Document:

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                                                                     EXHIBIT 4.3

                           CARDIOGENESIS CORPORATION
                       1996 EMPLOYEE STOCK PURCHASE PLAN

                            (AS AMENDED, JUNE 2004)

         The following constitute the provisions of the 1996 Employee Stock
Purchase Plan of CardioGenesis Corporation (formerly Eclipse Surgical
Technologies, Inc.)

         1.       Purpose. The purpose of the Plan is to provide employees of
the Company and its Designated Subsidiaries with an opportunity to purchase
Common Stock of the Company through accumulated payroll deductions. It is the
intention of the Company to have the Plan qualify as an "Employee Stock Purchase
Plan" under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.

         2.       Definitions.

                  (a)      "Board" shall mean the Board of Directors of the
Company.

                  (b)      "Code" shall mean the Internal Revenue Code of 1986,
as amended.

                  (c)      "Common Stock" shall mean the Common Stock of the
Company.

                  (d)      "Company" shall mean CardioGenesis Corporation
(formerly Eclipse Surgical Technologies, Inc.) and any Designated Subsidiary of
the Company.

                  (e)      "Compensation" shall mean all base straight time
gross earnings, commissions, overtime, shift premium, incentive compensation,
incentive payments, bonuses and other compensation.

                  (f)      "Designated Subsidiaries" shall mean the Subsidiaries
which have been designated by the Board from. time to time in its sole
discretion as eligible to participate in, the Plan.

                  (g)      "Employee" shall mean any individual who is an
Employee of the Company for tax purposes whose customary employment with the
Company is at least twenty (20) hours per week and more than five (5) months in
any calendar year. For purposes of the Plan, the employment relationship shall
be treated as continuing intact while the individual is on sick leave or other
leave of absence approved by the Company. Where the period of leave exceeds 90
days and the individual's right to reemployment is not guaranteed either by
statute or by contract, the employment relationship shall be deemed to have
terminated on the 91st day of such leave.

                  (h)      "Enrollment Date" shall mean the first day of each
Offering Period.

                  (i)      "Exercise Date" shall mean the last day of each
Offering Period.

                  (j)      "Fair Market Value" shall mean, as of any date, the
value of Common Stock determined as follows:

                           (1)      If the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The
Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system for the last market trading day prior to the time of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable, or;

                           (2)      If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean of the closing bid and asked prices for the

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Common Stock on the date of such determination, as reported in The Wall Street
Journal or such other source as the Board deems reliable, or;

                           (3)      In the absence of an established market for
the Common Stock, the Fair Market Value thereof shall be determined in good
faith by the Board.

                           (4)      For the purposes of the Enrollment Date
under the first Offering Period under the Plan, the Fair Market Value of the
Common Stock shall be the price to public as set forth in the final prospectus
included within the Registration Statement on Form S-1 filed with the Securities
and Exchange Commission for the initial public offering the Common Stock.

                  (k)      "Offering Period" shall mean a period of
approximately six (6) months, commencing on the first Trading Day on or after
May 16 and terminating on the last Trading Day in the period ending the
following November 15, or commencing on the first Trading Day on or after
November 16 and terminating on the last Trading Day in the period ending the
following May 15, during which an option granted pursuant to the Plan may be
exercised; provided, however, that the first Offering Period shall be the period
of approximately seven (7) months, commencing with the first Trading Day on or
after the date on which the Company's Registration Statement on Form S-1 is
declared effective by the Securities and Exchange Commission and terminated on
the last Trading Day in the period ending November 15. The duration of Offering
Periods. may be changed pursuant to Section 4 of this Plan.

                  (l)      "Plan" shall mean this Employee Stock Purchase Plan.

                  (m)      "Purchase Price" shall mean an amount equal to 85% of
the Fair Market Value of a share of Common Stock on the Enrollment Date or on
the Exercise Date, whichever is lower.

                  (n)      "Reserves" shall mean the number of shares of Common
Stock covered by each option under the Plan which have not yet been exercised
and the number of shares of Common Stock which have been authorized for issuance
under the Plan but not yet placed under option.

