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<SEC-DOCUMENT>0001116502-03-001230.txt : 20030707
<SEC-HEADER>0001116502-03-001230.hdr.sgml : 20030704
<ACCEPTANCE-DATETIME>20030707155407
ACCESSION NUMBER:		0001116502-03-001230
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20030630
ITEM INFORMATION:		Other events
ITEM INFORMATION:		Financial statements and exhibits
FILED AS OF DATE:		20030707

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SINGING MACHINE CO INC
		CENTRAL INDEX KEY:			0000923601
		STANDARD INDUSTRIAL CLASSIFICATION:	PHONOGRAPH RECORDS & PRERECORDED AUDIO TAPES & DISKS [3652]
		IRS NUMBER:				953795478
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-24968
		FILM NUMBER:		03777030

	BUSINESS ADDRESS:	
		STREET 1:		6601 LYONS ROAD
		STREET 2:		BLDG A-7
		CITY:			COCONUT CREEK
		STATE:			FL
		ZIP:			33073
		BUSINESS PHONE:		9545961000

	MAIL ADDRESS:	
		STREET 1:		6601 LYONS ROAD BLDG
		CITY:			COCONUT CREEK
		STATE:			FL
		ZIP:			33073
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>singingmachine8k.htm
<DESCRIPTION>CURRENT REPORT
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>BP 52716 Singing Machine 8K</TITLE>
<META NAME="author" CONTENT="Bassett Press, Inc. 954-767-4877">
<META NAME="date" CONTENT="07/07/2003">
</HEAD>
<BODY style="line-height:12pt; font-size:10pt; color:#000000">
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>SECURITIES AND EXCHANGE COMMISSION</B></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Washington, DC &nbsp;20549</B></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>__________</P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>FORM 8-K</B></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>CURRENT REPORT</B></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Pursuant to Section 13 or 15(d) of the </B></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Securities Exchange Act of 1934</B></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>Date of Report (Date of earliest event reported): <B>June 30, 2003</B></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; line-height:18pt; font-family:Times New Roman; font-size:16pt" align=center><B>THE SINGING MACHINE COMPANY, INC.</B></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman" align=center>(Exact Name of Registrant as Specified in its Charter)</P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Delaware</B></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman" align=center>(State or Other Jurisdiction of Incorporation)</P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<TABLE style="margin-right:72pt" cellspacing=0><TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>0-24968</B></P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>95-3795478</B></P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=center>(CommissionFile Number)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=center>(IRS&nbsp;Employer&nbsp;Identification&nbsp;No.)</P>
</TD></TR>
</TABLE>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>6601 Lyons Road, Bldg. A-7</B></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Coconut Creek, FL 33073</B></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman" align=center>(Address of Principal Executive Offices) &nbsp;&nbsp;(Zip Code)</P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>(954) 596-1000</B></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman" align=center>(Registrant&#146;s Telephone Number, Including Area Code)</P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>(Former Name or Former Address, if Change Since Last Report)</P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman"><BR></P>
<p Style='page-break-before:always'><HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:-14pt; padding-left:72pt; text-indent:-72pt; width:468pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>ITEM 5.</B></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; padding-left:72pt; width:468pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>OTHER EVENTS AND REGULATION FD DISCLOSURE</B></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; text-indent:36pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">We entered into a twelfth amendment to our credit facility with LaSalle Business Credit, LLC. , effective as of June 30, 2003, which changed the formula for determining our borrowing base and extended the expiration of our credit agreement until July 31, 2003. &nbsp;Other terms and conditions of this amendment include a requirement that we obtain $2 million in subordinated debt prior to July 10, 2003. &nbsp;A copy of the twelfth amendment is attached hereto as Exhibit 10.1 and is incorporated herein by this reference.</P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:-14pt; padding-left:72pt; text-indent:-72pt; width:468pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>ITEM 7.</B></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; padding-left:72pt; width:468pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>FINANCIAL STATEMENTS AND EXHIBITS</B></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:-14pt; padding-left:72pt; text-indent:-36pt; width:468pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>(c)</P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; padding-left:72pt; width:468pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Exhibits.</P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; text-indent:36pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:-14pt; padding-left:72pt; text-indent:-36pt; width:468pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>10.1</P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; padding-left:72pt; width:468pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Twelfth Amendment effective as of June 30, 2003 to the Loan and Security Agreement dated April 26, 2001 by and between LaSalle Business Credit, LLC. and The Singing Machine Company, Inc.</P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>2</P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman"><BR></P>
<p Style='page-break-before:always'><HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>SIGNATURES</B></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; text-indent:36pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized.</P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<B><P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; text-indent:216pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>THE SINGING MACHINE COMPANY, INC.</B></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:-14pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Date: July 7, 2003</P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:-14pt; text-indent:216pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>By:</P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; text-indent:252pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><U>/s/ A<SMALL>PRIL<BIG> G<SMALL>REEN&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</SMALL></U></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; text-indent:252pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>April Green</P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; text-indent:252pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Chief Financial Officer</P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>3</P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman"><BR></P>
<p Style='page-break-before:always'><HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>EXHIBIT INDEX</B></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:-14pt; padding-left:144pt; text-indent:-144pt; width:396pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><U>Exhibit No.</U></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; padding-left:144pt; width:396pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><U>Description</U></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; width:540pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:-14pt; padding-left:72pt; text-indent:-72pt; width:468pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>10.1</P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; padding-left:72pt; width:468pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Twelfth Amendment effective as of June 30, 2003 to the Loan and Security Agreement dated April 26, 2001 by and between LaSalle Business Credit, LLC. and The Singing Machine Company, Inc.</P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; padding-left:36pt; text-indent:-36pt; width:504pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; padding-left:36pt; text-indent:-36pt; width:504pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; padding-left:36pt; text-indent:-36pt; width:504pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; padding-left:36pt; text-indent:-36pt; width:504pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:72pt; margin-bottom:0pt; padding-left:36pt; text-indent:-36pt; width:504pt; font-family:Times New Roman" align=justify><BR></P>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>twelfthamendment.txt
<DESCRIPTION>TWELFTH AMENDMENT TO LASALLE AGREEMENT
<TEXT>
                                                                    Exhibit 10.1

