License Agreement - Koss Corp. and Trabelco NV
LICENSE AGREEMENT
(Western and Eastern Europe)
THIS AGREEMENT is made and entered into as of the 29th day of September,
1995 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
International Trade Center, P.O. Box 6169, Willemstad, Curacao, Netherlands
Antilles (the "LICENSEE").
WITNESSETH:
WHEREAS, LICENSOR and LICENSEE previously entered into a certain License
Agreement, dated November 15, 1991, as amended (the "Western Hemisphere License
Agreement"), regarding the use of certain trademarks of LICENSOR in connection
with the manufacture, marketing and distribution of LICENSEE's products in the
United States, Puerto Rico, Canada, Mexico, Central America and South America;
and
WHEREAS, LICENSEE now desires to obtain the right to use such trademarks
in connection with the manufacture, marketing and distribution of LICENSEE's
products in Western and Eastern Europe; 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 and as amended by the
parties from time to time.
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 all of the countries in Western and Eastern Europe,
including, but not limited to, Austria, Belgium, Bulgaria, Czechoslovakia,
Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg,
the Netherlands, Norway, Poland, Portugal, Romania, Spain, Sweden, Switzerland
and the United Kingdom.
1.5 "German Territory" means Austria, Germany, Belgium, Luxembourg and the
Netherlands.
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1.6 "Contract Period" means the period beginning on the effective date set
forth at the end of this Agreement and ending on December 31, 1998, and any
applicable renewal period.
1.7 "Contract Year" means the calendar year, except that the first
Contract Year shall run from the date hereof until December 31, 1995.
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 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 except as provided in the Western Hemisphere
License Agreement, 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. 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
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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 in its
published market statistics as a recognized product category at any time during
the Contract Period.
2.5 The parties agree that the 1995 Contract Year shall be a market
developmental year during which LICENSEE shall develop its line of Products,
market and promote the Products, and solicit customers in the Territory.
During the 1995 Contract Year, LICENSEE shall pay Royalties to LICENSOR with
respect to LICENSEE's sales of the Licensed Products as provided in Section 7.1
of this Agreement, however, no Minimum Royalties (as defined in Section 7.2
hereof) shall apply to the 1995 Contract Year. All Royalties paid by LICENSEE
with respect to the 1995 Contract Year shall be applied to the Renewal Amount
applicable at the end of the initial Contract Period for the renewal of this
Agreement for an additional Contract Period as provided in Section 7.6 of this
Agreement.
2.6 Notwithstanding anything herein to the contrary, LICENSEE shall have
the option, exercisable no later than December 31, 1996, to elect (i) to
terminate this Agreement with respect to the entire Territory upon the payment
to LICENSOR of the difference, if any, between the Royalties actually paid by
LICENSEE with respect to the 1996 Contract Year and the Minimum Royalties for
1996 (i.e. $25,000.00), and in such event the provisions of Section 13 hereof
shall apply with respect to the disposition of LICENSEE's inventory of Licensed
Products; or (ii) to continue this Agreement with respect to the German
Territory only, and in such event, except as otherwise specifically provided in
Sections 7.2, 7.3 and 7.6 hereof, all references in this Agreement to the
"Territory" shall be construed to mean the "German Territory."
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, 1995 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.
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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 thereof, 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 mockups 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 such
products 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 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. Notwithstanding
anything herein to the contrary, all Licensed Products approved by LICENSOR
during the prior twelve (12) month period for sale by LICENSEE in the United
States, Puerto Rico, Canada, Mexico, Central America and South America pursuant
to the Western Hemisphere License Agreement shall be deemed to be approved by
LICENSOR for sale by LICENSEE in the Territory pursuant to this Agreement.
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
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5.1. LICENSEE agrees that LICENSOR shall have the right to approve or
disapprove in advance of LICENSEE's commercial use, the content, 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 content 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 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 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.
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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 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 do 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 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%.
