Document:

EXHIBIT 10.1

                              2005 STOCK BONUS PLAN

                                       OF

                               BSD SOFTWARE, INC.
===============================================================================

ARTICLE I - THE PLAN

      This is the 2005 STOCK BONUS PLAN of BSD Software, Inc., a Florida
Corporation (the "Company"). The Plan was adopted by action of the Board of
Directors of the Company on July 13, 2005 and is effective on that date.

      The purpose of the Plan is to promote the long term success of the Company
and the creation of shareholder value by (a) encouraging key employees to focus
on long range objectives, (b) attracting and retaining key employees with
exceptional qualifications and (c) linking key employees directly to stockholder
interests through increased stock ownership. The Plan seeks to achieve these
purposes by providing a portion of bonuses to key employees in the form of
Restricted Shares.

      This Plan shall be governed by, and construed and enforced in accordance
with, the laws of the State of Florida.

ARTICLE II - DEFINITIONS OF TERMS.

      2.1 "Board" means the Company's Board of Directors as constituted from
time to time.

      2.2 "Committee" means a Committee of the Board as described in Article
III.

      2.3 "Common Share" means one share of the common stock of the Company.

      2.4 "Company" means BSD Software, Inc., a Florida corporation.

      2.5 "Participant" means an individual who holds Restricted Shares issued
under the Plan.

      2.6 "Plan" means this 2005 Stock Bonus Plan of BSD Software, Inc., as
amended from time to time.

      2.7 "Restricted Share" means a Common Share awarded under this Plan.

      2.8 "Restricted Share Agreement" means the agreement among the Company and
a Participant which contains the terms, conditions and restrictions pertaining
to such Restricted Shares.

ARTICLE III - ADMINISTRATION

      3.1 The Plan shall be administered by the Board of Directors of the
Company or by such Committee of the Board of Directors as the Board of Directors
shall designate from time to time.

      3.2 The Board of Directors or Committee shall (a) select the key employees
who are to receive Restricted Shares under the Plan, (b) determine the number of
shares, vesting requirements and other features and conditions of such
Restricted Shares, (c) interpret the Plan and (d) make all other decisions
relating to the operation of the Plan. The decision of the Board or Committee
shall be final and binding on all persons.

ARTICLE IV - SHARES AVAILABLE FOR GRANT

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<PAGE>

      4.1 Common Shares issued pursuant to the Plan may be authorized but
unissued shares or treasury shares. The aggregate number of Common Shares
available for issuance awarded under the Plan shall not exceed 600,000.

      4.2 If Restricted Shares are forfeited before any dividends have been paid
with respect to such Shares, then such Shares shall again become available for
grants under the Plan.

ARTICLE V - ELIGIBILITY

      5.1 Non-executive employees or consultants are eligible to be selected as
Participants in the Plan

ARTICLE VI - RESTRICTED SHARE AWARDS

      6.1 Restricted Shares under the Plan may be awarded in such amounts, at
such times, and subject to such vesting or other restrictions as the Committee
may determine.

      6.2 The Committee may determine the price, if any, of the Restricted
Shares awarded under the Plan, provided, however, that, to the extent that the
Restricted Shares are newly issued Common Shares, the Participant, as a
condition to the grant of the Shares, shall be required to pay to the Company in
cash an amount at least equal to the par value of such Common Shares. To the
extent that Restricted Shares are Common Shares from the Company's treasury, no
cash consideration need be required of the award recipients.

      6.3 As a condition to the receipt of Common Shares awarded under the Plan,
each Participant shall be required to execute and deliver to the Company the
Restricted Share agreement, in form acceptable to the Company.

      6.4 Each award of Restricted Shares shall become vested, in full or in
installments, upon satisfaction of the conditions specified in the Restricted
Share Agreement. Absent a provision to the contrary in the Restricted Share
Agreement, Restricted Shares awarded to Participants under the Plan shall be
vested immediately upon issuance.

ARTICLE VII - VOTING AND DIVIDEND RIGHTS

      The holders of Restricted Shares awarded under the Plan shall have the
same voting, dividend and other rights as the Company's other stockholders.

ARTICLE VIII - LIMITATIONS ON RIGHTS

      8.1 Neither the Plan, the Restricted Share Agreement nor any Restricted
Shares granted under the Plan shall be deemed to give any individual a right to
remain an employee or consultant of the Company. The Company, and each of its
affiliates, reserves the right to terminate the service of any employee or
consultant at any time, with or without cause, subject to applicable laws or
employment agreements, if any.

      8.2 Any other provisions of the Plan notwithstanding, the obligation of
the Company to issue Common Shares under the Plan shall be subject to all
applicable laws, rules and regulations and such approval by any regulatory body
as may be required. The Company reserves the right to restrict, in whole or in
part, the delivery of Common Shares pursuant to any award prior to the
satisfaction of all legal requirements relating to the issuance of such Common
Shares, to their registration, qualification or listing or to an exemption from
registration, qualification or listing.

