Document:

exv10w20

 

Exhibit 10.20

AMENDMENT TO LICENSE AGREEMENT

This Amendment to License Agreement (this “Amendment”) is made and entered into this 1st day of
August, 2005 (the “Amendment Effective Date”) by and between Koss Corporation, a Delaware
corporation (“Licensor”), and Sonigem Products, Inc., a corporation organized under the laws of the
Province of Ontario (“Licensee”). The License Agreement amended by this Amendment is referred to
in this Amendment as the “Agreement”.

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree to amend the Agreement as follows as of the Amendment Effective Date:

1. Section 2.4 of the Agreement is amended so that (i) the phrase “Products or Licensed Products”
is deleted from line 6 of Section 2.4 of the Agreement and is replaced with “Products, Licensed
Products, and any other items”, and (ii) the phrase “through LICENSOR’s web site or otherwise via
the Internet” at the end of Section 2.4 of the Agreement is deleted.

2. Section 3.2 of the Agreement is amended so that the following is added as the second sentence of
that section:

LICENSEE shall repair and service the Licensed Products in a professional and workmanlike
manner consistent with the highest industry standards.

3. Section 6.2 of the Agreement is deleted in its entirety and replaced with the following:

6.2 During the applicable Contract Year, the minimum quarterly Royalties (“Minimum Quarterly
Royalties”) for each Calendar Quarter during that Contract Year are as follows:

	 	 	 
	Contract Year	 	Minimum Quarterly Royalties
	 
	 	 
	July 1, 2003 — June 30, 2004

	 	U.S. $12,500
	July 1, 2004 — June 30, 2005

	 	U.S. $18,750
	July 1, 2005 — June 30, 2006

	 	U.S. $75,000
	July 1, 2006 — June 30, 2007

	 	U.S. $81,250
	July 1, 2007 — June 30, 2008

	 	The greater of U.S. $87,500 or the
Minimum Quarterly Royalties paid by
LICENSEE for July 1, 2006 — June 30,
2007

If at the end of any Calendar Quarter, the cumulative total Royalties paid by LICENSEE to
LICENSOR do not equal or exceed the cumulative Royalty for such Calendar Quarter as set
forth in Exhibit E, then, within thirty (30) days following the end of such Calendar
Quarter, LICENSEE shall pay to LICENSOR the difference between the Minimum Quarterly
Royalties for such Calendar Quarter and the Royalties paid by LICENSEE to LICENSOR for such
Calendar Quarter.

 

 

4. Section 6.3 of the Agreement is deleted in its entirety and replaced with the following:

6.3 If as of June 30, 2008, LICENSOR elects to renew this Agreement as hereinafter provided
for an additional two (2) year period, LICENSEE shall pay to LICENSOR the following Minimum
Quarterly Royalties:

	 	 	 
	Contract Year	 	Minimum Quarterly Royalties
	 
	 	 
	July 1, 2008 — June 30, 2009

	 	The greater of U.S. $89,375 or the
Minimum Quarterly Royalties paid by
LICENSEE for July 1, 2007 — June 30,
2008
	 
	 	 
	July 1, 2009 — June 30, 2010

	 	The greater of U.S. $91,344 or the
Minimum Quarterly Royalties paid by
LICENSEE for July 1, 2008 — June 30,
2009

If at the end of any Calendar Quarter, the cumulative total Royalties paid by LICENSEE to
LICENSOR do not equal or exceed the cumulative Royalty for such Calendar Quarter as set
forth in Exhibit E, then, within thirty (30) days following the end of such Calendar
Quarter, LICENSEE shall pay to LICENSOR the difference between the Minimum Quarterly
Royalties for such Calendar Quarter and the Royalties paid by LICENSEE to LICENSOR for such
Calendar Quarter.

