pursuant to this Section 3(a)(ii) or (Y) register any Registrable
Securities pursuant to this Section 3(a)(ii) for a period of 6 months following
the date on which a Registration Statement filed in respect of any previous
demand registration under Section 3(a), if any, was declared effective; provided
further, that the Company's delay right set forth in the foregoing proviso shall
not apply to any registration request pursuant to this Section 3(a)(ii)
delivered to the Company within 60 days of the expiration of the applicable
lock-up period described in clauses (ii)(A) and (ii)(B) above; and provided
further, that the number of demand registrations set forth in the first proviso
shall be increased by up to two additional demand registration rights, if any,
pursuant to the Consent Letter.

        Upon receipt of any request for registration pursuant to this Section
3(a)(ii) from any Holders of Registrable Securities, the Company shall promptly
give written notice of such request to all other Holders. The Company shall
include in the requested registration all Registrable Securities requested to be
included by such of the other Holders who shall make such request by written
notice to the Company delivered within 10 Business Days of their receipt of the
Company's notice. If the Company shall receive a request for inclusion in the
registration of the Registrable Securities of additional Holders, it shall
promptly so inform the Holders requesting registration under this Section
3(a)(ii).

        The Holders of a majority of the Registrable Securities requested to be
registered by the Series C Preferred Stockholders pursuant to this Section
3(a)(ii) may, at any time prior to the effective date of the Registration
Statement relating to such registration, revoke such request by providing a
written notice to the Company revoking such request; provided, however, that the
Registration Expenses with respect to (i) the first such revoked request shall
be borne by the Company, (ii) the second such revoked request shall be borne by
such Holders and any other holder that indicated it would be including its
securities in such demand registration and (iii) the third such revoked request
and any request made thereafter shall be borne by such Holders or at the
election of such Holders, shall be borne by the Company; provided, however, that
upon making any such election to cause the Company to bear such Registration
Expenses, the amount of demand registrations that the Company shall be obligated
to effect pursuant to this Section 3(a)(ii) shall be reduced by one.

            (iii) Meadowlane Demand. Upon the written request of Meadowlane

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requesting that the Company effect the registration under the Securities Act, at
any time after the consummation of the Roll-Up Transaction (if at all), of
Registrable Securities constituting at least the Meadowlane Requisite Share
Number, and specifying the intended method of disposition thereof (which may, if
the Company is eligible to register common stock on Form S-3 or any similar
form, include a continuous or delayed offering pursuant to a Shelf Registration
Statement), the Company will use its best efforts to effect, as expeditiously as
possible, the registration under the Securities Act of such Registrable
Securities; provided, however, that the Company shall not be obligated to (A)
effect more than one (or two, if the fair market value of the shares of the
Company's stock received by Meadowlane in connection with, and at the time of,
the Roll-Up Transaction is equal to or greater than $100,000,000) demand
registration(s) pursuant to this Section 3(a)(iii) or (B) register any
Registrable Securities pursuant to this Section 3(a)(iii) for a period of 6
months following the date on which a Registration Statement filed in respect of
any previous demand registration under Section 3(a), if any, was declared
effective; provided further, that the Company's delay right set forth in the
foregoing proviso shall not apply to any registration request pursuant to this
Section 3(a)(iii) delivered to the Company within 60 days of the consummation of
the Roll-Up Transaction.

        Upon receipt of any request for registration pursuant to this Section
3(a)(iii) from any Holders of Registrable Securities, the Company shall promptly
give written notice of such request to all other Holders. The Company shall
include in the requested registration all Registrable Securities requested to be
included by such of the other Holders who shall make such request by written
notice to the Company delivered within 10 Business Days of their receipt of the
Company's notice. If the Company shall receive a request for inclusion in the
registration of the Registrable Securities of additional Holders, it shall
promptly so inform Meadowlane.

        Meadowlane may, at any time prior to the effective date of the
Registration Statement relating to a registration under this Section 3(a)(iii),
revoke such request by providing a written notice to the Company revoking such
request; provided, however, that the Registration Expenses with respect to (i)
the first such revoked request shall be borne by the Company, (ii) the second
such revoked request shall be borne by Meadowlane and any other holder that
indicated it would be including its securities in such demand registration and
(iii) the third such revoked request and any request made thereafter shall be
borne by Meadowlane or at the election of Meadowlane, shall be borne by the
Company; provided, however, that upon making any such election to cause the
Company to bear such Registration Expenses, the amount of demand registrations
that the Company shall be obligated to effect pursuant to this Section 3(a)(iii)
shall be reduced by one.

        (b) Effectiveness of Registration Statement. The Company agrees to use
its best efforts to (i) cause the Registration Statement relating to any demand
registration pursuant to this Section 3 to become effective as promptly as
practicable; (ii) thereafter keep such Registration Statement effective
continuously for the period specified in the next succeeding paragraph; and
(iii) prevent the occurrence of any event of the kinds described in clauses (4),
(5) and (6) of Section 5(a)(ii).

        A demand registration requested pursuant to this Section 3 will not be
deemed to

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have been effected unless the Registration Statement relating thereto has become
effective under the Securities Act and remained continuously effective (except
as otherwise permitted under this Agreement) for a period ending on the earlier
of (i) the date which is six months after the effective date of such
Registration Statement (or as to a Shelf Registration Statement the date on
which all Registrable Securities covered thereby are eligible for sale without
limitation as to volume pursuant to Rule 144), subject to extension as provided
in the final paragraph of Section 5(a) and (ii) the date on which all
Registrable Securities covered by such Registration Statement have been sold and
the distribution contemplated thereby has been completed; provided, however,
that if, after such Registration Statement has become effective, the offering of
the Registrable Securities pursuant to such registration is interfered with by
any stop order, injunction or similar order of the SEC or other governmental
agency or court (other than by reason of any untrue statement of a material fact
or any omission of a material fact required to be stated in the Registration
Statement or necessary to make the statements therein not misleading, to the
extent, but only to the extent, that such untrue statement or omission is
contained in any information furnished in writing by a Holder to the Company
specifically for inclusion therein), such registration will be deemed not to
have been effected. The Company undertakes to use its best efforts to cause such
interference to be removed or terminated.

        (c) Inclusion of Other Securities. The Company, and any other holder of
the Company's securities who has registration rights (an "additional requesting
holder"), may include its securities in any demand registration effected
pursuant to this Agreement; provided, however, that if the managing underwriter
or underwriters of a proposed Underwritten Offering contemplated thereby advise
the Holder or Holders in writing (i) that the total amount or kind of securities
which the Company or any such additional requesting holder intends to include in
such proposed public offering is sufficiently large or of a type to materially
adversely affect the success of the proposed public offering requested by the
Holder or Holders, then the amount of securities to be offered for the account
of the Company or any such additional requesting holder, except a
Securityholder, shall first be reduced pro rata and, (ii) thereafter, if the
amount of securities of the Company and all additional requesting holders (other
than Holders) has been reduced to zero pursuant to Section 3(c)(i) and the
amount of securities the Holders intend to include in such proposed public
offering is greater than the number which can be offered without materially and
adversely affecting the success of such proposed public offering, the amount of
securities to be offered for the accounts of such requesting Holders shall be
reduced pro rata (except as provided below) to the extent necessary to reduce
the total amount of securities to be included in such proposed public offering
to the amount recommended by such managing underwriter or underwriters;
provided, however, that any First Issue AD Securities intended to be included in
any registration effected pursuant to this Section 3 shall in no event be
subject to reduction pursuant to this Section 3(c) in the case of a registration
initiated pursuant to Section 3(a)(i). For purposes of this Section 3(c), the
term "pro rata" shall mean the pro rata portion of Registrable Securities,
excluding any First Issue AD Securities.

        (d) Delay of Registration. Notwithstanding the terms of this Section 3,
if the Company shall furnish to Initiating Holders (or the Series C Preferred
Stockholders, in the case of a registration pursuant to Section 3(a)(ii); or
Meadowlane, in the case of a registration pursuant to Section 3(a)(iii)), a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously

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detrimental to the Company and its stockholders for such registration statement
to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer such filing
for a period of not more than 90 days after receipt of the request of the
Initiating Holders (or Meadowlane or the Series C Preferred Stockholders, as the
case may be); provided, however, that the Company may not utilize this right (i)
more than twice in any 12 month period with respect to registration requests
made pursuant to Section 3(a)(i), more than twice in any 12 month period with
respect to registration requests made pursuant to Section 3(a)(ii), and more
than twice with respect to registration requests made pursuant to Section
3(a)(iii) in any 12 month period or (ii) during the 60 days following the
expiration or earlier termination of any lockup period required by the managing
underwriter or underwriters of the initial public offering of the securities of
the Company unless all Holders were given the opportunity to participate in such
initial public offering and the amount of securities offered for the accounts of
all such Holders was not reduced; and, provided, further, that the aggregate of
the period of any such deferral and the period in which dispositions of
Registrable Securities are restricted pursuant to Section 3(a) and Section 10(c)
shall not exceed 180 days in any 12 month period (other than the 12 month period
in which the initial public offering of the Company occurs, in which case such
aggregate shall not exceed 270 days), measured separately for each of (A) the
Initiating Holders, with respect to registration requests pursuant to Section
3(a)(i), (B) the Series C Preferred Stockholders, with respect to registration
requests pursuant to Section 3(a)(ii), and (C) Meadowlane, with respect to
registration requests pursuant to Section 3(a)(iii).

