Document:

Exhibit
10.2

 

AMENDED AND RESTATED

 

SECURITYHOLDERS AGREEMENT

 

DATED AS OF
                ,
2010

 

Among

 

DYNAVOX INC.,

 

DYNAVOX SYSTEMS HOLDINGS LLC

 

AND

 

THE SECURITYHOLDERS PARTY HERETO

 

 

Table of Contents

 

 

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I REPRESENTATIONS AND WARRANTIES OF THE PARTIES

  	
  1

  
	
   

  	
   

  
	
  1.1

  	
  Representations and
  Warranties of the Corporation and Holdings

  	
  1

  
	
  1.2

  	
  Representations and
  Warranties of the Securityholders

  	
  1

  
	
   

  	
   

  
	
  ARTICLE II VOTING AGREEMENTS

  	
  2

  
	
   

  	
   

  
	
  2.1

  	
  Election of Directors

  	
  2

  
	
  2.2

  	
  Other Voting Matters 

  	
  3

  
	
  2.3

  	
  Agreement of the
  Corporation and of Holdings 

  	
  3

  
	
  2.4

  	
  Termination of Voting
  Agreements 

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE III VCOC MATTERS

  	
  4

  
	
   

  	
   

  
	
  3.1

  	
  VCOC Rights 

  	
  4

  
	
  3.2

  	
  Termination of VCOC Rights

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV TRANSFERS OF SECURITIES

  	
  5

  
	
   

  	
   

  
	
  4.1

  	
  Tag-Along Rights 

  	
  5

  
	
  4.2

  	
  Securities Act Compliance

  	
  8

  
	
  4.3

  	
  Certain Transferees Bound
  by Agreement

  	
  8

  
	
  4.4

  	
  Transfers in Violation of
  Agreement

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE V TAKE-ALONG RIGHTS ON APPROVED SALE

  	
  8

  
	
   

  	
   

  
	
  5.1

  	
  Take-Along Rights

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI AMENDMENT AND TERMINATION

  	
  10

  
	
   

  	
   

  
	
  6.1

  	
  Amendment and Waiver

  	
  10

  
	
  6.2

  	
  Termination of Agreement

  	
  10

  
	
  6.3

  	
  Termination as to a Party

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII MISCELLANEOUS

  	
  10

  
	
   

  	
   

  
	
  7.1

  	
  Certain Defined Terms

  	
  10

  
	
  7.2

  	
  Adjustments

  	
  14

  
	
  7.3

  	
  Legends

  	
  14

  
	
  7.4

  	
  Severability 

  	
  15

  
	
  7.5

  	
  Entire Agreement 

  	
  15

  
	
  7.6

  	
  Successors and Assigns;
  Certain Transferees Bound Hereby 

  	
  15

  
	
  7.7

  	
  Counterparts 

  	
  15

  

 

i

 

	
  7.8

  	
  Remedies 

  	
  15

  
	
  7.9

  	
  Notices 

  	
  15

  
	
  7.10

  	
  Governing Law

  	
  17

  
	
  7.11

  	
  Descriptive Headings

  	
  17

  

 

ii

 

AMENDED AND RESTATED SECURITYHOLDERS AGREEMENT,
dated as of
                ,
2010 (this “Agreement”), by and among DynaVox Inc., a Delaware
corporation (the “Corporation”), DynaVox Systems Holdings LLC, a
Delaware limited liability company (“Holdings”), Vestar Capital Partners
IV, L.P., a Delaware limited partnership (“VCP IV”), VCD Investors LLC,
a Delaware limited liability company (“VCD Investors” and, together with
VCP IV, “Vestar”); Park Avenue Equity Partners, L.P., a Delaware limited
partnership (“Park Avenue”) and each of the other holders of securities
that is or may become a party to this Agreement (each, with the exception of
Vestar Investors (as defined herein) and Park Avenue Investors (as defined
herein), an “Other Investor” and, collectively, the “Other Investors”
and, together with the Vestar Investors and the Park Avenue Investors, the “Securityholders”).