                  (o)      "Subsidiary" shall mean a corporation, domestic or
foreign, of which not less than 50% of the voting Shares are held by the Company
or a Subsidiary whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a Subsidiary.

                  (p)      "Trading Day" shall mean a day on which national
stock exchanges and the Nasdaq System are open for trading.

                  3.       Eligibility.

                  (a)      Any Employee (as defined in Section 2(g)), who shall
be employed by the Company on a given Enrollment Date shall be eligible to
participate in the Plan.

                  (b)      Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted an option under the Plan (i) to
the extent that, immediately after the grant, such Employee (or any other person
whose stock would be attributed to such Employee pursuant to Section 424(d) of
the Code) would own capital stock of the Company and/or hold outstanding options
to purchase such stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of the capital stock of the
Company or of any Subsidiary, or (ii) to the went that his or her rights to
purchase stock under all employee stock purchase plans of the Company and its
subsidiaries accrues at a rate which exceeds Twenty-Five Thousand Dollars
($25,000) worth of stock (determined at the fair market value of the shares at
the time such option is granted) for each calendar year in which such option is
outstanding at any time.

         4.       Offering Periods. The Plan shall be implemented by consecutive
Offering Periods with a new Offering Period commencing on the first Trading Day
on or after May 16 and November 16 each year, or on such other date as the Board
shall determine, and continuing thereafter until terminated in accordance with
Section 19 hereof; provided, however, that the first Offering Period shall be
the period of approximately seven (7) months,

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commencing with the first Trading Day on or after the date on which the
Company's registration statement on Form S-1 is declared effective by the
Securities and Exchange Commission and terminating on the last Trading Day in
the Period ending November 15. The Board shall have the power to change the
duration of Offering Periods (including the commencement dates thereof) with
respect to future offerings without shareholder approval if such change is
announced at least five (5) days prior to the scheduled beginning of the first
Offering Period to be affected thereafter.

         5.       Participation.

                  (a)      An eligible Employee may become a participant in the
Plan by completing a subscription agreement authorizing payroll deductions in
the form of Exhibit A to this Plan and filing it with the Company's payroll
office prior to the applicable Enrollment Date.

                  (b)      Payroll deductions for a participant shall commence
on the first payroll following the Enrollment Date and shall end on the last
payroll in the Offering Period to which such authorization is applicable, unless
sooner terminated by the participant as provided in Section 10 hereof.

         6.       Payroll Deductions.

                  (a)      At the time a participant files his or her
subscription agreement, he or she shall elect to have payroll deductions made on
each pay day during the Offering Period in an amount not exceeding fifteen
percent (15%) of the Compensation which he or she receives on each pay day
during the Offering Period; provided, however, that with respect to the first
Offering Period under the Plan a participant may elect to deduct an amount not
to exceed twenty percent (20%) of the Compensation such participant receives on
each pay day during the first Offering Period.

                  (b)      All payroll deductions made for a participant shall
be credited to his or her account under the Plan and shall be withheld in whole
percentages only. A participant may not make any additional payments in to such
account.

                  (c)      A participant may discontinue his or her
participation in the Plan as provided in Section 10 hereof, or may increase or
decrease the rate of his or her payroll deductions during the Offering Period by
completing or filing with the Company a new subscription agreement authorizing a
change in payroll deduction rate. The Board may, in its discretion, limit the
number of participation rate changes during any Offering Period. The change in
rate shall be effective with the first full payroll period following five (5)
business days after the Company's receipt of the new subscription agreement
unless the Company elects to process a given change in participation more
quickly. A participant's subscription agreement shall remain in effect for
successive Offering Periods unless terminated as provided in Section 10 hereof.

                  (d)      Notwithstanding the foregoing to the extent necessary
to comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a
participant's payroll deductions may be decreased to zero percent (0%) at such
time during any Offering Period which is scheduled to end ,during the current
calendar year (the "Current Offering Period") that the aggregate of all payroll
deductions which were previously used to purchase stock under the Plan in a
prior Offering Period which ended during that calendar year plus all payroll
deductions accumulated with respect to the Current Offering Period equal
$21,250. Payroll deductions shall recommence at the rate provided in such
participant's subscription agreement at the beginning of the first Offering
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10 hereof.

