-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ml9GqOkOmaBzn4Dneiqei80o0Zy41KaoEB4RrOf+aMRs6NB/mwgoNCiFSj4mdVub oM25uJ0RLqk7yLeAA8D0qg== 0000950124-00-003247.txt : 20000516 0000950124-00-003247.hdr.sgml : 20000516 ACCESSION NUMBER: 0000950124-00-003247 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TELEX COMMUNICATIONS INC CENTRAL INDEX KEY: 0000857668 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 381853300 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-30679 FILM NUMBER: 633641 BUSINESS ADDRESS: STREET 1: 9600 ALDRICH AVE S CITY: MINNEAPOLIS STATE: MN ZIP: 55420 BUSINESS PHONE: 6128844051 MAIL ADDRESS: STREET 1: 9600 ALDRICH AVENUE SOUTH CITY: MINNEAPOLIS STATE: MN ZIP: 55420 10-Q 1 FORM 10-Q 1 CONFORMED SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2000 Commission File No. 333-27341 TELEX COMMUNICATIONS, INC. (Exact name of Registrant as specified in its charter) DELAWARE 38-1853300 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 9600 ALDRICH AVENUE SOUTH, MINNEAPOLIS, MINNESOTA 55420 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) Registrant's telephone number, including area code: (952) 884-4051 ---------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ------ ------ AS OF MARCH 31, 2000 THERE WERE 110 SHARES OF TELEX COMMUNICATIONS, INC., $0.01 PAR VALUE, OUTSTANDING. THIS DOCUMENT CONTAINS 18 PAGES. 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS TELEX COMMUNICATIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) (UNAUDITED)
MARCH 31, DECEMBER 31, 2000 1999 --------- ------------ ASSETS Current assets: Cash and cash equivalents $ 2,649 $ 3,239 Accounts receivable, net 58,831 59,438 Inventories 65,986 66,573 Other current assets 16,918 14,665 --------- --------- Total current assets 144,384 143,915 Property, plant and equipment, net 44,823 45,048 Deferred financing costs, net 9,988 10,476 Intangible and other assets, net 66,775 62,559 --------- --------- $ 265,970 $ 261,998 ========= ========= LIABILITIES AND SHAREHOLDER'S DEFICIT Current liabilities: Revolving lines of credit $ 25,150 $ 22,688 Current maturities of long-term debt 9,232 8,982 Accounts payable 22,678 20,817 Accrued wages and benefits 11,424 10,708 Accrued interest 6,419 5,898 Other accrued liabilities 11,574 16,750 Income taxes payable 10,137 8,935 --------- --------- Total current liabilities 96,614 94,778 Long-term debt 310,776 312,207 Other long-term liabilities 10,181 9,470 --------- --------- Total liabilities 417,571 416,455 --------- --------- Shareholder's deficit: Common stock and capital in excess of par 3,147 3,139 Accumulated other comprehensive loss (4,636) (3,508) Accumulated deficit (150,112) (154,088) --------- --------- Total shareholder's deficit (151,601) (154,457) --------- --------- $ 265,970 $ 261,998 ========= =========
See accompanying notes. 2 3 TELEX COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS) (UNAUDITED)
QUARTER ENDED ------------------------------ MARCH 31, MARCH 31, 2000 1999 --------- --------- Net sales $ 82,727 $ 79,410 Cost of sales 51,204 50,780 -------- -------- Gross profit 31,523 28,630 -------- -------- Operating expenses: Engineering 3,473 3,738 Selling, general and administrative 20,031 18,324 Corporate charges 429 429 Amortization of goodwill and other intangibles 515 691 -------- -------- 24,448 23,182 -------- -------- Operating profit 7,075 5,448 Interest expense 9,511 9,118 Other income (7,311) (1,531) -------- -------- Income (loss) before taxes 4,875 (2,139) Provision for income taxes 899 218 -------- -------- Net income (loss) $ 3,976 $ (2,357) ======== ========
See accompanying notes. 3 4 TELEX COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)
QUARTER ENDED --------------------------- MARCH 31, MARCH 31, 2000 1999 --------- --------- OPERATING ACTIVITIES: Net income (loss) $ 3,976 $ (2,357) Adjustments to reconcile net income (loss) to cash flows from operations: Depreciation, amortization and provision for bad debts 3,502 3,408 Gain on sale of facilities, product lines and intangible assets (973) (322) Stock option compensation expense 8 63 Deferred income taxes 40 (269) Change in operating assets and liabilities (6,924) (1,854) Change in long-term liabilities 920 (15) ------- -------- Net cash provided by (used in) operating activities 549 (1,346) ------- -------- INVESTING ACTIVITIES: Additions to property, plant and equipment (2,462) (1,960) Proceeds from sale of facilities and product lines - 1,960 ------- -------- Net cash used in investing activities (2,462) - ------- -------- FINANCING ACTIVITIES: Borrowings under revolving lines of credit, net 2,598 8,136 Repayment of long-term debt (2,120) (6,304) Borrowings of other long-term debt 939 - ------- -------- Net cash used in financing activities 1,417 1,832 ------- -------- EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS: (94) (209) ------- -------- CASH AND CASH EQUIVALENTS: Net increase (decrease) (590) 277 Beginning of period 3,239 3,431 ------- -------- End of period $ 2,649 $ 3,708 ======= ======== SUPPLEMENTAL DISCLOSURES OF CASH PAID FOR: Interest $ 8,514 $ 8,111 ======= ======== Income taxes (refunds), net $ (25) $ 516 ======= ========
See accompanying notes. 4 5 TELEX COMMUNICATIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Telex Communications, Inc. ("Telex" or the "Company"), a Delaware corporation, is a wholly owned subsidiary of Telex Communications Group, Inc. ("Holdings"), a Delaware corporation and the corporate parent of the Company. The condensed consolidated balance sheet as of March 31, 2000 and the condensed consolidated statements of operations and cash flows for the quarters ended March 31, 2000 and March 31, 1999 have been prepared by the Company without being audited, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). In the opinion of management, these financial statements reflect all adjustments (which include normal recurring accruals) necessary to present fairly the financial position of Telex at March 31, 2000 and the results of its operations and cash flows for all periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Therefore, these statements should be read in conjunction with the more detailed information, risk factors and financial statements, including the related notes, included in the Form 10-K for the fiscal year ended December 31, 1999 filed by Telex with the SEC on March 30, 2000 (the "Form 10-K"). Unless otherwise defined herein, capitalized terms shall have the meaning set forth in the Form 10-K. The results of operations for interim periods are not necessarily indicative of results that will be realized for the full fiscal year. 2. Inventories consist of the following, in thousands:
March 31, December 31, 2000 1999 --------- ------------ Raw materials and parts $ 28,458 $ 31,848 Work in process 13,136 9,852 Finished products 24,392 24,873 -------- -------- $ 65,986 $ 66,573 ======== ========
3. The Company recorded an income tax provision of $0.9 million on pre-tax income of $4.9 million for the quarter ended March 31, 2000. The income tax provision is comprised of a U.S. Federal income tax expense of $1.6 million, which is offset by a deferred tax valuation allowance adjustment of $1.6 million, and an income tax provision of $0.9 million attributed to income of certain foreign subsidiaries for the quarter ended March 31, 2000. The Company has a net deferred tax valuation allowance of $20.7 million at March 31, 2000 due to the uncertainty of the realization of future tax benefits. The realization of the future tax benefits related to the deferred tax assets is dependent on many factors, including the Company's ability to generate taxable income within the net operating loss carryforward period. Management has considered these factors in reaching its conclusion as to the adequacy of the valuation allowance for financial reporting purposes. 4. Effective April 1, 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive Income." This statement established standards for reporting and display of comprehensive income and its components. Comprehensive income reflects the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. For the Company, comprehensive net loss represents net loss adjusted for foreign currency translation adjustments and minimum pension liability adjustment. Comprehensive net income was $2.8 million for the quarter ended March 31, 5 6 2000. Comprehensive net loss was $4.4 million for the quarter ended March 31, 1999. 5. In March 2000, the Company reached final agreement for payment of $6.0 million of past due royalty fees from a licensee for the use of the Altec Lansing trademark. In addition, the Company restructured the license agreement to provide for a one-time, up-front fee of $6.5 million in lieu of future royalties. The Company has received $3.9 million in cash through April 2000. The remaining $8.6 million plus interest on the unpaid balance will be received in varying amounts through March 2005. Subsequent to entering into the royalty fee agreement with the licensee of the Altec Lansing trademark, the Company sold the Altec Lansing trademark to the licensee for $1.0 million. In consideration, the Company will receive a $1.0 million interest-bearing promissory note, payable March 2004. In the first quarter ended March 31, 2000, the Company recognized in other income $7.5 million for the royalty agreement and the sale of the trademark. 6. Segment Information: The Company has two business segments: Professional Sound and Entertainment and Multimedia/Audio Communications. Professional Sound and Entertainment Professional Sound and Entertainment consists of five lines of business within the overall professional audio market: (i) Fixed Installation; (ii) Professional Music Retail; (iii) Concert/Recording/Broadcast; (iv) Broadcast Communications Systems; and (v) Sound Reinforcement. Multimedia/Audio Communications Multimedia/Audio Communications segment targets nine principal product markets: (i) Computer Audio; (ii) Audio Duplication; (iii) Multimedia Presentation/Training; (iv) Aviation Communications/Other Applications; (v) Wireless Local Area Networks ("LAN") and Satellite-based Mobile Phone Antennas ("SBA") Systems; (vi) Talking Book Players; (vii) Wireless Communications; (viii) Hearing Aids; and (ix) Wireless Assistive Listening Systems. The following tables provide information by business segments (amounts in thousands): 6 7 AS OF AND FOR THE QUARTER ENDED MARCH 31, 2000
Professional Multimedia/ Sound and Audio Entertain- Communi- ment cations Corporate Total ---------------------------------------------------------- Net sales $ 51,880 $ 30,847 $ -- $ 82,727 Cost of sales 31,144 20,060 -- 51,204 ------------------------------------------------------- Gross profit 20,736 10,787 -- 31,523 Operating expenses: Engineering -- -- 3,473 3,473 Selling, general and administrative -- -- 20,031 20,031 Corporate charges -- -- 429 429 Amortization of goodwill and other intangibles -- -- 515 515 ------------------------------------------------------- -- -- 24,448 24,448 ------------------------------------------------------- Operating profit (loss) 20,736 10,787 (24,448) 7,075 Interest expense -- -- 9,511 9,511 Other income -- -- (7,311) (7,311) Provision for income taxes -- -- 899 899 ------------------------------------------------------- Net income (loss) $ 20,736 $ 10,787 $ (27,547) $ 3,976 ======================================================= Depreciation expense $ 1,586 $ 603 $ 207 $ 2,396 ======================================================= Capital expenditures $ 1,671 $ 298 $ 493 $ 2,462 ======================================================= Total assets $ 107,195 $ 56,914 $ 101,861 $ 265,970 ======================================================= United States Germany Other Total ------------------------------------------------------- Net sales $ 53,749 $ 12,046 $ 16,932 $ 82,727 ======================================================= Long-lived assets $ 113,743 $ 4,267 $ 3,576 $ 121,586 =======================================================
7 8 AS OF AND FOR THE QUARTER ENDED MARCH 31, 1999
Professional Multimedia/ Sound and Audio Entertain- Communi- ment cations Corporate Total ---------------------------------------------------------- Net sales $ 49,599 $ 29,811 $ - $ 79,410 Cost of sales 29,621 21,159 - 50,780 ---------------------------------------------------------- Gross profit 19,978 8,652 - 28,630 Operating expenses: Engineering - - 3,738 3,738 Selling, general and administrative - - 18,324 18,324 Corporate charges - - 429 429 Amortization of goodwill and other intangibles - - 691 691 ---------------------------------------------------------- - - 23,182 23,182 ---------------------------------------------------------- Operating profit (loss) 19,978 8,652 (23,182) 5,448 Interest expense - - 9,118 9,118 Other income - - (1,531) (1,531) Provision for income taxes - - 218 218 ---------------------------------------------------------- Net income (loss) $ 19,978 $ 8,652 $ (30,987) $ (2,357) ========================================================== Depreciation expense $ 767 $ 414 $ 1,167 $ 2,348 ========================================================== Capital expenditures $ 939 $ 583 $ 438 $ 1,960 ========================================================== Total assets $ 122,495 $ 46,687 $ 105,274 $ 274,456 ========================================================== United States Germany Other Total ---------------------------------------------------------- Net sales $ 42,387 $ 6,158 $ 30,865 $ 79,410 ========================================================== Long-lived assets $ 126,182 $ 5,024 $ 4,228 $ 135,434 ==========================================================
8 9 7. SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," as revised by SFAS No. 137, must be adopted by Telex no later than January 1, 2001. SFAS No. 133 establishes accounting and reporting standards requiring that every derivative instrument, including certain derivative instruments embedded in other contracts, be recorded on the balance sheet as either an asset or liability measured at its fair value. SFAS No. 133 requires that changes in the derivative's fair value be recognized currently in earnings unless specific hedge criteria are met. Special accounting for qualifying hedges allows a derivative's gains or losses to offset related results on the hedged item in the income statement and requires that a company must formally document, designate and assess the effectiveness of transactions that receive hedge accounting. The Company has not quantified the impacts of adopting SFAS No. 133. 9 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Management's Discussion and Analysis of Financial Condition and Results of Operations, as well as other sections of this report, contains forward-looking statements, including, without limitation, statements relating to the Company's plans, strategies, objectives and expectations, that are based on management's current opinions, beliefs, or expectations as to future results or future events and are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements involve known and unknown risks and uncertainties and the Company's actual results may differ materially from those forward-looking statements. While made in good faith and with a reasonable basis based on information currently available to the Company's management, there is no assurance that such opinions or expectations will be achieved or accomplished. The Company does not undertake to update, revise or correct any of the forward-looking information contained in this document. The following factors, in addition to those discussed elsewhere in this report, are representative of those factors that could affect the future results of the Company, and could cause results to differ materially from those expressed in such forward-looking statements: (i) the timely development and market acceptance of new products; (ii) the financial resources of competitors and the impact of competitive products and pricing; (iii) changes in general and industry specific economic conditions on a national, regional or international basis; (iv) changes in laws and regulations, including changes in accounting standards; (v) the timing of the implementation of changes in operations to effect cost savings; (vi) opportunities that may be presented to and pursued by the Company; (vii) the Company's ability to access external sources of capital; and (viii) such risks and uncertainties as are detailed from time to time in the Company's reports and filings with the SEC. OVERVIEW The Company is a leader in the design, manufacture and marketing of sophisticated audio, wireless and multimedia communications equipment to commercial, professional and industrial customers. The Company provides high value-added communications products designed to meet the specific needs of customers in commercial, professional and industrial markets, and, to a lesser extent, in the retail consumer electronics market. The Company offers a comprehensive range of products worldwide for professional audio systems as well as for multimedia and other communications product markets, including wired and wireless microphones, wired and wireless intercom systems, mixing consoles, signal processors, amplifiers, loudspeaker systems, headphones and headsets, tape duplication products, talking book players, wireless LAN and SBA systems, personal computer speech recognition and speech dictation microphone systems, and hearing aids and wireless assistive listening devices. Its products are used in airports, theaters, sports arenas, concert halls, cinemas, stadiums, convention centers, television and radio broadcast studios, houses of worship and other venues where music or speech is amplified or transmitted, and by professional entertainers, television and radio on-air talent, presenters, airline pilots and the hearing impaired in order to facilitate speech or communications. The Company has two business segments: Professional Sound and Entertainment and Multimedia/Audio Communications. Professional Sound and Entertainment consists of five lines of business within the overall professional audio market: (i) Fixed Installation; (ii) Professional Music Retail; (iii) Concert/Recording/Broadcast; (iv) Broadcast Communications Systems; and (v) Sound Reinforcement. Multimedia/Audio Communications segment targets nine principal product markets: (i) Computer Audio; (ii) Audio Duplication; (iii) Multimedia Presentation/Training; (iv) Aviation Communications/Other Applications; (v) Wireless LAN and SBA Systems; (vi) Talking Book Players; (vii) Wireless Communications; (viii) Hearing Aids; and (ix) Wireless Assistive Listening Systems. The Company maintains assets and/or operations in a number of foreign jurisdictions, the most significant of which are Germany, the United Kingdom, Japan, Singapore, and Hong Kong. In 10 11 addition, the Company conducts business in local currency in many countries, the most significant of which are Germany, the United Kingdom, Japan, Singapore, Hong Kong, Canada, Australia, Switzerland and France. Exposure to U.S. dollar/German mark and U.S. dollar/British pound exchange rate volatility is mitigated to some extent by the Company's ability to source its production needs with existing manufacturing capacity in Germany and the United Kingdom, and the exposure to the U.S. dollar/Japanese yen exchange rate volatility is to some extent mitigated by sourcing products denominated in yen from Japan or through contractual provisions in sales agreements with certain customers. Nevertheless, the Company has a direct and continuing exposure to both positive and negative foreign currency movements. The Company reports the foreign exchange gains or losses on transactions as part of other (income) expense. Gains and losses on translation of foreign currency denominated balance sheets are classified as currency translation adjustments and are included in shareholder's deficit as a component of accumulated comprehensive loss. RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, certain items in the Company's Condensed Consolidated Statements of Operations, in thousands:
Quarter ended -------------------------- March 31, March 31, 2000 1999 -------------------------- Net sales: Professional Sound and Entertainment $ 51,880 $ 49,599 Multimedia/Audio Communications 30,847 29,811 -------- -------- 82,727 79,410 -------- -------- Gross profit: Professional Sound and Entertainment 20,736 19,978 Multimedia/Audio Communications 10,787 8,652 -------- -------- 31,523 28,630 -------- -------- Operating profit 7,075 5,448 Net income (loss) $ 3,976 $ (2,357) ======== ========
QUARTER ENDED MARCH 31, 2000 COMPARED TO QUARTER ENDED MARCH 31, 1999 Net sales. The Company's net sales increased $3.3 million, or 4.2%, from $79.4 million in the quarter ended March 31, 1999 to $82.7 million in the quarter ended March 31, 2000. The Company discontinued several product lines throughout 1999 and early 2000. The Company's net sales, excluding sales of discontinued products in both periods, increased approximately 11%. The increase in net sales, in both the Professional Sound and Entertainment and the Multimedia/Audio Communications segments, is attributed to new products. Net sales in the Company's Professional Sound and Entertainment segment increased $2.3 million, or 4.6%, from $49.6 million in the quarter ended March 31, 1999 to $51.9 million in the quarter ended March 31, 2000. Net sales, excluding sales of discontinued products in both periods, increased approximately 7%. The growth is attributed primarily to newly introduced speakers, amplifiers and consoles, in the last year. Net sales in the Company's Multimedia/Audio Communications segment increased $1.0 million, or 3.5%, from $29.8 million in the quarter ended March 31, 1999 to $30.8 million in the quarter ended March 31, 2000. Net sales, excluding sales of discontinued products in both periods, increased approximately 17%. The growth is attributed primarily to newly introduced computer 11 12 audio products in the last year. Gross profit. The Company's gross profit increased $2.9 million, or 10.1%, from $28.6 million in the quarter ended March 31, 1999 to $31.5 million in the quarter ended March 31, 2000. As a percentage of sales, the gross margin rate in the respective periods increased from 36.1% to 38.1%. The increase in the gross margin rate for the quarter ended March 31, 2000 was attributed mainly to increased sales of high-margin products, selective selling price increases and product cost reductions. Engineering. The Company's engineering expenses decreased $0.2 million, or 5.4% from $3.7 million in the quarter ended March 31, 1999 to $3.5 million in the quarter ended March 31, 2000. Selling, general and administrative. The Company's selling, general and administrative expenses increased $1.7 million, or 9.3%, from $18.3 million in the quarter ended March 31, 1999 to $20.0 million in the quarter ended March 31, 2000. The increase in spending is attributed mainly to inflationary increases, and to increased spending for information technology and advertising and promotion. Corporate charges. Corporate charges of $0.4 million in the quarter ended March 31, 2000 and 1999, respectively, represent fees for consulting and management services provided by Greenwich Street Capital Capital Partners, L.P. ("GSCP") under a management and services agreement. Other income. The Company's other income for the quarter ended March 31, 2000 includes $6.5 million of royalty income attributed to the restructuring of a license agreement to provide a one-time, up-front fee in lieu of future royalties and $1.0 million for the sale of a trademark, offset by $0.2 million of applicable expenses. In the quarter ended March 31, 1999, the Company recognized other income of $1.0 million attributed to the business interruption insurance benefit resulting from a 1998 fire that destroyed the Company's Mishawaka, IN facility and recognized a gain of $0.3 million on $2.0 million of proceeds on the sales of certain vacated facilities. Interest expense. Interest expense increased from $9.1 million in the quarter ended March 31, 1999 to $9.5 million in the quarter ended March 31, 2000. The increase was primarily due to higher interest rates associated with the Company's Senior Secured Credit Facility. 12 13 LIQUIDITY AND CAPITAL RESOURCES At March 31, 2000, the Company had cash and cash equivalents of $2.6 million compared to $3.2 million at December 31, 1999. The Company's principal source of funds in the quarter ended March 31, 2000 consisted of cash generated from financing activities. Net cash provided by financing activities was $1.4 million and net cash provided by operations was $0.5 million. Net cash used in investing activities was $2.5 million. The Company's investing activities consisted mainly of capital expenditures to maintain facilities, acquire machines or tooling, update certain manufacturing processes and improve efficiency. Capital expenditures totaled $2.5 million for the quarter ended March 31, 2000 compared to $2.0 million for the quarter ended March 31, 1999. The Company's ability to make capital expenditures is subject to certain restrictions under its Senior Secured Credit Facility. In the quarter ended March 31, 2000 the Company acquired for $1.7 million a manufacturing facility in Morrilton, Arkansas. The Company expects to reduce manufacturing costs and improve other efficiencies by relocating the manufacturing operations from certain of its existing manufacturing facilities to the Morrilton facility. The Company will recognize restructuring costs related to the closure of these facilities in the second quarter ended June 30, 2000 when plans are expected to be finalized. The Company's consolidated indebtedness increased $1.3 million from $343.9 million at December 31, 1999 to $345.2 million at March 31, 2000. The increase in indebtedness is comprised of increased borrowings under the Company's Revolving Credit Facility, which were partially offset by scheduled principal reductions on the Company's Term Loan Facility and $0.9 million of new debt associated with the acquisition of the Morrilton, Arkansas facility. The Company relies mainly on internally generated funds, and, to the extent necessary, borrowings under the Revolving Credit Facility and foreign working capital lines to meet its liquidity needs. The Company's liquidity needs arise primarily from debt service on indebtedness, working capital needs and capital expenditure requirements. The Company's current credit facilities include the Senior Secured Credit Facility consisting of the Term Loan Facility of $94.1 million, the Revolving Credit Facility, subject to certain borrowing base limitations, of $25.0 million, and foreign working capital lines, subject to certain limitations, of $5.4 million. In certain instances the foreign working capital lines are secured by a lien on foreign real property, leaseholds, accounts receivable and inventory or are guaranteed by another subsidiary. As of March 31, 2000, $9.2 million of the Company's $94.1 million Term Loan Facility is payable in the next 12 months. In addition, the Company had $21.1 million outstanding under the Revolving Credit Facility and $4.0 million outstanding under the foreign working capital lines. Net availability at March 31, 2000 under the Revolving Credit Facility, computed by deducting $3.8 million of open letters of credit and applying applicable borrowing limitations, totaled $0.1 million. Net availability at March 31, 2000 under foreign working lines totaled $1.4 million. Outstanding balances under substantially all of these credit facilities bear interest at floating rates based upon the interest rate option selected by the Company; therefore, the Company's financial condition is and will continue to be affected by changes in the prevailing interest rates. The effective interest rate under these credit facilities in the quarter ended March 31, 2000 was 9.5%. Pursuant to the Term Loan Facility, the Company is required to make permanent principal payments under (i) the $50.0 million Tranche A Term Loan Facility ($32.5 million outstanding at March 31, 2000), in the amount of $6.5 million in the remainder of 2000 and $11.0 million and $15.0 million in 2001 and 2002 (with a final maturity date of November 6, 2002), respectively, and (ii) the 13 14 $65.0 million Tranche B Term Loan Facility ($61.6 million outstanding at March 31, 2000), in the amount of $0.4 million in the remainder of 2000 and $0.5 million, $0.5 million, $24.1 million and $36.1 million in 2001, 2002, 2003 and 2004 (with a final maturity date of November 6, 2004), respectively. In addition, under the terms of the Senior Secured Credit Facility, the Company is required to make mandatory prepayments with (i) certain asset sale proceeds, (ii) any additional indebtedness and equity proceeds (with certain exceptions) and (iii) with 75% of the excess cash flow of the Company and its subsidiaries for each fiscal year commencing on April 1, 1997, and each fiscal year thereafter. In 2000 the Company will not make any payment under the excess cash flow requirements of the Senior Secured Credit Facility. The Company has incurred substantial indebtedness in connection with a series of leveraged transactions. As a result, debt service obligations represent significant liquidity requirements for the Company. The Company intends to improve operations and liquidate nonproductive assets in part to meet the liquidity needs of the debt service and to satisfy the requirements of the debt covenants. The Company's year 2000 operating plan includes strategies to significantly improve operating results by reducing purchased material costs through more effective supply chain management, increasing selling prices on selective products, managing other operating costs to planned levels, reducing inventory through the use of consigned inventory from certain vendors and by consolidating overseas warehouses, and improving the accounts receivable collection experience. In the event the Company is unable to achieve the necessary operating improvements, it could be in default under the terms of its Senior Secured Credit Facility, the EVI Notes and the Telex Notes. In the event the operating improvements are not realized management would consider other strategic alternatives, including the renegotiation of the debt covenants, and the sale of certain operating assets and certain product lines. There can be no assurance that the Company will be successful in achieving the planned operating improvements or executing alternative strategies on terms acceptable to the Company, or that the Company will be able to renegotiate the debt covenants. Additionally, the Company's future performance and its ability to service its obligations will also be subject to future economic conditions and to financial, business and other factors, many of which are beyond the Company's control. While the Company believes that the cash flow enhancements described above, together with the Company's Revolving Credit Facility and cash from operations, will be adequate to meet its debt service and principal payment requirements, capital expenditure needs, and working capital requirements in year 2000, no assurance can be given in this regard. ENVIRONMENTAL MATTERS The Company is a party in a number of environmental enforcement matters and related claims that have arisen in the ordinary course of business. Certain environmental matters are indemnified by Mark IV Industries, Inc. Based upon reliance of this indemnification, the Company believes that such matters and claims, if finally determined in a manner adverse to the Company, whether considered separately or in the aggregate, would not have a material adverse effect on the operating results of financial condition of the Company. The Company believes that compliance with current federal, state and local environmental protection laws and provisions should not have a material adverse effect on the operating income or financial condition of the Company. The assessment of materiality of such environmental matters and claims is based on a gross determination of such charges that could occur and does not give effect to possible third party recoveries. NEW ACCOUNTING STANDARDS SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" as revised by SFAS No. 137, must be adopted by Telex no later than January 1, 2001. SFAS No. 133 establishes accounting and reporting standards requiring that every derivative instrument, including certain derivative instruments embedded in other contracts, be recorded in the balance sheet as either an asset or liability measured at its fair value. The Company has not quantified the impacts of adopting SFAS No. 133. 14 15 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to various market risks, including changes in foreign currency exchange rates and interest rates. Market risk is the potential loss arising from adverse changes in market rates and prices, such as foreign exchange and interest rates. The Company does not enter into derivatives or other financial instruments for trading or speculative purposes. The counterparties to these transactions are major financial institutions. EXCHANGE RATE SENSITIVITY ANALYSIS The Company enters into forward exchange contracts principally to hedge the currency fluctuations in transactions denominated in foreign currencies, thereby limiting the Company's risk that would otherwise result from changes in exchange rates. During the quarter ended March 31, 2000, the principal transactions hedged were certain intercompany balances attributed primarily to intercompany sales. Gains and losses on forward exchange contracts and the offsetting losses and gains on the hedged transactions are reflected in the consolidated statement of operations. At March 31, 2000, the Company had $9.0 million in outstanding forward exchange contracts, with a weighted remaining maturity of 19 days. At March 31, 2000, the difference between the fair value of all outstanding contracts, as estimated by the amount required to enter into offsetting contracts with similar remaining maturities based on quoted prices, and the contract amounts was immaterial. A 10% fluctuation in exchange rates for these currencies would change the fair value by approximately $0.9 million. However, since these contracts hedge foreign currency denominated transactions, any change in the fair value of the contracts would be offset by changes in the underlying value of the transactions being hedged. INTEREST RATE AND DEBT SENSITIVITY ANALYSIS For fixed rate debt, interest rate changes affect the fair market value but do not impact earnings or cash flows. Conversely, for floating rate debt, interest rate changes generally do not affect the fair market value but do impact future earnings and cash flows, assuming other factors are held constant. At March 31, 2000, the Company had fixed rate debt of $225.0 million and floating rate debt of $119.2 million. Holding all other variables constant (such as foreign exchange rates and debt levels), a one-percentage point decrease in interest rates would increase the unrealized fair market value of the $225.0 million fixed rate debt by approximately $7.7 million. The earnings and cash flow impact for the next twelve months resulting from a one-percentage point increase in interest rates on the $119.2 million floating rate debt would be approximately $1.2 million, holding all other variables constant. 