License Agreement - Koss Corp. and Trabelco NV
LICENSE AGREEMENT
THIS AGREEMENT is made this 15th day of November, 1991 by and between KOSS
CORPORATION, a Delaware corporation with its principal place of business at
4129 North Port Washington Avenue, Milwaukee, WI 53212 (the "LICENSOR") and
TRABELCO N.V., a Netherlands Antilles company and a subsidiary of Hagemeyer
N.V., with its principal place of business at Van Engelenweg 21A, Willemstad,
Curaco, Netherlands Antilles (the "LICENSEE").
WITNESSETH:
WHEREAS, LICENSEE desires to obtain the right to use certain trademarks of
LICENSOR in connection with the manufacture, marketing and distribution of
LICENSEE's products; and
WHEREAS, LICENSOR is willing to grant such rights to LICENSEE upon the
terms and conditions set forth below;
NOW, THEREFORE, for and in consideration of the premises and of the mutual
promises and conditions herein contained, the parties hereby agree as follows:
1. DEFINITIONS
For purposes of this Agreement, unless the context otherwise requires, the
following terms shall have the meanings set forth below:
1.1 "Licensed Trademarks" mean "Koss" and all other registered trademarks
and trade names as listed on Exhibit A attached hereto.
1.2 "Products" mean the consumer electronic products of LICENSEE set forth
on Exhibit B attached hereto (including all consumer electronic products
substituted for or added to the Products by the parties after the execution of
this Agreement).
1.3 "Licensed Products" mean all Products of Licensee which have the
Licensed Trademarks affixed or attached thereto in any manner or which are
advertised, promoted, distributed or sold in connection with the Licensed
Trademarks.
1.4 "Territory" means the United States of America, Puerto Rico, Canada,
Mexico, Central America (including all individual countries therein and the
Caribbean republics) and South America (including all individual countries
therein).
1.5 "Contract Period" means the period beginning on the effective date set
forth at the end of this Agreement and ending on December 31, 1994, and any
applicable renewal period.
1.6 "Contract Year" means the calendar year., except that the first
Contract Year shall run from the date hereof until December 31, 1992.
2. GRANT OF LICENSE
2.1 Subject to all the terms and conditions of this Agreement, LICENSOR
hereby grants to LICENSEE the exclusive right and license to use the Licensed
Trademarks within the Territory
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during the Contract Period in connection with, and only with, the manufacture,
promotion, distribution and sale of the Products. Notwithstanding anything
herein to the contrary, LICENSEE shall not manufacture, distribute or sell
headphones labeled with the Licensed Trademarks except as a prepackaged
component of an audio system that is commonly expected by the consuming public
to include headphones with such audio system.
2.2 LICENSEE agrees that it will not make or authorize any use, direct or
indirect, of the Licensed Trademarks outside of the Territory; provided that
subject to the provisions of Section 2.3, LICENSEE shall have the right to have
the Licensed Products manufactured outside the Territory solely for sale inside
the Territory.
2.3 LICENSEE shall have the right to grant a sublicense under this
Agreement to any entity in which Hagemeyer N.V. owns at least a 51% equity
interest permitting such entities to manufacture, promote, distribute and sell
the Licensed Products subject to the terms of this Agreement. Further,
LICENSEE shall have the right to enter into an agreement with Hagemeyer
Consumer Products, Inc. ("HCP") regarding the performance by HCP of certain
duties of LICENSEE under this Agreement. LICENSEE shall also have the right to
subcontract the manufacture of the Licensed Products, provided that the
subcontractor executes a letter agreement in form substantially similar to
Exhibit C attached hereto undertaking to recognize and uphold the Licensed
Trademarks and other rights under this Agreement. LICENSEE shall not grant any
other sublicense under this Agreement other than as provided in this Section
2.3.
2.4 LICENSOR agrees that during the Contract Period, it will not grant a
license to any other entity to use the Licensed Trademarks within the Territory
in connection with the manufacture, promotion, distribution or sale of consumer
electronic products not included in the Products unless the opportunity to
obtain such license is first offered to LICENSEE pursuant to the following
procedure:
(a) LICENSOR shall notify LICENSEE in writing that it has or anticipates
an opportunity to license the Licensed Trademarks in one or more consumer
electronic product categories not covered by the Products, and shall offer to
negotiate with LICENSEE in good faith to permit LICENSEE to obtain an exclusive
license covering such product categories under the general terms of this
Agreement, but with appropriate adjustments in Exhibit B and in the level of
Minimum Royalties (Section 7.2).
(b) If LICENSOR and LICENSEE cannot reach a suitable modification to this
Agreement to include such additional product categories within 30 days after
notice is given pursuant to subpart (a) hereof, then LICENSOR shall be free to
negotiate an acceptable license for such additional product categories with a
licensee of its choosing, provided that LICENSEE shall retain the right to
secure such license for its own benefit by agreeing to meet all of the business
terms and provisions of such intended license during a period lasting 10
working days after LICENSEE receives written notice of the terms of such
intended license agreement.
For the purposes hereof, the term "consumer electronic product category" shall
refer to any product included by the Electronic Industries Association ("EIA")
in its published market statistics as a recognized product category at any time
during the Contract Period.
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3. LICENSEE'S OBLIGATIONS
3.1 LICENSEE agrees that no Licensed Products will be manufactured,
advertised, promoted, distributed or sold:
(a) in violation of any law or regulatory restriction; or
(b) in any manner which damages the image, reputation or goodwill of
the Licensed Trademarks or of LICENSOR.
3.2 On or before December 15, 1991 and December 15 of each Contract Year
during this Agreement, LICENSEE agrees to develop and submit to LICENSOR an
annual business plan for the Licensed Products stating expected sales by
product category for the following Contract Year. The business plan shall be
clearly marked as a planning document and shall not obligate LICENSEE to
perform in any particular manner. LICENSOR agrees to keep such plan
confidential. LICENSEE shall assume the entire responsibility and cost for
developing and implementing such a plan and, at the request of LICENSOR, will
keep LICENSOR informed of the results of the implementation of such business
plan. LICENSOR shall cooperate with LICENSEE to implement the business plan to
the extent reasonably required by the business plan.
3.3 LICENSEE agrees that during the Contract Period, it will diligently
manufacture, distribute and sell Licensed Products and make and maintain
adequate arrangements for the distribution, repair and servicing of the
Licensed Products throughout the Territory. LICENSEE and LICENSOR shall each
inform the other party of their respective toll-free customer service telephone
numbers, and shall inform customers who have mistakenly telephoned one party of
the other party's customer service telephone number.