                  (e)      At the time the option is exercised, in whole or in
part, or at the time some or all of the Company's Common Stock issued under the
Plan is disposed of, the participant must make adequate provision for the
Company's federal. state, or other tax withholding obligations, if any, which
arise upon the exercise of the option or the disposition of the Common Stock. At
any time, the Company may, but shall not be obligated to, withhold from the
participant's compensation the amount necessary for the Company to meet
applicable withholding obligations, including any withholding required to make
available to the Company any tax deductions or benefits attributable to sale or
early disposition of Common Stock by the Employee.

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         7.       Grant of Option. On the Enrollment Date of each Offering
Period, each eligible Employee participating in such Offering Period shall be
granted an option to purchase on the Exercise Date of such Offering Period (at
the applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during each Offering Period more than a
number of shares determined by dividing $12,500 by the Fair Market Value of a
share of the Company's Common Stock on the Enrollment Date, and provided further
that such purchase shall be subject to the limitations set forth in Sections
3(b) and 12 hereof. Notwithstanding anything to the contrary in this paragraph,
with respect to the first Offering Period under the Plan, an Employee shall not
be permitted to purchase more than the number of shares determined by dividing
$25,000 by the Fair Market Value of a share of the Company's Common Stock on the
Enrollment Date, except that such purchase shall be subject to the limitations
set forth in Sections 3(b) and 12 hereof Exercise of the option shall occur as
provided in Section 8 hereof, unless the participant has withdrawn pursuant to
Section 10 hereof. The Option shall expire on the last day of the Offering
Period.

         8.       Exercise of Option. Unless a participant withdraws from the
Plan as provided in Section 10 hereof his or her option for the purchase of
shares shall be exercised automatically on the Exercise Date, and the maximum
number of full shares subject to option shall be purchased for such participant
at the applicable Purchase Price with the accumulated payroll deductions in his
or her account. No fractional shares shall be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Offering Period, subject to earlier withdrawal by the participant as provided in
Section 10 hereof My other monies left over in a participant's account after the
Exercise Date shall be returned to the participant. During a participant's
lifetime, a participant's option to purchase shares hereunder is exercisable
only by him or her.

         9.       Delivery. As promptly as practicable after each Exercise Date
on which a purchase of shares occurs, the Company shall arrange the delivery to
each participant, as appropriate, of a Certificate representing the shares
purchased upon exercise of his or her option.

         10.      Withdrawal; Termination of Employment.

                  (a)      A participant may withdraw all but not less than all
the payroll deductions credited to his or her account and not yet used to
exercise his or her option under the Plan at any time by giving written notice
to the Company in the form of Exhibit B to this Plan. All of the participant's
payroll deductions credited to his or her account shall be paid to such
participant promptly after receipt of notice of withdrawal and such
participant's option for the Offering Period shall be automatically terminated,
and no further payroll deductions for the purchase of shares shall be made for
such Offering Period. If a participant withdraws from an Offering Period,
payroll deductions shall not resume at the beginning of the succeeding Offering
Period unless the participant delivers to the Company a new subscription
agreement.

                  (b)      Upon a participant's ceasing to be an Employee (as
defined in Section 2(g) hereof) for any reason, he or she shall be deemed to
have elected to withdraw from the Plan and the payroll deductions credited to
such participant's account during the Offering Period but not yet used to
exercise the option shall be returned to such participant or, in the case of his
or her death, to the person or persons entitled thereto under Section 14 hereof,
and such participant's option shall be automatically terminated. The preceding
sentence notwithstanding, a participant who receives payment in lieu of notice
of termination of employment shall be treated as continuing to be an Employee
for the participant's customary number of hours per week of employment during
the period in which the participant is subject to such payment in lieu of
notice.