5. The following provision is added to the Agreement as new Section 7.5

During the term of this Agreement, by the 10th day of each calendar month after
the Amendment Effective Date, LICENSEE will provide LICENSOR with (i) the inventory of
Products and Licensed Products as of the last day of the previous calendar month, (ii) a
list of all Products and Licensed Products in transit, (iii) a list of purchase orders
received by LICENSEE for the previous month, and (iv) a list of companies that LICENSEE has
subcontracted the manufacture of Licensed Products under Section 2.3 of this Agreement.

6. Exhibit B to the Agreement is deleted in its entirety and replaced with Exhibit B to this
Amendment.

7. Exhibit D to the Agreement is deleted in its entirety and replaced with Exhibit D to this
Amendment.

8. Exhibit E to the Agreement is deleted in its entirety and replaced with Exhibit E to this
Amendment.

9. This Amendment has been jointly drafted by the parties, reflects the parties mutual intent, and
no terms shall be construed more or less favorably to either party on the grounds that is was
drafted by such party.

 

 

10. Except as set forth in this Amendment, the Agreement remains in full force and effect.

	 	 	 	 	 
	 	 	KOSS CORPORATION
	 
	 	 	 	 
	 	 	By: /s/ Michael J. Koss
	 

	 	 	 	Michael J. Koss
	 

	 	 	 	Title: President and CEO
	 
	 	 	 	 
	 	 	SONIGEM PRODUCTS, INC.
	 
	 	 	 	 
	 	 	By: /s/ Reuben Klein
	 

	 	 	 	Reuben Klein
	 

	 	 	 	Title: President and CEO

 

 

EXHIBIT B

A. Description of Licensed Products to be sold under LICENSOR’s Trademark.

     1. Video Products. LICENSEE may only sell the following video products:

a. DVD players

b. Portable DVD players (TV/DVD)

c. DVD combos

d. VCR

e. Mobile video

f. Home theatre in a box with or without a DVD player

g. Television (CRT and LCD)

h. Personal media player / recorder

     2. Audio Products & Telephones. LICENSEE may only sell the following audio products
and telephones:

a. Radios

b. Personal CD players

c. MP3 player / recorder in flash and hard drive formats

d. Boomboxes

e. Home stereo

f. Automotive audio

g. Telephones only (i.e., the device can have no other functionality other than as a
telephone)

h. Satellite radio

     3. GPS Navigational Devices. LICENSEE may only sell the following GPS navigational
devices:

a. Portable

b. Mobile

 

 

     4. Speakers. LICENSEE may only sell speakers for the following:

a. Special MP3/IPOD style speaker

b. Car

     5. LICENSEE may include headphones and earbuds as part of a system only when the product being
sold does not include a speaker. For example, headphones and earbuds may be included as part of a
portable or mobile personal media player, portable or mobile personal CD player, portable or mobile
personal MP3 player, and a radio without a speaker.

B. For clarification, other than as set forth in Section A.5 of this Exhibit B, LICENSEE may not,
under any circumstances, sell or provide headphones, stereophones, or headsets, including wireless
headphones, stereophones and headsets.

C. The royalty rates for the Licensed Products listed on this Exhibit B are set forth in Exhibit D
to this Agreement.

 

 

EXHIBIT D

Calculation of Quarterly Royalties Payment (in U.S. Dollars)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Licensed Products	 	Total Sales	 	 	Returns	 	 	Net Sales	 	 	Royalty Rate	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Video Products
	 	$	_____	 	 	$	_____	 	 	$	_____	 	 	 	1.0	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Audio Products &
Telephones
	 	$	_____	 	 	$	_____	 	 	$	_____	 	 	 	1.5	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	GPS Navigational
Devices
	 	$	_____	 	 	$	_____	 	 	$	_____	 	 	 	1.5	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Speakers
	 	$	_____	 	 	$	_____	 	 	$	_____	 	 	 	5.0	%

     TOTAL ROYALTIES PAYMENT U.S. $___

 

 