 

WHEREAS, the parties hereto wish to amend and
restate the Securityholders Agreement, dated as of May 13, 2004 (the “Original
Securityholders Agreement”), by and among Holdings and the Securityholders
party thereto in its entirety as set forth herein;

 

NOW THEREFORE, in consideration of the mutual
covenants and agreements contained herein, the parties hereto, each intending
to be legally bound, agree that the Original Securityholders Agreement is
hereby amended and restated in its entirety, and further agree as follows:

 

ARTICLE I  

REPRESENTATIONS AND WARRANTIES 

OF THE PARTIES

 

1.1           Representations and Warranties of
the Corporation and Holdings.  Each
of the Corporation and Holdings hereby represents and warrants to the
Securityholders that as of the date of this Agreement:

 

(a)           it is duly incorporated or formed, as
the case may be, validly existing and in good standing under the laws of the
State of Delaware, it has full power and authority to execute, deliver and
perform this Agreement and to consummate the transactions contemplated hereby,
and the execution, delivery and performance by it of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate or limited liability company action, as the case may
be;

 

(b)           this Agreement has been duly and
validly executed and delivered by it and constitutes its legal and binding
obligation, enforceable against it in accordance with its terms; and

 

(c)           the execution, delivery and
performance by it of this Agreement will not, with or without the giving of
notice or lapse of time, or both (i) violate any provision of law,
statute, rule or regulation to which it is subject, (ii) violate any
order, judgment or decree applicable to it or (iii) conflict with, or
result in a breach or default under, any term or condition of its
organizational documents or any agreement or instrument to which it is a party
or by which it is bound.

 

1.2           Representations and Warranties of
the Securityholders.  Each
Securityholder (as to himself or herself or itself only) represents and
warrants to the Corporation, 

 

 

Holdings and the other Securityholders that, as of the
time such Securityholder becomes a party to this Agreement:

 

(a)           this Agreement (or the separate
joinder agreement executed by such Securityholder) has been duly and validly
executed and delivered by such Securityholder, and this Agreement constitutes a
legal and binding obligation of such Securityholder, enforceable against such
Securityholder in accordance with its terms; and

 

(b)           the execution and delivery by such
Securityholder of this Agreement (or the separate joinder agreement executed by
such Securityholder), and the performance by such Securityholder of this
Agreement will not, with or without the giving of notice or lapse of time, or
both, (i) violate any provision of law, statute, rule or regulation
to which such Securityholder is subject, (ii) violate any order, judgment
or decree applicable to such Securityholder or (iii) conflict with, or
result in a breach or default under, any term or condition of any agreement or
other instrument to which such Securityholder is a party or by which such
Securityholder is bound.

 

ARTICLE II

VOTING AGREEMENTS

 

2.1           Election of Directors.  (a)    Each
Securityholder hereby agrees that such Securityholder will vote, or cause to be
voted, all Voting Securities over which such Securityholder has the power to
vote or direct the voting, and will take all other necessary or desirable
actions within such Securityholder’s control, to cause the authorized number of
directors of the Corporation to be at least five, and to elect or cause to be
elected to the board of directors of the Corporation and cause to be continued
in office:

 

(i)            one (1) director who shall be
the chief executive officer of the Corporation (the “Management Director”);
and

 

(ii)           for so long as Vestar and its
Affiliates continue to hold Voting Securities representing at least 10% of the
total voting power of all the then outstanding Voting Securities, voting as a
single class, all of the remaining directors shall be designated by the Vestar
Majority Holders (the “Vestar Directors”).

 

(b)           Each Securityholder hereby agrees
that, if at any time the Vestar Majority Holders shall notify such
Securityholder of their desire to remove, with or without cause, any individual
from the board of directors of the Corporation for which the Vestar Majority
Holders have designation rights pursuant to paragraph (a) above at such
time, such Securityholder will vote, or cause to be voted, all Voting
Securities over which they have the power to vote or direct the voting, and
shall take all such other actions promptly as shall be necessary or desirable
to cause the removal of such director.