        SECTION 4. PIGGYBACK REGISTRATION. If the Company at any time proposes
to file a registration statement with respect to any class of equity securities,
whether for its own account (other than the Current Registration Statement or in
connection with any registration statement contemplated by Section 3 or a
registration statement on Form S-4 or S-8 (or any successor or substantially
similar form), any Rescission Offer Registration, or a registration statement
filed in connection with an exchange offer or offering or securities solely to
the Company's existing securityholders), or for the account of a holder of
securities of the Company (a "Requesting Securityholder"), then the Company
shall in each case give written notice of such proposed filing to the Founders
and all Holders of Registrable Securities at least 15 Business Days before the
anticipated filing date of any such registration statement by the Company, and
such notice shall offer to the Founders and all Holders the opportunity to have
any or all of the Registrable Securities held by the Founders and such Holders
included in such registration statement. Each of the Founders and each Holder of
Registrable Securities desiring to have its Registrable Securities registered
under this Section 4 shall so advise the Company in writing within 15 days after
the date of receipt of such notice (which request shall set forth the amount of
Registrable Securities for which registration is requested), and the Company
shall include in such Registration Statement all such Registrable Securities so
requested to be included therein. Notwithstanding the foregoing, if the managing
underwriter or underwriters of any such proposed public offering advises the
Company in writing that the total amount or kind of securities which the
Founders and the Holders of Registrable Securities, the Company and any other
persons or entities intended to be included in such proposed public offering is
sufficiently large to materially adversely affect the success of such proposed
public offering, then (A) the amount or kind of securities to be offered for the
accounts of the Company and holders of securities of the Company (except for the
Founders and Securityholders), to the extent that the Company did not initiate
such registration for its own account or such holders of securities are

                                       11
<PAGE>   12

not Requesting Securityholders, shall first be reduced pro rata, and (B) if the
amount of securities to be offered for such accounts is reduced to zero, to the
extent further reduction is necessary, the amount or kind of securities to be
offered for the accounts of the Founders shall next be reduced pro rata and, (C)
if the amount of securities to be offered for the accounts of the Founders is
reduced to zero, to the extent further reduction is necessary, the amount or
kind of securities to be offered for the accounts of the Securityholders of
Registrable Securities shall then be reduced pro rata to the extent necessary to
reduce the total amount or kind of securities to be included in such proposed
public offering to the amount or kind recommended by such managing underwriter
or underwriters before the securities offered by the Company, to the extent the
Company has initiated the registration for its own account, or any Requesting
Securityholder, are so reduced.

        Notwithstanding the foregoing, the Company may withdraw any registration
statement that is subject to this Section 4 at any time prior to the time it
became effective.

        SECTION 5. REGISTRATION PROCEDURES.

        (a) General. In connection with the Company's registration obligations
hereunder, the Company will:

                (i) prepare and file with the SEC a new Registration Statement
        or such amendments and post-effective amendments to an existing
        Registration Statement as may be necessary to keep such Registration
        Statement effective for the time periods set forth in Section 3(c),
        provided that no Registration Statement shall be required to remain in
        effect after all Registrable Securities covered by such Registration
        Statement have been sold and distributed as contemplated by such
        Registration Statement, and, provided, further, that as soon as
        practicable, but in no event later than three Business Days before
        filing such Registration Statement, any related Prospectus or any
        amendment or supplement thereto, other than any amendment or supplement
        which is automatically and solely made as a result of incorporation by
        reference of documents filed with the SEC subsequent to the filing of
        such Registration Statement, the Company shall furnish to the Holders of
        the Registrable Securities covered by such Registration Statement and
        the underwriters, if any, copies of all such documents proposed to be
        filed, which documents shall be subject to the review of such Holders
        and underwriters; not file any Registration Statement or amendment
        thereto or any Prospectus or any supplement thereto (other than any
        amendment or supplement which is automatically and solely made as a
        result of incorporation by reference of documents filed with the SEC
        subsequent to the filing of such Registration Statement) to which the
        managing underwriters of the applicable offering, if any, or the Holders
        of a majority of the Registrable Securities on a Registrable Class
        stock-equivalent basis covered by such Registration Statement (or, in
        the case of a registration pursuant to Section 3(a)(ii), the Holders of
        a majority of the Registrable Securities requested to be included by the
        Series C Preferred Stockholders; or, in the case of a registration
        pursuant to Section 3(a)(iii), Meadowlane) shall have reasonably
        objected in writing to the effect that such Registration Statement or
        amendment thereto or Prospectus or supplement thereto does not comply in
        all material respects with the requirements of the Securities Act
        (provided that the foregoing shall not limit the right of any Holder
        whose Registrable Securities are covered by a Registration Statement to

                                       12
<PAGE>   13

        reasonably object, within two Business Days after receipt of such
        documents, to any particular information that is to be contained in such
        Registration Statement, amendment, Prospectus or supplement that relates
        specifically to such Holder, including, without limitation, any
        information describing the manner in which such Holder acquired such
        Registrable Securities and the intended method or methods of
        distribution of such Registrable Securities), and if the Company is
        unable to file any such document due to the objections of such
        underwriters or such Holders, the Company shall use its best efforts to
        cooperate with such underwriters and Holders to prepare, as soon as
        practicable, a document that is responsive in all material respects to
        the reasonable objections of such underwriters and Holders; cause the
        Prospectus to be supplemented by any required Prospectus supplement, and
        as so supplemented to be filed pursuant to Rule 424 under the Securities
        Act; and comply with the provisions of the Securities Act applicable to
        the Company with respect to the disposition of all securities covered by
        such Registration Statement during the applicable period in accordance
        with the intended method or methods of distribution by the sellers
        thereof set forth in such Registration Statement or supplement to the
        Prospectus;

                      (ii) notify the selling Holders of Registrable Securities
        and the managing underwriters, if any, promptly (1) when a new
        Registration Statement, Prospectus or any Prospectus supplement or
        post-effective amendment has been filed, and, with respect to any new
        Registration Statement or post-effective amendment, when it has become
        effective, (2) of any request by the SEC for amendments or supplements
        to any Registration Statement or Prospectus or for additional
        information, (3) of the issuance by the SEC of any comments with respect
        to any filing, (4) of any stop order suspending the effectiveness of any
        Registration Statement or the initiation of any proceedings for that
        purpose, (5) in the case of an Underwritten Offering, if at any time the
        representations and warranties of the Company contemplated by paragraph
        (xi) below cease to be true and correct as of any time they are required
        to be true and correct, (6) of any suspension of the qualification of
        the Registrable Securities for sale in any jurisdiction or the
        initiation or threatening of any proceeding for such purpose and (7) of
        the happening of any event which makes any statement of a material fact
        made in any Registration Statement, Prospectus or any document
        incorporated therein by reference untrue or which requires the making of
        any changes in any Registration Statement, Prospectus or any document
        incorporated therein by reference in order to make the statements
        therein (in the case of any Prospectus, in the light of the
        circumstances under which they were made) not misleading; and make every
        reasonable effort to obtain as promptly as practicable the withdrawal of
        any order or other action suspending the effectiveness of any
        Registration Statement or suspending the qualification or registration
        (or exemption therefrom) of the Registrable Securities for sale in any
        jurisdiction;

                      (iii) if reasonably requested by the managing underwriter
        or underwriters or a Holder of Registrable Securities being sold in
        connection with an Underwritten Offering, promptly incorporate in a
        Prospectus supplement or post-effective amendment such information as
        the managing underwriters and the Holders of a majority of the
        Registrable Securities (on a Registrable Class equivalent basis) being
        sold in such Underwritten Offering (or, in the case of a registration
        pursuant to Section 3(a)(ii), the

                                       13
<PAGE>   14

        Holders of a majority of the Registrable Securities requested to be
        included by the Series C Preferred Stockholders; or, in the case of a
        registration pursuant to Section 3(a)(iii), Meadowlane) agree should be
        included therein relating to the sale of the Registrable Securities,
        including, without limitation, information with respect to the aggregate
        number of shares of Registrable Securities being sold to such
        underwriters, the purchase price being paid therefor by such
        underwriters and with respect to any other terms of the Underwritten
        Offering of the Registrable Securities to be sold in such offering; and
        promptly make all required filings of such Prospectus supplement or
        post-effective amendment;