3.4 LICENSEE agrees that it will not sell refurbished Products labeled
with the Licensed Trademarks unless such Products are clearly and conspicuously
labeled as refurbished merchandise.
4. APPROVAL OF LICENSED PRODUCTS
4.1 LICENSEE agrees that LICENSOR shall have the right to approve or
disapprove in the manner provided herein in advance of sale the quality, style,
appearance, material and workmanship of all Licensed Products and the packaging
therefor, and to approve or disapprove in advance any and all trademarks, trade
names, designs and logos (whether included in the Licensed Trademarks or not)
used in connection with the Licensed Products. LICENSEE shall not advertise,
distribute or sell any such Licensed Product which has not been approved by
LICENSOR, however, LICENSEE shall be permitted to present preliminary
renderings of potential products to its customers solely for the purpose of
securing their preliminary commercial acceptance before securing LICENSOR's
approval of same. Before selling or distributing any Licensed Product,
LICENSEE shall submit to LICENSOR for its approval, artist renderings of the
proposed products and/or mock-ups with full engineering specifications together
with packaging, labels and the like. LICENSOR agrees that it shall, within ten
(10) business days after receipt of each of the renderings and/or mock-ups,
approve or disapprove such products in writing, failing which it shall be
deemed to have been approved. LICENSOR agrees that any item submitted to it
under this Section 4 will not be unreasonably disapproved and, if it is
disapproved, that LICENSEE will be advised in writing of the
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specific reasons for disapproval in each case. After LICENSOR has approved the
proposed products and LICENSEE has obtained tooling for the proposed products,
LICENSEE shall provide LICENSOR with off-tool and/or production samples of the
products and LICENSOR shall disapprove such samples in writing within ten (10)
business days after LICENSOR's receipt of such items or else LICENSEE shall be
deemed to have approved them; provided that LICENSOR shall only disapprove the
off-tool and/or production samples if they fail to conform to the renderings and
mock-ups previously submitted. LICENSEE shall also provide to LICENSOR, at no
cost to LICENSOR, two (2) working samples of each Product within thirty (30)
days of the commencement of production of such Product. LICENSEE agrees that
Licensed Products which are sold or distributed hereunder shall be of no lesser
quality than the corresponding samples approved by LICENSOR.
4.2 During the Contract Period, LICENSEE shall take all actions
reasonably necessary to cure any product defects in the Licensed Products and
will act to preserve the image, reputation and goodwill of the Licensed
Trademarks and of LICENSOR.
5. APPROVAL OF ADVERTISING AND THE APPEARANCE AND USE OF THE LICENSED
TRADEMARKS
5.1 LICENSEE agrees that LICENSOR shall have the right to approve or
disapprove in advance of LICENSEE's commercial use the contents, appearance and
presentation of all advertising materials which incorporate the Licensed
Trademarks or which make reference in any way to the Licensed Trademarks.
Before producing, publishing or distributing any advertising materials
hereunder, LICENSEE shall submit to LICENSOR, for its approval, line art and
color specifications for the materials. LICENSOR agrees that it shall, within
ten (10) business days after receipt, approve or disapprove such material in
writing, failing which it shall be deemed to have been approved, provided that
LICENSOR's approval shall be subject to submission and approval of LICENSEE's
final packaging materials. LICENSOR agrees that any materials submitted will
not be unreasonably disapproved and, if any are disapproved, that LICENSEE will
be advised in writing of the specific reasons for disapproval in each case;
provided that LICENSOR shall only disapprove line art or final form product
packaging materials if they do not conform to the specifications previously
submitted to and approved by LICENSOR.
5.2 LICENSOR shall provide to LICENSEE, at LICENSEE's cost, all designs,
artwork, and color treatment associated with LICENSOR's use of the Licensed
Trademarks. LICENSEE agrees that it will not modify such designs and artwork,
other than color changes, without the prior written approval of LICENSOR.
5.3 Except as provided in Section 11.1, LICENSEE agrees to protect,
indemnify and save harmless LICENSOR, its parent, subsidiaries and affiliates
and all officers, directors, agents, employees and representatives thereof, and
any of them, from and against any and all expenses, damages, claims, suits,
actions, judgments and costs whatsoever, including reasonable attorneys fees,
arising out of, or in any way connected with, any claim or action relating to
the contents of LICENSEE's advertising of Licensed Products, whether or not
approved by LICENSOR hereunder.
5.4 LICENSEE agrees that LICENSOR shall have the right to include a full
line catalog of LICENSOR's products within each Product to which the Licensed
Trademarks are affixed and distributed by LICENSEE. A sample of the full line
catalog will be provided to LICENSEE, who
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shall instruct LICENSOR on a quarterly basis as to the quantity of full line
catalogs needed and the destination where they should be shipped for LICENSEE's
packaging purposes.
LICENSEE further agrees that LICENSOR shall have the right to include
promotional coupons for certain of LICENSOR's products on a quarterly basis
except as prohibited by specific retailers. Such coupons shall be provided in
a manner similar to that set forth above for the full line catalog and are to
be included in every product bearing the Licensed Trademarks and distributed by
LICENSEE.
5.5 LICENSEE agrees to provide to LICENSOR a copy of its most recent list
of holders of warranties on all Products distributed by LICENSEE. LICENSOR
agrees to keep such information confidential and to use it solely for
soliciting direct mail consumer sales.
6. TRADE NAME
6.1 LICENSOR agrees that LICENSEE, HCP and any other sublicensee of
LICENSEE under this Agreement shall have the right, exercisable solely during
the Contract Period, to conduct business in the Territory using the trade name
"Koss Electronic Products", or such other trade name(s) as the parties shall
mutually agree.
