<PAGE> 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.
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TELEX COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
--------- ------------
<S> <C> <C>
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
========= =========
</TABLE>
See accompanying notes.
2
<PAGE> 3
TELEX COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
QUARTER ENDED
------------------------------
MARCH 31, MARCH 31,
2000 1999
--------- ---------
<S> <C> <C>
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)
======== ========
</TABLE>
See accompanying notes.
3
<PAGE> 4
TELEX COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
QUARTER ENDED
---------------------------
MARCH 31, MARCH 31,
2000 1999
--------- ---------
<S> <C> <C>
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
======= ========
</TABLE>
See accompanying notes.
4
<PAGE> 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:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
--------- ------------
<S> <C> <C>
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
======== ========
</TABLE>
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
<PAGE> 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
<PAGE> 7
AS OF AND FOR THE QUARTER ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
Professional Multimedia/
Sound and Audio
Entertain- Communi-
ment cations Corporate Total
----------------------------------------------------------
<S> <C> <C> <C> <C>
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
=======================================================
<CAPTION>
United
States Germany Other Total
-------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 53,749 $ 12,046 $ 16,932 $ 82,727
=======================================================
Long-lived assets $ 113,743 $ 4,267 $ 3,576 $ 121,586
=======================================================
</TABLE>
7
<PAGE> 8
AS OF AND FOR THE QUARTER ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
Professional Multimedia/
Sound and Audio
Entertain- Communi-
ment cations Corporate Total
----------------------------------------------------------
<S> <C> <C> <C> <C>
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
==========================================================
<CAPTION>
United
States Germany Other Total
----------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 42,387 $ 6,158 $ 30,865 $ 79,410
==========================================================
Long-lived assets $ 126,182 $ 5,024 $ 4,228 $ 135,434
==========================================================
</TABLE>
8
<PAGE> 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
<PAGE> 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
<PAGE> 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:
<TABLE>
<CAPTION>
Quarter ended
--------------------------
March 31, March 31,
2000 1999
--------------------------
<S> <C> <C>
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)
======== ========
</TABLE>
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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 10
EXHIBIT A
<TABLE>
<CAPTION>
- ------------------------------------------ ------------------------------ ---------------------------- ---------------
Mark Registration Number Country Issue Date
- ------------------------------------------ ------------------------------ ---------------------------- ---------------
<S> <C> <C> <C>
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
- ------------------------------------------ ------------------------------ ---------------------------- ---------------
</TABLE>
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 37
EXHIBIT A
TO
TRADEMARK COLLATERAL ASSIGNMENT
AND SECURITY AGREEMENT
LIST OF MARKS
<TABLE>
<CAPTION>
Mark Registration Number Country Issue Date
- ---- ------------------- ------- ----------
<S> <C> <C> <C>
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
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
1
<PAGE> 38
<TABLE>
<CAPTION>
Mark Registration Number Country Issue Date
- ---- ------------------- ------- ----------
<S> <C> <C> <C>
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
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 39
EXHIBIT B
TO
TRADEMARK COLLATERAL ASSIGNMENT
AND SECURITY AGREEMENT
LIST OF LICENSES
License to Telex Communications, Inc. dated April ____, 2000.
<PAGE> 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:
-------------------------------
<PAGE> 41
Title:
------------------------------
<PAGE> 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
<PAGE> 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
<PAGE> 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").
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<PAGE> 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
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<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 53
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
11
<PAGE> 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
<PAGE> 55
EXHIBIT A
TO
TRADEMARK COLLATERAL ASSIGNMENT
AND SECURITY AGREEMENT
LIST OF MARKS
<TABLE>
<CAPTION>
Mark Registration Number Country Issue Date
- ---- ------------------- ------- ----------
<S> <C> <C> <C>
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
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
1
<PAGE> 56
<TABLE>
<CAPTION>
Mark Registration Number Country Issue Date
- ---- ------------------- ------- ----------
<S> <C> <C> <C>
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
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 57
EXHIBIT B
TO
TRADEMARK COLLATERAL ASSIGNMENT
AND SECURITY AGREEMENT
LIST OF LICENSES
License to Telex Communications, Inc. dated April ____, 2000.
<PAGE> 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
<PAGE> 59
Title:
-----------------------------
2
<PAGE> 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
<PAGE> 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").
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<PAGE> 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
<PAGE> 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.
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
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<PAGE> 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.
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<PAGE> 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.
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<PAGE> 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:
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<PAGE> 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,
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<PAGE> 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:
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<PAGE> 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.
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<PAGE> 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
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<PAGE> 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
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<PAGE> 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
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<PAGE> 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.
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<PAGE> 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
---------------------------
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<PAGE> 13
EXHIBIT A
<TABLE>
<CAPTION>
Mark Registration Number Country Issue Date
<S> <C> <C> <C>
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
</TABLE>
<PAGE> 14
<TABLE>
<CAPTION>
Mark Registration Number Country Issue Date
<S> <C> <C> <C>
VOICE OF THE THEATRE 964642 Japan 5/31/72
</TABLE>
<PAGE> 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
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<PAGE> 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
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<PAGE> 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-
<PAGE> 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
----------------------
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<PAGE> 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
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<PAGE> 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").