                      (iv) promptly after the filing of any document which is to
        be incorporated by reference into a Registration Statement or
        Prospectus, provide copies of such document to the selling Holders of
        the Registrable Securities covered thereby and the underwriters, if any;

                      (v) furnish to each selling Holder of Registrable
        Securities and each managing underwriter, without charge, the number of
        manually signed copies and as many conformed copies as may reasonably be
        requested, of the then effective Registration Statement and any
        post-effective amendments thereto, including financial statements and
        schedules, all documents incorporated therein by reference and all
        exhibits (including those incorporated by reference);

                      (vi) deliver to each selling Holder of Registrable
        Securities and the underwriters, if any, without charge, as many copies
        of the then effective Prospectus (including each prospectus subject to
        completion) and any amendments or supplements thereto as such Persons
        may reasonably request;

                      (vii) use reasonable best efforts to register or qualify
        or cooperate with the selling Holders of Registrable Securities, the
        underwriters, if any, and their respective counsel in connection with
        the registration or qualification of such Registrable Securities for
        offer and sale under the securities or blue sky laws of such
        jurisdictions as any selling Holder of Registrable Securities or
        underwriter reasonably requests in writing and do any and all other acts
        or things reasonably necessary or advisable to enable the disposition in
        such jurisdictions of the Registrable Securities covered by the then
        effective Registration Statement; provided, however, that the Company
        will not be required to (1) qualify to do business in any jurisdiction
        where it would not otherwise be required to qualify, but for this
        paragraph (vii) or (2) subject itself to general taxation in any such
        jurisdiction where it would not otherwise be subject to such taxation.

                      (viii) cooperate with the selling Holders of Registrable
        Securities and the managing underwriters, if any, to facilitate the
        timely preparation and delivery of certificates representing Registrable
        Securities to be sold and not bearing any restrictive legends; and
        enable such Registrable Securities to be in such denominations and
        registered in such names as the managing underwriters may request at
        least two Business Days prior to any sale of Registrable Securities to
        the underwriters or any other person;

                                       14
<PAGE>   15

                      (ix) upon the occurrence of any event contemplated by
        clause (7) of paragraph (ii) above, promptly prepare and furnish to the
        selling Holders a reasonable number of copies of a supplement or
        post-effective amendment to the Registration Statement or the related
        Prospectus or any document incorporated therein by reference or file any
        other required document so that, as thereafter delivered to the
        purchasers of the Registrable Securities, the Prospectus will not
        contain an untrue statement of a material fact or omit to state any
        material fact necessary to make the statements therein, in the light of
        the circumstances in which they were made, not misleading;

                      (x) cause all Registrable Securities covered by the
        Registration Statement to be listed on each securities exchange (or
        quotation system operated by a national securities association) on which
        securities of the same class issued by the Company are then listed, if
        any, and enter into customary agreements including, if necessary, a
        listing application and indemnification agreement in customary form, and
        provide a transfer agent for such Registrable Securities no later than
        the effective date of such Registration Statement;

                      (xi) in the case of an Underwritten Offering, enter into
        an underwriting agreement and take all such other actions in connection
        therewith in order to expedite and facilitate the disposition of such
        Registrable Securities, in each case as is reasonable and customary, and
        in connection therewith, (1) make such representations and warranties to
        the Holders of such Registrable Securities and the underwriters in form,
        substance and scope as are customarily made by issuers to underwriters
        in secondary underwritten offerings; (2) obtain opinions of counsel to
        the Company and updates thereof (which counsel and opinions (in form,
        scope and substance) shall be reasonably satisfactory to the
        underwriters and the selling Holders of such Registrable Securities and
        shall cover the matters customarily covered in opinions requested in
        secondary underwritten offerings and such other matters as may be
        reasonably requested by such Holders and underwriters); (3) obtain "cold
        comfort" letters and updates thereof from the independent certified
        public accountants of the Company addressed to the selling Holders of
        such Registrable Securities and the underwriters, such letters to be in
        customary form and covering matters of the type customarily covered in
        "cold comfort" letters in connection with secondary underwritten
        offerings; (4) provide such indemnification and contribution
        undertakings pursuant to such underwriting agreement as are customarily
        included in such agreements or reasonably required by such underwriters;
        and (5) deliver such documents and certificates as may be reasonably
        requested by the selling Holders of such Registrable Securities and the
        managing underwriters to evidence compliance with clause (1) above and
        with any customary conditions contained in the underwriting agreement or
        other agreement entered into by the Company in respect of the relevant
        offering. The above shall be done at each closing under such
        underwriting or similar agreement;

                      (xii) provide a CUSIP number for the Registrable
        Securities no later than the effective date of such registration
        statement;

                      (xiii) in the case of any nonunderwritten offering: (1)
        obtain customary and reasonable opinions of counsel to the Company at
        the time of effectiveness of such

                                       15
<PAGE>   16

        Registration Statement covering such offering and updates thereof of
        customary frequency, addressed to each Holder of any Registrable
        Securities participating in such offering; (2) obtain "cold comfort"
        letters from the independent certified public accountants of the Company
        at the time of effectiveness of such Registration Statement and, upon
        the request of the Holders of a majority of the Registrable Securities
        (on a Registrable Class equivalent basis) covered by such registration
        statement, updates thereof of customary frequency, in each case
        addressed to each Holder of Registrable Securities participating in such
        offering and covering matters that are no more extensive in scope than
        would be customarily covered in "cold comfort" letters and updates
        obtained in secondary underwritten offerings by issuers with similar
        market capitalization and reporting and financial histories; provided
        that any letter or update described in this clause (2) shall only be
        required to the extent such letters are being issued in respect of
        nonunderwritten secondary offerings under then prevailing accounting
        practices; and (3) deliver a certificate of a senior executive officer
        of the Company at the time of effectiveness of such Registration
        Statement and, upon the request of the Holders of a majority of the
        Registrable Securities (on a Registrable Class equivalent basis) covered
        by such Registration Statement, updates thereof of customary frequency,
        such certificates to cover matters no more extensive in scope than those
        matters customarily covered in officer's certificates delivered in
        connection with underwritten offerings by issuers with similar market
        capitalization and reporting and financial histories;

                      (xiv) otherwise use its best efforts to comply with all
        applicable rules and regulations of the SEC and the federal and state
        securities laws relating to such registration and the distribution of
        the securities being offered and make generally available to its
        securities holders earnings statements satisfying the provisions of
        Section 11(a) of the Securities Act, no later than 60 days after the end
        of any 12-month period (or 120 days, if such period is a fiscal year)
        commencing at the end of any fiscal quarter in which the Registrable
        Securities are sold to underwriters in a firm commitment or best efforts
        offering, or, if not sold to underwriters in such an offering, beginning
        with the first month of the first fiscal quarter commencing after the
        effective date of such Registration Statement, which earning statements
        shall cover such 12-month periods;

                      (xv) cooperate and assist in any filings required to be
        made with the National Association of Securities Dealers, Inc.;

                      (xvi) make available for inspection by a representative of
        the Holders of the Registrable Securities covered by such Registration
        Statement, any underwriter participating in any disposition pursuant to
        such registration, and any attorney or accountant retained by the
        sellers or underwriter, all financial and other records, pertinent
        corporate documents and properties of the Company and cause the
        Company's officers, directors and employees to supply all information
        reasonably requested by, and to cooperate fully with, any such
        representative, underwriter, attorney or accountant in connection with
        such registration, and otherwise to cooperate fully in connection with
        any due diligence investigation; provided that such representatives,
        underwriters, or accountants enter into a confidentiality agreement, in
        form and substance reasonably satisfactory to the Company, prior to the
        release or disclosure to them of any such

                                       16
<PAGE>   17

        information, records or documents;

                      (xvii) subject to the proviso in paragraph (vii) above,
        cause the Registrable Securities covered by the Registration Statement
        to be registered with or approved by such other governmental agencies or
        authorities as may be necessary to enable the seller or sellers thereof
        or the underwriters, if any, to consummate the disposition of such
        Registrable Securities (other than as may be required by the
        governmental agencies or authorities of any foreign jurisdiction and
        other than as may be required by a law applicable to a selling Holder by
        reason of its own activities or business other than the sale of
        Registrable Securities); and

                      (xviii)use its best efforts to take all action necessary
        or advisable to effect such registration in the manner contemplated by
        this Agreement and the applicable registration statement.

        The Company may require each seller of Registrable Securities as to
which any registration is being effected to furnish to the Company such
information regarding such seller and the distribution of such securities as the
Company may from time to time reasonably request in writing.

