Document:

Exhibit 10.5

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES

                          COMMON STOCK PURCHASE WARRANT

                  To Purchase 103,896 Shares of Common Stock of

                        THE SINGING MACHINE COMPANY, INC.

                  THIS COMMON STOCK PURCHASE WARRANT CERTIFIES that, for value
received, Roth Capital Partners, LLC (with any permitted assignee or successor,
the "Holder"), is entitled, upon the terms and subject to the limitations on
exercise and the conditions hereinafter set forth, at any time on or after
September 8, 2003 (the "Initial Exercise Date") and on or prior to the close of
business on the third anniversary of the Initial Exercise Date (the "Termination
Date") but not thereafter, to subscribe for and purchase from The Singing
Machine Company, Inc., a corporation incorporated in Delaware (the "Company"),
up to 103,896 shares (the "Warrant Shares") of Common Stock, par value $.01 per
share, of the Company (the "Common Stock"). The purchase price of one share of
Common Stock (the "Exercise Price") under this Warrant shall be $4.025, subject
to adjustment hereunder.

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     1. Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws and Section 7 of this Warrant, this Warrant and
all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed. The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company.

     2. Authorization of Warrant Shares. The Company represents and warrants
that all Warrant Shares which may be issued upon the exercise of the purchase
rights represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).

     3. Exercise of Warrant.

               (a) Exercise of the purchase rights represented by this Warrant
may be made at any time or times on or after the Initial Exercise Date and on or
before the Termination Date by delivery to the Company of a duly executed
facsimile copy of the Notice of Exercise Form annexed hereto (or such other
office or agency of the Company as it may designate by notice in writing to the
registered Holder at the address of such Holder appearing on the books of the
Company); provided, however, within 5 Trading Days of the date said Notice of
Exercise is delivered to the Company, the Holder shall have surrendered this
Warrant to the Company and the Company shall have received payment of the
aggregate Exercise Price of the shares thereby purchased by wire transfer or
cashier's check drawn on a United States bank. Certificates for shares purchased
hereunder shall be delivered to the Holder within the earlier of (i) 5 Trading
Days after the date on which the Notice of Exercise shall have been delivered by
facsimile copy or (ii) 3 Trading Days from the delivery to the Company of the
Notice of Exercise Form by facsimile copy, surrender of this Warrant and payment
of the aggregate Exercise Price as set forth above ("Warrant Share Delivery
Date"); provided, however, in the event the Warrant is not surrendered or the
aggregate Exercise Price is not received by the Company within 5 Trading Days
after the date on which the Notice of Exercise shall be delivered by facsimile
copy, the Warrant Share Delivery Date shall be extended to the extent such 5
Trading Day period is exceeded (or alternatively, within three (3) Trading Days
after the date on which this Warrant shall have been exercised, the Company
shall at the Holder's election deliver the Warrant Shares to the Holder, if
eligible, via the Depository Trust Company's ("DTC") Deposit Withdrawal Agent
Commission ("DWAC") system via the DTC instructions provided to the Company in
the Notice of Exercise or otherwise in writing). This Warrant shall be deemed to
have been exercised on the date the Notice of Exercise is delivered to the
Company by facsimile copy. The Warrant Shares shall be deemed to have been
issued, and Holder or any other person so designated to be named therein shall
be deemed to have become a holder of record of such shares for all purposes, as
of the date the Warrant has been exercised by payment to the Company of the
Exercise Price and all taxes required to be paid by the Holder, if any, pursuant
to Section 5 prior to the issuance of such shares, have been paid. If the
Company fails to deliver to the Holder a certificate or certificates
representing the Warrant Shares pursuant to this Section 3(a) by the

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Warrant Share Delivery Date, then the Holder will have the right to rescind such
exercise. In addition to any other rights available to the Holder, if the
Company fails to deliver to the Holder a certificate or certificates
representing the Warrant Shares pursuant to an exercise on or before the Warrant
Share Delivery Date, and if after such date the Holder is required by its broker
to purchase (in an open market transaction or otherwise) shares of Common Stock
to deliver in satisfaction of a sale by the Holder of the Warrant Shares which
the Holder anticipated receiving upon such exercise (a "Buy-In"), then the
Company shall (1) pay in cash to the Holder the amount by which (x) the Holder's
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of Warrant Shares that the Company was required to deliver to the Holder
in connection with the exercise at issue times (B) the price at which the sell
order giving rise to such purchase obligation was executed, and (2) at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored or deliver to
the Holder the number of shares of Common Stock that would have been issued had
the Company timely complied with its exercise and delivery obligations
hereunder. For example, if the Holder purchases Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (1) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The
Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In, together with applicable confirmations
and other evidence reasonably requested by the Company. Nothing herein shall
limit a Holder's right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company's failure to
timely deliver certificates representing shares of Common Stock upon exercise of
the Warrant as required pursuant to the terms hereof. The Holder agrees that it
will have not right to exercise any remedies contained in this Agreement if the
Company is in default under the terms of its credit agreement with its primary
commercial lender or the payment of any amounts required herein will result in
the Company's failing to meet its financial requirements under its credit
agreement with its primary commercial lender.

               (b) If this Warrant shall have been exercised in part, the
          Company shall, at the time of delivery of the certificate or
          certificates representing Warrant Shares, deliver to Holder a new
          Warrant evidencing the rights of Holder to purchase the unpurchased
          Warrant Shares called for by this Warrant, which new Warrant shall in
          all other respects be identical with this Warrant.

               (c) The Company shall not effect any exercise of this Warrant,
          and the Holder shall not have the right to exercise any portion of
          this Warrant, pursuant to Section 3(a) or otherwise, to the extent
          that after giving effect to such issuance after exercise, the Holder
          (together with the Holder's affiliates), as set forth on the
          applicable Notice of Exercise, would beneficially own in excess of
          4.99% of the number of shares of the Common Stock outstanding
          immediately after giving effect to such issuance. For purposes of the
          foregoing sentence, the number of shares of Common Stock beneficially
          owned by the Holder and its affiliates shall include the number of
          shares of Common Stock issuable upon exercise of this Warrant with
          respect to which the determination of

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          such sentence is being made, but shall exclude the number of shares of
          Common Stock which would be issuable upon (A) exercise of the
          remaining, nonexercised portion of this Warrant beneficially owned by
          the Holder or any of its affiliates and (B) exercise or conversion of
          the unexercised or nonconverted portion of any other securities of the
          Company (including, without limitation, any other Debentures or
          Warrants) subject to a limitation on conversion or exercise analogous
          to the limitation contained herein beneficially owned by the Holder or
          any of its affiliates. Except as set forth in the preceding sentence,
          for purposes of this Section 3(c), beneficial ownership shall be
          calculated in accordance with Section 13(d) of the Exchange Act. To
          the extent that the limitation contained in this Section 3(c) applies,
          the determination of whether this Warrant is exercisable (in relation
          to other securities owned by the Holder) and of which a portion of
          this Warrant is exercisable shall be in the sole discretion of such
          Holder, and the submission of a Notice of Exercise shall be deemed to
          be such Holder's determination of whether this Warrant is exercisable
          (in relation to other securities owned by such Holder) and of which
          portion of this Warrant is exercisable, in each case subject to such
          aggregate percentage limitation, and the Company shall have no
          obligation to verify or confirm the accuracy of such determination.
          For purposes of this Section 3(c), in determining the number of
          outstanding shares of Common Stock, the Holder may rely on the number
          of outstanding shares of Common Stock as reflected in (x) the
          Company's most recent Form 10-Q or Form 10-K, as the case may be, (y)
          a more recent public announcement by the Company or (z) any other
          notice by the Company or the Company's Transfer Agent setting forth
          the number of shares of Common Stock outstanding. Upon the written or
          oral request of the Holder, the Company shall within two Trading Days
          confirm orally and in writing to the Holder the number of shares of
          Common Stock then outstanding. In any case, the number of outstanding
          shares of Common Stock shall be determined after giving effect to the
          conversion or exercise of securities of the Company, including this
          Warrant, by the Holder or its affiliates since the date as of which
          such number of outstanding shares of Common Stock was reported. The
          provisions of this Section 3(c) may be waived by the Holder upon, at
          the election of the Holder, not less than 61 days' prior notice to the
          Company, and the provisions of this Section 3(c) shall continue to
          apply until such 61st day (or such later date, as determined by the
          Holder, as may be specified in such notice of waiver).