ARTICLE IX - WITHHOLDING TAXES

      9.1 To the extent required by applicable federal, state, local or foreign
law, a Participant or his or her successor shall make arrangements satisfactory
to the Company for the satisfaction of any withholding tax obligations that
arise in connection with the Plan. The Company shall not be required to issue
any Common Shares or make any cash payment under the Plan until such obligations
are satisfied.

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<PAGE>

      9.2 The Company may permit a Participant to satisfy all or part of his or
her withholding or income tax obligations by having the Company withhold all or
a portion of the Common Shares that otherwise would be issued to him or her by
surrendering all or a portion of any Common Shares that he or she previously
acquired.

ARTICLE X - ASSIGNMENT OR TRANSFER OF RESTRICTED SHARES

      9.1 Restricted Shares awarded under the Plan shall not be anticipated,
assigned, attached, garnished, optioned, transferred or made subject to any
creditor's process, whether voluntarily, involuntarily or by operation of law
prior to full vesting and while subject to restriction on transfer by reason of
the investment representations of the Participant. However, this provision shall
not preclude a Participant from designating a beneficiary who shall receive any
outstanding Restricted Shares in the event of Participant's death, nor shall it
preclude a transfer of the Restricted Shares by will or by the laws of descent
and distribution.

      9.2 All shares shall be subject to a restriction on transfer, and transfer
thereof shall be restricted by appropriate legend, by reason of the investment
representation of Participants as provided in the Restricted Share Agreement.

ARTICLE XI - EXECUTION

      To record the adoption of the Plan by the Board of Directors of the
Company, the Company has caused its duly authorized officer to affix the
corporate name and seal hereto.

                                 BSD Software, Inc.

                                 By /s/ Guy Fietz
                                    ----------------
                                 Name:  Guy Fietz
                                 Title: President (Chief Executive Officer)

                                       3
<PAGE>

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                 BSD Software, Inc.

March 14, 2006                   By: /s/GUY FIETZ
                                     ---------------------------
                                 Name:  Guy Fietz
                                 Title: President and Director

                                 By: /s/GORDON ELLISON
                                     ---------------------------
                                 Name:  Gordon Ellison
                                 Title  Chief Financial Officer

                                       4BRIDGE LOAN AGREEMENT

      THIS BRIDGE LOAN AGREEMENT, dated as of March 8, 2006, is entered into by
and between THE SINGING MACHINE COMPANY, INC., a Delaware corporation located at
6601 Lyons Road, Building A-7 Coconut Creek, FL 33073, USA (the "Company"), and
EVER SOLID LIMITED, a Hong Kong registered company, located at Shing Dao
Industrial Bldg., F/5, 232 Aberdeen Main Road, Hong Kong or its successors or
assigns (as used herein, each such signatory or their successors or assigns is
referred to as the "Lender" or a "Lender").

                              W I T N E S S E T H:

      WHEREAS,  the Company and the Lender are  executing  and  delivering  this
Agreement in accordance  with and in reliance upon the exemption from securities
registration for offers and sales to accredited investors afforded,  inter alia,
by Rule 506 under  Regulation D  ("Regulation  D") as  promulgated by the United
States  Securities and Exchange  Commission (the "SEC") under the Securities Act
of 1933, as amended (the "1933 Act"), and/or Section 4(2) of the 1933 Act; and

      WHEREAS, In connection with the Lender's intent to help Company facilitate
its faithful  performance  under that certain  Stock  Purchase  Agreement  dated
February 21, 2006  (hereafter  "SPA") by and between Company on the one hand and
koncepts  International  Limited ("koncepts") on the other, Lender has agreed to
lend funds to the Company,  subject to and upon the terms and conditions of this
Agreement the repayment of which will be represented by a Promissory Note of the
Company ("Senior Note"), on the terms and conditions referred to herein; and

      NOW THEREFORE,  in  consideration of the premises and the mutual covenants
contained  herein and other good and  valuable  consideration,  the  receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

1. AGREEMENT TO LEND

      1.1.  Subject to the terms and  conditions of this Agreement and the other
      Transaction  Agreements,  Lender  hereby agrees to loan to the Company the
      principal  amount  of  $2,000,000.00  US  Dollars  (the  "Loan  Amount  or
      Aggregate  Loan  Amount")  to  be  used  exclusively  to  redeem  existing
      outstanding  Debentures held by Omicron Master Trust, SF Capital Partners,
      Ltd.,  Bristol  Investment Fund, Ltd.,  Ascend Offshore Fund, Ltd., Ascend
      Partners LP, and Ascend Partners  Sapient LP  (collectively  the "Sub-Debt
      Holders") in the original  aggregate  principal amount of $4,000,000.  The
      obligation to repay the loan shall be evidenced by the Company's  issuance
      of the Senior Note, which shall be shall be in the form of Annex 1 annexed
      hereto.

