Exhibit 10.27
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
     This Amended and Restated Employment Agreement (“Agreement”) is made and
entered into as of the 1st day of January, 2007, between DIRECTED ELECTRONICS,
INC., a Florida corporation (the “Company”), and JAMES E. MINARIK (the
“Executive”).
Recitals
     A. The Company is engaged in the business of designing and marketing
consumer branded vehicle security and convenience systems, marketing and selling
certain SIRIUS-branded satellite radio receivers and accessories, and supplying
home audio and mobile audio and video products (collectively, and as may be
modified by the Company from time to time, the “Business”).
     B. The Company and the Executive are parties to that certain Amended and
Restated Employment Agreement, dated as of January 1, 2004, as heretofore
amended (the “Prior Agreement”).
     C. The Company desires to continue to employ the Executive and the
Executive desires to continue to be employed by the Company, upon the terms and
conditions set forth in this Agreement.
Agreement
     NOW THEREFORE, in consideration of (i) the Executive’s employment with the
Company, (ii) the compensation paid to the Executive and the benefits provided
to the Executive in connection with such employment, (iii) the Executive’s use
of the equipment, supplies, facilities and other resources of the Company, and
(iv) the opportunity provided to the Executive by the Company to acquire or use
information relating to or based on the Business and to work and develop in the
field for which the Executive is employed, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
INTERPRETATION OF THIS AGREEMENT
     1.1. Defined Terms. As used herein, the following terms when used in this
Agreement have the meanings set forth below:
          1.1.1. “Affiliate” has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act of 1934, as amended.
          1.1.2. “Base Salary” shall have the meaning given to it under
Section 2.2 of this Agreement.
          1.1.3. “Board” means the Board of Directors of the Company.
          1.1.4. “Cause” means (i) the failure by the Executive to perform the
Executive’s duties with the Company, as determined by the Board (other than any
such failure resulting from the Executive’s incapacity due to physical or mental
illness), which failure to perform is not cured within 60 days after a written
demand for substantial performance is delivered to the Executive by the Board,
(ii) the Executive’s conviction of a felony involving deceit, fraud or moral
turpitude or with respect to which public knowledge thereof could result in a
Material Adverse Effect or materially affect the Executive’s ability to perform
his duties, (iii) the engaging by the Executive in conduct which the Board
determines is injurious to the Company, monetarily or otherwise, or which could
result in a Material Adverse Effect, (iv) the commission by the Executive of an
act or acts involving fraud, embezzlement, misappropriation, theft, breach of
fiduciary duty or dishonesty against the property or personnel of the Company or
any of its Affiliates, (v) the breach by the Executive of any of the terms of
this Agreement, which breach is not cured within 15 days after written demand to
cure such breach is delivered to the Executive by the Board.

 

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          1.1.5. “Change of Control” means (i) any Person (other than the
Company or any trustee or other fiduciary holding securities under an employee
benefit plan of the Company) is or becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or
indirectly, of securities of the Company representing more than 50% of the
combined voting power of the Company’s then outstanding securities eligible to
vote, (ii) the merger or consolidation of the Company with any other corporation
or other business entity, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 50% of the
combined voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation; provided,
however, that a merger or consolidation effected to implement a recapitalization
of the Company (or similar transaction) in which no Person acquires more than
50% of the combined voting power of the Company’s then outstanding securities
shall not constitute a Change of Control, or (iii) the sale or disposition by
the Company of all or substantially all of its assets.
          1.1.6. “Company” shall have the meaning given to it in the first
sentence of this Agreement.
          1.1.7. “Company Information” means Confidential Information and Trade
Secrets.
          1.1.8. “Confidential Information” means confidential data and
confidential information relating to the business of the Company (which does not
rise to the status of a Trade Secret under applicable law) which is or has been
disclosed to the Executive or of which the Executive became aware as a
consequence of or through his employment with the Company and which has value to
the Company and is not generally known to the competitors of the Company.
Confidential Information does not include any data or information that (i) has
been voluntarily disclosed to the general public by the Company (other than by
any act or omission of the Executive without the approval of the Board), or
(ii) otherwise enters the public domain through lawful means.
