EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement") made as of the 1st day of March 1998
by and between THE SINGING MACHINE COMPANY, INC., a Delaware corporation with
its principal office at 3101 N.W. 25th Avenue, Pompano Beach, Florida 30069 (the
"Company") and Edward Steele, whose residence address is 19653 Oakbrook Court,
Boca Raton, Florida 33434 (the "Executive").
The Company and the Executive hereby agree as follows with respect to
the Executive's relationship with the Company:
1. Relationship; Term. The Company shall retain the Executive and the
Executive shall be retained by the Company, on the terms and conditions
hereinafter set forth, as an Executive for a period (the "Employment Period")
commencing on March 1, 1998 (the "Commencement Date"), and ending on February
28, 2001 (the "Termination Date"), unless terminated sooner pursuant to the
provisions hereof. Such period of employment shall be automatically extended for
one (1) one-year term unless either the Company or the Executive notifies the
other in writing at least sixty (60) days prior to the end of the then current
term that it or he does not intend to renew such employment, in which case such
employment will expire at the end of the then current term. During the entire
term of this Aareement, the Executive shall be the Company's Chief Executive
Officer/President, subject to the direction of the Board of Directors.
2. Efforts on Company's Behalf. The Executive shall devote all of his
time, and his best efforts, skills and attention to the business and affairs of
the Company, shall serve the Company faithfully and competently and shall at all
times act in the Company's best interest. The services to be rendered by
Executive during the term hereof shall be Chief Executive Officer/President,
subject at all times to the direction and control of the Company's Board of
Directors. Nothing herein shall be construed to prevent Executive from investing
in or participating in the management of companies or other entities which do
not compete with the Company or from serving on the board of directors of any
other company.
3. Base Compensation.
(a) The Company shall pay to the Executive, and the Executive agrees
to accept, minimum base compensation of One Hundred Eighty Thousand Dollars and
No/100 Cents ($180,000) per year (the "Base Compensation"), pursuant to the
payroll policies of the Company.
(b) Executive's Base Compensation shall automatically increase over
the prior year's Base Compensation each year during the term hereof by not less
than the greater of:
(i) Five percent (5%); or
1
(ii) An amount calculated by multiplying the prior year's Base
Compensation by a fraction, the numerator of which shall be
the consumer price index ("Consumer Price Index"), as
hereafter defined, for the month of January in the year of
adjustment and the denominator of which shall be the
Consumer Price Index for the month of January in the prior
year. The "Consumer Price Index" shall mean the Consumer
Price Index for All Urban Consumers, U.S. City Average
(1982-84=100) All Items, Bureau of Labor Statistics of the
United States Department of Labor.
4. Bonus Compensation.
(a) Executive shall be entitled to receive a bonus (the "Profit
Bonus") for each fiscal year of the Company ("Fiscal Year") during the
Employment Period based on a percentage of a bonus pool (the "Bonus Pool"). The
Bonus Pool shall be equal to ten percent (10%) of the fiscal year-end profit of
the Company (net income before taxes and interest as listed in the Company's
audited year end financial statements).
(b) Executive's Profit Bonus shall be equal to fifty percent (50%)
of the Bonus Pool unless modified by the Company in its sole and absolute
discretion.
(c) For purposes of this Paragraph 4, PTNI shall be based on the
Company's year end audited financial statements as determined in the course of
the Company's normal audit for the Fiscal Years ending, during the Employment
Period increased by any amounts payable for, or expenses associated with, the
Bonus Pool for any Fiscal Year; provided, however, that in no event shall PTNI
include: (i) income from extraordinary gains as set forth in the Financial
Statements (as hereinafter defined) (except that income from extraordinary gains
shall be applied to offset any extraordinary loss for the same Fiscal Year),
(ii) expenses related to the provision of key man life insurance acquired during
the lives of Executive or other key executive employees. The Company undertakes
to use its best efforts to cause the preparation and completion of audited
financial statements for all Fiscal Years within ninety (90) days of the end of
such Fiscal Year (the "Financial Statements"); provided, however, Executive
shall not have any right to complain or contest any failure by the Company to
complete such audited Financial Statements within such time frame if Executive
is then employed by the Company on substantially the same terms as provided
herein. The determination of PTNI by the Company's independent certified public
accountants shall be conclusive and binding upon the Company and Executive.