EXHIBIT E

Cumulative Royalty Schedule

	 	 	 	 	 
	Calendar Quarter	 	Cumulative Royalty	 
	 
	 	 	 	 
	July 1, 2003 — September 30, 2003
	 	$	12,500	 
	October 1, 2003 — December 31, 2003
	 	$	25,000	 
	January 1, 2004 — March 31, 2004
	 	$	37,500	 
	April 1, 2004 — June 30, 2004
	 	$	50,000	 
	 
	 	 	 	 
	July 1, 2004 — September 30, 2004
	 	$	68,750	 
	October 1, 2004 — December 31, 2004
	 	$	87,500	 
	January 1, 2005 — March 31, 2005
	 	$	106,250	 
	April 1, 2005 — June 30, 2005
	 	$	125,000	 
	 
	 	 	 	 
	July 1, 2005 — September 30, 2005
	 	$	200,000	 
	October 1, 2005 — December 31, 2005
	 	$	275,000	 
	January 1, 2006 — March 31, 2006
	 	$	350,000	 
	April 1, 2006 — June 30, 2006
	 	$	425,000	 
	 
	 	 	 	 
	July 1, 2006 — September 30, 2006
	 	$	506,250	 
	October 1, 2006 — December 31, 2006
	 	$	587,500	 
	January 1, 2007 — March 31, 2007
	 	$	668,750	 
	April 1, 2007 — June 30, 2007
	 	$	750,000	 

	 	 	 
	July 1, 2007 — September 30, 2007

	 	The greater of $837,500 or $750,000 + the average
Minimum Quarterly Royalties paid by LICENSEE for July 1, 2006 — June 30, 2007 (the
“17th Minimum Quarterly Royalty”)
	 
	 	 
	October 1, 2007 — December 31, 2007

	 	The 17th Minimum Quarterly Royalty + the greater of (i)
$87,500 and (ii) the average Minimum Quarterly Royalties paid by LICENSEE for July 1,
2006 — June 30, 2007 (the “18th Minimum Quarterly Royalty”)
	 
	 	 
	January 1, 2008 — March 31, 2008

	 	The 18th Minimum Quarterly Royalty + the greater of (i)
$87,500 and (ii) the average Minimum Quarterly Royalties paid by LICENSEE for July 1,
2006 — June 30, 2007 (the “19th Minimum Quarterly Royalty”)
	 
	 	 
	April 1, 2008 — June 30, 2008

	 	The 19th Minimum Quarterly Royalty + the greater of
(i) $87,500 and (ii) the average Minimum Quarterly Royalties paid by LICENSEE for July
1, 2006 — June 30, 2007 (the “20th Minimum Quarterly Royalty”)

 

 

	 	 	 
	Calendar Quarter	 	Cumulative Royalty	 
	July 1, 2008 — September 30, 2008

	 	The 20th Minimum Quarterly Royalty + the greater
of (i) $89,375 and (ii) the average Minimum Quarterly Royalties paid by LICENSEE for
July 1, 2007 — June 30, 2008 (the “21st Minimum Quarterly Royalty”)
	 
	 	 
	October 1, 2008 — December 31, 2008

	 	The 21st Minimum Quarterly Royalty + the greater of (i)
$89,375 and (ii) the average Minimum Quarterly Royalties paid by LICENSEE for July 1,
2007 — June 30, 2008 (the “22nd Minimum Quarterly Royalty”)
	 
	 	 
	January 1, 2009 — March 31, 2009

	 	The 22nd Minimum Quarterly Royalty + the greater of (i)
$89,375 and (ii) the average Minimum Quarterly Royalties paid by LICENSEE for July 1,
2007 — June 30, 2008 (the “23rd Minimum Quarterly Royalty”)
	 
	 	 
	April 1, 2009 — June 30, 2009

	 	The 23rd Minimum Quarterly Royalty + the greater of
(i) $89,375 and (ii) the average Minimum Quarterly Royalties paid by LICENSEE for July
1, 2007 — June 30, 2008 (the “24th Minimum Quarterly Royalty”)
	 