        (b) Holders' Obligations and Restrictions. In connection with any
Registration Statement in which a Holder of Registrable Securities is
participating, each such Holder will furnish to the Company in writing such
information as the Company reasonably requests for use in connection with any
such Registration Statement or related prospectus. Each Holder of Registrable
Securities agrees by acquisition of such Registrable Securities that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 5(a)(ii), such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the then current Prospectus
until (1) such Holder is advised in writing by the Company that a new
Registration Statement covering the offer of Registrable Securities has become
effective under the Securities Act or (2) such Holder receives copies of a
supplemented or amended Prospectus contemplated by Section 5(a)(ix), or until
such Holder is advised in writing by the Company that the use of the Prospectus
may be resumed. If the Company shall have given any such notice during a period
when a demand registration is in effect or if any action is taken by the Company
that results in Holders of the Registrable Securities covered thereby not being
able to dispose of such Registrable Securities during the applicable period,
without limiting any other remedy available to the Holders, the Company shall
extend the period during which such registration statement shall be maintained
effective pursuant to this Agreement by the number of days during which any such
disposition of Registrable Securities is discontinued pursuant to this paragraph
or as a result of such action. The Company shall use its best efforts to limit
the duration of any discontinuance with respect to the disposition of
Registrable Securities pursuant to this paragraph. The Company shall use its
reasonable best efforts to keep the affected Holders informed from time to time
of the status of such discontinuance.

        (c) Additional Procedures for Shelf Registration. If the Holders become
entitled, pursuant to an event described in clause (ii) of the definition of
Registrable Securities, to

                                       17
<PAGE>   18

receive any securities in respect of Registrable Securities that were already
included in a Shelf Registration Statement, subsequent to the date such Shelf
Registration Statement is declared effective, and the Company is unable under
the securities laws to add such securities to the then-effective Shelf
Registration Statement, the Company, as promptly as reasonably practicable,
shall file, in accordance with the procedures more particularly set forth in
Section 5(a), an additional Shelf Registration Statement with respect to any
such new Registrable Securities. The Company shall use its best efforts to have
any such additional Registration Statement declared effective as promptly as
reasonably practicable after such filing and to keep such additional Shelf
Registration Statement continuously effective during the period specified in the
second paragraph of Section 3(b). A request to file an additional Shelf
Registration Statement pursuant to this paragraph shall not constitute a demand
under Section 3(a).

        SECTION 6. HOLDBACK AGREEMENT. In the case of any underwritten offering
of Registrable Securities pursuant to Section 3, including under any Shelf
Registration Statement, each of the Company and each of the Founders agrees, if
and to the extent requested in writing by the managing underwriter or
underwriters administering such offering, as promptly as reasonably practicable
prior to the commencement of the 15-day period referred to below, not to effect
any public sale or distribution (other than sales pursuant to the same
Registration Statement, as permitted under this Agreement, or the Current
Registration Statement, or any registration on Form S-8 or S-4 (or any successor
or substantially similar form or a registration statement filed in connection
with an exchange offer or offering or securities solely to the Company's
existing securityholders) or a Rescission Offer Registration), of any equity
securities of the Company during the period beginning 15 days prior to the
closing date of each underwritten offering of Registrable Securities and during
the period ending on the earlier of (i) 90 days after such closing date
(provided, that if such underwritten offering is an initial public offering, the
period referred to in this clause (i) shall be 180 days after such closing date)
and (ii) the date such sale or distribution is permitted by such managing
underwriter or underwriters. Any agreement entered into after the date of this
Agreement pursuant to which the Company issues or agrees to issue any privately
placed securities similar to any issue of the Registrable Securities shall
contain a provision under which holders of such securities agree not to effect
any public sale or distribution of any such securities during such period.

        SECTION 7. REGISTRATION EXPENSES. All expenses incident to the Company's
performance of or compliance with this Agreement, including without limitation
all registration and filing fees, fees and expenses of compliance with
securities or blue sky laws (including reasonable fees and disbursements of
counsel in connection with blue sky qualifications or registrations (or the
obtaining of exemptions therefrom) of the Registrable Securities), printing
expenses (including expenses of printing Prospectuses), messenger and delivery
expenses, internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
fees and disbursements of its counsel and its independent certified public
accountants (including the expenses of any special audit or "comfort" letters
required by or incident to such performance or compliance), securities acts
liability insurance (if the Company elects to obtain such insurance), fees and
expenses of any special experts retained by the Company in connection with any
registration hereunder, fees and expenses of other Persons retained by the
Company, fees and expenses of one counsel for the Holders selected by the
Holders of a majority of the Registrable Securities being sold pursuant

                                       18
<PAGE>   19

to any registration (or, in the case of a registration pursuant to Section
3(a)(ii), the Holders of a majority of the Registrable Securities requested to
be included by the Series C Preferred Stockholders; or, in the case of a
registration pursuant to Section 3(a)(iii), Meadowlane), incurred in connection
with each registration hereunder, and reasonable out-of-pocket expenses incurred
by the Holders (all such expenses being referred to as "Registration Expenses"),
shall be borne by the Company, whether or not any registration statement becomes
effective; provided, that Registration Expenses shall not include any
underwriting discounts, commissions or fees attributable to the sale of the
Registrable Securities (other than sales of securities for the account of the
Company).

        SECTION 8. INDEMNIFICATION.

        (a) Indemnification by the Company. The Company hereby agrees to
indemnify and hold harmless, to the full extent permitted by law, but without
duplication, each Holder of Registrable Securities, its officers, directors,
employees, partners, principals, equity holders, managed or advised accounts,
advisors and agents, and each Person who controls such Holder (within the
meaning of the Securities Act), against all losses, claims, damages, liabilities
and expenses (including reasonable costs of investigation and reasonable legal
fees and expenses) resulting from (1) any untrue statement of a material fact
in, or any omission of a material fact required to be stated in, any
Registration Statement or Prospectus or necessary to make the statements therein
(in the case of a Prospectus in light of the circumstances under which they were
made) not misleading, except insofar as the same are caused by or contained in
any information furnished in writing to the Company by any Holder or any
underwriters expressly for use therein, (2) any violation or alleged violation
by the Company of any federal, state or common law rule or regulation applicable
to the Company in connection with any registration, qualification or compliance
effected by the Company pursuant to its obligations hereunder, or (3) any
failure to register or qualify Registrable Securities in any state where the
Company or its agents have affirmatively undertaken or agreed to undertake such
registration or qualification on behalf of Holders in connection with the
Company's obligations hereunder; provided, however, that the indemnification
provided for in this Section 8(a) shall not inure to the benefit of any Holder
with respect to any sale or disposition of Registrable Securities by such Holder
in violation of the provisions of Section 5(b) hereof. If so requested, the
Company will also indemnify underwriters participating in the distribution,
their officers, directors, employees, partners and agents, and each Person who
controls such underwriters (within the meaning of the Securities Act), to the
same extent as provided above with respect to the indemnification of the Holders
of Registrable Securities, if so requested.

        (b) Indemnification by Holders of Registrable Securities. In connection
with any Registration Statement in which a Holder of Registrable Securities is
participating, each such Holder hereby agrees to indemnify and hold harmless, to
the full extent permitted by law, but without duplication, the Company, its
officers, directors, shareholders, employees, advisors and agents, and each
Person who controls the Company (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities and expenses resulting from any
untrue statement of material fact in, or any omission of a material fact
required to be stated in, the Registration Statement or Prospectus or necessary
to make the statements therein (in the case of a Prospectus in light of the
circumstances under which they were made) not misleading, to the extent, but
only

                                       19
<PAGE>   20

to the extent, that such untrue statement or omission is contained in any
information so furnished in writing by such Holder to the Company specifically
for inclusion therein. If so requested, each Selling Holder also agrees to
indemnify and hold harmless Underwriters of the Registrable Securities, their
officers and directors and each Person who controls such Underwriters on
substantially the same basis as that of the indemnification of the Company
provided in this Section 8(b). In no event shall the liability of any selling
Holder of Registrable Securities hereunder be greater in amount than the dollar
amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation. The
Company and the other persons described above shall be entitled to request
indemnities from underwriters participating in the distribution, to the same
extent as provided above with respect to information so furnished in writing by
such Persons specifically for inclusion in any Prospectus or Registration
Statement.

        (c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder will (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided, however, that any Person
entitled to indemnification hereunder shall have the right to employ separate
counsel and to participate in the defense of such claim, but the fees and
expenses of such counsel shall be at the expense of such indemnified Person
unless (A) the indemnifying party has agreed to pay such fees or expenses, (B)
the indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to the indemnified party in a timely
manner or (C) in the reasonable judgment of any such Person, based upon advice
of its counsel, a conflict of interest may exist between such person and the
indemnifying party with respect to such claims (in which case, if the Person
notifies the indemnifying party in writing that such Person elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such claim on behalf of
such person). The indemnifying party will not be subject to any liability for
any settlement made without its consent (but such consent will not be
unreasonably withheld). No indemnified party will be required to consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation. An indemnifying party who is not entitled to, or elects not to,
assume the defense of the claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, as well as one local counsel in
each relevant jurisdiction.

