Exhibit 10.3


 


Dated December 1, 2005


 


 


Hauppauge Digital,Inc.


as Pledgor


 


JPMorgan Chase Bank, N.A.


as Pledgee


 


and


 


Hauppauge Digital Europe S.àr.l.


as the Company


 


 


SHARE PLEDGE AGREEMENT


 





















 


TABLE OF CONTENTS


 


	
  1.

  	
  DEFINITIONS

  	
  1

  
	
  2.

  	
  PLEDGE

  	
  3

  
	
  3.

  	
  PERFECTION OF THE PLEDGE

  	
  3

  
	
  4.

  	
  CONTINUING AND ADDITIONAL SECURITY

  	
  3

  
	
  5.

  	
  VOTING RIGHTS

  	
  4

  
	
  6.

  	
  DISTRIBUTIONS

  	
  5

  
	
  7.

  	
  SUBSCRIPTION RIGHTS

  	
  5

  
	
  8.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  5

  
	
  9.

  	
  UNDERTAKINGS AND COVENANTS

  	
  6

  
	
  10.

  	
  SHAREHOLDER APPROVAL

  	
  7

  
	
  11.

  	
  ENFORCEMENT

  	
  7

  
	
  12.

  	
  TERMINATION

  	
  8

  
	
  13.

  	
  LIABILITY AND INDEMNITY

  	
  8

  
	
  14.

  	
  WAIVERS, REMEDIES CUMULATIVE

  	
  8

  
	
  15.

  	
  COSTS

  	
  8

  
	
  16.

  	
  NOTICES

  	
  8

  
	
  17.

  	
  ASSIGNMENT

  	
  9

  
	
  18.

  	
  GOVERNING LAW AND JURISDICTION

  	
  10

  
	
  19.

  	
  AMENDMENTS

  	
  10

  
	
  20.

  	
  COUNTERPARTS

  	
  11

  
	
  21.

  	
  SEVERABILITY

  	
  11

  
	
   

  	
  EXECUTION PAGE

  	
  11

  
	
   

  	
  SCHEDULE 1

  	
  13

  
	
   

  	
  SCHEDULE 2

  	
  14

  



 


1





















 


THIS SHARE PLEDGE AGREEMENT (this “Agreement”) was made on this 1st day of December 2005


 


BETWEEN:


 


1.             Hauppauge Digital, Inc., a company
organised and existing under the laws of New York and having its principal
place of business at New York, 11788, 91, Cabot Court, Hauppauge (the “Pledgor”); and


 


2.             JPMorgan Chase Bank, N.A., a national banking
association organised and existing under the federal laws of the United States
of America and having its registered office at 395 North Service Road,
Melville, New York, 11747 (the “Pledgee”).


 


IN THE PRESENCE OF:


 


3.             Hauppauge Digital Europe S.àr.l., a private limited
liability company (société à responsabilité
limitée) organised and existing under the laws of the Grand Duchy of
Luxembourg, having its registered office at 12, rue Léon Thyes, L-2636
Luxembourg, Grand Duchy of Luxembourg and registered with the commercial
registry of Luxembourg under no. B 71.905 (the “Company”).


 


WHEREAS:


 


(A)          The Pledgor owns 100 per cent (100%) of the share capital
and the voting rights of the Company.


 


(B)           The Pledgee has made, and may from time to time make, loans
to Hauppauge Computer Works, Inc., (the “Borrower”),
which loans are or shall be evidenced by one or more promissory notes (the “Notes”) and pursuant to which the Borrower will incur
obligations owing to the Pledgee (the “Obligations”).


 


(C)           The Pledgor has guaranteed the Obligations of
the Borrower pursuant to a guarantee agreement dated on the date hereof (as
amended, restated or supplemented, from time to time, the “Guarantee”).


 


(D)          As a condition to the making of such loans under
the Notes and to accept the Guarantee of the Pledgor, the Pledgor is required to
create a first priority right of pledge over the Pledged Assets (as defined below)
in favour of the Pledgee in accordance with the terms set forth herein.