	 	 
	July 1, 2009 — September 30, 2009

	 	The 24th Minimum Quarterly Royalty + the greater
of (i) $91,344 and (ii) the average Minimum Quarterly Royalties paid by LICENSEE for
July 1, 2008 — June 30, 2009 (the “25th Minimum Quarterly Royalty”)
	 
	 	 
	October 1, 2009 — December 31, 2009

	 	The 25th Minimum Quarterly Royalty + the greater of (i)
$91,344 and (ii) the average Minimum Quarterly Royalties paid by LICENSEE for July 1,
2008 — June 30, 2009 (the “26th Minimum Quarterly Royalty”)
	 
	 	 
	January 1, 2010 — March 31, 2010

	 	The 26th Minimum Quarterly Royalty + the greater of (i)
$91,344 and (ii) the average Minimum Quarterly Royalties paid by LICENSEE for July 1,
2008 — June 30, 2009 (the “27th Minimum Quarterly Royalty”)
	 
	 	 
	April 1, 2010 — June 30, 2010

	 	The 27th Minimum Quarterly Royalty + the greater of
(i) $91,344 and (ii) the average Minimum Quarterly Royalties paid by LICENSEE for July
1, 2008 — June 30, 2009 (the “28th Minimum Quarterly Royalty”)<PAGE>
Exhibit 10.1

                           VERMONT PURE HOLDINGS, LTD.
                        1999 EMPLOYEE STOCK PURCHASE PLAN

                             Instrument of Amendment

     THIS INSTRUMENT OF AMENDMENT (the "Instrument") is executed this 22nd day
of September, 2005 by VERMONT PURE HOLDINGS, LTD., a Delaware corporation (the
"Company").

                              Statement of Purpose

     The Company sponsors the Vermont Pure Holdings, Ltd. 1999 Employee Stock
Purchase Plan (the "Plan"). The Company desires to amend the Plan for offerings
that begin after December 31, 2005 as set forth herein to reflect a change in
the method of determining the purchase price for shares under the Plan, in order
for the Plan to be treated thereafter as a non-compensatory plan under the
Financial Accounting Standards Board Statement No. 123(R), Share-Based Payment.
The amendment set forth herein has been approved by the Company's Board of
Directors in accordance with Section 17 of the Plan.

     NOW, THEREFORE, Section 7 of the Plan is hereby amended effective as of the
date hereof to read in its entirety as follows:

     "(A) WITH RESPECT TO ANY OFFERING BEGINNING PRIOR TO THE FIRST OFFERING IN
     WHICH FINANCIAL ACCOUNTING STANDARDS BOARD STATEMENT NO. 123(R),
     SHARE-BASED PAYMENT ("FAS 123(R)"), IS APPLICABLE TO THE OFFERING, AND WITH
     RESPECT TO THE OFFERING BEGINNING JULY 1, 2005 AND ENDING DECEMBER 31,
     2005, ON THE OFFERING COMMENCEMENT DATE OF SUCH OFFERING, A PARTICIPATING
     EMPLOYEE SHALL BE DEEMED TO HAVE BEEN GRANTED AN OPTION TO PURCHASE A
     MAXIMUM NUMBER OF SHARES OF THE COMMON STOCK EQUAL TO AN AMOUNT DETERMINED
     AS FOLLOWS: 85% OF THE MARKET VALUE PER SHARE OF THE COMMON STOCK ON THE
     APPLICABLE OFFERING COMMENCEMENT DATE SHALL BE DIVIDED INTO AN AMOUNT EQUAL
     TO THE SUM OF (X) THE PERCENTAGE OF THE EMPLOYEE'S COMPENSATION WHICH HE OR
     SHE HAS ELECTED TO HAVE WITHHELD (MULTIPLIED BY THE EMPLOYEE'S COMPENSATION
     OVER THE OFFERING PERIOD) PLUS (Y) ANY AMOUNTS IN THE EMPLOYEE'S ACCOUNT ON
     THE OFFERING COMMENCEMENT DATE THAT HAVE BEEN CARRIED FORWARD FROM PRIOR
     OFFERINGS, MULTIPLIED BY (II) TWO. SUCH MARKET VALUE PER SHARE OF THE
     COMMON STOCK SHALL BE DETERMINED AS PROVIDED IN CLAUSE (I) OF PARAGRAPH
     7(B).