 

2

 

(c)           Each Securityholder hereby agrees that, if at any time any
Vestar Director ceases to serve on the board of directors of the Corporation
(whether due to resignation, removal or otherwise), the Vestar Majority Holders
shall be entitled to designate a successor director to fill the vacancy created
thereby on the terms and subject to the conditions of paragraph (a) above.  Each Securityholder hereby agrees to vote, or
cause to be voted, all Voting Securities over which such Securityholder has the
power to vote or direct the voting, and shall take all such other actions as
shall be necessary or desirable, to cause the designated successor to be
elected to fill such vacancy.

 

(d)           The Corporation hereby agrees that it will take all
necessary and desirable actions within its control to cause the election and
continuation in office of the directors designated in accordance with the
foregoing provisions of this Section 2.1.

 

2.2           Other Voting Matters.  Each
Securityholder hereby agrees that such Securityholder will vote, or cause to be
voted, all Voting Securities or limited liability company interests of Holdings
(“Holdings Interests”) over which such party has the power to vote or
direct the voting, either in person or by proxy, whether at a meeting of
stockholders or of members, or by written consent, in the manner in which
Vestar directs in connection with (i) the approval of any amendment or
amendments to the organizational documents of the Corporation or of Holdings, (ii) the
merger, security exchange, combination or consolidation of the Corporation or
of Holdings with any other Person or Persons, (iii) the sale, lease or
exchange of all or substantially all of the property and assets of the
Corporation or of Holdings and/or (iv) the reorganization, recapitalization,
liquidation, dissolution or winding-up of the Corporation or of Holdings;
provided, that no Securityholder shall have any obligation to vote in favor of
any such matter which (A) has a material and adverse effect upon such
Securityholder which is disproportionate to the effect of such action upon
Vestar, (B) constitutes the approval of a Sale of DynaVox or an action
which is in contemplation of, or otherwise a condition to the consummation of,
a Sale of DynaVox unless the conditions set forth in Section 5.1(b) are
satisfied in connection with such Sale of DynaVox or (C) any action which
requires the approval of such Securityholder pursuant to Section 9.4 of
the Holdings LLC Agreement.

 

2.3           Agreement of the Corporation and of Holdings.  Each of the Corporation and Holdings hereby
agrees that it will take all necessary and desirable actions within its control
to cause the matters addressed by Section 2.2 to be carried out in
accordance with the provisions thereof. 
Without limiting the foregoing, the Secretary of each of the Corporation
and of Holdings or, if there be no Secretary, such other officer or employee of
the Corporation of or Holdings as may be fulfilling the duties of the
Secretary, shall not record any vote or consent or other action contrary to the
terms of this Article II.

 

2.4           Termination of Certain Provisions.   The provisions of each of this Article II,
Section 4.1 and Section 5.1
shall terminate and cease to be of any further force and effect at such time as
the Securityholders, collectively, cease to beneficially own Voting Securities
representing at least 25% of the total voting power of all the then outstanding
Voting Securities, voting as a single class.

 

3

 

ARTICLE III

VCOC MATTERS

 

3.1   VCOC Rights.

 

Each of the Corporation and Holdings hereby agrees
that, subject to any contractual obligations of confidentiality, reasonable
restrictions on the use and disclosure of such information and the Corporation’s
and Holdings’ right to limit such disclosure to comply with applicable
securities laws and fiduciary duties, it shall, with respect to each
Securityholder and, at the request of the Securityholder, each Affiliate
thereof that indirectly has an interest in the Corporation or Holdings through
such Securityholder, in each case that is intended to qualify as a “venture
capital operating company” within the meaning of 29 C.F.R. § 2510.3-101(d) (each,
a “VCOC Investor”):

 

(a)           Provide each such VCOC Investor with:

 

(i)            during normal business hours
and upon reasonable advance notice in writing, but not more frequently than
once per quarter, the right to visit and inspect any of the offices and
properties of each of the Corporation and Holdings and inspect and copy the
books and records of each of the Corporation and Holdings;

 

(ii)           if requested in writing, as
soon as available and in any event within 45 days after the end of each of the
first three quarters of each fiscal year of the Corporation, consolidated
balance sheets of the Corporation and its Subsidiaries as of the end of such
period, and consolidated statements of income and cash flows of the Corporation
and its Subsidiaries for the period then ended;

 