      1.2. The loan to be made by the Lender and the issuance of the Senior Note
      to the Lender and the other transactions contemplated hereby are sometimes
      referred to herein and in the other Transaction Agreements (as defined
      below) collectively as the "Transactions."

2. TERMS OF REPAYMENT

      2.1. The Note shall bear  interest  absent an event of default at the rate
      of eight percent (8%) per annum, commencing as of the date on which Lender
      advances  funds to Company  pursuant to the Senior Note,  which  interest,
      absent an event of default,  shall all be due upon

<PAGE>

      maturity of the Senior Note as provided for therein. If shareholder
      approval for completion of the SPA is granted, koncepts shall be entitled
      to deliver the original Senior Note marked 'Paid' and written satisfaction
      of this Bridge Loan Agreement to Company as payment for Two Million
      ($2,000,000 USD) dollars of koncepts total Three Million ($3,000,000 USD)
      dollars purchase consideration under the SPA thereby reducing the cash
      required at closing under the terms of the SPA to One Million dollars
      ($1,000,000 USD). Notwithstanding the foregoing, at such time Company will
      still owe Lender all amounts of accrued but unpaid interest and other
      fees, if any, owing under the terms of the Senior Note, and will
      concurrently pay such accrued but unpaid interest and fees, if any, to
      Lender in cash. If, however, shareholder approval is not granted, the
      Senior Note shall mature as per its terms on or before September 8, 2006.

3. SECURITY

      3.1.  The  obligations  of Company to Lender  pursuant to this Bridge Loan
      Agreement  and the  Senior  Note  are  secured  by a  separate  Collateral
      Security Agreement executed of even date herewith.

4. CERTAIN  DEFINITIONS.  As used herein,  each of the  following  terms has the
meaning set forth below, unless the context otherwise requires:

         4.1.1.   "Closing   Date"   means  the  date  of  the  closing  of  the
         Transactions, as provided herein.

         4.1.2.   "Escrow Agent" means Anton Handal, Esq.

         4.1.3.   "Person" means any living person or any entity, such as, but
         not necessarily limited to, a corporation, partnership or trust.

         4.1.4.   "Securities" means the Senior Note.

         4.1.5.   "Transaction Agreements" means this Bridge Loan Agreement,
         the Senior Note, the Collateral Security Agreement, the Settlement
         Agreement and Release and includes all ancillary documents referred
         to in those agreements collectively.

5. FORM OF PAYMENT; DELIVERY OF CERTIFICATES.

      5.1.  The Lender  shall  advance to Company the Loan Amount by  delivering
      immediately  available  good funds in United States  Dollars to the Escrow
      Agent no later than the Closing Date.

      5.2.  No later  than the  Closing  Date,  the  Company  shall  cause to be
      delivered to the Escrow  Holder fully  executed  copies of the  Settlement
      Agreement  and  Release  in the  form  as set  forth  in  Annex  2 to this
      agreement.

      5.3.  No later  than the  Closing  Date,  the  Company  shall  cause to be
      delivered to the Escrow Holder a fully executed Senior Note and Collateral
      Security Agreement in the form as set forth in Annex 3 to this Agreement.

<PAGE>

6. METHOD OF PAYMENT.  At Closing  disbursement of the Loan Amount shall be made
by  wire  transfer  of  funds  directly  from  Escrow  Holder's  account  to the
below-referenced  banks or such  other  financial  institution  as set  forth in
written instructions  provided to Lender by the Company in the amounts set forth
on the table below:

        SUB-DEBT HOLDERS             BANK ACCOUNT/WIRING INFO.       AMOUNT
-----------------------------------  -------------------------  ----------------
Omicron Master Trust                                            $   1,250,000.00
-----------------------------------  -------------------------  ----------------
SF Capital Partners, Ltd.                                       $     250,000.00
-----------------------------------  -------------------------  ----------------
Bristol Investment Fund, Ltd.                                   $     150,000.00
-----------------------------------  -------------------------  ----------------
Ascend Offshore Fund, Ltd.                                      $     239,000.00
-----------------------------------  -------------------------  ----------------
Ascend Partners LP                                              $      29,100.00
-----------------------------------  -------------------------  ----------------
Ascend Partners Sapient LP                                      $      81,900.00
-----------------------------------  -------------------------  ----------------
                                                         TOTAL  $   2,000,000.00
===================================  =========================  ================

7. LENDER REPRESENTATIONS,  WARRANTIES, ETC.; ACCESS TO INFORMATION; INDEPENDENT
INVESTIGATION

   The Lender represents and warrants to, and covenants and agrees with, the
      Company as follows:

      7.1. Without limiting Lender's right to sell the Securities pursuant to an
      effective  registration statement or otherwise in compliance with the 1933
      Act, if required,  the Lender is  purchasing  the  Securities  for its own
      account for investment only and not with a view towards the public sale or
      distribution thereof and not with a view to or for sale in connection with
      any distribution thereof.