          1.1.9. “Disability” means the Executive’s inability to perform his
normal duties as a result of incapacity due to physical or mental illness, for
any 90 consecutive calendar day period or any 60 business days (whether or not
consecutive) during any 365 calendar day period.
          1.1.10. "Employment Period” shall have the meaning given to it in
Section 2.1 hereof.
          1.1.11. “Executive” shall have the meaning given to it in the first
sentence of this Agreement.
          1.1.12. “Good Reason” shall mean (a) the assignment to the Executive
of duties inconsistent with the Executive’s position (including status, offices,
titles and reporting requirements), authority, duties or responsibilities as
contemplated by Section 2.3 of this Agreement, excluding for this purpose an
isolated, insubstantial and inadvertent action not taken in bad faith and which
is remedied by the Company promptly after receipt of notice thereof given by the
Executive; or (b) the Company’s requiring the Executive to be based at any
office or location more than 50 miles from Vista, California, except for travel
reasonably required in the performance of the Executive’s responsibilities.
          1.1.13. “Material Adverse Effect” shall mean a material adverse effect
on the business, assets, properties, results of operations, financial condition
or prospects of the Company or any of its Affiliates.
          1.1.14. “Non-Solicitation Period” shall mean a period of time equal to
(i) the Severance Period, if the Executive is terminated without Cause, or
(ii) a period of 12 months after the Termination Date if the Executive resigns
or if the Employment Period terminates for any reason other than termination by
the Company without Cause.
          1.1.15. “Notice of Termination” shall have the meaning given to it in
Section 2.1 hereof.

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          1.1.16. “Person” means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or a governmental entity (or any
department, agency or political subdivision thereof).
          1.1.17. “Significant Competitor” has the meaning given to it in
Section 3.6 hereof.
          1.1.18. “Significant Customer” has the meaning given to it in
Section 3.6 hereof.
          1.1.19. “Subsidiary” when used with respect to any Person means any
other Person, whether incorporated or unincorporated, of which (i) more than 50%
of the securities or other ownership interests or (ii) securities or other
interests having by their terms ordinary voting power to elect more than 50% of
the board of directors or others performing similar functions with respect to
such corporation or other organization, is directly owned or controlled by such
Person or by any one or more of its Affiliates.
          1.1.20. “Termination Date” shall have the meaning given to it in
Section 2.1 hereof.
          1.1.21. “Trade Secrets” means information of the Company including,
but not limited to, technical or nontechnical data, formulas, patterns,
compilations, programs, financial data, financial plans, product or service
plans, business plans or lists of actual or potential customers or suppliers
that (i) derives economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other persons
who can obtain economic value from its disclosure or use, and (ii) is the
subject of efforts that are reasonable under the circumstances to maintain its
secrecy.
          1.1.22. “Welfare Plan Benefits” shall have the meaning given to it in
Section 2.4 hereof.
     1.2. Interpretation. The words “herein,” “hereof,” “hereunder” and other
words of similar import refer to this Agreement as a whole, as the same from
time to time may be amended or supplemented and not any particular section,
paragraph, subparagraph or clause contained in this Agreement. Wherever from the
context it appears appropriate, each term stated in either the singular or
plural shall include the singular and the plural, and pronouns stated in
masculine, feminine or neuter gender shall include the masculine, feminine and
the neuter.