        (d) Contribution. If for any reason the indemnification provided for in
Section 8(a) or Section 8(b) is unavailable to an indemnified party or
insufficient to hold it harmless as contemplated by Section 8(a) and Section
8(b), then the indemnifying party shall contribute to the amount paid or payable
by the indemnified party as a result of such loss, claim, damage or liability in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified party, determined by reference to whether
the untrue statement of a material fact or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, on the one hand, or the Holder
of Registrable Securities, on the other, and the parties' relative intent,

                                       20
<PAGE>   21

knowledge, access to information and opportunity to correct or prevent such
statement or omission, provided, that no indemnifying Holder shall be required
to contribute an amount greater than the dollar amount of the net proceeds
received by such indemnifying Holder with respect to the sale of the Registrable
Securities giving rise to such indemnification obligation less any amounts
otherwise paid or payable by such indemnifying Holder as damages, penalties or
otherwise in connection with such matter. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentations.

        SECTION 9. RULES 144 AND 144A. After the Company completes its initial
public offering of securities, the Company shall use its reasonable best efforts
to make publicly available and available to the Holders, pursuant to Rule 144,
such information as is necessary to enable the Holders to make sales of
Registrable Securities pursuant to that Rule. The Company shall use its
reasonable best efforts to file timely with the SEC all documents and reports
required of the Company under the Exchange Act. After the Company completes its
initial public offering of securities, the Company shall furnish to any Holder,
upon request, a written statement executed on behalf of the Company as to
compliance with the current public information requirements of Rule 144. In
addition, the Company will provide to any Holder of a Registrable Security, or
any potential purchaser of a Registrable Security, upon any such Person's
reasonable request, the information required by paragraph (d)(4) of Rule 144A.

        SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.

        (a) If any of the Registrable Securities covered by a demand
registration hereunder are to be sold in an Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority of the
Registrable Securities included in such offering (or, in the case of a
registration initiated pursuant Section 3(a)(ii), by the holders of a majority
of the Registrable Securities requested to be included by the Series C Preferred
Stockholders; or, in the case of a registration statement initiated pursuant to
Section 3(a)(iii), Meadowlane); provided further that such investment bankers
and managers must be reasonably satisfactory to the Company, acting in good
faith, based on identified business reasons specific to such bankers or
managers.

        (b) No Person may participate in any Underwritten Offering hereunder
unless such Person (i) agrees to sell such Person's Registrable Securities on
the basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and (ii) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
Nothing in this Section 10 shall be construed to create any additional rights
regarding the registration of Registrable Securities in any Person otherwise
than as set forth herein.

        (c) Each Holder hereby agrees that, during the period of duration (up
to, but not exceeding, 15 days prior to the closing date of the Underwritten
Offering and 90 days thereafter or, as to an initial public offering of the
securities of the Company, 15 days prior to the closing date of the Underwritten
Offering and 180 days thereafter) specified by an underwriter of

                                       21
<PAGE>   22

a Registrable Class or other securities of the Company of the same class as
Registrable Securities, following the effective date of a registration statement
of the Company filed under the Securities Act, it shall not, to the extent
requested by such underwriter, directly or indirectly sell, offer to sell,
contract to sell (including, without limitation, any short sale), grant any
option to purchase or otherwise transfer or dispose of (other than to donees,
Affiliates of the Securityholders or the partners of the Securityholders (and
the equityholders of any successor entities thereto) and their Affiliates that
agree to be similarly bound) any Registrable Securities of the Company of the
same class as those offered pursuant to such registration statement held by it
at any time during such period except Registrable Securities included in such
registration; provided, however, that;

            (i) such agreement shall be applicable only during the three-year
period following the date of the final prospectus distributed pursuant to the
initial public offering of the Company's securities;

            (ii) all officers and directors of the Company, all holders of in
excess of one percent of any class of securities of the Company, and all other
persons with registration rights (whether or not pursuant to this Agreement)
enter into agreements which are no less restrictive;

            (iii) the aggregate of the period in which dispositions of
Registrable Securities are restricted pursuant to this Section 10(c) and any
period during which the filing of a registration statement is deferred pursuant
to Section 3(a) and Section 3(d) shall not exceed 180 days in any 12 month
period other than the 12 month period in which the effectiveness of the
registration statement for the initial public offering of the securities of the
Company occurs in which such aggregate shall not exceed 270 days;

            (iv) such restriction shall not prevent sales pursuant to Rule 144
or private placement sales to purchasers, Affiliates of the Securityholders or
the partners of the Securityholders (and the equityholders of any successor
entities thereto) and their Affiliates that agree to similar restrictions (which
agreements shall not be required for sales made pursuant to Rule 144); and

            (v) this Section 10(c) shall not apply to any Holder that holds less
than 2% of any class of securities of the Company.

        In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period, and each Holder agrees
that, if so requested, such Holder will execute an agreement in the form
provided by the underwriter containing terms which are consistent with the
provisions of this Section.

        SECTION 11. NO INCONSISTENT AGREEMENTS. The Company has not previously
and shall not in the future enter into any agreement, arrangement or
understanding with respect to its securities which is inconsistent with the
rights granted to the Holders of Registrable Securities in

                                       22
<PAGE>   23

this Agreement or otherwise conflicts with the provisions hereof.

        SECTION 12. AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this Section 12, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of a majority of the Registrable Securities then outstanding and each
Securityholder who is adversely affected.

        SECTION 13. REMEDIES. Any Person having rights under any provision of
this Agreement shall be entitled to enforce such rights specifically or to
recover damages or to exercise any other remedy available to it at law or in
equity. The foregoing rights and remedies shall be cumulative and the exercise
of any right or remedy provided herein shall not preclude any Person from
exercising any other right or remedy provided herein. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of any of the provisions of this Agreement and hereby
agrees to waive the defense in any action for specific performance that a remedy
at law would be adequate.

        SECTION 14. NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telecopier, or air-courier guaranteeing overnight delivery:

                (a) If to a Holder of Registrable Securities, at the current
        address for such Holder on the transfer records of the Company, which
        address initially is, with respect to each Holder:

                             For Constellation Venture Capital, L.P. and
                             Constellation Ventures
                             (BVI), Inc.:

                             Constellation Ventures Management, LLC
                             575 Lexington Avenue
                             New York, New York 10022
                             Attention: Clifford H. Friedman
                             Telecopy Number: (212) 272-7060

                             For Chase:

                             Chase Venture Capital Associates, L.P.
                             380 Madison Avenue, 12th Floor
                             New York, NY  10017
                             Attention:  I. Robert Greene
                             Telecopy Number:  (212) 622-3101

                             with copies to:

                             Kramer Levin Naftalis & Frankel LLP
                             919 Third Avenue

                                       23
<PAGE>   24

                             New York, NY  10022
                             Attention:  Howard A. Rothman, Esq.
                             Telecopy Number: (212) 715-8000

                             and

                             O'Sullivan, Graev & Karabell, LLP
                             30 Rockefeller Plaza, 24th Floor
                             New York, NY 10112
                             Attention:  Harvey M. Eisenberg, Esq.
                             Telecopy Number:  (212) 408-2420

                             For Cassandra/ARTISTdirect Partners, LLC:

                             561 Broadway, Suite 8C
                             New York, NY  10012
                             Attention: I. Robert Greene
                             Telecopy Number: (212) 622-3101

                             with copies to:

                             Kramer Levin Naftalis & Frankel LLP
                             919 Third Avenue
                             New York, NY  10022
                             Attention:  Howard A. Rothman, Esq.
                             Telecopy Number: (212) 715-8000

                             and

                             O'Sullivan, Graev & Karabell, LLP
                             30 Rockefeller Plaza, 24th Floor
                             New York, NY 10112
                             Attention:  Harvey M. Eisenberg, Esq.
                             Telecopy Number:  (212) 408-2420

                             For Flatiron Fund 1998/99, LLC and Flatiron
                             Associates, LLC:

                             Flatiron Partners
                             257 Park Avenue South, 12th Floor
                             New York, NY  10010
                             Attention: Michael F. Connor
                             Telecopy Number:  (212) 228-0552

                             with copies to:

                             Kramer Levin Naftalis & Frankel LLP

                                       24
<PAGE>   25

                             919 Third Avenue
                             New York, NY  10022
                             Attention:  Howard A. Rothman, Esq.
                             Telecopy Number: (212) 715-8000

                             and

                             O'Sullivan, Graev & Karabell, LLP
                             30 Rockefeller Plaza, 24th Floor
                             New York, NY 10112
                             Attention:  Harvey M. Eisenberg, Esq.
                             Telecopy Number:  (212) 408-2420

                             For Spinnaker Founders Fund, L.P., Spinnaker
                             Technology Fund, L.P., Spinnaker Clipper Fund,
                             L.P.:

                             Bowman Capital Management, L.L.C.
                             1875 South Grant Street, Suite 600
                             San Mateo, CA 94402
                             Attn:  Matthew Cowan
                             Telecopy Number (650) 572-1844

                             with copies to:

                             Shartsis, Friese & Ginsburg
                             One Maritime Plaza
                             Suite 1800
                             San Francisco, CA  94111
                             Telecopy Number: (415) 421-2922
                             Attn: Eric M. Sippel, Esq.