               (d) This Warrant may also be exercised at such time by means
          of a "cashless exercise" in which the Holder shall be entitled to
          receive a certificate for the number of Warrant Shares equal to the
          quotient obtained by dividing [(A-B) (X)] by (A), where:

            (A)  = the VWAP of the Common Stock on the Trading Day preceding
                   the date of such election;

            (B)  = the Exercise Price of the Warrants, as adjusted; and

            (X)  = the number of Warrant Shares issuable upon exercise of
                   this Warrant in accordance with the terms of this Warrant.

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            "VWAP" means, for any date, the price determined by the first of
            the following clauses that applies: (a) the daily volume weighted
            average price of the Common Stock for such date (or the nearest
            preceding date) on the primary market or exchange on which the
            Common Stock is then listed or quoted as reported by Bloomberg
            Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern
            Time to 4:00 p.m. Eastern Time); (b) if the Common Stock is not
            then listed or quoted on a market or exchange and if prices for
            the Common Stock are then quoted on the OTC Bulletin Board, the
            volume weighted average price of the Common Stock for such date
            (or the nearest preceding date) on the OTC Bulletin Board; (c) if
            the Common Stock is not then listed or quoted on the OTC Bulletin
            Board and if prices for the Common Stock are then reported in the
            "Pink Sheets" published by the National Quotation Bureau
            Incorporated (or a similar organization or agency succeeding to
            its functions of reporting prices), the average of the most
            recent bid and ask price per share of the Common Stock so
            reported; or (d) in all other cases, the fair market value of a
            share of Common Stock as determined by a nationally
            recognized-independent appraiser selected in good faith by
            Holder.

     4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.

     5. Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares
shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such certificate, all of
which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.

     6. Closing of Books. The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.

     7. Transfer, Division and Combination.

               (a) Subject to compliance with any applicable securities laws and
          the conditions set forth in Sections 1 and 7(e) hereof and to the
          provisions of Section 4.1 of the Purchase Agreement, this Warrant and
          all rights hereunder are transferable, in whole or in part, upon
          surrender of this Warrant at the principal office of the Company,
          together with a written assignment of this Warrant substantially in
          the form attached hereto duly executed by the Holder or its agent or
          attorney and funds sufficient to pay any transfer taxes payable upon
          the making of such transfer. Upon such surrender and, if required,

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          such payment, the Company shall execute and deliver a new Warrant or
          Warrants in the name of the assignee or assignees and in the
          denomination or denominations specified in such instrument of
          assignment, and shall issue to the assignor a new Warrant evidencing
          the portion of this Warrant not so assigned, and this Warrant shall
          promptly be cancelled. A Warrant, if properly assigned, may be
          exercised by a new holder for the purchase of Warrant Shares without
          having a new Warrant issued.

               (b) This Warrant may be divided or combined with other Warrants
          upon presentation hereof at the aforesaid office of the Company,
          together with a written notice specifying the names and denominations
          in which new Warrants are to be issued, signed by the Holder or its
          agent or attorney. Subject to compliance with Section 7(a), as to any
          transfer which may be involved in such division or combination, the
          Company shall execute and deliver a new Warrant or Warrants in
          exchange for the Warrant or Warrants to be divided or combined in
          accordance with such notice.

               (c) The Company shall prepare, issue and deliver at its own
          expense (other than transfer taxes) the new Warrant or Warrants under
          this Section 7.

               (d) The Company agrees to maintain, at its aforesaid office,
          books for the registration and the registration of transfer of the
          Warrants.

               (e) If, at the time of the surrender of this Warrant in
          connection with any transfer of this Warrant, the transfer of this
          Warrant shall not be registered pursuant to an effective registration
          statement under the Securities Act and under applicable state
          securities or blue sky laws, the Company may require, as a condition
          of allowing such transfer (i) that the Holder or transferee of this
          Warrant, as the case may be, furnish to the Company a written opinion
          of counsel (which opinion shall be in form, substance and scope
          customary for opinions of counsel in comparable transactions) to the
          effect that such transfer may be made without registration under the
          Securities Act and under applicable state securities or blue sky laws,
          (ii) that the holder or transferee execute and deliver to the Company
          an investment letter in form and substance acceptable to the Company
          and (iii) that the transferee be an "accredited investor" as defined
          in Rule 501(a) promulgated under the Securities Act.

     8. No Rights as Shareholder until Exercise. This Warrant does not entitle
the Holder to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof. Upon the surrender of this Warrant and the payment
of the aggregate Exercise Price (or by means of a cashless exercise), the
Warrant Shares so purchased shall be and be deemed to be issued to such Holder
as the record owner of such shares as of the close of business on the later of
the date of such surrender or payment.

     9. Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants
that upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and

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deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

     10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall be a Saturday, Sunday or a legal holiday, then such action may be taken or
such right may be exercised on the next succeeding day not a Saturday, Sunday or
legal holiday.

     11. Adjustments of Exercise Price and Number of Warrant Shares.

          (a) Stock Splits, etc. The number and kind of securities purchasable
     upon the exercise of this Warrant and the Exercise Price shall be subject
     to adjustment from time to time upon the happening of any of the following.
     In case the Company shall (i) pay a dividend in shares of Common Stock or
     make a distribution in shares of Common Stock to holders of its outstanding
     Common Stock, (ii) subdivide its outstanding shares of Common Stock into a
     greater number of shares, (iii) combine its outstanding shares of Common
     Stock into a smaller number of shares of Common Stock, or (iv) issue any
     shares of its capital stock in a reclassification of the Common Stock, then
     the number of Warrant Shares purchasable upon exercise of this Warrant
     immediately prior thereto shall be adjusted so that the Holder shall be
     entitled to receive the kind and number of Warrant Shares or other
     securities of the Company which it would have owned or have been entitled
     to receive had such Warrant been exercised in advance thereof. Upon each
     such adjustment of the kind and number of Warrant Shares or other
     securities of the Company which are purchasable hereunder, the Holder shall
     thereafter be entitled to purchase the number of Warrant Shares or other
     securities resulting from such adjustment at an Exercise Price per Warrant
     Share or other security obtained by multiplying the Exercise Price in
     effect immediately prior to such adjustment by the number of Warrant Shares
     purchasable pursuant hereto immediately prior to such adjustment and
     dividing by the number of Warrant Shares or other securities of the Company
     resulting from such adjustment. An adjustment made pursuant to this
     paragraph shall become effective immediately after the effective date of
     such event retroactive to the record date, if any, for such event.

          (b) Anti-Dilution Provisions. During the Exercise Period, the Exercise
     Price shall be subject to adjustment from time to time as provided in this
     Section 11(b). In the event that any adjustment of the Exercise Price as
     required herein results in a fraction of a cent, such Exercise Price shall
     be rounded up or down to the nearest cent.