15 16 PART II. OTHER INFORMATION ITEM 5. OTHER INFORMATION In April 2000, the Company announced its intention of phasing out production at its Newport and Sevierville, Tennessee manufacturing facilities. The Company will recognize restructuring costs related to the closure of these facilities along with the previously announced closure of the Austin, Texas facility in the second quarter ended June 30, 2000 when plans are expected to be finalized. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 10.1 (a) Restated and Amended Settlement Agreement, dated March 29, 2000, by and between Telex Communications, Inc. and Altec Lansing Technologies, Inc. 10.1 (b) Amendment to Restated and Amended Settlement Agreement, dated April 28, 2000 by and between Telex Communications, Inc. and Altec Lansing Technologies, Inc. 10.2 (a) Restated and Amended Purchase and Sale Agreement, dated March 30, 2000, by and between Telex Communications, Inc. and Altec Lansing Technologies, Inc. 10.2 (b) Amendment to Restated and Amended Purchase and Sale Agreement, dated April 28, 2000 by and between Telex Communications, Inc. and Altec Lansing Technologies, Inc. 27.1 Financial Data Schedule (b) Reports on Form 8-K None. 16 17 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED. TELEX COMMUNICATIONS, INC. Dated: May 15, 2000 By: /s/ Ned C. Jackson ---------------------- --------------------------------- Ned C. Jackson President and Chief Executive Officer TELEX COMMUNICATIONS, INC. Dated: May 15, 2000 By: /s/ Richard J. Pearson ---------------------- ----------------------------------- Richard J. Pearson Vice President and Chief Financial Officer 17 18 TELEX COMMUNICATIONS, INC. FORM 10-Q EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION OF DOCUMENT 10.1 (a) Restated and Amended Settlement Agreement, dated March 29, 2000, by and between Telex Communications, Inc. and Altec Lansing Technologies, Inc. 10.1 (b) Amendment to Restated and Amended Settlement Agreement, dated April 28, 2000 by and between Telex Communications, Inc. and Altec Lansing Technologies, Inc. 10.2 (a) Restated and Amended Purchase and Sale Agreement, dated March 30, 2000, by and between Telex Communications, Inc. and Altec Lansing Technologies, Inc. 10.2 (b) Amendment to Restated and Amended Purchase and Sale Agreement, dated April 28, 2000 by and between Telex Communications, Inc. and Altec Lansing Technologies, Inc. 27.1 Financial Data Schedule 18 EX-10.1(A) 2 RESTATED & AMENDED SETTLEMENT AGREEMENT 3/29/2000 1 EXHIBIT 10.1 (A) RESTATED AND AMENDED SETTLEMENT AGREEMENT EFFECTIVE DATE: March 29, 2000 PARTIES: Telex Communications, Inc. ("Telex") 9600 Aldrich Avenue South Minneapolis, MN 55420 Altec Lansing Technologies, Inc. ("ALTI") Route 6 and 209 Milford, PA 18337 This Restated and Amended Settlement Agreement restates and amends in its entirety that Settlement Agreement by and between the parties executed on or about March 29, 2000, and is effective as if fully executed on the Effective Date set forth above. RECITALS: A. Telex currently owns certain trademarks and trademark registrations in connection with the Altec Lansing brand including the trademark registrations listed on the attached Exhibit A (hereinafter the "Registered Marks"), and common law trademarks in the marks ALTEC, ALTEC LANSING, LANSING, VOICE OF THE HIGHWAY, and VOICE OF THE THEATRE, and numerous designs used in connection with each of the foregoing (hereinafter, such registered and unregistered trademarks being referred to as the "Marks"). B. ALTI holds a license to use the Marks in connection with certain audio products under the terms of a Trademark License Agreement dated November 5, 1985, as amended (the "License Agreement"). C. There exist between the parties disputes regarding their respective rights and obligations under the License Agreement (the "Dispute"). D. The parties desire to resolve the Dispute, without admission of wrongdoing by any party, on the terms and subject to the conditions set forth in this Agreement. AGREEMENTS: NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows (the "Agreement"): ARTICLE 1 -1- 2 SETTLEMENT OF LICENSE DISPUTE 1.1) Settlement of License Dispute. Subject to the terms and conditions of this Agreement, Telex and ALTI agree to settle all outstanding issues between them regarding the Dispute, by payment of certain fees in lieu of all past and future royalties due to Telex under the License Agreement and such other agreements as may be set forth below. 1.2) Effective Date. This Agreement shall become effective upon delivery by ALTI of the wire transfer payment set forth in Section 2.2(b) and the promissory notes described in Sections 2.2(c) and 2.2(d) (the "Effective Date"). In no event shall the Effective Date, which is also hereinafter referred to an the "Closing Date, be a date later than April 30, 2000. ARTICLE 2 SETTLEMENT PAYMENT 2.1) Settlement Price. The Settlement Price ("Settlement Price") shall be equal to Twelve Million Five Hundred Thousand and no/100 Dollars ($12,500,000.00). 2.2) Payment of Settlement Price. The Settlement Price shall be paid as follows: (a) ALTI has, prior to the Effective Date of this Agreement (as defined below), paid to Telex the aggregate sum of Two Million, One Hundred Thirty Seven Thousand, Seven Hundred Twenty Five and 62/100 Dollars ($2,137,725.62). (b) The sum of Six Million Eight Hundred Sixty Two Thousand Two Hundred Seventy Four and 38/100 ($6,862,264.38) (the "Closing Payment") shall be paid on the Closing Date by wire transfer to the account and using the wire transfer instructions set forth in Exhibit 2.2(b)(i); provided, however, that in the event ALTI is unable to obtain the additional financing described in Section 4.4 below, Five Million and no/00 Dollars ($5,000,000) of the Closing Payment shall be paid by ALTI by delivering to Telex a promissory note in the form of Exhibit 2.2(ii)(the "Prior Note"). (c) The sum of Three Million and no/100 Dollars ($3,000,000.00) shall be paid in accordance with the terms and conditions of a promissory note in substantially the form of Exhibit 2.2(c). (d) The balance of the Settlement Price, Five Hundred Thousand and no/100 Dollars ($500,000) shall be paid in full, together with interest accruing at the rate of 8 1/2 percent (8 1/2%) per annum, on March 31, 2005, in accordance with the terms of a promissory note in substantially the form of Exhibit 2.2(d). 2.3) Allocation of Settlement Price. The Settlement Price shall be allocated as payment of all outstanding (accrued and unaccrued, past and future) royalties, and the parties agree to report this transaction for federal and state tax purposes in accordance with the allocation set forth in this Section 2.3. -2- 3 2.4) Security for Promissory Notes. ALTI's performance under the Prior Note described in Sections 2.2(b) shall be secured by a security agreement granting Telex a lien on ALTI's interest in the Marks on the terms set forth on Exhibit 2.4(a) (the "Prior Security Agreement"). Telex's rights in the Marks will be subordinate in lien and subordinate in payment to the holder of the first lien on the Marks, namely, ALTI's Lender's first priority security interest in the Marks. ALTI's performance under the promissory notes described in Sections 2.2(c) and (d) (the "Subordinate Promissory Notes") shall be secured by a security agreement granting Telex a lien on ALTI's interest in the Marks on the terms set forth on Exhibit 2.4(b) (the "Subordinate Security Agreement"). The Subordinate Security Interest shall be subordinate only to the rights of ALTI's Lender and which shall include such additional subordination, inter-creditor and forbearance provisions as are typically required in such transactions by ALTI's Lender. Telex agrees to execute a subordination agreement (the "Subordination Agreement") evidencing the subordination of its prior security interest and subordinate security interest and the limitation of its remedies thereunder as ALTI's Lender may require, provided that the terms of such documents are typical of those required in similar transactions by ALTI's Lender. ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF TELEX Telex makes the following representations and warranties to ALTI with the intention that ALTI may rely upon the same and acknowledges that the same shall be true as of the Effective Date and shall survive the Effective Date of this transaction: 3.1) Organization. Telex is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has all requisite power and authority corporate and otherwise, to own its properties and assets and to conduct its business. 3.2) Corporate Authority. Telex has all requisite power and authority to execute, perform and carry out the provisions of this Agreement. Telex has taken all requisite corporate action authorizing and empowering Telex to enter into this Agreement and to consummate the transaction contemplated herein. 3.3) Binding Obligation. This Agreement and the documents executed in connection herewith, constitute the legal, valid and binding obligation of Telex enforceable against it in accordance with their terms. ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF ALTI ALTI makes the following representations and warranties to Telex, with the intention that Telex may rely upon the same and acknowledges that the same shall be true as of the Effective Date and shall survive the Effective Date of this transaction: -3- 4 4.1) Organization. ALTI is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania and has all requisite power and authority, corporate and otherwise to own its properties and assets and to conduct its business. 4.2) Corporate Authority. ALTI has all requisite power and authority to execute, perform and carry out the provisions of this Agreement. ALTI has taken all requisite corporate action authorized and empowering ALTI to enter into this Agreement and to consummate the transactions contemplated hereby. 4.3) Binding Obligation. This Agreement and the documents executed in connection herewith constitute the legal, valid, and binding obligation of ALTI enforceable against it in accordance with their terms. 4.4) Best Efforts to Obtain Financing. ALTI has and will continue to use its best efforts to locate at least $5,000,000 of additional financing, secured primarily by a first priority lien on the Marks in favor of ALTI's Lender to enable it to perform its obligations under this agreement on terms customarily available for borrowers of similar credit worthiness. In the event that ALTI has not obtained such financing on or before the Closing Date, ALTI shall continue to use its best efforts after the Closing Date to obtain replacement financing to pay to Telex the unpaid balance of the Prior Note. ARTICLE 5 CONDITIONS OF TELEX'S OBLIGATIONS The obligations of Telex to close the transaction contemplated by this Agreement shall be subject to the observance or performance of the following conditions on or before the Effective Date: 5.1) Truth of Representations and Warranties. The representations and warranties of ALTI set forth in Article 4 herein shall continue to be true and correct on the Effective Date as though made on such date. 5.2) Performance of Obligations. ALTI shall have duly performed and complied with all agreements and conditions required in this Agreement to be performed or complied with by ALTI prior to or as of the Effective Date, shall be ready, willing, and able to perform its duties hereunder on or before the Effective Date, and shall have so advised Telex. ARTICLE 6 CONDITIONS OF ALTI'S OBLIGATIONS The obligations of ALTI to close the transaction contemplated by this Agreement shall be subject to the observance or the performance of the following conditions on or before the Effective Date: -4- 5 6.1) Truth of Representations and Warranties. Telex's representations and warranties set forth in Article 3 herein shall continue to be true and correct on the Effective Date as though made on such date. 6.2) Performance of Obligations. Telex shall have performed and complied with all agreements and conditions required by this Agreement to be performed or complied with by Telex prior to or as of the Effective Date, shall be ready, willing, and able to perform its duties hereunder on or before the Effective Date, and shall have so advised ALTI. ARTICLE 7 DOCUMENTS DELIVERED ON OR BEFORE THE EFFECTIVE DATE 7.1) Documents Delivered by Telex. On or before the Effective Date, Telex shall deliver to ALTI the following documents, duly executed as appropriate: (a) Certificate of Good Standing for Telex from the State of Delaware dated no earlier than twenty-five (25) days prior to the Effective Date. (b) Certified copies of corporate resolutions of Telex authorizing it to enter into the transactions contemplated herein. (c) A Mutual General Release in the form of Exhibit 7. (d) Such other documents as ALTI may reasonably request for the purpose of assigning, transferring, granting, conveying and confirming to ALTI or reducing to its possession, any and all assets, property, and rights to be conveyed and transferred by this Agreement. 7.2) Documents Delivered by ALTI. On or before the Effective Date, ALTI shall deliver to Telex the following documents, duly executed as appropriate: (a) Certificate of Good Standing for ALTI from the Commonwealth of Pennsylvania dated no earlier than twenty-five (25) days prior to the Effective Date. (b) Certified copy of corporate resolutions of ALTI authorizing it to enter into the transactions as contemplated herein. (c) The Subordinate Promissory Notes, and if applicable the Prior Note. (d) The Subordinate Security Agreement, and if applicable the Prior Security Agreement. (e) A Mutual General Release in the form of Exhibit 7. -5- 6 (f) Such other documents as Telex may reasonably request to carry out the transaction contemplated under this Agreement. 7.3) Further Documents and Assurances. At any time and from time to time after the Effective Date, each party shall, upon the request of another party, execute, acknowledge, and deliver all such further and other assurances and documents, and will take such action consistent with the terms of this Agreement as may be reasonably requested to carry out the transactions contemplated herein and to permit each party to enjoy its rights and benefits hereunder. ARTICLE 8 INDEMNIFICATION 8.1) Indemnification by Telex. Telex shall indemnify and hold ALTI harmless from and against all losses or damages suffered by ALTI, including reasonable attorneys' fees and disbursements, which arise out of, relate to, pertain to or concern any misrepresentation by Telex or any breach of Telex's warranties and representations hereunder, or any breach, nonfulfillment or nonperformance by Telex of any of Telex's covenants, duties or obligations hereunder, or any claim, demand, action or proceeding asserted by a creditor of Telex. 8.2) Indemnification by ALTI. ALTI shall indemnify and hold Telex harmless from and against all losses or damages suffered by Telex (including reasonable attorneys' fees and disbursements) which arise out of, relate to, pertain to or concern any misrepresentation by ALTI, or any breach of ALTI's warranties and representations hereunder, or any breach, nonfulfillment or nonperformance by ALTI of any of ALTI's covenants, duties or obligations hereunder. ARTICLE 9 CONFIDENTIALITY 9.1) Admission of Wrongdoing. This Agreement is being entered into without any admission of wrongdoing by any party. 9.2) Confidentiality. The parties hereby expressly agree to maintain the confidentiality of the terms and conditions of this Agreement, and not to divulge or reveal any of the terms herein to any third party, except to ALTI's Lender and as may be reasonably necessary for tax and/or securities reporting purposes, for purposes of recording the transfer and assignment of the Marks, or as may be otherwise required by law or order of any court of competent jurisdiction. Notwithstanding the foregoing, Telex may reveal the existence of this Agreement to third parties as necessary to advise such third parties of the fact that Telex will be phasing out of its use of the Marks, that Telex's products will begin to be marketed under different brands, and that ALTI may begin selling Professional Audio Products using the Marks at some point. In the event a party is compelled to divulge the terms of this Agreement by legal process, the party shall promptly notify the other party, and the parties agree to cooperate with each other in any effort to obtain an order from the court preventing or limiting the disclosure. -6- 7 9.3) Enforcement. The foregoing notwithstanding, the parties recognize and agree that they may use and/or disclose the terms of this Agreement to any court of competent jurisdiction in connection with any action for the interpretation or enforcement of any provision or term set forth herein. 9.4) Registration and Recording. Nothing in this Agreement shall preclude either party from applying for, maintaining the registration of, or recording any rights or interests in or to any rights, including the intellectual property rights, being transferred under this Agreement. ARTICLE 10 GENERAL PROVISIONS 10.1) Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed to have been given, when received, if personally delivered, faxed during business hours (or if faxed after the close of business, receipt shall be deemed to occur on the next business day) or delivered by nationally recognized overnight courier service, and three (3) business days after deposit or when actually received, whichever occurs first, if placed in the U.S. mail for delivery by registered or certified mail, return receipt requested, postage prepaid addressed as follows: (a) To Telex at: Telex Communications, Inc. 9600 Aldrich Avenue South Minneapolis, MN 55420 Attention: President and Attention: General Counsel With a copy to: Ann M. Ladd Fredrikson & Byron, P.A. 1100 International Centre 900 Second Avenue South Minneapolis, MN 55402 (b) To ALTI at: Altec Lansing Technologies, Inc. Route 6 and 209 Milford, PA 18337 Attention: President -7- 8 With a copy to: Adam B. Landa Graham & James LLP 885 Third Avenue, 21st Floor New York, NY 10022-4834 Addresses may be changed by written notice given pursuant to this Section. 10.2) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their successors and assigns. 10.3) Headings. The descriptive headings of the several articles and sections of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. 10.4) Expenses. Each party hereto shall each bear and pay for its own cost and expenses incurred by it or on its behalf in connection with the transactions contemplated hereby, including, without limitation, all fees and disbursements of accountants and attorneys. 10.5) Entire Agreement Modification and Waiver. This Agreement, together with the Exhibits and the related written agreements specifically referred to herein, represents the only agreement among the parties concerning the subject matter hereof and supersedes all prior agreements, whether written or oral, relating thereto. No purported amendment, modification or waiver of any provision hereof shall be binding unless set forth in a written document signed by all parties (in the case of amendments or modifications) or by the party to be charged thereby (in the case of waivers). Any waiver shall be limited to the provision thereof and the circumstance or events specifically made subject thereto and shall not be deemed a waiver of any other term hereof or of the same circumstance or event of any recurrence thereof. 10.6) Severability. If any provision of this Agreement or its application to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of the provisions to other persons or circumstances shall not be affected thereby, and this Agreement shall be enforced to the greatest extent permitted by law. 10.7) Governing Law. This Agreement and the legal relations between the parties shall be governed by and construed in accordance with the laws of the State of Minnesota. 10.8) Admission of Wrongdoing. This Agreement is being entered into without any admission of wrongdoing by any party. 10.9) Counterparts. These Agreement may be executed with counterpart signatures. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in the manner appropriate to each, all as of the day and year first above written. -8- 9 TELEX COMMUNICATIONS, INC. By: /s/ Scott Myers ---------------------------- Name: Scott Myers --------------------------- Title: Vice President -------------------------- ALTEC LANSING TECHNOLOGIES, INC. By: /s/ Edward Anchel ---------------------------- Name: Edward Anchel --------------------------- Title: President and CEO ------------------------- -9- 10 EXHIBIT A
- ------------------------------------------ ------------------------------ ---------------------------- --------------- Mark Registration Number Country Issue Date - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 1380268 Argentina 4/30/90 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC A200324 Australia 2/17/66 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 58120 Austria 9/29/66 - ----------------------------------------- ------------------------------ ---------------------------- --------------- ALTEC 60565 Greece 2/10/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 88484 Hong Kong 11/21/79 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 103227 Mexico 7/13/66 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 132011 Sweden 7/10/70 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 354145 Switzerland 2/10/87 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 101768 Turkey 4/20/97 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 890602 United Kingdom 7/16/67 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 860,432 United States 11/19/68 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 534,754 United States 12/12/50 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING A348153 Australia 7/7/80 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 335509 Benelux 6/17/75 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 7033885 Brazil 12/10/89 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 216049 Canada 9/17/76 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 369189 Chile 5/28/81 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 351185 Chile 1/17/90 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 9900147973 (App. No.) China - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 6041979 Denmark 2/23/79 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 78861 Finland 9/21/81 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 1309979 France 4/25/95 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 947128 Germany 7/22/76 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 25501982 Hong Kong 7/6/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 429736 Indonesia 6/29/99 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 95565 Ireland 7/26/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 46192 Israel 7/6/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 639074 Italy 12/12/94 - ----------------------------------------- ------------------------------ ---------------------------- --------------- ALTEC LANSING 1354774 Japan 10/31/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING M79979 Malaysia 9/26/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 197420 Mexico 9/8/76 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 124571 New Zealand 7/26/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 104142 Norway 1/24/80 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 103459 (App. No.) Pakistan - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 14479 Peru 3/30/95 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 63938 Singapore 4/12/75 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 783660 South Africa 7/31/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 56392 South Korea 6/27/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 787240 Spain 5/24/77 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 87020 Taiwan 1/1/77 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 1040220 United Kingdom 12/9/76 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 2,113,891 United States 11/18/97 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 308193 Uruguay 11/25/98 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 83520F Venezuela 12/8/76 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING & DESIGN 45563 Philippines 6/30/89 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING & DESIGN TM66711 Thailand 12/25/97 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING & DESIGN 1,041,673 United States 6/22/76 - ------------------------------------------ ------------------------------ ---------------------------- --------------- LANSING 2,106,856 United States 10/21/97 - ------------------------------------------ ------------------------------ ---------------------------- --------------- VOICE OF THE HIGHWAY 1,172,997 United States 10/13/81 - ------------------------------------------ ------------------------------ ---------------------------- --------------- VOICE OF THE THEATRE 964642 Japan 5/31/72 - ------------------------------------------ ------------------------------ ---------------------------- ---------------
11 Exhibit 2.2(b)(i) Wire transfer instructions. US Bank S.W.I.F.T. # USBKUS44 Acct.: # 1702-2514-0525 Attn.: Telex Communications, Inc. ABA Routing # 091000022 12 Exhibit 2.2.b(ii) PROMISSORY NOTE $5,000,000 April ___, 2000 FOR VALUE RECEIVED, ALTEC LANSING TECHNOLOGIES, INC., A PENNSYLVANIA CORPORATION (the "Borrower") promises to pay to the order of TELEX COMMUNICATIONS, INC., A DELAWARE CORPORATION, or its successors or assigns (the "Holder"), at its office in Minneapolis, Minnesota or at such other place as may be designated from time to time by the Holder, in lawful money of the United States of America, the principal sum of Five Million and no/100 Dollars ($5,000,000), together with interest on the unpaid principal balance hereof, from the date hereof until this Promissory Note (the "Note") is fully paid, at an annual rate as set forth below, calculated on the basis of the actual number of days elapsed in a 360-day year. Payment Terms. (a) The Borrower shall pay the principal amount of this Note in full, with accrued interest, in sixteen consecutive quarterly installments, commencing on July 31, 2000, and continuing quarterly thereafter through and including April 30, 2004. The amount of each quarterly payment shall be equal to Three Hundred Twelve Thousand, Five Hundred and no/00 Dollars ($312,500), plus the accrued interest on the unpaid principal balance at the interest rate set forth below. (b) The unpaid principal balance of this Note shall accrue interest at the following rates: May 1, 2000-July 31, 2000 8.5% August 1, 2000-October 31, 2000 8.75% November 1, 2000-January 31, 2001 9.00% February 1, 2001-April 30, 2001 9.25% May 1, 2001-July 31, 2001 9.5% August 1, 2001-October 31, 2001 9.75% November 1, 2001-January 31, 2002 10.00% February 1, 2002-April 30, 2002 10.25% May 1, 2002-July 31, 2002 10.5% August 1, 2002-October 31, 2002 10.75% November 1, 2002-January 31, 2003 11.00% February 1, 2003-April 30, 2003 11.25% May 1, 2003-July 31, 2003 11.5% August 1, 2003-October 31, 2003 11.75% November 1, 2003-January 31, 2004 12.00% February 1, 2004-April 30, 2004 12.25% 1 13 (c) Each quarterly payment shall be made by wire transfer and in accordance with the instructions provided by the Holder, unless the Holder agrees in writing to another method of payment. Prepayment. This Note may be prepaid in whole or in part at any time or from time to time without penalty or premium. Application of Payments. Payments hereunder shall be applied first to the payment of accrued interest and then to reduction of principal. Events of Default. The continuation of any one or more of the following events for a seven day period following notice to the Borrower shall constitute an Event of Default: (a) The Borrower shall fail to make when due, whether by acceleration or otherwise, any payment of principal of, or interest on, any indebtedness of the Borrower to the Holder within ten (10) days after the due date of the payment; (b) The Borrower shall materially fail to comply with any other agreement, covenant, condition, provision or term contained in (i) this Note, and any other promissory note delivered by Borrower to Holder, (ii) that certain Settlement Agreement dated March 29, 2000 by and between Borrower and Holder; (iii) that certain Purchase and Sale Agreement dated March 30, 2000 by and between Borrower and Holder, or (iv) that certain Trademark Collateral Assignment and Security Agreement dated April __, 2000 by and between Borrower and Holder, and such failure to comply shall continue for thirty (30) days following notice; (c) An Act of Bankruptcy shall occur with respect to the Borrower. As used herein, an "Act of Bankruptcy" shall be deemed to have occurred with respect to Borrower if: (1) Borrower becomes insolvent; (2) Borrower applies for or consents to the appointment of, or the taking of possession by, a receiver, custodian, trustee, liquidator or the like of Borrower or of all or a substantial part of the Borrower's property; (3) Borrower commences a voluntary case under any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceeding under the laws of any jurisdiction; (4) Borrower files a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts; (5) Borrower admits in writing its inability to pay its debts as they mature; or (6) Borrower makes an assignment for the benefit of its creditors; or 2 14 (d) A "Change in Control" shall have occurred with respect to Borrower. For purposes of this Section, "Change in Control" means the occurrence of any of the following events: (i) the initial public offering of the Borrower's voting stock; (ii) acquisition by any person, entity or group of 35% or more of the combined voting power of the Borrower's then outstanding voting securities; or (iii) more than 65% of the value of the assets of the Borrower are voluntarily or involuntarily transferred. Remedies. If any Event of Default shall occur with respect to the Borrower, the outstanding unpaid principal and any accrued and unpaid interest shall automatically become due and payable immediately. In addition, upon any Event of Default, the Holder may exercise all rights and remedies under any other instrument, document or agreement in favor of the Holder, and enforce all rights and remedies under any applicable law, including without limitation the rights and remedies available upon default to a secured party under the Uniform Commercial Code as adopted in the State of Minnesota, including, without limitation, the right to take possession of any collateral, or any evidence thereof, proceeding without judicial process or by judicial process (without a prior hearing or notice thereof, which the Borrower hereby expressly waives) and the right to sell, lease or otherwise dispose of any or all of any collateral, and, in connection therewith, the Borrower will on demand assemble any collateral and make it available to the Holder at a place to be designated by the Holder which is reasonably convenient to both parties. No Waiver. No delay or failure on the part of the Holder in exercising any right or remedy hereunder, or at law or at equity, shall operate as a waiver of or preclude the exercise of any such right or remedy, and no single or partial exercise by the Holder of any such right or remedy shall preclude or estop another or further exercise thereof or exercise of any other right or remedy. No waiver by the Holder hereof shall be effective unless in writing signed by the Holder. A waiver on any one occasion shall not be construed as a waiver of any such right or remedy on any prior or subsequent occasion. Costs of Collection. The Borrower agrees to pay all costs of collection, including attorneys' fees, in the event that any amount under this Note is not paid when due. Miscellaneous. (a) Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed to have been given, when received, if personally delivered, faxed during business hours or delivered by nationally recognized overnight courier service, and three (3) business days after deposit or when actually received, whichever occurs 3 15 first, if placed in the U.S. mail for delivery by registered or certified mail, return receipt requested, postage prepaid addressed as follows: (i) To Secured Party at: Telex Communications, Inc. 9600 Aldrich Avenue South Minneapolis, MN 55420 Attention: President and Attention: General Counsel With a copy to Ann M. Ladd Fredrikson & Byron, P.A. 1100 International Centre 900 Second Avenue South Minneapolis, MN 55402 (ii) To Borrower at: Altec Lansing Technologies, Inc. Route 6 and 209 Milford, PA 18337 Attention: President With a copy to Adam B. Landa, Esq. Graham & James LLP 885 Third Avenue 21 New York, NY 10022 Addresses may be changed by written notice given pursuant to this Section. (b) This Note is being delivered in, and shall be governed by the laws of, the State of Minnesota. Presentment or other demand for payment, notice of dishonor and protest are expressly waived. 