                  (c)      A participant's withdrawal from an Offering Period
shall not have any effect upon his or her eligibility to participate in any
similar plan which may hereafter be adopted by the Company or in succeeding
Offering Periods which commence after the termination of the Offering Period
from which the participant withdraws.

         11.      Interest. No interest shall accrue on the payroll deductions
of a participant in the Plan.

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         12.      Stock.

                  (a)      The maximum number of shares of the Company's Common
Stock which shall be made available for sale under the Plan shall be 1,000,000
shares, subject to adjustment upon changes in capitalization of the Company as
provided in Section 18 hereof. If, on a given Exercise Date, the number of
shares with respect to which options are to be exercised exceeds the lesser of
(i) 62,500 shares or (ii) the number of shares then available under the Plan,
the Company shall make a pro rata allocation of the shares up to the lesser of
(i) or (ii) in as uniform a manner as shall be practicable and as it shall
determine to be equitable.

                  (b)      The participant shall have no interest or voting
right in shares covered by his option until such option has been exercised.

                  (c)      Shares to be delivered to a participant under the
Plan shall be registered in the name of the participant or in the name of the
participant and his or her spouse.

         13.      Administration.

                  (a)      Administrative Body. The Plan shall be administered
by the Board or a committee of members of the Board appointed by the Board. The
Board or its committee shall have full arid exclusive discretionary authority to
construe, interpret and apply the terms of the Plan, to determine eligibility
and to adjudicate all disputed claims filed under the Plan. Every finding,
decision and determination made by the Board or its committee shall, to the full
extent permitted by law, be final and binding upon all parties.

                  (b)      Rule 16b-3 Limitations. Notwithstanding the
provisions of Subsection (a) of this Section 13, in the event that Rule 16b-3
promulgated under the Securities Exchange Act of 1034, as amended (the "Exchange
Act"), or any successor provision ("Rule 16b-3") provides specific requirements
for the administrators of plans of this type, the Plan shall be administered
only by such a body and in such a manner as shall comply with the applicable
requirements of Rule 16b-3. Unless permitted by Rule 16b-3, no discretion
concerning decisions regarding the Plan shall be afforded to any committee or
person that is not "disinterested" as that term is used in Rule 16b-3.

         14.      Designation of Beneficiary.

                  (a)      A participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
participant's account under the Plan in the event of such participant's death
subsequent to an Exercise Date on which the option is exercised but prior to
delivery to such participant of such shares and cash. In addition, a participant
may file a written designation of a beneficiary who is to receive any cash from
the participant's account under the Plan in the event of such participant's
death prior to exercise of the option. If a participant is married and the
designated beneficiary is not the spouse, spousal consent shall be required for
such designation to be effective.

                  (b)      Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.

         15.      Transferability. Neither payroll deductions credited to a
participants account nor arty rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 14 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.

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         16.      Use of Funds. All payroll deductions received or held by the
Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.

         17.      Reports. Individual accounts shall be maintained for each
participant in the Plan. Statements of account shall be given to participating
Employees at least annually, which statements shall set forth the amounts of
payroll deductions, the Purchase Price, the number of shares purchased and the
remaining cash balance, if any.

         18.      Adjustments Upon Changes in Capitalization, Dissolution,
Liquidation, Merger or Asset Sale.

                  (a)      Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the Reserves, as well as the price
per share and the number of shares of Common Stock covered by each option under
the Plan which has not yet been exercised, shall be proportionately adjusted for
any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Common Stock, or any other increase or decrease in
the number of shares of Common Stock effected without receipt of consideration
by the Company; provided, however, that conversion of any convertible securities
of the Company shall not be deemed to have been "effected without receipt of
consideration". Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an option.

                  (b)      Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Offering Period shall
terminate immediately prior to the consummation of such proposed action, unless
otherwise provided by the Board.