(d) The Profit Bonus due Executive, if any, with respect to a
particular Fiscal Year shall be payable in cash within thirty (30) days after
receipt by the Company of the Financial Statements for said Fiscal Year, but in
no event prior to completion of the audit of such Financial Statements. If
Executive's employment is terminated for any reason (including expiration of the
term of this Agreement) prior to the end of any Fiscal Year during the
Employment Period, the Profit Bonus due Executive for such Fiscal Year shall be
for the entire Fiscal Year.
2
(e) In consideration of Executive's services hereunder, the
Executive shall be granted the option to purchase shares of common stock of the
Company in accordance with the terms of a Stock Option Agreement to be executed
between the Company and Employee after the effective date of this Agreement.
5. Benefit Plans. The payments provided in Paragraphs 3 and 4 hereof
shall be in addition to any benefits to which Executive may be, or become,
entitled under any group hospitalization, health, dental care, or sick-leave
plan, life or other insurance or death benefit plan, travel or accident
insurance, auto allowance or auto lease plan, or executive contingent
compensation plan, including, without limitation, capital accumulation and
termination pay programs, restricted or stock purchase plan, stock option plan,
retirement income or pension plan, or other present or future group employee
benefit plan or program of the Company for which key Executives are or shall
become eligible, and Executive shall be eligible to receive during the term
hereof, and during, any subsequent period for which he shall be entitled to
receive payments from the Company under Paragraph 9(e) below, all benefits and
emoluments for which key Executives are eligible under every such plan or
program to the extent permissible under the general terms and provisions of such
plans or programs and in accordance with the provisions thereof. Notwithstanding
the foregoing, during the term hereof the Executive shall at all times be
provided with:
(a) Medical insurance for himself and his spouse;
(b) Disability insurance;
(c) Directors' and Officers' Liability Insurance;
(d) Indemnification by the Company to the fullest extent permitted
by law;
(e) A private executive office commensurate with the office of the
Company's most senior executive;
(f) An automobile allowance of $600 per month, which allowance shall
automatically increase by five percent (5%) over the prior year's base allowance
each year during the term hereof, and reimbursement for all automobile expenses
including, but not limited to, insurance, gasoline, oil and repairs;
(g) A travel allowance of $3,000 per year to allow the Executive's
spouse to accompany Executive on those business trips that are approved by the
Company; and
(h) In the event that the Company purchases insurance on the life of
Executive, Executive shall be entitled to purchase said policy from the Company
in the event of his termination, pursuant to the terms hereof, for an amount
equal to the cash surrender value thereof.
3
6. Business Expenses. The Executive shall be reimbursed for all usual
and customary expenses incurred on behalf of the Company, in accordance with
Company practices and procedures; provided that each such expense is of a nature
qualifying it as a proper deduction on the Federal income tax returns of the
Company, exclusive of any limitation rules as a business expense of the Company
and not as compensation to Executive, and Executive furnishes the Company with
adequate documentary evidence to substantiate such expenses.
7. Vacation. Executive shall be entitled to a paid vacation of four (4)
weeks each year during the term hereof. Any unused vacation time for each year
of the term hereof shall be accrued by Executive if not used during such year
or, at the option of the Executive, the Company shall pay the Executive within
30 days from the end of the Fiscal Year any unused vacation at Executive's
current Base Compensation. Executive shall also be entitled to all paid holidays
made generally available by the Company to its executive officers.
8. Death or Disability.
(a) Notwithstanding anything to the contrary contained in Paragraph
1 above if, during the term hereof, the Executive suffers a disability (as
defined below) the Company shall, subject to the provisions of Paragraph 8(c)
hereof, continue to pay Executive the compensation provided in Paragraphs 3 and
4 hereof during the period of his disability; provided, however, that, in the
event Executive is disabled for a continuous period of ninety (90) consecutive
days or for shorter periods aggregating ninety (90) days in any twelve-month
period that the Employee is incapable of substantially fulfilling the duties set
forth in Section 2 or hereafter assigned to him by the Board of Directors of the
Company because of physical, mental or emotional incapacity resulting from
injury, sickness or disease as determined by an independent physician agreed
upon by both the Company and the Executive, the Company may, at its election,
terminate this Agreement. In the event of such termination, the Company shall
continue to be obligated to pay Executive his compensation earned up to the date
of termination.
