<PAGE>


                                                                   EXHIBIT 10.12

                              EMPLOYMENT AGREEMENT

                  This Employment Agreement ("Agreement") is made effective as
of February 16, 2000 by and between SURGE COMPONENTS, INC., a New York
corporation (hereinafter, including its successors and/or parent, "Company"),
and ADAM EPSTEIN (hereinafter "Employee").

                  WHEREAS, Company is engaged in the business of supplying
electronic components and, through certain of its subsidiaries, offers Internet
access and web integration services focused primarily on the Latin American
market; and

                  WHEREAS, Employee is currently employed in the position of
President and Chief Executive Officer of MailEncrypt.com, Inc. ("MailEncrypt");

                  WHEREAS, the Company and MailEncrypt have entered into a
Merger Agreement and Plan of Reorganization (the "Merger Agreement") providing
for the acquisition by the Company of all of the outstanding shares of capital
stock of MailEncrypt in exchange for shares of capital stock of the Company (the
"Merger"); and

                  WHEREAS, effective upon the execution of the Merger Agreement
(the "Effective Date"), Company desires to employ Employee, and Employee desires
to be employed by Company, as set forth herein.

                  NOW THEREFORE, in consideration of the foregoing recitals and
the respective covenants, terms and provisions contained herein, the parties
hereto agree as follows:

                  1. EMPLOYMENT/SALARY. Company hereby agrees to employ
Employee, and Employee hereby accepts such employment, on the terms and
conditions set forth herein, commencing on the Effective Date and continuing for
a three year period thereafter (the "Term"), unless terminated earlier as
provided in Section 2 below. Employee shall report directly to the Company's
Board of Directors.

                  (a) Position; Duties. Employee shall be employed in the
position of Chairman of the Board ("Chairman") and, commencing upon the date of
the proposed reorganization pursuant to which Company will become a public
holding company (the "Reorganization Date"), Employee shall also become Chief
Executive Officer of Company. Between the Effective Date and the Reorganization
Date, Employee will serve as Acting Chief Executive Officer of the Company.
Notwithstanding the foregoing, at no time shall Employee assume day-to-day
operational and/or direct managerial control over the Company's existing
electronics components business, which duties shall at all times remain with and
be performed by Ira Levy in accordance with the terms of the employment
agreement, as amended, between Mr. Levy and the Company.


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                  During the Term, Employee will devote his full time and best
efforts to Company and will not engage in any outside employment or business
(whether for compensation or otherwise) without the prior written consent of
Company's Board of Directors. Employee shall at all times faithfully,
industriously and to the best of Employee's ability, experience and talent
perform all of the duties that may be assigned to Employee hereunder. The
services to be rendered by Employee shall include, without limitation, all
services customarily rendered by persons engaged in the same capacity or in a
similar capacity in the Internet industry, and such other services as may be
reasonably requested by Company from time to time. Employee shall be responsible
for the day-to-day operation of the Company and its businesses. Employee's
responsibilities shall specifically include, but not be limited to, directing
the operations of the Company's in-house public relations, investor relations,
investment banking and Internet functions, with responsibility for originating,
negotiating and closing all contracts and other agreements related thereto;
provided, however, that Employee may hire and/or designate all such persons
reasonably necessary to carry out these functions under Employee's general
supervision.

                  Notwithstanding the foregoing, however, this Agreement shall
not be interpreted to prohibit Employee from making personal investments,
serving on other boards of directors and advisory boards, attending educational
classes, or conducting private business affairs if those activities do not
materially interfere with the services required under this Agreement, provided
that Employee shall not directly or indirectly acquire, hold or retain any
material interest in any business competing, directly or indirectly, with the
business of Company, except for investments in mutual and other similar funds.

                  (b) Base Salary. The Company shall pay Employee as
compensation for his services hereunder a base salary, commencing as of the
Effective Date, at the annualized rate of $200,000.00 (the "Base Salary"),
subject to Section 1(c) hereof, which amount shall be paid in accordance with
the Company's payroll practices and subject to the usual and applicable required
withholding.