ARTICLE II
EMPLOYMENT
     2.1. Duration. The Company agrees to continue to employ the Executive and
the Executive agrees to be so employed until the first to occur of
(i) January 1, 2010, (ii) the date specified in a Notice of Termination given by
the Executive in connection with his voluntary resignation other than for Good
Reason (which shall not be less than 60 days from the date such Notice of
Termination is given), (iii) the date specified in a Notice of Termination
stating that the Board has determined that the Executive’s employment be
terminated for Cause, (iv) the date specified in a Notice of Termination given
by the Company stating that the Board has determined that the Executive’s
employment with the Company is no longer in the best interest of the Company (in
which event, the Executive will be entitled to severance pay as described in
Section 2.4 below) (termination pursuant to this clause (iv) is sometimes
referred to in this Agreement as “termination without Cause”), (v) the date
specified in a Notice of Termination given by the Executive in connection with
his resignation for Good Reason, (vi) the date of the Executive’s death, or
(vii) the date specified in a Notice of Termination given by the Company in
connection with a termination of the Executive’s employment by reason of his
Disability. For purposes of this Agreement, the term “Employment Period” shall
mean such period of employment and the term “Termination Date” shall mean the
date on which the Employment Period terminates. Any purported termination of the
Executive’s employment by the Company or by the Executive shall be communicated
by written Notice of Termination to the other party hereto in accordance with
Section 4.1 below, which notice shall indicate the specific termination
provision in this Section 2.1 relied upon (a “Notice of Termination”).
     2.2. Salary and Benefits. During the Employment Period, the Company will
pay the Executive a base salary at the rate of $550,000 per annum or at such
higher rate as the Board designates in its sole discretion from time to time
(“Base Salary”), payable in installments consistent with the Company’s

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normal payroll schedule, subject to applicable withholding and other taxes. Base
Salary for each calendar year after calendar 2006 shall be increased by $25,000
over the previous calendar year so long as the Company achieves EBITDAM equal to
or greater than the Company’s EBITDAM for the prior calendar year (i.e.,
(i) 2008 Base Salary shall be $575,000 if 2007 EBITDAM is at least equal to 2006
EBITDAM, and (ii) 2009 Base Salary shall be increased by $25,000 from 2008 Base
Salary if 2008 EBITDAM is at least equal to 2007 EBITDAM). The Base Salary shall
also be reviewed, at least annually, for additional merit increases and may, by
action and in the discretion of the Board, be increased at any time and from
time to time. During the Employment Period, the Executive shall also be entitled
to participate in the following programs and receive the following benefits:
          2.2.1. the Executive will be entitled to participate in all medical
and hospitalization, group life insurance, retirement and any and all other
fringe benefit plans as are from time to time provided by the Company to its
executives, subject to the provisions of such plans, including, without
limitation, eligibility criteria and contribution requirements, as the same may
be in effect from time to time;
          2.2.2. the Executive will be entitled to a maximum of four weeks
vacation each year with salary; provided, however, that in no event may a
vacation be taken at a time when to do so could, in the reasonable judgment of
the Chairman of the Board, materially adversely affect the business of the
Company;
          2.2.3. the Executive will be entitled to reimbursement for reasonable
business expenses incurred by the Executive (subject to submission of
appropriate substantiation by the Executive);
          2.2.4. the Executive will be entitled to reimbursement (subject to
submission of appropriate substantiation by the Executive) for reasonable
expenses incurred in attending trade association meetings and shows for the
Executive where such attendance is appropriate for a particular meeting or show;
          2.2.5. the Executive will be entitled to reimbursement (subject to
submission of appropriate substantiation by the Executive) for the cost of
annual membership dues to one country club, subject to applicable withholding
and other taxes (to the extent such payments are not reimbursable business
expenses), provided, however, that the Executive will not be entitled to
reimbursement of annual dues pursuant to this Subsection in an amount in excess
of $10,000 annually;
          2.2.6. the Company will, promptly after the end of each calendar year
during the Employment Term, make a payment of $15,000 in deferred salary to the
deferred compensation plan previously established for Executive’s benefit; and
          2.2.7. the Company shall (i) provide the Executive with the use of a
car (at a lease cost of no more than $1,500 per month) and related automobile
insurance, (ii) reimburse the Executive for maintenance and gasoline expenses
attributable to such automobile (subject to submission of appropriate
substantiation by the Executive), and (iii) upon expiration of Executive’s
current automobile lease and submission of appropriate substantiation, reimburse
Executive for applicable excess mileage charges. Such payments are subject to
applicable withholding and other taxes to the extent they are not reimbursable
business expenses.
