HAUPPAUGE DIGITAL INC
EX. 10.7 DEAN CIRIELLI EMPLOYMENT AGREEMENT
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<TYPE>EX-10
<SEQUENCE>7
<FILENAME>ex10-7.txt
<DESCRIPTION>EX. 10.7 DEAN CIRIELLI EMPLOYMENT AGREEMENT
<TEXT>
                              EMPLOYMENT AGREEMENT

     This  Agreement  is entered  into as of this 1st day of May,  2002,  by and
between  Dean  Cirielli  ("Employee"),  and  Hauppauge  Digital Inc. of 91 Cabot
Court, Hauppauge,  ("Hauppauge") New York, hereinafter  collectively referred to
as "the parties" or "we."


     As Hauppauge desires to employ Employee and Employee desires to be employed
by Hauppauge as President and Chief Operating  Officer,  and we mutually wish to
define the duties and  responsibilities  of each of us herein,  it is  therefore
agreed:

          1.  Employment  and Duties:  Hauppauge  hereby  employs  Employee  and
Employee  agrees to be employed by Hauppauge  as of the date of this  Agreement.
Employee  shall perform such duties as are required in his position as President
and Chief Operating Officer and such other duties as mutually agreed.

          2. Term:  The Term of this  Agreement  shall  begin not later than the
date of this Agreement and shall terminate,  except for those clauses  contained
in this Agreement  regarding  post  employment  obligations  which shall survive
Employee's employment, on the earlier of (i) two years after the signing of this
Agreement or (ii) any one of the following:

               a.)  The death,  permanent  disability  resulting  in  Employee's
                    inability to satisfactorily  perform the essential functions
                    of President and Chief Operating Officer, or adjudication of
                    physical  or  mental   incompetence   by  a  medical  board,
                    authority or practitioner.

               b.)  Immediately  upon  written  notice  of  termination  by  the
                    Employer  for  cause  (cause  as  defined  in Par.  2 (e)(1)
                    herein).

               c.)  Upon the expiration of 90 days after  Hauppauge has notified
                    the  Employee in writing of his  termination  without  cause
                    pursuant to Par. 2(e) (2).

               d.)  Upon the  expiration  of 90 days  after  Hauppauge  receives
                    written  notice of  voluntary  resignation  by  Employee  in
                    accordance with Par. 2(f) below.

               e.)  Hauppauge's Termination of Employee:
                    -----------------------------------

                    (1) For  Cause:  In the event that  Employee  shall have (a)
                    committed  any act of  dishonesty  material  with respect to
                    Hauppauge or its  employees,  (b) been  convicted of a crime
                    involving moral turpitude, or (c) intentionally  disregarded
                    the provisions of this Agreement or the express instructions
                    of Hauppauge  with  respect to matters of policy  continuing
                    (in the case of  clause  (c) for a period  of not less  than
                    thirty (30) days after notice of such disregard),  Hauppauge
                    may terminate this  Agreement and the Employee's  employment
                    with  Hauppauge  effective at such date as it shall,  in its
                    sole

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                    and  absolute  discretion,  specify  in a written  notice to
                    Employee.  Any such termination by Hauppauge shall be deemed
                    to be termination  "for cause." Upon delivery to Employee of
                    such  termination,  together  with  payment  of  any  salary
                    accrued under Par. 3 hereof,  Employee's  employment and all
                    obligations of Hauppauge  pursuant to this  Agreement  shall
                    forthwith  terminate.  Any termination for cause pursuant to
                    this said Clause shall not prejudice any accrued rights that
                    Hauppauge  may  have  against  the  Employee.  In the  event
                    Employee is  terminated  for cause,  he will not be eligible
                    for the termination payments provided for in Par. 2(g).

                    (2) Without Cause:  Employee's  employment  hereunder may be
                    terminated  at any time by Hauppauge  without  cause upon 90
                    days prior written  notice to the  Employee,  subject to the
                    termination payment provisions of Par. 2(g) hereof.

               f.)  Employee's   Termination:   Employee   may   terminate   his
                    employment at any time upon (90) days prior  written  notice
                    to  Hauppauge.  Simultaneously  with such  notice,  Employee
                    shall inform Hauppauge in writing as to his employment plans
                    following the termination of his employment with Hauppauge.

                    In the event Employee  terminates  his  employment  because,
                    there has been:  1) a  material  downgrading  in  Employee's
                    duties  or  responsibilities,   2)  a  permanent  change  in
                    Hauppauge's  principal  office to a  location  not within 20
                    miles of its present locationor 3) any permanent  relocation
                    of Employee to a place of business more than 20 miles of its
                    present   location.   Employee  shall  be  entitled  to  the
                    compensation   provided   for  in  Par.   2(g)   upon   such
                    termination.

               g.)  Termination  Payments- Discharge Without Cause: If Hauppauge
                    terminates  Employee's  employment  prior  to the end of the
                    Term  without  cause  pursuant  to Par.  2(e)(2) or Employee
                    tenders his resignation  pursuant to Par. 2(f) because of 1)
                    a   material    downgrading   in   Employee's    duties   or
                    responsibilities,  2)  a  permanent  change  in  Hauppauge's
                    principal  office to a  location  not within 20 miles of its
                    present location or 3) any permanent  relocation of Employee
                    to a place of  business  more  than 20 miles of its  present
                    location, Employee shall be entitled to termination payments
                    totaling  twelve  (12) months of Base Salary then in effect,
                    with such payment to be made in a lump sum within sixty (60)
                    days of  termination.  No payments  shall be made under this
                    provision if the  Employee's  employment  is  terminated  by
                    reason of the expiration of the Term of this Agreement. This
                    sub-clause  shall survive any  termination of this Agreement
                    and shall  expire  upon the said  payment  being made to the
                    Employee  in full  and  final  satisfaction  of  Hauppauge's
                    obligation to Employee.