               (i) Adjustment of Exercise Price. If and whenever the Company
          issues or sells, or in accordance with Section 11(b)(ii) hereof is
          deemed to have issued or sold, any shares of Common Stock by means of
          Capital Shares Equivalents (as defined in the Purchase Agreement) for
          an effective consideration per share of less than the then Exercise
          Price or for no consideration (such lower price, the "Base Share
          Price" and such issuances collectively, a "Dilutive Issuance"), then,
          the Exercise Price shall be reduced (A) if such Dilutive Issuance
          occurs on or prior to the first anniversary of the Initial Exercise

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          Date, by an amount equal to 75% of the difference between the then
          Exercise Price and the Base Share Price and (B) if such Dilutive
          Issuance occurs after the first anniversary of the Initial Exercise
          Date, by an amount equal to 50% of the difference between the then
          Exercise Price and the Base Share Price. Such adjustment shall be made
          whenever such shares of Common Stock or Capital Shares Equivalent are
          issued.

               (ii) Effect on Exercise Price of Certain Events. For purposes of
          determining the adjusted Exercise Price under Section 11(b) hereof,
          the following will be applicable:

                    (A) Issuance of Rights or Options. If the Company in any
               manner issues or grants any warrants, rights or options, whether
               or not immediately exercisable, to subscribe for or to purchase
               Common Stock or Capital Shares Equivalent (such warrants, rights
               and options to purchase Common Stock or Capital Shares Equivalent
               are hereinafter referred to as "Options") and the effective price
               per share for which Common Stock is issuable upon the exercise of
               such Options is less than the Exercise Price ("Below Base Price
               Options"), then the maximum total number of shares of Common
               Stock issuable upon the exercise of all such Below Base Price
               Options (assuming full exercise, conversion or exchange of
               Capital Shares Equivalent, if applicable) will, as of the date of
               the issuance or grant of such Below Base Price Options, be deemed
               to be outstanding and to have been issued and sold by the Company
               for such price per share and the maximum consideration payable to
               the Company upon such exercise (assuming full exercise,
               conversion or exchange of Capital Shares Equivalent, if
               applicable) will be deemed to have been received by the Company.
               For purposes of the preceding sentence, the "effective price per
               share for which Common Stock is issuable upon the exercise of
               such Below Base Price Options" is determined by dividing (i) the
               total amount, if any, received or receivable by the Company as
               consideration for the issuance or granting of all such Below Base
               Price Options, plus the minimum aggregate amount of additional
               consideration, if any, payable to the Company upon the exercise
               of all such Below Base Price Options, plus, in the case of
               Capital Shares Equivalent issuable upon the exercise of such
               Below Base Price Options, the minimum aggregate amount of
               additional consideration payable upon the exercise, conversion or
               exchange thereof at the time such Capital Shares Equivalent first
               become exercisable, convertible or exchangeable, by (ii) the
               maximum total number of shares of Common Stock issuable upon the
               exercise of all such Below Base Price Options (assuming full
               conversion of Capital Shares Equivalent, if applicable). No
               further adjustment to the Exercise Price will be made upon the
               actual issuance of such Common Stock upon the exercise of such
               Below Base Price Options or upon the exercise, conversion or
               exchange of Capital Shares Equivalent issuable upon exercise of
               such Below Base Price Options.

                    (B) Issuance of Capital Shares Equivalent. If the Company in
               any manner issues or sells any Capital Shares Equivalent,

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               whether or not immediately convertible (other than where the
               same are issuable upon the exercise of Options) and the effective
               price per share for which Common Stock is issuable upon such
               exercise, conversion or exchange is less than the Exercise Price,
               then the maximum total number of shares of Common Stock issuable
               upon the exercise, conversion or exchange of all such Capital
               Shares Equivalent will, as of the date of the issuance of such
               Capital Shares Equivalent, be deemed to be outstanding and to
               have been issued and sold by the Company for such price per share
               and the maximum consideration payable to the Company upon such
               exercise (assuming full exercise, conversion or exchange of
               Capital Shares Equivalent, if applicable) will be deemed to have
               been received by the Company. For the purposes of the preceding
               sentence, the "effective price per share for which Common Stock
               is issuable upon such exercise, conversion or exchange" is
               determined by dividing (i) the total amount, if any, received or
               receivable by the Company as consideration for the issuance or
               sale of all such Capital Shares Equivalent, plus the minimum
               aggregate amount of additional consideration, if any, payable to
               the Company upon the exercise, conversion or exchange thereof at
               the time such Capital Shares Equivalent first become exercisable,
               convertible or exchangeable, by (ii) the maximum total number of
               shares of Common Stock issuable upon the exercise, conversion or
               exchange of all such Capital Shares Equivalent. No further
               adjustment to the Exercise Price will be made upon the actual
               issuance of such Common Stock upon exercise, conversion or
               exchange of such Capital Shares Equivalent.

                    (C) Change in Option Price or Conversion Rate. If there is a
               change at any time in (i) the amount of additional consideration
               payable to the Company upon the exercise of any Options; (ii) the
               amount of additional consideration, if any, payable to the
               Company upon the exercise, conversion or exchange of any Capital
               Shares Equivalent; or (iii) the rate at which any Capital Shares
               Equivalent are convertible into or exchangeable for Common Stock
               (in each such case, other than under or by reason of provisions
               designed to protect against dilution), the Exercise Price in
               effect at the time of such change will be readjusted to the
               Exercise Price which would have been in effect at such time had
               such Options or Capital Shares Equivalent still outstanding
               provided for such changed additional consideration or changed
               conversion rate, as the case may be, at the time initially
               granted, issued or sold.

                    (D) Calculation of Consideration Received. If any Common
               Stock, Options or Capital Shares Equivalent are issued, granted
               or sold for cash, the consideration received therefor for
               purposes of this Warrant will be the amount received by the
               Company therefor, before deduction of reasonable commissions,
               underwriting discounts or allowances or other reasonable expenses
               paid or incurred by the Company in connection with such issuance,
               grant or sale. In case any Common

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               Stock, Options or Capital Shares Equivalent are issued or sold
               for a consideration part or all of which shall be other than
               cash, the amount of the consideration other than cash received by
               the Company will be the fair market value of such consideration,
               except where such consideration consists of securities, in which
               case the amount of consideration received by the Company will be
               the fair market value (closing bid price, if traded on any
               market) thereof as of the date of receipt. In case any Common
               Stock, Options or Capital Shares Equivalent are issued in
               connection with any merger or consolidation in which the Company
               is the surviving corporation, the amount of consideration
               therefor will be deemed to be the fair market value of such
               portion of the net assets and business of the non-surviving
               corporation as is attributable to such Common Stock, Options or
               Capital Shares Equivalent, as the case may be. The fair market
               value of any consideration other than cash or securities will be
               determined in good faith by an investment banker or other
               appropriate expert of national reputation selected by the Company
               and reasonably acceptable to the holder hereof, with the costs of
               such appraisal to be borne by the Company.

                    (E) Exceptions to Adjustment of Exercise Price.
               Notwithstanding the foregoing, no adjustment will be made under
               this Section 11(b) in respect of (1) the granting of options to
               employees, officers, directors and key consultants of the Company
               pursuant to any stock option plan or other plan duly adopted by a
               majority of the non-employee members of the Board of Directors of
               the Company or a majority of the members of a committee of
               non-employee directors established for such purpose, or (2) upon
               the exercise of the Debentures or any Debentures of this series
               or of any other series or security issued by the Company in
               connection with the offer and sale of this Company's securities
               pursuant to the Purchase Agreement, or (3) upon the exercise of
               or conversion of any Capital Shares Equivalent or Options issued
               and outstanding on the Original Issue Date, provided that the
               securities have not been amended since the date of the Purchase
               Agreement except as a result of the Purchase Agreement, or (4)
               acquisitions or strategic investments, the primary purpose of
               which is not to raise capital, or (5) the granting of stock,
               stock options and/or warrants to an investment group in
               connection with the advancement of $1 million to the Company,
               which transaction is described in Item 13 of the Company's Annual
               Report on Form 10-K for the fiscal year ended March 31, 2003.