7.2 Notwithstanding the provisions of Section 7.1, if LICENSEE does not
exercise its option pursuant to Section 2.6 of this Agreement to terminate this
Agreement or reduce the Territory to the German Territory, LICENSEE agrees to
pay to LICENSOR during the Contract Period annual minimum Royalties ("Minimum
Royalties") as follows:
Year Minimum Royalties
---- -----------------
1995 None
1996 $25,000
1997 $100,000
1998 $175,000
In the event that LICENSEE elects to reduce the Territory to the German
Territory, LICENSEE shall pay to LICENSOR during the Contract Period Minimum
Royalties as follows:
German Territory
Year Minimum Royalties
---- -----------------
1995 None
1996 $25,000
1997 $50,000
1998 $87,500
If the sum of the total Royalties paid with respect to a Contract Year
does 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.
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7.3 If upon the expiration of the initial Contract Period, LICENSEE elects
to renew this Agreement as hereinafter provided with respect to either the
Territory or the German Territory for an additional three (3) year term, the
Minimum Royalties for the first renewal period shall be as follows:
Territory German Territory
Year Minimum Royalties Minimum Royalties
---- ----------------- -----------------
1999 $250,000 $125,000
2000 $290,000 $145,000
2001 $335,000 $167,500
If LICENSEE elects to further renew this Agreement, the Minimum Royalty for
each year during such renewal period shall be calculated by the parties using
the statistics for growth in the Territory or German Territory, as applicable,
in total factory sales for the categories of consumer electronic products
included in the Licensed Products as published by an independent trade
associations) to be mutually selected by the parties no later than December
31, 1998 (the "Independent Statistics"). Specifically, for any Contract Year
after 2001, the Minimum Royalty for such Contract Year shall be calculated as
the amount of the Minimum Royalty for the prior Contract Year multiplied by a
fraction, the numerator of which shall be the total factory sales of such
products in the Territory or German Territory, as applicable, for such
Contract Year as published in the Independent Statistics, and the denominator
of which shall be the total factory sales of such products in the Territory or
German Territory, as applicable, for the prior Contract Year as published in
the Independent Statistics, but in no event shall the Minimum Royalty be less
than the Minimum Royalty applicable for any prior year. Until such time as
the Independent Statistics are published and the parties are able to calculate
the Minimum Royalty for a Contract Year, the Minimum Royalty shall be the same
as the Minimum Royalty for the prior Contract Year. Within thirty (30) days
after the publication of the necessary Independent Statistics, the parties
shall calculate the Minimum Royalty 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 $25,000 against earned Royalties for the 1996 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, and it does hereby agree, to guarantee without limit
the financial payment provisions of LICENSEE under this Agreement for the
benefit of LICENSOR.
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 with respect to the Territory or the German
Territory, as applicable, for additional
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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 and the second Contract Period shall be
as follows:
Territory German Territory
Renewal Amount Renewal Amount
-------------- ----------------
Initial
Contract Period $375,000 $203,125
Second
Contract Period $1,093,750 $546,875
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 LICENSEE (or a company affiliated with LICENSEE as designated by
LICENSEE) shall maintain for LICENSEE and all sublicensees for five (5) years
following the close of each Contract Year, accurate books and records which
disclose: the cost of sales of the Licensed 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
customers, 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 LICENSEE (or its designee) 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, LICENSEE (or its designee) shall furnish to LICENSOR a statement,
certified to be true and correct by the Chief Financial Officer of LICENSEE (or
its designee), 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
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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 such place as the parties shall mutually 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 or 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. TRADEMARKS
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.
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10. MAINTENANCE OF LICENSED TRADEMARKS AND INFRINGEMENT
10.1 A list of LICENSOR's current trademark registrations and pending
applications for registration of the Licensed Trademarks in the countries
included in the Territory is attached hereto as Exhibit A. In the event that
such trademark registrations and applications for registration do not encompass
every Licensed Product hereunder licensed, LICENSOR shall cause appropriate
amendments to be filed as soon after the execution of this Agreement as
practical.