                  (c) Increases to Base Salary. In the event that any other
employee of the Company or any of its subsidiaries receives a base salary in
excess of $200,000.00, Employee's Base Salary shall be increased commensurately
so that his Base Salary remains at all times as high or higher than that
received by any other employee of the Company or its subsidiaries. In addition,
promptly following each anniversary of the Effective Date during the term of
this Agreement, the compensation committee of the Company's Board shall review
Employee's Base Salary and implement such increase, if any, as it shall
determine is reasonable and appropriate; provided, however, that in the event
any other employee of the Company or any of its subsidiaries has received an
increase to his or her base salary during the 12-month period preceding such
review of Employee's Base Salary, the amount of the increase to Employee's Base
Salary shall equal or exceed the amount of the greatest salary increase received
by any such other person.

                  (d) Bonus. Employee shall be entitled, during the term of this
Agreement, to an annual bonus at the discretion of the compensation committee of
the Board of Directors of the Company.


                                       2
<PAGE>

                  2. TERMINATION.

                  (a) Termination for Cause. The Company may terminate this
Agreement immediately for cause as defined herein. If Employee's employment is
terminated "for cause", Employee shall be entitled to exercise his stock options
(in accordance with the terms thereof) to the extent vested as of the date of
termination, and to receive his accrued but unpaid Base Salary and vacation
through the date of termination, a pro-ration with respect to the bonus to which
he would otherwise be entitled and reimbursement for any expenses through the
date of termination, but shall not be entitled to receive any additional
compensation or accelerated vesting of his options. For purposes of this
Agreement, "Cause" is defined as: (i) any act of personal dishonesty taken by
the Employee in connection with his responsibilities to the Company which the
Board reasonably determines is injurious to the Company, (ii) Employee's
conviction of a felony or other crime involving moral turpitude which the Board
reasonably believes has had or will have a material detrimental effect on the
Company's reputation or business or which results in incarceration of Employee
for in excess of 15 days or (iii) the failure, refusal or neglect by Employee to
substantially perform all of his obligations to the Company after there has been
delivered to Employee a written demand for performance from the Company which
describes the basis for the Company's belief that Employee has not substantially
performed his duties and provides a 15 day cure period in connection therewith.

                  (b) Termination Without Cause. Employee and the Company
understand and acknowledge that Employee's employment with the Company
constitutes "at-will" employment. Therefore, Employee and the Company
acknowledge that, subject to the terms of this Agreement, either the Company or
Employee may terminate the employment relationship at any time with or without
cause, by giving written notice to the other party.

                  (c) Severance Payments and Other Benefits Upon Termination. If
the Company terminates Employee's employment without cause, or in the event of
an Involuntary Termination of the Employee, as hereinafter defined, the Company
(or its successor, as the case may be) shall pay Employee the following: (i) any
accrued but unpaid Base Salary and vacation through the date of termination;
(ii) a pro-ration with respect to any bonus to which he would otherwise be
entitled pursuant to any bonus or incentive compensation plan (or other
arrangement pursuant to which bonuses are awarded to employees on a formula
basis) adopted by the Board of Directors; (iii) reimbursement for any expenses
through the date of termination; (iv) the unvested portion, if any, of the stock
options granted by the Company to Employee shall be subject to the acceleration
provisions set forth in the stock option agreement applicable thereto; and (v) a
severance payment in an amount equal to Employee's then current annual Base
Salary, payable over a period of twelve (12) months following the effective date
of such Involuntary Termination or termination without cause, subject to
withholding as may be required by law. For purposes of this Agreement,
"Involuntary Termination" shall mean termination of Employee's employment with
the Company immediately following any of the following: (1) a reduction by the
Company of Employee's Base Salary as in effect immediately prior to such
reduction (including, for such purposes, the failure of the Company to maintain
in accordance with Section 1(c) hereof Employee's status as the most highly
compensated employee of the Company and its subsidiaries); (2) a material
reduction by the Company in the kind or level of employee benefits to which
Employee is entitled immediately prior to such reduction that is not generally
applicable to all executive level employees of Company; (3) a material reduction
by the Company of Employee's duties and responsibilities, including any
reduction in job title; (4) Employee's voluntary resignation following a Change
of Control, as hereinafter defined, in which Employee is not offered a position
of comparable pay and responsibilities in the same geographic area in which he
worked immediately prior to the Change of Control, or is required to report to
anyone other than the Company's Board of Directors; (5) Employee's voluntary
resignation after submitting a written proposal to the Board, which is prepared
in good faith and is a reasonable exercise of business judgment, outlining his
recommendations for the future and direction of the Company which is then
rejected by the Board; or (6) the continued breach by the Company of its
material obligations hereunder following 30 days' prior written notice thereof
by the Employee.