4 16 (c) The Holder will not transfer this Note to any entity which may be considered a competitor of the Borrower. ALTEC LANSING TECHNOLOGIES, INC. By -------------------------------------- Name ------------------------------------ Title ------------------------------------ 5 17 Exhibit 2.2.c PROMISSORY NOTE $3,000,000 April ___, 2000 FOR VALUE RECEIVED, ALTEC LANSING TECHNOLOGIES, INC., A PENNSYLVANIA CORPORATION (the "Borrower") promises to pay to the order of TELEX COMMUNICATIONS, INC., A DELAWARE CORPORATION, or its successors or assigns (the "Holder"), at its office in Minneapolis, Minnesota or at such other place as may be designated from time to time by the Holder, in lawful money of the United States of America, the principal sum of Three Million and no/100 Dollars ($3,000,000), together with interest on the unpaid principal balance hereof, from the date hereof until this Promissory Note (the "Note") is fully paid, at an annual rate equal to eight and one-half percent (8.5%), calculated on the basis of the actual number of days elapsed in a 360-day year. Payment Terms. (a) The Borrower shall pay the principal amount of this Note in full, with accrued interest, in twelve consecutive quarterly installments, commencing on the earlier of the date hereof or April 30, 2000, with the second installment due and payable June 30, 2000, and continuing quarterly thereafter through and including December 31, 2002. The amount of each quarterly payment shall be equal to the accrued interest on the unpaid principal balance, plus a sum equal to $250,000, subject to the provisions of subsection (b) below. (b) The Borrower shall have the right to pay less than $250,000 in principal in up to two quarters of each of the three years of the term of this Note. In no event, shall any unpaid quarterly payment be less than a sum equal to $200,000 plus the accrued interest on the principal balance. (c) If the Borrower elects to pay less than $250,000 of principal in any quarter, interest shall accrue on the entire unpaid principal balance at a rate of eleven percent (11%) per annum (the "Default Rate") from the first day of the quarter in which the Borrower exercises the election until such time as the Borrower makes additional principal payment(s) equal to such principal payments as would have been made by Borrower had it not exercised its right to pay less than $250,000 in each quarter as provided in subsection (b). (d) Notwithstanding the provisions of subsection (b) above, the entire unpaid principal balance, plus all accrued and unpaid interest, including any Default Rate Interest, shall be due and payable on December 31, 2002. 1 18 (e) Each quarterly payment shall be made by wire transfer and in accordance with the instructions provided by the Holder, unless the Holder agrees in writing to another method of payment. Prepayment. This Note may be prepaid in whole or in part at any time or from time to time without penalty or premium. Application of Payments. Payments hereunder shall be applied first to the payment of accrued interest and then to reduction of principal. Events of Default. The continuation of any one or more of the following events for a seven day period following notice to the Borrower shall constitute an Event of Default: (a) The Borrower shall fail to make when due, whether by acceleration or otherwise, any payment of principal of, or interest on, any indebtedness of the Borrower to the Holder within ten (10) days after the due date of the payment; (b) The Borrower shall materially fail to comply with any other agreement, covenant, condition, provision or term contained in (i) this Note, and any other promissory note delivered by Borrower to Holder, (ii) that certain Settlement Agreement dated March 29, 2000 by and between Borrower and Holder, (iii) that certain Purchase and Sale Agreement dated March 30, 2000 by and between Borrower and Holder, or (iv) that certain Trademark Collateral Assignment and Security Agreement dated April ,2000 by and between Borrower and Holder, and such failure to comply shall continue for thirty (30) days following notice; (c) An Act of Bankruptcy shall occur with respect to the Borrower. As used herein, an "Act of Bankruptcy" shall be deemed to have occurred with respect to Borrower if: (1) Borrower becomes insolvent; (2) Borrower applies for or consents to the appointment of, or the taking of possession by, a receiver, custodian, trustee, liquidator or the like of Borrower or of all or a substantial part of the Borrower's property; (3) Borrower commences a voluntary case under any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceeding under the laws of any jurisdiction; (4) Borrower files a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts; (5) Borrower admits in writing its inability to pay its debts as they mature; or (6) Borrower makes an assignment for the benefit of its creditors; or 2 19 (d) A "Change in Control" shall have occurred with respect to Borrower. For purposes of this Section, "Change in Control" means the occurrence of any of the following events: (i) the initial public offering of the Borrower's voting stock; (ii) acquisition by any person, entity or group of 35% or more of the combined voting power of the Borrower's then outstanding voting securities; or (iii) more than 65% of the value of the assets of the Borrower are voluntarily or involuntarily transferred. Remedies. If any Event of Default shall occur with respect to the Borrower, the outstanding unpaid principal and any accrued and unpaid interest shall automatically become due and payable immediately. In addition, upon any Event of Default, the Holder may exercise all rights and remedies under any other instrument, document or agreement in favor of the Holder, and enforce all rights and remedies under any applicable law, including without limitation the rights and remedies available upon default to a secured party under the Uniform Commercial Code as adopted in the State of Minnesota, including, without limitation, the right to take possession of any collateral, or any evidence thereof, proceeding without judicial process or by judicial process (without a prior hearing or notice thereof, which the Borrower hereby expressly waives) and the right to sell, lease or otherwise dispose of any or all of any collateral, and, in connection therewith, the Borrower will on demand assemble any collateral and make it available to the Holder at a place to be designated by the Holder which is reasonably convenient to both parties. No Waiver. No delay or failure on the part of the Holder in exercising any right or remedy hereunder, or at law or at equity, shall operate as a waiver of or preclude the exercise of any such right or remedy, and no single or partial exercise by the Holder of any such right or remedy shall preclude or estop another or further exercise thereof or exercise of any other right or remedy. No waiver by the Holder hereof shall be effective unless in writing signed by the Holder. A waiver on any one occasion shall not be construed as a waiver of any such right or remedy on any prior or subsequent occasion. Costs of Collection. The Borrower agrees to pay all costs of collection, including attorneys' fees, in the event that any amount under this Note is not paid when due. Miscellaneous. (a) Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed to have been given, when received, if personally delivered, faxed during business hours or delivered by nationally recognized overnight courier service, and three (3) business days after deposit or when actually received, whichever occurs first, if placed in the U.S. mail for delivery by registered or certified mail, return receipt requested, postage prepaid addressed as follows: 3 20 (i) To Secured Party at: Telex Communications, Inc. 9600 Aldrich Avenue South Minneapolis, MN 55420 Attention: President and Attention: General Counsel With a copy to Ann M. Ladd Fredrikson & Byron, P.A. 1100 International Centre 900 Second Avenue South Minneapolis, MN 55402 (ii) To Borrower at: Altec Lansing Technologies, Inc. Route 6 and 209 Milford, PA 18337 Attention: President With a copy to Adam B. Landa, Esq. Graham & James LLP 885 Third Avenue 21 New York, NY 10022 Addresses may be changed by written notice given pursuant to this Section. (b) This Note is being delivered in, and shall be governed by the laws of, the State of Minnesota. Presentment or other demand for payment, notice of dishonor and protest are expressly waived. 4 21 (c) The Holder will not transfer this Note to any entity which may be considered a competitor of the Borrower. ALTEC LANSING TECHNOLOGIES, INC. By --------------------------------------- Name ------------------------------------- Title ------------------------------------ 5 22 Exhibit 2.2(d) PROMISSORY NOTE $500,000 April ___, 2000 FOR VALUE RECEIVED, ALTEC LANSING TECHNOLOGIES, INC., A PENNSYLVANIA CORPORATION (the "Borrower") promises to pay to the order of TELEX COMMUNICATIONS, INC., A DELAWARE CORPORATION, or its successors or assigns (the "Holder"), at its office in Minneapolis, Minnesota or at such other place as may be designated from time to time by the Holder, in lawful money of the United States of America, the principal sum of Five Hundred Thousand and no/100 Dollars ($500,000), together with interest on the unpaid principal balance hereof, from the date hereof until this Promissory Note (the "Note") is fully paid, at an annual rate equal to eight and one-half percent (8.5%), calculated on the basis of the actual number of days elapsed in a 360-day year. Payment Terms. The principal amount of this Note and interest thereon shall be paid in full on April 30, 2005, and shall be made by wire transfer in accordance with the instructions provided by the Holder, unless the Holder agrees in writing to another method of payment. Prepayment. This Note may be prepaid in whole or in part at any time or from time to time without penalty or premium. Application of Payments. Payments hereunder shall be applied first to the payment of accrued interest and then to reduction of principal. Events of Default. The continuation of any one or more of the following events for a seven day period following notice to the Borrower shall constitute an Event of Default: (a) The Borrower shall fail to make when due, whether by acceleration or otherwise, any payment of principal of, or interest on, any indebtedness of the Borrower to the Holder within ten (10) days after the due date of the payment; (b) The Borrower shall materially fail to comply with any other agreement, covenant, condition, provision or term contained in (i) this Note and any other promissory note delivered by the Borrower to the Holder, (ii) that certain Settlement Agreement 1 23 dated March 29, 2000 by and between Borrower and Holder, (iii) that certain Purchase and Sale Agreement dated March 30, 2000 by and between Borrower and Holder, or (iv) that certain Trademark Collateral Assignment and Security Agreement dated April __, 2000 by and between Borrower and Holder, and such failure to comply shall continue for thirty (30) days; (c) An Act of Bankruptcy shall occur with respect to the Borrower. As used herein, an "Act of Bankruptcy" shall be deemed to have occurred with respect to Borrower if: (1) Borrower becomes insolvent; (2) Borrower applies for or consents to the appointment of, or the taking of possession by, a receiver, custodian, trustee, liquidator or the like of Borrower or of all or a substantial part of the Borrower's property; (3) Borrower commences a voluntary case under any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceeding under the laws of any jurisdiction; (4) Borrower files a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts; (5) Borrower admits in writing its inability to pay its debts as they mature; or (6) Borrower makes an assignment for the benefit of its creditors; or (d) A "Change in Control" shall have occurred with respect to Borrower. For purposes of this Section, "Change in Control" means the occurrence of any of the following events: (i) the initial public offering of the Borrower's voting stock; (ii) acquisition by any person, entity or group of 35% or more of the combined voting power of the Borrower's then outstanding voting securities; or (iii) more than 65% of the value of the assets of the Borrower are voluntarily or involuntarily transferred. Remedies. If any Event of Default shall occur with respect to the Borrower, the outstanding unpaid Loan Amount shall automatically become due and payable immediately. In addition, upon any Event of Default, the Holder may exercise all rights and remedies under any other instrument, document or agreement in favor of the Holder, and enforce all rights and remedies under any applicable law, including without limitation the rights and remedies available upon default to a secured party under the Uniform Commercial Code as adopted in the State of Minnesota, including, without limitation, the right to take possession of any collateral, or any evidence thereof, proceeding without judicial process or by judicial process (without a prior hearing or notice thereof, which the Borrower hereby expressly waives) and the right to sell, lease or otherwise dispose of any or all of any collateral, and, in connection therewith, the Borrower will on demand assemble any collateral and make it available to the Holder at a place to be designated by the Holder which is reasonably convenient to both parties. No Waiver. No delay or failure on the part of the Holder in exercising any right or remedy hereunder, or at law or at equity, shall operate as a waiver of or preclude the exercise of any such right or remedy, and no single or partial exercise by the Holder of any such right or remedy shall 2 24 preclude or estop another or further exercise thereof or exercise of any other right or remedy. No waiver by the Holder hereof shall be effective unless in writing signed by the Holder. A waiver on any one occasion shall not be construed as a waiver of any such right or remedy on any prior or subsequent occasion. Costs of Collection. The Borrower agrees to pay all costs of collection, including attorneys' fees, in the event that any amount under this Note is not paid when due. Miscellaneous. (a) Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed to have been given, when received, if personally delivered, faxed during business hours or delivered by nationally recognized overnight courier service, and three (3) business days after deposit or when actually received, whichever occurs first, if placed in the U.S. mail for delivery by registered or certified mail, return receipt requested, postage prepaid addressed as follows: (i) To Secured Party at: Telex Communications, Inc. 9600 Aldrich Avenue South Minneapolis, MN 55420 Attention: President With a copy to Ann Ladd Fredrikson & Byron, P.A. 1100 International Centre 900 Second Avenue South Minneapolis, MN 55402 (ii) To Debtor at: Altec Lansing Technologies, Inc. Route 6 and 209 Milford, PA 18337 Attention: President 3 25 With a copy to Adam B. Landa, Esq. Graham & James LLP 885 Third Avenue 21 New York, NY 10022 Addresses may be changed by written notice given pursuant to this Section. (b) This Note is being delivered in, and shall be governed by the laws of, the State of Minnesota. Presentment or other demand for payment, notice of dishonor and protest are expressly waived. (c) The Holder will not transfer this Note to any entity which may be considered a competitor of the Borrower. ALTEC LANSING TECHNOLOGIES, INC. By -------------------------------------- Name ----------------------------------- Title ----------------------------------- 4 26 Exhibit 2.4(a) TRADEMARK COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT DATE: April __, 2000 ("Effective Date") PARTIES: Telex Communications, Inc. ("Secured Party") 9600 Aldrich Avenue South Minneapolis, MN 55420 Altec Lansing Technologies, Inc. ("Debtor") Route 6 and 209 Milford, PA 18337 RECITALS: A. Debtor is the owner of all right, title and interest in and to certain trademarks and trademark registrations in connection with the Altec Lansing brand including the trademark registrations listed on the attached Exhibit A (hereinafter the "Registered Marks"), and common law trademarks in the marks ALTEC, ALTEC LANSING, LANSING, VOICE OF THE HIGHWAY, and VOICE OF THE THEATRE, and numerous designs used in connection with the foregoing (hereinafter, such registered and unregistered trademarks being referred to as the "Marks"), subject to a license granted to Telex Communications, Inc. B. Secured Party and Debtor have entered into a financing arrangements pursuant to which Secured Party has made loans and advances and provided other financial accommodations to Debtor as set forth in that certain promissory note, dated of even date herewith, made by Debtor in favor of Secured Party in the original principal amount of Five Million and no/00 Dollars ($5,000,000)(as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, the "Promissory Note") and other agreements, documents and instruments referred to therein or at any time executed and/or delivered in connection therewith or related thereto, including, but not limited to, this Agreement; and E. To induce Secured Party to accept the Promissory Note and provide financial accommodations to Debtor pursuant thereto, Debtor has agreed to grant to Secured Party certain collateral security as set forth herein. 1 27 AGREEMENTS: NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows (the "Agreement"): 1. GRANT OF SECURITY INTEREST As collateral security for the prompt performance, observance and indefeasible payment in full of all of the Obligations (as hereinafter defined), Debtor hereby grants to Secured Party a lien and security interest upon, and a conditional assignment of, the following (being collectively referred to herein as the "Collateral"): (a) all of Debtor's now existing or hereafter acquired right, title, and interest in and to the Marks, together with all rights and privileges arising under applicable law with respect to Debtor's use of any of the Marks; (b) the goodwill of the business symbolized by each of the Marks; (c) all future income, fees, royalties and other payments at any time due or payable with respect to the Marks, including, without limitation, payments under all licenses at any time entered into in connection with the Marks; (d) the right to sue for past, present and future infringements thereof; (e) all rights corresponding thereto throughout the world; and (f) any and all other proceeds of any of the foregoing, including, without limitation, damages and payments or claims by Debtor against third parties for past or future infringement of the Marks. 2. OBLIGATIONS SECURED The security interest, lien and other interests granted to Secured Party pursuant to this Agreement shall secure the prompt performance, observance and payment in full of any and all obligations, liabilities and indebtedness of every kind, nature and description owing by Debtor to Secured Party, arising under this Agreement, and/or the Promissory Note (collectively, the "Financing Agreements") including principal, interest, charges, fees, costs and expenses, however evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of the Promissory Note or after the commencement of any case with respect to Debtor under the United States Bankruptcy Code or any similar statute (including, without limitation, the payment of interest and other amounts which would accrue and become due but for the commencement of such case), whether direct or indirect, absolute or contingent joint or several, due or not due, primary or secondary, liquidated or unliquidated, secured or unsecured, and however acquired by Secured Party (all of the foregoing being collectively referred to herein as the "Obligations"). 3. REPRESENTATIONS, WARRANTIES AND COVENANTS Debtor hereby represents, warrants and covenants with and to Secured Party the following (all of such representations, warranties and covenants being continuing so long as any of the Obligations are outstanding): 2 28 (a) Debtor shall pay and perform all of the Obligations according to their terms. (b) Debtor owns the title to all of the existing Collateral, and has the right and power to grant the security interest and conditional assignment granted hereunder. Debtor shall, at Debtor's expense, perform all commercially reasonable acts and execute all documents necessary to maintain the existence of the Collateral (as commercially reasonable) consisting of registered Marks as registered trademarks and, where commercially reasonable, to maintain the existence of all of the Collateral as valid and subsisting, including, without limitation, the filing of any renewal affidavits and applications. The Collateral is not subject to any liens, claims, mortgages, assignments, licenses, security interests of encumbrances of any nature whatsoever, except: (i) to a first priority security interest granted to ALTI's Lender (as that term is defined in the Settlement Agreement) on the date hereof; (ii) the security interests granted hereunder; (iii) the security interests permitted under the Settlement Agreement by and between the parties dated March 29, 2000; and (iv) the licenses permitted under Section 3(e) below. (c) Debtor shall not assign, sell, mortgage, lease, transfer, pledge, hypothecate, grant a security interest in or lien upon, encumber, grant an exclusive license relating to the Collateral, or otherwise dispose of any of the Collateral, in each case without the prior written consent of Secured Party, except as otherwise permitted herein or in the Promissory Note. Nothing in this Agreement shall be deemed a consent by Secured Party to any such action, except as such action is expressly permitted hereunder. Secured Party hereby expressly permits Debtor to grant such non-exclusive licenses to the Marks as are commercially reasonable under the circumstances. Secured Party hereby expressly permits the Debtor to grant a first priority security interest in the Collateral to ALTI's Lender on the date hereof. The Secured Party's rights and remedies under this Agreement are hereby expressly made subject and subordinate in lien and subject and subordinate in payment to ALTI's Lender's first priority security interest in the Collateral (including, without limitation, any future advances by ALTI's Lender to protect the Collateral or ALTI's Lender's lien thereon or rights thereto), and to all of ALTI's Lender's rights and remedies under the Subordination Agreement (as that term is defined in the Settlement Agreement) dated , 2000 by and between the Debtor, ALTI's Lender and the Secured Party. (d) Debtor shall, at Debtor's expense, promptly perform all acts and execute all documents reasonably requested at any time by Secured Party to evidence the security interest in and conditional assignment of the Collateral granted hereunder or to otherwise further the provisions of this Agreement. Secured Party shall be permitted, at Secured Party's sole cost and expense, to perform all acts and execute all documents reasonably necessary to perfect, maintain, record or enforce the security interest in and conditional assignment of the Collateral granted hereunder or to otherwise further the provisions of this Agreement. Debtor hereby authorizes Secured Party to execute and file one or more financing statements (or similar documents) with respect to the Collateral, signed only by Secured Party or as otherwise determined by Secured Party. Debtor further authorizes Secured Party to have this Agreement or any other similar security agreement filed with the Commissioner of Patents and Trademarks or any other appropriate federal, state or government office. 3 29 (e) As of the date hereof, Debtor has not granted any licenses with respect to the Marks other than as set forth in Exhibit B hereto. (f) Debtor shall, concurrently with the execution and delivery of this Agreement, execute and deliver to for escrow, five (5) originals of a Special Power of Attorney in the form of Exhibit C annexed hereto for the implementation of the assignment, sale or other disposition of the Collateral pursuant to Secured Party's exercise of the rights and remedies granted to Secured Party hereunder. shall be bound by this Agreement and shall hold and shall not deliver such Special Power of Attorney to Secured Party, except pursuant to the terms and conditions of this Agreement. shall make no copies of such Special Power of Attorney. Promptly upon termination of this Agreement, regardless of the reason for such termination, shall return to Debtor all five (5) originals of the Special Power of Attorney, and any copies thereof, except such originals as shall have properly been delivered to Secured Party under the terms and conditions of this Agreement. (g) Secured Party may, in its reasonable and good faith discretion, pay any amount or do any act which Debtor fails to pay or do as required hereunder or as reasonably requested by Secured Party to preserve, defend, protect maintain, record or enforce the Obligations, the Collateral, or the security interest and conditional assignment granted hereunder, including, but not limited to, all filing or recording fees, court costs, collection charges, reasonable attorneys' fees and legal expenses. Debtor shall be liable to Secured Party for such reasonable and actual payments as are made by Secured Party which payments were necessary to preserve, defend, protect maintain, or enforce the Obligations, the Collateral, or the security interest and conditional assignment granted hereunder, which payment shall be deemed an advance by Secured Party to Debtor, shall be payable on demand together with interest at the rate then applicable to the Obligations set forth in the Promissory Note and shall be part of the Obligations secured hereby. (h) Debtor has not abandoned any of the Marks and Debtor will not do any act, nor omit to do any act, whereby the Marks may become abandoned, invalidated, unenforceable, avoided, or avoidable; provided, that, Debtor may abandon or fail to maintain any of the Marks after thirty (30) days prior written notice to Secured Party with respect to any Marks that satisfy each of the following conditions: (i) any such Trademark is no longer used or useful in the business of Debtor or any of its affiliates, (ii) any such Trademark has not been used by Debtor or any of its affiliates for a period of six (6) months in an applicable territory or more from the date of such written notice to Secured Party and (iii) any such Mark is not otherwise material to the business of Debtor or any of its affiliates in any respect and has little or no value. Debtor shall notify Secured Party immediately if it knows or has reason to know of any reason why any application, registration, or recording with respect to the Marks may become abandoned, canceled, invalidated, avoided, or avoidable. (i) Debtor shall render any assistance, as Secured Party shall in good faith determine is necessary, to Secured Party in any proceeding before the United States Patent and Trademark Office, any federal or state court, or any similar office or agency in the United States, any State thereof, any political subdivision thereof or in any other country, to maintain such application 4 30 and registration of the Marks as Debtor's exclusive property and to protect Secured Party's interest therein, including, without limitation, filing of renewals, affidavits of use, affidavits of incontestability and opposition, interference, and cancellation proceedings (except to the extent a trademark may be abandoned as permitted under Section 3(h) above). (j) Debtor shall promptly notify Secured Party if Debtor learns of any use by any person of any term or design which it believes infringes on any Mark or is likely to cause confusion with any Mark. Secured Party shall promptly notify Debtor if Secured Party learns of any use by any person of any term or design which it believes infringes on any Mark or is likely to cause confusion with any Mark. Debtor may, at Debtor's sole expense, bring such action as Debtor, in Debtor's sole discretion, may deem advisable for the protection of the Marks; any recovery from such action shall be for the sole use and benefit of Debtor. In the event that Debtor has not brought such action, and Secured Party, in Secured Party's sole discretion deems such action advisable for the protection of Secured Party's interest in and to the Marks, Secured Party may bring such action. If requested by Secured Party, Debtor, at Debtor's expense, shall join with Secured Party in such action as Secured Party, in Secured Party's discretion, may deem advisable for the protection of Secured Party's interest in and to the Marks. (k) Debtor assumes all responsibility and liability arising from its use of the Marks and Debtor hereby indemnifies and holds Secured Party harmless from and against any claim, suit, loss, damage, or expense (including reasonable attorneys' fees and legal expenses) arising out of any alleged defect in any product manufactured, promoted, or sold by Debtor (or any affiliate or subsidiary thereof) in connection with any Trademark or out of the manufacture, promotion, labeling, sale or advertisement of any such product by Debtor (or any affiliate or subsidiary thereof). Debtor shall not be obliged to so indemnify and hold Secured Party harmless to the extent such losses, costs, damages, expenses and liabilities are caused by the negligence or willful misconduct of Telex. The foregoing indemnity shall survive the payment of the Obligations, the termination of this Agreement and the termination or nonrenewal of the Promissory Note. (l) Except as otherwise set forth herein, Debtor shall promptly pay Secured Party for any and all expenditures made by Secured Party pursuant to the provisions of this Agreement or for the defense, protection or enforcement of the Obligations, the Collateral, or the security interests and conditional assignment granted hereunder, including, but not limited to, all filing or recording fees, court costs, collection charges, travel expenses, and reasonable attorneys' fees and legal expenses. Such expenditures shall be payable on demand, together with interest at the rate then applicable to the Obligations set forth in the Promissory Note and shall be part of the Obligations secured hereby. (m) This Agreement creates a valid security interest in the Collateral securing the payment of the Obligations. 4. EVENTS OF DEFAULT 5 31 All Obligations shall become immediately due and payable, without notice or demand, at the option of Secured Party, upon the occurrence of any Event of Default, as such term is defined in the Promissory Note (each an "Event of Default" hereunder). 5. RIGHTS AND REMEDIES At any time an Event of Default has occurred and is continuing in addition to all other rights and remedies of Secured Party, whether provided under this Agreement, the Promissory Note, applicable law or otherwise, Secured Party shall have the following rights and remedies which may be exercised without notice to, or consent by, Debtor except as such notice or consent is expressly provided for hereunder: (a) Secured Party may require that neither Debtor nor any affiliate or subsidiary of Debtor make any use of the Marks or any marks similar thereto for any purpose whatsoever. Secured Party may make use of any Marks for the sale of goods, completion of work-in-process or rendering of services in connection with enforcing any other security interest granted to Secured Party by Debtor or any subsidiary or affiliate of Debtor. (b) Secured Party may grant such license or licenses relating to the Collateral for such term or terms, on such conditions, and in such manner, as Secured Party shall in its good faith discretion deem appropriate. Such license or licenses may be general, special or otherwise, and may be granted on an exclusive or non-exclusive basis throughout all or any part of the United States of America, its territories and possessions, and all foreign countries. (c) may release from escrow one or more of the five (5) originals of the Special Power of Attorney held pursuant to paragraph 3(f) of this Agreement. Secured Party may assign, sell or otherwise dispose of the Collateral or any part thereof, either with or without special conditions or stipulations except that if notice to Debtor of intended disposition of Collateral is required by law, the giving of ten (10) days prior written notice to Debtor of any proposed disposition shall be deemed reasonable notice thereof and Debtor waives any other notice with respect thereto. Secured Party shall have the power to buy the Collateral or any part thereof, and Secured Party shall also have the power to execute assurances and perform all other acts which Secured Party may, in its good faith discretion, deem appropriate or proper to complete such assignment sale, or disposition. In any such event, Debtor shall be liable for any deficiency and, in the event of any surplus, such surplus shall be paid to Debtor or such other person as may be entitled thereto under applicable law or order of any court or other governmental authority. (d) In addition to the foregoing, in order to implement the assignment sale, or other disposition of any of the Collateral pursuant to the terms hereof, Secured Party may at any time execute and deliver on behalf of Debtor, pursuant to the authority granted in the Powers of Attorney described in Section 3(f) hereof, one or more instruments of assignment of the Marks (or any application, registration, or recording relating thereto), in form suitable for filing, recording, or registration. Debtor agrees to pay Secured Party on demand all costs incurred in 6 32 any such transfer of the Collateral, including, but not limited to, any taxes, fees, and reasonable attorneys' fees and legal expenses. (e) Secured Party shall apply the proceeds actually received from any such license, assignment, sale or other disposition of any of the Collateral to the Obligations in such order and manner as Secured Party may reasonably determine. Debtor shall remain liable to Secured Party for any of the Obligations remaining unpaid after the application of such proceeds, and Debtor shall pay Secured Party on demand any such unpaid amount together with interest at the rate then applicable to the Obligations set forth in the Promissory Note. In the event of any surplus, such surplus shall be paid to Debtor or such other person as may be entitled thereto under applicable law or order of any court or other governmental authority. (f) Debtor shall supply to Secured Party or to Secured Party's designee, Debtor's knowledge and expertise relating to the manufacture and sale of the products and services bearing the Marks and Debtor's customer lists and other records relating to the Marks and the distribution thereof (g) Nothing contained herein shall be construed as requiring Secured Party to take any such action at any time. All of Secured Party's rights and remedies, whether provided under this Agreement, the other Financing Agreements, applicable law, or otherwise, shall be cumulative and none is exclusive. Such rights and remedies may be enforced alternatively, successively, or concurrently. 6. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW (a) The validity, interpretation and enforcement of this Agreement and the Promissory Note and any dispute arising out of the relationship between the parties hereto, whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State of Minnesota (without giving effect to principles of conflicts of law). (b) Debtor and Secured Party irrevocably consent and submit to the non-exclusive jurisdiction of the courts of the State of Minnesota, and the United States District Court for the District of Minnesota and waive any objection based on venue or forum non conveniens with respect to any action instituted therein arising under this Agreement or any of the other Financing Agreements or in any way connected or related or incidental to the dealings of Debtor and Secured Party in respect of this Agreement, the Promissory Note, or the other Financing Agreements, in each case whether now existing or thereafter arising, and whether in contract, tort, equity or otherwise, and agrees that it shall not bring any action with respect to any such matters except in such courts described above (except that Secured Party shall have the right to bring any action or proceeding against Debtor or its property in the courts of any other jurisdiction which is reasonably necessary or appropriate in order to realize on the Collateral or to otherwise enforce its rights against Debtor or its property). 7 33 (c) Debtor hereby waives personal service of any and all process upon it and consents that all such service of process may be made by certified mail (return receipt requested) directed to its address set forth herein and service so made shall be deemed to be completed ten (10) days after the same shall have been so deposited in the U.S. mails, or, at Secured Party's option, by service upon Debtor in any other manner provided under the rules of any such courts. Within thirty (30) days after such service, Debtor shall appear in answer to such process, failing which Debtor shall be deemed in default and judgment may be entered by Secured Party against Debtor for the amount of the claim and other relief requested. Secured Party hereby waives personal service of any and all process upon it and consents that all such service of process may be made by certified mail (return receipt requested) directed to its address set forth herein and service so made shall be deemed to be completed ten (10) days after the same shall have been so deposited in the U.S. mails. (d) DEBTOR AND SECURED PARTY EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF DEBTOR AND SECURED PARTY IN RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. DEBTOR AND SECURED PARTY EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT DEBTOR OR SECURED PARTY MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF DEBTOR AND SECURED PARTY TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. (e) Secured Party shall not have any liability to Debtor (whether in tort, contract, equity or otherwise) for losses suffered by Debtor in connection with, arising out of, or in any way related to the transactions or relationships contemplated by this Agreement, or any act, omission or event occurring in connection herewith, unless it is determined by a judgment or court order binding on Secured Party that the losses were the result of acts or omissions constituting gross negligence or willful misconduct. 7. MISCELLANEOUS (a) Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed to have been given, when received, if personally delivered, faxed during business hours or delivered by nationally recognized overnight courier service, and three (3) business days after deposit or when actual received, whichever occurs first, if placed in the U.S. mail for delivery by registered or certified mail, return receipt requested, postage prepaid addressed as follows: 8 34 (i) To Secured Party at: Telex Communications, Inc. 9600 Aldrich Avenue South Minneapolis, MN 55420 Attention: President and Attention: General Counsel With a copy to Ann M. Ladd Fredrikson & Byron, P.A. 1100 International Centre 900 Second Avenue South Minneapolis, MN 55402 (ii) To Debtor at: Altec Lansing Technologies, Inc. Route 6 and 209 Milford, PA 18337 Attention: President With a copy to Adam B. Landa, Esq. Graham & James LLP 885 Third Avenue 21 New York, NY 10022 Addresses may be changed by written notice given pursuant to this Section. (b) All references to the plural herein shall also mean the singular and to the singular shall also mean the plural. All references to Debtor and Secured Party pursuant to the definitions set forth in the recitals hereto, or to any other person herein, shall include their respective successors and assigns. The words "hereof," "herein," "hereunder," "this Agreement" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not any particular provision of this Agreement and as this Agreement now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced. All references to the term "Person" or "person" herein shall mean any individual, sole proprietorship, partnership, corporation (including, without limitation, any corporation which elects S corporation status under the Internal Revenue Code of 1986, as amended), limited liability company, limited liability partnership, business trust unincorporated association, joint stock company, trust joint venture or other entity or any government or any agency or instrumentality or political subdivision thereof. 9 35 (c) This Agreement, the Promissory Note and any other document referred to herein or therein shall be binding upon each party and its successors and assigns and inure to the benefit of and be enforceable by each party and its successors and assigns. (d) If any provision of this Agreement or its application to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of the provisions to other persons or circumstances shall not be affected thereby, and this Agreement shall be enforced to the greatest extent permitted by law. (e) This Agreement, together with the Exhibits and the related written agreements specifically referred to herein, represents the only agreement among the parties concerning the subject matter hereof and supersedes all prior agreements, whether written or oral, relating thereto. No purported amendment, modification or waiver of any provision hereof shall be binding unless set forth in a written document signed by all parties (in the case of amendments or modifications) or by the party to be charged thereby (in the case of waivers). No consent or waiver, expressed or implied, by either party to or of any breach or default by the other party in the performance by the other party of its obligations under this Agreement shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by that party of the same or any other obligations of that party. Failure on the part of either party to complain of any act or failure to act on the part of the other party or to declare the other party in default, irrespective of how long the failure continues, shall not constitute a waiver by that party of its rights under this Agreement. IN WITNESS WHEREOF, Debtor and Secured Party have executed this Agreement as of the day and year first above written. ALTEC LANSING TECHNOLOGIES, INC. By: -------------------------------------- Name: ----------------------------------- Title: ----------------------------------- TELEX COMMUNICATIONS, INC. By: -------------------------------------- Name: ----------------------------------- Title: ----------------------------------- 10 36 STATE OF MINNESOTA ) ) ss.: COUNTY OF HENNEPIN ) On this day of April, 2000, before me personally came to me known, who being duly sworn, did depose and say, that he/she is the of Altec Lansing Technologies, Inc., the corporation described in and which executed the foregoing instrument; and that he/she signed his/her name thereto by order of the Board of Directors of said corporation. -------------------------------- Notary Public STATE OF MINNESOTA ) ) ss.: COUNTY OF HENNEPIN ) On this day of April, 2000, before me personally came to me known, who being duly sworn, did depose and say, that he/she is the of Telex Communications, Inc., the corporation described in and which executed the foregoing instrument; and that he signed his/her name thereto by order of the Board of Directors of said corporation. -------------------------------- Notary Public 11 37 EXHIBIT A TO TRADEMARK COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT LIST OF MARKS
Mark Registration Number Country Issue Date - ---- ------------------- ------- ---------- ALTEC 1380268 Argentina 4/30/90 - ------------------------------------------------------------------------------------------------------------------- ALTEC A200324 Australia 2/17/66 - ------------------------------------------------------------------------------------------------------------------- ALTEC 58120 Austria 9/29/66 - ------------------------------------------------------------------------------------------------------------------- ALTEC 60565 Greece 2/10/78 - ------------------------------------------------------------------------------------------------------------------- ALTEC 88484 Hong Kong 11/21/79 - ------------------------------------------------------------------------------------------------------------------- ALTEC 103227 Mexico 7/13/66 - ------------------------------------------------------------------------------------------------------------------- ALTEC 132011 Sweden 7/10/70 - ------------------------------------------------------------------------------------------------------------------- ALTEC 354145 Switzerland 2/10/87 - ------------------------------------------------------------------------------------------------------------------- ALTEC 101768 Turkey 4/20/97 - ------------------------------------------------------------------------------------------------------------------- ALTEC 890602 United Kingdom 7/16/67 - ------------------------------------------------------------------------------------------------------------------- ALTEC 860,432 United States 11/19/68 - ------------------------------------------------------------------------------------------------------------------- ALTEC 534,754 United States 12/12/50 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING A348153 Australia 7/7/80 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 335509 Benelux 6/17/75 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 7033885 Brazil 12/10/89 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 216049 Canada 9/17/76 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 369189 Chile 5/28/81 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 351185 Chile 1/17/90 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 9900147973 (App. No.) China - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 6041979 Denmark 2/23/79 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 78861 Finland 9/21/81 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 1309979 France 4/25/95 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 947128 Germany 7/22/76 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 25501982 Hong Kong 7/6/78 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 429736 Indonesia 6/29/99 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 95565 Ireland 7/26/78 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 46192 Israel 7/6/78 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 639074 Italy 12/12/94 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 1354774 Japan 10/31/78 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING M79979 Malaysia 9/26/78 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 197420 Mexico 9/8/76 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 124571 New Zealand 7/26/78 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 104142 Norway 1/24/80 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 103459 (App. No.) Pakistan - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 14479 Peru 3/30/95 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 63938 Singapore 4/12/75 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 783660 South Africa 7/31/78 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 56392 South Korea 6/27/78 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 787240 Spain 5/24/77 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 87020 Taiwan 1/1/77 - -------------------------------------------------------------------------------------------------------------------
1 38
Mark Registration Number Country Issue Date - ---- ------------------- ------- ---------- ALTEC LANSING 1040220 United Kingdom 12/9/76 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 2,113,891 United States 11/18/97 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 308193 Uruguay 11/25/98 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 83520F Venezuela 12/8/76 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING & DESIGN 45563 Philippines 6/30/89 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING & DESIGN TM66711 Thailand 12/25/97 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING & DESIGN 1,041,673 United States 6/22/76 - ------------------------------------------------------------------------------------------------------------------- LANSING 2,106,856 United States 10/21/97 - ------------------------------------------------------------------------------------------------------------------- VOICE OF THE HIGHWAY 1,172,997 United States 10/13/81 - ------------------------------------------------------------------------------------------------------------------- VOICE OF THE THEATRE 964642 Japan 5/31/72 - -------------------------------------------------------------------------------------------------------------------
2 39 EXHIBIT B TO TRADEMARK COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT LIST OF LICENSES License to Telex Communications, Inc. dated April ____, 2000. 40 EXHIBIT C TO TRADEMARK COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT SPECIAL POWER OF ATTORNEY STATE OF MINNESOTA ) ) ss.: COUNTY OF HENNEPIN ) KNOW ALL MEN BY THESE PRESENTS, that ALTEC LANSING TECHNOLOGIES, INC. ("Debtor"), having an office at Route 6 and 209, Milford, Pennsylvania 18337 hereby appoints and constitutes, severally, TELEX COMMUNICATIONS, INC. ("Secured Party"), and each of its officers, its true and lawful attorney, with full power of substitution and with full power and authority, upon the occurrence of any Event of Default, to perform the following acts on behalf of Debtor: 1. Execution and delivery of any and all agreements, documents, instrument of assignment or other papers which Secured Party, in its good faith discretion, deems necessary or advisable for the purpose of assigning, selling, or otherwise disposing of all right title, and interest of Debtor in and to any Marks as that term is defined in that certain Trademark Collateral Assignment and Security Agreement dated April __, 2000 by and between Debtor and Secured Party and all registrations, recordings, reissues, extensions, and renewals thereof, or for the purpose of recording, registering and filing of, or accomplishing any other formality with respect to the foregoing. 2. Execution and delivery of any and all documents, statements, certificates or other papers which Secured Party, in its good faith discretion, deems necessary or advisable to further the purposes described in Subparagraph 1 hereof. This Power of Attorney is made pursuant to a Trademark Collateral Assignment and Security Agreement dated of even date herewith, between Debtor and Secured Party (the "Security Agreement") and is subject to the terms and provisions thereof. This Power of Attorney, being coupled with an interest, is irrevocable until all "Obligations", as such term is defined in the Security Agreement are paid in full and the Security Agreement is terminated in writing by Secured Party, and is automatically revoked upon the termination of the Security Agreement. Dated: April ___, 2000 ALTEC LANSING TECHNOLOGIES, INC. By: --------------------------------- Name: ------------------------------- 41 Title: ------------------------------ 42 STATE OF MINNESOTA ) ) ss.: COUNTY OF HENNEPIN ) On this _____ day of April, 2000, before me personally came ____________________ to me known, who being duly sworn, did depose and say, that he is the ____________ of Altec Lansing Technologies, Inc., the corporation described in and which executed the foregoing instrument; and that he signed his name thereto by order of the Board of Directors of said corporation. --------------------------------------- Notary Public 43 Exhibit 2.4(b) TRADEMARK COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT DATE: April __, 2000 ("Effective Date") PARTIES: Telex Communications, Inc. ("Secured Party") 9600 Aldrich Avenue South Minneapolis, MN 55420 Altec Lansing Technologies, Inc. ("Debtor") Route 6 and 209 Milford, PA 18337 RECITALS: A. Pursuant to that certain Purchase and Sale Agreement ("Purchase Agreement") between the parties dated March 30, 2000, Secured Party has assigned to Debtor all right, title and interest in and to certain trademarks and trademark registrations in connection with the Altec Lansing brand including the trademark registrations listed on the attached Exhibit A (hereinafter the "Registered Marks"), and common law trademarks in the marks ALTEC, ALTEC LANSING, LANSING, VOICE OF THE HIGHWAY, and VOICE OF THE THEATRE, and numerous designs used in connection with the foregoing (hereinafter, such registered and unregistered trademarks being referred to as the "Marks"), subject to the Telex License (as that term is defined in the Purchase Agreement). B. Pursuant to that certain Settlement Agreement between the parties dated March 29, 2000, the parties have resolved certain other outstanding issues between them ("Settlement Agreement"). C. Subject to the Telex License and the other terms of the Purchase Agreement and Settlement Agreement, Debtor has adopted, used and is using, and is the owner of the entire right, title, and interest in and to the Marks. D. The provisions of the Settlement Agreement and of the Purchase Agreement by and between Secured Party and Debtor set forth certain financing arrangements pursuant to which Secured Party may make loans and advances and provide other financial accommodations to Debtor as set forth in certain promissory notes, dated of even date herewith, (see Article 2.2(c) and 2.2(d) of the Settlement Agreement) made by Debtor in favor of Secured Party (as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, the "Promissory Notes") and other agreements, documents and instruments referred to therein or at any time executed and/or delivered in connection therewith or related thereto, including, but not limited to, this Agreement; and 1 44 E. To induce Secured Party to accept the Promissory Notes and to provide financial accommodations to Debtor pursuant thereto, Debtor has agreed to grant to Secured Party certain collateral security as set forth herein. AGREEMENTS: NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows (the "Agreement"): 1. GRANT OF SECURITY INTEREST As collateral security for the prompt performance, observance and indefeasible payment in full of all of the Obligations (as hereinafter defined), Debtor hereby grants to Secured Party a lien and security interest upon, and a conditional assignment of, the following (being collectively referred to herein as the "Collateral"): (a) all of Debtor's now existing or hereafter acquired right, title, and interest in and to the Marks, together with all rights and privileges arising under applicable law with respect to Debtor's use of any of the Marks; (b) the goodwill of the business symbolized by each of the Marks; (c) all future income, fees, royalties and other payments at any time due or payable with respect to the Marks, including, without limitation, payments under all licenses at any time entered into in connection with the Marks; (d) the right to sue for past, present and future infringements thereof; (e) all rights corresponding thereto throughout the world; and (f) any and all other proceeds of any of the foregoing, including, without limitation, damages and payments or claims by Debtor against third parties for past or future infringement of the Marks. 2. OBLIGATIONS SECURED The security interest, lien and other interests granted to Secured Party pursuant to this Agreement shall secure the prompt performance, observance and payment in full of any and all obligations, liabilities and indebtedness of every kind, nature and description owing by Debtor to Secured Party, arising under this Agreement, the Purchase Agreement, the Settlement Agreement and/or the Promissory Notes (collectively, the "Financing Agreements") including principal, interest, charges, fees, costs and expenses, however evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of the Promissory Notes or after the commencement of any case with respect to Debtor under the United States Bankruptcy Code or any similar statute (including, without limitation, the payment of interest and other amounts which would accrue and become due but for the commencement of such case), whether direct or indirect, absolute or contingent joint or several, due or not due, primary or secondary, liquidated or unliquidated, secured or unsecured, and however acquired by Secured Party (all of the foregoing being collectively referred to herein as the "Obligations"). 2 45 3. REPRESENTATIONS, WARRANTIES AND COVENANTS Debtor hereby represents, warrants and covenants with and to Secured Party the following (all of such representations, warranties and covenants being continuing so long as any of the Obligations are outstanding): (a) Debtor shall pay and perform all of the Obligations according to their terms. (b) Debtor owns the title to all of the existing Collateral, and has the right and power to grant the security interest and conditional assignment granted hereunder. Debtor shall, at Debtor's expense, perform all commercially reasonable acts and execute all documents necessary to maintain the existence of the Collateral (as commercially reasonable) consisting of registered Marks as registered trademarks and, where commercially reasonable, to maintain the existence of all of the Collateral as valid and subsisting, including, without limitation, the filing of any renewal affidavits and applications. The Collateral is not subject to any liens, claims, mortgages, assignments, licenses, security interests of encumbrances of any nature whatsoever, except: (i) to a first priority security interest granted to ALTI's Lender (as that term is defined in the Settlement Agreement) on the date hereof; (ii) the security interests granted hereunder and pursuant to the Promissory Notes; (iii) the security interests permitted under the Settlement Agreement between the parties dated March 29, 2000, and (iv) the licenses permitted under Section 3(e) below. (c) Debtor shall not assign, sell, mortgage, lease, transfer, pledge, hypothecate, grant a security interest in or lien upon, encumber, grant an exclusive license relating to the Collateral, or otherwise dispose of any of the Collateral, in each case without the prior written consent of Secured Party, except as otherwise permitted herein or in the Promissory Notes. Nothing in this Agreement shall be deemed a consent by Secured Party to any such action, except as such action is expressly permitted hereunder. Secured Party hereby expressly permits Debtor to grant such non-exclusive licenses to the Marks as are commercially reasonable under the circumstances. Secured Party hereby expressly permits the Debtor to grant a first priority security interest in the Collateral to ALTI's Lender on the date hereof. The Secured Party's rights and remedies under this Agreement are hereby expressly made subject and subordinate in lien and subject and subordinate in payment to ALTI's Lender's first priority security interest in the Collateral (including, without limitation, any future advances by ALTI's Lender to protect the Collateral or ALTI's Lender's lien thereon or rights thereto), and to all of ALTI's Lender's rights and remedies under the Subordination Agreement (as that term is defined in the Settlement Agreement) dated ____, 2000 by and between the Debtor, ALTI's Lender and the Secured Party. (d) Debtor shall, at Debtor's expense, promptly perform all acts and execute all documents reasonably requested at any time by Secured Party to evidence the security interest in and conditional assignment of the Collateral granted hereunder or to otherwise further the provisions of this Agreement. Secured Party shall be permitted, at Secured Party's sole cost and expense, to perform all acts and execute all documents reasonably necessary to perfect, maintain, record or enforce the security interest in and conditional assignment of the Collateral granted hereunder or to otherwise further the provisions of this Agreement. Debtor hereby authorizes 3 46 Secured Party to execute and file one or more financing statements (or similar documents) with respect to the Collateral, signed only by Secured Party or as otherwise determined by Secured Party. Debtor further authorizes Secured Party to have this Agreement or any other similar security agreement filed with the Commissioner of Patents and Trademarks or any other appropriate federal, state or government office. (e) As of the date hereof, Debtor has not granted any licenses with respect to the Marks other than as set forth in Exhibit B hereto. (f) Debtor shall, concurrently with the execution and delivery of this Agreement, execute and deliver to ________ for escrow, five (5) originals of a Special Power of Attorney in the form of Exhibit C annexed hereto for the implementation of the assignment, sale or other disposition of the Collateral pursuant to Secured Party's exercise of the rights and remedies granted to Secured Party hereunder. _______ shall be bound by this Agreement and shall hold and shall not deliver such Special Power of Attorney to Secured Party, except pursuant to the terms and conditions of this Agreement. ____________ shall make no copies of such Special Power of Attorney. Promptly upon termination of this Agreement, regardless of the reason for such termination, ______________ shall return to Debtor all five (5) originals of the Special Power of Attorney, and any copies thereof, except such originals as shall have properly been delivered to Secured Party under the terms and conditions of this Agreement. (g) Secured Party may, in its reasonable and good faith discretion, pay any amount or do any act which Debtor fails to pay or do as required hereunder or as reasonably requested by Secured Party to preserve, defend, protect maintain, record or enforce the Obligations, the Collateral, or the security interest and conditional assignment granted hereunder, including, but not limited to, all filing or recording fees, court costs, collection charges, reasonable attorneys' fees and legal expenses. Debtor shall be liable to Secured Party for such reasonable and actual payments as are made by Secured Party which payments were necessary to preserve, defend, protect maintain, or enforce the Obligations, the Collateral, or the security interest and conditional assignment granted hereunder, which payment shall be deemed an advance by Secured Party to Debtor, shall be payable on demand together with interest at the rate then applicable to the Obligations set forth in the Promissory Notes and shall be part of the Obligations secured hereby. (h) Debtor has not abandoned any of the Marks and Debtor will not do any act, nor omit to do any act, whereby the Marks may become abandoned, invalidated, unenforceable, avoided, or avoidable; provided, that, Debtor may abandon or fail to maintain any of the Marks after thirty (30) days prior written notice to Secured Party with respect to any Marks that satisfy each of the following conditions: (i) any such Trademark is no longer used or useful in the business of Debtor or any of its affiliates, (ii) any such Trademark has not been used by Debtor or any of its affiliates for a period of six (6) months in an applicable territory or more from the date of such written notice to Secured Party and (iii) any such Mark is not otherwise material to the business of Debtor or any of its affiliates in any respect and has little or no value. Debtor shall notify Secured Party immediately if it knows or has reason to know of any reason why any 4 47 application, registration, or recording with respect to the Marks may become abandoned, canceled, invalidated, avoided, or avoidable. (i) Debtor shall render any assistance, as Secured Party shall in good faith determine is necessary, to Secured Party in any proceeding before the United States Patent and Trademark Office, any federal or state court, or any similar office or agency in the United States, any State thereof, any political subdivision thereof or in any other country, to maintain such application and registration of the Marks as Debtor's exclusive property and to protect Secured Party's interest therein, including, without limitation, filing of renewals, affidavits of use, affidavits of incontestability and opposition, interference, and cancellation proceedings (except to the extent a trademark may be abandoned as permitted under Section 3(h) above). (j) Debtor shall promptly notify Secured Party if Debtor learns of any use by any person of any term or design which it believes infringes on any Mark or is likely to cause confusion with any Mark. Secured Party shall promptly notify Debtor if Secured Party learns of any use by any person of any term or design which it believes infringes on any Mark or is likely to cause confusion with any Mark. Debtor may, at Debtor's sole expense, bring such action as Debtor, in Debtor's sole discretion, may deem advisable for the protection of the Marks; any recovery from such action shall be for the sole use and benefit of Debtor. In the event that Debtor has not brought such action, and Secured Party, in Secured Party's sole discretion deems such action advisable for the protection of Secured Party's interest in and to the Marks, Secured Party may bring such action. If requested by Secured Party, Debtor, at Debtor's expense, shall join with Secured Party in such action as Secured Party, in Secured Party's discretion, may deem advisable for the protection of Secured Party's interest in and to the Marks. (k) Debtor assumes all responsibility and liability arising from its use of the Marks and Debtor hereby indemnifies and holds Secured Party harmless from and against any claim, suit, loss, damage, or expense (including reasonable attorneys' fees and legal expenses) arising out of any alleged defect in any product manufactured, promoted, or sold by Debtor (or any affiliate or subsidiary thereof) in connection with any Trademark or out of the manufacture, promotion, labeling, sale or advertisement of any such product by Debtor (or any affiliate or subsidiary thereof). Debtor shall not be obligated to so indemnify and hold Secured Party harmless to the extent such losses, costs, damages, expenses and liabilities are caused by the negligence or willful misconduct of Telex. The foregoing indemnity shall survive the payment of the Obligations, the termination of this Agreement and the termination or nonrenewal of the Promissory Notes. (l) Except as otherwise set forth herein, Debtor shall promptly pay Secured Party for any and all expenditures made by Secured Party pursuant to the provisions of this Agreement or for the defense, protection or enforcement of the Obligations, the Collateral, or the security interests and conditional assignment granted hereunder, including, but not limited to, all filing or recording fees, court costs, collection charges, travel expenses, and reasonable attorneys' fees and legal expenses. Such expenditures shall be payable on demand, together with interest at the rate then applicable to the Obligations set forth in the Promissory Notes and shall be part of the Obligations secured hereby. 5 48 (m) This Agreement creates a valid security interest in the Collateral securing the payment of the Obligations. 4. EVENTS OF DEFAULT All Obligations shall become immediately due and payable, without notice or demand, at the option of Secured Party, upon the occurrence of any Event of Default, as such term is defined in the Promissory Notes (each an "Event of Default" hereunder). 