(iii)          if requested in writing, as
soon as available and in any event within 120 days after the end of each fiscal
year of the Corporation, a consolidated balance sheet of the Corporation and
its Subsidiaries as of the end of such year, and consolidated statements of
income and cash flows of the Corporation and its Subsidiaries for the year then
ended; and

 

(iv)          if requested in writing, to
the extent it is required by law or pursuant to the terms of any of its
outstanding indebtedness to prepare such reports, any annual reports, quarterly
reports and other periodic reports pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended, actually prepared by it as
soon as available;

 

provided that, in each case, if the
Corporation or Holdings makes the information described in clauses (ii), (iii) or
(iv) of this paragraph 3.1(a) available through public filings on the
EDGAR system or any successor or replacement system of the SEC, the delivery of
the information shall be deemed satisfied by such public filings;

 

(b)           Make appropriate officers of each of the Corporation and
Holdings available periodically and at such times as reasonably requested in
writing by such VCOC Investor, but not more frequently than once per quarter,
for consultation with each such VCOC Investor or its authorized representative
with respect to matters relating to the business and

 

4

 

affairs
of each of the Corporation and Holdings and their respective Subsidiaries (at
which meetings the other VCOC Investors who have similar rights under this Section 3.1
of the Agreement may be permitted to attend, at the Corporation’s and Holdings’
discretion); and

 

(c)           Consider, in good faith, the recommendations of each such
VCOC Investor or its authorized representative in connection with the matters
on which it is consulted as described above, it being understood that the
ultimate discretion with respect to such matters shall be retained by the
Corporation and its Subsidiaries.

 

In the
event a VCOC Investor is an Affiliate of a Securityholder as described in this Section 3.1,
such VCOC Investor shall be treated for purposes of this Section 3.1, as a
third party beneficiary hereunder.

 

3.2           Termination of VCOC Rights.  The provisions of this Article III shall
not apply, and shall terminate and cease to be of any further force and effect,
with respect to any VCOC Investor that (i) does not, directly or
indirectly, together with its Affiliates, hold or continue to hold Voting
Securities representing at least 5% of the total voting power of all the then
outstanding Voting Securities, voting as a single class or (ii) notifies
the Corporation and Holdings in writing that it has waived its rights under
this Article III.

 

ARTICLE IV

TRANSFERS OF SECURITIES

 

4.1           Tag-Along Rights.

 

(a)           Tag-Along Rights.  Prior to making any Transfer of Vestar
Securities (other than a Transfer described in Section 4.1(b)) any holder
of Vestar Securities proposing to make such a Transfer (for purposes of this Section 4.2,
a “Selling Holder”) shall give at least thirty (30) days’ prior written
notice to each holder of Park Avenue Securities or Other Investor Securities
(for purposes of this Section 4.1, each an “Other Holder”), to the
Corporation and to Holdings, which notice (for purposes of this Section 4.1,
the “Sale Notice”) shall identify the type and amount of Vestar
Securities to be sold (for purposes of this Section 4.1, the “Offered
Securities”), describe the terms and conditions of such proposed Transfer,
and identify each prospective Transferee. 
Any of the Other Holders may, within fifteen (15) days of the receipt of
the Sale Notice, give written notice (each, a “Tag-Along Notice”) to the
Selling Holder that such Other Holder wishes to participate in such proposed
Transfer upon the terms and conditions set forth in the Sale Notice, which
Tag-Along Notice shall specify the Park Avenue Securities or Other Investor
Securities such Other Holder desires to include in such proposed Transfer;
provided, however, that (1) each Other Holder shall be required, as a
condition to being permitted to sell Park Avenue Securities or Other Investor
Securities pursuant to this Section 4.1(a) in connection with a Transfer
of Offered Securities, to elect to sell Park Avenue Securities or Other
Investor Securities of the same type and class and in the same relative
proportions as the Securities which comprise the Offered Securities, (2) no
Security that is at the time in question subject to vesting, forfeiture,
repurchase or similar provisions shall be entitled to be sold pursuant to this Section 4.1(a) except
to the extent that such vesting, forfeiture, repurchase or similar provisions
have lapsed prior thereto or will lapse in accordance with the terms thereof
upon the consummation of such transaction; and (3) to exercise its
tag-along rights