LASALLE BUSINESS CREDIT, LLC

                                                           MEMBER ABN AMRO GROUP

135 South LaSalle Street
Suite 425
Chicago, Illinois 80603                     June 30, 2003
(312) 804-8490

The Singing Machine Company, Inc.
6601 Lyons Road
Suite A-7
Coconut Creek, Florida 33073

     Re: Twelfth Amendment

Gentlemen:

         The Singing Machine Company, Inc., a Delaware corporation
("Borrower") and LaSalle Business Credit, LLC, a Delaware limited
liability company ("Lender") have entered into that certain Loan and
Security Agreement dated April 26, 2001 (the "Security Agreement").
From time to time thereafter, Borrower and Bank may have executed
various amendments (each an "Amendment" and collectively the
"Amendments") to the Security Agreement (the Security Agreement and
the Amendments hereinafter are referred to, collectively, as the
"Agreement"). Borrower and Lender now desire to further amend the
Agreement as provided herein, subject to the terms and conditions
hereinafter set forth.

         NOW, THEREFORE, in consideration of the foregoing recitals,
the mutual covenants and agreement set forth herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

         1.  The Agreement hereby is amended as follows:

         (a) Paragraph (1) of Exhibit A of the Agreement is deleted in
its entirety and the following is substituted in its place:

             (1) LOANS: Subject to the terms and conditions of the Agreement and
                 the Other Agreements, Lender shall, absent the occurrence of an
                 Event of Default, advance an amount up to the sum of the
                 following sublimits (the "Loan Limit"):

                 (a) Up to seventy percent (70%), or such lesser percentage as
                     determined by Lender in its sole discretion exercised in
                     good faith, of the face amount (less maximum discounts,
                     credits and allowances which may be taken by or granted to
                     Account Debtors in

<PAGE>

LASALLE BUSINESS CREDIT, LLC
- --------------------------------------------------------------------------------
                                                           MEMBER ABN AMRO GROUP

