<PAGE>   1
                                                                    EXHIBIT 10.3

                        AMENDMENT & EXTENSION AGREEMENT

     THIS AMENDMENT & EXTENSION AGREEMENT is made as of the 1 day of May, 2001,
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 LOGITECH ELECTRONICS INC., an Ontario company, with its
principal place of business at 60 Bell Farm Road, Barrie, Ontario L4M 5G6 (the
"LICENSEE")

         WITNESSETH:

         WHEREAS LICENSOR and LICENSEE are parties to a certain License
Agreement dated the 30th day of June, 1998 (the "LICENSE AGREEMENT") and are
furthermore parties to a certain Addendum Agreement dated the 30th day of June,
1998 (the "ADDENDUM") with respect to the License Agreement;

         AND WHEREAS the parties now desire to amend and extend the terms and
conditions of the License Agreement and the Addendum as hereinafter provided;

         NOW THEREFORE for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

     1.  AMENDMENT TO ROYALTY.

         Section 6.1 of the License Agreement is hereby amended to replace the
         definition of "Royalties" as "an amount equal to ten percent (10%) of
         net sales" to read "AN AMOUNT EQUAL TO SIX AND ONE-HALF PERCENT (6.5%)
         OF NET SALES", said amendment to be effective as of the 1st day of
         July, 2000.

     2.  AMENDMENT TO MINIMUM ANNUAL ROYALTIES:

         Section 6.2 of the License Agreement is hereby amended to replace the
         "annual minimum Royalties" as referred to therein, for the period from
         July 1, 2000, to June 30, 2003, as follows:

<TABLE>
<CAPTION>
                "CONTRACT YEAR                MINIMUM ROYALTIES
                 --------------               -----------------
<S>                                   <C>
         JULY 1, 2000 - JUNE 30, 2001 U.S. $210,000
         JULY 1, 2001 - JUNE 30, 2002 U.S. $220,000
         JULY 1, 2002 - JUNE 30, 2003 U.S. $230,000"
</TABLE>
<PAGE>   2
                                      -2-

    3.   EXTENSION OF LICENSE AGREEMENT & ADDENDUM.

         It is agreed that the License Agreement and Addendum shall be renewed
         and extended for a further five (5) year term from the 1st day of July,
         2003, to the 30th day of June, 2008.  It is furthermore agreed that
         Section 6.3 of the License Agreement is hereby amended to replace the
         "Minimum Royalties for the first renewal period" as referred to
         therein, for the period from July 1, 2003, to June 30, 2008, as
         follows:
<TABLE>
<CAPTION>
              "CONTRACT YEAR                    MINIMUM ROYALTIES
              ---------------                   -----------------
<S>                                        <C>
              JULY 1, 2003 - JUNE 30, 2004 U.S. $241,000
              JULY 1, 2004 - JUNE 30, 2005 U.S. $252,000
              JULY 1, 2005 - JUNE 30, 2006 U.S. $265,000
              JULY 1, 2006 - JUNE 30, 2007 U.S. $278,000
              JULY 1, 2007 - JUNE 30, 2008 U.S. $292,000"
</TABLE>

    4.   MISCELLANEOUS

         Save and except as amended and extended herein, the License Agreement
         and Addendum shall remain in full force and effect, binding upon the
         parties thereto and hereto in accordance with the terms therein.

         IN WITNESS WHEREOF the parties hereto have caused this Amendment &
Extension Agreement to be executed as of the date set forth above. The
effective date of this Amendment & Extension Agreement is the 1st day of July,
2000.

                                             KOSS CORPORATION

                                             BY: /s/ Michael J. Koss
                                                     MICHAEL J. KOSS
                                                     PRESIDENT AND CEO

                                             LOGITECH ELECTRONICS INC.

                                             BY: /s/ Greg Bell
                                                     GREG BELL
                                                     PRESIDENT AND CEO