     "(B) WITH RESPECT TO ANY OFFERING BEGINNING PRIOR TO THE FIRST OFFERING IN
     WHICH FAS 123(R) IS APPLICABLE TO THE OFFERING, AND WITH RESPECT TO THE
     OFFERING BEGINNING JULY 1, 2005 AND ENDING DECEMBER 31, 2005, THE OPTION
     PRICE OF THE COMMON STOCK PURCHASED WITH PAYROLL DEDUCTIONS MADE DURING
     EACH SUCH OFFERING FOR A PARTICIPANT THEREIN SHALL BE THE LOWER OF
<PAGE>
            "(I) 85% OF THE AVERAGE OF THE BID AND THE ASKED PRICES AS REPORTED
            BY THE NASDAQ STOCK MARKET IN THE WALL STREET JOURNAL, OR, IF THE
            COMMON STOCK IS DESIGNATED AS A NATIONAL MARKET SECURITY BY THE
            NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. ("NASD"), THE LAST
            TRADING PRICE OF THE COMMON STOCK AS REPORTED BY THE NASDAQ NATIONAL
            MARKET SYSTEM IN THE WALL STREET JOURNAL, OR, IF THE COMMON STOCK IS
            LISTED ON AN EXCHANGE, THE CLOSING PRICE OF THE COMMON STOCK ON THE
            EXCHANGE ON THE OFFERING COMMENCEMENT DATE APPLICABLE TO SUCH
            OFFERING (OR ON THE NEXT REGULAR BUSINESS DATE ON WHICH SHARES OF
            THE COMMON STOCK SHALL BE TRADED, IN THE EVENT THAT NO SHARES OF THE
            COMMON STOCK HAVE BEEN TRADED ON THE OFFERING COMMENCEMENT DATE); OR
            IF THE COMMON STOCK IS NOT QUOTED ON NASDAQ, NOT DESIGNATED AS A
            NASDAQ NATIONAL MARKET SECURITY AND NOT LISTED ON AN EXCHANGE, 85%
            OF THE FAIR MARKET VALUE ON THE OFFERING COMMENCEMENT DATE AS
            DETERMINED BY THE COMMITTEE; AND

            "(II) 85% OF THE AVERAGE OF THE BID AND THE ASKED PRICES AS REPORTED
            BY THE NASDAQ STOCK MARKET IN THE WALL STREET JOURNAL, OR, IF THE
            COMMON STOCK IS DESIGNATED AS A NATIONAL MARKET SECURITY BY THE
            NASD, THE LAST TRADING PRICE OF THE COMMON STOCK AS REPORTED BY THE
            NASDAQ NATIONAL MARKET SYSTEM IN THE WALL STREET JOURNAL, OR, IF THE
            COMMON STOCK IS LISTED ON AN EXCHANGE, THE CLOSING PRICE OF THE
            COMMON STOCK ON THE EXCHANGE ON THE OFFERING TERMINATION DATE
            APPLICABLE TO SUCH OFFERING (OR ON THE NEXT REGULAR BUSINESS DATE ON
            WHICH SHARES OF THE COMMON STOCK SHALL BE TRADED, IN THE EVENT THAT
            NO SHARES OF THE COMMON STOCK SHALL HAVE BEEN TRADED ON THE OFFERING
            TERMINATION DATE); OR IF THE COMMON STOCK IS NOT QUOTED ON NASDAQ,
            NOT DESIGNATED AS A NASDAQ NATIONAL MARKET SECURITY AND NOT LISTED
            ON AN EXCHANGE, 85% OF THE FAIR MARKET VALUE ON THE OFFERING
            TERMINATION DATE AS DETERMINED BY THE COMMITTEE.