 


NOW IT IS AGREED AS FOLLOWS:


 


1              DEFINITIONS


 


1.1           Unless
otherwise defined herein, capitalised terms and expressions used in this Agreement
(including the recitals hereto) will have the same respective meanings as set
forth in the Guarantee and the Notes. In addition, the following capitalised
terms and expressions will have 


 


1





















 


the following meanings:


 


“Business Day”
means a day on which the banks are open for general business in Luxembourg and New
York.


 


“Pledged Assets”
means the Shares together with any present or future rights attached thereto
(including, but not limited to, any voting rights and rights of pre-emption), any
cash distributions on the Shares, including dividends or redemption proceeds of
such Shares, or any other values, securities, rights or property received in
respect of the Shares.


 


“Right of Pledge”
means the right of pledge created by this Agreement in accordance with Clause
2.


 


“Shares” means:


 


(a)           eight thousand twenty three (8023) registered
shares in the capital of the Company with a nominal value of thirty euro (EUR
30.-) each; and


 


(b)           any and all shares in the capital of the Company
which are acquired or offered in substitution or in addition to such shares,
including those which may be subscribed by the Pledgor in the case of an
increase of the share capital of the Company, following exchange, merger,
consolidation, division, issue or stock dividend, subscription for cash or
otherwise after the date of this Agreement.


 


“Secured Obligations”
means any and all obligations and liabilities of the Pledgor to the Pledgee,
whether present or future, whether actual or contingent, whether for principal,
interest, costs, charges and expenses in connection with (i) the Guarantee
and the Notes or (ii) this Agreement, each as amended, supplemented,
restated or novated from time to time, as well as any indemnities due
thereunder.


 


1.2           Unless
otherwise defined herein, any reference in this Agreement to:


 


(a)           the Pledgor, the Pledgee, the Company and any
other person will be construed so as to include any subsequent successors and
permitted assigns and transferees in accordance with their respective
interests;


 


(b)           a “Clause” or a “Schedule” will, subject to any contrary indication, be construed
as a reference to a clause of or a schedule to this Agreement;


 


(c)           this Agreement, the Guarantee, the Notes or any
other agreement or document will be construed as a reference to this Agreement,
the Guarantee, the Notes or, as the case may be, such other agreement or
document as the same may have been, or may from time to time be, amended,
varied, novated, supplemented or replaced.


 


1.3           The
titles and headings of the Clauses are for convenience only and do not form
part of this Agreement and shall in no way affect the interpretation of this
Agreement.


 


2





















 


2              PLEDGE


 


As security for the due and full payment and
discharge of the Secured Obligations, the Pledgor agrees to grant and hereby
grants to the Pledgee a continuing first priority pledge (gage de
premier rang) over the Pledged Assets (the “Pledge”)
in accordance with articles 3 and following of the law on financial collateral dated
5 August 2005 (Loi de 5 août 2005 sur les
contrats de garantie financière) (the “Financial
Collateral Law”), and the Pledgee agrees to accept and hereby accepts
such Pledge.


 


3              PERFECTION OF THE PLEDGE


 


3.1           The
Pledge is perfected by the acknowledgement and acceptance thereof by the Company
and the entry (inscription) of the Pledge in the
Company’s shareholders’ register (registre des associés)
at the date of execution of this Agreement


 


3.2           The
Company, by executing this Agreement, hereby expressly acknowledges and accepts
the Pledge.


 


3.3           Upon the
signing of this Agreement, the Pledgor shall inure the Company to (i) record
the Pledge in the Company’s shareholders’ register by completing and inserting
the wording of Schedule 1 to this Agreement, opposite the name of the
respective Pledgor and Shares and (ii) confirm, immediately upon
registration, in writing to the Pledgee that registration of the Pledge in the
Company’s shareholders’ register has been done by the execution and delivery of
a letter, substantially in the form of Schedule 2 to this Agreement, to
the Pledgee together with a photocopy of the relevant pages of the
shareholders’ register.


 


3.4           As
soon as a Pledgor will acquire Pledged Assets after the date of this Agreement,
the Pledgor shall inure the Company to forthwith register the Pledge with
respect to those Pledged Assets in the Company’s shareholders’ register.