     2.3. Services. During the Employment Period, the Executive will serve as
the President and Chief Executive Officer of the Company and will render such
services of an executive and administrative character to the Company as the
Board or the Chairman of the Board may from time to time direct. The Executive
will devote his best efforts and substantially all of his business time and
attention (except for vacation periods and reasonable periods of illness or
other incapacity) to the business of the Company. During the Employment Period,
Executive will serve as a member of the Board. Nothing in this Agreement shall
prohibit the Executive from engaging in trade association activities, including
serving as a board member or committee member to trade associations or serving
on the boards of directors of other companies which do not engage in business
activities that are competitive with those of the Company,

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provided that none of such activities materially interfere with the performance
of the Executive’s duties and responsibilities to the Company under this
Agreement.
     2.4. Severance Pay.
          2.4.1. If, as a result of or following a Change of Control, (i) the
Executive’s employment is terminated without Cause pursuant to Section 2.1(iv),
or (ii) the Executive resigns for Good Reason pursuant to Section 2.1(v)
(subject in the case of this clause (ii) to the Executive signing a release of
claims in a form satisfactory to the Company), the Company will pay to the
Executive all amounts due to the Executive as Base Salary pursuant to
Section 2.2 above for a period of 24 months after the Termination Date. If the
Executive’s employment is terminated without Cause pursuant to Section 2.1(iv)
or the Executive resigns for Good Reason pursuant to Section 2.1(v) in each case
other than as a result of or following a Change of Control, or if, after the
third anniversary of the date hereof, the Company and the Executive have not
either extended the Employment Period or entered into a new employment
agreement, the Company will pay to the Executive all amounts due to the
Executive as Base Salary pursuant to Section 2.2 above for a period of 12 months
after the Termination Date. Such payments shall be made in installments, and on
the payment dates, on which such Base Salary would have been paid if the
Employment Period had continued for such applicable period. Upon the making of
the last of such payments, except as otherwise provided this Section 2.4, the
Company will have no further obligation to the Executive. All payments of
severance under this Section are subject to the Executive complying with the
covenants in Sections 3.1 through (and including) 3.6 of this Agreement.
          2.4.2. In addition, for so long as the Company is making the payments
described in Section 2.4.1 (the “Severance Period”), the Company will
(i) arrange to provide the Executive with benefits substantially similar to
those which the Executive was receiving or entitled to receive under the
Company’s life, disability, accident and group health insurance plans or any
similar plans in which the Executive was participating immediately prior to the
Termination Date (“Welfare Plan Benefits”) at a cost to the Executive which is
not substantially greater than the cost to him in effect at the Termination
Date; provided, however, that to the extent any such coverage is prohibited by
any judicial or legislative authority, the Company shall make alternative
arrangements to provide the Executive with Welfare Plan Benefits, including, but
not limited to, providing the Executive with a payment in an amount equal to his
cost of purchasing the Welfare Plan Benefits, and (ii) if the termination is as
a result of or following a Change of Control, continue during the Severance
Period to provide Executive with the automobile-related benefits described in
Section 2.2.7 hereof. Benefits otherwise receivable by the Executive pursuant to
the preceding sentence shall be reduced to the extent comparable benefits are
actually received on the Executive’s behalf during the Severance Period, and
such benefits actually received by the Executive shall be reported by him to the
Company.
          2.4.3. Notwithstanding anything to the contrary in this Agreement, any
severance payments to be made to the Executive under this Agreement will not be
paid during the six (6) month period (or such other period of time required
under Section 409A(a)(2)(B) of the Internal Revenue Code of 1986, as amended
(the “Code”)) following the Executive’s separation from service (as defined in
Section 409A of the Code and the regulations and guidance provided by the
Internal Revenue Service thereunder), unless the Company determines, in its good
faith judgment, that paying such amounts at the time or times indicated above
would not cause the Executive to incur any additional tax under Section 409A of
the Code (in which case such amounts shall be paid at the time or times
otherwise indicated in this Agreement). If the payment of any amounts are
delayed as a result of the previous sentence, on the first day following the end
of the delay, the Company will pay the Executive a lump-sum amount equal to the
cumulative amounts that would have otherwise been previously paid to the
Executive under this Agreement.