               (iii) Minimum Adjustment of Exercise Price. No adjustment of the
          Exercise Price shall be made in an amount of less than 1% of the
          Exercise Price in effect at the time such adjustment is otherwise
          required to be made, but any such lesser adjustment shall be carried
          forward and shall be made at the time and together with the next
          subsequent adjustment which, together with any

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          adjustments so carried forward, shall amount to not less than 1% of
          such Exercise Price.

     12. Reorganization, Reclassification, Merger, Consolidation or Disposition
of Assets. In case the Company shall reorganize its capital, reclassify its
capital stock, consolidate or merge with or into another corporation (where the
Company is not the surviving corporation or where there is a change in or
distribution with respect to the Common Stock of the Company), or sell, transfer
or otherwise dispose of all or substantially all its property, assets or
business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common Stock
of the Company, then the Holder shall have the right thereafter to receive, at
the option of the Holder, (a) upon exercise of this Warrant, the number of
shares of Common Stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and Other Property receivable upon
or as a result of such reorganization, reclassification, merger, consolidation
or disposition of assets by a Holder of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such event or (b) cash
equal to the value of this Warrant as determined in accordance with the
Black-Scholes option pricing formula. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of Warrant Shares
for which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 12. For purposes of
this Section 12, "common stock of the successor or acquiring corporation" shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation and which
is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 12 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.

     13. Voluntary Adjustment by the Company. The Company may at any time during
the term of this Warrant reduce the then current Exercise Price to any amount
and for any period of time deemed appropriate by the Board of Directors of the
Company.

     14. Notice of Adjustment. Whenever the number of Warrant Shares or number
or kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted, as herein provided, the Company shall
give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other

                                       11
<PAGE>

securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.

     15. Notice of Corporate Action. If at any time:

          (a) the Company shall take a record of the holders of its Common Stock
     for the purpose of entitling them to receive a dividend or other
     distribution, or any right to subscribe for or purchase any evidences of
     its indebtedness, any shares of stock of any class or any other securities
     or property, or to receive any other right, or

          (b) there shall be any capital reorganization of the Company, any
     reclassification or recapitalization of the capital stock of the Company or
     any consolidation or merger of the Company with, or any sale, transfer or
     other disposition of all or substantially all the property, assets or
     business of the Company to, another corporation or,

          (c) there shall be a voluntary or involuntary dissolution, liquidation
     or winding up of the Company;

then, in any one or more of such cases, the Company shall give to Holder (i) at
least 20 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 20
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their Warrant Shares for securities or other property
deliverable upon such disposition, dissolution, liquidation or winding up. Each
such written notice shall be sufficiently given if addressed to Holder at the
last address of Holder appearing on the books of the Company and delivered in
accordance with Section 17(d).

     16. Authorized Shares. The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Principal Market
upon which the Common Stock may be listed.

                                       12
<PAGE>

     Except and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder as set forth in this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this Warrant.

     Before taking any action which would result in an adjustment in the number
of Warrant Shares for which this Warrant is exercisable or in the Exercise
Price, the Company shall obtain all such authorizations or exemptions thereof,
or consents thereto, as may be necessary from any public regulatory body or
bodies having jurisdiction thereof.

     17. Miscellaneous.

          (a) Jurisdiction. This Warrant shall constitute a contract under the
     laws of California, without regard to its conflict of law, principles or
     rules. Venue shall be exclusively the county of San Diego, California.

          (b) Restrictions. The Holder acknowledges that the Warrant Shares
     acquired upon the exercise of this Warrant, if not registered, will have
     restrictions upon resale imposed by state and federal securities laws.

          (c) Nonwaiver and Expenses. No course of dealing or any delay or
     failure to exercise any right hereunder on the part of Holder shall operate
     as a waiver of such right or otherwise prejudice Holder's rights, powers or
     remedies, notwithstanding all rights hereunder terminate on the Termination
     Date. If the Company willfully and knowingly fails to comply with any
     provision of this Warrant, which results in any material damages to the
     Holder, the Company shall pay to Holder such amounts as shall be sufficient
     to cover any costs and expenses including, but not limited to, reasonable
     attorneys' fees, including those of appellate proceedings, incurred by
     Holder in collecting any amounts due pursuant hereto or in otherwise
     enforcing any of its rights, powers or remedies hereunder.

          (d) Notices. Any notice, request or other document required or
     permitted to be given or delivered to the Holder by the Company shall be
     delivered in accordance with the notice provisions of the Purchase
     Agreement.

                                       13
<PAGE>

          (e) Limitation of Liability. No provision hereof, in the absence of
     any affirmative action by Holder to exercise this Warrant or purchase
     Warrant Shares, and no enumeration herein of the rights or privileges of
     Holder, shall give rise to any liability of Holder for the purchase price
     of any Common Stock or as a stockholder of the Company, whether such
     liability is asserted by the Company or by creditors of the Company.

          (f) Remedies. Holder, in addition to being entitled to exercise all
     rights granted by law, including recovery of damages, will be entitled to
     specific performance of its rights under this Warrant. The Company agrees
     that monetary damages would not be adequate compensation for any loss
     incurred by reason of a breach by it of the provisions of this Warrant and
     hereby agrees to waive the defense in any action for specific performance
     that a remedy at law would be adequate.

          (g) Successors and Assigns. Subject to applicable securities laws,
     this Warrant and the rights and obligations evidenced hereby shall inure to
     the benefit of and be binding upon the successors of the Company and the
     successors and permitted assigns of Holder. The provisions of this Warrant
     are intended to be for the benefit of all Holders from time to time of this
     Warrant and shall be enforceable by any such Holder or holder of Warrant
     Shares.

          (h) Amendment. This Warrant may be modified or amended or the
     provisions hereof waived with the written consent of the Company and the
     Holder.

          (i) Severability. Wherever possible, each provision of this Warrant
     shall be interpreted in such manner as to be effective and valid under
     applicable law, but if any provision of this Warrant shall be prohibited by
     or invalid under applicable law, such provision shall be ineffective to the
     extent of such prohibition or invalidity, without invalidating the
     remainder of such provisions or the remaining provisions of this Warrant.

          (j) Headings. The headings used in this Warrant are for the
     convenience of reference only and shall not, for any purpose, be deemed a
     part of this Warrant.

          (k) Broker-Dealer Provision. To the extent this Warrant is being
     issued to a broker-dealer that is acting as a placement agent in the
     transaction in which it is being issued, any terms, restrictions or
     limitations required by the compensation rules of the National Association
     of Securities Dealers are incorporated by this reference herein.

                              ********************

                                       14
<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officer thereunto duly authorized.

Dated:  September 8, 2003
                                          THE SINGING MACHINE COMPANY, INC.

                                          By: /s/ Yi Ping Chan
                                              ----------------
                                              Name: Yi Ping Chan
                                              Title: Chief Operating Officer

                                       15
<PAGE>

                               NOTICE OF EXERCISE

To:      THE SINGING MACHINE COMPANY, INC.

     (1) The undersigned hereby elects to purchase ________ Warrant Shares of
The Singing Machine Company, Inc. pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise price
in full, together with all applicable transfer taxes, if any.