 


4              CONTINUING AND
ADDITIONAL SECURITY


 


4.1           The
Pledge will be a continuing security and shall not be considered as satisfied
by any intermediate payment, satisfaction or settlement of any part of the
Secured Obligations until expressly released in accordance with Clause 12.1 of
this Agreement, and shall  remain in full
force and effect until the due and full payment and discharge of the Secured
Obligations.


 


4.2           The
Pledge will be cumulative, in addition to and independent of any other security
or security interest now or hereafter held by the Pledgee as security for the
Secured Obligations or any rights, powers and remedies provided by law and
shall not operate so as in any way to prejudice or affect or be prejudiced or
affected by any security interest or other right or remedy which the Pledgee
may now or in the future have in respect of the Secured Obligations.


 


4.3           The
Pledgor hereby waives any rights it may have of first requiring the Pledgee to
proceed against or claim payment from any other person or enforce any guarantee
or security before enforcing the Pledge. The rights of the Pledgee hereunder
are in addition to and not exclusive of those provided by law.


 


3





















 


4.4           The
Pledge shall not be discharged by the entry of any Secured Obligations into any
current account, in which case the Pledge shall secure any balance of such
current account up to the amount in which the Secured Obligations were entered
therein.


 


4.5           To
the extent permitted by law, the Pledgor recognises that the Pledge will not in
any way be prejudiced or affected by any change in the articles of association or
status of the Pledgor or by any limitation, disability, incapacity or other
circumstances relating to the Pledgor or any other person, by any invalidity,
illegality or unenforceability of the obligation of the Pledgor or any other
person, and the Pledgor agrees to keep the Pledgee fully indemnified against
any loss suffered as a result of any failure by the Pledgor to perform any such
obligation or purported obligation.


 


4.6           The
Pledgee may at any time without discharging or in any way affecting the pledge
created hereby (a) grant the Pledgor any time or indulgence, (b) concur
in any moratorium of the Secured Obligations, (c) amend the terms and
conditions of the Secured Obligations, (d) abstain from taking or
perfecting any other security and discharge any other security and (e) abstain
from exercising any right or recourse or from proving or claiming any debt and
waive any right or recourse.


 


5.             VOTING RIGHTS


 


5.1           Until
the occurrence of an Event of Default, the Pledgor shall be entitled to
exercise all voting rights in relation to the Shares in a manner which does not
adversely affect this Pledge or cause an Event of Default to occur. After the
occurrence of an Event of Default, the Pledgor shall not, without the prior
written consent of the Pledgee, exercise any voting rights or otherwise in
relation to the Shares and undertakes to request such consent in writing.


 


5.2           The
Pledgee shall be entitled, after an Event of Default has occurred, to request
the Pledgor to exercise the voting rights (to the extent permitted by law) or
to appoint the Pledgee (or any person designed to the Pledgor by the Pledgee)
as the Pledgor’s irrevocable proxy to represent the Pledgor at the relevant
shareholders’ meeting and exercise the voting rights in any manner the Pledgee
deems fit for the purpose of protecting and/or enforcing its rights hereunder.
The Pledgor shall do whatever is necessary in order to ensure that the exercise
of the voting rights in these circumstances is facilitated and becomes possible
for the Pledgee or such other person, including the issuing of a writte proxy
in any form required under applicable law.


 


The
Pledgor hereby expressly acknowledges that, after the occurrence of an Event of
Default, the Pledgee shall be totally and unconditionally authorised to
exericse the voting rights attached to the Shares in any manner necessary or
useful for the pusposed of ensuring the complete satisfaction of the Secured
Obligations and hereby waives any claim it may have in this respect in particular
with respect to the liability of the Pledgee or such other person (save for
events of wilful misconduct, gross negligence or bad faith).


 


5.3           The
Company will, following the notification by the Pledgee of the occurrence of an
Event of Default, forthwith send to the Pledgee a copy of all agendas for
future shareholders’ meetings and other documents relevant to such future
shareholders’ meetings, notices and communications which it sends to
shareholders of the Company, as well as copies of all resolutions that will be adopted
by future shareholders’ meetings.