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                  For purposes of this Agreement, "Change of Control" means (i)
a merger or consolidation or other reorganization or transaction (but excluding
the recapitalization and reorganization of Company contemplated by the Merger
and/or the Merger Agreement) in which securities possessing more than 50% of the
total combined voting power of the Company's outstanding voting securities are
transferred or issued to a person or persons different from the persons holding
those securities immediately prior to such transaction, or (ii) the sale,
transfer or other disposition of all or substantially all of the Company's
assets.

                  (d) Termination of Merger Agreement. Employee and Company
expressly agree that this Agreement is being entered into concurrently with and
contingent upon execution of the Merger Agreement. If the Merger Agreement is
terminated after this Agreement has been executed, Employee or the Company may
immediately terminate this Agreement. If Employee's employment is terminated
hereunder, Employee shall be entitled to receive his accrued but unpaid Base
Salary and vacation through the date of termination, a pro-ration with respect
to the bonus to which he would otherwise be entitled and reimbursement for any
expenses through the date of termination. Employee shall also be entitled to
exercise any options that have vested as of the date of the termination. If
Employee's employment with Company is terminated as set forth in this Section
2(d), the Company agrees that it will not take any action, directly or
indirectly, to interfere with Employee's continuing relationship with
MailEncrypt.

                  3. BENEFITS.

                  (a) Executive Benefits. Employee shall be eligible to
participate in the employee benefit plans currently and hereafter maintained by
the Company of general applicability to other senior executives of the Company.
The benefits received by Employee under any such benefit plan shall be at least
commensurate with those received by any other employee of the Company or any of
its subsidiaries.

                  (b) Stock Options. Effective as of the Effective Date, the
Company shall grant Employee a stock option (the "Option") consisting of
1,500,000 shares of the Company's Class B Common Stock (or such other shares of
common stock as are exchangeable on a one-for-one basis into shares of Class B
Common Stock, the "Option Shares") at an exercise price equal to the fair market

                                       4
<PAGE>

value of such Option Shares on the date of grant. The Option shall vest
immediately as to 300,000 Option Shares and the remainder thereof (consisting of
an option to purchase 1,200,000 Option Shares) shall vest ratably on a monthly
basis as of the last day of each of the first 36 months following the date of
grant, such that 1/36th of the Option will vest on the one-month anniversary of
the Effective Date and the Option shall be fully vested on the third anniversary
of the Effective Date, subject to Employee continuing to render services to the
Company. In addition, the Option shall be subject to acceleration upon the
occurrence of certain events, including if Employee is terminated by the Company
without cause (which shall result in acceleration of 50% of Employee's then
unvested options), if Employee is subject to an Involuntary Termination (which
shall result in acceleration of 50% of Employee's then unvested options), or due
to a Change of Control, as defined above (which shall result in acceleration of
100% of Employee's then unvested options), all as set forth in greater detail in
the stock option agreement by and between Employee and the Company (the "Stock
Option Agreement"), which agreement shall be substantially in the form of
Exhibit A hereto and is incorporated by this reference as if fully set forth
herein. In the event that Employee elects to terminate his employment with
Company without cause, or if Company terminates Employee "for cause" pursuant to
and as defined in Section 2(a) above, the Option shall immediately terminate,
and Employee shall be entitled to exercise the portion of the Option that was
vested on the date of termination only for such period of time as is provided in
the Company's Stock Option Plan and reflected in the Stock Option Agreement. In
all other respects, the Option shall be subject to the terms, definitions and
provisions of the Company's Stock Option Plan and the Stock Option Agreement.

                  (c) Vacation, Etc. Employee shall be entitled to vacation time
and sick leave during each calendar year during the term of this Agreement, in
such amounts as are at least equal to the amounts provided to any other employee
of the Company or any of its subsidiaries, without loss of compensation, in
addition to statutory holidays normally observed by Company in accordance with
Company's vacation and holiday policy adopted from time to time by Company.