     "(C) WITH RESPECT TO ANY OFFERING THAT BEGINS AFTER DECEMBER 31, 2005 AND
     TO WHICH FAS 123(R) IS APPLICABLE, ON THE OFFERING COMMENCEMENT DATE OF
     SUCH OFFERING, A PARTICIPATING EMPLOYEE SHALL BE DEEMED TO HAVE BEEN
     GRANTED AN OPTION TO PURCHASE A MAXIMUM NUMBER OF SHARES OF THE COMMON
     STOCK EQUAL TO AN AMOUNT DETERMINED AS FOLLOWS: 95% OF THE MARKET VALUE PER
     SHARE OF THE COMMON STOCK ON THE APPLICABLE OFFERING COMMENCEMENT DATE
     SHALL BE DIVIDED INTO AN AMOUNT EQUAL TO THE SUM OF (X) THE PERCENTAGE OF
     THE EMPLOYEE'S COMPENSATION WHICH HE OR SHE HAS ELECTED TO HAVE WITHHELD
     (MULTIPLIED BY THE EMPLOYEE'S COMPENSATION OVER THE OFFERING PERIOD) PLUS
     (Y) ANY AMOUNTS IN THE EMPLOYEE'S ACCOUNT ON THE OFFERING COMMENCEMENT DATE
     THAT HAVE BEEN CARRIED FORWARD FROM PRIOR OFFERINGS, MULTIPLIED BY (II)
     TWO. SUCH MARKET VALUE PER SHARE OF THE COMMON STOCK SHALL BE DETERMINED AS
     PROVIDED IN PARAGRAPH 7(D).

     "(D) WITH RESPECT TO ANY OFFERING THAT BEGINS AFTER DECEMBER 31, 2005 AND
     TO WHICH FAS 123(R) IS APPLICABLE, THE OPTION PRICE OF THE COMMON STOCK
<PAGE>
     PURCHASED WITH PAYROLL DEDUCTIONS MADE DURING EACH SUCH OFFERING FOR A
     PARTICIPANT THEREIN SHALL BE 95% OF THE AVERAGE OF THE BID AND THE ASKED
     PRICES AS REPORTED BY THE NASDAQ STOCK MARKET IN THE WALL STREET JOURNAL,
     OR, IF THE COMMON STOCK IS DESIGNATED AS A NATIONAL MARKET SECURITY BY THE
     NASD, THE LAST TRADING PRICE OF THE COMMON STOCK AS REPORTED BY THE NASDAQ
     NATIONAL MARKET SYSTEM IN THE WALL STREET JOURNAL, OR, IF THE COMMON STOCK
     IS LISTED ON AN EXCHANGE, THE CLOSING PRICE OF THE COMMON STOCK ON THE
     EXCHANGE ON THE OFFERING TERMINATION DATE APPLICABLE TO SUCH OFFERING (OR
     ON THE NEXT REGULAR BUSINESS DATE ON WHICH SHARES OF THE COMMON STOCK SHALL
     BE TRADED, IN THE EVENT THAT NO SHARES OF THE COMMON STOCK SHALL HAVE BEEN
     TRADED ON THE OFFERING TERMINATION DATE); OR IF THE COMMON STOCK IS NOT
     QUOTED ON NASDAQ, NOT DESIGNATED AS A NASDAQ NATIONAL MARKET SECURITY AND
     NOT LISTED ON AN EXCHANGE, 95% OF THE FAIR MARKET VALUE ON THE OFFERING
     TERMINATION DATE AS DETERMINED BY THE COMMITTEE."

     Except as expressly or by necessary implication amended hereby, the Plan
shall continue in full force and effect.

     IN WITNESS WHEREOF, the Company has caused this Instrument to be executed
by its duly authorized officer as of the day and year first above written.

                                  VERMONT PURE HOLDINGS, LTD.

                                  By:    /s/ Bruce MacDonald
                                        ------------------------------
                                  Name: Bruce MacDonald
                                  Title:Chief Financial Officer

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