 

5

 

hereunder,
each Other Holder must agree to make to the Transferee the same
representations, warranties, covenants (other than any non-competition
covenants), indemnities and agreements as the Selling Holder agrees to make in
connection with the Transfer of the Offered Securities (except that in the case
of representations and warranties pertaining specifically to, or covenants made
specifically by, the Selling Holder, the Other Holders shall make comparable
representations and warranties pertaining specifically to (and, as applicable,
covenants by) themselves), and must agree to bear his or its ratable share
(which may be joint and several but shall be based on the value of Securities
that are Transferred) of all liabilities to the Transferees arising out of
representations, warranties and covenants (other than those representations,
warranties and covenants that pertain specifically to a given Securityholder,
who shall bear all of the liability related thereto), indemnities or other agreements
made in connection with the Transfer. 
Each Securityholder will bear (x) its or his or her own costs of
any sale of Securities pursuant to this Section 4.1(a) and (y) its
or his or her pro-rata share (based upon the relative amount of Securities sold)
of the costs of any sale of Securities pursuant to this Section 4.1(a) (excluding
all amounts paid to any Securityholder or his or its Affiliates as a
transaction fee, broker’s fee, finder’s fee, advisory fee, success fee, or
other similar fee or charge related to the consummation of such sale) to the
extent such costs are incurred for the benefit of all Securityholders and are
not otherwise paid by the Transferee.

 

If none of the Other Holders gives the Selling
Holder a timely Tag-Along Notice with respect to the Transfer proposed in the
Sale Notice, then (notwithstanding the first sentence of this Section 4.1(a))
the Selling Holder may, subject to the terms and conditions of the Holdings LLC
Agreement and applicable law, Transfer such Offered Securities on the terms and
conditions set forth, and to or among any of the Transferees identified (or
Affiliates of Transferees identified), in the Sale Notice at any time within
ninety (90) days after expiration of the fifteen-day period for giving
Tag-Along Notices with respect to such Transfer.  Any such Offered Securities not Transferred
by the Selling Holder during such ninety-day period will again be subject to
the provisions of this Section 4.1(a) upon subsequent Transfer.  If one or more Other Holders give the Selling
Holder a timely Tag-Along Notice, then the Selling Holder shall use all
reasonable efforts to obtain the agreement of the prospective Transferee(s) to
the participation of the Other Holders in any contemplated Transfer, on the
same terms and conditions as are applicable to the Offered Securities, and no
Selling Holder shall transfer any of its Securities to any prospective
Transferee if such prospective Transferee(s) declines to allow the
participation of the Other Holders.  If
the prospective Transferee(s) is unwilling or unable to acquire all of the
Offered Securities specified in a timely Tag-Along Notice upon such terms, then
the Selling Holder may elect either to cancel such proposed Transfer or to
allocate the maximum number of each class of Securities that the prospective
Transferees are willing to purchase (the “Allocable Securities”) among the
Selling Holder and the Other Holders giving timely Tag-Along Notices as follows
(it being understood that the prospective Transferees shall be required to
purchase Securities of the same class on the same terms and conditions taking
into account the provisions of clause (1) of the first paragraph of this Section 4.1(a),
whether or not they are represented by voting trust certificates, and to
consummate such Transfer on those terms and conditions):

 

(i)            each participating
Securityholder (including the Selling Holder) shall be entitled to sell a
number of shares of each class of Securities (taking into account the
provisions of clause (1) of the first paragraph of this Section 4.1(a))
(not to exceed,

 

6

 

for any Other Holder, the
number of shares of such class of Securities identified in such Other Holder’s
Tag-Along Notice) equal to the product of (A) the number of Allocable
Securities of such class of Securities and (B) a fraction, the numerator
of which is such Securityholder’s Ownership Percentage of such class of
Securities and the denominator of which is the aggregate Ownership Percentage
for all participating Securityholders of such class of Securities; and

 

(ii)           if after allocating the
Allocable Securities of any class of Securities to such Securityholders in
accordance with clause (i) above, there are any Allocable Securities of
such class that remain unallocated, then they shall be allocated (in one or
more successive allocations on the basis of the allocation method specified in
clause (i) above) among the Selling Holder and each such Other Holder that
has elected in its Tag-Along Notice to sell a greater number of shares of such
class of Securities than previously has been allocated to it pursuant to clause
(i) and this clause (ii) (all of whom (but no others) shall, for
purposes of clause (i) above, be deemed to be the participating
Securityholders) until all such Allocable Securities have been allocated in
accordance with this clause (ii).