                  (d) Expenses. The Company will pay or reimburse Employee for
reasonable travel, entertainment or other expenses incurred by Employee in the
furtherance of or in connection with the performance of Employee's duties
hereunder in accordance with the Company's established policies. Notwithstanding
the foregoing, the parties acknowledge that any amounts paid by the Company
pursuant to this Section 3(d) prior to the date on which the Company's
shareholders approve the Merger shall be reimbursed to the Company from the
proceeds of the sale of certain 12% convertible promissory notes due December
31, 2000, which the Company is currently offering to qualified investors.

                  (e) Perquisites. Employee shall be entitled, during the Term,
to a car allowance in the amount of $650 per month, and such other perquisites
as are at least commensurate with those received by any other employee of the
Company or any of its subsidiaries.

                                       5
<PAGE>

                  All compensation payable to Employee hereunder shall be
subject to such deductions and withholdings as Company is from time to time
required to make pursuant to any federal, state or local law, governmental
regulation or order.

                  4. OFFICE LOCATION/SUPPORT. The Company will provide Employee
with the office space, support staff, and equipment that Employee needs in order
to perform his job duties herein. The location of the office (which is
contemplated to be in the San Francisco Bay area) will be selected by Employee.
Prior to securing and staffing any such office, Employee shall prepare and
submit to the Company's Board of Directors, for their approval, a budget with
respect thereto, which budget shall include a reasonable allowance for the
expenses incurred by Employee in relocating his residence to the vicinity of
such office location.

                  5. REPRESENTATION AND WARRANTIES. Employee represents and
warrants to Company that: (i) Employee is under no contractual or other
restriction or obligation that is materially inconsistent with the execution of
this Agreement, the performance of his duties hereunder, or the rights of
Company hereunder, including, without limitation, any development agreement,
non-competition agreement or confidentiality agreement previously entered into
by Employee, and (ii) Employee is under no physical, mental or other disability
that would substantially hinder or prevent the performance of his duties under
this Agreement.

                  6. CERTAIN COVENANTS.

                  (a) Intellectual Property Rights.

                           (i) Employee agrees that the Company will be the sole
                  owner of any and all of Employee's "Discoveries" and "Work
                  Product," hereinafter defined, made during the term of his
                  employment with the Company, whether pursuant to this
                  Agreement or otherwise. For purposes of this Agreement,
                  "Discoveries" means all inventions, discoveries, improvements,
                  and copyrightable works (including, without limitation, any
                  information relating to the Company's software products,
                  source code, know-how, processes, designs, algorithms,
                  computer programs and routines, formulae, techniques,
                  developments or experimental work, work-in-progress, or
                  business trade secrets) made or conceived or reduced to
                  practice by Employee during the term of his employment by the
                  Company, whether or not potentially patentable or
                  copyrightable in the United States or elsewhere. For purposes
                  of this Agreement, "Work Product" means any and all work
                  product relating to Discoveries.

                           (ii) Employee shall promptly disclose to the Company
                  all Discoveries and Work Product. All such disclosures must
                  include complete and accurate copies of all source code,
                  object code or machine-readable copies, documentation, work
                  notes, flow-charts, diagrams, test data, reports, samples, and
                  other tangible evidence or results (collectively, "Tangible
                  Embodiments") of such Discoveries or Work Product. All
                  Tangible Embodiments of any Discoveries or Work Project will
                  be deemed to have been assigned to the Company as a result of
                  the act of expressing any Discovery or Work Product therein.


                                       6
<PAGE>

                           (iii) Employee hereby assigns and agrees to assign to
                  the Company all of his interest in any country in any and all
                  Discoveries and Work Product, whether such interest arises
                  under patent law, copyright law, trade-secret law,
                  semiconductor chip protection law, or otherwise. Without
                  limiting the generality of the preceding sentence, Employee
                  hereby authorizes the Company to make any desired changes to
                  any part of any Discovery or Work Product, to combine it with
                  other materials in any manner desired, and to withhold
                  Employee's identity in connection with any distribution or use
                  thereof alone or in combination with other materials. This
                  assignment and assignment obligation applies to all
                  Discoveries and Work Product arising during Employee's
                  employment with the Company (or its predecessors), whether
                  pursuant to this Agreement or otherwise. Employee's agreement
                  to assign to the Company any of his rights as set forth in
                  this Section 6(a)(iii) shall not apply to any invention that
                  qualifies fully under the provisions of California Labor Code
                  Section 2870, where no equipment, supplies, facility or trade
                  secret information of the Company was used and that was
                  developed entirely upon Employee's own time, and (i) that does
                  not relate to Company business or to the Company's actual or
                  anticipated research or development, or (ii) that does not
                  result from any work performed by Employee for the Company.