                  (c)      Merger or Asset Sale. In the event of a proposed sale
of all or substantially all of the assets of the Company, or the merger of the
Company with or into another corporation, the Offering Period then in progress
shall be shortened by setting a new Exercise Date (the "New Exercise Date"). The
New Exercise Date shall be before the date of the Company's proposed sale or
merger. The Board shall notify each participant in writing, at least ten (10)
business days prior to the New Exercise Date, that the Exercise Date for the
participant's option has been changed to the New Exercise Date and that the
participant's option shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 10 hereof.

         19.      Amendment or Termination.

                  (a)      The Board of Directors of the Company may at any time
and for any reason terminate or amend the Plan. Except as provided in Section 18
hereof no such termination can affect options previously granted, provided that
an Offering Period may be terminated by the Board of Directors on any Exercise
Date if the Board determines that the termination of the Plan is in the best
interests of the Company and its shareholders, except as provided in Section 18
hereof, no amendment may make any change in any option theretofore granted which
adversely affects the rights of any participant. To the extent necessary to
comply with Rule 16b-3 or under Section 423) of the Code (or any successor rule
or provision or any other applicable law or regulation), the Company shall
obtain shareholder approval in such a manner and to such a degree as required.

                  (b)      Without shareholder consent and without regard to
whether any participant rights may be considered to have been "adversely
affected," the Board (or its committee) shall be entitled to change the Offering
Periods, limit the frequency and/or number of changes in the amount withheld
during an Offering Period, establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars, permit payroll withholding in
excess of the amount designated by a participant in order to adjust for delays
or mistakes in the Company's processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or accounting
and crediting procedures to ensure that amounts applied toward the purchase of
Common Stock for each participant properly correspond with amounts withheld from
the participant's Compensation, and establish such

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other limitations or procedures as the Board (or its committee) determines in
its sole discretion advisable which are consistent with the Plan.

         20.      Notice. All notices or other communications by a participant
to the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.

         21.      Conditions Upon Issuance of Shares. Shares shall not be issued
with respect to an option unless the exercise of such option and the issuance
and delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
off any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.

         As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.

         22.      Term of Plan. The Plan shall become effective upon the earlier
to occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 19 hereof.

                                       7<PAGE>
                                                                    Exhibit 10.3

                               ARTISTDIRECT, INC.
                         NOTICE OF GRANT OF STOCK OPTION

         Pursuant to Section 3(b) of the Consulting Agreement dated January 1,
2004 between Keith Yokomoto and ARTISTdirect, Inc. (the "Corporation"), notice
is hereby given of the following option grant (the "Option") to purchase shares
of the Common Stock of the Corporation:

         Optionee:  Keith Yokomoto

         Grant Date:  January 8, 2004

         Vesting Commencement Date:  January 8, 2004

         Exercise Price:  $0.50 per share

         Number of Option Shares:  10,000 shares

         Expiration Date:  January 8, 2011

         Type of Option:   _____   Incentive Stock Option
                             X     Non-Statutory Stock Option

         Date Exercisable:  Immediately Exercisable.

         Vesting Schedule: All of the shares underlying the Option are
immediately exercisable and none are subject to repurchase by the Corporation.

         Optionee and the Corporation hereby agree to be bound by all the terms
and conditions of the Option as set forth in the Stock Option Agreement and
Stock Purchase Agreement attached hereto as Exhibits A and B, respectively.

         All capitalized terms in this Notice shall have the meaning assigned to
them in this Notice or in the attached Stock Option Agreement or Stock Purchase
Agreement.

DATED:  January 5, 2005                     ARTISTDIRECT, INC.

                                            By:  /s/ Robert Weingarten
                                                -------------------------------
                                            Name:  Robert Weingarten
                                            Title: Chief Financial Officer

                                            By:  /s/ Keith Yokomoto
                                                 ------------------------------
                                            Optionee: Keith Yokomoto

                                            Address:
                                            1746 Havemeyer Lane
                                            Redondo Beach, California  90278

<PAGE>

                                    EXHIBIT A

                               ARTISTDIRECT, INC.
                      NON-STATUTORY STOCK OPTION AGREEMENT

                                    RECITALS

         A. The Board of the Corporation has approved a stock option grant to
Optionee in conjunction with the one-year Consulting Agreement between the
Corporation and Keith Yokomoto dated January 1, 2004.

