Exhibit 4.1
WAIVER
TO CONVERTIBLE SUBORDINATED
NOTES
THIS WAIVER (“ Waiver
”) is made and entered into as of this 7th day of November,
2006, by and among ARTISTdirect, Inc., a Delaware corporation (the
“ Company ”), and the undersigned Holders.
Capitalized terms used herein and undefined shall have the meanings
set forth in the Subordinated Notes (defined in the Recitals
below).
RECITALS:
WHEREAS, reference is made to those
certain Convertible Subordinated Notes originally issued by the
Company on July 28, 2005, as amended, pursuant to the terms of a
Securities Purchase Agreement dated as of July 28, 2005, as
amended, by and among the Company and the Holders (collectively,
the “ Subordinated Notes ”);
WHEREAS, Section 8(f)(v) of the
Subordinated Notes (“ Section 8(f)(v )”) contain
a negative covenant pertaining to the Company’s Consolidated
Fixed Charge Coverage Ratio, to be calculated quarterly;
WHEREAS, pursuant to Section 2 of
the Subordinated Notes, the first cash payment of accrued interest
was not due and payable to the Holders by the Company until
September 30, 2006;
WHEREAS, as a result of the Company
making a cash payment to the Holders for interest that accrued on
the Subordinated Notes for an approximate fourteen (14) month
period ended September 30, 2006 (the “ First Interest
Payment ”), the Company was in default of Section 8(f)(v)
at September 30, 2006; and
WHEREAS, the Holders have agreed to
waive any default by the Company of Section 8(f)(v) that was
triggered at September 30, 2006 as a result of the First Interest
Payment.
NOW, THEREFORE, in consideration of
the foregoing recitals and the mutual agreement herein contained
and for