                           (iv) At the request of the Company, Employee shall
                  promptly and without additional compensation execute any and
                  all patent applications, copyright registration applications,
                  waivers of moral rights, assignments, or other instruments
                  that the Company deems necessary or appropriate to apply for
                  or obtain Letters Patent of the United States or any foreign
                  country, copyright registrations or otherwise to protect the
                  Company's interest in such Discovery and Work Product, the
                  expenses for which will be borne by the Company. Employee
                  hereby irrevocably designates and appoints the Company and its
                  duly authorized officers and agents as his agents and
                  attorneys-in-fact to, if the Company is unable for any reason
                  to secure Employee's signature to any lawful and necessary
                  document required or appropriate to apply for or execute any
                  patent application, copyright registration application, waiver
                  of moral rights, or other similar document with respect to any
                  Discovery and Work Product (including, without limitation,
                  renewals, extensions, continuations, divisions, or
                  continuations in part), (i) act for and in his behalf, (ii)
                  execute and file any such document, and (iii) do all other
                  lawfully permitted acts to further the prosecution of the same
                  legal force and effect as if executed by him; this designation
                  and appointment constitutes an irrevocable power of attorney
                  coupled with an interest.

                           (v) To the extent that any Discovery or Work Product
                  constitutes copyrightable or similar subject matter that is
                  eligible to be treated as a "work made for hire" or as having
                  similar status in the United States or elsewhere, it will be
                  so deemed. This provision does not alter or limit Employee's
                  other obligations to assign intellectual property rights under
                  this Agreement.



                                       7
<PAGE>

                           (vi) The obligations of Employee set forth in this
                  Section 6 (including, without limitation, the assignment
                  obligations) will continue beyond the termination of
                  Employee's employment with respect to Discoveries and Work
                  Product conceived or made by Employee alone or in concert with
                  others during Employee's employment with the Company, whether
                  pursuant to this Agreement or otherwise. Those obligations
                  will be binding upon Employee, his assignees permitted under
                  this Agreement, executors, administrators, and other
                  representatives.

                  (b) Exposure to Proprietary Information.

                           (i) As used in this Agreement, "Proprietary
                  Information" means all information of a business or technical
                  nature that relates to the Company including, without
                  limitation, all information about software products whether
                  currently released or in development, all inventions,
                  discoveries, improvements, copyrightable work, source code,
                  know-how, processes, designs, algorithms, computer programs
                  and routines, formulae and techniques, and any information
                  regarding the business of any customer or supplier of the
                  Company or any other information that the Company is required
                  to keep confidential. Notwithstanding the preceding sentence,
                  the term "Proprietary Information" does not include
                  information that is or becomes publicly available through no
                  fault of Employee, or information that Employee learned prior
                  to the Effective Date.

                           (ii) In recognition of the special nature of his
                  employment under this Agreement, including his special access
                  to the Proprietary Information, and in consideration of his
                  employment pursuant to this Agreement, Employee agrees to the
                  covenants and restrictions set forth in Section 6 of this
                  Agreement.

                  (c) Use of Proprietary Information; Restrictive Covenants.

                           (i) Employee acknowledges that the Proprietary
                  Information constitutes a protectible business interest of the
                  Company, and covenants and agrees that during the term of his
                  employment, whether under this Agreement or otherwise, and
                  after the termination of such employment, he will not,
                  directly or indirectly, disclose, furnish, make available or
                  utilize any of the Proprietary Information, other than in the
                  proper performance of his duties for the Company.