(b) As used in this Agreement, the term "disability" shall mean the
substantial inability of Executive to perform his duties under this Agreement as
determined by an independent physician agreed upon by both the Company and the
Executive.
(c) In the event that Executive's employment ceases prior to the end
of a calendar month as a result of his death or disability or in the event of a
termination described in Paragraph 11 below, the Company shall pay Executive or
his legal representatives, as the case may be, in addition to any other amounts
payable by the Company hereunder, a lump cash sum which shall in no event be
less than the salary plus any bonus to which Executive would have been entitled,
had he continued to be affiliated with the Company until the end of the calendar
month during which his affiliation terminates.
4
9. Change of Control.
(a) For the purposes of this Agreement, a "Change of Control" shall
be deemed to have taken place if: (i) any person, including a "group" as defined
in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, becomes
the owner or beneficial owner of Company securities, after the date of this
Agreement, having 30% or more of the combined voting power of the then
outstanding securities of the Company that may be case for the election of
directors of the Company (other than as a result of an issuance of securities
initiated by the Company, or open market purchases approved by the Board, as
long as the majority of the Board approving the purchases is the majority at the
time the purchases are made), or (ii) the persons who were directors of the
Company before such transactions shall cease to constitute a majority of the
Board of the Company, or any successor to the Company, as the direct or indirect
result of, or in connection with, any cash tender or exchange offer, merger or
other business combination, sale of assets or contested election, or any
combination of the foregoing transactions.
(b) The Company and Executive hereby agree that, if Executive is
affiliated with the Company on the date on which a Change of Control occurs (the
"Change of Control Date") the Company (or, if Executive is affiliated with a
subsidiary, the subsidiary) will continue to retain Executive and Executive will
remain affiliated with the Company (or subsidiary), for the period commencing on
the Change of Control Date and ending on the first anniversary of such date to
exercise such authority and perform such executive duties as are commensurate
with the authority being exercised and duties being performed by the Executive
immediately prior to the Change of Control Date.
(c) During the remaining term hereof after the Change of Control
Date, the Company (or Subsidiary) will (i) continue to pay Executive a salary at
not less than the level applicable to Executive on the Change of Control Date,
(ii) pay Executive bonuses in amounts not less in amount than those paid during
the twelve month period preceding the Change of Control Date, and (iii) continue
employee benefit programs as to Executive at levels in effect on the Change of
Control Date (but subject to such reductions as may be required to maintain such
plans in compliance with applicable federal law regulating employee benefit
programs).
(d) If during the remaining term hereof after the Change of Control
Date (i) Executive's employment is terminated by the Company (or subsidiary), or
(ii) there shall have occurred a material reduction in Executive's compensation
or employment related benefits, or a material change in Executive's status,
working conditions, management responsibilities or titles, and Executive
voluntarily terminates his relationship with the Company within sixty (60) days
of any such occurrence, or the last in a series of occurrences, then Executive
shall be entitled to receive, subject to the provisions of subparagraphs (e) and
(f) below, a lump sum payment equal to 300% of Executive's "base period income"
as determined under (e) below. Such amount will be paid to Executive within
fifteen (15) business days after his termination of affiliation with the
Company.
5
(e) The Executive's "base period income" shall be his base salary
and annual incentive bonuses paid or payable to him during or with respect to
the twelve month period preceding the date of his termination of affiliation.
(f) The amounts payable to Executive under any other compensation
arrangement maintained by the Company (or a subsidiary) which became payable
after payment of the lump sum provided for in (a), upon or as a result of the
exercise by Executive of rights which are contingent on a Change of Control (and
would be considered a "parachute payment" under Internal Revenue Code ss. 280G
and regulations thereunder), shall be increased by an additional amount
representing a gross-up of any federal income tax liability arising from an
excess parachute payment or otherwise.
10. Location of Principal Place of Employment.
(a) The Executive's principal business location hereunder shall be
Pompano Beach, Florida.
(b) If, for any reason, Executive is requested, and, in his sole
and absolute discretion, consents to change his principal business location, the
Company will reimburse the Executive for his reasonable relocation expenses,
including without limitation, moving expenses, temporary living and travel
expenses for a reasonable time while arranging to move his residence to the
changed location, closing costs, if any, associated with the sale of his
existing residence and the purchase of a replacement residence at the changed
location, plus an additional amount representing a gross-up of any state or
federal taxes payable by Executive as a result of any such reimbursements. If
the Executive shall not consent to change his business location, the Executive
may continue to provide the services required of him hereunder in the counties
of Palm Beach or Broward, Florida, and the Company shall continue to maintain an
office for Executive at that location commensurate with the Company's office
prior to its relocation.