 


4





















 


6.             DISTRIBUTIONS


 


6.1           If
and as long as no Event of Default has occurred and is continuing, all
distributions on the Shares, including dividends, will remain vested in the
Pledgor.


 


6.2           Upon
the occurrence of an Event of Default, which is continuing, any distributions
on the Shares, including dividends, shall be paid to the Pledgee which shall
apply these distributions exclusively towards the discharge of the Secured
Obligations.


 


7.             SUBSCRIPTION RIGHTS


 


Unless
agreed otherwise by the Pledgee, the Pledgor shall exercise all subscription
rights to which the Shares may be entitled. The shares obtained by exercising these
subscription rights shall be part of the Shares and the Pledge with respect of
those Shares shall be registered in the Company’s shareholders’ register in
accordance with Clause 2.


 


8.             REPRESENTATIONS AND
WARRANTIES


 


In addition to the representations and warranties made in
the Guarantee, the Pledgor hereby
represents and warrants for the benefit of the Pledgee that:


 


(a)           the Pledgor and the Company are duly incorporated and
validly existing under the laws of their jurisdiction of incorporation, have
the power to enter into this Agreement and to exercise and perform their rights
and obligations hereunder and have taken all corporate and other actions required
for the execution, delivery and performance of this Agreement;


 


(b)           the granting of the pledge falls within the corporate
purpose of the Pledgor, which has also satisfied itself that the benefits it
expects to derive from the Guarantee and the Notes are an adequate
consideration for it to grant this Pledge;


 


(c)           no demand, order or resolution for the winding-up or
liquidation has been made or filed or is currently pending before the court in
relation to the Pledgor or the Company and neither the Pledgor nor the Company
are subject to any bankruptcy proceedings or proceedings for concordat préventif de faillite, gestion
contrôlée or sursis de paiement;


 


(d)           the Shares represent, on the date of execution of this
Agreement, sixty-five per cent (65%) of the issued share capital of the Company,
are validly issued and fully paid up, and no dividends have been distributed on
the Shares which remain unpaid on the date hereof;


 


(e)           on the date of execution of this Agreement, the Shares
are, and shall remain, in registered form until the date upon which the Secured
Obligations have been unconditionally and irrevocably paid and discharged in
full;


 


(f)            the Pledgor is, on the date of execution of this
Agreement, the registered and absolute legal owner and beneficial owner of the
Shares, duly registered in the Company’s 


 


5





















 


shareholders’ register. The Company’s
shareholders’ register accurately reflects the number of shares held by the
shareholders;


 


(g)           the Pledged Assets are free from any security
interest, lien or encumbrance of any kind, except for the Pledge. The business
of the Pledgor is not subject to a floating charge (gage sur
fonds de commerce), similar foreign law security or any mandate to
create the same, save as required or permitted under the Guarantee and/or  the Notes;


 


(h)           none of the rights attached to the Pledged Assets, and
in particular voting rights or rights to dividends, have been transferred to
any other shareholder or any other third party or may be exercised by any other
party, by virtue of a power of attorney, a proxy or a similar authorisation;


 


(i)            this Agreement constitutes the legal, valid and
binding obligations of the Pledgor, enforceable in accordance with its terms save
(i) that an order for specific performance is at the discretion of the
courts and (ii) for all laws affecting creditor’s rights generally.


 


9.             UNDERTAKINGS AND COVENANTS


 


In addition to any covenants and undertakings made by
the Pledgor in theGuarantee, the
Pledgor hereby undertakes and covenants the following:


 


(a)           to preserve and maintain its Pledged Assets until all
Secured Obligations which have arisen have been unconditionally and irrevocably
paid and discharged in full, as set forth in Clause 12, and not to waive,
without the prior written consent of the Pledgee, any rights attached to its
Shares and in general not to perform any acts which result in a reduction of
the value of its Pledged Assets;


 


