Exhibit 10.1


 


AMENDMENT NO. 1


AND WAIVER


TO NOTE AND WARRANT PURCHASE AGREEMENT


 


THIS AMENDMENT NO. 1 AND WAIVER (“Amendment and Waiver”) is made and entered into as of this
7th day of April, 2006, by and among ARTISTdirect, Inc., a Delaware corporation
(the “Company”), and the undersigned Purchasers.
Capitalized terms used herein and undefined shall have the meanings set forth
in that certain Agreement (defined in the Recitals below).


 


RECITALS:


 


WHEREAS, reference is made to that certain Note and
Warrant Purchase Agreement dated as of July 28, 2005 (the “Agreement”),
by and among the Company and the Purchasers;


 


WHEREAS, the parties wish to amend Sections 7(h)(i),
7(h)(iii), 7(h)(iv) and 7(h)(v) and the definition of “Excess Cash Flow”
contained in the Agreement;


 


WHEREAS, Section 13(e) of the Agreement permits any
provision of the Agreement to be amended upon the written consent of the holder
or holders representing at least a majority of the principal amount of the
Notes outstanding;


 


WHEREAS, pursuant to the terms of the Agreement, any
amendment of a provision of the Agreement by the holder or holders representing
at least a majority of the principal amount of the Notes outstanding shall be
binding on all of the other Purchasers; and


 


WHEREAS, the undersigned Purchasers hold one hundred
percent (100%) of the principal amount of the Notes outstanding.


 


NOW, THEREFORE, in consideration of the foregoing recitals
and the mutual agreements herein contained and for other good and valuable
consideration, the parties hereto agree as follows:


 


1.             AMENDMENT.


 


(a)           Section 7(h)(i)
of the Agreement shall be amended and restated in its entirety as follows:


 


“Minimum Working Capital. The Company will not permit its
Consolidated Working Capital, calculated as of the last day of any fiscal
quarter ending after the Closing Date, to be less than $750,000. For purposes
of this Section 7(h)(i) only, the calculation of Consolidated Working Capital
shall exclude any warrant liability or change therein and any effect on the
financial statements of the Company resulting from or otherwise related to (i)
the Omnibus Amendment dated as of the date hereof involving the Warrants, (ii)
the repricing of the warrants on the date hereof that were issued by the
Company on July 28, 2005 pursuant to the Securities Purchase Agreement and to
Libra FE, LP and (iii) any related amendment to or waiver dated as of the date
hereof involving the Agreement, the Securities Purchase Agreement, any
transaction document related thereto, or the registration rights agreement with
Libra FE, LP.”


 


(b)           Section 7(h)(iii)
of the Agreement shall be amended and restated in its entirety as follows:


 


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“Minimum Leverage Ratio. The Company will not permit its
Consolidated Leverage Ratio, calculated as of the end of any fiscal quarter
ending after the Closing Date, to exceed (x) 3.00 for fiscal quarters ending on
or before December 31, 2005, (y) 2.75 for fiscal quarters ending on or after
March 31, 2006, and on or before December 31, 2006, or (z) 2.50 for fiscal
quarters ending on or after March 31, 2007.  For purposes of this Section
7(h)(iii) only, the calculation of Consolidated Leverage Ratio shall exclude
any warrant liability or change therein and any effect on the financial
statements of the Company resulting from or otherwise related to (i) the
Omnibus Amendment dated as of the date hereof involving the Warrants, (ii) the
repricing of the warrants on the date hereof that were issued by the Company on
July 28, 2005 pursuant to the Securities Purchase Agreement and to Libra FE, LP
and (iii) any related amendment to or waiver dated as of the date hereof
involving the Agreement, the Securities Purchase Agreement, any transaction
document related thereto, or the registration rights agreement with Libra FE,
LP.”


 


(c)           Section 7(h)(iv) of the Agreement shall be
amended and restated in its entirety as follows:


 


“Minimum EBITDA. The Company will not permit its Consolidated
EBITDA for any fiscal quarter (calculated for the Test Period ending on the
last day of such fiscal quarter; provided that for the Test Period ending on
September 30, 2005, Consolidated EBITDA shall be (x) Consolidated EBITDA for
the three-fiscal-quarter period ending on September 30, 2005 times (y) 4/3) to
be less than (x) $5,000,000 for fiscal quarters ending on or before December
31, 2005, (y) $4,500,000 for fiscal quarters ending on or after March 31, 2006,
and on or before December 31, 2006, or (z) $4,000,000 for fiscal quarters
ending on or after March 31, 2007.  For purposes of this Section 7(h)(iv)
only, the calculation of Consolidated EBITDA shall exclude any warrant
liability or change therein and any effect on the financial statements of the
Company resulting from or otherwise related to (i) the Omnibus Amendment dated
as of the date hereof involving the Warrants, (ii) the repricing of the
warrants on the date hereof that were issued by the Company on July 28, 2005
pursuant to the Securities Purchase Agreement and to Libra FE, LP and (iii) any
related amendment to or waiver dated as of the date hereof involving the
Agreement, the Securities Purchase Agreement, any transaction document related
thereto, or the registration rights agreement with Libra FE, LP.”


