Exhibit 10.40



 


Exhibit 10.40



ARTISTdirect, Inc.

5670 Wilshire Blvd, Suite 200

Los Angeles, CA 90036


December 23, 2002


Keith Yokomoto

c/o ARTISTdirect, Inc.

5670 Wilshire Boulevard, Suite 200

Los Angeles, California 90036


Re: Amendment to Employment Agreement


Dear Keith:


     The purpose of this letter is to memorialize the terms and conditions of
our prior agreement on August 1, 2002 to defer the payment of your salary as
described below. Reference is made to the employment agreement between you and
us dated July 1, 2001 (the “Agreement”). Capitalized terms used without
definition in this amendment to the Agreement (this “Amendment”) shall have the
meanings ascribed to them in the Agreement.


     This Amendment confirms our prior agreement that, notwithstanding anything
to the contrary contained in Section 5(a) of the Agreement, you and we agreed
on August 1, 2002 to amend the Agreement, effective as of August 1, 2002, to
defer payment of thirty-three percent (33%) (i.e., $166,334) of your future
annual salary as set forth in Section 5(a) of the Agreement for the period of
August 1, 2002 through August 31, 2002; and fifty percent (50%) (i.e.,
$250,000) of your future annual salary for the period of September 1, 2002
through the end of the Term, until our receipt of an aggregate of Twenty
Million Dollars ($20,000,000) or more in new debt or equity financing (the
“Triggering Event”), and, for the avoidance of doubt, excluding any amounts
paid to us as an advance against amounts payable to us under any agreement
regarding the distribution of our products). In addition to the foregoing, if
any of the following other events occur prior to the Triggering Event, you will
also be paid the deferred salary as set forth below; (i) a merger,
consolidation, sale of fifty percent (50%) or more of our voting stock or sale
of all or substantially all of our assets; (ii) your death or your attainment
of age sixty-five (65); or (iii) the termination of your employment with us.
Within thirty (30) days following the Triggering Event or any of the other
events described above, we shall pay you in one lump sum the amount of your
deferred salary, net of applicable tax withholdings. For the avoidance of
doubt, upon the Triggering Event or any of the other events described above,
our agreement to defer your future salary as memorialized herein will
terminate.


     You understand that salary can only be deferred before it is earned and
before the services it relates to have been rendered. You further understand
that the deferred salary will be credited to an account maintained on your
behalf on our books and records, but no actual trust fund or escrow account
will be established. You will at all times have the status of a general
employee creditor of us with respect to the balance credited to your deferred
salary account, and you will have no right to assign, pledge or otherwise
encumber your interest in that account.


 






 


Keith Yokomoto

December 23, 2002

Page 2 of 2


     You hereby confirm that your prior agreement with us on August 1, 2002 to
defer payment of your salary was made voluntarily on your part for the sole
purpose of facilitating our ability to raise additional capital from outside
investors for our operations.


     In signing this Amendment, you agree that you are not relying upon any
statements, representations or promises made by us or our agents, except as
specifically set forth herein. This Amendment, together with the Agreement as
modified herein, sets forth the entire agreement between us and fully
supersedes any and all prior or contemporaneous negotiations, understandings,
agreements or communications, whether written or oral, between us pertaining to
the subject matter hereof.


     As amended hereby, the Agreement remains in full force and effect and is
hereby ratified and affirmed.



	 	 	 	 	 
	 	 	ARTISTdirect, Inc.
	 	 	 	 	 
	   	 	
By:

Its:
	 	/s/ JAMES B. CARROLL


An Authorized Signatory

EVP & CFO



ACCEPTED AND AGREED:


/s/ KEITH YOKOMOTO