7. ROYALTIES; PAYMENT: RENEWAL
7.1 During the term of this Agreement, LICENSEE will pay to LICENSOR as
royalties ("Royalties") an amount equal to the sum of the respective percentage
(as set forth on Exhibit D) of net sales of each category of the Licensed
Products, less 2% of the itemized discounts, rebates and shipping costs as
stated on LICENSEE's invoices regarding such sales of the Licensed Products (2%
representing an average of such amounts), and as further exemplified on Exhibit
D attached hereto. The term "net sales" with respect to each category of the
Licensed Products shall be defined as the total amount invoiced by LICENSEE for
sales of the Licensed Products in such category less the total amount of returns
of the Licensed Products in such category. In calculating royalties, no
deduction shall be made for advertising allowances, uncollectible accounts or
any other form of discount other than volume rebates which does not appear on
the customer's invoice. Volume rebates allowed a customer will be credited on a
separate invoice to the customer, and an annual adjustment of 2% of such rebates
shall be made to the Royalties regarding all volume rebates allowed during the
respective Contract Year. Notwithstanding anything herein to the contrary, in
the event that at any time during a Contract Year during the initial Contract
Period or the first renewal period (as provided in Section 7.6), the Royalties
paid and accrued with respect to such Contract Year equal $1,340,000, thereafter
for the remainder of such Contract Year, the amount of the Royalties that
LICENSEE shall be required to pay to LICENSOR shall be reduced by 50%.
Notwithstanding anything herein to the contrary, in the event that at any time
during a Contract Year after the first renewal period, the Royalties paid and
accrued with respect to such Contract Year equal twice the Minimum Royalties (as
hereinafter defined) for such Contract Year, thereafter for the remainder of
such Contract Year, the amount of the Royalties that LICENSEE shall be required
to pay to LICENSOR shall be reduced by 50%.
7.2 Notwithstanding the provisions of Section 7.1, LICENSEE hereby agrees
to pay to LICENSOR during the Contract Period annual minimum Royalties ("Minimum
Royalties") as follows:
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Year Minimum Royalties
---- -----------------
1992 $100,000
1993 $200,000
1994 $350,000
If the sum of the total Royalties paid with respect to a Contract Year do not
equal or exceed the Minimum Royalties for such Contract Year, the difference
between the Minimum Royalties and the Royalties for such Contract Year shall be
due and payable on January 20 following such Contract Year.
7.3 If upon the expiration of the initial Contract Period, LICENSEE
elects to renew this Agreement as hereinafter provided for an additional three
(3) year term, the Minimum Royalties for the first renewal period shall be as
follows:
Year Minimum Royalties
---- -----------------
1995 $500,000
1996 $580,000
1997 $670,000
If LICENSEE elects to further renew this Agreement, the Minimum Royalties
for each year during such renewal period shall be calculated by the parties
using the EIA statistics for growth in total factory sales for the categories of
consumer electronic products included in the Licensed Products. Specifically,
for any Contract year after 1997, the Minimum Royalty for such Contract Year
shall be calculated as $670,000 multiplied by a fraction, the numerator of which
shall be the EIA total factory sales of such products for such Contract Year and
the denominator of which shall be the EIA total factory sales for the prior
Contract Year. Until such time as the EIA statistics are published and the
parties are able to calculate the Minimum Royalties for a Contract Year, the
Minimum Royalties shall be the same as the Minimum Royalties for the prior
Contract Year. Within thirty (30) days after the publication of the necessary
EIA statistics, the parties shall calculate the Minimum Royalties for such
Contract Year.
7.4 Payment of Royalties shall be made quarterly by LICENSEE to LICENSOR
on or before the 20th day following the end of each calendar quarter of each
Contract Year during the term of this Agreement (i.e. January 20, April 20, July
20 and October 20) and within thirty (30) days after the expiration or earlier
termination of the License, in respect of all Licensed Products shipped during
such quarter (or other period). Notwithstanding anything herein to the
contrary, upon the execution of this Agreement, LICENSEE shall pay to LICENSOR
an advance of $50,000 against earned Royalties for the first Contract Year,
which advance shall be applied toward the Royalties to be paid by LICENSEE with
respect to the final calendar quarter of such Contract Year. Hagemeyer
Electronics (N.A.), Inc. has affixed its signature to this Agreement for the
sole purpose of agreeing to, and it does hereby agree to, guarantee without
limit the financial payment provisions of LICENSEE under this Agreement for the
benefit of LICENSOR.
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7.5 Payment of all Royalties shall be in United States funds. The late
payment of any Royalties shall bear interest at the rate of one and one-half
percent (1-1/2%) per month, or at the highest rate permitted by applicable
state law, whichever is lower.
7.6 LICENSEE shall have the right and option of renewing this Agreement
after the initial Contract Period for additional terms of three (3) years each
if (i) LICENSEE is not then in default under the terms of this Agreement and
(ii) the total Royalties paid by LICENSEE during such Contract Period were no
less than 125% of the sum of the Minimum Royalties for such Contract Period
(the "Renewal Amount"), or LICENSEE pays to LICENSOR no later than January 20
following the end of such Contract Period the difference between the total
Royalties paid during such Contract Period and the Renewal Amount for such
Contract Period. The parties agree that the Renewal Amount for the initial
Contract Period shall be $812,500, and the Renewal Amount for the second
Contract Period shall be $2,187,500.
LICENSEE shall give written notice to LICENSOR of its election to renew this
Agreement no later than thirty (30) days before the expiration of the Contract
Period.
8. BOOKS, RECORDS, AND STATEMENTS
8.1 HCP shall maintain for LICENSEE and all sublicensees for two (2)
years following the close of each Contract Year accurate books and records which
disclose: the cost of sales of the License Products, the amount of sales of the
Licensed Products (ignoring any sales to sublicensees by the LICENSEE or other
sublicensees); the amount of credits for returns, trade discounts and customer's
shipping costs; the amount of all Royalties payable hereunder by LICENSEE and
all sublicensees; and the manner in which such Royalties were determined.
8.2 LICENSEE shall deliver to LICENSOR with each quarterly Royalties
payment a detailed accounting statement showing the calculation of such
Royalties payment. Such statement shall be in sufficient detail to be audited
from the books of HCP maintained pursuant to Section 8.1 hereof. By the 15th
day of each month during the Contract Period, LICENSEE shall also provide
LICENSOR with a preliminary tabulation of the sales and returns by customer and
by Product model number for the prior month, for LICENSOR's use and analysis.
8.3 Annually, within ninety (90) days after the close of each Contract
Year, HCP shall furnish to LICENSOR a statement, certified to be true and
correct by HCP's Chief Financial Officer, that the accounting for sales is
complete and correct, that the Licensed Products have been classified into the
proper categories, and the total sales of the Licensed Products to each retail
account.