 


(d)           Section 7(h)(v)
of the Agreement shall be amended and restated in its entirety as follows:


 


“Minimum Fixed Charge Coverage Ratio. The Company will not
permit its Consolidated Fixed Charge Coverage Ratio for any fiscal quarter to
be less than (x) 1.20 for fiscal quarters ending on or before December 31,
2005, or (y) 1.25 for fiscal quarters ending on or after March 31, 2006. 
For purposes of this Section 7(h)(iv) only, the calculation of Consolidated
Fixed Charge Coverage Ratio shall exclude any warrant liability or change
therein and any effect on the financial statements of the Company resulting
from or otherwise related to (i) the Omnibus Amendment dated as of the date
hereof involving the Warrants, (ii) the repricing of the warrants on the date
hereof that were issued by the Company on July 28, 2005 pursuant to the
Securities Purchase Agreement and to Libra FE, LP and (iii) any related amendment
to or waiver dated as of the date hereof involving the Agreement, the
Securities Purchase Agreement, any transaction document related thereto, or the
registration rights agreement with Libra FE, LP.”


 


(e)           The definition of “Excess Cash Flow” shall be
amended and restated in its entirely as follows:


 


“Excess Cash Flow” means, for any
period, (A) the Consolidated EBITDA
(excluding any warrant liability or change therein and any effect on the
financial statements of the Company


 


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resulting
from or otherwise related to (i) the Omnibus Amendment dated as of the date
hereof involving the Warrants, (ii) the repricing of the warrants on the date
hereof that were issued by the Company on July 28, 2005 pursuant to the
Securities Purchase Agreement and to Libra FE, LP and (iii) any related amendment
to or waiver dated as of the date hereof involving the Agreement, the Securities
Purchase Agreement, any transaction document related thereto, or the
registration rights agreement with Libra FE, LP.) for such period minus
(B) the sum (without duplication) of (i) Consolidated Interest Expense
paid in cash during such period, (ii) income tax expense paid by in cash by the
Company and its Subsidiaries during such period, (iii) voluntary principal
payments on the Notes made during such period, and (iv) Consolidated
Capital Expenditures permitted pursuant to Section 7(h) which are paid in cash
during such period (other than Consolidated Capital Expenditures financed (but
only to the extent financed) with equity proceeds, insurance or condemnation
proceeds or Indebtedness proceeds), in each case calculated on a consolidated
basis for the Company and its Subsidiaries in accordance with GAAP.”


 


2.             WAIVER.
The Purchasers agree to forever waive any Event of Default under the
Notes that may have been triggered prior to the date hereof due solely from a
breach of the negative covenants contained in Sections 7(h)(i), 7(h)(iii),
7(h)(iv) or 7(h)(v) of the Agreement resulting from any accrual of warrant
liability.


 


3.             CONFLICTS. Except as
expressly set forth in this Amendment and Waiver, the terms and provisions of
the Agreement shall continue unmodified and in full force and effect. In the
event of any conflict between this Amendment and Waiver and the Agreement, this
Amendment and Waiver shall control.


 


4.             GOVERNING
LAW. This Amendment and Waiver shall be governed and construed under the
laws of the State of New York, and shall be binding on and shall inure to the
benefit of the parties and their respective successors and permitted assigns.


 


5.             COUNTERPARTS. This Amendment
and Waiver may be executed in any number of counterparts, each of which shall
be an original, but all of which together shall constitute one instrument.


 


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IN WITNESS WHEREOF, the parties hereto have executed this Amendment and
Waiver as of the date first set forth above.


 


 


	
  COMPANY:

  
	
   

  
	
  ARTISTdirect, Inc.

  
	
   

  
	
  By:

  	
  /s/ Robert N. Weingarten

  	
   

  
	
   

  
	
  Name:

  	
  Robert N. Weingarten

  	
   

  
	
   

  
	
  Title:

  	
  Chief Financial Officer

  	
   

  
	
   

  
	
   

  
	
  PURCHASERS:

  
	
   

  
	
  JMB Capital Partners, L.P.

  
	
   

  
	
  By:

  	
  /s/ Cyrus Hadidi

  	
   

  
	
   

  
	
  Name:

  	
  Cyrus Hadidi

  	
   

  
	
   

  
	
  Title:

  	
  Partner

  	
   

  
	
   

  
	
   

  
	
  JMG Capital Partners, L.P.

  
	
   

  
	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  
	
  Name:

  	
  [ILLEGIBLE]

  	
   

  
	
   

  
	
  Title:

  	
  [ILLEGIBLE]

  	
   

  
	
   

  
	
   

  
	
  JMG Triton Offshore Fund, Ltd.

  
	
   

  
	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  
	
  Name:

  	
  [ILLEGIBLE]

  	
   

  
	
   

  
	
  Title:

  	
  [ILLEGIBLE]

  	
   

  
	
   

  
	
   

  
	
  CCM Master Qualified Fund, Ltd.

  
	
   

  
	
  By:

  	
  /s/ Clint D. Coghill

  	
   

  
	
   

  
	
  Name:

  	
  Clint D. Coghill

  	
   

  
	
   

  
	
  Title:

  	
  Director

  	
   

  
														



 


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