Document:

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:

 

1

 

“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

 

2

 

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.

 

3

 

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

  	
   

  
														

 

4Exhibit 10.24

    
      

    

    Exhibit
      10.24

    

    SEPARATION
      AGREEMENT

    

    

    June
      24,
      2005

    

    CONFIDENTIAL

    Mr.
      Patrick T. Hogan

    Executive
      Vice President

    RCN
      Telecom Services, Inc. 

    105
      Carnegie Center

    Princeton,
      NY 08540-6215

    

    Dear
      Pat:

    

    This
      memorandum confirms our understanding regarding your ongoing employment
      relationship with RCN Telecom Services, Inc. and its affiliates (collectively,
      “RCN”), and serves to follow up and memorialize the notice that was provided to
      you on May 12, 2005 (the “Effective Date”).

     

    
      
        	 	
                1.

              	
                As
                  of the Effective Date, you have ceased to serve as the Chief Financial
                  Officer of RCN and shall instead serve as Executive Vice President
                  -
                  Corporate.

              

      

      

      
        	 	
                2.

              	
                From
                  the Effective Date to July 1, 2005, you shall devote your full
                  business
                  time and attention to (A) assisting RCN and its employees to complete
                  and
                  file with the Securities and Exchange Commission RCN’s financial
                  statements for the fiscal quarter ended March 31, 2005 (the “Financial
                  Statements”) and (B) performing such other duties and responsibilities as
                  are reasonably assigned to you from time to time by RCN’s Chief Executive
                  Officer. You shall report to RCN’s Chief Executive Officer in connection
                  with your duties described in (B),
                  above.

              

      

      

      
        	 	
                3.

              	
                You
                  agree that you shall not voluntarily terminate your employment
                  with RCN
                  for any reason before July 1, 2005, unless an earlier end date
                  is agreed
                  to in writing by RCN’s Chief Executive Officer (the “Termination Date”).
                  You agree that your employment with RCN shall automatically terminate
                  on
                  the Termination Date.

              

      

      

      
        	 	
                4.

              	
                In
                  consideration of your promises herein, RCN shall (i) continue to
                  pay you
                  at your current base salary through the Termination Date and (ii)
                  grant
                  you options to acquire 75,000 shares of common stock of RCN Corporation
                  (“Stock”) on the terms and conditions set forth herein (the “Options”).
                  The Options have been authorized by the Board of Directors and
                  have a per
                  share exercise price equal to $18.80. The Options shall fully vest
                  on the
                  90th
                  day following the grant date (regardless of whether you are then
                  employed
                  by RCN) provided you have, within 45 days of the Termination Date,
                  executed and delivered to RCN a full and irrevocable release of
                  claims
                  through the date hereof, substantially in the form of Exhibit A
                  (the
                  “Release”). Vested Options shall remain exercisable until the third
                  anniversary of the grant date. The Options shall be automatically
                  forfeited on the 45th
                  day following the Termination Date if you have not executed and
                  delivered
                  the Release as set forth above. Notwithstanding anything to the
                  contrary
                  contained herein, the Options shall be subject to the terms of
                  the RCN
                  Corporation 2005 Stock Compensation Plan in the form approved by
                  the RCN’s
                  stockholders and its Board of
                  Directors.

              

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      
        	 	
                5.

              	
                Promptly,
                  and in any event within two business days, after your execution
                  and
                  delivery of the Release described in Paragraph 4 above, you shall
                  be paid
                  $393,730, which constitutes the severance benefits specified in
                  Section
                  3(b) of the letter agreement between you and RCN dated December
                  7, 2004
                  (the “2004 Agreement”), it being understood and agreed that you shall not
                  be entitled to any additional duplicative severance benefits under
                  the
                  2004 Agreement and this Separation Agreement; provided however,
                  that (for
                  the avoidance of doubt) RCN shall provide you and your family,
                  at its
                  expense; with health insurance benefits as contemplated by Section
                  3(b) of
                  the 2004 letter.

              

      

      

      
        	 	
                6.

              	
                This
                  letter constitutes the complete agreement between the parties on
                  the
                  matters set forth herein and merges and supersedes all prior discussions,
                  agreements (whether written or oral) and understandings of every
                  kind and
                  nature in respect of the subject matter of his letter. Notwithstanding
                  the
                  foregoing, this letter shall not relieve you of any obligations
                  you may
                  have to RCN under any other agreement, including the 2004
                  Agreement.

              

      

      

      
        	 	
                7.

              	
                This
                  letter may be executed in one or more counterparts, which, together,
                  shall
                  constitute one and the same
                  agreement.

              

      

      

      
        	 	
                8.

              	
                This
                  letter shall be governed by and construed in accordance with the
                  laws of
                  the State of New Jersey, without regard to its conflicts of law
                  rules.

              

      
    

    
      If
        this
        letter sets forth our agreement on the subject matter hereof, please sign
        and
        return to RCN the enclosed copy of this letter, which will then constitute
        our
        agreement on this subject.

      

        
          	
                  RCN
                    TELECOM SERVICES, INC.

                	 	
                  Accepted
                    and Agreed:

                	 
	 	 	 	 	 
	 	 	 	 	 
	
                  By:

                	
                   

                	 	
                   

                	 
	 	
                  Peter
                    D. Aquino

                	 	
                  Patrick
                    T. Hogan

                	 
	 	
                  CEO
                    and President

                	 	 	 

        

      

    

     

    2

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