TENDERS AND REDEMPTIONS Oct. 25, 2001

TELEX COMMUNICATIONS INC. (Ca/) said Wednesday (Oct. 24) that it had modified and extended the expiration date for its previously announced exchange offer and consent solicitation for its 10½% senior subordinated notes due 2007 and for its 11% senior subordinated notes due 2007, which is being undertaken in connection with the company's restructuring. The expiration deadline, which had been Oct. 26, has now been extended to 5 p.m. ET on Nov. 7. The terms of the exchange offer have been modified to give holders the option of either exchanging their notes for units consisting of an allocable portion ($56.25 million) of the issuer's new 13% senior subordinated discount notes due 2006 and an allocable portion of shares of the capital stock of the issuer (at least approximately 99% of Telex if Telex is the issuer, or 100% of any new operating company formed if the Telex assets are transferred to the new operating company); or for units consisting of an allocable portion of warrants to purchase shares of the capital stock of the issuer which will represent up to 25% of its capital stock, subject to the satisfaction of specified EBITDA requirements. Jeffries & Co., Inc. is now acting as information agent for the offer, replacing GSC Partners. AS PREVIOUSLY ANNOUNCED, Telex, a Burnsville, Minn.-based electronic components company formerly known as EV International Inc. said on Sept. 13 that it was proposing a debt restructuring plan intended to significantly reduce its outstanding debt and debt service obligations, increase its financial flexibility and improve its cash flow. It set 5 p.m. ET on Oct. 12 as the deadline for the receipt of consents and the expiration of the offer (subsequently extended). It said that holders of the 10½% and 11% notes would the opportunity to exchange their notes for units comprised of various combinations of cash and securities to be issued by a newly organized operating company which will acquire substantially all of the assets of Telex. The new securities to be issued by the new operating company would include senior subordinated notes, shares of preferred stock, shares of common stock and warrants to purchase common stock. The company said noteholders would have four exchange options, which were not outlined in the announcement. It said the he exchange offer would be conditioned upon the new operating company being able to obtain senior secured financing to repay outstanding senior secured indebtedness (including senior bank debt) and other indebtedness of Telex and its subsidiaries and to pay expenses of the debt restructuring. Telex said it was in the process of seeking to arrange such financing, and that in anticipation of completing the debt restructuring, it would not make the interest payment due Sept. 17 on its 11% notes and the Nov. 1 interest payment on its 10½% notes. Telex said that if all of the notes were tendered and accepted for exchange, and if the requisite financing for the debt restructuring obtained, the aggregate exchange consideration would be comprised of $127 million of cash, senior subordinated notes and preferred stock, and all of the common stock of the new operating company, plus warrants to purchase up to 30% of the new shares. Telex said that in order to effect the restructuring plan, including the exchange offer, it was soliciting consents to, among other things, the transfer of Telex's assets and liabilities to the new operating company and to amending the terms of the indentures governing the Telex senior subordinated notes to eliminate various restrictive covenants. The company said on Oct. 15 that as of that date, approximately $27.5 million of the 10½% notes and approximately $18.5 million of the 11% notes had been received by the offer, a figure which remained in effect as of the Oct. 24 advisory.

THE HALLWOOD GROUP INC. (HWG) said Monday (Oct. 22) that it had completed its previously announced solicitation of consents from the holders of its 10% collateralized subordinated debentures due 2005. Holders of a majority of the outstanding principal amount of the notes had consented to waive certain events of default and rescind and annul the acceleration. Therefore, Hallwood said, once it complies with the other provisions of the indenture (including - but not limited to - paying all amounts due and payable to the holders of the debentures and the notes' trustee), the acceleration will be rescinded and annulled. Hallwood said it will take all actions necessary to complete the rescission and annulment of the acceleration in the near future, including paying to the trustee all amounts due to the holders of the debentures and the trustee, and announcing the record date for the payment of interest to holders of the debentures. AS PREVIOUSLY ANNOUNCED, Hallwood Group, a Dallas-based energy company, said Sept. 24 that it had begun soliciting consents from the holders of record (as of Sept. 4) of the 10% debentures to waiving certain events of default contained in the debentures' indenture, and set 5 p.m. ET on Oct. 19 for the expiration. Hallwood said that the solicitation arose from events which resulted in its being prohibited by the indenture from making the quarterly interest payment which came due on July 31. Hallwood said that if the holders of a majority of the outstanding debentures consented to the waivers and directed the securities' trustee (Bank One NA) to rescind and annul the previously announced acceleration of the notes, and if Hallwood complied with the other provisions of the indenture, including paying all amounts due and payable to the holders of the debentures and the trustee, the acceleration would be rescinded and annulled. Hallwood said that since its inception, it had made all interest payments on the debentures on a timely basis (save for July 31), and said that it intends to make all future quarterly interest payments when due and the full principal payment at the maturity date (July 31, 2005). Although the company was prohibited from making the July 31 payment, it said it was prepared to deposit those funds and all amounts due and owing to the trustee and its counsel with the trustee and additional funds to pay interest due through the expiration date of the solicitation period for immediate payment to the bondholders. Hallwood said that its financial condition has been significantly strengthened by the May, 2001 all-cash sale of its investment in Hallwood Energy Corp. for $25.5 million. It further said that it repaid the $14.1 million outstanding balance on its senior secured term loan with a a portion of the sale proceeds. Hallwood Group additionally said that it currently has $12 million of cash on deposit, of which $6.3 million is restricted (as described in the solicitation materials). It said that in addition to the improved overall financial strength of the company, the debentures continue to be collateralized by a subordinated lien on the stock of the company's Brookwood Companies Inc. subsidiary. The Herman Group, LP was the solicitation agent.

AEARO CORP. (B3/B) said Oct. 19 that its board of directors had authorized the company's management to buy back some of its 12½% senior subordinated notes. The Indianapolis, Ind.-based personal protective equipment company said in a filing with the Securities and Exchange Commission the repurchases would be made subject to market conditions and unspecified "other factors," adding that it could give no assurances as to whether, when or at what prices such purchases would occur. Aereo said the buyback authorization was one of a package of measures aimed at strengthening the company's financial position.

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