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<PAGE> 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
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<PAGE> 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
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<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 29
By:
--------------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
-11-
<PAGE> 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-
<PAGE> 31
EXHIBIT A
TO
TRADEMARK COLLATERAL ASSIGNMENT
AND SECURITY AGREEMENT
LIST OF MARKS
<TABLE>
<CAPTION>
- ------------------------------------------ ------------------------------ ---------------------------- ---------------
Mark Registration Number Country Issue Date
- ------------------------------------------ ------------------------------ ---------------------------- ---------------
<S> <C> <C> <C>
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
- ------------------------------------------ ------------------------------ ---------------------------- ---------------
</TABLE>
-1-
<PAGE> 32
<TABLE>
<CAPTION>
- ------------------------------------------ ------------------------------ ---------------------------- ---------------
Mark Registration Number Country Issue Date
- ------------------------------------------ ------------------------------ ---------------------------- ---------------
<S> <C> <C> <C>
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
- ------------------------------------------ ------------------------------ ---------------------------- ---------------
</TABLE>
-2-
<PAGE> 33
EXHIBIT B
TO
TRADEMARK COLLATERAL ASSIGNMENT
AND SECURITY AGREEMENT
LIST OF LICENSES
License to Telex Communications, Inc. dated March , 2000.
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 41
SCHEDULE 1.1
LICENSED MARKS
<TABLE>
<CAPTION>
- ------------------------------------------ ------------------------------ ---------------------------- ---------------
Mark Registration Number Country Issue Date
- ------------------------------------------ ------------------------------ ---------------------------- ---------------
<S> <C> <C> <C>
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
- ------------------------------------------ ------------------------------ ---------------------------- ---------------
</TABLE>
<PAGE> 42
<TABLE>
<CAPTION>
- ------------------------------------------ ------------------------------ ---------------------------- ---------------
Mark Registration Number Country Issue Date
- ------------------------------------------ ------------------------------ ---------------------------- ---------------
<S> <C> <C> <C>
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
- ------------------------------------------ ------------------------------ ---------------------------- ---------------
</TABLE>
<PAGE> 43
SCHEDULE 1.1
LICENSED GOODS
<PAGE> 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
<PAGE> 45
EXHIBIT A
<TABLE>
<CAPTION>
- ----------------- ----------------------- ---------------- ------------- -----------------------------------------------------------
Mark Registration Number Country Issue Date Description of Goods
- ----------------- ----------------------- ---------------- ------------- -----------------------------------------------------------
<S> <C> <C> <C> <C>
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.
- ----------------- ----------------------- ---------------- ------------- -----------------------------------------------------------
</TABLE>
1
<PAGE> 46
<TABLE>
<CAPTION>
- ----------------- ----------------------- ---------------- ------------- -----------------------------------------------------------
Mark Registration Number Country Issue Date Description of Goods
- ----------------- ----------------------- ---------------- ------------- -----------------------------------------------------------
<S> <C> <C> <C> <C>
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.
- ----------------- ----------------------- ---------------- ------------- -----------------------------------------------------------
</TABLE>
2
<PAGE> 47
<TABLE>
<CAPTION>
- ----------------- ----------------------- ---------------- ------------- -----------------------------------------------------------
Mark Registration Number Country Issue Date Description of Goods
- ----------------- ----------------------- ---------------- ------------- -----------------------------------------------------------
<S> <C> <C> <C> <C>
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.
- ----------------- ----------------------- ---------------- ------------- -----------------------------------------------------------
</TABLE>
3
<PAGE> 48
<TABLE>
<CAPTION>
- ----------------- ----------------------- ---------------- ------------- -----------------------------------------------------------
Mark Registration Number Country Issue Date Description of Goods
- ----------------- ----------------------- ---------------- ------------- -----------------------------------------------------------
<S> <C> <C> <C> <C>
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.
- ----------------- ----------------------- ---------------- ------------- -----------------------------------------------------------
</TABLE>
4
<PAGE> 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
<PAGE> 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
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 2,649
<SECURITIES> 0
<RECEIVABLES> 60,892
<ALLOWANCES> (2,061)
<INVENTORY> 65,986
<CURRENT-ASSETS> 144,384
<PP&E> 120,415
<DEPRECIATION> (75,592)
<TOTAL-ASSETS> 265,970
<CURRENT-LIABILITIES> 96,614
<BONDS> 310,776
0
0
<COMMON> 3,147
<OTHER-SE> (154,748)
<TOTAL-LIABILITY-AND-EQUITY> 265,970
<SALES> 82,727
<TOTAL-REVENUES> 82,727
<CGS> 51,204
<TOTAL-COSTS> 24,448
<OTHER-EXPENSES> (7,311)
<LOSS-PROVISION> 107
<INTEREST-EXPENSE> 9,511
<INCOME-PRETAX> 4,875
<INCOME-TAX> 899
<INCOME-CONTINUING> 3,976
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,976
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