(b)           to give, execute, deliver, file, register and record,
authorise or obtain all such notices, instruments, documents, agreements, or
other papers, and take such other action, as may be necessary or desirable (in
the reasonable judgement of the Pledgee) to create, preserve, publish notice
of, perfect, validate or preserve the priority of the Pledge or to enable the Pledgee
to exercise and enforce its rights hereunder with respect to such pledge and to
do all such acts as to facilitate, to the extent permitted by law, the
appropriation of the Pledged Assets or any part thereof in the manner
contemplated by this Agreement;


 


(c)           without prejudice to Clause 5.1, not to vote in any
manner that is inconsistent with the terms of this Agreement,  the Guarantee or the Notes and not to exercise
its voting rights in any way which might affect the Pledge or the rights of the
Pledgee under this Agreement, the Guarantee and the Notes;


 


(d)           in the event that a Pledgor foresees or reasonably
should foresee that the Pledgee’s interest would be affected by the exercise of
voting rights, to consult with the Pledgee, prior to exercising its voting
rights, on the resolution to be passed and subsequently vote in accordance with
the instructions of the Pledgee;


 


(e)           not, without the express prior written consent of the Pledgee:


 


6





















 


(i)            create or permit to subsist any
security interest, pledge or encumbrance on or over the Pledged Assets or any
part thereof or interest therein, other than the Pledge;


 


(ii)           permit the Company to cancel, reduce, increase,
redeem, create or issue or put under option any shares or other securities of
the Company, or securities convertible or exchangeable into shares or other
securities of the Company, or to make otherwise any alteration to, or
reorganise, the capital of the Company; or


 


(iii)          permit any
modification of the articles of association of the Company which could have an
adverse impact on the rights of the Pledgee under this Agreement,  the Guarantee and the Notes;


 


(f)            to take all such other measures as may reasonably be required
to protect the Pledgee’s interest in the Pledged Assets and to ensure that the
security constituted by this Agreement and its undertakings and obligations under
this Agreement will inure to the benefit of any such assignee of the Pledgee as
is referred to in Clause 17.


 


10.          SHAREHOLDER APPROVAL


 


The
enforcement of the Pledge created hereunder may result in the transfer of the
Shares to a third party and as shareholder of the Company on the date hereof,
the Pledgor hereby expressly and specifically, approves and accepts such
transfer and such transferee(s) as new shareholder(s) of the Company, whoever
it, he, she or they may be, and the Pledgor undertakes to take all necessary
and possible steps, if and when so required, to reiterate this approval and
acceptance, respectively, by way of a formal shareholder’s resolution.


 


11.          ENFORCEMENT


 


11.1         Upon
the occurrence of an Event of Default and at any time thereafter for so long as
such an Event of Default is continuing, the Pledgee shall be entitled to
exercise all its rights and powers by virtue of this Agreement, without prior
notice.


 


11.2         Without
limiting the generality of the forgoing, the Pledgee shall be entitled to
realise the Pledged Assets in any manner as provided for, or permitted by
Luxembourg law or to request attribution by the competent court, in all cases,
without prejudice to any rights of appropriation in relation to the Pledged
Assets arising under this Agreement or any applicable laws.


 


11.3         In
case of a private appropriation of the Pledged Assets (to the extent permitted
by applicable law), the Pledged Assets shall be valued by an independent
expert, appointed upon the request of any of the parties by the president of
the Institut Luxembourgeois des Réviseurs d’Entreprises.


 


11.3         Any
moneys received by the Pledgee upon enforcement of the Pledge in accordance
with the provisions of this clause 11 shall be applied to pay all or any part
of the then outstanding Secured Obligations.


 


7





















 


12.          TERMINATION


 


12.1         This
Agreement and the Pledge will be and remain in full force and effect until all
Secured Obligations have been fully repaid or discharged to the satisfaction of
the Pledgee.


 


12.2         Upon
termination of this Agreement and of the Pledge in accordance with Clause 12.1,
the Pledgee will, at the reasonable request of the Pledgor, issue a notice of
confirmation of release to the Pledgor.


 


13.          LIABILITY AND INDEMNITY


 


13.1         The Pledgee shall not be liable for
any losses arising in connection with the exercise of any of its rights, powers
and discretions hereunder save for liabilities and expenses arising from the
gross negligence or wilful default of the Pledgee.