                           (ii) Employee will not, during the term of this
                  Agreement or, solely with respect to clauses 2 and 3 of this
                  subparagraph (ii), for a period of one year thereafter (the
                  "Restricted Period"), anywhere within the United States (the
                  "Restricted Territory"), directly or indirectly (whether as an
                  owner, partner, shareholder, agent, officer, director,
                  employee, independent contractor, consultant, or otherwise):


                                       8
<PAGE>

                                    1. perform services for, or engage in, any
                           business that develops or sells products or services
                           which are competitive with any products or services
                           sold or developed by the Company for which Employee
                           has provided any assistance in planning, development,
                           marketing, training, support, or maintenance during
                           the period of Employee's employment with the Company
                           (the "Products");

                                    2. except on behalf of the Company, solicit
                           any person or entity who is, or was at any time
                           during the twelve-month period immediately prior to
                           the termination of Employee's employment with the
                           Company, a customer of the Company for the sale of
                           the Products or any product or service of a type then
                           sold by the Company for which Employee provided any
                           direct, material assistance in planning, development,
                           marketing, training, support, or maintenance; or

                                    3. solicit for employment any person who is,
                           or was at any time during the twelve-month period
                           immediately prior to the termination of Employee's
                           employment with the Company, an employee of the
                           Company.

                  (d) Scope/Severability. The parties acknowledge that the
business of the Company is and will be national and international in scope and
thus the covenants in this Section 6 would be particularly ineffective if the
covenants were to be limited to a particular geographic area of the United
States. If any court of competent jurisdiction at any time deems the Restricted
Period unreasonably lengthy, or the Restricted Territory unreasonably extensive,
or any of the covenants set forth in this Section 6 not fully enforceable, the
other provisions of this Section 6, and this Agreement in general, will
nevertheless stand and to the full extent consistent with law continue in full
force and effect, and it is the intention and desire of the parties that the
court treat any provisions of this Agreement which are not fully enforceable as
having been modified to the extent deemed necessary by the court to render them
reasonable and enforceable and that the court enforce them to such extent (for
example, that the Restricted Period be deemed to be the longest period
permissible by law, but not in excess of the length provided for in Section
6(c), and the Restricted Territory be deemed to comprise the largest territory
permissible by law under the circumstances).

                  (e) Return of Company Materials upon Termination. Employee
acknowledges that all records, documents, and Tangible Embodiments containing or
of Proprietary Information prepared by Employee or coming into his possession by
virtue of his employment by the Company are and will remain the property of the
Company. Upon termination of his employment with the Company, Employee shall
immediately return to the Company all such items in his possession and all
copies of such items.


                                       9
<PAGE>

                  7. EQUITABLE REMEDIES.

                  (a) Employee acknowledges and agrees that the agreements and
covenants set forth in Sections 6(a), (b), (c), (d) and (e) are reasonable and
necessary for the protection of the Company's business interests, that
irreparable injury will result to the Company if Employee breaches any of the
terms of said covenants, and that in the event of Employee's actual or
threatened breach of any such covenants, the Company will have no adequate
remedy at law. Employee accordingly agrees that, in the event of any actual or
threatened breach by him of any of said covenants, the Company will be entitled
to immediate injunctive and other equitable relief, without bond and without the
necessity of showing actual monetary damages. Nothing in this Section 7 will be
construed as prohibiting the Company from pursuing any other remedies available
to it for such breach or threatened breach, including the recovery of any
damages that it is able to prove.

                  (b) Each of the covenants in Sections 6(a), (b), (c), (d) and
(e) will be construed as independent of any other covenants or other provisions
of this Agreement.

                  (c) In the event of any judicial determination that any of the
covenants in Sections 6(a), (b), (c), (d), and (e) are not fully enforceable, it
is the intention and desire of the parties that the court treat said covenants
as having been modified to the extent deemed necessary by the court to render
them reasonable and enforceable, and that the court enforce them to such extent.

                  8. MISCELLANEOUS.

                  (a) Modification; Prior Claims. This Agreement and the Stock
Option Agreement set forth the entire understanding and agreement of the parties
with respect to the subject matter hereof, supersede all existing agreements,
arrangements or understandings, whether oral or written, between them concerning
such subject matter, and may be modified only by a written instrument duly
executed by each party. Except as otherwise specifically provided for in this
Agreement, Employee hereby agrees and acknowledges that any and all
compensation, reimbursement or other obligations or liabilities of Company due
to Employee prior to the effective date of this Agreement have been received and
satisfied in full by Company and Employee hereby waives and releases any claims
which he may have relating thereto or resulting therefrom.