11. Termination.
(a) Termination Without Cause. The Company may terminate this
Agreement without cause at any time upon written notice to the Executive,
whereupon this Agreement shall terminate on the date specified therein. The
Company shall pay the Executive a severance amount equal to three (3) years of
Executive's Base Compensation payable as follows: one years salary within five
(5) days from the date specified therein, plus any bonuses, pursuant to Section
4 hereof, to which Executive would have been entitled to for the next fiscal
year from the date specified therein, i.e., Executive is terminated on September
30, Executive is entitled to participate in the Bonus Pool for the remainder of
that fiscal year. The payment for the salary for years two and three shall be
due and payable in full within eighteen (18) months from the date of
termination. These payouts shall be payable in accordance with the normal
payroll policies of the Company (hereinafter, the "Severance Payout Period") and
shall be subject to all usual and customary payroll deductions, including
applicable withholding taxes.
6
(b) Termination For Cause. This Agreement may be immediately
terminated by the Company at any time during the Employment Period for "cause".
In such an event of termination, the Company shall be obligated only to continue
to pay to Executive his Base Salary earned up to the effective date of
termination. "Cause" for purposes hereof shall mean a breach of any of the
provisions of this Agreement by Executive, unsatisfactory performance of
Executive's duties hereunder as reasonably determined by the Company's Board of
Directors and Executive has not caused within sixty (60) days from receipt of
such notice, willful misconduct or neglect of duties, conviction of any
criminal offense involving a felony, gross negligence, malfeasance or a crime of
moral turpitude.
(c) Reduction in Responsibilities/Activities. [TO FOLLOW]
(d) Continuing Effect. Notwithstanding any termination of the
Executive as provided in this Section 11 or otherwise, the provisions of Section
13 and 14 shall remain in full force and effect and shall be binding on the
Executive and his legal representatives, successors and assigns.
12. Consolidation, Merger or Sale of Assets. Nothing in this Agreement
shall preclude the Company from consolidating or merging into or with, or
transferring all or substantially all of its assets to, another corporation
which assumes this Agreement, and all obligations of the Company hereunder, in
writing. Upon such consolidation, merger, or transfer of assets and assumption,
the term "the Company" as used herein, shall mean such other corporation and
this Agreement shall continue in full force and effect.
13. Restrictive Covenants.
(a) The Executive acknowledges that his services and
responsibilities are unique in character and are of particular significance to
the Company, that the Company is a competitive business and that the Executive's
continued and exclusive service to the Company under this Agreement is of a high
degree of importance to the Company. Therefore, during the Employment Period and
for the applicable periods specified below (each, the "Noncompete Period"), the
Executive shall not, directly or indirectly, as owner, partner, joint venturer,
Executive, broker, agent, corporate officer, principal, licensor, shareholder
(unless as owner of no more than five percent (5%) of the issued and outstanding
capital stock of such entity if such stock is traded on a major securities
exchange) or in any other capacity whatsoever, engage in or have any connection
with any business which is competitive with the Company, and which operates
anywhere in the United States, European or Far East corridors on the effective
date of termination of this Agreement:
Reason for Termination Noncompete Period
---------------------- -----------------
Termination without cause N/A
Termination for cause 1 year
7
For purposes of this Agreement, a business will be deemed to be competitive with
the Company if it is an importer/re-seller of Karaoke hardware and software
specializing in the United States mass merchant marketplace.
(b) In addition to the restrictions set forth in Section 13(a),
during the Noncompete Period, the Executive shall not:
(i) directly or indirectly, by initiating contact or otherwise,
induce, influence, combine or conspire with, or attempt to induce,
influence, combine or conspire with, any of the officers, Executives
or agents of the Company to terminate his, her or its employment or
relationship with or to compete against the Company; or
(ii) directly or indirectly, by initiating contact or
otherwise, divert or attempt to divert any or all of any customers'
or suppliers' business with the Company.