8.4 LICENSOR, at its expense, shall have the right at any time during
regular business hours after the end of any Contract Year, upon thirty (30)
days written notice to LICENSEE, to have a representative of LICENSOR examine
or audit the books, accounts and records of LICENSEE and its sublicensees which
pertain to the importation, manufacture, distribution and sale of the Licensed
Products and the amount of credit for returns, trade discounts and customer's
shipping costs with respect thereto, and other books and records only as they
may be reasonably required by LICENSOR's accountants in order to verify the
figures reported in any statements furnished to LICENSOR pursuant 'to this
Section 8. Such books of account and records shall be made available to
LICENSOR and its accountants at HCP's office located as herein stated or such
other place as the parties shall mutually
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agree. LICENSEE shall render all possible assistance to LICENSOR and its
accountants for the purpose of facilitating the checking or auditing of net
sales and of the figures set forth in any of LICENSEE's statements. LICENSOR
shall be entitled to exercise its inspection right once each Contract Year
during the term of this Agreement and once after termination of this Agreement.
If the examination or audit reveals the underpayment of any Royalties, LICENSEE
shall immediately pay LICENSOR the amount of the deficiency with interest, and
if the deficiency exceeds five percent (5%) of the amount of Royalties paid with
respect to such year or years audited, LICENSEE shall pay the cost of the
examination of audit.
8.5 Any disputes between the parties regarding the classification of any
of the Licensed Products for purposes of calculating the Royalties due under
this Agreement or the manner of calculating such Royalties shall be submitted
to a commercial arbitrator mutually selected by the parties and such
arbitration proceeding shall be held in St. Louis, Missouri pursuant to the
rules of procedure established by the American Arbitration Association. In the
event that the parties are unable to mutually select an arbitrator, each party
shall select an arbitrator, and the arbitrators shall mutually select a third
arbitrator. The ruling of such arbitrators shall be binding upon the parties.
9. TRADEMARK
9.1 LICENSEE shall cause to be imprinted irremovably and legibly on each
Licensed Product manufactured, distributed or sold under this Agreement
including, but not limited to, advertising, promotional, packaging and wrapping
material and any other such material wherein the Licensed Trademarks may appear,
the appropriate trademark and/or copyright notices, as shall be designated in
writing in advance by LICENSOR. LICENSEE agrees to deliver to LICENSOR upon
request, free of cost, samples of each Licensed Product together with their
packaging and wrapping material for approval and copyright registration
purposes.
9.2 LICENSEE agrees that, except as provided in Section 12.3 hereof, it
will not, during the Contract Period or thereafter, file any application for
trademark registration or otherwise obtain or attempt to obtain ownership of any
name, design, logo, trademark or trade name within the Territory or in any other
country of the world which includes or is confusingly similar to or suggestive
of the Licensed Trademarks.
9.3 LICENSEE agrees that it. will not, directly or indirectly, challenge
or contest LICENSOR's ownership of and rights in the Licensed Trademarks,
whether for the Licensed Products or otherwise.
9.4 All use of the Licensed Trademarks by LICENSEE shall inure to the
benefit of LICENSOR, and LICENSEE shall acquire no rights therein adverse to
LICENSOR except as expressly provided herein.
10. MAINTENANCE OF LICENSED TRADEMARKS AND INFRINGEMENT
10.1 In the event that present trademark registrations for the Licensed
Trademarks in the Territory do not encompass every Licensed Product in every
country in the Territory hereunder licensed, LICENSOR shall cause appropriate
trademark applications for registration to be filed as soon after the execution
of this Agreement as practical. LICENSEE shall cooperate by providing
necessary
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samples, invoices or other documents necessary to support registration of the
Licensed Trademarks for the Licensed Products. In the event said applications
are successfully opposed in the United States or Canada, LICENSOR shall
reimburse LICENSEE for all expenses incurred by LICENSEE regarding the
distribution, marketing and sale of the Licensed Products in the prohibited
areas of the Territory, and the refurbishing and resale of the products; and
LICENSEE shall be permitted to void this Agreement at its election.
10.2 LICENSEE shall promptly notify LICENSOR in writing of any
infringement by others of the Licensed Trademarks on articles similar to the
Licensed Products if and when such become known to LICENSEE and shall provide
LICENSOR with any available evidence of such infringement. LICENSOR shall have
the first right to commence legal proceedings against such infringer, and the
expense of such legal proceedings shall be shared equally by LICENSOR and
LICENSEE. In any infringement action, proceeding or claim brought by LICENSOR,
LICENSEE, at its expense, shall make available to LICENSOR any relevant books,
records, papers, information, designs, samples, specimens, and the like and
shall cause any of the LICENSEE's employees to be deposed or to testify,
whenever requested to do so by LICENSOR. Any damage award or recovery resulting
from such legal proceedings shall be divided equally between LICENSOR and
LICENSEE. Should LICENSOR fail to commence legal proceedings against any
infringer within thirty (30) days after being notified by LICENSEE, LICENSEE
shall have the right to commence legal proceedings on its own behalf against
such infringer. LICENSEE shall keep LICENSOR advised in advance of its
intentions in such proceedings and will consult with LICENSOR with respect
thereto. LICENSEE shall retain any recovery from any legal proceeding commenced
by LICENSEE.
11. WARRANTIES AND INDEMNITIES
11.1 LICENSOR represents and warrants that LICENSOR owns all rights in and
to the Licensed Trademarks in the Territory as are necessary to enable LICENSOR
to license the use thereof as set forth herein, that listed on Exhibit A are all
of LICENSOR's current registrations and applications for registration for the
Licensed Trademarks in the Territory, and that there are no assignments or other
dispositions of any rights in the Licensed Trademarks presently in effect or
contemplated by LICENSOR which in any way detract from or are competitive with
the rights granted to LICENSEE under this Agreement. LICENSOR agrees to
indemnify and hold harmless LICENSEE, its parent, subsidiaries and affiliates
and all officers, directors, agents and employees thereof, and any of them, from
any and all expenses, damages, claims, suits, actions, judgments and costs
whatsoever, including reasonable attorneys fees, which LICENSEE may hereinafter
incur, suffer or be required to pay arising out of or in connection with the use
by LICENSEE of the Licensed Trademarks in the Territory pursuant to this
Agreement; provided, however, that LICENSOR's liability to indemnify LICENSEE
shall not exceed the sum of the amount of Royalties theretofore received by
LICENSOR under this Agreement and all expenses incurred by LICENSEE regarding
the design and development of the Licensed Products and packaging, advertising
and marketing materials for the Licensed Products. LICENSEE shall give LICENSOR
prompt written notice, cooperation and assistance in connection with any such
claim and the LICENSOR shall have complete control over the defense or,
settlement thereof.