<PAGE>


          3. Compensation:

               a)   Salary:  Employee  will be paid an  annual  Base  Salary  of
                    $175,000.00  for the  first  year of  this  Agreement,  with
                    annual  performance  evaluations  and upward  adjustments to
                    Base Salary as determined by the  Compensation  Committee of
                    the Board of  Directors,  based on  Employee's  performance.
                    Base Salary shall not be adjusted  downward  during the term
                    of this Agreement.

               b)   Bonuses:  Employee shall receive a yearly bonus totaling one
                    percent (1%) of the operating income of Hauppauge,  provided
                    that  earnings are at least 120% of the prior fiscal  year's
                    earnings.

               c)   Stock  Options:  Employee  shall receive a reasonable  stock
                    option package, commensurate with the level of his position,
                    to be determined  and set forth in writing within 60 days of
                    the date of this Agreement. The Stock Option Package will be
                    governed by the terms and  conditions of the 2000 ISO or Non
                    Qualified  Stock  Option  Plan,  whichever  appropriate,  as
                    approved by the Hauppauge Digital Inc.'s shareholders.

               d)   Benefits:  At all times during the Term, Employee shall have
                    the right to participate  in and receive  benefits under and
                    in  accordance  with  the  then-current  provisions  of  all
                    incentive,  profit sharing,  retirement,  life,  disability,
                    health and  accident  insurance,  hospitalization  and other
                    incentive and benefit plans or programs (except for any such
                    plan in which the President may not participate  pursuant to
                    the terms of such plan,  or which  calls for  vesting  after
                    term of employment)  which  Hauppaugemay at any time or from
                    time to time  have in  effect  for  executive  employees  of
                    Hauppauge or its subsidiaries,  Employee's  participation to
                    be on a basis  commensurate  with other executive  employees
                    considering    their   respective    responsibilities    and
                    compensation.   Employee   shall  also  be  entitled  to  be
                    reimbursed  for all reasonable  expenses  incurred by him in
                    the  performance  of his duties  hereunder.  Employee  shall
                    receive 10 days of paid vacation per year with an additional
                    day  after   completion   of  every  year  of  service  with
                    Hauppaugesubject  to a  maximum  of 15  paid  vacation  days
                    annually.

               e)   Relocation Reimbursement: Hauppauge shall pay all reasonable
                    relocation costs for Employee, provided that such relocation
                    expenses are approved in advance by the Board of Directors.

               f)   Housing expenses:  Until Employee relocates to the Hauppauge
                    New York area which is  anticipated to be within 6 months of
                    joining  Hauppauge,   Hauppauge  agrees  to  pay  reasonable
                    housing  expenses.  To this end,  Hauppauge will arrange for
                    either hotel accommodations from Monday

<PAGE>

                    through  Friday  or for the  use of an  apartment  with  the
                    provision of utilities, electricity and the use of telephone
                    services only.

          4. Other  Agreements:  Employee  warrants that the  performance of the
          terms of this Agreement will not conflict with or result in the breach
          of any  other  agreement  to  which  Employee  is a party  or by which
          Employee is bound. Employee will enter into a separate Confidentiality
          and Non-Competition  Agreement with Hauppauge,  on such terms as would
          be agreed between with the parties.

          5. Waiver:  The waiver by either party of a breach of any provision of
          this Agreement  shall not operate or be constructed as a waiver of any
          subsequent breach thereof.

          6.  Assignment:  The  rights  and  benefits  of  Hauppauge  under this
          Agreement  shall be  transferable,  and all covenants  and  agreements
          hereunder  shall inure to the benefit  of, and be  enforceable  by its
          successors  and assigns.  Hauppauge's  successors and assigns shall be
          bound by this agreement to the benefit of, and such  provisions  shall
          be enforceable by, Employee.

          7. Applicable Law: This Agreement shall be governed by and constructed
          in accordance with the substantive and procedural laws of the State of
          New York.

          8. Severability:  The invalidity or  unenforceability of any provision
          hereof  shall in no way affect the validity or  enforceability  of any
          other provision.

          9.  Arbitration:  Any dispute between  Hauppauge and Employee  arising
          from this  Agreement  shall be submitted  to the American  Arbitration
          Association  for  arbitration  in  accordance  with  the  rules of the
          American  Arbitration  Association  within one (1) year of the date on
          which the party demanding arbitration first had notice of the claim.

     IN WITNESS WHEREOF, the parties have read and executed this Agreement as of
the day and year first above written.


Employee                                               Hauppauge Digital, Inc.


/s/ Dean Cirielli                                      /s/ Kenneth Plotkin
---------------------------                            ------------------------
Dean Cirielli                                          Kenneth Plotkin,
                                                       Chief Executive Officer




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