     (2) Payment shall take the form of (check applicable box):

          [ ] in lawful money of the United States; or

          [ ] the cancellation of such number of Warrant Shares as is
              necessary, in accordance with the formula set forth in subsection
              3(d), to exercise this Warrant with respect to the maximum number
              of Warrant Shares purchasable pursuant to the cashless exercise
              procedure set forth in subsection 3(d).

     (3) Please issue a certificate or certificates representing said Warrant
Shares in the name of the undersigned or in such other name as is specified
below:

         ________________________________________

The Warrant Shares shall be delivered to the following DTC account:

                  ________________________________________

                  ________________________________________

                  ________________________________________

     (4) Accredited Investor. The undersigned is an "accredited investor" as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.

                                         [PURCHASER]

                                          By: ______________________________
                                              Name:
                                              Title:

                                          Dated:  __________________________

<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

     FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

                                           Dated:  ______________, _______

                           Holder's Signature:  _____________________________

                           Holder's Address:    _____________________________

                                                _____________________________

Signature Guaranteed:  ___________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.EXHIBIT 10.6

                          REGISTRATION RIGHTS AGREEMENT

         This Registration Rights Agreement (this "Agreement") is made and
entered into as of August 20, 2003, among The Singing Machine Company, Inc., a
Delaware corporation (the "Company"), and the purchasers signatory hereto (each
such purchaser is a "Purchaser" and all such purchasers are, collectively, the
"Purchasers").

         This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof among the Company and the Purchasers (the "Purchase
Agreement"). This Agreement is also subject to the terms and conditions of a
subordination agreement (the "LaSalle Subordination Agreement") that the Holder
has signed with LaSalle Business Credit, LLC, the Company's commercial lender,
on about the date hereof and any future subordination agreements that it is
required to sign during the time period that the Company has any obligations
under the Transaction Documents (collectively, any or all such agreements shall
be referred to as the "Subordination Agreement"). Any inconsistencies between
this Agreement and the Subordination Agreement will be resolved in favor of the
terms of the Subordination Agreement.

         The Company and the Purchasers hereby agree as follows:

         1. Definitions

         CAPITALIZED TERMS USED AND NOT OTHERWISE DEFINED HEREIN THAT ARE
DEFINED IN THE PURCHASE AGREEMENT SHALL HAVE THE MEANINGS GIVEN SUCH TERMS IN
THE PURCHASE AGREEMENT. As used in this Agreement, the following terms shall
have the following meanings:

                  "Effectiveness Date" means, with respect to the initial
         Registration Statement required hereunder, the 90th calendar day
         following the Closing Date (150th calendar day following the Closing
         Date in the event of a "full review" of the Registration Statement by
         the Commission) and, with respect to any additional Registration
         Statements which may be required pursuant to Section 3(c), the 90th
         calendar day following the date on which the Company first knows, or
         reasonably should have known, that such additional Registration
         Statement is required hereunder; provided, however, in the event the
         Company is notified by the Commission that one of the above
         Registration Statements will not be reviewed or is no longer subject to
         further review and comments, the Effectiveness Date as to such
         Registration Statement shall be the fifth Trading Day following the
         date on which the Company is so notified if such date precedes the
         dates required above.

                  "Effectiveness Period" shall have the meaning set forth in
         Section 2(a).

                  "Filing Date" means, with respect to the initial Registration
         Atement required hereunder, the 30th day following the Closing Date
         and, with respect to any additional Registration Statements which may

                                       1
<PAGE>

         be required pursuant to Section 3(c), the 15th day following the date
         on which the Company first knows, or reasonably should have known that
         such additional Registration Statement is required hereunder.

                  "Holder" or "Holders" means the holder or holders, as the case
         may be, from time to time of Registrable Securities.

                  "Indemnified Party" shall have the meaning set forth in
         Section 5(c) hereof.

                  "Indemnifying Party" shall have the meaning set forth in
         Section 5(c) hereof.

                  "Losses" shall have the meaning set forth in Section 5(a).

                  "Proceeding" means an action, claim, suit, investigation or
         proceeding (including, without limitation, an investigation or partial
         proceeding, such as a deposition), whether commenced or threatened.

                  "Prospectus" means the prospectus included in a Registration
         Statement (including, without limitation, a prospectus that includes
         any information previously omitted from a prospectus filed as part of
         an effective registration statement in reliance upon Rule 430A
         promulgated under the Securities Act), as amended or supplemented by
         any prospectus supplement, with respect to the terms of the offering of
         any portion of the Registrable Securities covered by a Registration
         Statement, and all other amendments and supplements to the Prospectus,
         including post-effective amendments, and all material incorporated by
         reference or deemed to be incorporated by reference in such Prospectus.

                  "Registrable Securities" means (i) all of the shares of Common
         Stock issuable upon conversion in full of the Debentures, (ii) all
         shares issuable as interest on the Debentures assuming all interest
         payments are made in shares of Common Stock and the Debentures are held
         until maturity, (iii) all Warrant Shares, (iv) any securities issued or
         issuable upon any stock split, dividend or other distribution
         recapitalization or similar event with respect to the foregoing, (v)
         any additional share issuable in connection with any anti-dilution
         provisions in the Debentures and (vi) any shares of common stock
         issued, or issuable upon exercise of warrants issued, to Roth Capital
         Partners, LLC in connection with the consummation of the transactions
         contemplated by the Purchase Agreement.

                  "Registration Statement" means the registration statements
         required to be filed hereunder and any additional registration
         statements contemplated by Section 3(c), including (in each case) the
         Prospectus, amendments and supplements to such registration statement
         or Prospectus, including pre- and post-effective amendments, all
         exhibits thereto, and all material incorporated by reference or deemed
         to be incorporated by reference in such registration statement.

                                       2
<PAGE>

                  "Rule 415" means Rule 415 promulgated by the Commission
         pursuant to the Securities Act, as such Rule may be amended from time
         to time, or any similar rule or regulation hereafter adopted by the
         Commission having substantially the same purpose and effect as such
         Rule.

                  "Rule 424" means Rule 424 promulgated by the Commission
         pursuant to the Securities Act, as such Rule may be amended from time
         to time, or any similar rule or regulation hereafter adopted by the
         Commission having substantially the same purpose and effect as such
         Rule.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Warrants" shall mean the Common Stock purchase warrants
         issued to the Purchasers pursuant to the Purchase Agreement.

                  "Warrant Shares" shall mean the shares of Common Stock
         issuable upon exercise of the Warrants.

         2. Shelf Registration

         (a) On or prior to each Filing Date, the Company shall prepare and file
with the Commission a "Shelf" Registration Statement covering the resale of 130%
of the Registrable Securities on such Filing Date for an offering to be made on
a continuous basis pursuant to Rule 415. The Registration Statement shall be on
Form S-3 (unless the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance herewith) and shall contain (unless
otherwise directed by the Holders) substantially the "Plan of Distribution"
attached hereto as Annex A. Subject to the terms of this Agreement, the Company
shall use its best efforts to cause the Registration Statement to be declared
effective under the Securities Act as promptly as possible after the filing
thereof, but in any event prior to the applicable Effectiveness Date, and shall
use its best efforts to keep such Registration Statement continuously effective
under the Securities Act until all Registrable Securities covered by such
Registration Statement have been sold or may be sold without volume restrictions
pursuant to Rule 144(k) as determined by the counsel to the Company pursuant to
a written opinion letter to such effect, addressed and acceptable to the
Company's transfer agent and the affected Holders (the "Effectiveness Period").
The Company shall immediately notify the Holders via facsimile of the
effectiveness of the Registration Statement on the same day that the Company
receives notification of the effectiveness from the Commission.