(c) If, in any judicial proceedings, a court shall refuse to
enforce any of the covenants included in this Section 13 due to extent,
geographic scope or duration thereof, or otherwise, then such unenforceable
covenant shall be amended to relate to such lesser extent, geographic scope or
duration and this Section 13 shall be enforceable, as amended. In the event the
Company should bring any legal action or other proceeding against Executive for
enforcement of this Agreement, the calculation of the Noncompete Period shall
not include the period of time commencing with the filing of legal action or
other proceeding to enforce this Agreement through the date of final judgment or
final resolution, including all appeals, if any, of such legal action or other
proceeding unless the Company is receiving the practical benefits of this
Section 13 during such time. The existence of any claim or cause of action by
the Executive against the Company predicated on this Agreement or otherwise
shall not constitute a defense to the enforcement by the Company of these
covenants.
(d) The Executive has carefully considered the nature and extent of
the restrictions upon the Executive and the rights and remedies conferred upon
the Company under this Section 13, and the Executive hereby acknowledges that
the restrictions on his activity as contained herein are reasonably required for
the Company's protection, would not operate as a bar to the Executive's sole
means of support, are fully required to protect the legitimate interests of the
Company, do not confer a benefit on the Company disproportionate to the
detriment to the Executive and are material inducements to the Company to enter
into this Agreement. The Executive hereby agrees that in the event of a
violation by him of any of the provisions of this Agreement, the Company will be
entitled to institute and prosecute proceedings at law or in equity to obtain
damages with respect to such violation or to enforce the specific performance of
this Agreement by the Executive or to enjoin the Executive from engaging in any
activity in violation hereof.
14. Treatment and Ownership of Confidential Information. The Executive
acknowledges that during his employment he will learn and will have access to
Confidential Information regarding the Company. For purposes of this Agreement,
the term "Confidential
8
Information" shall mean all of the materials and information which Executive
makes use of, acquires or develops or has made use of, acquired or developed, in
whole or in part, in connection with Executive's employment with the Company
(whether before or after the date of this Agreement), including any financial
data, client names and addresses, employee data, discoveries, processes,
formulas, inventions, know-how, techniques and any other materials or
information related to the business or activities of the Company which are no[
generally known to others engaged in similar businesses or activities. The
Executive acknowledges that such Confidential Information as is acquired and
used by the Company or its affiliates is a special, valuable and unique asset.
The Executive will not, except in connection with and as required by his
performance of his duties under this Agreement, for any reason use for his own
benefit, or the benefit of any person or entity with which he may be associated,
or disclose any such Confidential Information to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever without the
prior written consent of the Company's Board of Directors, unless such
Confidential Information previously shall have become public knowledge through
no action by or omission of the Executive. The Executive covenants and agrees
that all right, title and interest in any Confidential Information shall be and
shall remain the exclusive property of the Company. The Executive agrees to
promptly disclose to the Company all Confidential Information developed in whole
or in part by the Executive within the scope of this Agreement and to assign to
the Company any right, title or interest the Executive may have in such
Confidential Information. The Executive agrees to turn over to the Company all
physical manifestations of the Confidential Information in his possession or
under his control at the request of the Company.
15. Executive Representations and Warranties. The Executive represents
and warrants that he is not a party to, or bound by, any other employment
agreements. The Executive further represents and warrants to the Company that he
is free of known physical and mental disabilities that would, with or without
reasonable accommodations that would create an undue hardship for the Company,
impair his performance hereunder and he is fully empowered to enter and perform
his obligations under this Agreement. Without limiting the generality of the
foregoing, the Executive represents and warrants that he is under no
restrictive covenants to any person or entity that will be violated by his
entering into and performing this Agreement.
16. Arbitration. Except as provided in sections 13 and 26 hereof, any
dispute, controversy or claim arising under, out of, in connection with, or in
relation to this Agreement, or the breach, termination, validity or
enforceability of any provision of this Agreement, will be settled by final and
binding confidential arbitration conducted in accordance with, and before a
single arbitrator (the "Arbitrator") chosen according to, the rules of the
American Arbitration Association's National Rules for Resolution of Employment
Disputes, with the additional proviso that all steps necessary to insure the
confidentiality of the proceedings will be added to the basic rules. Unless
otherwise mutually agreed upon by the parties, the arbitration hearings shall be
held in the Broward County, Florida. The parties hereby agree that the
Arbitrator has full power and authority to hear and determine the controversy
and make an award in writing in the form of a reasoned judicial opinion. The
parties hereby stipulate in advance that the award is binding and final. The
parties hereto also agree that judgment upon the arbitration award may be
entered in any federal or state
9
court having jurisdiction thereof. Each party is responsible for his or its own
legal fees and out-of-pocket expenses incurred in connection with such
arbitration.
