Restated Lease

RESTATED LEASE


THIS RESTATED LEASE (this "RESTATED LEASE") is made by and between KOSS CORPORATION, a Delaware corporation ("TENANT") and HOME DEPOT U.S.A., INC., a Delaware corporation ("LANDLORD") as of the 20th day of January, 1999.


RECITALS


A. By Building Lease dated December 31, 1985, Hi-Tran, Inc. as landlord and Tenant entered into a written lease (the "BUILDING LEASE") for certain premises commonly known as 4129 and 4189 North Port Washington Road and legally described on Exhibit A attached thereto as Parcels 1 and 2. The Building Lease was subsequently amended by: (i) that certain Amendment to Lease dated February 28, 1986 between Junior House, Inc. (as successor to Hi-Tran, Inc. by merger) and Tenant (the "FIRST AMENDMENT"); (ii) that certain Addendum to Lease dated December ___, 1987 (the foregoing date intentionally left blank to reflect the exact reference to the date in said document) between John C. Koss ("KOSS") (as successor by assignment to Junior House, Inc.) and Tenant (the "SECOND AMENDMENT"); and (iii) that certain Third Lease Amendment dated as of June 25, 1993 between Koss and Tenant (the "THIRD AMENDMENT" which, together with the Building Lease, the First Amendment and the Second Amendment is sometimes collectively referred to herein as the "LEASE").


B. In conjunction with the sale of a portion of the original premises demised under the Lease from Koss to Landlord, Koss, Landlord and Tenant have concurrently herewith entered into a Partial Assignment, Termination and Modification of Lease (the "ASSIGNMENT"). For purposes of this Restated Lease, all terms used herein with initial capital letters which are defined in the Assignment shall have the same meaning herein as are ascribed to such terms in the Assignment unless otherwise defined herein or the context dictates otherwise. The purpose of the Assignment was, among other things, to: (i) terminate the Lease as to all portions of the HD Parcel except for the Koss Sign Premises; and (ii) memorialize the partial assignment of Koss' rights and obligations as landlord under the Lease with respect to the Koss Sign Premises to Landlord.


C. In connection with the foregoing sale transaction, Koss and Landlord have also concurrently herewith executed a Reciprocal Easement Agreement ("REA") which, among other things, contained various rights and obligations concerning the Koss Signs. Tenant executed a consent to the REA whereby, among other things, Tenant consented to and agreed to be bound by all applicable terms, conditions and provisions of the REA, subject to the limitations contained in such consent.


D. Pursuant to the terms of the Assignment, Landlord and Tenant agreed to execute this Restated Lease with respect to the HD Lease, and now desire to enter into this Restated Lease for purposes of better describing the parties respective rights and obligations with respect to the Koss Sign Premises. For purposes of this Restated Lease, the term "this Restated Lease" shall in all instances refer to the HD Lease, as amended, supplemented and clarified by the terms of this Restated Lease.


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NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:


1. LEASE. Landlord and Tenant mutually ratify and confirm Tenant's continued leasehold rights in and to the Koss Sign Premises (consisting of the Koss Signs and the Koss Sign Pads located on the HD Parcel legally described on EXHIBIT A attached hereto and as approximately shown on the Site Plan attached hereto as EXHIBIT B upon and subject to the terms of this Restated Lease. For purposes of this Restated Lease, (i) all references in the Lease to the terms "this Lease" or "the Lease" or "hereof" or "herein" or words of similar import referring to the Lease shall refer to this Restated Lease, (ii) all references in the Lease to the terms "Premises," or "Leased Premises," or "demised premises" or any words of similar import shall refer to the Koss Sign Premises; and (iii) all references in the Lease to the term "Landlord" shall refer to Home Depot U.S.A., Inc. or its grantees, successors or assigns, as the case may be.


2. TERM, PURPOSE AND POSSESSION.


(a) The term of this Restated Lease is hereby extended so as to expire upon the earlier to occur of (i) the cessation of Tenant's use of the Koss Parcel for electronics manufacturing and related business, or (ii) December 31, 2098, unless sooner terminated as provided in the Restated Lease. Upon the expiration or earlier termination of this Restated Lease, Tenant agrees, upon not less than fifteen (15) days' prior written notice, to sign an instrument in recordable form to be provided by Landlord releasing all of Tenant's right, title and interest in and to the HD Parcel as Landlord or its title insurer may reasonably require to insure over Tenant's leasehold rights pursuant hereto.


(b) Subject to the terms of this Restated Lease, the Koss Sign Premises may be used by Tenant for purposes of the maintenance, operation, repair and replacement (including the periodic changing of the billboard advertising signage) of the Koss Signs and for no other purpose. Landlord and Tenant acknowledge and agree that any physical changes to the structure of the Koss Signs shall be subject to the prior written consent of Landlord as more particularly set forth in Section 8 of the Building Lease; provided, however, Landlord hereby agrees that such consent shall not be unreasonably withheld or delayed. In no event may the Koss Signs be used (i) to identify any of Landlord's competitors, (ii) to advertise any product or service for or on behalf of any owner or operator of a home improvement center or hardware store (other than Landlord) or for any other item described in Section 3.01(f) of the REA (unless first approved by Landlord), or (iii) to communicate any negative or derogatory material concerning Landlord, its home improvement centers or any products or services sold by Landlord. In connection with Tenant's use of the Koss Sign Premises, Tenant agrees that it will not do, suffer or permit, or agree to do anything that would in any way interfere with or delay or increase the cost of the development or operation of the HD Parcel or Landlord's business operated thereon.


(c) Tenant acknowledges that as of the date hereof, Tenant is in possession of the entire Koss Sign Premises, and: (i) Tenant hereby accepts the Koss Sign Premises in their "AS-IS CONDITION AND AS-BUILT CONFIGURATION" subject to all easements, covenants, conditions or other matters of record; and (ii) Landlord shall not be required to install, or


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contribute toward the cost of any alterations, additions or improvements to the Koss Sign Premises for Tenant's occupancy during the term of this Restated Lease, except for Landlord's obligations pursuant to Sections 2.03(e) and (f) of the REA.


3. RENT. Landlord acknowledges that annual rent in the amount of Ten Dollars (10.00) per year for the entire term of this Restated Lease has been prepaid, the receipt and sufficiency of which are acknowledged by Landlord and that except as referenced in Section 4 hereof, no other consideration is due Landlord from Tenant throughout the term under this Restated Lease with respect to the use of the Koss Sign Premises without in any way otherwise limiting, modifying or affecting Tenant's obligations ...