The Singing Machine Company, Inc.
June 30, 2003
Page 2

                     connection therewith in the ordinary course of Borrower's
                     business) of Borrower's Eligible Accounts; plus

                 (b) Subject to subparagraph (3)(a) of this Exhibit A, the
                     lesser of: up to twenty-five percent (25%), or such lesser
                     percentage as determined by Lender in its sole discretion
                     exercised in good faith, of the lower of the cost or market
                     value of Borrower's Eligible inventory or Six Million and
                     No/100 Dollars ($6,000,000.00) during the period of July 1,
                     2003 through July 31, 2003; provided, however, that said
                     sublimit shall reduce by sixty percent (60%) of the cost of
                     inventory sold after the first Two Million Five Hundred
                     Thousand and No/100 Dollars ($2,500,000.00) in Borrower's
                     cost of sales until said sublimit reaches zero; plus

                 (c) Subject to subparagraph (3)(a) of this Exhibit A, up to
                     sixty percent (60%), or such lesser percentage as
                     determined by Lender in its sole discretion exercised in
                     good faith, against the face amount of commercial Letters
                     of Credit issued or guaranteed by Lender for the purpose of
                     purchasing Eligible inventory; provided, that such
                     commercial Letters of Credit are in form and substance
                     satisfactory to Lender or up to Three Million and No/100
                     Dollars ($3,000,000.00) during the period of July 1, 2003
                     through July 31, 2003; minus

                 (d) Such reserves as Lender elects, in its sole discretion
                     exercised in good faith, to establish from time to time;

                     provided, that the Loan Limit shall in no event exceed Ten
                     Million and No/100 Dollars ($10,000,000.00) during the
                     period of June 30, 2003 through July 31, 2003, (the
                     "Maximum Loan Limit"), except as such amount may be
                     increased or, following the

<PAGE>

LASALLE BUSINESS CREDIT, LLC
- --------------------------------------------------------------------------------
                                                           MEMBER ABN AMRO GROUP

The Singing Machine Company, Inc.
June 30, 2003
Page 3

                     occurrence of an Event of Default, decreased by Lender, in
                     its sole discretion, exercised in good faith, from time to
                     time.

         (b) Paragraph (5)(c) of Exhibit A of the Agreement is deleted in its
entirety and the following is substituted in its place:

             (c) One-Time Amendment Fee: Borrower shall pay to Bank a one-time
                 amendment fee of Fifth Thousand and No/100 Dollar ($50,000.00),
                 which fee shall be deemed fully earned on the date of this
                 Twelfth Amendment and payable on or before July 31, 2003.

         (c) Paragraph (11) of Exhibit A of the Agreement is amended to add the
following provision:

             (11)(1) Subordination Agreement: Prior to July 10, 2003, Borrower
                     shall cause the appropriate parties to invest Two Million
                     and No/100 Dollars ($2,000,000.00) into Borrower in the
                     form of subordinated debt. Relative thereto, Borrower shall
                     cause each such subordinated debt holder to execute and
                     deliver to Bank a Subordination Agreement in form and
                     substance satisfactory to Bank in its sole discretion.

         2. This Amendment shall not become effective until fully executed by
all parties hereto.

         3. Except as expressly amended hereby and by any other supplemental
documents or instruments executed by either party hereto in order to effectuate
the transactions contemplated hereby, the Agreement and Exhibit A thereto hereby
are ratified and confirmed by the parties hereto and remain in full force and
effect in accordance with the terms thereof.

                                              LASALLE BUSINESS CREDIT, LLC, A
                                              DELAWARE LIMITED LIABILITY COMPANY

                                              By /s/ Casey Orlowsky
                                                 -------------------------------
                                                 Casey Orlowsky
                                                 Vice President


<PAGE>

The Singing Machine Company, Inc.
June 30, 2003
Page 4

ACKNOWLEDGED AND AGREED TO
this 30th day of June, 2003.

THE SINGING MACHINE COMPANY, INC.

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


By /s/ April J. Green
   ------------------------------
   April J. Green
   Title: Chief Financial Officer





</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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