17. Binding Effect. Except as herein otherwise provided, this
Agreement shall inure to the benefit of and shall be binding upon the parties
hereto, their personal representatives, successors, heirs and assigns.
18. Severability. Invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provisions.
19. Terminology. All personal pronouns used in this Agreement, whether
used in the masculine, feminine or neuter gender, shall include all other
genders; the singular shall include the plural and vice versa. Titles of
Paragraphs are for convenience only, and neither limit nor amplify the
provisions of the Agreement itself.
20. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Florida.
21. Entire Agreement. This Agreement contains the entire understanding
between the parties and may not be changed or modified except by an Agreement in
writing signed by all the parties.
22. Notice. Any notice required or permitted to be delivered hereunder
shall be deemed to be delivered when deposited in the United States mail,
postage prepaid, registered or certified mail, return receipt requested,
addressed to the parties at the addresses first stated herein, or to such other
address as either party hereto shall from time to time designate to the other
party by notice in writing as provided herein.
23. No Publicity. The Executive agrees that he will not engage in any
conduct that is injurious to the Company's reputation and interests, including,
but not limited to, publicly disparaging (or inducing or encouraging others to
publicly disparage) the Company or any of the Company's directors, officers,
employees or agents.
24. Cooperation. Executive agrees to cooperate fully with the Company
by providing information to the Company and its representatives, agents or
advisors regarding any business matters with which the Executive may become
involved with during the terms of this Agreement and to cooperate fully in the
event of any litigation or legal, administrative or reulatory proceeding by
providing information, including but not limited to, providing truthful
testimony at any legal, administrative or regulatory proceeding, regarding any
facts or information of which Executive has knowledge and/or any business
matters of which Executive has or had knowledge.
25. Assignability. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the Company, provided that such successor or assign shall acquire all
or substantially all of the assets and
10
business of the Company and, further provided that any such assignment shall not
release the Company from its obligations to the Executive hereunder. The
Executive's rights and obligations hereunder may not be assigned or alienated
without the prior written consent of the Company and any attempt to do so by the
Executive will be void.
26. Attorneys' Fees. If any legal action or other proceeding is brought
by the Company for the enforcement of section 13 of this Agreement, or because
of an alleged dispute, breach, default or misrepresentation by the Executive in
connection with any provision of this Agreement, the Company or the Executive
shall be responsible for its own attorneys' fees, sales and use taxes, court
costs and other expenses incurred in that action or proceeding.
27. Injunctive Relief. The Executive acknowledges and agrees that in
the event Executive violates any term, covenant or provision of Section 13 of
this Agreement, the Company will suffer irreparable harm for which the Company
will have no adequate remedy at law. The Executive agrees that the Company shall
be entitled to injunctive relief for any breach or violation of Section 13 of
this Agreement, including but not limited to the issuance of an ex parte
preliminary injunction, in addition to and not in limitation of any and all
other remedies available to the Company at law or in equity.
28. No Offsets. The existence of any claim or cause of action of the
Executive against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
this Agreement.
29. Executive Acknowledgment. The Executive acknowledges and agrees
that Executive has read and understands the terms set forth in this Agreement
and has been given a reasonable opportunity to consult with an attorney prior to
execution of this Agreement.
30. Other Instruments. The parties hereby covenant and agree that they
will execute such other and further instruments and documents as are or may
become necessary or convenient to effectuate and carry out the terms of this
Agreement.
31. Counterparts. This Agreement may be executed in any number of
counterparts and each such counterpart shall for all purposes be deemed an
original.
32. Assignability. This Agreement shall not be assigned by either
party, except with the written consent of the other.
[SIGNATURE PAGE ON NEXT PAGE]
11
IN WITNESS WHEREOF, this Agreement has been duly signed by the
Executive and on behalf of the Company on the day and year first above written.
THE SINGING MACHINE COMPANY, INC.
By: Edward Pearson By: Paul Wu
--------------------------------- ---------------------------------
Edward Pearson (Director) Paul Wu (Director)
Edward Steele
---------------------------------
Edward Steele
12