11.2 LICENSEE agrees to protect, indemnify and save harmless LICENSOR, its
parent, subsidiaries and affiliates and all officers, directors, agents,
employees and representatives thereof, and any of them, from and against any and
all expenses, damages, claims, suits, actions, judgments and
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costs whatsoever, including reasonable attorneys fees, arising out of, or in any
way connected with, any claim or action for the violation by LICENSEE of any
statutory or regulatory obligation, any claim or action for injury or damage to
property, personal injury, death or other cause of action involving alleged
defects in Licensed Products, and any other claim or action arising out of
LICENSEE's activities pursuant to this Agreement or other conduct of its
business, except as provided in Section 11.1 herein.
11.3 LICENSEE shall, within thirty (30) calendar days after the execution
of this Agreement, obtain from an insurance company reasonably acceptable to
LICENSOR, and maintain during the term of this Agreement and for a period of
twenty-four (24) months following the expiration or termination of this
Agreement, public and products liability insurance with a limit of liability of
not less than Five Million ($5,000,000) U.S. dollars per occurrence in order to
protect LICENSOR against any liabilities with which it may be charged because of
damage or injuries suffered by any servants, agents, contractors, employees or
customers of LICENSEE or by the general public, resulting from the use or sale
of the Licensed Products manufactured, distributed, advertised or sold by
LICENSEE or by LICENSEE's contractor. LICENSEE agrees to cause LICENSOR's name
to be entered in such policy as an additional named insured and to deliver to
LICENSOR a certificate thereof. Said insurance shall provide that it cannot be
canceled without the insurer first giving LICENSOR twenty (20) calendar days,
advance written notice thereof. LICENSEE shall furnish or cause to be furnished
to LICENSOR evidence of the maintenance and renewal of the insurance required
herein, including, but not limited to, copies of policies, certificates of
insurance,, with applicable riders and endorsements, and proof of premium
payments.
12. DEFAULT; TERMINATION
12.1 In the event of a default by either party in the performance of any
of its obligations pursuant to this Agreement, the non-defaulting party shall
give written notice of such default to the defaulting party. Within sixty (60)
days of its receipt of such notice, the defaulting party shall take reasonable
efforts toward correcting the default, and shall cure the default within six
(6) months of its receipt of such notice. If the defaulting party does not
take such corrective actions or cure the default within the respective time
period, the non-defaulting party shall have the right to terminate this
Agreement upon the expiration of the respective period. The right to remedy a
default shall not apply to a violation of the prior authorization and reporting
requirements of Sections 4 and 5 which shall be deemed a non-curable default.
12.2 Either party shall have the right to terminate this Agreement upon
ten (10) days prior notice upon the occurrence of any of the following events:
(a) If the other party shall become insolvent or shall make an
assignment for the benefit of creditors or become the subject of receivership,
bankruptcy or other insolvency or debtor relief proceedings, or any similar
proceedings, or in proceedings, voluntary or forced, whereby it is limited in
the free and unrestrained exercise of its own judgment as to the carrying out of
the terms of this Agreement;
(b) If the other party shall cease to do business;
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(c) Except as permitted under Section 16, if the other party shall
attempt to assign any of its rights under this Agreement; or
(d) In the event that this Agreement is held invalid or
unenforceable by the determination of any government agency or any court of
competent jurisdiction.
A party's exercise of its right, pursuant to this Section 12.2, to
terminate this Agreement shall be without prejudice to any other legal or
equitable remedy such party may hold against the other party by reason of the
other party's breach of any term or condition of this Agreement.
12.3 In the event that LICENSEE shall terminate this Agreement as provided
in subparagraph (a) of Section 12.2, LICENSEE shall have the right to purchase
the Licensed Trademarks from LICENSOR for use with respect to the categories of
consumer electronic products included on Exhibit B and any other consumer
electronic products manufactured and sold by LICENSEE pursuant to this Agreement
immediately prior to such termination, and LICENSOR agrees to take all actions
reasonably necessary to transfer such registrations of the Licensed Trademarks
to LICENSEE. LICENSOR and LICENSEE shall each obtain a valuation of the
Licensed Trademarks from an independent appraiser. If the difference between
the valuations does not exceed 10% of the higher valuation, the purchase price
for the Licensed Trademarks shall be the average of the two valuations. If the
difference between the valuations exceeds 10% of the higher valuation, the two
independent appraisers shall mutually select a third independent appraiser and
the valuation of the third appraiser shall be the purchase price of the Licensed
Trademarks.
12.4 No assignee for the benefit of creditors, receiver, liquidator,
trustee in bankruptcy, sheriff or any other officer of the court or official
charged with taking over custody of LICENSEE's assets or business, shall have
any right to continue performance of this Agreement, and this Agreement may not
be assigned by operation of law.
12.5 Failure to terminate this Agreement pursuant to this Section 12 shall
not effect or constitute a waiver of any remedies the non-defaulting party would
have been entitled to demand in the absence of the section, whether by way of
damages, termination or otherwise. Termination of this Agreement shall be
without prejudice to the rights and liabilities of either party to the other in
respect of any matter arising under this Agreement.
13. RIGHTS AFTER TERMINATION
13.1 Except as provided in Section 13.2 hereof, from and after the
termination of this Agreement, whether because of non-renewal, default or
otherwise, all of the rights of LICENSEE to the use of the Licensed Trademarks
shall, except as hereinafter expressly provided, cease absolutely, and LICENSEE
shall not thereafter advertise, promote, distribute or sell any item whatsoever
in connection with the Licensed Trademarks. It is further agreed that following
expiration of the Contract Period, LICENSEE shall not advertise, promote,
distribute or sell any item whatsoever in connection with the use of any name,
figure, design, logo, trademark or trade name similar to or suggestive of the
Licensed Trademarks.
13.2 Any Licensed Products for which as of the date of termination
LICENSEE has non-cancelable open orders or which are in transit to the United
States may be sold by LICENSEE on a
11
<PAGE> 12
non-exclusive basis during the twelve (12) month period following the date of
termination. Any Licensed Products which are warehoused in the United States on
the date of termination and any Licensed Products which were returned to
LICENSEE by a customer may be sold by LICENSEE on a non-exclusive basis during
the nine (9) month period following the date of termination. LICENSEE shall
continue to pay to LICENSOR with respect to such sales Royalties at the rate and
in the manner specified in this Agreement. Within sixty (60) days of the date of
termination, LICENSEE shall provide to LICENSOR a complete listing of the
inventory in transit and the warehoused inventory. Notwithstanding anything
herein to the contrary, LICENSEE shall have no right to manufacture any
additional Licensed Products after the date of termination.