      7.2. The Lender is (i) an "accredited investor" as that term is defined in
      Rule 501 of the General Rules and Regulations under the 1933 Act by reason
      of Rule  501(a)(3),  (ii)  experienced  in making  investments of the kind
      described in this  Agreement  and the related  documents,  (iii) able,  by
      reason of the business  and  financial  experience  of its officers (if an
      entity)  and  professional  advisors  (who  are  not  affiliated  with  or
      compensated  in any way by the Company or any of its Affiliates or selling
      agents),  to protect its own interests in connection with the transactions
      described in this Agreement,  and the related  documents,  and to evaluate
      the merits and risks of an investment in the Securities,  and (iv) able to
      afford the entire loss of its investment in the Securities.

      7.3. All subsequent offers and sales of the Securities by the Lender shall
      be made pursuant to registration of the relevant Securities under the 1933
      Act or pursuant to an exemption from registration, if required.

      7.4. The Lender understands that the Securities are being offered and sold
      to  it  in  reliance  on  specific   exemptions   from  the   registration
      requirements  of the  1933  Act and  state  securities  laws  and that the
      Company  is  relying  upon the truth and  accuracy  of,  and the  Lender's
      compliance   with,   the    representations,    warranties,    agreements,
      acknowledgments and understandings of the Lender set forth herein in order
      to determine the  availability  of such  exemptions and the eligibility of
      the Lender to acquire the Securities.

      7.5.  This  Agreement  and the other  Transaction  Agreements to which the
      Lender is a party, and the transactions  contemplated  thereby,  have been
      duly and  validly  authorized,  executed  and  delivered  on behalf of the
      Lender and are valid and binding  agreements of the Lender  enforceable in

<PAGE>

      accordance with their respective  terms,  subject as to  enforceability to
      general principles of equity and to bankruptcy, insolvency, moratorium and
      other  similar  laws  affecting  the  enforcement  of  creditors'   rights
      generally.

8.  COMPANY  REPRESENTATIONS,  ETC. The Company  represents  and warrants to the
Lender as of the date hereof and as of the Closing Date:

      8.1. RIGHTS OF OTHERS AFFECTING THE TRANSACTIONS.  There are no preemptive
      rights of any  shareholder of the Company to acquire the Senior Notes.  No
      party other than a Lender or an Other  Lender has a currently  exercisable
      right of first  refusal,  which would be  applicable  to any or all of the
      transactions contemplated by the Transaction Agreements.

      8.2. STATUS. The Company is a corporation duly organized, validly existing
      and in good  standing  under the laws of the State of Delaware and has the
      requisite  corporate  power  to own its  properties  and to  carry  on its
      business  as now being  conducted.  The  Company  is duly  qualified  as a
      foreign  corporation  to do  business  and is in  good  standing  in  each
      jurisdiction  where the nature of the business conducted or property owned
      by it makes such qualification  necessary,  other than those jurisdictions
      in which the failure to so qualify  would not have or result in a Material
      Adverse  Effect.  The Company has registered its stock and is obligated to
      file reports pursuant to Section 12 or Section 15(d) of the Securities and
      Exchange  Act of 1934,  as amended  (the 1934 Act").  The Common  Stock is
      quoted on the American Stock Exchange ("Principal Trading Market").

      8.3.  TRANSACTION  AGREEMENTS  AND STOCK.  This  Agreement and each of the
      other Transaction Agreements,  and the transactions  contemplated thereby,
      have been duly and validly  authorized by the Company,  this Agreement has
      been duly executed and delivered by the Company and this Agreement is, and
      the  Senior  Note,  and each of the  other  Transaction  Agreements,  when
      executed  and  delivered  by the  Company,  will  be,  valid  and  binding
      consensual  agreements of the Company enforceable in accordance with their
      respective terms,  subject as to  enforceability to general  principles of
      equity and to bankruptcy,  insolvency,  moratorium, and other similar laws
      affecting the enforcement of creditors' rights generally.

      8.4.  NON-CONTRAVENTION.  The execution and delivery of this Agreement and
      each of the other Transaction  Agreements by the Company,  the issuance of
      the  Securities,  and  the  consummation  by  the  Company  of  the  other
      transactions  contemplated  by this  Agreement,  the Senior Note,  and the
      other  Transaction  Agreements do not and will not conflict with or result
      in a breach  by the  Company  of any of the  terms or  provisions  of,  or
      constitute a default under (i) the certificate of incorporation or by-laws
      of the Company, each as currently in effect, (ii) any indenture, mortgage,
      deed of trust,  or other  material  agreement or  instrument  to which the
      Company is a party or by which it or any of its  properties  or assets are
      bound,  including  any  listing  agreement  for the  Common  Stock  on the
      American  or any other  recognized  stock  exchange  except as herein  set
      forth,  or (iii) to its knowledge,  any existing  applicable law, rule, or
      regulation  or any  applicable  decree,  judgment,  or order of any court,
      United States federal or state regulatory body,  administrative agency, or
      other governmental body having jurisdiction over the Company or any of its
      properties or assets, except such conflict,  breach or default which would
      not have or result in a Material Adverse Effect.

