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EXHIBIT 10.12
February 17, 1999
Mr. Xxxxx Xxxx
c/o Imusic, Inc.
000 Xxxx Xxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Re: Bonus Agreement
Dear Xxxxx:
Effective as of the date of this letter, you have entered into that
certain Employment Agreement ("Employment Agreement") with Imusic, Inc., a
Washington corporation ("Imusic"), which sets forth the terms and conditions
pursuant to which you will provide your employment services to Imusic and The
Ultimate Band List, LLC, a California limited liability company ("UBL"). In
order to induce you to enter into the Employment Agreement, UBL hereby agrees to
pay cash payments (the "Bonus Payments") in an amount equal to the quotient of
(i) any accrued interest with respect to one or more Secured Promissory Notes
(each, a "Note") executed by you in connection with that certain Contingent Loan
Agreement (the "Loan Agreement") made as of February __, 1999, by and between
you and UBL divided by (ii) one less the sum of (A) your marginal federal income
tax rate (expressed as a decimal) in the tax year of such interest payment plus
(B) your marginal state income tax rate (expressed as a decimal) then in effect,
net of any tax benefit received from the deductibility of such state tax
liability against your federal income tax liability, if any. UBL shall deduct
and withhold all required federal and state income and employment taxes from
each Bonus Payment.
The Bonus Payments shall be made no earlier than ten (10) days from the
due date of the applicable interest payment as provided in each Note. UBL, at
its option, may offset the Bonus Payments against any interest payments due and
payable to UBL or the then current holder under each Note.
Notwithstanding the foregoing, so long as there shall exist an Event of
Default (as such term is defined in the Loan Agreement), UBL shall not be
obligated to make any Bonus
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Mr. Xxxxx Xxxx
February __, 1999
Page 2
Payment, provided, however, UBL's failure to pay any Bonus Payment hereunder
shall not constitute an Event of Default pursuant to Section 7(a)(i) of the Loan
Agreement.
You hereby acknowledge and agree that your employment with Imusic is
governed by the Employment Agreement, and this letter shall not confer upon you
any right to employment or continuance of the performance of services for UBL
or Imusic or any affiliated entity. Accordingly, the provisions of the
Employment Agreement shall remain in full force and effect, unmodified hereby.
If you agree to the foregoing, please counter-execute this letter below and
return the same to the undersigned, whereupon this letter shall be binding upon
you and UBL. No right or obligation referred to herein or created herein shall
be assignable. This letter may be executed in counterparts, each of which shall
be an original and all of which taken together shall constitute one and the same
letter.
Sincerely,
THE ULTIMATE BAND LIST, LLC, a
California limited liability company
By: /s/ Xxxx X. Xxxxxx
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Name:
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Its: Co-Chief Executive Officer
AGREED AND ACCEPTED:
Dated: February __, 1999
/s/ Xxxxx Xxxx
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Xxxxx Xxxx
