Exhibit 10.2
THE SINGING MACHINE COMPANY, INC.
0000 Xxxxx Xxxx, Xxxxxxxx X-0
Xxxxxxx Xxxxx, Xxxxxxx 00000
September 5, 2003
Omicron Master Trust
SF Capital Partners, Ltd.
Bristol Investment Fund, Ltd.
Ascend Offshore Fund, Ltd.
Ascend Partners LP
Ascend Partners Sapient LP
c/o Feldman Xxxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
RE: AMENDMENT TO THE TRANSACTION DOCUMENTS ("AMENDMENT")
Dear Sirs:
Reference is made to that certain Securities Purchase Agreement
("Purchase Agreement") dated August 19, 2003 entered into by and among The
Singing Machine Company, Inc. (the "Company") and Omicron Master Trust, SF
Capital Partners, Ltd., Bristol Investment Fund, Ltd., Ascend Offshore Fund,
Ltd., Ascend Partners LP and Ascend Partners Sapient LP (collectively referred
to herein as the "Purchasers" and individually, as a "Purchaser"). All
capitalized terms not defined herein shall have the same meaning as defined
terms in the Purchase Agreement.
The Purchasers agrees that the Company shall have forty five (45) days
from the Closing Date, to obtain approval from the American Stock Exchange
("AMEX") to list the Underlying Shares and any other securities which are being
issued in connection with the transactions set forth in the Transaction
Documents. If the Company does not obtain approval from AMEX by October 20,
2003, the Purchasers shall have the right to rescind the transactions set forth
in the Transaction Documents ("Rescission") or to provide the Company with an
additional thirty (30) day time period in which to seek AMEX approval (which
would continue every 30 days until AMEX approval is obtained). The Company shall
use its best efforts to obtain AMEX approval as soon as possible after the date
hereof.
If the Transaction is rescinded, the Company agrees that it will return
to each Purchaser the Subscription Amount, plus interest on such amount at the
rate of 8% per annum, calculated on a pro-rata basis, on or before October 25,
2003 or such other date requested by the Purchasers. In exchange for the return
of the Subscription Amount, plus interest, each Purchaser agrees that it will
return it Debenture to the Company, along with all other Transaction Documents,
including but not limited to the Warrant, the Registration Rights Agreement and
the Purchase Agreement on or before October 25, 2003 or such other date. The
Company will place a notation on each Debenture noting that it has been "PAID IN
FULL" and will place a notation on the Warrant, Registration Rights Agreement
and Purchase Agreement noting that these agreements have been "CANCELLED AND
TERMINATED."
If the Transaction is rescinded, the Company and the Purchaser each
agree that the other party will not have liability of any type to the other
party. Each Purchaser agrees that the return of the Subscription Amount, plus
interest, shall be their sole remedy for the Rescission.
In the Transaction Documents, there are statements that the Company
will not issue more than 19.99% of its common stock unless it obtains AMEX
approval. All of these statements are hereby deleted and replaced with the
statement that the Company will not issue any of its securities, until it has
obtained approval from AMEX to issue such shares.
The Purchasers also agree that they will sign any subordination
agreements that LaSalle Business Credit, LLC or any of the Company's prospective
commercial lenders present to the Purchasers in connection with any new credit
agreements that the Company enters into while the Company has obligations under
the Transaction Documents, the terms of which shall be substantially similar to
the terms of the subordination agreement entered into with LaSalle Business
Credit, LLC in connection with the consummation of the Purchase Agreement and
issuance of the Debentures.
Except as expressly amended hereby, the Purchase Agreement, the
Debentures, the Warrants and the Registration Rights Agreement are ratified and
confirmed by the parties hereto and remain in full force and effect in
accordance with the terms hereof.
This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and, all of which taken
together shall constitute one and the same Agreement. In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.
Sincerely,
THE SINGING MACHINE COMPANY, INC.
By: /s/ Yi Xxxx Xxxx
Yi Xxxx Xxxx
Chief Operating Officer
Agreed and accepted this 5th day of September, 2003:
Omicron Master Trust SF Capital Partners, Ltd.
By: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxxx Name: Xxxxx Xxxxxxxx
Title: Managing Partner Its: Authorized Signator
Bristol Investment Fund, Ltd. Ascend Offshore Fund, Ltd.
By: /s/ Xxxx Xxxxxxx By: /s/ Xxxxxxx Xxxxxxxxx
Name: Xxxx Xxxxxxx Name: Xxxxxxx Xxxxxxxxx
Title: Director Title: Managing Member
Ascend Partners LP Ascend Partners Sapient LP
By: /s/ Xxxxxxx Xxxxxxxxx By: /s/ Xxxxxxx Xxxxxxxxx
Name: Xxxxxxx Xxxxxxxxx Name: Xxxxxxx Xxxxxxxxx
Title: Managing Member Title: Managing Member
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