<PAGE>

      8.5.  APPROVALS.  No  authorization,  approval  or  consent  of any court,
      governmental body,  regulatory agency,  self-regulatory  organization,  or
      stock exchange or market or the shareholders of the Company is required to
      be obtained by the Company for the issuance and sale of the  Securities to
      the Lender as contemplated by this Agreement,  except such authorizations,
      approvals and consents that have been obtained.

      8.6. FULL DISCLOSURE. To the best of the Company's knowledge,  there is no
      fact known to the Company (other than general economic conditions known to
      the public  generally or as disclosed in the Company's SEC Documents) that
      has not been disclosed in writing to the Lender.

      8.7. CONFIRMATION. The Company confirms that all statements of the Company
      contained herein shall survive acceptance of this Agreement by the Lender.
      The Company agrees that, if any events occur or circumstances  exist prior
      to the Closing Date or the release of the Loan Amount to the Company which
      would make any of the Company's representations, warranties, agreements or
      other  information  set  forth  herein  materially  untrue  or  materially
      inaccurate  as of such date,  the  Company  shall  immediately  notify the
      Lender (directly or through its counsel,  if any) in writing prior to such
      date of such fact, specifying which  representation,  warranty or covenant
      is affected and the reasons therefor.

      8.8.  INTEGRATION.  The Company has  previously  entered into that certain
      Securities  Purchase Agreement with koncepts dated as of February 21, 2006
      pursuant to which the Company made certain  representations and warranties
      as are contained in that agreement.  Such  representations  and warranties
      are hereby incorporated into this Agreement by reference,  and the Company
      hereby reaffirms such  representations and warranties as being accurate as
      of the date of this Agreement as if they were contained in this Agreement.

9. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.

      9.1.  FILINGS.  The Company  undertakes  and agrees to make all  necessary
      filings in connection  with the sale of the Securities to the Lender under
      any United States laws and  regulations  applicable to the Company,  or by
      any domestic  securities exchange or trading market, and to provide a copy
      thereof to the Lender promptly after such filing.

      9.2. REPORTING STATUS. So long as the Lender  beneficially owns any of the
      Securities  and for at least  twenty (20)  Trading  Days  thereafter,  the
      Company shall file all reports  required to be filed with the SEC pursuant
      to Section 13 or 15(d) of the 1934 Act, shall take all  reasonable  action
      under its control to ensure that adequate current public  information with
      respect to the Company,  as required in accordance  with Rule 144(c)(2) of
      the 1933 Act, is publicly available, and shall not terminate its status as
      an issuer required to file reports under the 1934 Act even if the 1934 Act
      or the rules and regulations thereunder would permit such termination. The
      Company will take all reasonable  action under its control to maintain the
      continued  listing  and  quotation  and  trading of its  Common  Stock the
      Principal  Trading Market or a listing on the NASDAQ/Small Cap or National
      Markets and, to the extent  applicable  to it, will comply in all material
      respects with the Company's reporting,  filing and other obligations under
      the by-laws or rules of the Principal  Trading  Market and/or the National
      Association of Securities Dealers, Inc., as the case may be, applicable to

<PAGE>

      it at least  through  the date which is sixty (60) days after the later of
      the date on which (x) all of the Notes have been converted or been paid in
      full or (y) all of the Warrants have been exercised or have expired.

      9.3. USE OF PROCEEDS.  The Company will use 100% of the proceeds  received
      hereunder to retire all of its issued and outstanding  debentures together
      with all accrued but unpaid interest and penalties.