                             For Psilos Group Partners, L.P., CCP/Psilos
                             ARTISTdirect, LLC and CCP/Psilos UBL, LLC:

                             Psilos Group Partners, L.P.
                             CCP/Psilos ARTISTdirect, LLC
                             152 West 57th Street
                             33rd Floor
                             New York, NY  10019
                             Telecopy Number: (212) 957-2013
                             Attn:  Albert S. Waxman, Ph.D.

                             For Toronto Dominion Investments, Inc.:

                             Toronto Dominion Investments, Inc.
                             909 Fannin Street, Suite 1700

                                       25
<PAGE>   26

                             Houston, TX  77010
                             Attention: Martha Gariepy
                             Telecopy Number: (713) 652-2647

                             with copies to:

                             Kramer Levin Naftalis & Frankel LLP
                             919 Third Avenue
                             New York, NY  10022
                             Attention:  Howard A. Rothman, Esq.
                             Telecopy Number: (212) 715-8000

                             For Meadowlane Enterprises Ltd.:

                             c/o Cisneros Television Group
                             404 Washington Avenue
                             Miami Beach, FL 33139

                             with copies to:

                             Wachtell, Lipton, Rosen & Katz
                             51 West 52nd Street
                             New York, New York  10019
                             Attention: Andrew J. Nussbaum, Esq.
                             Fax: (212) 403-2331

                             For Universal Music Group, Inc.:

                             70 Universal City Plaza
                             Universal City, California 91608

                             with copies to:

                             Munger, Tolles & Olson LLP
                             355 S. Grand Ave., Floor 35
                             Los Angeles, California  90071-1560
                             Attention: Ruth E. Fisher, Esq.
                             Fax:  (213) 687-3702

            (b) If to Rubin, at the current address for Rubin on the transfer
records of the Company, which address initially is:

                             Alan S. Halfon & Company
                             9595 Wilshire Boulevard
                             Suite 505
                             Beverly Hills, CA 90212
                             Attention:  Alan S. Halfon

                                       26
<PAGE>   27

                             Telecopy Number: (310) 385-1345

                             with copies to:

                             Paul, Hastings, Janofsky & Walker LLP
                             555 South Flower Street
                             23rd Floor
                             Los Angeles, CA 90071-2371
                             Attention:  Anna M. Graves, Esq.
                             Telecopy Number: (213) 627-0705

            (c) If to Di Dia, at the current address for Di Dia on the transfer
records of the Company, which address initially is:

                             Mark Di Dia
                             2121 Kress Street
                             Los Angeles, CA  90046

            (d) If to Van Dalsem, at the current address for Van Dalsem on the
transfer records of the Company, which address initially is:

                             Bruce E. Van Dalsem, Esq.
                             c/o Gradstein, Luskin & Van Dalsem, PC
                             12100 Wilshire Boulevard, Suite 350
                             Los Angeles, CA  90025

            (e) If to Gradstein, at the current address for Gradstein on the
transfer records of the Company, which address initially is:

                             Henry D. Gradstein, Esq.
                             c/o Gradstein, Luskin & Van Dalsem, PC
                             12100 Wilshire Boulevard, Suite 350
                             Los Angeles, CA  90025

                                       27
<PAGE>   28

            (f) If to the Company or to the Founders, initially to:

                             ARTISTdirect, Inc.
                             17835 Ventura Boulevard
                             Suite 310
                             Encino, California 91316
                             Telecopy Number: (818) 758-8722

                             with a copy to:

                             Allen D. Lenard, Esq.
                             Lenard & Gonzalez, LLP
                             1900 Avenue of The Stars
                             Los Angeles, California 90067
                             Telecopy Number: (310) 552-0740

and thereafter at such other address as may be designated from time to time by
notice given in accordance with the provisions of this Section 14.

            (b) All such notices and other communications shall be deemed to
        have been delivered and received (i) in the case of personal delivery,
        telecopier or telegram, on the date of such delivery (assuming delivery
        is confirmed), (ii) in the case of overnight guaranteed delivery air
        courier, on the Business Day after the date when sent and (iii) in the
        case of mailing, on the third Business Day following such mailing.

        SECTION 15. SUCCESSORS AND ASSIGNS. Subject to compliance with Article V
of the Stockholders Agreement, any right, remedy, obligation or liability
arising hereunder or by reason hereof shall be assignable by any Holder in
connection with the transfer of its Registrable Securities without the prior
written consent of the Company; provided (a) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of the
name and address of such transferee or assignee and the securities with respect
to which such registration rights are being transferred or assigned; (b) such
transferee or assignee agrees in writing to be bound by and subject to the terms
and conditions of this Agreement, including without limitation the provisions of
Section 6 (if applicable to the transferor); and (c) such transferee or assignee
(i) agrees to act through a single representative with the transferring Holder
for the purpose of exercising rights, receiving notices and taking action
hereunder, or (ii) acquires all of the shares of Registrable Securities held by
such transferring Holder or at least one million (1,000,000) shares of such
Registrable Securities (subject to appropriate adjustment for stock splits,
stock dividends, combinations and other recapitalizations). Any such transferee
or assignee shall be subject to all rights and obligations hereunder and, if
requested by the Company, shall agree in writing to be bound by the terms of
this Agreement. Subject to the foregoing, this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto, including without limitation and without the need for an express
assignment, subsequent Holders of the Registrable Securities.

                                       28
<PAGE>   29

        SECTION 16. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

        SECTION 17. HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.

        SECTION 18. GOVERNING LAW; FORUM. This Agreement shall be governed by,
construed and enforced in accordance with, the laws of the State of Delaware
without regard to the principles thereof relating to conflict of laws. Each of
the parties hereby submits to personal jurisdiction and waives any objection as
to venue in the County of Los Angeles, State of California. Service of process
on the parties in any action arising out of or relating to this Agreement shall
be effective if mailed to the parties in accordance with Section 14 hereof. The
parties hereto waive all right to trial by jury in any action or proceeding to
enforce or defend any rights under this Agreement.

        SECTION 19. SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.

        SECTION 20. ENTIRE AGREEMENT. This Agreement is intended by the parties
as a final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter, including but not limited to, that certain Second Amended and
Restated Registration Rights Agreement dated as of May 18, 1999, among
ARTISTdirect, LLC, a California limited liability company (the Company's
predecessor) and certain of the Company's stockholders, as amended by that
certain First Amendment to Second Amended and Restated Registration Rights
Agreement dated as of October 6, 1999.

        SECTION 21. ATTORNEYS' FEES. In any proceeding brought to enforce any
provision of this Agreement, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to its costs and expenses and any other
available remedy.

                  [Remainder of Page Intentionally Left Blank]

                                       29
<PAGE>   30

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.

                                          ARTISTDIRECT, INC.

