Exhibit 4.1
AMENDMENT NO. 2
TO
FORBEARANCE AND CONSENT
AGREEMENT
This AMENDMENT No.
2 (the “ Amendment ”) to the FORBEARANCE AND
CONSENT AGREEMENT dated April 17, 2007, as amended pursuant to
AMENDMENT No. 1 dated June 25, 2007 (the “ Agreement
”), is entered into as of November 30, 2007 by and among
ARTISTdirect, Inc., a Delaware corporation and its
subsidiaries and affiliates (collectively, the “
Company ”), U.S. Bank National Association, as
Collateral Agent under the Note and Warrant Purchase Agreement (as
defined below) (in such capacity, “ Collateral Agent
”) and the senior lenders signatories hereto (“
Initial Purchasers ”).
Recitals
A.
Company, Initial Purchasers and Collateral Agent are parties to
that certain Note and Warrant Purchase Agreement, dated as of
July 28, 2005 (the “ Senior Financing Agreement
”), among Company, the investors party thereto, as Initial
Purchasers, and Collateral Agent. The Senior Financing
Agreement, together with the other Transaction Documents (as
defined in the Senior Financing Agreement) as such documents have
been amended from time to time, are collectively referred to herein
as the “ Senior Financing Documents
”.
B.
Company is in default and may trigger additional defaults under
certain provisions of the Senior Financing Documents and such
defaults are expected to continue.
C.
The Existing Senior Defaults constitute “Events of
Default” for purposes hereof that entitle Collateral Agent
and Initial Purchasers to enforce their rights and remedies under
the Senior Financing Documents. According to Schedule I of
the Agreement, one of the Events of Default was a failure of the
Company to maintain an effective registration statement covering
the resale of shares of common stock underlying the various
securities issued by the Company to each holder. This Default
was cured on July 6, 2007, when the Company’s registration
statement was declared effective by the Securities and Exchange
Commission.
D.
Company, Initial Purchasers and the Collateral Agent have
previously entered in the Agreement whereby, subject to the
conditions contained therein, Collateral Agent and Initial
Purchasers agreed to forbear from the exercise of their rights and
remedies relating to the Existing Senior Defaults and any other
additional Events of Default through July 31, 2007 for the purpose
of affording a period of time for Company to obtain funds to pay
the obligations under the Senior Financing Documents or to
restructure its capital structure.
E. &n
