Exhibit 10.1


 


FIRST
AMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT


 


This FIRST AMENDMENT TO NOTE AND WARRANT PURCHASE
AGREEMENT (this “Amendment”) is made and entered into as of December 31,
2008, by and among ARTISTdirect, Inc., a Delaware corporation (the “Company”),
U.S. Bank National Association, a national banking association as collateral
agent for the Initial Purchasers (the “Collateral Agent”), and the
investors listed in the signature page to this Amendment (the “Senior
Lenders”), with reference to the following facts:


 


A.            The
Company entered into a Note and Warrant Purchase Agreement, dated July 28,
2005 (the “Agreement”), pursuant to which the Initial Purchasers
purchased from the Company 11.25% senior secured notes for the aggregate
principal amount of $15,000,000 (the “Notes”) and warrants to purchase
up to an aggregate of 3,250,000 shares of the Company’s common stock at an
exercise price of $2.00 per share (the “Warrants”).


 


B.            CCM
Master Qualified Fund, Ltd., one of the Initial Purchasers, transferred its
equity interest in the Company, including the securities received under the
Transaction Documents, to Trilogy Capital Partners, Inc. (“Trilogy”),
pursuant to a Stock Purchase Agreement, dated October 31, 2008.


 


C.            The
Collateral Agent, Senior Lenders and the Company desire to amend the Agreement
to extinguish all obligations by the Company under the Agreement and
Transaction Documents, as such term is defined in the Agreement, subject to and
conditioned upon (a) the payment to the Senior Lenders of $3,500,000; (b) the
issuance to the Senior Lenders of subordinated notes in the aggregate principal
amount of $1,000,000; (c) the issuance of 9,000,000 shares of the Company’s
Common Stock; and (d) the conversion by the holders thereof of all of the
Convertible Subordinated Notes, issued by the Company on July 28, 2005
(the “Subordinated Notes”).


 


D.            The
Collateral Agent and the Senior Lenders desire to amend the Agreement in
accordance with Section 13(e) thereof.


 


E.             All
defined terms not defined herein shall have the same meanings as set forth in
the Agreement, except as otherwise provided.


 


NOW, THEREFORE, the Company, the Collateral Agent and the Senior
Lenders agree as follows:


 


1.             Extinguishment
of Obligations.  Each Senior Lender
agrees to extinguish all obligations by the Company under the Agreement and
Transaction Documents (the “Senior Debt Restructuring”),
subject to the following conditions, which shall be satisfied by or before January 30,
2009 (the “Effective Date”):


 


(a)           the payment to the Senior Lenders of $3,500,000;


 


(b)          the
issuance to the Senior Lenders of 5-year subordinated notes at the rate of 6%
per annum, in the aggregate principal amount of $1,000,000 (the “New
Subordinated Notes”), substantially in the form of Exhibit A attached hereto;


 

















 


(c)           the issuance of 9,000,000 restricted shares of the Company’s
Common Stock to the Senior Lenders (the “Covered Securities”); and


 


(d)                               the conversion of all of the Subordinated Notes.


 


For avoidance of doubt, upon satisfaction of the conditions
set forth above by or before the Effective Date, all obligations of the Company
under the Agreement, the Notes, the Guaranty, the Security Agreement, the
Pledge Agreement, the Registration Rights Agreement, the Irrevocable Transfer
Agent Instructions, the Warrants, together with any other Transaction Document
entered into by the parties to the Agreement in connection with the
transactions contemplated therein shall be extinguished.


 


2.             Deliveries.  In connection with the Senior Debt
Restructuring, each Senior Lender shall deliver to the Company for cancellation
the Notes and the Warrants by or before the Effective Date, and the Company
shall deliver to the Senior Lenders the deliveries set forth under Subsections
1(a)-(c) above by or before the Effective Date.


 


3.             Trilogy.  In connection with the Senior Debt
Restructuring, Trilogy shall deliver to the Company for cancellation the
Warrant to purchase up to 433,333 shares of Common Stock at an exercise price
of $2.00 per share.


 


4.             Lock
Up.  Each Senior Lender agrees to
not: (1) sell, transfer, assign, pledge or hypothecate the Covered
Securities or (2) subject the Covered Securities to any hedging, short
sale, derivative, put, or call transactions that would result in the effective
economic disposition of the Covered Securities by any person during the period
beginning on the Effective Date and ending on the date that is 12 months after
the Effective Date, unless the Covered Securities are transferred to a
transferee pursuant to a private sale or to an affiliate, provided  that
such transferee or affiliate agrees to be subject to the terms and conditions
of this Section 4.