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

                                          CHASE VENTURE CAPITAL ASSOCIATES, L.P.
                                                   By:   Chase Capital Partners,
                                                         L.P.,
                                                   its General Partner

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

                                          CASSANDRA/ARTISTDIRECT PARTNERS, LLC
                                          By:      Chase Venture Capital
                                                   Associates, L.P.,
                                                   its Managing Member

                                          By:      Chase Capital Partners, L.P.,
                                                   its General Partner

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

                                          CCP/PSILOS ARTISTDIRECT, LLC
                                          By:      Psilos Group Investors, LLC,
                                                   its Managing Member

                                          By:
                                             -----------------------------------
                                                   Name: Albert S. Waxman, Ph.D.
                                                   Title: Senior Managing
                                                   Director

                                       30
<PAGE>   31

                                          CCP/PSILOS UBL, LLC
                                          By:      Psilos Group Investors, LLC,
                                                   its Managing Member

                                          By:
                                             -----------------------------------
                                                   Name: Albert S. Waxman, Ph.D.
                                                   Title: Senior Managing
                                                   Director

                                          FLATIRON FUND 1998/99, LLC

                                          By:
                                             -----------------------------------
                                                   Fred Wilson
                                                   Managing Member

                                          FLATIRON ASSOCIATES, LLC

                                          By:
                                             -----------------------------------
                                                   Fred Wilson
                                                   Managing Member

                                          SPINNAKER TECHNOLOGY FUND, L.P.
                                          By:    Bowman Capital Management,
                                          L.L.C., its General Partner

                                          By:
                                             -----------------------------------
                                                   Name:  Eric Moore
                                                   Title: Controller

                                          SPINNAKER FOUNDERS FUND, L.P.
                                          By:      Bowman Capital Management,
                                          L.L.C., its General Partner

                                          By:
                                             -----------------------------------
                                                   Name:  Eric Moore
                                                   Title: Controller

                                       31
<PAGE>   32

                                          SPINNAKER CLIPPER FUND, L.P.
                                          By:      Bowman Capital Management,
                                          L.L.C., its General Partner

                                          By:
                                             -----------------------------------
                                                   Name:  Eric Moore
                                                   Title:  Controller

                                          PSILOS GROUP PARTNERS L.P.
                                          By:      Psilos Group Investors, LLC,
                                                   its General Partner

                                          By:
                                             -----------------------------------
                                                   Name: Albert S. Waxman, Ph.D.
                                                   Title: Senior Managing
                                                   Director

                                          TORONTO DOMINION INVESTMENTS, INC.

                                          By:
                                             -----------------------------------
                                                   Name:  Carole Clause
                                                   Title:  President

                                          CONSTELLATION VENTURE CAPITAL, L.P.
                                          By:      Constellation Ventures
                                                   Management LLC, its General
                                                   Partner

                                          By:
                                             -----------------------------------
                                                   Clifford H. Friedman
                                                   Member

                                       32
<PAGE>   33

                                          CONSTELLATION VENTURES (BVI), INC.

                                          By:
                                             -----------------------------------
                                                   Clifford H. Friedman
                                                   President and Chief Executive
                                                   Officer

                                          MEADOWLANE ENTERPRISES, LTD.

                                          By:
                                             -----------------------------------

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

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

                                          UNIVERSAL MUSIC GROUP, INC.

                                          By:
                                             -----------------------------------

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

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

                                          --------------------------------------
                                          Rick Rubin

                                          --------------------------------------
                                          Mark Di Dia

                                          --------------------------------------
                                          Bruce E. Van Dalsem

                                          --------------------------------------
                                          Henry D. Gradstein

                                          --------------------------------------
                                          Marc P. Geiger

                                          --------------------------------------
                                          Donald P. Muller

                                       33
<PAGE>   34

                                 AMENDMENT NO. 1
                              TO THIRD AMENDED AND
                     RESTATED REGISTRATION RIGHTS AGREEMENT

                  This AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT (this "Amendment") is made and entered into as of
December 20, 1999, by and among ARTISTDIRECT, INC, a Delaware corporation
("AD"), CHASE VENTURE CAPITAL ASSOCIATES, a California limited partnership,
CASSANDRA/ARTISTDIRECT PARTNERS, LLC, a Delaware limited liability company,
CCP/PSILOS ARTISTDIRECT, LLC, a Delaware limited liability company, CCP/PSILOS
UBL, LLC, a Delaware limited liability company, FLATIRON FUND 1998/99 LLC, a
Delaware limited liability company, FLATIRON ASSOCIATES, LLC, a Delaware limited
liability company, SPINNAKER TECHNOLOGY FUND, L.P., a Delaware limited
partnership, SPINNAKER FOUNDERS FUND, L.P., a Delaware limited partnership,
SPINNAKER CLIPPER FUND, L.P., a Delaware limited partnership, PSILOS GROUP
PARTNERS L.P., a Delaware limited partnership, TORONTO DOMINION INVESTMENTS,
INC., a Delaware corporation, CONSTELLATION VENTURE CAPITAL, L.P., a Delaware
limited partnership, CONSTELLATION VENTURES (BVI), INC., a British Virgin
Islands corporation, MEADOWLANE ENTERPRISES LTD., a British Virgin Islands
limited company ("Meadowlane"), UNIVERSAL MUSIC GROUP, INC., a California
corporation ("Universal"), BMG MUSIC d/b/a BMG ENTERTAINMENT, a New York general
partnership ("BMG"), YAHOO! INC, a Delaware corporation ("Yahoo!"), SONY MUSIC,
a Group of SONY MUSIC ENTERTAINMENT INC., a Delaware corporation ("Sony"),
ART-DIR HOLDINGS INC., a Delaware corporation ("Art-Dir Holdings") and MAVERICK
RECORDING COMPANY, a California general partnership ("Maverick") (the foregoing
entities, collectively and with the exception of AD, the "Investor
Securityholders"), MARK DI DIA, an individual ("Di Dia"), BRUCE E. VAN DALSEM,
an individual ("Van Dalsem"), HENRY D. GRADSTEIN, an individual ("Gradstein"),
and RICK RUBIN an individual ("Rubin"; each of the Investor Securityholders, Di
Dia, Van Dalsem, Gradstein and Rubin, a "Securityholder" and collectively, the
"Securityholders"), MARC P. GEIGER, an individual residing at 3378 Alginet
Drive, Encino, California 91436 ("Geiger"), and DONALD MULLER, an individual
residing a 20324 Howard Court, Woodland Hills, California 91364 ("Muller").

                  The Company and Securityholders (other than BMG, Yahoo! Inc.,
Sony, Art-Dir Holdings and Maverick) are parties to that certain third Amended
and Restated Registration Rights Agreement dated as of November 12, 1999 (the
"Existing Registration Rights Agreement").

                  Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed them in the Existing Registration Rights Agreement.

                  NOW, THEREFORE, in consideration of the premises and mutual
covenants and obligations hereinafter set forth, the Company and each of the
parties hereto, intending legally to be bound, hereby agree as follows.

                                       1

<PAGE>   35

                  SECTION 1. AMENDMENTS TO EXISTING REGISTRATION RIGHTS
AGREEMENT.  The Existing  Registration  Rights  Agreement is hereby amended
as follows:

                  (a) BMG, Yahoo!, Sony, Art-Dir Holdings and Maverick shall
each be added as parties to the Existing Registration Rights Agreement.

                  (b) The definition of "Consent Letter" in Section 1 of the
Existing Registration Rights Agreement is hereby deleted in its entirety.

                  (c) Sub-section (iii) of the first sentence of the definition
of "Registrable Securities" in Section 1 of the Existing Registration Rights
Agreement is hereby amended and restated in its entirety as follows:

                  "(iii) any shares of common stock acquired from time to time
                  (A) from the Company pursuant to Section 2.1 of the
                  Stockholders Agreement, (B) pursuant to Section 5.5 of the
                  Stockholders Agreement, or (C) upon exercise of the warrant
                  issued to Yahoo! in connection with that certain Letter of
                  Understanding dated as of December 1, 1999, between the
                  Company and Yahoo!,"

                  (d) The definition of "Series C Preferred Stockholder" in
Section 1 of the Existing Registration Rights Agreement is hereby amended and
restated in its entirety as follows:

                  ""Series C Preferred Stockholder" shall mean Meadowlane,
                  Universal, BMG, Yahoo!, Sony, Art-Dir Holdings, Maverick and
                  any of their permitted transferees pursuant to Section 5.5 of
                  the Stockholders Agreement and to whom such transferees are
                  assigned rights hereunder pursuant to Section 15 hereunder."

                  (e) The first paragraph of Section 3(a)(ii) of the Existing
Registration Rights Agreement is hereby amended and restated in its entirety as
follows:

                  "Series C Preferred Demand. Upon the written request of one or
                  more Series C Preferred Stockholders requesting that the
                  Company effect the registration under the Securities Act, at
                  any time after the earlier of (A) May 18, 2004 or (B) the
                  one-year anniversary of the consummation of the initial public
                  offering of the securities of the Company, of Registrable
                  Securities constituting the Series C Requisite Share Number,
                  and specifying the intended method of disposition thereof
                  (which may, if the Company is eligible to register common
                  stock on Form S-3 or any similar form, include a continuous or
                  delayed offering pursuant to a Shelf Registration Statement),
                  the Company will use its best efforts to effect, as
                  expeditiously as possible, the registration under the
                  Securities Act of such Registrable Securities; provided,
                  however, that the Company shall not be obligated (X) to effect
                  more than five demand registrations pursuant to this Section
                  3(a)(ii) or (Y) register any Registrable Securities pursuant
                  to this Section 3(a)(ii) for a period of 6 months following
                  the date on which a Registration Statement

                                       2
<PAGE>   36

                  filed in respect of any previous demand registration
                  under Section 3(a), if any, was declared effective; provided
                  further, that the Company's delay right set forth in the
                  foregoing proviso shall not apply to any registration
                  request pursuant to this Section 3(a)(ii) delivered to the
                  Company within 60 days of the expiration of the applicable
                  lock-up period described in clauses (ii)(A) and (ii)(B)
                  above."