13.3 LICENSOR agrees that during the inventory disposal periods as
provided in Section 13.2 hereof, LICENSOR will not place any advertisements or
announcements in any trade or mass publication concerning the expiration of this
Agreement or the identity of a successor LICENSEE, nor will LICENSOR participate
in any discussions or negotiations with any other party regarding the use of the
Licensed Trademarks in the Territory on any type of consumer electronic product
similar to the Licensed Products. LICENSOR acknowledges that the actions herein
described would severely limit LICENSEE's ability to dispose of the remaining
inventory.
14. NON-COMPETITION
14.1 LICENSOR acknowledges that as a result of the performance of this
Agreement, LICENSOR will acquire confidential and proprietary information of
LICENSEE regarding its product development, business plans and marketing plans
for the Licensed Products. LICENSOR hereby agrees that during the initial
Contract Period and all renewal periods of this Agreement and for a period of
one (1) year after the termination of this Agreement, LICENSOR will not
participate, directly or indirectly, in any business engaged in the design,
development, manufacture, distribution or sale of any consumer electronic
products included in the categories listed on Exhibit B (including all consumer
electronic products substituted for or added to the Products by the parties)
other than as provided in Section 14.2 hereof; provided, however, LICENSOR shall
not be prohibited from continuing and expanding any business which it is
presently conducting or from manufacturing, distributing and selling itself
consumer electronic products not included in the categories listed on Exhibit B.
14.2 LICENSEE hereby agrees to sell the Products to LICENSOR provided that
the Products are labeled with and marketed under the Licensed Trademarks and
LICENSOR resells the Products at retail by direct mail or through retail outlets
owned by LICENSOR. LICENSEE agrees to sell the Products to LICENSOR at prices
which are not in excess of LICENSEE's most recent wholesale prices for such
Products to an unrelated third party upon terms of net 90 days.
15. NOTICE
All notices required or provided for in this Agreement shall be in writing
and shall be given by registered mail, prepaid and properly addressed to the
last known address of the party to be served herewith, or by telecopy facsimile
and confirmed by regular mail, and shall be deemed to have been given on the
date upon which said notice was received. Notices sent to LICENSOR shall be
addressed as follows:
12
<PAGE> 13
Koss Corporation
4129 North Port Washington Avenue
Milwaukee, WI 53212
Attn: President
Notices sent to LICENSEE shall be addressed as follows:
Trabelco N.V.
c/o 10825 Watson Road
St. Louis, MO 63127
Attn: Richard P. Proctor
16. ASSIGNMENT
This Agreement shall bind and inure to the benefit of LICENSOR, and the
successors and assigns of LICENSOR. The rights granted LICENSEE hereunder shall
be exclusive to it and shall not, without the prior written consent of LICENSOR,
be transferred or assigned to any other, provided that LICENSEE may assign this
Agreement to any corporation controlling, controlled by or under common control
with LICENSEE. In the event of the merger or consolidation of LICENSEE with any
other entity, except for a subsidiary or parent of Hagemeyer N.V., LICENSOR
shall have the right to terminate the Contract Period by so notifying LICENSEE
in writing on or before sixty (60) days after LICENSOR has received notice of
such merger or consolidation.
17. JOINT VENTURE
This Agreement does not constitute and shall not be construed as
constituting a partnership or joint venture between LICENSOR and LICENSEE.
Neither party shall have any right to obligate or bind the other party in any
manner whatsoever, and nothing herein contained shall give, or is intended to
give, any rights of any kind to any third person.
18. MISCELLANEOUS
18.1 Section headings contained herein are solely for the purpose of
aiding in speedy location of subject matter and are not in any sense to be
given weight in the construction of this Agreement. Accordingly, in case of
any question with respect to the construction of this Agreement, it is to be
construed as though such section headings had been omitted.
18.2 This writing constitutes the entire Agreement between the parties
hereto and may not be changed or modified except by a writing signed by the
party or parties hereto and may not be changed or modified except by a writing
signed by the party or parties to be charged thereby.
18.3 This Agreement shall be governed by and construed according to the
law of the State of Wisconsin (without regard to principles of conflicts of
law). If and to the extent that any provisions of this Agreement are
prohibited or unenforceable under any applicable law, such provisions shall be
ineffective to the extent of such prohibition or unenforceable without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of any other provision hereof.
13
<PAGE> 14
18.4 The failure of either party at any time or times to demand strict
performance by the other of any of the terms, covenants or conditions set forth
herein shall not be construed as a continuing waiver or relinquishment thereof
and each may at any time demand strict and complete performance by the other of
said terms, covenants and conditions.
THIS CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE
PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed as of the date set forth above. The effective date is: November 15,
1991.
KOSS CORPORATION
By: /s/ Michael J. Koss
---------------------------------
Title Michael J. Koss
TRABELCO N.V.
By: /s/ Bernard L. van Hooidonk,
---------------------------------
Bernard L. van Hooidonk,
Managing Director
GUARANTY
The undersigned, Hagemeyer Electronics (N.A.), Inc., for good and valuable
consideration, the receipt of which is hereby acknowledged, hereby guarantees
to Koss Corporation any and all payments owed to Koss Corporation by Trabelco
N.V. under the terms of the foregoing Agreement.
DATED: November 15, 1991
HAGEMEYER ELECTRONICS (N.A.), INC.