 


5.             Representations
and Warranties of Senior Lenders. Each Senior Lender represents and
warrants as follows to the Company as of the date hereof and acknowledges and
confirms that the Company are relying on such representations and warranties in
connection with the issuance by the Company of the Covered Securities and the
other transactions contemplated hereby (it being understood that no investigations
made by or on behalf of the Company shall have the effect of waiving,
diminishing the scope of, or otherwise affecting any such representations and
warranties):


 


(a)           Requisite Power
and Authority.  The Senior Lender has
all necessary corporate, limited liability company or other (as the case may
be) power and authority to execute and deliver this Agreement and to carry out
their provisions.  All corporate, limited
liability company or other (as the case may be) action on the Senior Lender’s
part required for the execution and delivery of this Agreement has been
taken.  Upon execution and delivery, this
Agreement will be valid and binding obligations of the Senior Lender,
enforceable in accordance with their respective terms, except (a) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other laws
of general application affecting enforcement of creditors’ rights and (b) as
limited by general principles of equity that restrict the availability of
equitable remedies.


 

















 


(b)           Experience.  Senior Lender is an accredited investor
within the meaning of Regulation D promulgated by the Securities and Exchange
Commission and, by virtue of its experience in evaluating and investing in
private placement transactions of securities in companies similar to the
Company, it is capable of evaluating the merits and risks of his investment in
the Company and has the capacity to protect its own interests.


 


(c)           Investment.  Senior Lender is acquiring the Covered
Securities for investment for its own account, not as a nominee or agent, and
not with the view to, or for resale in connection with, any distribution of any
part thereof, and that the Senior Lender has no present intention of selling,
granting any participation in, or otherwise distributing the same.  By executing this Agreement, the Senior
Lender further represents that it does not presently have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or
grant participations to such person or to any third person, with respect to any
of the Covered Securities.  Senior Lender
understands that the Covered Securities have not been registered under the
Securities Act of 1933, as amended (the “Securities Act of 1933”) or
applicable state and other securities laws by reason of a specific exemption
from the registration provisions of the Securities Act of 1933 and applicable
state and other securities laws, the availability of which depends upon, among
other things, the bona fide nature of the investment intent and the accuracy of
its representations as expressed herein.


 


6.             No Assignment.  Senior Lender will not assign either this Amendment, the Agreement or any of its rights,
interests or obligations hereunder or under the Transaction Documents without
the prior written approval of the Company, and any such assignment by Senior
Lender without the prior written approval of the Company will be deemed invalid
and not binding on the Company.


 


7.             Further
Assurances.  From time to time after
the Effective Date, each party shall, at the request of any other party,
execute and deliver such additional conveyances, transfers and other assurances
as may be reasonably required to effectively carry out the intent of this
Agreement.


 


8.             Effect of Amendment.  Except as amended herein, the Agreement shall
remain in full force and effect.


 


[Signature
pages follow]


 

















 


IN WITNESS WHEREOF, the Company, the Collateral Agent
and the Senior Lenders have accepted and agreed to this Amendment, and have
executed this Amendment as of the day and year first above written.


 


	
  Company:

  	
   

  	
  Collateral Agent:

  
	
   

  	
   

  	
   

  
	
  ARTISTdirect, Inc.

  	
   

  	
  U.S.
  BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Dimitri
  Villard

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Dimitri
  Villard

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  Interim
  CEO 

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
  Senior Lenders:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  JMB
  Capital Partners, L.P.

  	
   

  	
  JMG
  Capital Partners, L.P.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Cyrus
  Hadidi 

  	
   

  	
  By:

  	
  /s/ Jonathan
  Glaser

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Cyrus
  Hadidi 

  	
   

  	
  Name:

  	
  Jonathan
  M. Glaser

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  Managing
  Director

  	
   

  	
  Its:

  	
  Member
  Manager 

  
	
   

  	
   

  	
   

  
	
  CCM
  Master Qualified Fund, Ltd.

  	
   

  	
  JMG
  Triton Offshore Fund, Ltd.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Clint
  D. Coghill

  	
   

  	
  By:

  	
  /s/ Jonathan
  Glaser

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Clint
  D. Coghill

  	
   

  	
  Name:

  	
  Jonathan
  M. Glaser

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  Director

  	
   

  	
  Its:

  	
  Member
  Manager 

  
	
   

  	
   

  	
   

  
	
  Trilogy:  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Trilogy
  Capital Partners, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Robert
  S. Rein

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Robert
  S. Rein

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  Vice
  Chairman 

  	
   

  	
   

  



 

















 


Exhibit A


 


Subordinated
Promissory Note