Exhibit 10.2
PROMISSORY NOTE
|
$800,000.00
|
March 30, 2009
|
FOR VALUE RECEIVED AND INTENDING TO
BE LEGALLY BOUND HEREBY, ARTISTDIRECT INC. and MEDIA DEFENDER, INC.
(together the “Makers”) hereby, jointly and severally,
promise to pay to SAFENET, INC. or its assignee (the
“Holder”) or order, the principal sum of Eight Hundred
Thousand and 00/100 Dollars ($800,000.00) (the “Loan”),
together with interest on the outstanding principal balance hereof
from time to time outstanding from the date hereof until this Note
is paid in full.
1.
Interest Rate
.
(a)
The principal sum outstanding from
time to time hereunder shall bear interest at the rate of six
percent (6%) per annum. Such interest shall be paid as provided in
Section 2 below.
(b)
Both before and after any default,
interest shall be calculated on the basis of a 360-day year but
charged on the basis of the actual number of days elapsed in any
calendar year or part thereof.
2.
Principal and Interest Payments;
Maturity Date .
(a)
Interest shall be paid in arrears
commencing on the first day of July and October, 2009 and
January and March, 2010.
(b)
Makers shall repay the outstanding
principal balance of the Loan, all accrued and unpaid interest
thereon and any other sums then outstanding hereunder on
March 30, 2010 (the “Maturity Date”). All
payments shall be applied first to any fees due to Holder, second
to accrued but unpaid interest and third to principal.
(c)
If any payment of principal or
interest becomes due on a day which is not a business day, such
payment shall be due on the next succeeding business day, and such
extension of time shall be taken into account in calculating the
amount of interest payable under this Note. “Business
day” means any day other than a Saturday or Sunday or other
day on which banks are authorized or required to close under the
laws of the State of New York or under Federal law.
(d)
Amounts repaid or prepaid under the
Loan may not be reborrowed.
(e)
All amounts payable hereunder to
Holder shall be paid in United States Dollars in immediately
available funds to an account designated by Holder.
3.
Prepayments
. Makers may prepay the
principal of this Note in whole or in part. Any such
prepayment shall be accompanied by the payment of all accrued and
unpaid interest hereunder and all other sums which are due and
payable hereunder or otherwise in connection with this Note to the
date of prepayment.
4.
Events of Default
. Each of the following shall
constitute an event of default (each, an “Event of
Default”) hereunder:
(a)
If any payment of any installment of
principal and interest is not paid within three (3) days after
the date such payment is due, except that no grace period shall
apply in respect to payment of interest on the Maturity
Date;
(b)
If the outstanding principal balance
of the Loan, all accrued and unpaid interest there and any other
sums then outstanding hereunder are not paid on the Maturity Date;
or
(c)
If any proceeding under the
Bankruptcy Code or any law of the United States, any state thereof
or any country relating to insolvency, receivership, or debt
adjustment is instituted by either Maker, or if any such proceeding
is instituted against either Maker and is consented to by such
Maker or an order for relief is entered in such proceeding or such
proceeding remains undismissed for sixty (60) days, or if a trustee
or receiver is appointed for any substantial part of a
Maker’s property, or if either Maker makes an assignment for
the benefit of creditors, admits in writing its inability to pay
debts generally as they become due or becomes insolvent.
5.
Default Rate
. Upon the occurrence of an
Event of Default hereunder, the interest rate shall increase
immediately and without notice and thereafter shall be payable at a
rate of ten percent (10%) per annum (the “Default
Rate”), until the Event of Default has been cured, or in the
event the principal of this Note has been accelerated, until this
Note is paid in full, including the period following entry of any
judgment on or relating to this Note. Interest o