Within sixty (60) days after the execution of this Agreement, LICENSOR
shall have registered or filed applications for the registration of the
Licensed Trademarks for the Licensed Products in all of the countries included
in the German Territory and such other countries included in the Territory as
LICENSEE shall specify in writing. in the event that LICENSEE does not exercise
its option pursuant to Section 2.6 hereof to terminate this Agreement or reduce
the Territory to the German Territory, then within sixty (60) days after
LICENSOR receives written notice from LICENSEE regarding LICENSEE's decision
with respect to the option set forth under section 2.6, LICENSOR shall have
registered or filed applications for registration of the Licensed Trademarks
for the Licensed Products in all other countries included in the Territory. In
the event LICENSOR is unable to register one or more of the Licensed Trademarks
in a country as required by this Section 10.1, the parties agree to negotiate
in good faith a mutually acceptable resolution with respect to such
registration or amendment to this Agreement.
LICENSEE agrees to provide samples, invoices or other documents necessary
to support LICENSOR's registrations of the Licensed Trademarks for the Licensed
Products.
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 of
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
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contemplated by LICENSOR which in any way detract from or are competitive with
the rights granted to LICENSEE under this Agreement. LICENSOR further
represents and warrants that it has not entered into any other written license
agreements granting or assigning to any person or entity other than LICENSEE
the right to manufacture, label with the Licensed Trademarks, distribute and/or
sell in the Territory any type of consumer electronic product included in the
Products.
LICENSOR agrees to indemnify and hold harmless LICENSEE, 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, 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 any country included in the Territory
pursuant to this Agreement provided that LICENSEE did not commence marketing
and selling the Licensed Products in a particular country included in the
Territory prior to the issuance to LICENSOR of the registration of the Licensed
Trademarks in such country; 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 indemnify and hold 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, which LICENSOR may hereinafter incur,
suffer or be required to pay 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 trademark infringement claim if LICENSEE commenced marketing
and selling the Licensed Products in the country in which the infringement
claim is brought prior to the issuance to LICENSOR of the registration of the
Licensed Trademarks for the Licensed Products in such country, 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 U.S. Dollars ($5,000,000) 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
11
<PAGE> 12
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 nondefaulting 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;
(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
12
<PAGE> 13
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, 1090, trademark or trade name similar to or
suggestive of the Licensed Trademarks.
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 to or warehoused in the Territory. 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.
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
Territory may be sold by LICENSEE on a non-exclusive basis during the twelve
(12) month period following the date of termination. Any Licensed Products
which are warehoused in the Territory 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
<PAGE> 14
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 the German Territory or the Territory,
as applicable, 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 set
forth 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 or German Territory, as applicable) 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 or German Territory, as applicable).
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
the same price as LICENSEE's most recent sale of such Products to a company
related or affiliated to LICENSEE.
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 therewith, 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:
Koss Corporation
4129 North Port Washington Avenue
Milwaukee, WI 53212
Attn: President
Fax: 414-964-8615
14
<PAGE> 15
Notices sent to LICENSEE shall be addressed as follows:
Trabelco N.V.
c/o 10825 Watson Road
St. Louis, MO 63127
Attn: President
Fax: 314-821-9183
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 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.
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 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.
15
<PAGE> 16
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 CONTRACT 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: September 29,
1995.
KOSS CORPORATION
By: /s/ Michael J. Koss
-------------------------------------
Michael J. Koss, President and CEO
TRABELCO N.V.