5. RIGHTS AND REMEDIES At any time an Event of Default has occurred and is continuing in addition to all other rights and remedies of Secured Party, whether provided under this Agreement, the Promissory Notes, applicable law or otherwise, Secured Party shall have the following rights and remedies which may be exercised without notice to, or consent by, Debtor except as such notice or consent is expressly provided for hereunder: (a) Secured Party may require that neither Debtor nor any affiliate or subsidiary of Debtor make any use of the Marks or any marks similar thereto for any purpose whatsoever. Secured Party may make use of any Marks for the sale of goods, completion of work-in-process or rendering of services in connection with enforcing any other security interest granted to Secured Party by Debtor or any subsidiary or affiliate of Debtor. (b) Secured Party may grant such license or licenses relating to the Collateral for such term or terms, on such conditions, and in such manner, as Secured Party shall in its good faith discretion deem appropriate. Such license or licenses may be general, special or otherwise, and may be granted on an exclusive or non-exclusive basis throughout all or any part of the United States of America, its territories and possessions, and all foreign countries. (c) __________ may release from escrow one or more of the five (5) originals of the Special Power of Attorney held pursuant to paragraph 3(f) of this Agreement. Secured Party may assign, sell or otherwise dispose of the Collateral or any part thereof, either with or without special conditions or stipulations except that if notice to Debtor of intended disposition of Collateral is required by law, the giving of ten (10) days prior written notice to Debtor of any proposed disposition shall be deemed reasonable notice thereof and Debtor waives any other notice with respect thereto. Secured Party shall have the power to buy the Collateral or any part thereof, and Secured Party shall also have the power to execute assurances and perform all other acts which Secured Party may, in its good faith discretion, deem appropriate or proper to complete such assignment sale, or disposition. In any such event, Debtor shall be liable for any deficiency and, in the event of any surplus, such surplus shall be paid to Debtor or such other person as may be entitled thereto under applicable law or order of any court or other governmental authority. 6 49 (d) In addition to the foregoing, in order to implement the assignment sale, or other disposition of any of the Collateral pursuant to the terms hereof, Secured Party may at any time execute and deliver on behalf of Debtor, pursuant to the authority granted in the Powers of Attorney described in Section 3(f) hereof, one or more instruments of assignment of the Marks (or any application, registration, or recording relating thereto), in form suitable for filing, recording, or registration. Debtor agrees to pay Secured Party on demand all costs incurred in any such transfer of the Collateral, including, but not limited to, any taxes, fees, and reasonable attorneys' fees and legal expenses. (e) Secured Party shall apply the proceeds actually received from any such license, assignment, sale or other disposition of any of the Collateral to the Obligations in such order and manner as Secured Party may reasonably determine. Debtor shall remain liable to Secured Party for any of the Obligations remaining unpaid after the application of such proceeds, and Debtor shall pay Secured Party on demand any such unpaid amount together with interest at the rate then applicable to the Obligations set forth in the Promissory Notes. In the event of any surplus, such surplus shall be paid to Debtor or such other person as may be entitled thereto under applicable law or order of any court or other governmental authority. (f) Debtor shall supply to Secured Party or to Secured Party's designee, Debtor's knowledge and expertise relating to the manufacture and sale of the products and services bearing the Marks and Debtor's customer lists and other records relating to the Marks and the distribution thereof (g) Nothing contained herein shall be construed as requiring Secured Party to take any such action at any time. All of Secured Party's rights and remedies, whether provided under this Agreement, the other Financing Agreements, applicable law, or otherwise, shall be cumulative and none is exclusive. Such rights and remedies may be enforced alternatively, successively, or concurrently. 6. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW (a) The validity, interpretation and enforcement of this Agreement and the Promissory Note and any dispute arising out of the relationship between the parties hereto, whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State of Minnesota (without giving effect to principles of conflicts of law). (b) Debtor and Secured Party irrevocably consent and submit to the non-exclusive jurisdiction of the courts of the State of Minnesota, and the United States District Court for the District of Minnesota and waive any objection based on venue or forum non conveniens with respect to any action instituted therein arising under this Agreement or any of the other Financing Agreements or in any way connected or related or incidental to the dealings of Debtor and Secured Party in respect of this Agreement, the Promissory Notes, or the other Financing Agreements, in each case whether now existing or thereafter arising, and whether in contract, tort, equity or otherwise, and agrees that it shall not bring any action with respect to any such 7 50 matters except in such courts described above (except that Secured Party shall have the right to bring any action or proceeding against Debtor or its property in the courts of any other jurisdiction which is reasonably necessary or appropriate in order to realize on the Collateral or to otherwise enforce its rights against Debtor or its property). (c) Debtor hereby waives personal service of any and all process upon it and consents that all such service of process may be made by certified mail (return receipt requested) directed to its address set forth herein and service so made shall be deemed to be completed ten (10) days after the same shall have been so deposited in the U.S. mails, or, at Secured Party's option, by service upon Debtor in any other manner provided under the rules of any such courts. Within thirty (30) days after such service, Debtor shall appear in answer to such process, failing which Debtor shall be deemed in default and judgment may be entered by Secured Party against Debtor for the amount of the claim and other relief requested. Secured Party hereby waives personal service of any and all process upon it and consents that all such service of process may be made by certified mail (return receipt requested) directed to its address set forth herein and service so made shall be deemed to be completed ten (10) days after the same shall have been so deposited in the U.S. mails. (d) DEBTOR AND SECURED PARTY EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF DEBTOR AND SECURED PARTY IN RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. DEBTOR AND SECURED PARTY EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT DEBTOR OR SECURED PARTY MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF DEBTOR AND SECURED PARTY TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. (e) Secured Party shall not have any liability to Debtor (whether in tort, contract, equity or otherwise) for losses suffered by Debtor in connection with, arising out of, or in any way related to the transactions or relationships contemplated by this Agreement, or any act, omission or event occurring in connection herewith, unless it is determined by a judgment or court order binding on Secured Party that the losses were the result of acts or omissions constituting gross negligence or willful misconduct. 7. MISCELLANEOUS (a) Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed to have been given, when received, if personally 8 51 delivered, faxed during business hours or delivered by nationally recognized overnight courier service, and three (3) business days after deposit or when actual received, whichever occurs first, if placed in the U.S. mail for delivery by registered or certified mail, return receipt requested, postage prepaid addressed as follows: (i) To Secured Party at: Telex Communications, Inc. 9600 Aldrich Avenue South Minneapolis, MN 55420 Attention: President and Attention: General Counsel With a copy to Ann M. Ladd Fredrikson & Byron, P.A. 1100 International Centre 900 Second Avenue South Minneapolis, MN 55402 (ii) To Debtor at: Altec Lansing Technologies, Inc. Route 6 and 209 Milford, PA 18337 Attention: President With a copy to Adam B. Landa, Esq. Graham & James LLP 885 Third Avenue 21 New York, NY 10022 Addresses may be changed by written notice given pursuant to this Section. (b) All references to the plural herein shall also mean the singular and to the singular shall also mean the plural. All references to Debtor and Secured Party pursuant to the definitions set forth in the recitals hereto, or to any other person herein, shall include their respective successors and assigns. The words "hereof," "herein," "hereunder," "this Agreement" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not any particular provision of this Agreement and as this Agreement now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced. All references to the term "Person" or "person" herein shall mean any individual, sole proprietorship, partnership, 9 52 corporation (including, without limitation, any corporation which elects S corporation status under the Internal Revenue Code of 1986, as amended), limited liability company, limited liability partnership, business trust unincorporated association, joint stock company, trust joint venture or other entity or any government or any agency or instrumentality or political subdivision thereof. (c) This Agreement, the Promissory Notes and any other document referred to herein or therein shall be binding upon each party and its successors and assigns and inure to the benefit of and be enforceable by each party and its successors and assigns. (d) If any provision of this Agreement or its application to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of the provisions to other persons or circumstances shall not be affected thereby, and this Agreement shall be enforced to the greatest extent permitted by law. (e) This Agreement, together with the Exhibits and the related written agreements specifically referred to herein, represents the only agreement among the parties concerning the subject matter hereof and supersedes all prior agreements, whether written or oral, relating thereto. No purported amendment, modification or waiver of any provision hereof shall be binding unless set forth in a written document signed by all parties (in the case of amendments or modifications) or by the party to be charged thereby (in the case of waivers). No consent or waiver, expressed or implied, by either party to or of any breach or default by the other party in the performance by the other party of its obligations under this Agreement shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by that party of the same or any other obligations of that party. Failure on the part of either party to complain of any act or failure to act on the part of the other party or to declare the other party in default, irrespective of how long the failure continues, shall not constitute a waiver by that party of its rights under this Agreement. IN WITNESS WHEREOF, Debtor and Secured Party have executed this Agreement as of the day and year first above written. ALTEC LANSING TECHNOLOGIES, INC. By: -------------------------------- Name: ------------------------------ Title: ----------------------------- TELEX COMMUNICATIONS, INC. 10 53 By: -------------------------------- Name: ------------------------------ Title: ----------------------------- 11 54 STATE OF MINNESOTA ) ) ss.: COUNTY OF HENNEPIN ) On this ____ day of April, 2000, before me personally came _________________ to me known, who being duly sworn, did depose and say, that he/she is the ______________ of Altec Lansing Technologies, Inc., the corporation described in and which executed the foregoing instrument; and that he/she signed his/her name thereto by order of the Board of Directors of said corporation. ------------------------------------- Notary Public STATE OF MINNESOTA ) ) ss.: COUNTY OF HENNEPIN ) On this ____ day of April, 2000, before me personally came ________________ to me known, who being duly sworn, did depose and say, that he/she is the _______________ of Telex Communications, Inc., the corporation described in and which executed the foregoing instrument; and that he signed his/her name thereto by order of the Board of Directors of said corporation. ------------------------------------- Notary Public 12 55 EXHIBIT A TO TRADEMARK COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT LIST OF MARKS
Mark Registration Number Country Issue Date - ---- ------------------- ------- ---------- ALTEC 1380268 Argentina 4/30/90 - ------------------------------------------------------------------------------------------------------------------- ALTEC A200324 Australia 2/17/66 - ------------------------------------------------------------------------------------------------------------------- ALTEC 58120 Austria 9/29/66 - ------------------------------------------------------------------------------------------------------------------- ALTEC 60565 Greece 2/10/78 - ------------------------------------------------------------------------------------------------------------------- ALTEC 88484 Hong Kong 11/21/79 - ------------------------------------------------------------------------------------------------------------------- ALTEC 103227 Mexico 7/13/66 - ------------------------------------------------------------------------------------------------------------------- ALTEC 132011 Sweden 7/10/70 - ------------------------------------------------------------------------------------------------------------------- ALTEC 354145 Switzerland 2/10/87 - ------------------------------------------------------------------------------------------------------------------- ALTEC 101768 Turkey 4/20/97 - ------------------------------------------------------------------------------------------------------------------- ALTEC 890602 United Kingdom 7/16/67 - ------------------------------------------------------------------------------------------------------------------- ALTEC 860,432 United States 11/19/68 - ------------------------------------------------------------------------------------------------------------------- ALTEC 534,754 United States 12/12/50 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING A348153 Australia 7/7/80 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 335509 Benelux 6/17/75 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 7033885 Brazil 12/10/89 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 216049 Canada 9/17/76 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 369189 Chile 5/28/81 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 351185 Chile 1/17/90 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 9900147973 (App. No.) China - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 6041979 Denmark 2/23/79 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 78861 Finland 9/21/81 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 1309979 France 4/25/95 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 947128 Germany 7/22/76 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 25501982 Hong Kong 7/6/78 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 429736 Indonesia 6/29/99 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 95565 Ireland 7/26/78 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 46192 Israel 7/6/78 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 639074 Italy 12/12/94 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 1354774 Japan 10/31/78 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING M79979 Malaysia 9/26/78 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 197420 Mexico 9/8/76 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 124571 New Zealand 7/26/78 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 104142 Norway 1/24/80 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 103459 (App. No.) Pakistan - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 14479 Peru 3/30/95 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 63938 Singapore 4/12/75 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 783660 South Africa 7/31/78 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 56392 South Korea 6/27/78 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 787240 Spain 5/24/77 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 87020 Taiwan 1/1/77 - -------------------------------------------------------------------------------------------------------------------
1 56
Mark Registration Number Country Issue Date - ---- ------------------- ------- ---------- ALTEC LANSING 1040220 United Kingdom 12/9/76 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 2,113,891 United States 11/18/97 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 308193 Uruguay 11/25/98 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING 83520F Venezuela 12/8/76 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING & DESIGN 45563 Philippines 6/30/89 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING & DESIGN TM66711 Thailand 12/25/97 - ------------------------------------------------------------------------------------------------------------------- ALTEC LANSING & DESIGN 1,041,673 United States 6/22/76 - ------------------------------------------------------------------------------------------------------------------- LANSING 2,106,856 United States 10/21/97 - ------------------------------------------------------------------------------------------------------------------- VOICE OF THE HIGHWAY 1,172,997 United States 10/13/81 - ------------------------------------------------------------------------------------------------------------------- VOICE OF THE THEATRE 964642 Japan 5/31/72 - -------------------------------------------------------------------------------------------------------------------
2 57 EXHIBIT B TO TRADEMARK COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT LIST OF LICENSES License to Telex Communications, Inc. dated April ____, 2000. 58 EXHIBIT C TO TRADEMARK COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT SPECIAL POWER OF ATTORNEY STATE OF MINNESOTA ) ) ss.: COUNTY OF HENNEPIN ) KNOW ALL MEN BY THESE PRESENTS, that ALTEC LANSING TECHNOLOGIES, INC. ("Debtor"), having an office at Route 6 and 209, Milford, Pennsylvania 18337 hereby appoints and constitutes, severally, TELEX COMMUNICATIONS, INC. ("Secured Party"), and each of its officers, its true and lawful attorney, with full power of substitution and with full power and authority to perform, upon the occurrence of any Event of Default, the following acts on behalf of Debtor: 1. Execution and delivery of any and all agreements, documents, instrument of assignment or other papers which Secured Party, in its good faith discretion, deems necessary or advisable for the purpose of assigning, selling, or otherwise disposing of all right title, and interest of Debtor in and to any Marks as that term is defined in that certain Trademark Collateral Assignment and Security Agreement dated April ___, 2000 by and between Debtor and Secured Party and all registrations, recordings, reissues, extensions, and renewals thereof, or for the purpose of recording, registering and filing of, or accomplishing any other formality with respect to the foregoing. 2. Execution and delivery of any and all documents, statements, certificates or other papers which Secured Party, in its good faith discretion, deems necessary or advisable to further the purposes described in Subparagraph 1 hereof. This Power of Attorney is made pursuant to a Trademark Collateral Assignment and Security Agreement dated of even date herewith, between Debtor and Secured Party (the "Security Agreement") and is subject to the terms and provisions thereof. This Power of Attorney, being coupled with an interest, is irrevocable until all "Obligations", as such term is defined in the Security Agreement are paid in full and the Security Agreement is terminated in writing by Secured Party, and is automatically revoked upon the termination of the Security Agreement. Dated: April ___, 2000 ALTEC LANSING TECHNOLOGIES, INC. By: -------------------------------- Name: ------------------------------ 1 59 Title: ----------------------------- 2 60 STATE OF MINNESOTA ) ) ss.: COUNTY OF HENNEPIN ) On this _____ day of April, 2000, before me personally came ____________________ to me known, who being duly sworn, did depose and say, that he is the ____________ of Altec Lansing Technologies, Inc., the corporation described in and which executed the foregoing instrument; and that he signed his name thereto by order of the Board of Directors of said corporation. ------------------------------ Notary Public 3 61 Exhibit 7 Mutual General Release DATE: April ___, 2000 ("Effective Date") PARTIES: Altec Lansing Technologies, Inc. ("ALTI") Route 6 and 209 Milford, PA 18337 Telex Communications, Inc. ("Telex") 9600 Aldrich Avenue South Minneapolis, MN 55420 RECITALS: WHEREAS, ALTI and Telex are parties to a Trademark License Agreement dated November 5, 1985, as amended (the "License Agreement"); and WHEREAS, the Telex and ALTI have entered into a Settlement Agreement dates March 29, 2000 (the "Settlement Agreement"); and WHEREAS, the parties have agreed, in accordance with the terms of the Settlement Agreement, to settle certain disputes between them and to release all other claims they may have arising under the License Agreement. NOW, THEREFORE, in consideration of the mutual releases granted herein and other good and valuable consideration exchanged between the parties, including the mutual promises and covenants contained in the Settlement Agreement, the parties agree as follows: AGREEMENT 1. ALTI hereby release and forever discharge Telex, its past, present and future officers, directors, agents, servants, employees and their respective heirs, legal representatives, successors and assigns, of and from any and all claims, demands, obligations, damages, controversies, suits, liabilities, actions or causes of action of any kind whatsoever, whether known or unknown, in law or in equity (collectively the "ALTI Claims"), based on events that occurred on or before the Effective Date, other than ALTI Claims arising under or relating to the Settlement Agreement, License Agreement or the Purchase and Sale Agreement by and between the parties dated March 30, 2000 (the "Purchase Agreement"). 1 62 2. Telex hereby release and forever discharge ALTI, its past, present and future officers, directors, agents, servants, employees and their respective heirs, legal representatives, successors and assigns, of and from any and all claims, demands, obligations, damages, controversies, suits, liabilities, actions or causes of action of any kind whatsoever, whether known or unknown, in law or in equity, (collectively the "Telex Claims"), based upon events that occurred on or before the Effective Date, other than Telex Claims arising under or relating to the Settlement Agreement, License Agreement or the Purchase Agreement, $3,000,000 Promissory Note, $1,000,000 Promissory Note, $500,000 Promissory Note, or Trademark Collateral Assignment and Security Agreement. IN WITNESS WHEREOF, ALTI has caused this Release to be executed in the manner appropriate, all as of the day and year first above written. ALTEC LANSING TECHNOLOGIES, INC. By: -------------------------------- Name: ------------------------------ Title: ----------------------------- IN WITNESS WHEREOF, Telex has caused this Release to be executed in the manner appropriate, all as of the day and year first above written. TELEX COMMUNICATIONS, INC. By: -------------------------------- Name: ------------------------------ Title: ----------------------------- 2 EX-10.1(B) 3 AMENDED & RESTATED SETTLEMENT AGREEMENT 4/28/2000 1 EXHIBIT 10.1 (B) AMENDMENT TO RESTATED AND AMENDED SETTLEMENT AGREEMENT This Amendment (the "AMENDMENT") to the Restated and Amended Settlement Agreement ("RESTATED SETTLEMENT AGREEMENT") dated March 29, 2000, by and among Telex Communications, Inc. ( "TELEX"), and Altec Lansing Technologies, Inc. ("ALTI"), is entered into effective as of April 28, 2000. W I T N E S S E T H: WHEREAS, pursuant to the terms of the Restated Settlement Agreement ALTI and Telex agree to enter into certain agreements and ALTI agrees to make certain payments and certain promissory notes on a date no later than April 30, 2000; and WHEREAS, ALTI has advised Telex that it is using its best efforts to locate financing as set forth in Section 4.4 of the Restated Settlement Agreement.; and WHEREAS, ALTI has further advised Telex that it believes that it may locate such additional financing on or before May 15, 2000; and WHEREAS, Telex is willing to grant to ALTI an additional period of time to locate such financing, in exchange for ALTI's payment by wire transfer (an instruction for which ALTI shall make on the date hereof) of the sum of One Million Eight Hundred Thousand and no/Dollars ($1,800,000), which payment shall be credited against the sums payable under Section 2.2(b) of the Restated Settlement Agreement; and WHEREAS, Telex and ALTI each desire to amend the terms of the Restated Settlement Agreement to extend the date by which the "Closing" (as defined in Section 1.2 of the Restated Settlement Agreement) must occur; and WHEREAS, in accordance with Section 10.5 of the Restated Settlement Agreement, Telex and ALTI may amend the terms of the Restated Settlement Agreement by a writing signed by both parties; and WHEREAS, ALTI has a good faith belief that it will obtain financing from Congress Financial Corporation ("Congress") that will permit it to close the transaction contemplated by the Restated Settlement Agreement on or before May 15, 2000 without the need for Telex to hold any notes referred to in Section 2.2 of the Restated Settlement Agreement. 2 NOW, THEREFORE, for and in consideration of the mutual benefits to be derived, promises and agreements contained herein, and other good and value consideration, the parties hereto agree as follows: A G R E E M E N T: 1. Amendments. a. Section 1.2 of the Restated Settlement Agreement is hereby amended and restated in its entirety to read as follows: 1.2) Effective Date. This Agreement shall become effective upon delivery by ALTI of the wire transfer payment set forth in Section 2.2(b) and the promissory notes described in Sections 2.2(c) and 2.2(d) (the "Effective Date"). In no event shall the Effective Date, which is also hereinafter referred to an the "Closing Date, be a date later than May 15, 2000. b. Section 2.2(a) of the Restated Settlement Agreement is hereby amended and restated in its entirety to read as follows: (a) ALTI has, prior to the Effective Date of this Agreement (as defined below), paid to Telex the aggregate sum of Three Million, Nine Hundred Thirty Seven Thousand, Seven Hundred Twenty Five and 62/100 Dollars ($3,937,725.62). c. Section 2.2(b) of the Restated Settlement Agreement is hereby amended and restated in its entirety to read as follows: (b) The sum of Five Million Sixty Two Thousand Two Hundred Seventy Four and 38/100 ($5,062,264.38) (the "Closing Payment") shall be paid on the Closing Date by wire transfer to the account and using the wire transfer instructions set forth in Exhibit 2.2(b)(i); provided, however, that in the event ALTI is unable to obtain the additional financing described in Section 4.4 below, Five Million and no/00 Dollars ($5,000,000) of the Closing Payment shall be paid by ALTI by delivering to Telex a promissory note in the form of Exhibit 2.2 b (ii) (the "Prior Note"). d. Exhibit 2.2(c) to the Restated Settlement Agreement is hereby amended by replacing the following paragraph (a) in its entirety: The Borrower shall pay the principal amount of this Note in full, with accrued interest, in twelve consecutive quarterly installments, commencing on the earlier of the date hereof or April 30, 2000, with the second installment due and payable June 30, 2000, and continuing 2 3 quarterly thereafter through and including December 31, 2002. The amount of each quarterly payment shall be equal to the accrued interest on the unpaid principal balance, plus a sum equal to $250,000, subject to the provisions of subsection (b) below. With the following paragraph: The Borrower shall pay the principal amount of this Note in full, with accrued interest, in twelve consecutive quarterly installments, commencing on the earlier of the date hereof or May 15, 2000, with the second installment due and payable June 30, 2000, and continuing quarterly thereafter through and including December 31, 2002. The amount of each quarterly payment shall be equal to the accrued interest on the unpaid principal balance, plus a sum equal to $250,000, subject to the provisions of subsection (b) below. 2. ALTI shall promptly notify Telex if, and in the event that, ALTI learns that its application for financing from Congress has been denied. The parties agree to use their best efforts to cause the Closing Date to occur within three (3) business days following such a denial. 3. Construction. All references in any other ancillary agreements or otherwise to the Restated Settlement Agreement shall be deemed to refer to the Restated Settlement Agreement as amended by this Amendment. Unless otherwise defined in this Amendment, capitalized terms used in this Amendment will have the meanings ascribed to them in the Restated Settlement Agreement. In the event of a conflict between the respective provisions of the Restated Settlement Agreement and this Amendment, the terms of this Amendment shall control. 4. Effect of Amendment. Except as specifically amended by the terms of this Amendment, the terms and conditions of the Restated Settlement Agreement shall remain in full force and effect for all purposes, and Telex and ALTI hereby ratify and confirm the terms and conditions of the Restated Settlement Agreement, as amended pursuant to this Amendment 5. Counterparts; Facsimiles. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and such counterparts together shall constitute one and the same instrument. Each Party shall receive a duplicate original of the counterpart copy or copies executed by it. For purposes hereof, a facsimile copy of this Agreement, including the signature pages hereto, shall be deemed to be an original. Notwithstanding the foregoing, the Parties shall each deliver original execution copies of this Agreement to one another as soon as practicable following execution thereof. 3 4 IN WITNESS WHEREOF, Telex and ALTI have caused this Amendment to be executed by their respective duly authorized officers effective as of the date first above written. TELEX COMMUNICATIONS, INC. ("TELEX") By: /s/ Scott Myers ------------------------------- ALTEC LANSING TECHNOLOGIES, INC. ("ALTI") By: /s/ Edward Anchel ------------------------------- 4 EX-10.2(A) 4 RESTATED & AMENDED PURCHASE/SALE AGRMT. 3/30/2000 1 EXHIBIT 10.2 (A) RESTATED AND AMENDED PURCHASE AND SALE AGREEMENT EFFECTIVE DATE: March 30, 2000 PARTIES: Telex Communications, Inc. ("Telex") 9600 Aldrich Avenue South Minneapolis, MN 55420 Altec Lansing Technologies, Inc. ("ALTI") Route 6 and 209 Milford, PA 18337 This Restated and Amended Purchase and Sale Agreement restates and amends in its entirety that Purchase and Sale Agreement by and between the parties executed on or about March 30, 2000, and is effective as if fully executed on the Effective Date set forth above. RECITALS: A. Telex currently owns certain trademarks and trademark registrations in connection with the Altec Lansing brand including the trademark registrations listed on the attached Exhibit A (hereinafter the "Registered Marks"), and common law trademarks in the marks ALTEC, ALTEC LANSING, LANSING, VOICE OF THE HIGHWAY, and VOICE OF THE THEATRE, and numerous designs used in connection with each of the foregoing (hereinafter, such registered and unregistered trademarks being referred to as the "Marks") B. ALTI holds a license to use the Marks in connection with certain audio products under the terms of a Trademark License Agreement dated November 5, 1985, as amended (the "License Agreement"). C. Telex wishes to sell to ALTI, and ALTI wishes to purchase, the Marks on the terms and conditions set forth below. AGREEMENTS: NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows (the "Agreement"): ARTICLE 1 SALE AND PURCHASE OF MARKS 1.1) Sale and Purchase of Marks. Subject to the terms and conditions of this Agreement, Telex agrees to sell, and ALTI agrees to purchase, all of Telex's rights, title, and -1- 2 interest in and to the Marks together with the goodwill associated therewith and the registrations thereof, as set forth on Exhibit A hereto. 1.2) Termination of License Agreement. Upon Closing (as that term is hereinafter defined) and sale of the Marks by Telex to ALTI hereunder, the parties' respective rights and obligations under the License Agreement shall terminate, no further royalties (including any accrued but unpaid interest on royalties) shall be owed, and such License Agreement shall be void and of no further force and effect. 1.3) Transfer Taxes. ALTI shall be responsible for payment of any sales, use or other transfer tax assessable with respect to the transactions herein, other than tax measured on Telex's income, including the income it receives as a result of the payments and other consideration received by it under this Agreement. ARTICLE 2 PURCHASE PRICE AND PAYMENT 2.1) Purchase Price. The Purchase Price ("Purchase Price") shall be equal to One Million and no/100 Dollars ($1,000,000.00). 2.2) Payment of Purchase Price. The Purchase Price shall be paid as follows: (a) ALTI shall execute and deliver to Telex at the Closing a promissory note in substantially the form of Exhibit 2.2 in the principal amount of One Million and no/100 Dollars ($1,000,000.00), due and payable in full, together with interest accruing at the rate of 8 1/2% per annum, on April 30, 2004. 2.3) Allocation of Purchase Price. The entire Purchase Price, equal to the sum of One Million and no/100 Dollars ($1,000,000.00) shall be allocated as payment for the Marks, and the parties agree to report this transaction for Federal and state tax purposes in accordance with the allocation set forth in this Section 2.3. 2.4) Security for Promissory Note. ALTI shall execute and deliver to Telex at the Closing a security agreement granting Telex a lien on the Marks to the extent of ALTI's unpaid obligations to Telex on terms substantially similar to those set forth in Exhibit 2.4 (the "Security Agreement"), and which shall include such additional subordination, inter-creditor and forbearance provisions as are typically required in such transactions by the holder of the first lien on the Marks ("ALTI's Lender"). Telex's rights in the Marks will be subordinate in lien and subordinate in payment to ALTI's Lender's first priority security interest in the Marks. Telex agrees to execute such documents evidencing the subordination of its Security Agreement and the limitation of its remedies thereunder as ALTI's Lender may require, provided that the terms of such documents are typical of those required in similar transactions involving ALTI's Lender. -2- 3 2.5) License. ALTI shall execute and deliver to Telex at the Closing a license granting Telex a limited right to continued use of the Marks on the terms and conditions set forth in a license agreement in the form of Exhibit 2.5 (the "Telex License"). ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF TELEX Telex makes the following representations and warranties to ALTI with the intention that ALTI may rely upon the same and acknowledges that the same shall be true as of the date of this Agreement and of the Closing Date (as if made at the Closing) and shall survive the Closing of this transaction: 3.1) Organization. Telex is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has all requisite power and authority corporate and otherwise, to own its properties and assets and to conduct its business. 3.2) Corporate Authority. Telex has all requisite power and authority to execute, perform and carry out the provisions of this Agreement. Telex has taken all requisite corporate action authorizing and empowering Telex to enter into this Agreement and to consummate the transaction contemplated herein. 3.3) Title to Marks; Status of Marks. Except as set forth below, Telex makes no other warranties or representations regarding the Marks or the goodwill, if any, associated therewith. (a) Telex holds marketable title to the Registered Marks free and clear of all liens, charges, security interests, claims or encumbrances, and the right and power to grant the unconditional assignment granted hereunder. (b) To the best of Telex's knowledge and belief, Telex holds marketable title to the unregistered marks free and clear of all liens, charges, security interests, claims or encumbrances, and the right and power to grant the unconditional assignment granted hereunder. (c) To the best of Telex's knowledge and belief, all of the registrations for the Registered Marks are valid and subsisting in full force and effect and Telex owns the title thereto. (d) To the best of Telex's knowledge and belief, the Registered Marks constitute all of the registered trademarks, logos, trade names and/or other registered designations or designs used in connection with the Altec Lansing brand. (e) The Marks are not subject to any liens, mortgages, assignments, licenses (except the License Agreement), security interests or encumbrances of any nature whatsoever, except the permitted exceptions listed in Schedule 3.3(c) hereto. -3- 4 3.4) Use of Marks. Telex represents and warrants that, after the Closing Date, Telex shall make no use of the Marks, or any confusingly similar mark or designation, except as expressly permitted under the terms of the Telex License. 3.5) Binding Obligation. This Agreement and the documents executed in connection herewith, constitute the legal, valid and binding obligation of Telex enforceable against it in accordance with their terms. ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF ALTI ALTI makes the following representations and warranties to Telex, with the intention that Telex may rely upon the same and acknowledges that the same shall be true as of the Closing Date (as if made at the Closing) and shall survive the Closing of this transaction: 4.1) Organization. ALTI is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania and has all requisite power and authority, corporate and otherwise to own its properties and assets and to conduct its business. 4.2) Corporate Authority. ALTI has all requisite power and authority to execute, perform and carry out the provisions of this Agreement. ALTI has taken all requisite corporate action authorized and empowering ALTI to enter into this Agreement and to consummate the transactions contemplated hereby. 4.3) Use of Marks. ALTI represents and warrants that, after the Closing Date, ALTI shall make no use of the Marks, or any confusingly similar mark or designation, which use is prohibited by the provisions of Article 6 of this Agreement. 4.4) Binding Obligation. This Agreement and the documents executed in connection herewith constitute the legal, valid, and binding obligation of ALTI enforceable against it in accordance with their terms. 4.5) ALTI's Acknowledgement. ALTI acknowledges that Telex has not made any representations regarding the value of the Marks nor the goodwill, if any, associated therewith, and that the Marks are being transferred to ALTI "as is" and "where is", except as specifically set forth in this Agreement. ARTICLE 5 REVIEW OF DOCUMENTS 5.1) Trademark Files. Promptly after execution of this Agreement, Telex shall make available for ALTI's review and inspection, at Telex's Minnesota facility or at such other location as the parties may mutually agree upon, during normal business hours any of the following documents that are in Telex's possession: -4- 5 (a) evidence of current registration for each Registered Mark; (b) all of the records and files relating to the Marks, including the prosecution history relating to each Registered Mark and any abandoned or expired registrations for any of the Marks; (c) any written legal opinion relating to the validity or infringement of any of the Marks; (d) all documents referring or relating to any trademark proceedings in any country in which Telex is a party based in whole or in part upon one or more of the Marks; (e) all documents referring or relating to all liens, charges, security interests, encumbrances, or third party claims or interests as of the Closing Date to any of the Marks; (f) all documents referring to or relating to any asserted or unasserted claim of Telex against any other party based in whole or in part upon such party's use or proposed use of any of the Marks, or any designation confusingly similar with any of the Marks; (g) all documents referring or relating to any asserted, threatened or pending claim against Telex based in whole or in part upon Telex's use or proposed use of any of the Marks; (h) all documents referring or relating to any known defects in or problems with, any of the Registered Marks; and (i) all licenses, distribution agreements and other documents referring or relating to any right of any third party to use, market or otherwise promote any goods or services under the Marks. ARTICLE 6 NON COMPETE 6.1) Definitions. For purposes of this Article 6: "Professional Audio Products" means (a) commercial sound paging and commercial background/foreground music systems including but not limited to commercial ceiling speakers, commercial paging horns, commercial paging amplifiers, commercial paging (audio) projectors, commercial automatic mixers, commercial integrated mixer-amplifiers, powered amplifiers for commercial office building sound systems, -5- 6 mixers with integral AM and/or FM radio receivers for use with commercial paging systems, including, but not limited to, wireless applications and devices of any of these products, and parts, components and accessories for all of these products, and (b) professional sound reinforcement systems including any audio products (including but not limited to speakers, mixers, amplifiers, microphones, and audio signal processing units providing crossover, equalization, time delay, etc.) that are sold or marketed (either through labeling, advertising, direct sales, or otherwise) for use in commercial/professional cinema, theatre, concert sound, performing arts centers, television broadcast studios, radio broadcast studios, audio recording studios, and video production studios, including, but not limited to, wireless applications and devices of any of these products; but in no event shall the definition of Professional Audio Products include speakers designed primarily for home and/or personal use, non-commercial home theatre, non-commercial home cinema or TV, Internet-enabled systems; micro-computer/personal computer/hand-held computer peripherals; or non-commercial cable and/or satellite-based systems, including but not limited to, wireless applications and devices of any of these products. 6.2) Covenant Not to Compete. For a period of two (2) years from the date of this Agreement ALTI shall not use the Marks (including any use as part of a company name) in conjunction with the sale of any Professional Audio Products. 6.3) Consideration. The mutual covenants and agreements contained in this Agreement shall be deemed full and adequate consideration for ALTI's agreement not to compete set forth in this Section 6. 6.4) Injunctive Relief. Being recognized by both ALTI and Telex that irreparable damage will result to Telex if ALTI violates the foregoing Section 6.2 hereof, it is hereby agreed that in the event of any breach or threatened breach of Section 6.2 by ALTI, Telex shall be entitled, in addition to any other remedies available to it, to an injunction to restrain the violation of such covenant by ALTI and to recover attorneys' fees and disbursements for the securing of such relief. ARTICLE 7 CONDITIONS OF TELEX'S OBLIGATIONS The obligations of Telex to close the transaction contemplated by this Agreement shall be subject to the observance or performance of the following conditions on or before the Closing Date: -6- 7 7.1) Timing of Closing. ALTI shall be ready, willing and able to close the transaction contemplated by this Agreement on or before the Closing Date and shall have advised Telex of that fact. 7.2) Truth of Representations and Warranties. The representations and warranties of ALTI set forth in Article 4 herein shall continue to be true and correct on the Closing Date as though made on such date. 7.3) Performance of Obligations. ALTI shall have duly performed and complied with all agreements and conditions required in this Agreement to be performed or complied with by ALTI prior to or as of the Closing Date. 7.4) Settlement Agreement Effective. The Closing (as that term is defined under the Settlement Agreement) under that certain Settlement Agreement dated March 29, 2000 (the "Settlement Agreement") between the parties of even date herewith shall have occurred. ARTICLE 8 CONDITIONS OF ALTI'S OBLIGATIONS The obligations of ALTI to close the transaction contemplated by this Agreement shall be subject to the observance or the performance of the following conditions on or before the Closing Date: 8.1) Timing of Closing. Telex shall be ready, willing and able to close the transaction contemplated by this Agreement on or before the Closing Date and shall have advised ALTI of that fact. 8.2) Truth of Representations and Warranties. Telex's representations and warranties set forth in Article 3 herein shall continue to be true and correct on the Closing Date as though made on such date. 8.3) Performance of Obligations. Telex shall have performed and complied with all agreements and conditions required by this Agreement to be performed or complied with by Telex prior to or as of the Closing Date. 8.4) Settlement Agreement Effective. The Closing (as that term is defined under the Settlement Agreement) under the Settlement Agreement between the parties of even date herewith shall have occurred. -7- 8 ARTICLE 9 CLOSING 9.1) Closing Date. The closing (herein before and hereinafter the "Closing") of the transaction contemplated by this Agreement shall be held on or before April 30, 2000 (herein before and hereinafter the "Closing Date") at such place as mutually agreed to by the parties. 9.2) Documents Delivered by Telex. At the Closing, Telex shall deliver to ALTI the following documents, duly executed as appropriate: (a) an assignment of the Marks in the form of Exhibit 9.2 or in such other form as is reasonable and customary in the applicable jurisdiction; (b) an original, to the extent Telex has such originals, of each of the documents referenced in Section 5.1; provided further that if Telex is not in possession or control of such files at Closing, it shall use its best efforts at Telex's sole cost and expense to locate such files and provide copies to ALTI after the Closing; (c) Certificate of Good Standing for Telex from the State of Minnesota dated no earlier than twenty-five (25) days prior to the Closing Date; (d) certified copies of corporate resolutions of Telex authorizing it to enter into the transactions contemplated herein; and (e) such other documents as ALTI may reasonably request for the purpose of assigning, transferring, granting, conveying and confirming to ALTI or reducing to its possession, any and all assets, property, and rights to be conveyed and transferred by this Agreement. 9.3) Documents Delivered by ALTI. At the Closing, ALTI shall deliver to Telex the following documents, duly executed as appropriate: (a) Certificate of Good Standing for ALTI from the Commonwealth of Pennsylvania dated no earlier than twenty-five (25) days prior to the Closing Date; (b) certified copy of corporate resolutions of ALTI authorizing it to enter into the transactions as contemplated herein; (c) the Promissory Note; (d) the Security Agreement; (e) the License Agreement; and -8- 9 (f) such other documents as Telex may reasonably request to carry out the transaction contemplated under this Agreement. 9.4) Further Documents and Assurances. At any time and from time to time after the Closing Date, each party shall, upon the request of another party, execute, acknowledge, and deliver all such further and other assurances and documents, and will take such action consistent with the terms of this Agreement as may be reasonably requested to carry out the transactions contemplated herein and to permit each party to enjoy its rights and benefits hereunder. ARTICLE 10 INDEMNIFICATION 10.1) Indemnification by Telex. Telex shall indemnify and hold ALTI harmless from and against all losses or damages suffered by ALTI, including reasonable attorneys' fees and disbursements, which arise out of, relate to, pertain to or concern any misrepresentation by Telex or any breach of Telex's warranties and representations hereunder, or any breach, nonfulfillment or nonperformance by Telex of any of Telex's covenants, duties or obligations hereunder, or any claim, demand, action or proceeding asserted by a creditor of Telex. 10.2) Indemnification by ALTI. ALTI shall indemnify and hold Telex harmless from and against all losses or damages suffered by Telex (including reasonable attorneys' fees and disbursements) which arise out of, relate to, pertain to or concern any misrepresentation by ALTI, or any breach of ALTI's warranties and representations hereunder, or any breach, nonfulfillment or nonperformance by ALTI of any of ALTI's covenants, duties or obligations hereunder. ARTICLE 11 CONFIDENTIALITY 11.1) Confidentiality. The parties hereby expressly agree to maintain the confidentiality of the terms and conditions of this Agreement, and not to divulge or reveal any of the terms herein to any third party, except to ALTI's Lender and as may be reasonably necessary for tax and/or securities reporting purposes, for purposes of recording the transfer and assignment of the Marks, or as may be otherwise required by law or order of any court of competent jurisdiction. Notwithstanding the foregoing, Telex may reveal the existence of this Agreement to third parties as necessary to advise such third parties of the fact that Telex will be phasing out of its use of the Marks, that Telex's products will begin to be marketed under different brands, and that ALTI may begin selling Professional Audio Products using the Marks at some point. In the event a party is compelled to divulge the terms of this Agreement by legal process, the party shall promptly notify the other party, and the parties agree to cooperate with each other in any effort to obtain an order from the court preventing or limiting the disclosure. 11.2) Enforcement. The foregoing notwithstanding, the parties recognize and agree that they may use and/or disclose the terms of this Agreement to any court of competent jurisdiction -9- 10 in connection with any action for the interpretation or enforcement of any provision or term set forth herein. 11.3) Registration and Recording. Nothing in this Agreement shall preclude either party from applying for, maintaining the registration of, or recording any rights or interests in or to any rights, including the intellectual property rights, being transferred under this Agreement. ARTICLE 12 GENERAL PROVISIONS 12.1) Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed to have been given, when received, if personally delivered, faxed during business hours or delivered by nationally recognized overnight courier service, and three (3) business days after deposit or when actually received, whichever occurs first, if placed in the U.S. mail for delivery by registered or certified mail, return receipt requested, postage prepaid addressed as follows: (a) To Telex at: Telex Communications, Inc. 9600 Aldrich Avenue South Minneapolis, MN 55420 Attention: President and Attention: General Counsel With a copy to: Ann M. Ladd Fredrikson & Byron, P.A. 1100 International Centre 900 Second Avenue South Minneapolis, MN 55402 (b) To ALTI at: Altec Lansing Technologies, Inc. Route 6 and 209 Milford, PA 18337 Attention: President -10- 11 With a copy to: Adam B. Landa Graham & James LLP 885 Third Avenue, 21st Floor New York, NY 10022-4834 Addresses may be changed by written notice given pursuant to this Section. 12.2) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their successors and assigns. 12.3) Headings. The descriptive headings of the several articles and sections of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. 12.4) Attorneys' Fees. In any action commenced by either party to enforce the provisions of the Agreement, the prevailing party shall be entitled to recover its reasonable costs and expenses, including attorneys' fees. 12.5) Entire Agreement Modification and Waiver. This Agreement, together with the Exhibits and the related written agreements specifically referred to herein, represents the only agreement among the parties concerning the subject matter hereof and supersedes all prior agreements, whether written or oral, relating thereto. No purported amendment, modification or waiver of any provision hereof shall be binding unless set forth in a written document signed by all parties (in the case of amendments or modifications) or by the party to be charged thereby (in the case of waivers). Any waiver shall be limited to the provision thereof and the circumstance or events specifically made subject thereto and shall not be deemed a waiver of any other term hereof or of the same circumstance or event of any recurrence thereof. No consent or waiver, expressed or implied, by either party to or of any breach or default by the other party in the performance by the other party of its obligations under this Agreement shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by that party of the same or any other obligations of that party. Failure on the part of either party to complain of any act or failure to act on the part of the other party or to declare the other party in default, irrespective of how long the failure continues, shall not constitute a waiver by that party of its rights under this Agreement. 12.6) Severability. If any provision of this Agreement or its application to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of the provisions to other persons or circumstances shall not be affected thereby, and this Agreement shall be enforced to the greatest extent permitted by law. 12.7) Governing Law. This Agreement and the legal relations between the parties shall be governed by and construed in accordance with the laws of the State of Minnesota. -11- 12 12.8) Waiver. No consent or waiver, expressed or implied, by either party to or of any breach or default by the other party in the performance by the other party of its obligations under this Agreement shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by that party of the same or any other obligations of that party. Failure on the part of either party to complain of any act or failure to act on the part of the other party or to declare the other party in default, irrespective of how long the failure continues, shall not constitute a waiver by that party of its rights under this Agreement. 12.9) Counterparts. This Agreement may be executed with counterpart signatures. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in the manner appropriate to each, all as of the day and year first above written. TELEX COMMUNICATIONS, INC. By: /s/ Scott Myers ------------------------------ Name: Scott Myers ---------------------------- Title: Vice President --------------------------- ALTEC LANSING TECHNOLOGIES, INC. By: /s/ Edward Anchel ------------------------------ Name: Edward Anchel ---------------------------- Title: President and CEO --------------------------- -12- 13 EXHIBIT A
Mark Registration Number Country Issue Date ALTEC 1380268 Argentina 4/30/90 ALTEC A200324 Australia 2/17/66 ALTEC 58120 Austria 9/29/66 ALTEC 60565 Greece 2/10/78 ALTEC 88484 Hong Kong 11/21/79 ALTEC 103227 Mexico 7/13/66 ALTEC 132011 Sweden 7/10/70 ALTEC 354145 Switzerland 2/10/87 ALTEC 101768 Turkey 4/20/97 ALTEC 890602 United Kingdom 7/16/67 ALTEC 860,432 United States 11/19/68 ALTEC 534,754 United States 12/12/50 ALTEC LANSING A348153 Australia 7/7/80 ALTEC LANSING 335509 Benelux 6/17/75 ALTEC LANSING 7033885 Brazil 12/10/89 ALTEC LANSING 216049 Canada 9/17/76 ALTEC LANSING 369189 Chile 5/28/81 ALTEC LANSING 351185 Chile 1/17/90 ALTEC LANSING 9900147973 (App. No.) China ALTEC LANSING 6041979 Denmark 2/23/79 ALTEC LANSING 78861 Finland 9/21/81 ALTEC LANSING 1309979 France 4/25/95 ALTEC LANSING 947128 Germany 7/22/76 ALTEC LANSING 25501982 Hong Kong 7/6/78 ALTEC LANSING 429736 Indonesia 6/29/99 ALTEC LANSING 95565 Ireland 7/26/78 ALTEC LANSING 46192 Israel 7/6/78 ALTEC LANSING 639074 Italy 12/12/94 ALTEC LANSING 1354774 Japan 10/31/78 ALTEC LANSING M79979 Malaysia 9/26/78 ALTEC LANSING 197420 Mexico 9/8/76 ALTEC LANSING 124571 New Zealand 7/26/78 ALTEC LANSING 104142 Norway 1/24/80 ALTEC LANSING 103459 (App. No.) Pakistan ALTEC LANSING 14479 Peru 3/30/95 ALTEC LANSING 63938 Singapore 4/12/75 ALTEC LANSING 783660 South Africa 7/31/78 ALTEC LANSING 56392 South Korea 6/27/78 ALTEC LANSING 787240 Spain 5/24/77 ALTEC LANSING 87020 Taiwan 1/1/77 ALTEC LANSING 1040220 United Kingdom 12/9/76 ALTEC LANSING 2,113,891 United States 11/18/97 ALTEC LANSING 308193 Uruguay 11/25/98 ALTEC LANSING 83520F Venezuela 12/8/76 ALTEC LANSING & DESIGN 45563 Philippines 6/30/89 ALTEC LANSING & DESIGN TM66711 Thailand 12/25/97 ALTEC LANSING & DESIGN 1,041,673 United States 6/22/76 LANSING 2,106,856 United States 10/21/97 VOICE OF THE HIGHWAY 1,172,997 United States 10/13/81
14
Mark Registration Number Country Issue Date VOICE OF THE THEATRE 964642 Japan 5/31/72
15 EXHIBIT 2.2 PROMISSORY NOTE $1,000,000 April __, 2000 FOR VALUE RECEIVED, ALTEC LANSING TECHNOLOGIES, INC., A PENNSYLVANIA CORPORATION (the "Borrower") promises to pay to the order of TELEX COMMUNICATIONS, INC., A DELAWARE CORPORATION, or its successors or assigns (the "Holder"), at its office in Minneapolis, Minnesota or at such other place as may be designated from time to time by the Holder, in lawful money of the United States of America, the principal sum of One Million and no/100 Dollars ($1,000,000), together with interest on the unpaid principal balance hereof, from the date hereof until this Promissory Note (the "Note") is fully paid, at an annual rate equal to eight and one-half percent (8.5%), calculated on the basis of the actual number of days elapsed in a 360-day year. Payment Terms. The principal amount of this Note and interest thereon shall be paid in full on April 30, 2004, and shall be made by wire transfer in accordance with the instructions provided by the Holder, unless the Holder agrees in writing to another method of payment. Prepayment. This Note may be prepaid in whole or in part at any time or from time to time without penalty or premium. Application of Payments. Payments hereunder shall be applied first to the payment of accrued interest and then to reduction of principal. Events of Default. The continuation of any one or more of the following events for a seven day period following notice to the Borrower shall constitute an Event of Default: (a) The Borrower shall fail to make when due, whether by acceleration or otherwise, any payment of principal of, or interest on, any indebtedness of the Borrower to the Holder within ten (10) days after the due date of the payment; (b) The Borrower shall materially fail to comply with any other agreement, covenant, condition, provision or term contained in (i) this Note and any other promissory note delivered by the Borrower to the Holder, (ii) that certain Settlement Agreement dated March 29, 2000 by and between Borrower and Holder, (iii) that certain Purchase -1- 16 and Sale Agreement dated March 30, 2000 by and between Borrower and Holder, or (iv) that certain Trademark Collateral Assignment and Security Agreement dated April __, 2000 by and between Borrower and Holder, and such failure to comply shall continue for thirty (30) days; (c) An Act of Bankruptcy shall occur with respect to the Borrower. As used herein, an "Act of Bankruptcy" shall be deemed to have occurred with respect to Borrower if: (1) Borrower becomes insolvent; (2) Borrower applies for or consents to the appointment of, or the taking of possession by, a receiver, custodian, trustee, liquidator or the like of Borrower or of all or a substantial part of the Borrower's property; (3) Borrower commences a voluntary case under any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceeding under the laws of any jurisdiction; (4) Borrower files a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts; (5) Borrower admits in writing its inability to pay its debts as they mature; or (6) Borrower makes an assignment for the benefit of its creditors; or (d) A "Change in Control" shall have occurred with respect to Borrower. For purposes of this Section, "Change in Control" means the occurrence of any of the following events: (i) the initial public offering of the Borrower's voting stock; (ii) acquisition by any person, entity or group of 35% or more of the combined voting power of the Borrower's then outstanding voting securities; or (iii) more than 65% of the value of the assets of the Borrower are voluntarily or involuntarily transferred. Remedies. If any Event of Default shall occur with respect to the Borrower, the outstanding unpaid Loan Amount shall automatically become due and payable immediately. In addition, upon any Event of Default, the Holder may exercise all rights and remedies under any other instrument, document or agreement in favor of the Holder, and enforce all rights and remedies under any applicable law, including without limitation the rights and remedies available upon default to a secured party under the Uniform Commercial Code as adopted in the State of Minnesota, including, without limitation, the right to take possession of any collateral, or any evidence thereof, proceeding without judicial process or by judicial process (without a prior hearing or notice thereof, which the Borrower hereby expressly waives) and the right to sell, lease or otherwise dispose of any or all of any collateral, and, in connection therewith, the Borrower will on demand assemble any collateral and make it available to the Holder at a place to be designated by the Holder which is reasonably convenient to both parties. No Waiver. No delay or failure on the part of the Holder in exercising any right or remedy hereunder, or at law or at equity, shall operate as a waiver of or preclude the exercise of any such right or remedy, and no single or partial exercise by the Holder of any such right or remedy shall preclude or estop another or further exercise thereof or exercise of any other right or remedy. No -2- 17 waiver by the Holder hereof shall be effective unless in writing signed by the Holder. A waiver on any one occasion shall not be construed as a waiver of any such right or remedy on any prior or subsequent occasion. Costs of Collection. The Borrower agrees to pay all costs of collection, including attorneys' fees, in the event that any amount under this Note is not paid when due. Miscellaneous. (a) Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed to have been given, when received, if personally delivered, faxed during business hours or delivered by nationally recognized overnight courier service, and three (3) business days after deposit or when actually received, whichever occurs first, if placed in the U.S. mail for delivery by registered or certified mail, return receipt requested, postage prepaid addressed as follows: (i) To Secured Party at: Telex Communications, Inc. 9600 Aldrich Avenue South Minneapolis, MN 55420 Attention: President With a copy to Ann Ladd Fredrikson & Byron, P.A. 1100 International Centre 900 Second Avenue South Minneapolis, MN 55402 (ii) To Debtor at: Altec Lansing Technologies, Inc. Route 6 and 209 Milford, PA 18337 Attention: President With a copy to Adam B. Landa, Esq. Graham & James LLP 885 Third Avenue 21 -3- 18 New York, NY 10022 Addresses may be changed by written notice given pursuant to this Section. (b) This Note is being delivered in, and shall be governed by the laws of, the State of Minnesota. Presentment or other demand for payment, notice of dishonor and protest are expressly waived. (c) The Holder will not transfer this Note to any entity which may be considered a competitor of the Borrower. ALTEC LANSING TECHNOLOGIES, INC. By -------------------------- Name ------------------------ Title ---------------------- -4- 19 Exhibit 2.4 TRADEMARK COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT DATE: April __, 2000 ("Effective Date") PARTIES: Telex Communications, Inc. ("Secured Party") 9600 Aldrich Avenue South Minneapolis, MN 55420 Altec Lansing Technologies, Inc. ("Debtor") Route 6 and 209 Milford, PA 18337 RECITALS: A. Pursuant to that certain Purchase and Sale Agreement ("Purchase Agreement") between the parties dated March 30, 2000, Secured Party has assigned to Debtor all right, title and interest in and to certain trademarks and trademark registrations in connection with the Altec Lansing brand including the trademark registrations listed on the attached Exhibit A (hereinafter the "Registered Marks"), and common law trademarks in the marks ALTEC, ALTEC LANSING, LANSING, VOICE OF THE HIGHWAY, and VOICE OF THE THEATRE, and numerous designs used in connection with the foregoing (hereinafter, such registered and unregistered trademarks being referred to as the "Marks"), subject to the Telex License (as that term is defined in the Purchase Agreement). B. Pursuant to that certain Settlement Agreement between the parties dated March 29, 2000, the parties have resolved certain other outstanding issues between them ("Settlement Agreement"). C. Subject to the Telex License and the other terms of the Purchase Agreement and Settlement Agreement, Debtor has adopted, used and is using, and is the owner of the entire right, title, and interest in and to the Marks. D. The provisions of the Settlement Agreement and of the Purchase Agreement by and between Secured Party and Debtor set forth certain financing arrangements pursuant to which Secured Party may make loans and advances and provide other financial accommodations to Debtor as set forth in certain promissory notes, dated of even date herewith, made by Debtor in favor of Secured Party (as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, the "Promissory Notes") and other agreements, documents and instruments referred to therein or at any time executed and/or delivered in connection therewith or related thereto, including, but not limited to, this Agreement; and -1- 20 E. To induce Secured Party to accept the Promissory Notes and to provide financial accommodations to Debtor pursuant thereto, Debtor has agreed to grant to Secured Party certain collateral security as set forth herein. AGREEMENTS: NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows (the "Agreement"): 1. GRANT OF SECURITY INTEREST As collateral security for the prompt performance, observance and indefeasible payment in full of all of the Obligations (as hereinafter defined), Debtor hereby grants to Secured Party a lien and security interest upon, and a conditional assignment of, the following (being collectively referred to herein as the "Collateral"): (a) all of Debtor's now existing or hereafter acquired right, title, and interest in and to the Marks, together with all rights and privileges arising under applicable law with respect to Debtor's use of any of the Marks; (b) the goodwill of the business symbolized by each of the Marks; (c) all future income, fees, royalties and other payments at any time due or payable with respect to the Marks, including, without limitation, payments under all licenses at any time entered into in connection with the Marks; (d) the right to sue for past, present and future infringements thereof; (e) all rights corresponding thereto throughout the world; and (f) any and all other proceeds of any of the foregoing, including, without limitation, damages and payments or claims by Debtor against third parties for past or future infringement of the Marks. 