                  (b) Assignment. This Agreement shall inure to the benefit of,
and be binding upon, the parties and their respective successors and assigns;
provided, however, that this Agreement may not be assigned by Employee, nor may
any of Employee's duties hereunder be delegated, without the prior written
consent of Company, which consent may be given or withheld by Company in its
sole discretion. The rights of Company under this Agreement may not be assigned
without the consent of Employee, which consent may be given or withheld by
Employee in his sole discretion.


                                       10
<PAGE>

                  (c) Excise Tax. If any payments or transfers of property to be
made to Employee hereunder are subject, in whole or in part, to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986 (the "Excise Tax"),
and application of Section 280G of the Code can be avoided by an appropriate
shareholder vote pursuant to Section 280G(b)(5)(A) of the Code, the Company and
Employee agree that they will respectively take all reasonable steps necessary
or appropriate to obtain a favorable shareholder vote to ensure that the Excise
Tax and the provisions of Section 280G are not applicable with respect to such
compensation.

                  (d) Survival. The covenants, agreements, representations and
warranties contained in or made pursuant to (i) Sections 5 and 6 hereof by
Employee and (ii) Section 2(c) hereof by Company shall survive the termination
of this Agreement and Employee's employment with Company.

                  (e) Third Party Beneficiaries. Except as expressly provided
herein with respect to successors and assigns of the parties, this Agreement
does not create, and shall not be construed as creating, any rights enforceable
by any person or entity not a party to this Agreement.

                  (f) Waiver. The failure of either party hereto at any time to
enforce performance by the other party of any provision of this Agreement shall
in no way affect such party's rights thereafter to enforce the same, nor shall
the waiver by either party of any breach of any provision hereof be deemed to be
a waiver by such party of any other breach of the same or any other provision
hereof.

                  (g) Section Headings. The headings of the several sections in
this Agreement are inserted solely for the convenience of the parties and are
not a part of and are not intended to govern, limit or aid in the construction
of any term or provision hereof.

                  (h) Notices. All notices and other communications required or
permitted under this Agreement shall be in writing, served personally on, or
mailed by certified or registered mail to, the party to be charged with receipt
thereof. Notices and other communications served by mail shall be deemed given
hereunder three (3) calendar days after deposit of such notice of communication
in the United States mail as certified or registered mail, with postage prepaid
and duly addressed to whom such notice or communications is to be given, in the
case of (i) Company: Surge Components, Inc., 1016 Grand Boulevard, Deer Park,
New York 11729 or (ii) Employee: Adam Epstein, 13955 Tahiti Way, Unit 163,
Marina del Rey, California 90292. Any party may change said party's address for
purposes of giving notices under this Section by giving to the other party a
written notice of such change in the manner provided in this Section.

                  (i) Severability. All sections, clauses thereof and covenants
contained in this Agreement are severable, and in the event any of them shall be
held to be invalid by any court, this Agreement shall be interpreted as if such
invalid sections, clauses or covenants were not contained herein.


                                       11
<PAGE>

                  (j) Applicable Law. This Agreement is made with reference to
the laws of this State of California, and shall be governed by and construed in
accordance therewith. Any legal action, suit or proceeding brought by either
party to enforce or interpret any term or provision of this Agreement shall be
brought in the appropriate state or federal court located in Los Angeles,
California. The prevailing party in any such legal action, suit or proceeding
shall be entitled to have and recover from the losing party such prevailing
party's attorneys' fees and costs incurred in connection therewith.



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<PAGE>



                  (k) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and have made it effective as of the Effective
Date of this Agreement.

                                                     COMPANY:

                                                     SURGE COMPONENTS, INC., a
                                                     New York corporation

                                                     By: /s/ IRA LEVY
                                                        ------------------------
                                                         Ira Levy, President

                                                     EMPLOYEE:

                                                     /s/ ADAM EPSTEIN
                                                     ---------------------------
                                                     Adam Epstein




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