                  (f) Section 14(a) of the Existing Registration Rights
Agreement is hereby amended by adding the following addresses:

                                    For BMG Music d/b/a BMG Entertainment

                                    1540 Broadway
                                    New York, NY 10036-4098

                                    Attention: Vice President, Corporate
                                    Development

                                    with copies to:

                                    Levin & Srinivasen
                                    1776 Broadway, 19th Floor
                                    New York, NY 10019
                                    Attention:  Greg Srinivasan, Esq.
                                    Telecopy Number: (212) 957-4565

                                    For Yahoo! Inc.

                                    3420 Central Expressway
                                    Santa Clara, California 95051
                                    Attention: Senior Vice President,
                                    Corporate Development
                                    Telecopy Number: (408) 731-3400

                                    with copies to:

                                    Yahoo! Inc.
                                    3420 Central Expressway
                                    Santa Clara, California 95051
                                    Attention:  General Counsel
                                    Telecopy Number: (408) 731-3400

                                    For Sony Music, a Group of Sony Music
                                    Entertainment Inc.

                                    550 Madison Avenue
                                    New York, New York 10022

                                       3

<PAGE>   37

                                    Attention: Senior Vice President, Business
                                    Affairs and Administration
                                    Telecopy Number: (212) 833-7844

                                    with copies to:

                                    550 Madison Avenue
                                    New York, New York 10022
                                    Attention: Senior Vice President and General
                                    Counsel
                                    Telecopy Number: (212) 833-8083

                                    and

                                    Rosenman & Colin LLP
                                    575 Madison Avenue
                                    New York, New York 10022
                                    Attention: Lisa Weiss, Esq.
                                    Telecopy Number: (212) 940-8776

                                    For Art-Dir Holdings Inc.

                                    c/o Time Warner Inc.
                                    75 Rockefeller Plaza
                                    New York, New York 10019
                                    Attention: General Counsel

                                    with copies to:

                                    Cravath, Swaine & Moore
                                    Worldwide Plaza
                                    825 Eighth Avenue
                                    New York, New York 10019
                                    Attention: Faiza J. Saeed, Esq.

                                    For Maverick Recording Company

                                    c/o Maverick Records LLC
                                    9348 Civic Center Drive
                                    Beverly Hills, CA  90210
                                    Attn:  Ms. Ronnie Dashev
                                    Facsimile:  (310) 385-9087

                                    and:

                                    SR/MDM Venture, Inc.

                                       4

<PAGE>   38

                                    c/o Warner Bros. Records Inc.
                                    3300 Warner Boulevard
                                    Burbank, CA  91505-4694
                                    Attn:  Vice Chairman
                                    Facsimile:  (818) 840-2382

                                    with copies to:

                                    Grubman, Indursky & Schindler, P.C.
                                    152 West 57th Street
                                    New York, NY  10019
                                    Attn:  Donald R. Friedman, Esq.
                                            or Alan Grubman, Esq.
                                    Facsimile:  (212) 554-0444

                                    Kramer Levin Naftalis & Frankel LLP
                                    919 Third Avenue
                                    New York, NY  10022
                                    Attn:  Howard J. Rothman, Esq.
                                    Facsimile:  (212) 715-8000

                                    Legal Department
                                    Warner Music Group Inc.
                                    4000 Warner Boulevard
                                    Burbank, CA  91522
                                    Attn:  General Counsel
                                    Facsimile:  (818) 954-5274

                                    Cravath, Swaine & Moore
                                    Worldwide Plaza
                                    825 Eighth Avenue
                                    New York, NY  10019
                                    Attn:  Faiza J. Saeed, Esq.
                                    Facsimile: (212) 474-3700

                  SECTION 2. NO OTHER  CHANGES.  Except as expressly  provided
for in Section 1 above, all of the provisions of the Existing Registration
Rights Agreement shall continue in full force and effect.

                  [Remainder of Page Intentionally Left Blank]

                                       5

<PAGE>   39

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.

                                     ARTISTDIRECT, INC.

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

                                     CHASE VENTURE CAPITAL ASSOCIATES, L.P.
                                     By:   Chase Capital Partners, L.P.,
                                           its General Partner

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

                                     CASSANDRA/ARTISTDIRECT PARTNERS, LLC
                                     By: Chase Venture Capital Associates, L.P.,
                                         its Managing Member

                                     By: Chase Capital Partners, L.P.,
                                         its General Partner

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

                                     CCP/PSILOS ARTISTDIRECT, LLC
                                     By: Psilos Group Investors, LLC,
                                         its Managing Member

                                     By:
                                        ---------------------------------------
                                          Name:  Albert S. Waxman, Ph.D.
                                          Title: Senior Managing Director

                                       6

<PAGE>   40

                                     CCP/PSILOS UBL, LLC
                                     By: Psilos Group Investors, LLC,
                                         its Managing Member

                                     By:
                                         --------------------------------------
                                          Name:  Albert S. Waxman, Ph.D.
                                          Title: Senior Managing Director

                                     FLATIRON FUND 1998/99, LLC

                                     By:
                                        ---------------------------------------
                                          Fred Wilson
                                          Managing Member

                                     FLATIRON ASSOCIATES, LLC

                                     By:
                                        ---------------------------------------
                                          Fred Wilson
                                          Managing Member

                                     SPINNAKER TECHNOLOGY FUND, L.P.
                                     By: Bowman Capital Management, L.L.C., its
                                     General Partner

                                     By:
                                        ---------------------------------------
                                          Name:  Eric Moore
                                          Title: Controller

                                     SPINNAKER FOUNDERS FUND, L.P.
                                     By: Bowman Capital Management, L.L.C., its
                                     General Partner

                                     By:
                                        ---------------------------------------
                                          Name:  Eric Moore
                                          Title: Controller

                                       7

<PAGE>   41

                                     SPINNAKER CLIPPER FUND, L.P.
                                     By: Bowman Capital Management, L.L.C., its
                                     General Partner

                                     By:
                                        ---------------------------------------
                                          Name:  Eric Moore
                                          Title:  Controller

                                     PSILOS GROUP PARTNERS L.P.
                                     By:  Psilos Group Investors, LLC,
                                          its General Partner

                                     By:
                                        ---------------------------------------
                                          Name:  Albert S. Waxman, Ph.D.
                                          Title: Senior Managing Director

                                     TORONTO DOMINION INVESTMENTS, INC.

                                     By:
                                        ---------------------------------------
                                           Name:  Carole Clause
                                           Title:  President

                                     CONSTELLATION VENTURE CAPITAL, L.P.
                                     By: Constellation Ventures Management LLC,
                                         its General Partner

                                     By:
                                         --------------------------------------
                                           Clifford H. Friedman
                                           Member

                                       8

<PAGE>   42

                                     CONSTELLATION VENTURES (BVI), INC.

                                     By:
                                         --------------------------------------
                                           Clifford H. Friedman
                                           President and Chief Executive Officer

                                     MEADOWLANE ENTERPRISES, LTD.

                                     By:
                                         ---------------------------------------

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

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

                                     UNIVERSAL MUSIC GROUP, INC.

                                     By:
                                         ---------------------------------------

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

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

                                       9

<PAGE>   43

                                     ------------------------------------------
                                     Rick Rubin

                                     ------------------------------------------
                                     Mark Di Dia

                                     -------------------------------------------
                                     Bruce E. Van Dalsem

                                     -------------------------------------------
                                     Henry D. Gradstein

                                     -------------------------------------------
                                     Marc P. Geiger

                                     -------------------------------------------
                                     Donald P. Muller

                                       10

<PAGE>   44

                                     BMG MUSIC d/b/a BMG ENTERTAIMENT

                                     By:
                                         ---------------------------------------

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

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

                                       11

<PAGE>   45

                                     YAHOO! INC.

                                     By:
                                         ---------------------------------------

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

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

                                       12

<PAGE>   46

                                     SONY MUSIC, a group of SONY MUSIC
                                     ENTERTAINMENT INC.

                                     By:
                                         ---------------------------------------

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

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

                                       13

<PAGE>   47

                                     ART-DIR HOLDINGS, INC.

                                     By:
                                         ---------------------------------------

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

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

                                       14

<PAGE>   48

                                     MAVERICK RECORDING COMPANY

                                     By:
                                         --------------------------------------
                                           Name: Guy Oseary
                                           Its: Co-Chief Executive Officer

                                     15<PAGE>   1

                                                                   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 October
2001. The next offering period shall commence on the first business day in
November 2001, 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.
<PAGE>   4

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 Two Million (2,000,000)
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.
<PAGE>   5

                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.
<PAGE>   6

        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.

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