     2.5. Incentive Compensation. Executive will be eligible to earn an annual
bonus under the Company’s Executive Bonus Plan based upon the achievement of
certain performance objectives to be established by the Compensation Committee
of the Board. The Compensation Committee shall, in its reasonable sole
discretion, determine the extent to which such performance objectives have been
achieved.

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     2.6. Equity Participation. Executive shall be eligible to receive equity
compensation as may be determined by the Board or the Compensation Committee
based upon such factors as the Board or the Compensation Committee, in its sole
discretion, may deem relevant, including, without limitation, the performance of
the Executive and the Company; provided, however, that the Board or the
Compensation Committee shall grant equity compensation to Executive to the
extent grants are made to the Company’s executive team and in a size
proportionate for Executive’s duties.
ARTICLE III
PROPERTY AND BUSINESS OF THE COMPANY
     3.1. Nondisclosure. During the Employment Period and during the periods
described in the last sentence of this Section 3.1, the Executive (a) will
receive and hold all Company Information in trust and in strictest confidence,
(b) will protect the Company Information from disclosure and will in no event
take any action causing, or fail to take any action reasonably necessary to
prevent, any Company Information to lose its character as Company Information,
and (c) except as required by the Executive’s duties in the course of his
employment by the Company or by applicable law, will not, directly or
indirectly, use, disseminate or otherwise disclose any Company Information to
any third party without the prior written consent of the Board, which may be
withheld in the Board’s absolute discretion. The provisions of this Section 3.1
shall survive the termination of the Executive’s employment (i) for a period of
five years with respect to Confidential Information, and (ii) with respect to
Trade Secrets, for so long as any such information qualifies as a Trade Secret
under applicable law.
     3.2. Books and Records. All books, records, reports, writings, notes,
notebooks, computer programs, sketches, drawings, blueprints, prototypes,
formulas, photographs, negatives, models, equipment, chemicals, reproductions,
proposals, flow sheets, supply contracts, customer lists and other documents
and/or things relating in any manner to the business of the Company (including
but not limited to any of the same embodying or relating to any Confidential
Information or Trade Secrets), whether prepared by the Executive or otherwise
coming into the Executive’s possession, shall be the exclusive property of the
Company and shall not be copied, duplicated, replicated, transformed, modified
or removed from the premises of the Company except pursuant to and in
furtherance of the business of the Company and shall be returned immediately to
the Company on the Termination Date or on the Company’s request at any time.
     3.3. Inventions and Patents. Subject to the provisions of Sections 2870
through 2872 of the California Labor Code, the Executive agrees that all
inventions, innovations or improvements in the Company’s method of conducting
its business (including new contributions, improvements, ideas and discoveries,
whether patentable or not) conceived or made by him during his employment with
the Company belong to the Company and the Executive hereby assigns all of such
contributions, improvements, ideas and discoveries to the Company. The Executive
will promptly disclose such inventions, innovations and improvements to the
Board and perform all actions reasonably requested by the Board to establish and
confirm such ownership.
     3.4. Other Businesses. Except as provided in Section 2.3, the Executive
shall not, without the express written consent of the Board, during the
Employment Period, become engaged in, render services for, or permit his name to
be used in connection with, any business other than the business of the Company.
     3.5. Non-Solicitation of Employees. During the Employment Period and for a
period of time equal to the Non-Solicitation Period, the Executive will not,
directly or indirectly, (i) solicit for employment or employ (or attempt to
solicit for employment or employ), for himself or on behalf of any sole
proprietorship, partnership, corporation, limited liability company or business
or any other Person (other than the Company or any of its Subsidiaries), any
employee of the Company or any Person who was an employee during the one year
period preceding the date of such solicitation, employment or attempted
solicitation or employment, or (ii) encourage any such employee to leave his or
her employment with the Company. To the extent that the covenant provided for in
this Section 3.5 may later be deemed by a court to be too broad to be enforced
with respect to its duration or with respect to any particular activity or
geographic area, the court making such determination shall have the power to
reduce the duration or

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scope of the provision, and to add or delete specific words or phrases to or
from the provision. The provision as modified shall then be enforced.