By: /s/ Elaine N. Christiaans
-------------------------------------
Elaine N. Christiaans,
Managing Director
16
<PAGE> 17
GUARANTY
The undersigned, Hagemeyer Electronics (N.A.), Inc., for good and valuable
consideration, the receipt of which is hereby acknowledged, hereby guarantees
the performance by Trabelco N.V. of all of Trabelco N.V.'S obligations under
the foregoing License Agreement and the payment to KOSS Corporation of any and
all amounts owed to KOSS Corporation by Trabelco N.V. thereunder, including but
not limited to, the 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
17
<PAGE> 18
EXHIBIT A
Trademarks and Trade Names
KOSS & Design
KOSS (block)
KOSS (stylized)
Current Trademark Registrations and
Pending Applications for Registration
Registration/
Application
Trademark Country Number Product Classes
--------- ------- ------------- ---------------
1
<PAGE> 19
EXHIBIT A
Registration/
Application
Trademark Country Number Product Class
--------------- -------------- ------------- -------------
KOSS (BLOCK) AUSTRIA PENDING 009
KOSS (BLOCK) BELGIUM PENDING 009
KOSS (BLOCK) BULGARIA PENDING 009
KOSS (BLOCK) CZECHOSLOVAKIA PENDING 009
KOSS (BLOCK) DENMARK PENDING 009
KOSS (BLOCK) FINLAND PENDING 009
KOSS (BLOCK) FRANCE PENDING 009
KOSS (BLOCK) GERMANY PENDING 009
KOSS (BLOCK) GREECE PENDING 009
KOSS (BLOCK) HUNGARY PENDING 009
KOSS (BLOCK) IRELAND PENDING 009
KOSS (BLOCK) ITALY PENDING 009
KOSS (BLOCK) LUXEMBOURG PENDING 009
KOSS (BLOCK) NETHERLANDS PENDING 009
KOSS (BLOCK) NORWAY PENDING 009
KOSS (BLOCK) POLAND PENDING 009
KOSS (BLOCK) PORTUGAL PENDING 009
KOSS (BLOCK) ROMANIA PENDING 009
KOSS (BLOCK) SPAIN PENDING 009
KOSS (BLOCK) SWEDEN PENDING 009
KOSS (BLOCK) SWITZERLAND PENDING 009
2
<PAGE> 20
KOSS (BLOCK) UNITED KINGDOM PENDING 009
3
<PAGE> 21
Registration/
Application
Trademark Country Number Product Class
--------------- -------------- ------------- -------------
KOSS & DESIGN AUSTRIA PENDING 009
KOSS & DESIGN BELGIUM PENDING 009
KOSS & DESIGN BULGARIA PENDING 009
KOSS & DESIGN CZECHOSLOVAKIA PENDING 009
KOSS & DESIGN) DENMARK PENDING 009
KOSS & DESIGN FINLAND PENDING 009
KOSS & DESIGN FRANCE PENDING 009
KOSS & DESIGN GERMANY PENDING 009
KOSS & DESIGN) GREECE PENDING 009
KOSS & DESIGN HUNGARY PENDING 009
KOSS & DESIGN IRELAND PENDING 009
KOSS & DESIGN ITALY PENDING 009
KOSS & DESIGN LUXEMBOURG PENDING 009
KOSS & DESIGN NETHERLANDS PENDING 009
KOSS & DESIGN NORWAY PENDING 009
KOSS & DESIGN POLAND PENDING 009
KOSS & DESIGN PORTUGAL PENDING 009
KOSS & DESIGN ROMANIA PENDING 009
KOSS & DESIGN SPAIN PENDING 009
KOSS & DESIGN SWEDEN PENDING 009
KOSS & DESIGN SWITZERLAND PENDING 009
KOSS & DESIGN UNITED KINGDOM PENDING 009
4
<PAGE> 22
Registration/
Application
Trademark Country Number Product Class
--------------- ---------------- ------------- -------------
KOSS (STYLIZED) AUSTRIA PENDING 009
KOSS (STYLIZED) BELGIUM PENDING 009
KOSS (STYLIZED) BULGARIA PENDING 009
KOSS (STYLIZED) CZECHOSLOVAKIA PENDING 009
KOSS (STYLIZED) DENMARK PENDING 009
KOSS (STYLIZED) FINLAND PENDING 009
KOSS (STYLIZED) FRANCE PENDING 009
KOSS (STYLIZED) GERMANY PENDING 009
KOSS (STYLIZED) GREECE PENDING 009
KOSS (STYLIZED) HUNGARY PENDING 009