2. OBLIGATIONS SECURED The security interest, lien and other interests granted to Secured Party pursuant to this Agreement shall secure the prompt performance, observance and payment in full of any and all obligations, liabilities and indebtedness of every kind, nature and description owing by Debtor to Secured Party, arising under this Agreement, the Purchase Agreement, the Settlement Agreement and/or the Promissory Notes (collectively, the "Financing Agreements") including principal, interest, charges, fees, costs and expenses, however evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of the Promissory Notes or after the commencement of any case with respect to Debtor under the United States Bankruptcy Code or any similar statute (including, without limitation, the payment of interest and other amounts which would accrue and become due but for the commencement of such case), whether direct or indirect, absolute or contingent joint or several, due or not due, primary or secondary, liquidated or unliquidated, secured or unsecured, and however acquired by Secured Party (all of the foregoing being collectively referred to herein as the "Obligations"). -2- 21 3. REPRESENTATIONS, WARRANTIES AND COVENANTS Debtor hereby represents, warrants and covenants with and to Secured Party the following (all of such representations, warranties and covenants being continuing so long as any of the Obligations are outstanding): (a) Debtor shall pay and perform all of the Obligations according to their terms. (b) Debtor owns the title to all of the existing Collateral, and has the right and power to grant the security interest and conditional assignment granted hereunder. Debtor shall, at Debtor's expense, perform all commercially reasonable acts and execute all documents necessary to maintain the existence of the Collateral (as commercially reasonable) consisting of registered Marks as registered trademarks and, where commercially reasonable, to maintain the existence of all of the Collateral as valid and subsisting, including, without limitation, the filing of any renewal affidavits and applications. The Collateral is not subject to any liens, claims, mortgages, assignments, licenses, security interests of encumbrances of any nature whatsoever, except: (i) to a first priority security interest granted to ALTI's Lender (as that term is defined in the Settlement Agreement) on the date hereof; (ii) the security interests granted hereunder and pursuant to the Promissory Notes; (iii) the security interests permitted under the Settlement Agreement between the parties dated March 29, 2000; and (iv) the licenses permitted under Section 3(e) below. (c) Debtor shall not assign, sell, mortgage, lease, transfer, pledge, hypothecate, grant a security interest in or lien upon, encumber, grant an exclusive license relating to the Collateral, or otherwise dispose of any of the Collateral, in each case without the prior written consent of Secured Party, except as otherwise permitted herein or in the Promissory Notes. Nothing in this Agreement shall be deemed a consent by Secured Party to any such action, except as such action is expressly permitted hereunder. Secured Party hereby expressly permits Debtor to grant such non-exclusive licenses to the Marks as are commercially reasonable under the Circumstances. Secured Party hereby expressly permits the Debtor to grant a first priority security interest in the Collateral to ALTI's Lender on the date hereof. The Secured Party's rights and remedies under this Agreement are hereby expressly made subject and subordinate in lien and subject and subordinate in payment to ALTI's Lender's first priority security interest in the Collateral (including, without limitation, any future advances by ALTI's Lender to protect the Collateral or ALTI's Lender's lien thereon or rights thereto), and to all of ALTI's Lender's rights and remedies under the Subordination Agreement (as that term is defined in the Settlement Agreement) dated , 2000 by and between the Debtor, ALTI's Lender and the Secured Party. (d) Debtor shall, at Debtor's expense, promptly perform all acts and execute all documents reasonably requested at any time by Secured Party to evidence the security interest in and conditional assignment of the Collateral granted hereunder or to otherwise further the provisions of this Agreement. Secured Party shall be permitted, at Secured Party's sole cost and expense, to perform all acts and execute all documents reasonably necessary to perfect, maintain, record or enforce the security interest in and conditional assignment of the Collateral granted hereunder or to otherwise further the provisions of this Agreement. Debtor hereby authorizes -3- 22 Secured Party to execute and file one or more financing statements (or similar documents) with respect to the Collateral, signed only by Secured Party or as otherwise determined by Secured Party. Debtor further authorizes Secured Party to have this Agreement or any other similar security agreement filed with the Commissioner of Patents and Trademarks' or any other appropriate federal, state or government office. (e) As of the date hereof, Debtor has not granted any licenses with respect to the Marks other than as set forth in Exhibit B hereto. (f) Debtor shall, concurrently with the execution and delivery of this Agreement, execute and deliver to for escrow, five (5) originals of a Special Power of Attorney in the form of Exhibit C annexed hereto for the implementation of the assignment sale or other disposition of the Collateral pursuant to Secured Party's exercise of the rights and remedies granted to Secured Party hereunder. shall be bound by this Agreement and shall hold and shall not deliver such Special Power of Attorney to Secured Party, except pursuant to the terms and conditions of this Agreement. shall make no copies of such Special Power of Attorney. Promptly upon termination of this Agreement, regardless of the reason for such termination, shall return to Debtor all five (5) originals of the Special Power of Attorney, and any copies thereof, except such originals as shall have properly been delivered to Secured Party under the terms and conditions of this Agreement. (g) Secured Party may, in its reasonable and good faith discretion, pay any amount or do any act which Debtor fails to pay or do as required hereunder or as reasonably requested by Secured Party to preserve, defend, protect maintain, record or enforce the Obligations, the Collateral, or the security interest and conditional assignment granted hereunder, including, but not limited to, all filing or recording fees, court costs, collection charges, reasonable attorneys' fees and legal expenses. Debtor shall be liable to Secured Party for such reasonable and actual payments as are made by Secured Party which payments were necessary to preserve, defend, protect maintain, or enforce the Obligations, the Collateral, or the security interest and conditional assignment granted hereunder, which payment shall be deemed an advance by Secured Party to Debtor, shall be payable on demand together with interest at the rate then applicable to the Obligations set forth in the Promissory Notes and shall be part of the Obligations secured hereby. (h) Debtor has not abandoned any of the Marks and Debtor will not do any act, nor omit to do any act, whereby the Marks may become abandoned, invalidated, unenforceable, avoided, or avoidable; provided, that, Debtor may abandon or fail to maintain any of the Marks after thirty (30) days prior written notice to Secured Party with respect to any Marks that satisfy each of the following conditions: (i) any such Trademark is no longer used or useful in the business of Debtor or any of its affiliates, (ii) any such Trademark has not been used by Debtor or any of its affiliates for a period of six (6) months in an applicable territory or more from the date of such written notice to Secured Party and (iii) any such Mark is not otherwise material to the business of Debtor or any of its affiliates in any respect and has little or no value. Debtor shall notify Secured Party immediately if it knows or has reason to know of any reason why any -4- 23 application, registration, or recording with respect to the Marks may become abandoned, canceled, invalidated, avoided, or avoidable. (i) Debtor shall render any assistance, as Secured Party shall in good faith determine is necessary, to Secured Party in any proceeding before the United States Patent and Trademark Office, any federal or state court, or any similar office or agency in the United States, any State thereof, any political subdivision thereof or in any other country, to maintain such application and registration of the Marks as Debtor's exclusive property and to protect Secured Party's interest therein, including, without limitation, filing of renewals, affidavits of use, affidavits of incontestability and opposition, interference, and cancellation proceedings (except to the extent a trademark may be abandoned as permitted under Section 3(h) above). (j) Debtor shall promptly notify Secured Party if Debtor learns of any use by any person of any term or design which it believes infringes on any Mark or is likely to cause confusion with any Mark. Secured Party shall promptly notify Debtor if Secured Party learns of any use by any person of any term or design which it believes infringes on any Mark or is likely to cause confusion with any Mark. Debtor may, at Debtor's sole expense, bring such action as Debtor, in Debtor's sole discretion, may deem advisable for the protection of the Marks; any recovery from such action shall be for the sole use and benefit of Debtor. In the event that Debtor has not brought such action, and Secured Party, in Secured Party's sole discretion deems such action advisable for the protection of Secured Party's interest in and to the Marks, Secured Party may bring such action. If requested by Secured Party, Debtor, at Debtor's expense, shall join with Secured Party in such action as Secured Party, in Secured Party's discretion, may deem advisable for the protection of Secured Party's interest in and to the Marks. (k) Debtor assumes all responsibility and liability arising from its use of the Marks and Debtor hereby indemnifies and holds Secured Party harmless from and against any claim, suit, loss, damage, or expense (including reasonable attorneys' fees and legal expenses) arising out of any alleged defect in any product manufactured, promoted, or sold by Debtor (or any affiliate or subsidiary thereof) in connection with any Trademark or out of the manufacture, promotion, labeling, sale or advertisement of any such product by Debtor (or any affiliate or subsidiary thereof). Debtor shall not be obliged to so indemnify and hold Secured Party harmless to the extent such losses, costs, damages, expenses and liabilities are caused by the negligence or willful misconduct of Telex. The foregoing indemnity shall survive the payment of the Obligations, the termination of this Agreement and the termination or nonrenewal of the Promissory Notes. (l) Except as otherwise set forth herein, Debtor shall promptly pay Secured Party for any and all expenditures made by Secured Party pursuant to the provisions of this Agreement or for the defense, protection or enforcement of the Obligations, the Collateral, or the security interests and conditional assignment granted hereunder, including, but not limited to, all filing or recording fees, court costs, collection charges, travel expenses, and reasonable attorneys' fees and legal expenses. Such expenditures shall be payable on demand, together with interest at the rate then applicable to the Obligations set forth in the Promissory Notes and shall be part of the Obligations secured hereby. -5- 24 (m) This Agreement creates a valid security interest in the Collateral securing the payment of the Obligations. 4. EVENTS OF DEFAULT All Obligations shall become immediately due and payable, without notice or demand, at the option of Secured Party, upon the occurrence of any Event of Default, as such term is defined in the Promissory Notes (each an "Event of Default" hereunder). 5. RIGHTS AND REMEDIES At any time an Event of Default has occurred and is continuing in addition to all other rights and remedies of Secured Party, whether provided under this Agreement, the Promissory Notes, applicable law or otherwise, Secured Party shall have the following rights and remedies which may be exercised without notice to, or consent by, Debtor except as such notice or consent is expressly provided for hereunder: (a) Secured Party may require that neither Debtor nor any affiliate or subsidiary of Debtor make any use of the Marks or any marks similar thereto for any purpose whatsoever. Secured Party may make use of any Marks for the sale of goods, completion of work-in-process or rendering of services in connection with enforcing any other security interest granted to Secured Party by Debtor or any subsidiary or affiliate of Debtor. (b) Secured Party may grant such license or licenses relating to the Collateral for such term or terms, on such conditions, and in such manner, as Secured Party shall in its good faith discretion deem appropriate. Such license or licenses may be general, special or otherwise, and may be granted on an exclusive or non-exclusive basis throughout all or any part of the United States of America, its territories and possessions, and all foreign countries. (c) may release from escrow one or more of the five (5) originals of the Special Power of Attorney held pursuant to paragraph 3(f) of this Agreement. Secured Party may assign, sell or otherwise dispose of the Collateral or any part thereof, either with or without special conditions or stipulations except that if notice to Debtor of intended disposition of Collateral is required by law, the giving of ten (10) days prior written notice to Debtor of any proposed disposition shall be deemed reasonable notice thereof and Debtor waives any other notice with respect thereto. Secured Party shall have the power to buy the Collateral or any part thereof, and Secured Party shall also have the power to execute assurances and perform all other acts which Secured Party may, in its good faith discretion, deem appropriate or proper to complete such assignment sale, or disposition. In any such event, Debtor shall be liable for any deficiency and, in the event of any surplus, such surplus shall be paid to Debtor or such other person as may be entitled thereto under applicable law or order of any court or other governmental authority. -6- 25 (d) In addition to the foregoing, in order to implement the assignment sale, or other disposition of any of the Collateral pursuant to the terms hereof, Secured Party may at any time execute and deliver on behalf of Debtor, pursuant to the authority granted in the Powers of Attorney described in Section 3(f) hereof, one or more instruments of assignment of the Marks (or any application, registration, or recording relating thereto), in form suitable for filing, recording, or registration. Debtor agrees to pay Secured Party on demand all costs incurred in any such transfer of the Collateral, including, but not limited to, any taxes, fees, and reasonable attorneys' fees and legal expenses. (e) Secured Party shall apply the proceeds actually received from any such license, assignment, sale or other disposition of any of the Collateral to the Obligations in such order and manner as Secured Party may reasonably determine. Debtor shall remain liable to Secured Party for any of the Obligations remaining unpaid after the application of such proceeds, and Debtor shall pay Secured Party on demand any such unpaid amount together with interest at the rate then applicable to the Obligations set forth in the Promissory Notes. In the event of any surplus, such surplus shall be paid to Debtor or such other person as may be entitled thereto under applicable law or order of any court or other governmental authority. (f) Debtor shall supply to Secured Party or to Secured Party's designee, Debtor's knowledge and expertise relating to the manufacture and sale of the products and services bearing the Marks and Debtor's customer lists and other records relating to the Marks and the distribution thereof (g) Nothing contained herein shall be construed as requiring Secured Party to take any such action at any time. All of Secured Party's rights and remedies, whether provided under this Agreement, the other Financing Agreements, applicable law, or otherwise, shall be cumulative and none is exclusive. Such rights and remedies may be enforced alternatively, successively, or concurrently. 6. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW (a) The validity, interpretation and enforcement of this Agreement and the Promissory Notes and any dispute arising out of the relationship between the parties hereto, whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State of Minnesota (without giving effect to principles of conflicts of law). (b) Debtor and Secured Party irrevocably consent and submit to the non-exclusive jurisdiction of the courts of the State of Minnesota, and the United States District Court for the District of Minnesota and waive any objection based on venue or forum non conveniens with respect to any action instituted therein arising under this Agreement or any of the other Financing Agreements or in any way connected or related or incidental to the dealings of Debtor and Secured Party in respect of this Agreement, the Promissory Notes, or the other Financing Agreements, in each case whether now existing or thereafter arising, and whether in contract, tort, equity or otherwise, and agrees that it shall not bring any action with respect to any such -7- 26 matters except in such courts described above (except that Secured Party shall have the right to bring any action or proceeding against Debtor or its property in the courts of any other jurisdiction which is reasonably necessary or appropriate in order to realize on the Collateral or to otherwise enforce its rights against Debtor or its property). (c) Debtor hereby waives personal service of any and all process upon it and consents that all such service of process may be made by certified mail (return receipt requested) directed to its address set forth herein and service so made shall be deemed to be completed ten (10) days after the same shall have been so deposited in the U.S. mails, or, at Secured Party's option, by service upon Debtor in any other manner provided under the rules of any such courts. Within thirty (30) days after such service, Debtor shall appear in answer to such process, failing which Debtor shall be deemed in default and judgment may be entered by Secured Party against Debtor for the amount of the claim and other relief requested. Secured Party hereby waives personal service of any and all process upon it and consents that all such service of process may be made by certified mail (return receipt requested) directed to its address set forth herein and service so made shall be deemed to be completed ten (10) days after the same shall have been so deposited in the U.S. mails. (d) DEBTOR AND SECURED PARTY EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF DEBTOR AND SECURED PARTY IN RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. DEBTOR AND SECURED PARTY EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT DEBTOR OR SECURED PARTY MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF DEBTOR AND SECURED PARTY TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. (e) Secured Party shall not have any liability to Debtor (whether in tort, contract, equity or otherwise) for losses suffered by Debtor in connection with, arising out of, or in any way related to the transactions or relationships contemplated by this Agreement, or any act, omission or event occurring in connection herewith, unless it is determined by a judgment or court order binding on Secured Party that the losses were the result of acts or omissions constituting gross negligence or willful misconduct. 7. MISCELLANEOUS (a) Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed to have been given, when received, if personally -8- 27 delivered, faxed during business hours or delivered by nationally recognized overnight courier service, and three (3) business days after deposit or when actual received, whichever occurs first, if placed in the U.S. mail for delivery by registered or certified mail, return receipt requested, postage prepaid addressed as follows: (i) To Secured Party at: Telex Communications, Inc. 9600 Aldrich Avenue South Minneapolis, MN 55420 Attention: President and Attention: General Counsel With a copy to Ann M. Ladd Fredrikson & Byron, P.A. 1100 International Centre 900 Second Avenue South Minneapolis, MN 55402 (ii) To Debtor at: Altec Lansing Technologies, Inc. Route 6 and 209 Milford, PA 18337 Attention: President With a copy to Adam B. Landa, Esq. Graham & James LLP 885 Third Avenue 21 New York, NY 10022 Addresses may be changed by written notice given pursuant to this Section. (b) All references to the plural herein shall also mean the singular and to the singular shall also mean the plural. All references to Debtor and Secured Party pursuant to the definitions set forth in the recitals hereto, or to any other person herein, shall include their respective successors and assigns. The words "hereof," "herein," "hereunder," "this Agreement" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not any particular provision of this Agreement and as this Agreement now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced. All references to the term "Person" or "person" herein shall mean any individual, sole proprietorship, partnership, -9- 28 corporation (including, without limitation, any corporation which elects S corporation status under the Internal Revenue Code of 1986, as amended), limited liability company, limited liability partnership, business trust unincorporated association, joint stock company, trust joint venture or other entity or any government or any agency or instrumentality or political subdivision thereof. (c) This Agreement, the Promissory Notes and any other document referred to herein or therein shall be binding upon each party and its successors and assigns and inure to the benefit of and be enforceable by each party and its successors and assigns. (d) If any provision of this Agreement or its application to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of the provisions to other persons or circumstances shall not be affected thereby, and this Agreement shall be enforced to the greatest extent permitted by law. (e) This Agreement, together with the Exhibits and the related written agreements specifically referred to herein, represents the only agreement among the parties concerning the subject matter hereof and supersedes all prior agreements, whether written or oral, relating thereto. No purported amendment, modification or waiver of any provision hereof shall be binding unless set forth in a written document signed by all parties (in the case of amendments or modifications) or by the party to be charged thereby (in the case of waivers). No consent or waiver, expressed or implied, by either party to or of any breach or default by the other party in the performance by the other party of its obligations under this Agreement shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by that party of the same or any other obligations of that party. Failure on the part of either party to complain of any act or failure to act on the part of the other party or to declare the other party in default, irrespective of how long the failure continues, shall not constitute a waiver by that party of its rights under this Agreement. IN WITNESS WHEREOF, Debtor and Secured Party have executed this Agreement as of the day and year first above written. ALTEC LANSING TECHNOLOGIES, INC. By: -------------------------------------------- Name: ----------------------------------------- Title: ----------------------------------------- TELEX COMMUNICATIONS, INC. -10- 29 By: -------------------------------------------- Name: ----------------------------------------- Title: ----------------------------------------- -11- 30 STATE OF MINNESOTA ) ) ss.: COUNTY OF HENNEPIN ) On this day of March, 2000, before me personally came to me known, who being duly sworn, did depose and say, that he/she is the of Altec Lansing Technologies, Inc., the corporation described in and which executed the foregoing instrument; and that he/she signed his/her name thereto by order of the Board of Directors of said corporation. ------------------------------ Notary Public STATE OF MINNESOTA ) ) ss.: COUNTY OF HENNEPIN ) On this day of March, 2000, before me personally came to me known, who being duly sworn, did depose and say, that he/she is the of Telex Communications, Inc., the corporation described in and which executed the foregoing instrument; and that he signed his/her name thereto by order of the Board of Directors of said corporation. ------------------------------ Notary Public -12- 31 EXHIBIT A TO TRADEMARK COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT LIST OF MARKS
- ------------------------------------------ ------------------------------ ---------------------------- --------------- Mark Registration Number Country Issue Date - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 1380268 Argentina 4/30/90 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC A200324 Australia 2/17/66 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 58120 Austria 9/29/66 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 60565 Greece 2/10/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 88484 Hong Kong 11/21/79 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 103227 Mexico 7/13/66 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 132011 Sweden 7/10/70 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 354145 Switzerland 2/10/87 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 101768 Turkey 4/20/97 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 890602 United Kingdom 7/16/67 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 860,432 United States 11/19/68 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 534,754 United States 12/12/50 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING A348153 Australia 7/7/80 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 335509 Benelux 6/17/75 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 7033885 Brazil 12/10/89 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 216049 Canada 9/17/76 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 369189 Chile 5/28/81 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 351185 Chile 1/17/90 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 9900147973 (App. No.) China - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 6041979 Denmark 2/23/79 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 78861 Finland 9/21/81 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 1309979 France 4/25/95 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 947128 Germany 7/22/76 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 25501982 Hong Kong 7/6/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 429736 Indonesia 6/29/99 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 95565 Ireland 7/26/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 46192 Israel 7/6/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 639074 Italy 12/12/94 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 1354774 Japan 10/31/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING M79979 Malaysia 9/26/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 197420 Mexico 9/8/76 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 124571 New Zealand 7/26/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 104142 Norway 1/24/80 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 103459 (App. No.) Pakistan - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 14479 Peru 3/30/95 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 63938 Singapore 4/12/75 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 783660 South Africa 7/31/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 56392 South Korea 6/27/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 787240 Spain 5/24/77 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 87020 Taiwan 1/1/77 - ------------------------------------------ ------------------------------ ---------------------------- ---------------
-1- 32
- ------------------------------------------ ------------------------------ ---------------------------- --------------- Mark Registration Number Country Issue Date - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 1040220 United Kingdom 12/9/76 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 2,113,891 United States 11/18/97 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 308193 Uruguay 11/25/98 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 83520F Venezuela 12/8/76 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING & DESIGN 45563 Philippines 6/30/89 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING & DESIGN TM66711 Thailand 12/25/97 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING & DESIGN 1,041,673 United States 6/22/76 - ------------------------------------------ ------------------------------ ---------------------------- --------------- LANSING 2,106,856 United States 10/21/97 - ------------------------------------------ ------------------------------ ---------------------------- --------------- VOICE OF THE HIGHWAY 1,172,997 United States 10/13/81 - ------------------------------------------ ------------------------------ ---------------------------- --------------- VOICE OF THE THEATRE 964642 Japan 5/31/72 - ------------------------------------------ ------------------------------ ---------------------------- ---------------
-2- 33 EXHIBIT B TO TRADEMARK COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT LIST OF LICENSES License to Telex Communications, Inc. dated March , 2000. 34 EXHIBIT C TO TRADEMARK COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT SPECIAL POWER OF ATTORNEY STATE OF MINNESOTA ) ) ss.: COUNTY OF HENNEPIN ) KNOW ALL MEN BY THESE PRESENTS, that ALTEC LANSING TECHNOLOGIES, INC. ("Debtor"), having an office at Route 6 and 209, Milford, Pennsylvania 18337 hereby appoints and constitutes, severally, TELEX COMMUNICATIONS, INC. ("Secured Party"), and each of its officers, its true and lawful attorney, with full power of substitution and with full power and authority to perform, upon the occurrence of any event of default, the following acts on behalf of Debtor: 1. Execution and delivery of any and all agreements, documents, instrument of assignment or other papers which Secured Party, in its good faith discretion, deems necessary or advisable for the purpose of assigning, selling, or otherwise disposing of all right title, and interest of Debtor in and to any Marks as that item is defined in that certain Trademark Collateral Agreement and Security Agreement dated April ___, 2000 by and between Debtor and Secured Party and all registrations, recordings, reissues, extensions, and renewals thereof, or for the purpose of recording, registering and filing of, or accomplishing any other formality with respect to the foregoing. 2. Execution and delivery of any and all documents, statements, certificates or other papers which Secured Party, in its good faith discretion, deems necessary or advisable to further the purposes described in Subparagraph 1 hereof. This Power of Attorney is made pursuant to a Trademark Collateral Assignment and Security Agreement dated of even date herewith, between Debtor and Secured Party (the "Security Agreement") and is subject to the terms and provisions thereof. This Power of Attorney, being coupled with an interest, is irrevocable until all "Obligations", as such term is defined in the Security Agreement are paid in full and the Security Agreement is terminated in writing by Secured Party, and is automatically revoked upon the termination of the Security Agreement. Dated: April ___, 2000 ALTEC LANSING TECHNOLOGIES, INC. By: ---------------------------------------- Name: -------------------------------------- -1- 35 Title: ------------------------------------- STATE OF MINNESOTA ) ) ss.: COUNTY OF HENNEPIN ) On this day of March, 2000, before me personally came to me known, who being duly sworn, did depose and say, that he is the of Altec Lansing Technologies, Inc., the corporation described in and which executed the foregoing instrument; and that he signed his name thereto by order of the Board of Directors of said corporation. ------------------------------------------ Notary Public -2- 36 Exhibit 2.5 LICENSE AGREEMENT DATE: April _____, 2000 ("Effective Date") PARTIES: Telex Communications, Inc. ("Telex") 9600 Aldrich Avenue South Minneapolis, MN 55420 Altec Lansing Technologies, Inc. ("ALTI") Route 6 and 209 Milford, PA 18337 RECITALS: A. Pursuant to that certain Purchase and Sale Agreement between the parties dated March 30, 2000, Telex has assigned To ALTI all right, title and interest in and to certain trademarks and trademark registrations in connection with the Altec Lansing brand including the trademark registrations listed on the attached Exhibit A (hereinafter the "Registered Marks"), and common law trademarks in the marks ALTEC, ALTEC LANSING, LANSING, VOICE OF THE HIGHWAY, and VOICE OF THE THEATRE, and numerous designs used in connection with each of the foregoing (hereinafter, such registered and unregistered trademarks being referred to as the "Marks"). B. The parties wish to provide a period of time during which Telex may continue its use of the Marks, under license from ALTI, provided that the use of the Marks and the good will associated therewith shall inure to the benefit of ALTI. AGREEMENTS: NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows (the "Agreement"): ARTICLE I LICENSE 1.1 Licensed Marks, License Grant. 1.1.1 As used herein, the term Licensed Marks means all of the Marks as defined above. 