         B. The option evidenced by this Agreement (the "Option") is granted to
Optionee for services in his capacity as a consultant.

         C. The Option granted to Optionee is in consideration of services
rendered to the Corporation and is not for any capital-raising purposes or in
connection with any capital-raising activities.

         D. The Option is intended to be a Non-Statutory Option which does NOT
satisfy the requirements of Section 422 of the Code.

         E. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.

         NOW, THEREFORE, it is hereby agreed as follows:

         1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as of
the Grant Date, an Option to purchase up to the number of Option Shares
specified in the Grant Notice attached hereto. The Option Shares shall be
purchasable at any time or from time to time during the Option term specified in
Paragraph 2 at the Exercise Price.

         2. OPTION TERM. The Option shall have a term of five (5) years measured
from the Grant Date and shall accordingly expire at the close of business on the
Expiration Date.

         3. LIMITED TRANSFERABILITY. The Option shall be neither transferable
nor assignable by Optionee other than by will or by the laws of descent and
distribution following Optionee's death and may be exercised, during Optionee's
lifetime, only by Optionee or as otherwise set forth herein. However, the Option
may, in connection with the Optionee's estate plan, be assigned in whole or in
part during Optionee's lifetime to one or more members of the Optionee's
immediate family or to a trust established for the exclusive benefit of one or
more such family members. The assigned portion shall be exercisable only by the
person or persons who acquire a proprietary interest in the Option pursuant to
such assignment or as set forth herein. The terms applicable to the assigned
portion shall be the same as those in effect for the Option immediately prior to
such assignment and shall be set forth in such documents issued to the assignee
as the Board may deem appropriate.

<PAGE>

         4. DATES OF EXERCISE. The Option shall be immediately exercisable for
all of the Option Shares, and shall remain exercisable for all of the Option
Shares as to which it has not been exercised until the Expiration Date.

         5. RESERVED

         6. RESERVED

         7. ADJUSTMENT IN OPTION SHARES. 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, in order to reflect such change and thereby preclude a dilution
or enlargement of benefits hereunder, appropriate adjustments shall be made to
(i) the number and/or class of securities subject to the Option and (ii) the
Exercise Price, but no change shall be made in the aggregate Exercise Price.

         8. STOCKHOLDER RIGHTS. The holder of the Option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the Option, paid the Exercise Price and become a holder of record
of the purchased shares.

         9. MANNER OF EXERCISING OPTION.

         (a) In order to exercise the Option with respect to all or any part of
the Option Shares for which the Option is at the time exercisable, Optionee (or
any other person or persons exercising the Option) must take the following
actions:

            (i) Execute and deliver to the Corporation a Notice of Exercise for
the number of Option Shares for which the Option is exercised.

            (ii) Pay the aggregate Exercise Price for the purchased shares in
one or more of the following forms:

               (A) cash or certified check made payable to the Corporation;

               (B) shares of Common Stock held by Optionee (or any other person
                   or persons exercising the Option) for the requisite period
                   necessary to avoid a charge to the Corporation's earnings for
                   financial reporting purposes and valued at Fair Market Value
                   on the Exercise Date; or

               (C) through a special sale and remittance procedure pursuant to
                   which optionee (or any other person or persons exercising the
                   Option) shall concurrently provide irrevocable instructions
                   (a) to a brokerage firm, not arranged by and not having any
                   pre-existing business relationship with the Corporation, to
                   effect the immediate sale of all or some of the purchased
                   shares and remit to the Corporation, out of the sale proceeds
                   available on the settlement date, not later than three (3)
                   days after the Exercise Date,

<PAGE>

                   sufficient funds to cover the aggregate Exercise Price
                   payable for the purchased shares plus all applicable federal,
                   state and local income and employment taxes required to be
                   withheld by the Corporation by reason of such exercise and
                   (b) to the Corporation to deliver the certificates for the
                   purchased shares directly to such brokerage firm in order to
                   complete the sale.