         (b) If: (i) a Registration Statement is not filed on or prior to its
Filing Date (if the Company files a Registration Statement without affording the
Holders the opportunity to review and comment on the same as required by Section
3(a), the Company shall not be deemed to have satisfied clause (i)), or (ii) the

                                       3
<PAGE>

Company fails to file with the Commission a request for acceleration in
accordance with Rule 461 promulgated under the Securities Act, within five
Trading Days of the date that the Company is notified (orally or in writing,
whichever is earlier) by the Commission that a Registration Statement will not
be "reviewed," or not subject to further review, or (iii) prior to its
Effectiveness Date, the Company fails to file a pre-effective amendment and
otherwise respond in writing to comments made by the Commission in respect of
such Registration Statement within 10 Trading Days after the receipt of comments
by or notice from the Commission that such amendment is required in order for a
Registration Statement to be declared effective, or (iv) a Registration
Statement filed or required to be filed hereunder is not declared effective by
the Commission by its Effectiveness Date, or (v) after the Effectiveness Date, a
Registration Statement ceases for any reason to remain continuously effective as
to all Registrable Securities for which it is required to be effective, or the
Holders are not permitted to utilize the Prospectus therein to resell such
Registrable Securities for 20 consecutive Trading Days or an aggregate of 30
Trading Days during any 12-month period (which need not be consecutive Trading
Days) (any such failure or breach being referred to as an "Event", and for
purposes of clause (i) or (iv) the date on which such Event occurs, or for
purposes of clause (ii) the date on which such five Trading Day period is
exceeded, or for purposes of clause (iii) the date which such 10 Trading Day
period is exceeded, or for purposes of clause (v) the date on which such 20 or
30 Trading Day period, as applicable, is exceeded being referred to as "Event
Date"), then, on each such Event Date and every monthly anniversary thereof
until the applicable Event is cured, the Company shall pay, subject to the terms
of the Subordination Agreement, to each Holder an amount in cash, as liquidated
damages and not as a penalty, equal to 2.0% per month, pro rata on a daily
basis, of (i) the Subscription Amount paid by such Holder pursuant to the
Purchase Agreement for Debentures then held by such Holder, and (ii) if the
Warrants are "in the money" and then held by the Holder, the value of any
outstanding Warrants (valued at the difference between the average of the VWAPs
during the applicable month and the Exercise Price multiplied by the number of
shares of Common Stock the Warrants are exercisable into). By way of example, if
a Holder at the time of an Event holds $500,000 principal amount of debentures
and such Holder's Warrants are in the money by $50,000, on average as calculated
above, at the time of such Event, the Company shall pay such Holder $11,000 at
such time and $11,000 per month (pro-rated if partial months) until such Event
no longer exists. If the Company fails to pay any liquidated damages pursuant to
this Section in full within seven days after the date payable, the Company will
pay, subject to the terms of the Subordination Agreement, interest thereon at a
rate of 18% per annum (or such lesser maximum amount that is permitted to be
paid by applicable law) to the Holder, accruing daily from the date such
liquidated damages are due until such amounts, plus all such interest thereon,
are paid in full. The liquidated damages pursuant to the terms hereof shall
apply on a pro-rata basis for any portion of a month prior to the cure of an
Event. All remedies are subject to the terms of the Subordination Agreement.

         3. Registration Procedures

         In connection with the Company's registration obligations hereunder,
the Company shall:

                                       4
<PAGE>

         (a) Not less than five Trading Days prior to the filing of each
Registration Statement or any related Prospectus or any amendment or supplement
thereto (including any document that would be incorporated or deemed to be
incorporated therein by reference), the Company shall, (i) furnish to each
Holder copies of all such documents proposed to be filed, which documents (other
than those incorporated or deemed to be incorporated by reference) will be
subject to the review of such Holders, and (ii) cause its officers and
directors, counsel and independent certified public accountants to respond to
such inquiries as shall be necessary, in the reasonable opinion of respective
counsel to conduct a reasonable investigation within the meaning of the
Securities Act. The Company shall not file the Registration Statement or any
such Prospectus or any amendments or supplements thereto to which the Holders of
a majority of the Registrable Securities shall reasonably and in good faith
object, provided, the Company is notified of such objection in writing no later
than 3 Trading Days after the Holders have been so furnished copies of such
documents.

         (b) (i) Prepare and file with the Commission such amendments, including
post-effective amendments, to a Registration Statement and the Prospectus used
in connection therewith as may be necessary to keep a Registration Statement
continuously effective as to the applicable Registrable Securities for the
Effectiveness Period and prepare and file with the Commission such additional
Registration Statements in order to register for resale under the Securities Act
all of the Registrable Securities; (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement (subject to the
terms of this Agreement), and as so supplemented or amended to be filed pursuant
to Rule 424; (iii) respond as promptly as reasonably possible, and in any event
within 10 Trading Days, to any comments received from the Commission with
respect to a Registration Statement or any amendment thereto and as promptly as
reasonably possible provide the Holders true and complete copies of all
correspondence from and to the Commission relating to a Registration Statement;
and (iv) comply in all material respects with the provisions of the Securities
Act and the Exchange Act with respect to the disposition of all Registrable
Securities covered by a Registration Statement during the applicable period in
accordance (subject to the terms of this Agreement) with the intended methods of
disposition by the Holders thereof set forth in such Registration Statement as
so amended or in such Prospectus as so supplemented.

         (c) If during the Effectiveness Period, the number of Registrable
Securities at any time exceeds 85% of the number of shares of Common Stock then
registered in a Registration Statement, then the Company shall file as soon as
reasonably practicable but in any case prior to the applicable Filing Date, an
additional Registration Statement covering the resale by the Holders of not less
than 130% of the number of such Registrable Securities.

         (d) Notify the Holders of Registrable Securities to be sold (which
notice shall, pursuant to clauses (ii) through (vi) hereof, shall be accompanied
by an instruction to suspend the use of the Prospectus until the requisite
changes have been made) as promptly as reasonably possible (and, in the case of
(i)(A) below, not less than five Trading Days prior to such filing) and (if
requested by any such Person) confirm such notice in writing no later than one
Trading Day following the day (i)(A) when a Prospectus or any Prospectus

                                       5
<PAGE>

supplement or post-effective amendment to a Registration Statement is proposed
to be filed; (B) when the Commission notifies the Company whether there will be
a "review" of such Registration Statement and whenever the Commission comments
in writing on such Registration Statement (the Company shall provide true and
complete copies thereof and all written responses thereto to each of the
Holders); and (C) with respect to a Registration Statement or any post-effective
amendment, when the same has become effective; (ii) of any request by the
Commission or any other Federal or state governmental authority for amendments
or supplements to a Registration Statement or Prospectus or for additional
information; (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of a Registration Statement covering any or all of
the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; (v) of the occurrence of any
event or passage of time that makes the financial statements included in a
Registration Statement ineligible for inclusion therein or any statement made in
a Registration Statement or Prospectus or any document incorporated or deemed to
be incorporated therein by reference untrue in any material respect or that
requires any revisions to a Registration Statement, Prospectus or other
documents so that, in the case of a Registration Statement or the Prospectus, as
the case may be, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; and (vi) the occurrence or existence of any pending
corporate development with respect to the Company that the Company believes may
be material and that, in the determination of the Company, makes it not in the
best interest of the Company to allow continued availability or the Registration
Statement or Prospectus; provided that any and all of such information shall
remain confidential to each Holder until such information otherwise becomes
public, unless disclosure by a Holder is required by law; provided, further,
notwithstanding each Holder's agreement to keep such information confidential,
the Holders make no acknowledgement that any such information is material,
non-public information.

         (e) Promptly deliver to each Holder, without charge, as many copies of
the Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request. Subject
to the terms of this Agreement, the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the selling
Holders in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto.