 


13.2         The Pledgor will indemnify the
Pledgee and every attorney which may be appointed from time to time in respect
of all liabilities and reasonable documented expenses incurred by it, him, her
or them in the execution of any rights, powers or discretions vested in it,
him, her or them pursuant hereto save for liabilities and expenses arising from
the gross negligence or wilful default of the Pledgee or its attorneys or both.


 


14.          WAIVERS, REMEDIES CUMULATIVE


 


No waiver of any of the terms
hereof shall be effective unless in writing signed by the Pledgee. No delay in
or non-exercise of any right by the Pledgee shall constitute a waiver. Any
waiver may be on such terms as the Pledgee sees fit. The rights, powers and discretions
of the Pledgee herein are additional to and not exclusive of those provided by
law, by any agreement with or other security in favour of the Pledgee.


 


15.          COSTS


 


(a)           The Pledgor will reimburse the
Pledgee:


 


(i)            for all documented charges and expenses
incurred in the negotiation, preparation and execution of this Agreement and
all waivers, discharges, amendments and other documents in connection herewith
(including, but not limited to, the fees and expenses of legal advisers and any
VAT thereon); and


 


(ii)           subject to clause 13, for all
charges and expenses incurred by the Pledgee in connection with the enforcement
of or preservation of any rights under this Agreement (including, but not
limited to, the fees and expenses of legal advisers and any VAT thereon).


 


(b)           The Pledgor will pay or procure the
payment when due of all present and future registration fees, stamp duties and
other imposts or transaction taxes in relation to this Agreement and keep the
Pledgee indemnified against any failure or delay in paying the same.


 


16.          NOTICES


 


Any notice or other
communication required or permitted to be given hereunder shall be in 


 


8





















 


writing and shall be delivered
in person or sent by registered mail, charges prepaid, or by facsimile,
addressed as follows:


 


(i)            to the Pledgor in the English
language at:


 


Hauppauge Digital, Inc.


91 Cabot Court


Hauppauge New York 11788


Fax number:  631 434 3198


Att.:  Gerald Tucciarone


 


(ii)           to the Pledgee, in the English
language at:


 


JPMorgan Chase Bank, N.A.


395 North Service Road, Suite 302


Melville New York 11747


Fax number:  631 755-0137


Att.:   
Relationship
Manager – Hauppauge Computer Works, Inc.


 


(iii)          to the Company in the English
language at:


 


Hauppauge Digital Europe S.àr.l


12, rue Léon Thyes


L-2636 Luxembourg


Fax number: 49 2161 694 888


Att.:    Chris Strijbosch


 


Any such notice or other
communication shall be deemed to have been given and received on the day on
which it was delivered (in person) or dispatched by facsimile if so delivered
or dispatched prior to 6:00 p.m. local time at the place of receipt (or,
if such day is not a Business Day or such communication is delivered or
dispatched after 6:00 p.m. local time at the place of receipt, on the next
following Business Day) or, if mailed, on the third Business Day after having
been posted.


 


Each party may at any time
change its address for service from time to time by giving notice to the other
parties to this Agreement in accordance with this clause.


 


17.          ASSIGNMENT


 


17.1         In the case of an assignment,
transfer or novation by any party to the Guarantee and the Notes to 


 


9





















 


one or several transferees of all or any part of its
rights and obligations under the Guarantee and the Notes, the Pledgee and the
Pledgor hereby agree that in such event, to the extent required under
applicable laws, the security interest created hereunder shall be preserved for
the benefit of the Pledgee as expressly permitted under articles 1278 to 1281
of the Luxembourg civil code.


 


17.2         The Pledgor may not assign any of
its rights under this Agreement without the prior written consent of the
Pledgee. The Pledgee may assign all or any part of its rights under this
Agreement. Such assignment by the Pledgee shall be enforceable towards the
Pledgor pursuant to the provisions of article 1690 of the Luxembourg civil
code.


 


18.          GOVERNING LAW AND
JURISDICTION


 


18.1         This
Agreement will be governed by and construed in accordance with the laws of the
Grand Duchy of Luxembourg.