         Except to the extent the sale and remittance procedure is utilized in
connection with the Option exercise, payment of the Exercise Price must
accompany the Notice of Exercise.

            (iii) Furnish to the Corporation appropriate documentation that the
person or persons exercising the Option (if other than Optionee) have the right
to exercise the Option.

            (iv) Execute and deliver to the Corporation such written
representations as may be requested by the Corporation in order for it to comply
with the applicable requirements of federal and state securities laws.

            (v) Make appropriate arrangements with the Corporation (or
Subsidiary retaining Optionee) for the satisfaction of all federal, state and
local income and employment tax withholding requirements as may be applicable to
the Option exercise.

         (b) As soon as practical after the Exercise Date, the Corporation shall
issue to or on behalf of Optionee (or any other person or persons exercising the
Option) a certificate for the purchased Option Shares.

         (c) In no event may the Option be exercised for any fractional shares.

         10. RESERVED

         11. COMPLIANCE WITH LAWS AND REGULATIONS.

         (a) The exercise of the Option and the issuance of the Option Shares
upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange (or the Nasdaq Stock Market or
other national market, if applicable, or the Over-The-Counter Bulletin Board) on
which the Common Stock may be listed for trading at the time of such exercise
and issuance. The Corporation and Optionee shall use reasonable efforts to
comply with all such requirements of law and applicable regulations.

         (b) The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to the Option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such
approvals.

<PAGE>

         12. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
Paragraph 3, the provisions of this Agreement shall inure to the benefit of, and
be binding upon, the Corporation and its successors and assigns and Optionee,
Optionee's assigns and the legal representatives, heirs and legatees of
Optionee's estate.

         13. GOVERNING LAW. The interpretation, performance and enforcement of
this Agreement shall be governed by the laws of the State of California without
resort to its conflict-of-laws rules.

         14. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.

<PAGE>

                                    EXHIBIT 1

                               NOTICE OF EXERCISE

         I hereby notify ARTISTdirect, Inc. (the "Corporation") that I elect to
purchase ______________ shares of the Corporation's Common Stock (the "Purchased
Shares") at the option exercise price of $_____________________________ per
share (the "Exercise Price") pursuant to that certain option (the "Option")
granted to me on ______________________________, 20_____.

         Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure or cashless exercise procedure specified in my agreement to
effect payment of the Exercise Price.

____________________, 20_____
Date

                                    ------------------------------------------
                                    Optionee

                                    Address:

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

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

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

Print name in exact manner it is to
appear on the stock certificate: ______________________________________

Address to which certificate is to be
sent, if different from address above: ________________________________

Social Security Number:  _______________________

<PAGE>

                                    APPENDIX

         The following definitions shall be in effect under the Agreement:

         A. AGREEMENT shall mean this Stock Option Agreement.

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

         C. CAUSE shall mean Optionee is terminated because Optionee shall have
(i) been convicted of, or pleaded nolo contendere to, any felony or lesser crime
involving fraud, embezzlement or misappropriation of the property of the
Corporation or any of its Subsidiaries; (ii) engaged in gross negligence or
willful misconduct in the performance of Optionee's duties hereunder that has
resulted in material injury to the Corporation; (iii) materially and willfully
breached any material provision hereof; or (iv) misappropriated for his own
purpose and benefit any material property of Corporation or any Subsidiary or
misappropriated for his own purpose and benefit, in violation of his fiduciary
obligation to the Corporation, any material opportunity of the Corporation or
any Subsidiary. Notwithstanding anything to the contrary contained herein, none
of the events or circumstances described in clauses (ii), (iii) or (iv) above
shall constitute "Cause" for purposes of this Agreement unless the Corporation
gives Optionee written notice delineating the claimed event or circumstance and
setting forth the Corporation's intention to terminate Optionee's employment if
such claimed event or circumstance is not capable of remedy or is not duly
remedied within thirty (30) days following such notice, if capable of remedy,
and Optionee fails to remedy such event or circumstance within such thirty
(30)-day period.