1.1.2 ALTI grants to Telex the exclusive, royalty-free, non-terminable, non-sublicensable, one-year right to license to utilize the Licensed Marks within the United States upon and in connection with the sales and marketing of those audio products sold by Telex under -1- 37 the Licensed Marks prior to Telex's assignment of the Licensed Marks to ALTI. Upon information and belief, the products listed on Exhibit 1.1 are the products that were sold by Telex in and outside of the United States under the Licensed Marks prior to Telex's assignment of the Licensed Marks to ALTI. All use of the Marks by Telex shall inure to the benefit of ALTI. 1.1.3 ALTI grants to Telex the personal, exclusive, royalty-free, non-assignable, non-sublicensable, two-year right and license to utilize the Licensed Marks outside the United States upon and in connection with the sales and marketing of those audio products sold by Telex under the Licensed Marks prior to Telex's assignment of the Licensed Marks to ALTI. Upon information and belief, the products listed on Exhibit 1.1 are the products that were sold by Telex in and outside the United States under the Licensed Marks prior to Telex's assignment of the Licensed Marks to ALTI. All use of the Marks by Telex shall inure to the benefit of ALTI. 1.2 Acknowledgment. Telex acknowledges that, as between Telex and ALTI, the Licensed Marks and all rights therein and goodwill pertaining thereto shall belong exclusively to ALTI. Telex agrees to cooperate fully and in good faith with ALTI for the purpose of preserving ALTI's rights in and to the Licensed Marks, but at the sole expense of ALTI. 1.3 Reservation of Rights. No implied license is granted to Telex by this Agreement, all rights in and to the Marks not expressly granted to Telex herein are reserved to ALTI. 1.4 Other Use of the Marks. Telex agrees that it shall make no use of the Marks, or any confusingly similar designation, except as expressly permitted under paragraphs 1.1.2 and 1.1.3 above. ARTICLE II QUALITY AND APPROVAL 2.1 Quality. Telex hereby agrees that its use of the Licensed Marks (including all promotional material and advertising) shall be of high standards and the quality and appearance of each use of the Licensed Marks, and the goods sold in connection with the Licensed Marks shall be consistent with Telex's past quality standards, as shall be adequate to maintain the goodwill associated with the Licensed Marks. All use of the Licensed Marks shall be in accordance with all applicable laws and shall comply with commercially reasonable quality standards as may be determined by ALTI from time to time. The parties agree that Telex shall be in compliance with ALTI's standards so long as Telex maintains the level of quality characterized by the services and goods currently offered by Telex. Upon ALTI's reasonable request, Telex agrees to allow ALTI, at ALTI's sole cost and expense, to inspect at Telex's facilities specimens of Telex's use of the Mark sufficient for ALTI to determine Telex's compliance with the terms of this Agreement. 2.2 Indemnification. Telex assumes all responsibility and liability arising from its use of the Marks, and Telex hereby indemnifies and holds ALTI harmless from and against all claims, suits, loss, costs, damages, expenses (including reasonable attorneys' fees and legal expenses) incurred, claimed or sustained, if such claim, suit, loss, cost, damage, or expense arises out of: (i) any alleged defect in any product manufactured, promoted, or sold by Telex (or any -2- 38 affiliate or subsidiary thereof) in connection with any Mark; (ii) the use of any such product by Telex or any third party; or (iii) the manufacture, promotion, marketing, labeling, sale or advertising of any such product by Telex (or any affiliate or subsidiary thereof). The foregoing indemnity shall survive the termination of this Agreement. ARTICLE III TERM AND BREACH 3.1 Term. This Agreement shall extend for a period of two years from the Effective Date. 3.2 Breach. Neither party shall have the right to terminate this Agreement for any breach. If either party breaches or otherwise fails to perform in any material respect any of its obligations under the terms of this Agreement and such breach or failure continues for five days following receipt of written notice from the other party specifying the nature of such breach or failure, then the other party may, but need not, institute an action for specific performance of obligations under this Agreement. Such an action for breach shall be the sole remedy of the non-breaching party. 3.3 Consent to injunction and enforcement costs. Since the only remedy for breach of this Agreement is specific performance, the parties each acknowledge and agree that there would be no adequate remedy at law for its breach of this Agreement. Thus, each party consents to the issuance of an order of specific performance in the form of temporary and/or preliminary relief pending a final judgment in this matter in connection with any action brought to enforce the terms of this Agreement. The prevailing party shall have the right to recover from the breaching party the reasonable costs of enforcement of this Agreement, including, without limitation, court costs, actual and reasonable out-of-pocket costs and expenses, reasonable attorney and expert witness fees. ARTICLE IV GENERAL 4.1 Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed to have been given, when received, if personally delivered, faxed during business hours (or if faxed after the close of business, receipt shall be deemed to occur on the next business day) or delivered by nationally recognized overnight courier service, and three (3) business days after deposit or when actually received, whichever occurs first, if placed in the U.S. mail for delivery by registered or certified mail, return receipt requested, postage prepaid addressed as follows: (a) To Telex at: Telex Communications, Inc. 9600 Aldrich Avenue South Minneapolis, MN 55420 Attention: President -3- 39 and Attention: General Counsel With a copy to: Ann M. Ladd Fredrikson & Byron, P.A. 1100 International Centre 900 Second Avenue South Minneapolis, MN 55402 (b) To ALTI at: Altec Lansing Technologies, Inc. Route 6 and 209 Milford, PA 18337 Attention: President With a copy to: Adam B. Landa Graham & James LLP 885 Third Avenue, 21st Floor New York, NY 10022-4834 Addresses may be changed by written notice given pursuant to this Section. 4.2 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their successors and assigns. 4.3 Headings. The descriptive headings of the several articles and sections of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. 4.4 Entire Agreement Modification and Waiver. This Agreement, together with the Exhibits and the related written agreements specifically referred to herein, represents the only agreement among the parties concerning the subject matter hereof and supersedes all prior agreements, whether written or oral, relating thereto. No purported amendment, modification or waiver of any provision hereof shall be binding unless set forth in a written document signed by all parties (in the case of amendments or modifications) or by the party to be charged thereby (in the case of waivers). Any waiver shall be limited to the provision thereof and the circumstance or events specifically made subject thereto and shall not be deemed a waiver of any other term hereof or of the same circumstance or event of any recurrence thereof. No consent or waiver, expressed or implied, by either party to or of any breach or default by the other party in the performance by the other party of its obligations under this Agreement shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by that party of the same or any other obligations of that party. Failure on the part of either party to -4- 40 complain of any act or failure to act on the part of the other party or to declare the other party in default, irrespective of how long the failure continues, shall not constitute a waiver by that party of its rights under this Agreement. 4.5 Severability. If any provision of this Agreement or its application to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of the provisions to other persons or circumstances shall not be affected thereby, and this Agreement shall be enforced to the greatest extent permitted by law. 4.6 Governing Law. This Agreement and the legal relations between the parties shall be governed by and construed in accordance with the laws of the State of Minnesota. 4.7 Waiver. No consent or waiver, expressed or implied, by either party to or of any breach or default by the other party in the performance by the other party of its obligations under this Agreement shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by that party of the same or any other obligations of that party. Failure on the part of either party to complain of any act or failure to act on the part of the other party or to declare the other party in default, irrespective of how long the failure continues, shall not constitute a waiver by that party of its rights under this Agreement. 4.8 Disclaimer of Agency. This Agreement shall not constitute either party as a legal representative or agent of the other party, nor shall a party have the right or authority to assume, create or incur any liability or any obligation of any kind, expressed or implied, against or in the name or on behalf of the other party, unless otherwise expressly permitted by such party. IN WITNESS WHEREOF, this Agreement has been executed and delivered as of, and is effective as of, the date first set forth above. TELEX COMMUNICATIONS, INC. By: ----------------------------------------------- Name: -------------------------------------------- Title: -------------------------------------------- ALTEC LANSING TECHNOLOGIES, INC. By: ----------------------------------------------- Name: -------------------------------------------- Title: -------------------------------------------- -5- 41 SCHEDULE 1.1 LICENSED MARKS
- ------------------------------------------ ------------------------------ ---------------------------- --------------- Mark Registration Number Country Issue Date - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 1380268 Argentina 4/30/90 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC A200324 Australia 2/17/66 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 58120 Austria 9/29/66 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 60565 Greece 2/10/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 88484 Hong Kong 11/21/79 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 103227 Mexico 7/13/66 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 132011 Sweden 7/10/70 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 354145 Switzerland 2/10/87 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 101768 Turkey 4/20/97 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 890602 United Kingdom 7/16/67 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 860,432 United States 11/19/68 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC 534,754 United States 12/12/50 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING A348153 Australia 7/7/80 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 335509 Benelux 6/17/75 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 7033885 Brazil 12/10/89 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 216049 Canada 9/17/76 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 369189 Chile 5/28/81 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 351185 Chile 1/17/90 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 9900147973 (App. No.) China - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 6041979 Denmark 2/23/79 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 78861 Finland 9/21/81 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 1309979 France 4/25/95 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 947128 Germany 7/22/76 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 25501982 Hong Kong 7/6/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 429736 Indonesia 6/29/99 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 95565 Ireland 7/26/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 46192 Israel 7/6/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 639074 Italy 12/12/94 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 1354774 Japan 10/31/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING M79979 Malaysia 9/26/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 197420 Mexico 9/8/76 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 124571 New Zealand 7/26/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 104142 Norway 1/24/80 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 103459 (App. No.) Pakistan - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 14479 Peru 3/30/95 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 63938 Singapore 4/12/75 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 783660 South Africa 7/31/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 56392 South Korea 6/27/78 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 787240 Spain 5/24/77 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 87020 Taiwan 1/1/77 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 1040220 United Kingdom 12/9/76 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 2,113,891 United States 11/18/97 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 308193 Uruguay 11/25/98 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING 83520F Venezuela 12/8/76 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING & DESIGN 45563 Philippines 6/30/89 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING & DESIGN TM66711 Thailand 12/25/97 - ------------------------------------------ ------------------------------ ---------------------------- --------------- ALTEC LANSING & DESIGN 1,041,673 United States 6/22/76 - ------------------------------------------ ------------------------------ ---------------------------- ---------------
42
- ------------------------------------------ ------------------------------ ---------------------------- --------------- Mark Registration Number Country Issue Date - ------------------------------------------ ------------------------------ ---------------------------- --------------- LANSING 2,106,856 United States 10/21/97 - ------------------------------------------ ------------------------------ ---------------------------- --------------- VOICE OF THE HIGHWAY 1,172,997 United States 10/13/81 - ------------------------------------------ ------------------------------ ---------------------------- --------------- VOICE OF THE THEATRE 964642 Japan 5/31/72 - ------------------------------------------ ------------------------------ ---------------------------- ---------------
43 SCHEDULE 1.1 LICENSED GOODS 44 Exhibit 9.2 TRADEMARK ASSIGNMENT WHEREAS, Telex Communications, Inc., a Delaware corporation having offices in Minneapolis, Minnesota (hereinafter "Assignor"), is the owner of certain trademarks and trademark registrations in connection with the Altec Lansing brand including the trademark registrations listed on the attached Exhibit A (hereinafter the "Registered Marks"), and common law trademarks in the marks ALTEC, ALTEC LANSING, LANSING, VOICE OF THE HIGHWAY, and VOICE OF THE THEATRE, and numerous designs used in connection with each of the foregoing (hereinafter, such registered and unregistered trademarks being referred to as the "Marks"); and WHEREAS, Altec Lansing Technologies, Inc., a Pennsylvania corporation having offices at Route 6 and 209, Milford, Pennsylvania 18337, (hereinafter "Assignee") with desires of acquiring the Marks and any registrations thereof. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Assignor hereby assigns to Assignee all right, title and interest in and to the Marks, together with the goodwill associated therewith and the registrations thereof, as set forth on Exhibit A hereto. This Assignment includes all rights in the nature of trademark, service mark, and trade name rights, as well as the right to sue for past infringement by any third party. TELEX COMMUNICATIONS, INC. By: ----------------------------------------------- Name: -------------------------------------------- Title: -------------------------------------------- State of ) County of ) On this day of , 2000, before me appeared , of , the person who signed this instrument, who acknowledged that (s)he signed it as a free act on behalf of said company with authority to do so. ------------------------------------------------- Notary Public 45 EXHIBIT A
- ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- Mark Registration Number Country Issue Date Description of Goods - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 1380268 Argentina 4/30/90 Sound recording, producing and reproducing, apparatus, equipment. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC A200324 Australia 2/17/66 Sound recording, producing and reproducing, apparatus, equipment and components, loudspeakers, microphones, amplifiers, transmitter. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 58120 Austria 9/29/66 Sound recording, sound producing, sound reproducing apparatus, equipment and components therefor, including loudspeakers, microphones, amplifiers, transmitters, receivers, tuners and parts for these goods. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 60565 Greece 2/10/78 Appliances for the recording, production and reproduction of the sound, their accessories and parts including loudspeakers, microphones, amplifiers, transmitters, receivers, tone-adjusters, transformers, parts and sorts of them. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 88484 Hong Kong 11/21/79 Speakers, speaker systems, monitor speaker systems, amplifier, power supplies, microphone mixers, microphone tone generators, equalizers, filters, all being accessorieSs for the aforesaid goods included in class 9. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 103227 Mexico 7/13/66 Electric apparatus, machinery and accessories including microphones. Vacuum tubes or thermionic or audio tubes. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 132011 Sweden 7/10/70 Sound recording, sound producing, sound reproducing apparatus, equipment and components thereof, including loudspeakers, microphones, amplifiers, transmitters, receivers, tuners, transformers and parts for these goods. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 354145 Switzerland 2/10/87 Sound recording, sound production, sound reproducing apparatus, equipment and components thereof, including loudspeakers, microphones, amplifiers, transmitters, receivers, tuners, transformers and parts for these goods. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 101768 Turkey 4/20/97 Electrical and electronic apparatus, particularly sound recording, sound producing, sound reproducing apparatus, equipment and components thereof, including loudspeakers, microphones, amplifiers, transmitters, receivers, tuners, transformers and parts for these goods. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 890602 United Kingdom 7/16/67 Sound recording and sound reproducing apparatus and instruments; apparatus included in class 9 for producing sound and parts and fittings included in class 9 for the aforesaid goods. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 860,432 United States 11/19/68 Electronic equipment - namely, attenuators, switches, networks, equalizers, filters, transformers, amplifiers, audio controls, microphones, microphone bases and microphone extensions. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 534,754 United States 12/12/50 Microphones and equipment therefor - namely, microphone bases, microphone extensions and vacuum tubes. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC A348153 Australia 7/7/80 Loudspeakers, speaker systems including speaker cabinets LANSING and enclosures and components therefor being in class 9. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 335509 Benelux 6/17/75 Sound recording, sound producing and reproducing, LANSING apparatus equipment and components, loudspeakers, microphones, amplifiers. - ----------------- ----------------------- ---------------- ------------- -----------------------------------------------------------
1 46
- ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- Mark Registration Number Country Issue Date Description of Goods - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 7033885 Brazil 12/10/89 Sound production and sound reproduction apparatus and LANSING equipment and parts and extras thereof, loud speakers and microphones. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 216049 Canada 9/17/76 Sound recording, sound producing and sound reproducing LANSING apparatus, equipment and components thereof, namely loudspeakers, microphones, amplifiers, receivers, tuners and parts for these goods. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 369189 Chile 5/28/81 Sound recording, sound producing, sound reproducing LANSING apparatus, equipment and components therefor including loudspeakers, microphones, amplifiers, transmitters, receivers, tuners, transformers and parts for these goods. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 351185 Chile 1/17/90 Sound recording, sound producing, sound reproducing LANSING apparatus, equipment and components therefor including loudspeakers, microphones, amplifiers, transmitters, receivers, tuners, transformers and parts for these goods. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 9900147973 China PENDING Sound recording, sound producing, sound reproducing LANSING (Application No.) apparatus, equipment and components therefor including microphones, mixing consoles, signal processors, power amplifiers, loudspeakers, loudspeaker systems, and component parts and accessories, namely, transformers, signal processing modules, cables, and connectors for such products. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 6041979 Denmark 2/23/79 Sound recording, sound producing and sound reproducing LANSING apparatus, equipment (not included in other classes) and parts thereof, including loudspeakers, microphones, amplifiers, transmitters, receivers and tuners, transformers and parts of these goods. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 78861 Finland 9/21/81 Sound recording, sound producing, sound reproducing LANSING apparatus, equipment and components therefor, including loudspeakers, microphones, amplifiers, transmitters, receivers, tuners, transformers and parts for these goods. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 1309979 France 4/25/95 Loudspeakers, sound reproducing systems, microphones, etc. LANSING - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 947128 Germany 7/22/76 Production, manufacture and distribution of sound LANSING recording-high fidelity equipment and sound response equipment - including installation of the equipment and their components. Sound reception, sound recording and sound response equipment and installation of namely: loudspeakers, microphones, amplifiers, transmitters, receivers, equalizers, and components of all foregoing articles. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 25501982 Hong Kong 7/6/78 Speakers, speaker system, monitor speaker system, LANSING amplifiers, power supplies and accessories therefor (e.g. microphone, mixe microphones tone generators, equalizers, filters) - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 429736 Indonesia 6/29/99 Sound producing and reproducing apparatus and equipment and LANSING parts and accessories therefor, including loudspeakers and microphones. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 95565 Ireland 7/26/78 Sound recording, sound producing, sound reproducing LANSING apparatus, equipment and components therefor including loudspeakers, microphones, amplifiers, transmitters, receivers, tuners, transformers and parts for these goods. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 46192 Israel 7/6/78 Sound recording and producing apparatus, loudspeakers, LANSING microphones, amplifiers, transmitters, receivers and parts, etc. - ----------------- ----------------------- ---------------- ------------- -----------------------------------------------------------
2 47
- ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- Mark Registration Number Country Issue Date Description of Goods - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 639074 Italy 12/12/94 Scientific, nautical, surveying and electrical apparatus LANSING and instruments (including wireless), photographic, cinematographic, optical, weighing, measuring, signaling, checking (supervision), life-saving and teaching apparatus and instruments, coin or counter-freed apparatus, talking machines, cash registers, calculating machines, fire-extinguishing apparatus. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 1354774 Japan 10/31/78 Sound recording, sound producing, sound reproducing LANSING apparatus, electrical communication machines and instruments, their parts and accessories, and all other goods belonging to this class. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC M79979 Malaysia 9/26/78 Sound recording, sound producing and sound reproducing LANSING apparatus; loudspeakers, microphones, sound amplifiers, transmitters, receivers, electric tuning devices; and parts and fittings included in Class 9 for all the aforesaid goods. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 197420 Mexico 9/8/76 Beaters, elevators, spark plugs, brushers, cutters, LANSING dynamos, magnetic clutches, carbon scobeys, electricity generators, tools, air injectors, sewing machines, and their parts, mixers, coffee mills, motors, (except those highway vehicles), meat prickers, clothing dryers, sawing machines, saws, goal drillers, drillers, winches, conveyors, crushers, electrohydraulic presses and steam machines. Electrical shaving machines and electrical machines for cutting hair only. Electrical apparatus and their parts, electromechanical and electrothermicals not belonging to other classes. Air conditioning apparatus, electrical lighting devices, electrical screens, electrical roasters, electrical distribution cabins, electrical coffee pots, electrical lamps, electrical dryers. Electrical alarms, speakers, claxons, directionals and brakes only. Electrical typewriter machines, reproducing electrical apparatus, electrical sharpeners, xerography apparatus only. Isolating tapes, isolating fabrics for electrical works. Bell glasses only. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 124571 New Zealand 7/26/78 Sound recording, sound producing, sound reproducing LANSING apparatus, equipment and components therefore, including loudspeakers, microphones and amplifiers, transmitters, receivers, tuners, transformers and parts for these goods. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 104142 Norway 1/24/80 Sound recording, sound producing, sound reproducing LANSING apparatus, equipment and components therefor, including loudspeakers, microphones, amplifiers, transmitters, receivers, tuners, transformers and parts for these goods. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 103459 Pakistan PENDING Sound recording, producing and reproducing apparatus LANSING (Application No.) equipment including loudspeakers, receivers, tuners. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 14479 Peru 3/30/95 Sound recording, sound producing sound reproducing LANSING apparatus, equipment and components therefor including loudspeakers, microphones, amplifiers, transmitters, receivers, tuners, transformers and parts therefor. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 63938 Singapore 4/12/75 Sound production and reproduction and reproduction LANSING apparatus and equipment and parts and accessories, loudspeakers and microphones. - ----------------- ----------------------- ---------------- ------------- -----------------------------------------------------------
3 48
- ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- Mark Registration Number Country Issue Date Description of Goods - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 783660 South Africa 7/31/78 Sound and image recording, producing and reproducing LANSING apparatus, equipment and components therefor, including loudspeakers, microphones, amplifiers, transmitters, receivers, tuners, transformers and parts for these goods. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 56392 South Korea 6/27/78 Sound amplifying apparatus, amplifier, converter and LANSING microphone. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 787240 Spain 5/24/77 Sound recording, producing and reproducing apparatus, LANSING equipment and components including loudspeakers, microphones, amplifiers. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 87020 Taiwan 1/1/77 Television sets, phonographs, radio receivers, recorders, LANSING stereo, microphones, speakers, amplifiers, mixers, equalizers, signal processors. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 1040220 United Kingdom 12/9/76 Sound recording, sound producing and reproducing, apparatus LANSING equipment and components, loudspeakers, microphones, amplifiers. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 2,113,891 United States 11/18/97 Microphones, mixing consoles, signal processors, power LANSING amplifiers, loudspeakers, loudspeaker systems, and component parts and accessories, namely, transformers, signal processing modules, cables, and connectors for such products and instruction manuals associated with such products and sold as a unit therewith. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 308193 Uruguay 11/25/98 Sound recording, producing, and reproducing apparatus, LANSING equipment. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 83520F Venezuela 12/8/76 Sound recording, producing and reproducing apparatus, LANSING equipment and components thereof, including loudspeakers, microphones. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 45563 Philippines 6/30/89 Acoustic horns, loudspeakers, amplifiers, LANSING mixer/preamplifiers, microphone mixers; acoustic feedback & DESIGN suppressors and equalizers. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC TM66711 Thailand 12/25/97 Loudspeakers for home and automotive uses and computer LANSING speakers. & DESIGN - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- ALTEC 1,041,673 United States 6/22/76 Electrically operated sound amplification and reproducing LANSING systems and the components thereof. & DESIGN - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- LANSING 2,106,856 United States 10/21/97 Loudspeakers, loudspeaker systems, dividing networks, audio transformers, amplifiers, preamplifiers, and power supplies, and instruction manuals sold as a unit with such goods. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- THE VOICE 421,777 United States 06/18/46 Apparatus and parts thereof for the synchronous production OF THE and reproduction of talking motion pictures, public address THEATRE and other sound, music or voice reinforcement. AND DESIGN - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- VOICE OF 1,172,997 United States 10/13/81 Loudspeaker systems - namely, loudspeakers, enclosures for THE loudspeakers, crossover networks, dividing networks, HIGHWAY loudspeaker drivers, and loudspeaker phasing plugs combined together in various combinations to reproduce sound. - ----------------- ----------------------- ---------------- ------------- ----------------------------------------------------------- VOICE OF 964642 Japan 5/31/72 Apparatus and parts thereof for the synchronous production THE and reproduction of talking motion pictures, public address THEATRE and other sound, music or voice reinforcement, and all other goods belonging to this class. - ----------------- ----------------------- ---------------- ------------- -----------------------------------------------------------
4 EX-10.2(B) 5 AMENDMENT TO RESTATED & PURCHASE AGRMT. 4/28/2000 1 EXHIBIT 10.2 (B) AMENDMENT TO RESTATED AND AMENDED PURCHASE AND SALE AGREEMENT This Amendment (the "AMENDMENT") to the Restated and Amended Purchase and Sale Agreement ("RESTATED PURCHASE AGREEMENT") dated March 30, 2000, by and among Telex Communications, Inc. ( "TELEX"), and Altec Lansing Technologies, Inc. ("ALTI"), is entered into effective as of April 28, 2000. W I T N E S S E T H: WHEREAS, Telex and ALTI each desire to amend the terms of the Restated Purchase Agreement to extend the date by which the "Closing" (as defined in Section 9.1 of the Restated Purchase Agreement) must occur on the conditions set forth below; and WHEREAS, in accordance with Section 7(e) of the Restated Purchase Agreement, Telex and ALTI may amend the terms of the Restated Purchase Agreement by a writing signed by both parties. NOW, THEREFORE, for and in consideration of the mutual benefits to be derived, promises and agreements contained herein, and other good and value consideration, the parties hereto agree as follows: A G R E E M E N T: 1. Amendments. Section 9.1 of the Restated Purchase Agreement is hereby amended and restated in its entirety to read as follows: 9.1) Closing Date. The closing (herein before and hereinafter the "Closing") of the transaction contemplated by this Agreement shall be held on or before May 15, 2000 (herein before and hereinafter the "Closing Date") at such place as mutually agreed to by the parties. 2. ALTI shall promptly notify Telex if, and in the event that, ALTI learns that its application for financing from Congress has been denied. The parties agree to use their best efforts to cause the Closing Date to occur within three (3) business days following such a denial. 3. Construction. All references in any other ancillary agreements or otherwise to the Restated Purchase Agreement shall be deemed to refer to the Restated Purchase Agreement as amended by this Amendment. Unless otherwise defined in this Amendment, capitalized terms used in this Amendment will have the 2 meanings ascribed to them in the Restated Purchase Agreement. In the event of a conflict between the respective provisions of the Restated Purchase Agreement and this Amendment, the terms of this Amendment shall control. 4. Effect of Amendment. Except as specifically amended by the terms of this Amendment, the terms and conditions of the Restated Purchase Agreement shall remain in full force and effect for all purposes, and Telex and ALTI hereby ratify and confirm the terms and conditions of the Restated Purchase Agreement, as amended pursuant to this Amendment. 5. Counterparts; Facsimiles. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and such counterparts together shall constitute one and the same instrument. Each Party shall receive a duplicate original of the counterpart copy or copies executed by it. For purposes hereof, a facsimile copy of this Agreement, including the signature pages hereto, shall be deemed to be an original. Notwithstanding the foregoing, the Parties shall each deliver original execution copies of this Agreement to one another as soon as practicable following execution thereof. IN WITNESS WHEREOF, Telex and ALTI have caused this Amendment to be executed by their respective duly authorized officers effective as of the date first above written. TELEX COMMUNICATIONS, INC. ("TELEX") By: /s/ Scott Myers ----------------------------- ALTEC LANSING TECHNOLOGIES, INC. ("ALTI") By: /s/ Edward Anchel ----------------------------- 2 EX-27 6 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 2,649 0 60,892 (2,061) 65,986 144,384 120,415 (75,592) 265,970 96,614 310,776 0 0 3,147 (154,748) 265,970 82,727 82,727 51,204 24,448 (7,311) 107 9,511 4,875 899 3,976 0 0 0 3,976 0 0
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