         (f) Use commercially reasonable efforts to register or qualify the
resale of such Registrable Securities as required under applicable securities or
Blue Sky laws of each State within the United States as any Holder requests in
writing, to keep each such registration or qualification (or exemption
therefrom) effective during the Effectiveness Period; provided, that the Company
shall not be required to qualify generally to do business in any jurisdiction
where it is not then so qualified or subject the Company to any material tax in
any such jurisdiction where it is not then so subject.

                                       6
<PAGE>

         (g) Cooperate with the Holders to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be delivered to
a transferee pursuant to a Registration Statement, which certificates shall be
free, to the extent permitted by the Purchase Agreement, of all restrictive
legends, and to enable such Registrable Securities to be in such denominations
and registered in such names as any such Holders may request.

         (h) Upon the occurrence of any event contemplated by this Section 3, as
promptly as reasonably possible under the circumstances taking into account the
Company's good faith assessment of any adverse consequences to the Company and
its stockholders of the premature disclosure of such eventt, prepare a
supplement or amendment, including a post-effective amendment, to a Registration
Statement or a supplement to the related Prospectus or any document incorporated
or deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, neither a Registration Statement nor
such Prospectus will contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If the Company notifies the Holders in accordance with clauses
(ii) through (vi) of Section 3(d) above to suspend the use of the use of any
Prospectus until the requisite changes to such Prospectus have been made, or the
Company otherwise notifies the Holders of its election to suspend the
availability of a Registration Statement and Prospectus pursuant to clause (vi)
of Section 3(d), then the Holders shall suspend use of such Prospectus. The
Company will use its best efforts to ensure that the use of the Prospectus may
be resumed as promptly as is practicable, except that in the case of suspension
of the availability of a Registration Statement and Prospectus pursuant to
clause (vi) of Section 3(d), the Company shall not be required to take such
action until such time as it shall determine that the continued availability of
the Registration Statement and Prospectus is no longer not in the best interest
of the Company. Notwithstanding the Company's right to suspend the use of the
prospectus hereunder, the Company shall remain liable to the Holders pursuant to
Section 2(c) for any suspensions of the Registration Statement hereunder which
otherwise require payment thereunder.

         (i) Comply with all applicable rules and regulations of the Commission.

         (j) Use its best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of a
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.

         (k) The Company may require, at any time prior to the third Trading Day
prior to the Filing Date, each Holder to furnish to the Company a statement as
to the number of shares of Common Stock beneficially owned by such Holder and,

                                       7
<PAGE>

if requested by the Commission, the controlling person thereof, within three
Trading days of the Company's request. During any periods that the Company is
unable to meet its obligations hereunder with respect to the registration of the
Registrable Securities solely because any Holder fails to furnish such
information within three Trading Days of the Company's request, any liquidated
damages that are accruing at such time shall be tolled and any Event that may
otherwise occur solely because of such delay shall be suspended, until such
information is delivered to the Company.

         4. Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to
the Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the Principal Market on which the Common Stock is then
listed for trading, and (B) in compliance with applicable state securities or
Blue Sky laws reasonably agreed to by the Company in writing (including, without
limitation, fees and disbursements of counsel for the Company in connection with
Blue Sky qualifications or exemptions of the Registrable Securities and
determination of the eligibility of the Registrable Securities for investment
under the laws of such jurisdictions as requested by the Holders), (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses requested by the Holders),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, and (v) fees and expenses of all other Persons retained
by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. In no event shall the Company be
responsible for any broker or similar commissions or, except to the extent
provided for in the Transaction Documents, any legal fees or other costs of the
Holders.

         5. Indemnification

         (a) Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents, brokers (including brokers who offer and sell
Registrable Securities as principal as a result of a pledge or any failure to
perform under a margin call of Common Stock), investment advisors and employees
of each of them, each Person who controls any such Holder (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of each such controlling Person, to
the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation,
costs of preparation and reasonable attorneys' fees) and expenses (collectively,

                                       8
<PAGE>

"Losses"), as incurred, arising out of or relating to any untrue or alleged
untrue statement of a material fact contained in a Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading, except to the extent, but only to the extent,
that (1) such untrue statements or omissions or alleged untrue statements or
omissions are based upon information regarding such Holder furnished in writing
to the Company by such Holder expressly for use therein, or to the extent that
such information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in a Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement thereto
or (2) in the case of an occurrence of an event of the type specified in Section
3(d)(ii)-(vi), the use by such Holder of an outdated or defective Prospectus
after the Company has notified such Holder in writing that the Prospectus is
outdated or defective and prior to the receipt by such Holder of the Advice
contemplated in Section 6(e). The Company shall notify the Holders promptly of
the institution, threat or assertion of any Proceeding arising from or in
connection with the transactions contemplated by this Agreement of which the
Company is aware.

         (b) Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses (as
determined by a court of competent jurisdiction in a final judgment not subject
to appeal or review) arising out of or based upon any untrue statement of a
material fact contained in any Registration Statement, any Prospectus, or any
form of prospectus, or in any amendment or supplement thereto, or arising solely
out of or based solely upon: (i) such Holder's failure to comply with the
prospectus delivery requirements of the Securities Act or (ii) any omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading to the extent, but only to the extent, such untrue
statement or omission is contained in any information so furnished in writing by
such Holder to the Company specifically for inclusion in such Registration
Statement or such Prospectus or to the extent that (1) such untrue statements or
omissions are based upon information regarding such Holder furnished in writing
to the Company by such Holder expressly for use therein, or to the extent such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement thereto

                                       9
<PAGE>

or (2) in the case of an occurrence of an event of the type specified in Section
3(d)(ii)-(vi), the use by such Holder of an outdated or defective Prospectus
after the Company has notified such Holder in writing that the Prospectus is
outdated or defective and prior to the receipt by such Holder of the Advice
contemplated in Section 6(e). In no event shall the liability of any selling
Holder hereunder be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation.

         (c) Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof; provided, that
the failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that such failure shall have prejudiced the
Indemnifying Party.

         An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; or (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a material conflict of interest is
likely to exist if the same counsel were to represent such Indemnified Party and
the Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and the expense of one such counsel for each
Holder shall be at the expense of the Indemnifying Party). The Indemnifying
Party shall not be liable for any settlement of any such Proceeding effected
without its written consent, which consent shall not be unreasonably withheld.
No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.

         Subject to the terms of this Agreement, all fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such Proceeding in a
manner not inconsistent with this Section) shall be paid to the Indemnified
Party, as incurred, within ten Trading Days of written notice thereof to the
Indemnifying Party (regardless of whether it is ultimately determined that an
Indemnified Party is not entitled to indemnification hereunder; provided, that
the Indemnifying Party may require such Indemnified Party to undertake to
reimburse all such fees and expenses to the extent it is finally judicially
determined that such Indemnified Party is not entitled to indemnification
hereunder).

                                       10
<PAGE>

         (d) Contribution. If a claim for indemnification under Section 5(a) or
5(b) is unavailable to an Indemnified Party (by reason of public policy or
otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.

         The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.

         The indemnity and contribution agreements contained in this Section are
in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.

         6. Miscellaneous

         (a) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the same shall be in writing and signed by the Company and all of
the Holders of the then outstanding Registrable Securities. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of Holders and that does not
directly or indirectly affect the rights of other Holders may be given by

                                       11
<PAGE>

Holders of all of the Registrable Securities to which such waiver or consent
relates; provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of
the immediately preceding sentence.