     3.6. Non-Solicitation of Customers. During the Employment Period and for a
period of time equal to the Non-Solicitation Period, the Executive will not,
directly or indirectly, (i) solicit sales from any Significant Customer (as
defined below) on behalf of any Significant Competitor (as defined below), or
(ii) encourage any Significant Customer to cease its business relationship with
the Company. To the extent that the covenant provided for in this Section 3.6
may later be deemed by a court to be too broad to be enforced with respect to
its duration or with respect to any particular activity, the court making such
determination shall have the power to reduce the duration or scope of the
provision, and to add or delete specific words or phrases to or from the
provision. The provision as modified shall then be enforced. A “Significant
Customer” is any customer of the Company or any of its Subsidiaries that during
the 12 month period immediately prior to the Termination Date accounted for
$1,000,000 or more of revenue to the Company and its Subsidiaries. A
“Significant Competitor” is any sole proprietorship, partnership, corporation,
limited liability company or business or any other Person (other than the
Company or any of its Subsidiaries) that designs, manufactures, sells, markets
or distributes products or services in the vehicle security or convenience,
satellite radio, or home audio categories, but only if annual revenues of such
sole proprietorship, partnership, corporation, limited liability company or
business or any other Person with respect to any such products or services
exceeds $10 million.
ARTICLE IV
MISCELLANEOUS
     4.1. Notices. Any notice, request, demand, claim or other communication
hereunder that is required to be made in writing shall be deemed duly given on
the second business day after if it is sent by registered or certified mail,
return receipt requested, postage prepaid, or, on the next business day after if
sent by a reputable overnight courier such as Federal Express, and addressed to
the intended recipient as set forth below:
     If to the Executive:
c/o Directed Electronics, Inc.
One Viper Way
Vista, California 92083
With copies to (which shall not constitute notice to the Executive):
R. Craig Scott, Esq.
Executive Law Group
1 Newport Place, Suite 1000
Newport, CA 92660
Facsimile: (949) 222-0113
     If to the Company:
c/o Andrew D. Robertson
516 W. Webster Avenue
Chicago, IL 60614
Facsimile: (773) 348-4625
E-mail: andrew.robertson@sbcglobal.net

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With copies to (which shall not constitute notice to the Company):
Greenberg Traurig, LLP
2375 E. Camelback Road
Suite 700
Phoenix, Arizona 85016
Attention: Brian H. Blaney, Esq.
Facsimile: (602) 445-8603
E-mail: blaneyb@gtlaw.com
Either party hereto may send any notice, request, demand, claim or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, messenger service, telecopy,
telex, ordinary mail or electronic mail), but no such notice, request, demand,
claim or other communication shall be deemed to have been duly given unless and
until it actually is received by the intended recipient. Either party hereto may
change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other party notice in
the manner herein set forth.
     4.2. Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein. This
Section 4.2 shall be read consistently with Sections 3.5 and 3.6 as the parties
intend that such provisions may be modified by a court of competent jurisdiction
only to the extent necessary to allow for enforcement thereof.
     4.3. Complete Agreement. This Agreement embodies the complete agreement and
understanding among the parties and supersedes and preempts any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way,
including the Prior Agreement.
     4.4. Counterparts. This Agreement may be executed on separate counterparts,
each of which is deemed to be an original and all of which taken together
constitute one and the same agreement. Any telecopied signature shall be deemed
a manually executed and delivered original.
     4.5. Successors and Assigns. This Agreement is intended to bind and inure
to the benefit of and be enforceable by the Executive and the Company and their
respective successors and assigns (and, in the case of the Executive, heirs and
personal representatives), except that Executive may not assign any of his
rights or delegate any of his obligations hereunder.
     4.6. Equitable Remedies. The Executive acknowledges and agrees that the
Company would not have an adequate remedy at law in the event any of the
provisions of Article III of this Agreement are not performed in accordance with
their specific terms or are breached. Accordingly, the Executive agrees that the
Company shall be entitled to an injunction or injunctions to prevent breaches of
Article III of this Agreement and to enforce specifically the terms and
provisions thereof in any action instituted in any court of competent
jurisdiction, in addition to any other remedies which may be available to it.
