of Setoff
60
SECTION 8.09. Governing Law; Jurisdiction; Consent to Service of Process
60
SECTION 8.10. WAIVER OF JURY TRIAL
61
SECTION 8.11. Headings
61
SECTION 8.12. Confidentiality
61
SECTION 8.13. Nonreliance; Violation of Law
62
SECTION 8.14. USA PATRIOT Act
62
SECTION 8.15. Disclosure
62
SECTION 8.16. Interest Rate Limitation
62
iii
This CREDIT AGREEMENT dated as of May 12, 2010 (as it may be amended or modified
from time to time, this "Agreement"), is entered into by and between KOSS
CORPORATION, a Delaware corporation ("Borrower"), and JPMORGAN CHASE BANK, N.A
("Lender").
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01.
Defined Terms.
As used in this Agreement, the following terms
have the meanings specified below:
"ACCOUNT" HAS THE MEANING ASSIGNED TO SUCH TERM IN THE SECURITY AGREEMENT.
"ACCOUNT DEBTOR" MEANS ANY PERSON OBLIGATED ON AN ACCOUNT.
"ADJUSTED LIBO RATE" MEANS, WITH RESPECT TO ANY EURODOLLAR BORROWING FOR ANY
INTEREST PERIOD, AN INTEREST RATE PER ANNUM (ROUNDED UPWARDS, IF NECESSARY, TO
THE NEXT 1/16 OF 1%) EQUAL TO (A) THE LIBO RATE FOR SUCH INTEREST PERIOD
MULTIPLIED BY (B) THE STATUTORY RESERVE RATE.
"ADJUSTED ONE MONTH LIBO RATE" MEANS, WITH RESPECT TO A CB FLOATING RATE LOAN
FOR ANY DATE, AN INTEREST RATE EQUAL TO THE SUM OF (A) 2.50% PER ANNUM PLUS
(B) THE RATE EQUAL TO (I) THE INTEREST RATE DETERMINED BY LENDER BY REFERENCE TO
THE PAGE TO BE THE RATE AT APPROXIMATELY 11:00 AM LONDON TIME, ON SUCH DATE OR,
IF SUCH DATE IS NOT A BUSINESS DAY, ON THE IMMEDIATELY PRECEDING BUSINESS DAY
FOR DOLLAR DEPOSITS WITH A MATURITY EQUAL TO ONE MONTH, MULTIPLIED BY (II) THE
STATUTORY RESERVE RATE APPLICABLE TO DOLLAR DEPOSITS IN THE LONDON INTERBANK
MARKET WITH A MATURITY EQUAL TO ONE MONTH.
"AFFILIATE" MEANS, WITH RESPECT TO A SPECIFIED PERSON, ANOTHER PERSON THAT
DIRECTLY, OR INDIRECTLY THROUGH ONE OR MORE INTERMEDIARIES, CONTROLS OR IS
CONTROLLED BY OR IS UNDER COMMON CONTROL WITH THE PERSON SPECIFIED.
"APPLICABLE RATE" MEANS, FOR ANY DAY, WITH RESPECT TO ANY CB FLOATING RATE LOAN
OR EURODOLLAR REVOLVING LOAN, OR WITH RESPECT TO THE COMMITMENT FEES PAYABLE
HEREUNDER, AS THE CASE MAY BE, THE APPLICABLE RATE PER ANNUM SET FORTH BELOW
UNDER THE CAPTION "CB FLOATING RATE SPREAD", "EURODOLLAR SPREAD" OR "COMMITMENT
FEE RATE", AS THE CASE MAY BE, BASED UPON BORROWER'S LEVERAGE RATIO AS OF THE
MOST RECENT DETERMINATION DATE, PROVIDED THAT UNTIL THE DELIVERY TO LENDER,
PURSUANT TO SECTION 5.01, OF BORROWER'S CONSOLIDATED FINANCIAL INFORMATION FOR
BORROWER'S FISCAL QUARTER ENDING SEPTEMBER 30, 2010, THE "APPLICABLE RATE" SHALL
BE THE APPLICABLE RATE PER ANNUM SET FORTH BELOW IN CATEGORY 3:
Leverage Ratio
Revolver
CB Floating Rate
Spread
Revolver
Eurodollar
Spread
Commitment Fee
Rate
Category 1
Less than or equal to 1.00 to 1.00
0.00
%
2.00
%
0.30
%
Category 2
Greater than 1.00 to 1.00 and less then or equal to 1.50 to 1.00
0.25
%
2.25
%
0.35
%
Category 3
Greater than 1.50 to 1.00 but less than