By: /s/ Richard P. Proctor
-------------------------------------
Richard P. Proctor, Chairman of Board
of Directors
14
<PAGE> 15
EXHIBIT A
Trademarks And Trade Names
Koss Registered Trademarks
(Western Hemisphere only)
United States
Mark: KOSS (Stylized)
Registration No.976,692
Registered January 15, 1974
Mark: Design (Bug Alone)
Registration No. 1,049,413
Registered October 5, 1976
Mark. KOSS & (Bug) Design
Registration No. 1.114,433
Registered March 6, 1979
Mark: KOSS (Stylized)
Registration No. 1,138,617
Registered August 12, 1980
Mark: KOSS
Registration No. 1,602,016
Registered June 19, 1990
Canada
Mark: KOSS
Registration No. 215,579
Registered August 20, 1976
Mark: KOSS & Design
Registration No. 221,160
Registered June 10, 1977
Mark: KOSS & Design
Registration No. 225,302
Registered January 6, 1978
1
<PAGE> 16
Brazil
Mark: KOSS
Registration No. 790324699
Registered August 3, 1982
Mark: KOSS
Registration No. 813202086
Registered October 11, 1988
Mexico
Mark. KOSS & Design
Registration No. 326,272
Registered Circa June 11, 1985
2
<PAGE> 17
EXHIBIT B
Product Royalty
------------------------------------------ -------
Clock Radios 2.0%
Radios without a cassette or compact
disc player 3.0%
Audio systems of any nature with a
cassette player but without a
compact disc player 2.0%
Audio systems of any nature with a
compact disc player 1.5%
Telephones and telephone answering devices 2.0%
Televisions 1.5%
Video cassette recorders 1.5%
1
<PAGE> 18
EXHIBIT C
TO: D.P.I. (H.K.) Limited
FROM: (Subcontractor) Manufacturing Factory
RE: Use of the "Koss" Brandname
The purpose of this letter is to acknowledge that D.P.I. (H.K.) Limited has the
exclusive rights to the use of the "Koss" brandname and trademarks for North,
South and Central America for consumer electronic products other than
headphones. We agree that we will not use the "Koss" name on any products
other than those manufactured for your account.
<PAGE> 19
EXHIBIT D
Calculation of Quarterly Royalties Payment
Total Sales Returns Net Sales Royalty Rate Subtotal
Clock radios $ $ 2.0%
---------- --------- ---------- --------
Radios without
cassette or compact
disc player 3.0%
---------- --------- ---------- --------
Audio systems with
radio, cassette player
and/or compact disc
player 1.5%
--------- --------- --------- --------
Telephones &
Telephone answering
devices 2.0%
-------- -------- -------- --------
Subtotal $ X
--------
Subtotal $ X
--------
Less 2% of itemized
discounts, rebates
and shipping costs ( )
---------
ROYALTIES PAYMENT $
1
<PAGE> 20
AMENDMENT TO LICENSE AGREEMENT
THIS AMENDMENT is made as of the 15th day of November, 1991, by and
between KOSS CORPORATION, a Delaware corporation with its principal place of
business at 4129 North Port Washington Avenue, Milwaukee, WI 53212 (the
"LICENSOR"), and TRABELCO N.V., a Netherlands Antilles company with its
principal place of business at Van Engelenweg 21A, Willemstad, Curacao,
Netherlands Antilles (the "LICENSEE").
WITNESSETH:
WHEREAS, the parties previously entered into a certain License Agreement,
dated November 15, 1991; and
WHEREAS, the parties now desire to amend the License Agreement in certain
respects;
NOW, THEREFORE, the parties hereby agree as follows:
1. Section 13.1(a) of the License Agreement shall be inserted after
Section 13.1 and shall read as follows:
13.1(a) As of the date which is six (6) months after the effective date of
termination, LICENSOR shall have the option to purchase all of LICENSEE's
unsold and uncommitted inventory of Licensed Products, including such
inventory as may be in transit or warehoused in the United States. The
purchase price shall be at LICENSEE's cost. LICENSOR shall give notice of
its intent to exercise said option no later than the date which is five (5)
months after the effective date of termination. Upon receipt of such
notice, LICENSEE shall provide a complete listing of the inventory of all
Licensed Products, with additional detail for each product model as to the
quantities of such inventory previously sold or committed and the names of
the buyers or parties committed therefor. In the event LICENSOR does not
exercise this option, LICENSEE has the right to dispose of the Licensed
Products as provided in Section 13.2.
2. Section 16 of the License Agreement is hereby amended to read as
follows:
16. ASSIGNMENT
This Agreement shall bind and inure to the benefit of LICENSOR, and the
successors and assigns of LICENSOR. The rights granted LICENSEE hereunder
shall be exclusive to it and shall not, without the prior written consent
of LICENSOR, be transferred or assigned to any other entity, provided that
LICENSEE may assign this Agreement to any other corporation controlling,
controlled by or under common control with LICENSEE. In the event of the
merger or consolidation of LICENSEE with any other entity, including any
subsidiary or parent of Hagemeyer N.V., LICENSEE shall provide written
notice to LICENSOR at least thirty (30) days prior to the effective date of
such merger or consolidation. LICENSOR shall have the right to terminate
the Contract Period if LICENSEE is to be merged or consolidated with any
other entity except a subsidiary or parent of Hagemeyer N.V. by so
notifying LICENSEE in writing on or before thirty (30) days after receiving
such notice.
<PAGE> 21
IN WITNESS WHEREOF, the parties have duly executed this Amendment as of
the date first above written.
KOSS CORPORATION
By: /s/ Michael Koss
------------------------------------
Michael Koss,
President
TRABELCO N.V.
By: /s/ Bernard L. van Hooidonk
------------------------------------
Bernard L. van Hooidonk,
Managing Director
CONSENT OF GUARANTOR
The undersigned, as guarantor of the payments owed to Koss Corporation by
Trabelco N.V. under the License Agreement, hereby consents to the foregoing
Amendment to the License Agreement.
Dated: December 12, 1991
HAGEMEYER ELECTRONICS (N.A.), INC.
By: /s/ Richard P. Proctor
------------------------------------
Richard P. Proctor, Chairman of
Board of Directors
2
<PAGE> 22
November 18, 1994
VIA TELECOPIER
(Confirmation copy
sent via U.S. Mail)
Koss Corporation
4129 North Port Washington Ave.
Milwaukee, WI 53212
Attn: Michael Koss, President
Re: License Agreement between Koss Corporation and Trabelco
N.V., dated November 15, 1991, as Amended
Dear Michael:
The initial Contract Period of the License Agreement ("License
Agreement"), dated November 15, 199l, between Koss Corporation, as Licensor, and
Trabelco N.V., as Licensee, as amended, expires December 31, 1994. Pursuant to
Section 7.6 of the License Agreement, Licensee hereby elects to renew the
License Agreement for an additional three (3) year Contract Period, ending
December 31, 1997. Since the total Royalties paid by Licensee during the
initial Contract Period exceed the Renewal Amount for the initial Contract
Period of $812,500, no additional payment by Licensee to Licensor is required
for the renewal of the License Agreement.
Sincerely,
TRABELCO N.V.
By: /s/ F. Lawrence Dickt
-----------------------------
F. Lawrence Dickt,
General Administrator
<PAGE> 23
SECOND AMENDMENT TO
LICENSE AGREEMENT
THIS SECOND AMENDMENT is made and entered into as of the 29th day of
September, 1995 by and between KOSS CORPORATION, a Delaware corporation
("LICENSOR"), and TRABELCO N.V., a Netherlands Antilles company ("LICENSEE").