 


18.2         The
courts of the district of Luxembourg City are to have non- exclusive jurisdiction
to settle any disputes which may arise in connection with this Agreement.


 


19.          AMENDMENTS


 


19.1         This Agreement will not be amended, modified or
rescinded except in writing and duly signed by authorised signatories of the
Pledgor, the Company and the Pledgee.


 


19.2         Any amendment, addendum and schedule so
signed will constitute part of this Agreement.


 


10





















 


20.          COUNTERPARTS


 


At least three counterparts of this
Agreement have been executed by the parties hereto, each of which will be
deemed to be an original but all of which taken together will constitute a
single agreement.


 


21.          SEVERABILITY


 


Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction will, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction will not invalidate or render
unenforceable such provision in any other jurisdiction.


 


IN WITNESS WHEREOF the parties hereto have executed this Agreement
in three counterparts on the date first above written by attaching their
respective signatures to the following page.


 


EXECUTION PAGE TO THE SHARE
PLEDGE AGREEMENT DATED DECEMBER 1, 2005


 


	
  For and on behalf of

  	
   

  
	
  Hauppauge Digital, Inc.

  	
   

  
	
  as Pledgor

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Kenneth
  Plotkin

  	
   

  
	
  Name:

  	
  Kenneth Plotkin

  	
   

  
	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of 

  	
   

  
	
  JPMorgan
  Chase Bank, N.A.

  	
   

  
	
  as Pledgee 

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Christopher Jantzen

  	
   

  
	
  Name:

  	
  Christopher Jantzen

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  



 


The Pledge created by this Agreement and (so far as
the Company is concerned) the terms and conditions thereof are hereby expressly
accepted by the Company.


 


11





















 


	
  For and on behalf of

  	
   

  
	
  Hauppauge
  Digital Europe S.àr.l.

  	
   

  
	
  as the Company

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Kenneth Plotkin

  	
   

  
	
  Name:

  	
  Kenneth Plotkin

  	
   

  
	
  Title:

  	
  Manager

  	
   

  



 


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Schedule 1


 


“Eight thousand twenty three (8023) 
of the above shares held by Hauppauge Digital, Inc. are subject to a
first priority pledge in favour of JPMorgan Chase Bank, N.A. pursuant to a share
pledge agreement dated December 1, 2005 made between Hauppauge Digital, Inc.,
as pledgor and JPMorgan Chase Bank, N.A., as pledgee”


 


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Schedule 2


 


Hauppauge
Digital Europe S.àr.l.


12, rue Léon Thyes


L-2636 Luxembourg


 


	
  To:

  	
  JPMorgan Chase Bank, N.A.

  
	
   

  	
  395 North Service Road, Suite 302

  
	
   

  	
  Melville New York 11747

  
	
   

  	
   

  
	
  Date:

  	
  December 1, 2005

  



 


Dear Sirs,


 


We write with reference to the share pledge agreement of
even date herewith entered into between you as pledgee, Hauppauge Digital Inc.,
as pledgor and ourselves (the “Share Pledge Agreement”).


 


We hereby inform you that:


 


(a)           the pledge on eight thousand
twenty three (8023) registered shares, granted to you in accordance with the
Share Pledge Agreement, by Hauppauge Digital, Inc. has been duly
registered on the date of this letter in the shareholders’ register; and


 


(b)           our shareholders’ meeting has
duly approved the creation of such pledge in accordance with article 189 of
the law on commercial companies dated 10 August 1915, as amended and article 7
of the articles of association of our company and has agreed that the effect of
such approval shall extend to any transfer of shares that may take place as a
result of the enforcement of the pledge.


 


Duly certified copies of the relevant entries into the
shareholders’ register, as made on the date hereof, and the minutes of the shareholders meeting
are attached for your records.


 


We hereby agree to inform you of any further changes
made or to be made in the shareholders’ register.


 


This letter is construed and shall be governed in
accordance with the laws of Luxembourg.


 


	
  Truly yours,

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Hauppauge Digital Europe S.àr.l.

  
	
  By: Kenneth Plotkin

  
	
  Title: Manager

  



 


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