      9.4. PUBLICITY, FILINGS, RELEASES, ETC. Each of the parties agrees that it
      will  not  disseminate   any  information   relating  to  the  Transaction
      Agreements or the transactions contemplated thereby, including issuing any
      press releases,  holding any press  conferences or other forums, or filing
      any reports  (collectively,  "Publicity"),  without giving the other party
      reasonable  advance  notice and an  opportunity to comment on the contents
      thereof. Neither party will include in any such Publicity any statement or
      statements or other material to which the other party reasonably  objects,
      unless in the  reasonable  opinion of counsel to the party  proposing such
      statement,   such  statement  is  legally  required  to  be  included.  In
      furtherance  of the  foregoing,  the  Company  will  provide to the Lender
      drafts of the  applicable  text of the first filing of a Current Report on
      Form 8-K or a Quarterly or Annual  Report on Form 10-Q or 10-K intended to
      be made with the SEC which  refers to the  Transaction  Agreements  or the
      transactions contemplated thereby as soon as practicable (but at least two
      (2) Trading Days before such filing will be made) will not include in such
      filing any statement or  statements  or other  material to which the other
      party reasonably  objects,  unless in the reasonable opinion of counsel to
      the party proposing such statement,  such statement is legally required to
      be included.  Notwithstanding  the  foregoing,  each of the parties hereby
      consents to the  inclusion of the text of the  Transaction  Agreements  in
      filings made with the SEC as well as any descriptive text  accompanying or
      part of such filing which is accurate  and  reasonably  determined  by the
      Company's counsel to be legally required. Notwithstanding, but subject to,
      the foregoing provisions of this Section 4(d), the Company will, after the
      Closing Date,  promptly issue a press release and file a Current Report on
      Form  8-K  or,  if  appropriate,  a  quarterly  or  annual  report  on the
      appropriate  form,  referring  to  the  transactions  contemplated  by the
      Transaction Agreements. Both the Company and Lender hereby consent to Cove
      Partners   LLC   preparing  a  Tombstone   relating  to  the   transaction
      contemplated by this Agreement for use on its corporate website and in its
      marketing materials.

      9.5. For so long as the Senior Note is outstanding,  and unless the Lender
      has prior consented in writing,  which consent can be withheld at the sole
      and absolute  discretion  of Lender,  Company shall not incur in excess of
      $1,500,000  US Dollars of debt with  Crestmark  Bank,  or any  replacement
      accounts receivable lender or factor.

10. CLOSING DATE.

      10.1. The Closing Date shall occur on the date which is the first Business
      Day after each of the conditions  contemplated  by Sections 7 and 8 hereof
      shall have  either  been  satisfied  or been  waived by the party in whose
      favor such conditions run.

      10.2. The closing of the  Transactions  shall occur on the Closing Date at
      the  offices of Handal &  Associates,  1200 Third Ave.,  Suite  1321,  San
      Diego,  CA 92101,  and shall take place no later than 5:00 P.M.,  New York

<PAGE>

      time on such day, or such other day and time,  as is mutually  agreed upon
      by the Company and the Lender.

11. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.

      11.1.  The Lender  understands  that the Company's  obligation to sell the
      Notes to the Lender  pursuant to this  Agreement  on the  Closing  Date is
      conditioned upon:

         11.1.1. The execution and delivery of this Agreement by the Lender;

         11.1.2.  Delivery  by the Lender of good funds as payment in full of an
         amount equal to the Loan Amount in accordance with this Agreement;

         11.1.3.  The accuracy on such Closing Date of the  representations  and
         warranties of the Lender  contained in this Agreement,  each as if made
         on such date, and the  performance by the Lender on or before such date
         of all covenants and agreements of the Lender  required to be performed
         on or before such date; and

         11.1.4.  There  shall  not be in  effect  any law,  rule or  regulation
         prohibiting or restricting the  transactions  contemplated  hereby,  or
         requiring any consent or approval which shall not have been obtained.

12. CONDITIONS TO THE LENDER'S OBLIGATION TO PURCHASE.

      12.1. The Company understands that the Lender's obligation to purchase the
      Notes on the Closing Date is conditioned upon:

         12.1.1.  Delivery to Escrow  Holder by the Company of a fully  executed
         copy of this Agreement and Note;

         12.1.2.  Delivery to Escrow  Holder by the Company of a fully  executed
         Sub-Debt Holder  Settlement and Release  Agreement in the form attached
         hereto as Annex 2;

         12.1.3.  Delivery to Escrow Holder of a fully executed  Broad-Form UCC1
         filing  statement and collateral  security  agreement  securitizing the
         Note;

         12.1.4.  The accuracy in all  material  respects on the Closing Date of
         the  representations  and  warranties of the Company  contained in this
         Agreement,  each as if made on such date,  and the  performance  by the
         Company on or before such date of all covenants  and  agreements of the
         Company required to be performed on or before such date; and

         12.1.5.   Approval  of  this  Agreement  and  all  related  Transaction
         Agreements by the Hong Kong Stock Exchange;

      12.2. There shall not be in effect any law, rule or regulation prohibiting
      or restricting  the  transactions  contemplated  hereby,  or requiring any
      consent or approval which shall not have been obtained; and

      12.3.  From and after the date hereof to and  including  the Closing Date,
      each of the following conditions will remain in effect: (i) the trading of
      the  Common  Stock  shall  not have  been  suspended  by the SEC or on the
      Principal  Trading  Market;  (ii) trading in  securities  generally on the
      Principal  Trading Market shall not have been suspended or limited;  (iii)

<PAGE>

      no minimum  prices shall been  established  for  securities  traded on the
      Principal Trading Market;  and (iv) there shall not have been any material
      adverse change in any financial market.