         (b) No Inconsistent Agreements. Neither the Company nor any of its
subsidiaries has entered, as of the date hereof, nor shall the Company or any of
its subsidiaries, on or after the date of this Agreement, enter into any
agreement with respect to its securities, that would have the effect of
impairing the rights granted to the Holders in this Agreement or otherwise
conflicts with the provisions hereof. Except as set forth on Schedule 6(b),
neither the Company nor any of its subsidiaries has previously entered into any
agreement granting any registration rights with respect to any of its securities
to any Person that have not been satisfied in full.

         (c) No Piggyback on Registrations. Except as set forth on Schedule 6(c)
attached hereto, neither the Company nor any of its security holders (other than
the Holders in such capacity pursuant hereto) may include securities of the
Company in the Registration Statement other than the Registrable Securities, and
the Company shall not after the date hereof enter into any agreement providing
any such right to add other securities onto the Registration Statement to any of
its security holders. The Company shall not file any other registration
statement, other than on Form S-8, until the initial Registration Statement
required hereunder is declared effective by the Commission, provided that this
Section 6(c) shall not prohibit the Company from filing amendments to
registration statements already filed.

         (d) Compliance. Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable to
it in connection with sales of Registrable Securities pursuant to the
Registration Statement.

         (e) Discontinued Disposition. Each Holder agrees by its acquisition of
such Registrable Securities that, upon receipt of a notice from the Company of
the occurrence of any event of the kind described in Sections 3(d)(ii), (iii) or
(vi), such Holder will forthwith discontinue disposition of such Registrable
Securities under a Registration Statement until such Holder's receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(h), or until it is advised in writing (the "Advice")
by the Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph. The Company agrees and acknowledges
that any periods during which the Holder is required to discontinue the
disposition of the Registrable Securities hereunder shall be subject to the
provisions of Section 2(b).

         (f) Piggy-Back Registrations. If at any time during the Effectiveness
Period there is not an effective Registration Statement covering all of the
Registrable Securities and the Company shall determine to prepare and file with
the Commission a registration statement relating to an offering for its own

                                       12
<PAGE>

account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to each Holder written notice of such
determination and, if within fifteen days after receipt of such notice, any such
Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
holder requests to be registered; provided, that, the Company shall not be
required to register any Registrable Securities pursuant to this Section 6(f)
that are eligible for resale pursuant to Rule 144(k) promulgated under the
Securities Act or that are the subject of a then effective Registration
Statement.

         (g) Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be delivered as set forth
in the Purchase Agreement.

         (h) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Holder. The Company may not
assign its rights or obligations hereunder without the prior written consent of
all of the Holders of the then-outstanding Registrable Securities. Each Holder
may assign their respective rights hereunder in the manner and to the Persons as
permitted under the Purchase Agreement.

         (i) Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.

         (j) Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each party hereto hereby

                                       13
<PAGE>

irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby. If either party shall
commence a Proceeding to enforce any provisions of this Agreement, then the
prevailing party in such Proceeding shall be reimbursed by the other party for
its attorneys fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such Proceeding.

         (k) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.

         (l) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.

         (m) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

         (n) Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser hereunder is several and not joint with the
obligations of any other Purchaser hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated by this Agreement.
Each Purchaser shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.

                              ********************

                                       14
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.

                                    THE SINGING MACHINE COMPANY, INC.

                                    By: /s/ Yi Ping Chan
                                        -------------------------------
                                        Name:  Yi Ping Chan
                                        Title: Chief Operating Officer

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                                       15
<PAGE>

                       [SIGNATURE PAGE OF HOLDERS TO RRA]

                                  OMICRON MASTER TRUST
                                  By: Omicron Capital L.P., as subadvisor
                                  By: Omicron Capital Inc., its general partner

                                  By: /s/ Bruce Bernstein
                                      ------------------------
                                      Name:Bruce Bernstein
                                      Title:   President

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                                       16
<PAGE>

                       [SIGNATURE PAGE OF HOLDERS TO RRA]

BRISTOL INVESTMENT FUND, LTD.

By:   /s/ Paul Kessler
      ------------------------
      Name:  Paul Kessler
      Title:    Director

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                                       17
<PAGE>

                       [SIGNATURE PAGE OF HOLDERS TO RRA]

ASCEND OFFSHORE FUND, LTD.

By:      /s/ Malcolm Fairbairn
         ----------------------------
         Name:  Malcolm Fairbairn
         Title:     Investment Manager

Subscription Amount: $478,000
------------------

ASCEND PARTNERS LP

By:        /s/ Malcolm Fairbairn
         ----------------------------
         Name:  Malcolm Fairbairn
         Title:    Managing Member

Subscription Amount: $58,200
------------------

ASCEND PARTNERS SAPIENT LP

By:       /s/ Malcolm Fairbairn
         ----------------------------
         Name:  Malcolm Fairbairn
         Title:    Managing Member

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                                       18
<PAGE>

                       [SIGNATURE PAGE OF HOLDERS TO RRA]

SF CAPITAL PARTNERS, LLC

By:   /s/ Brian H. Davidson
      ---------------------------
      Name:  Brian H. Davidson
      Title:    Authorized Signatory

                                       19
<PAGE>

                       [SIGNATURE PAGE OF HOLDERS TO RRA]

ROTH CAPITAL PARTNERS, LLC

By:   /s/
      ---------------------------
      Name:
      Title:

                                       20

<PAGE>

                              PLAN OF DISTRIBUTION
                              --------------------

         The selling stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling stockholders may use any one or more of the
following methods when selling shares:

         o        ordinary brokerage transactions and transactions in which the
                  broker-dealer solicits purchasers;

         o        block trades in which the broker-dealer will attempt to sell
                  the shares as agent but may position and resell a portion of
                  the block as principal to facilitate the transaction;

         o        purchases by a broker-dealer as principal and resale by the
                  broker-dealer for its account;

         o        an exchange distribution in accordance with the rules of the
                  applicable exchange;

         o        privately negotiated transactions;

         o        broker-dealers may agree with the selling stockholders to sell
                  a specified number of such shares at a stipulated price per
                  share;

         o        a combination of any such methods of sale; and

         o        any other method permitted pursuant to applicable law.

         The selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus. Broker-dealers
engaged by the selling stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the selling stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated. The
selling stockholders do not expect these commissions and discounts to exceed
what is customary in the types of transactions involved. Broker-dealers may
agree to sell a specified number of such shares at a stipulated price per share,
and, to the extent such broker-dealer is unable to do so acting as agent for us
or a selling shareholder, to purchase as principal any unsold shares at the
price required to fulfill the broker-dealer commitment. Broker-dealers who
acquire shares as principal may thereafter resell such shares from time to time
in transactions, which may involve block transactions and sales to and through
other broker-dealers, including transactions of the nature described above, in
the over-the-counter markets or otherwise at pries and on terms then prevailing
at the time of sale, at prices than related to the then-current market price or
in negotiated transactions. In connection with such resales, broker-dealers may
pay to or receive from the purchasers such shares commissions as described
above.

                                       21
<PAGE>

         The selling stockholder may from time to time pledge or grant a
security interest in some or all of the Shares or common stock or Warrant owned
by them and, if they default in the performance of their secured obligations,
the pledgees or secured parties may offer and sell the shares of common stock
from time to time under this prospectus, or under an amendment to this
prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act of 1933 amending the list of selling stockholders to include the pledgee,
transferee or other successors in interest as selling stockholders under this
prospectus.

         The selling stockholders also may transfer the shares of common stock
in other circumstances, in which case the transferees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus.

         The selling stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. The selling stockholders have
informed the Company that none of them have any agreement or understanding,
directly or indirectly, with any person to distribute the common stock.

         The Company is required to pay all fees and expenses incurred by the
Company incident to the registration of the shares. The Company has agreed to
indemnify the selling stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.

                                       22

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