KOSS (STYLIZED) IRELAND PENDING 009
KOSS (STYLIZED) ITALY PENDING 009
KOSS (STYLIZED) LUXEMBOURG PENDING 009
KOSS (STYLIZED) NETHERLANDS PENDING 009
KOSS (STYLIZED) NORWAY PENDING 009
KOSS (STYLIZED) POLAND PENDING 009
KOSS (STYLIZED) PORTUGAL PENDING 009
KOSS (STYLIZED) ROMANIA PENDING 009
KOSS (STYLIZED) SPAIN PENDING 009
KOSS (STYLIZED) SWEDEN PENDING 009
KOSS (STYLIZED) SWITZERLAND PENDING 009
KOSS (STYLIZED) UNITED KINGDOM PENDING 009
5
<PAGE> 23
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> 24
EXHIBIT C
TO: Trabelco N.V.
FROM: (Subcontractor) Manufacturing Factory
RE: Use of the "KOSS" Brandname
The purpose of this letter is to acknowledge that Trabelco N.V. has the
exclusive rights to the use of the "KOSS" brandname and trademarks in Austria,
Belgium, Bulgaria, Czechoslovakia, Denmark, Finland, France, Germany, Greece,
Hungary, Ireland, Italy, Luxembourg, the Netherlands, Norway, Poland, Portugal,
Romania, Spain, Sweden, Switzerland and the United Kingdom for consumer
electronic products as listed on Exhibit B attached to the License Agreement
between KOSS Corporation, as Licensor, and Trabelco N.V., as Licensee, dated
September 29, 1995. We agree that we will not use the "KOSS" name on any
products other than those manufactured for your account.
1
<PAGE> 25
EXHIBIT D
Calculation of Quarterly Royalties Payment
Total Sales Returns Net Sales Royalty Subtotal
----------- ------- --------- -------- --------
Clock radios $___________ $____________ _________ 2% ____________
Radios without cassette or
compact disc player ____________ ____________ _________ 3% ____________
Audio systems with radio,
cassette player and/or compact
disc player ____________ ____________ _________ 1.5% ____________
Telephones and telephone
answering devices ____________ ____________ _________ 2.0% ____________
Subtotal X
------------
Subtotal $ X
--------------------
Less 2% of itemized
discounts, rebates
and shipping costs (__________________)
ROYALTIES PAYMENT $__________________
1
<PAGE> 26
FIRST AMENDMENT TO
LICENSE AGREEMENT
THIS FIRST AMENDMENT is made and entered into as of the 26th day of
December, 1995, by and between KOSS CORPORATION, a Delaware corporation
("LICENSOR"), and TRABELCO N.V., a Netherlands Antilles company ("LICENSEE").
W I T N E S S E T H
WHEREAS, LICENSOR and LICENSEE previously entered into a certain License
Agreement dated September 29, 1995, (the "License Agreement"); and
WHEREAS, the paries now desire to amend the Licence Agreement;
NOW, THEREFORE, the parties hereby agree as follows:
1. That the first sentence of the second paragraph of Section 10.1 is
hereby amended to read as follows (terms not herein defined shall be as defined
in the License Agreement):
Not later than January 31, 1996, LICENSOR shall have
registered or filed applications for the registration of the
Licensed Trademarks for the Licensed Products in all of the
countries set forth on Exhibit A-1 and such other countries
included in the Territory as LICENSEE shall specify in writing
on or before December 31, 1995. ***[Remainder of paragraph
unaffected]***
IN WITNESS WHEREOF, the parties have executed this First Amendment to
License Agreement as of the date first set forth above.