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

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

         F. CORPORATE TRANSACTION shall mean any of the following transactions
effecting a change in control or ownership of the Corporation:

            (i) a stockholder-approved merger or consolidation in which the
Corporation is merged into or consolidated with any other corporation or entity
and immediately following consummation of the transaction the persons who held
the Corporation's capital stock immediately prior to such transaction hold less
than an aggregate of fifty percent (50%) of the total combined voting power of
the surviving entity's outstanding securities, or

            (ii) a stockholder-approved sale, transfer or other disposition of
all or substantially all of the Corporation's assets, or

            (iii) the acquisition, directly or indirectly, by any 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
Securities Exchange Act of 1934, as amended) 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.

<PAGE>

         G. CORPORATION shall mean ARTISTdirect, Inc., a Delaware corporation.

         H. CONSULTANT shall mean the Optionee in his capacity as a consultant
of the Corporation (or any Subsidiary), subject to the control and direction of
the Corporation entity as to both the work to be performed and the manner and
method of performance.

         I. EXERCISE DATE shall mean the date on which the Option shall have
been exercised in accordance with Paragraph 9 of the Agreement.

         J. EXERCISE PRICE shall mean the exercise price per share as specified
in the Grant Notice.

         K. EXPIRATION DATE shall mean the date on which the Option expires as
specified in the Grant Notice.

         L. FAIR MARKET VALUE per share of Common Stock on any relevant date,
for purposes of Paragraph 9 only, shall be determined in accordance with the
following provisions:

            (i) If the Common Stock is at the time traded on the Nasdaq National
or SmallCap Markets, then the Fair Market Value shall be the average of the high
and low selling prices per share of Common Stock on the date in question, as
such prices are reported by the National Association of Securities Dealers on
the Nasdaq National or SmallCap Markets (or, if not listed on such market, any
other national market) and published in The Wall Street Journal. If there are no
selling prices quoted for the Common Stock on the date in question, then the
Fair Market Value shall be the average of the high and low selling prices on the
last preceding date for which such quotations exist.

            (ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the average high and low selling
prices per share of Common Stock on the date in question on the Stock Exchange
determined by the Compensation Committee to be the primary market for the Common
Stock, as such prices are officially quoted in the composite tape of
transactions on such exchange and published in The Wall Street Journal. If there
are no selling prices quoted for the Common Stock on the date in question, then
the Fair Market Value shall be the average of the high and low selling prices on
the last preceding date for which such quotations exist.

            (iii) If the Common Stock is at the time traded on the
over-the-counter market, then the Fair Market Value shall be the average of the
closing bid prices over the 30-day period prior to the date in question, as such
prices are reported on the Over-The-Counter Bulletin Board.

            (iv) If the Common Stock is not at the time traded on the
over-the-counter market, a Stock Exchange or the Nasdaq National or SmallCap
Markets, then the Fair Market Value shall be as determined in good faith by the
Corporation's Board of Directors.

         M. RESERVED
<PAGE>

         N. GRANT DATE shall mean the date of grant of the Option as specified
in the Grant Notice.

         O. GRANT NOTICE shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the Option evidenced hereby.

         P. INVOLUNTARY TERMINATION shall mean the termination of Optionee's
Service by reason of Optionee's involuntary dismissal or discharge by the
Corporation for reasons other than (X) for Cause or (Y) by reason of death or
Permanent Disability.

         Q. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.

         R. NOTICE OF EXERCISE shall mean the written notice of exercise in the
form attached hereto as Exhibit 1.

         S. OPTION SHARES shall mean the number of shares of Common Stock
subject to the Option as specified in the Grant Notice.

         T. OPTIONEE shall mean the person to whom the Option is granted as
specified in the Grant Notice.

         U. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

         V. PERMANENT DISABILITY shall mean the inability of Optionee to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or has lasted
or can be expected to last for a continuous period of twelve (12) months or
more.

         W. SERVICE shall mean the Optionee's performance of services for the
Corporation (or any Subsidiary) in the capacity of an independent consultant.

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

         Y. SUBSIDIARY shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.

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