WITNESSETH:
WHEREAS, the parties previously entered into a certain License Agreement,
dated November 15, 1991, as amended by a certain Amendment to License Agreement
dated the same date; and
WHEREAS, the parties now desire to further amend the said License
Agreement in certain respects;
NOW, THEREFORE, the parties hereby agree as follows:
1. The said License Agreement shall be amended by deleting Section 7.1
in its entirety and inserting in lieu thereof the following which shall be read
as Section 7.1:
7.1 During the term of this Agreement, LICENSEE will pay to LICENSOR
as royalties ("Royalties") an amount equal to the sum of the respective
percentage (as set forth on Exhibit B) of net sales of each category of the
Licensed Products, less 2% of the itemized discounts, rebates and shipping
costs as stated on LICENSEE's invoices regarding such sales of the Licensed
Products (2% representing an average of such amounts), and as further
exemplified on Exhibit D attached hereto. The term "net sales" with
respect to each category of the Licensed Products shall be defined as the
total amount invoiced by LICENSEE for sales of the Licensed Products in
such category less the total amount of returns of the Licensed Products in
such category, and shall include sales of the Licensed Products to LICENSOR
as provided in Section 14.2 hereof. In calculating royalties, no deduction
shall be made for advertising allowances, uncollectible accounts or any
other form of discount other than volume rebates which does not appear on
the customer's invoice. Volume rebates allowed a customer will be credited
on a separate invoice to the customer, and an annual adjustment of 2% of
such rebates shall be made to the Royalties regarding all volume rebates
allowed during the respective Contract Year. Notwithstanding anything
herein to the contrary, in the event that at any time during a Contract
Year during the initial Contract Period or the first renewal period (as
provided in Section 7.6), the Royalties paid and accrued with respect to
such Contract Year equal $1,340,000, thereafter for the remainder of such
Contract Year, the amount of the Royalties that LICENSEE shall be required
to pay to LICENSOR shall be reduced by 50%. Notwithstanding anything
herein to the contrary, in the event that at any time during a Contract
Year after the first renewal period, the Royalties paid and accrued with
respect to such Contract Year equal twice the Minimum Royalties (as
hereinafter defined) for such Contract Year, thereafter for the remainder
of such Contract Year, the amount of the Royalties that LICENSEE shall be
required to pay to LICENSOR shall be reduced by 50%.
2. The said License Agreement shall be amended by deleting Section 14.1
in its entirety and inserting in lieu thereof the following which shall be read
as Section 14.1:
14.1 LICENSOR acknowledges that as a result of the performance of
this Agreement, LICENSOR will acquire confidential and proprietary
information of LICENSEE
<PAGE> 24
regarding its product development, business plans and marketing plans for
the Licensed Products. LICENSOR hereby agrees that during the initial
Contract Period and all renewal periods of this Agreement and for a period
of one (1) year after the termination of this Agreement, LICENSOR will not
participate, directly or indirectly, in the Territory, in any business
engaged in the design, development, manufacture, distribution or sale of
any consumer electronic products included in the categories listed on
Exhibit B (including all consumer electronic products substituted for or
added to the Products by the parties) other than as provided in Section
14.2 hereof; provided, however, that LICENSOR shall not be prohibited from
(i) continuing and expanding anywhere in the world (including, without
limitation, in the Territory) any business which it is presently
conducting, or (ii) manufacturing, distributing and/or selling consumer
electronic products not included in the categories listed on Exhibit B
anywhere in the world (including, without limitation, in the Territory).
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
as of the date first above written.
KOSS CORPORATION
By: /s/ Michael J. Koss
----------------------------------------
Michael J. Koss, President
TRABELCO N.V.
By: /s/ Elaine N. Christiaans
----------------------------------------
Elaine N. Christiaans, Managing Director
CONSENT OF GUARANTOR
The undersigned, as Guarantor, hereby consents to the foregoing Second
Amendment to License Agreement and reaffirms its guarantee of the performance
by Trabelco N.V. of all of Trabelco N.V.'s obligations under said License
Agreement, as amended, and the payment to KOSS Corporation of any and all
payments owed to KOSS Corporation by Trabelco N.V. thereunder, including but
not limited to, indemnity obligations of Trabelco N.V.
DATED: September 29, 1995
HAGEMEYER ELECTRONICS (N.A.), INC.
By: /s/ Richard P. Proctor
----------------------------------------
Richard P. Proctor, Chairman of Board
of Directors
2
<PAGE> 25
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
as of the date first above written.
KOSS CORPORATION
By: /s/ Michael J. Koss
----------------------------------------
Michael J. Koss, President
TRABELCO N.V.
By: /s/ Elaine N. Christiaans
----------------------------------------
Elaine N. Christiaans, Managing Director
CONSENT OF GUARANTOR
The undersigned, as Guarantor, hereby consents to the foregoing Second
Amendment to License Agreement and reaffirms its guarantee of the performance
by Trabelco N.V. of all of Trabelco N.V.'s obligations under said License
Agreement, as amended, and the payment to KOSS Corporation of any and all
payments owed to KOSS Corporation by Trabelco N.V. thereunder, including but
not limited to, indemnity obligations of Trabelco N.V.
DATED: September 29, 1995
HAGEMEYER ELECTRONICS (N.A.), INC.
By: /s/ Richard P. Proctor
----------------------------------------
Richard P. Proctor, Chairman of Board
of Directors
3
<PAGE> 26
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
as of the date first above written.
KOSS CORPORATION
By: /s/ Michael J. Koss
-----------------------------------------
Michael J. Koss, President
TRABELCO N.V.
By: /s/ Elaine N. Christiaans
-----------------------------------------
Elaine N. Christiaans, Managing Director
CONSENT OF GUARANTOR
The undersigned, as Guarantor, hereby consents to the foregoing Second
Amendment to License Agreement and reaffirms its guarantee of the performance
by Trabelco N.V. of all of Trabelco N.V.'s obligations under said License
Agreement, as amended, and the payment to KOSS Corporation of any and all
payments owed to KOSS Corporation by Trabelco N.V. thereunder, including but
not limited to, indemnity obligations of Trabelco N.V.
DATED: September 29, 1995
HAGEMEYER ELECTRONICS (N.A.), INC.
By: /s/ Richard P. Proctor
-------------------------------------
Richard P. Proctor, Chairman of Board
of Directors
4