      12.4.  Company shall reimburse  Lender its direct  out-of-pocket  costs in
      connection  with the  transactions  contemplated  under this  Bridge  Loan
      Agreement to a maximum of $15,000 US Dollars.

13. INDEMNIFICATION AND REIMBURSEMENT.

      13.1. The Company agrees to indemnify and hold harmless the Lender and its
      officers, directors, employees, and agents, and each Lender Control Person
      from and against  any losses,  claims,  damages,  liabilities  or expenses
      incurred  (collectively,  "Damages"),  joint or several, and any action in
      respect thereof to which the Lender, its partners,  Affiliates,  officers,
      directors,  employees,  and duly  authorized  agents,  and any such Lender
      Control  Person  becomes  subject to,  resulting  from,  arising out of or
      relating to any  misrepresentation,  breach of warranty or non-fulfillment
      of or failure to perform any  covenant or agreement on the part of Company
      contained in this Agreement,  as such Damages are incurred,  except to the
      extent such Damages result  primarily from Lender's failure to perform any
      covenant or agreement  contained in this  Agreement or the Lender's or its
      officer's,  director's,  employee's,  agent's or Lender  Control  Person's
      gross negligence,  recklessness or bad faith in performing its obligations
      under this Agreement.

      13.2. The Company hereby agrees that, if the Lender,  other than by reason
      of its gross negligence,  illegal or willful  misconduct (in each case, as
      determined  by a  non-appealable  judgment  to such  effect),  (x) becomes
      involved  in any  capacity  in any  action,  proceeding  or  investigation
      brought by any  shareholder  of the Company,  in  connection  with or as a
      result  of the  consummation  of the  transactions  contemplated  by  this
      Agreement  or  the  other  Transaction  Agreements,  or if the  Lender  is
      impleaded in any such action,  proceeding or  investigation by any Person,
      or (y) becomes  involved in any  capacity  in any  action,  proceeding  or
      investigation  brought by the SEC,  any  self-regulatory  organization  or
      other body having  jurisdiction,  against or  involving  the Company or in
      connection  with or as a result of the  consummation  of the  transactions
      contemplated by this Agreement or the other Transaction Agreements, or (z)
      is  impleaded  in any such  action,  proceeding  or  investigation  by any
      Person,  then in any such case,  the Company shall  indemnify,  defend and
      hold  harmless  the Lender  from and against and in respect of all losses,
      claims,  liabilities,  damages or expenses resulting from, imposed upon or
      incurred by the Lender, directly or indirectly,  and reimburse such Lender
      for its  reasonable  legal and other  expenses  (including the cost of any
      investigation and preparation) incurred in connection  therewith,  as such
      expenses are incurred.  The indemnification and reimbursement  obligations
      of the Company under this paragraph  shall be in addition to any liability
      which the Company may otherwise have, shall extend upon the same terms and
      conditions to any  Affiliates of the Lender who are actually named in such
      action,  proceeding or  investigation,  and partners,  directors,  agents,
      employees and Lender Control  Persons (if any), as the case may be, of the
      Lender and any such Affiliate,  and shall be binding upon and inure to the
      benefit of any successors,  assigns, heirs and personal representatives of
      the Company,  the Lender,  any such  Affiliate  and any such  Person.  The
      Company  also  agrees  that  neither  the Lender  nor any such  Affiliate,

<PAGE>

      partner, director, agent, employee or Lender Control Person shall have any
      liability to the Company or any Person asserting claims on behalf of or in
      right of the Company in connection with or as a result of the consummation
      of this Agreement or the other  Transaction  Agreements,  except as may be
      expressly and specifically provided in or contemplated by this Agreement.

14. JURY TRIAL  WAIVER.  The Company and the Lender hereby waive a trial by jury
in any  action,  proceeding  or  counterclaim  brought by either of the  Parties
hereto  against the other in respect of any matter  arising out or in connection
with the Transaction Agreements.

15.  GOVERNING  LAW:  MISCELLANEOUS.  This  Agreement  shall be  governed by and
interpreted  in accordance  with the laws of the State of New York for contracts
to be wholly performed in such state and without giving effect to the principles
thereof  regarding  the  conflict of laws.  Each of the parties  consents to the
exclusive  jurisdiction of the federal courts whose districts encompass any part
of the County of New York or the state  courts of the State of New York  sitting
in the County of New York in  connection  with any  dispute  arising  under this
Agreement or any of the other  Transaction  Agreements and hereby waives, to the
maximum extent permitted by law, any objection, including any objection based on
forum  non  conveniens,   to  the  bringing  of  any  such  proceeding  in  such
jurisdictions or to any claim that such venue of the suit,  action or proceeding
is improper. To the extent determined by such court, the Company shall reimburse
the  Lender for any  reasonable  legal fees and  disbursements  incurred  by the
Lender in  enforcement  of or  protection  of any of its rights under any of the
Transaction Agreements.  Nothing in this Section shall affect or limit any right
to serve process in any other manner permitted by law.