     4.7. Choice of Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without regard to conflicts
of laws principles thereof and all questions concerning the validity and
construction hereof shall be determined in accordance with the laws of said
state. Subject to the last sentence of this Section 4.7, by execution and
delivery of this Agreement, each Party irrevocably submits to the personal and
exclusive jurisdiction of any federal or state court of competent jurisdiction
located in the County of San Diego, State of California, for himself or herself
to enforce this Agreement. Each party agrees that venue would be proper in any
of such courts, and hereby waives any objection that any such court is an
improper or inconvenient forum for the resolution of any

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such action. The parties further agree that the mailing by certified or
registered mail, return receipt requested, to the addresses specified for notice
in this Agreement, of any process or summons required by any such court shall
constitute valid and lawful service of process against them, without the
necessity for service by any other means provided by statute or rule of court.
Nothing in this Agreement shall affect or limit any right to serve process in
any other manner permitted by law or shall be construed to prevent the Company
from bringing and pursuing, or in any way limit, the right of the Company to
bring or pursue, any action arising out of or in connection with Article III in
any jurisdiction where the Executive is subject to personal jurisdiction and
venue is proper.
     4.8. Dispute Resolution. Subject to the last sentence of this Section 4.8,
if any dispute arises over the terms of this Agreement between the parties to
this Agreement, either Executive or Company may submit the dispute to binding
arbitration within 30 days after such dispute arises, to be governed by the
evidentiary and procedural rules of the American Arbitration Association
(Employment Arbitration). Executive and Company shall mutually select one
arbitrator within 10 days after a dispute is submitted to arbitration. In the
event that the parties do not agree on the identity of the arbitrator within
such period, the arbitrator shall be selected by the American Arbitration
Association. The arbitrator shall hold a hearing on the dispute in San Diego,
California within 30 days after having been selected and shall issue a written
opinion within 15 days after the hearing. Executive and Company shall each be
responsible for paying the fees of their own legal counsel, if legal counsel is
obtained. Except for filing fees, all costs of the arbitrator shall be allocated
by the arbitrator, but in no event will the Executive be obligated to pay more
than he would have paid in any comparable court action. Either Executive or
Company, or both parties, may file the decision of the arbitrator as a final,
binding and nonappealable judgment in a court of appropriate jurisdiction.
Notwithstanding the foregoing provisions of this Section 4.8 to the contrary,
matters in which an equitable remedy or injunctive relief is sought by a party,
including but not limited to the remedies referred to in Section 4.6 hereof,
shall not be required to be submitted to arbitration, if the party seeking such
remedy or relief objects thereto, but shall instead be subject to the provisions
of Section 4.7 hereof.
     4.9. Amendments and Waivers. No provision of this Agreement may be amended
or waived without the prior written consent of the parties hereto. The waiver by
either party to this Agreement of a breach of any provision of this Agreement
shall not be construed or operate as a waiver of any preceding or succeeding
breach of the same or any other term or provision or as a waiver of any
contemporaneous breach of any other term or provision or as a continuing waiver
of the same or any other term or provision.
     4.10. Business Days. Whenever the terms of this Agreement call for the
performance of a specific act on a specified date, which date falls on a
Saturday, Sunday or legal holiday, the date for the performance of such act
shall be postponed to the next succeeding regular business day following such
Saturday, Sunday or legal holiday.
     4.11. No Third Party Beneficiary. Except for the parties to this Agreement
and their respective successors and assigns, nothing expressed or implied in
this Agreement is intended, or will be construed, to confer upon or give any
person other than the parties hereto and their respective successors and assigns
any rights or remedies under or by reason of this Agreement.
[SIGNATURES APPEAR ON FOLLOWING PAGE]

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     IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.

            DIRECTED ELECTRONICS, INC.
      By:   /s/ Troy D. Templeton         Troy D. Templeton, Chairman of the
Board                      /s/ James E. Minarik       James E. Minarik         
 

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