KOSS CORPORATION
By /s/ Michael J. Koss
-----------------------------------
Michael J. Koss, President and CEO
TRABELCO N.V.
By /s/ Elaine N. Christiaans
-----------------------------------
Elaine N. Christiaans,
Managing Director
<PAGE> 27
CONSENT OF GUARANTOR
The undersigned, as Guarantor, hereby consents to the foregoing First
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
amounts owed to KOSS Corporation by Trabelco N.V. thereunder, including, but
not limited to, the indemnity obligations of Trabelco N.V.
DATED: December 26, 1995
HAGEMEYER ELECTRONICS (N.A.), INC.
By: /s/ Richard P. Proctor
-----------------------------------------
Richard P. Proctor, Chairman of the Board
of Directors
2
<PAGE> 28
EXHIBIT A-1
Registration/
Application
Trademark Country Number Product Class
--------------- -------------- ------------- -------------
KOSS (BLOCK) AUSTRIA PENDING 009
KOSS (BLOCK) BELGIUM PENDING 009
KOSS (BLOCK) DENMARK PENDING 009
KOSS (BLOCK) FINLAND PENDING 009
KOSS (BLOCK) FRANCE PENDING 009
KOSS (BLOCK) GERMANY PENDING 009
KOSS (BLOCK) GREECE PENDING 009
KOSS (BLOCK) IRELAND PENDING 009
KOSS (BLOCK) ITALY PENDING 009
KOSS (BLOCK) LUXEMBOURG PENDING 009
KOSS (BLOCK) NETHERLANDS PENDING 009
KOSS (BLOCK) PORTUGAL PENDING 009
KOSS (BLOCK) SPAIN PENDING 009
KOSS (BLOCK) SWEDEN PENDING 009
KOSS (BLOCK) UNITED KINGDOM PENDING 009
1
<PAGE> 29
Registration/
Application
Trademark Country Number Product Class
--------- ------- ------------- -------------
KOSS & DESIGN AUSTRIA PENDING 009
KOSS & DESIGN BELGIUM PENDING 009
KOSS & DESIGN DENMARK PENDING 009
KOSS & DESIGN FINLAND PENDING 009
KOSS & DESIGN FRANCE PENDING 009
KOSS & DESIGN GERMANY PENDING 009
KOSS & DESIGN GREECE PENDING 009
KOSS & DESIGN IRELAND PENDING 009
KOSS & DESIGN ITALY PENDING 009
KOSS & DESIGN LUXEMBOURG PENDING 009
KOSS & DESIGN NETHERLANDS PENDING 009
KOSS & DESIGN PORTUGAL PENDING 009
KOSS & DESIGN SPAIN PENDING 009
KOSS & DESIGN SWEDEN PENDING 009
KOSS & DESIGN UNITED KINGDOM PENDING 009
2
<PAGE> 30
Registration/
Application
Trademark Country Number Product Class
--------- ------- ------------- -------------
KOSS (STYLIZED) AUSTRIA PENDING 009
KOSS (STYLIZED) BELGIUM PENDING 009
KOSS (STYLIZED) DENMARK PENDING 009
KOSS (STYLIZED) FINLAND PENDING 009
KOSS (STYLIZED) FRANCE PENDING 009
KOSS (STYLIZED) GERMANY PENDING 009
KOSS (STYLIZED) GREECE PENDING 009
KOSS (STYLIZED) IRELAND PENDING 009
KOSS (STYLIZED) ITALY PENDING 009
KOSS (STYLIZED) LUXEMBOURG PENDING 009
KOSS (STYLIZED) NETHERLANDS PENDING 009
KOSS (STYLIZED) PORTUGAL PENDING 009
KOSS (STYLIZED) SPAIN PENDING 009
KOSS (STYLIZED) SWEDEN PENDING 009
KOSS (STYLIZED) UNITED KINGDOM PENDING 009