      15.1. The Company and the Lender  acknowledge  and agree that  irreparable
      damage  would  occur  in the  event  that  any of the  provisions  of this
      Agreement  or the  other  Transaction  Agreements  were not  performed  in
      accordance  with their specific terms or were  otherwise  breached.  It is
      accordingly  agreed that the parties shall be entitled to an injunction or
      injunctions  to  prevent  or  cure  breaches  of the  provisions  of  this
      Agreement and the other Transaction Agreements and to enforce specifically
      the terms and provisions hereof and thereof, this being in addition to any
      other remedy to which any of them may be entitled by law or equity.

      15.2.  Failure  of any party to  exercise  any right or remedy  under this
      Agreement or otherwise,  or delay by a party in  exercising  such right or
      remedy, shall not operate as a waiver thereof.

      15.3. This Agreement shall inure to the benefit of and be binding upon the
      successors and assigns of each of the parties hereto.

      15.4.  All pronouns and any  variations  thereof  refer to the  masculine,
      feminine or neuter, singular or plural, as the context may require.

      15.5. A facsimile transmission of this signed Agreement shall be legal and
      binding on all parties hereto.

      15.6.  This Agreement may be signed in one or more  counterparts,  each of
      which shall be deemed an original.

<PAGE>

      15.7. The headings of this Agreement are for  convenience of reference and
      shall not form part of, or affect the interpretation of, this Agreement.

      15.8. If any provision of this Agreement shall be invalid or unenforceable
      in any jurisdiction,  such invalidity or unenforceability shall not affect
      the validity or  enforceability  of the remainder of this Agreement or the
      validity or enforceability of this Agreement in any other jurisdiction.

      15.9.  This  Agreement  may be amended  only by an  instrument  in writing
      signed by both Parties.

16.  NOTICES.  Any notice  required  or  permitted  hereunder  shall be given in
writing  (unless  otherwise  specified  herein) and shall be deemed  effectively
given on the earliest of:

      16.1.  the date  delivered,  if delivered by personal  delivery as against
      written receipt therefor or by confirmed facsimile transmission,

      16.2. the fifth Business Day after deposit, postage prepaid, in the United
      States Postal Service by registered or certified mail, or

      16.3.  the third  Business Day after mailing by domestic or  international
      express courier, with delivery costs and fees prepaid,

      16.4. in each case, addressed to each of the other parties thereunto:

17. SURVIVAL OF REPRESENTATIONS  AND WARRANTIES.  The Company's and the Lender's
representations  and warranties  herein shall survive the execution and delivery
of this  Agreement and the delivery of the  Certificates  and the payment of the
Loan  Amount,  and shall  inure to the benefit of the Lender and the Company and
their respective successors and assigns.

18.  ISSUANCE OF EQUITY OR DEBT  SECURITIES.  For so long as the  Securities  or
Senior  Note is  outstanding,  and absent  prior  receipt  by the  Company of an
express  written waiver from the Lender of this  condition,  which waiver can be
withheld  for any or no reason by  Lender in its sole and  absolute  discretion,
Company will not enter into any agreement pursuant to which it will issue, or be
obligated  to  issue,  any form of equity or  quasi-equity  securities,  or debt
instrument  which  may be  converted  into any form of  equity  or  quasi-equity
securities,  or has attached to it any form of warrants or options which entitle
the holder thereof to purchase and/or receive in any manner equity securities of
the Company.

19.  BROAD FORM UCC FILING.  The Company  shall grant  Lender a  consensual  and
perfected "broad form" UCC-1 filing secured by all of the assets of the Company,
such that Lender  shall be deemed a  consensual  secured  lender in the event of
either a voluntary or  non-voluntary  filing by or against  Company under United
States Code Title 11 or any  similar  state or federal  statute.  In this regard
Company shall promptly  execute such documents as Lender may reasonably  request
from time to time so as to perfect its position as a secured lender to Company.

<PAGE>

      IN WITNESS WHEREOF,  with respect to the Loan Amount specified below, this
Agreement  has been duly  executed  by the Lender and the Company as of the date
set first above written.

LENDER:                                   COMPANY: THE SINGING MACHINE  COMPANY,
EVER SOLID, LTD.                                   INC.
(a Hong Kong registered company)

By: /s/       Sak Hong Lau                By: /s/       Yi Ping Chan
    ---------------------------------         ----------------------------------
    (Signature of Authorized Person)          (Signature of Authorized Person)

                                          Yi Ping Chan,
Sak Hong Lau, Chairman                    Interim Chief Executive Officer
-------------------------------------     --------------------------------------
Printed Name and Title                    Printed Name and Title

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