 

(b)           Excluded Transfers.  The rights and restrictions contained in Section 4.1(a) shall
not apply with respect to any of the following Transfers of Securities:

 

(i)            any Transfer of Vestar
Securities in a Public Sale;

 

(ii)           any Transfer of Vestar
Securities to and among the members or partners of Vestar and the members,
partners, securityholders and employees of such partners (subject to compliance
with Sections 4.3 and 4.4 hereof);

 

(iii)          any Transfer of Vestar
Securities in accordance with Section 5.1;

 

(iv)          any Transfer of Vestar
Securities incidental to the exercise, conversion or exchange of such
securities in accordance with their terms or any reclassification or
combination of shares (including any reverse stock split);

 

(v)           any Transfer of Vestar
Securities to employees or directors of, or consultants to, any of the Holdings
and its Subsidiaries;

 

(vi)          any Transfer constituting an
Exempt Individual Transfer;

 

(vii)         any Transfer of Securities
pursuant to the Exchange Agreement; and

 

(viii)        any Transfer of Securities
to the Corporation, Holdings or any of the their respective Subsidiaries if
such Transfer is funded by the sale of Voting Securities by the Corporation,
Holding or any of their respective Subsidiaries.

 

(c)           Excluded Securities.  No Securityholder shall be entitled to
exercise any rights as an Other Holder under Section 4.1(a) with respect
to Securities that have been transferred by the Selling Holder or an Other
Holder in a Transfer pursuant to the provisions of

 

7

 

Section 4.1(a)
(“Excluded Securities”), and no Excluded Securities held by a Selling
Holder or any Other Holder shall be counted in determining the respective
participation rights of such Holders in a Transfer subject to Section 4.1(a).

 

4.2           Securities Act Compliance  No Voting Securities may be Transferred by a
Securityholder (other than pursuant to an effective registration statement
under the Securities Act) unless such Securityholder first delivers to the
Corporation an opinion of counsel (which may be internal counsel), which
opinion and counsel shall be reasonably satisfactory to the Holdings, to the
effect that such Transfer is not required to be registered under the Securities
Act.  No Holdings Interests may be
Transferred by a Securityholder other than in compliance with the terms of the
Holdings LLC Agreement.

 

4.3           Certain Transferees Bound by
Agreement. Each Securityholder hereby agrees that it shall,
prior to any Transfer by such Securityholder of Securities that is not to be
made (a) pursuant to an offering registered under the Securities Act (a “Public
Offering”) , or to the public through a broker, dealer or market-maker
pursuant to Rule 144 promulgated thereunder (a “Rule 144 Sale”)
or (b) in a transaction that will result in the termination of this
Agreement, deliver to the Corporation and to Holdings a written agreement of
the proposed Transferee to become a Securityholder and to be bound by the terms
of this Agreement; provided that the foregoing agreement shall not apply in
respect of Transfers of Voting Securities and/or Holdings Interests to a
limited partner of Vestar (excluding any such limited partner who is an
employee either of the general partner of Vestar or an Affiliate of the general
partner of Vestar).  All Park Avenue
Securities and Other Investor Securities will continue to be Park Avenue
Securities or Other Investor Securities, as the case may be, in the hands of any
Transferee (other than the Corporation, Holdings or any of their Subsidiaries,
Vestar or any Transferee in a Public Sale). 
All Vestar Securities will continue to be Vestar Securities in the hands
of any Transferee (other than the Corporation, Holdings or any of their
Subsidiaries, Park Avenue, Other Investors or a Transferee in a Public Sale).

 

4.4           Transfers in Violation of
Agreement. Any Transfer or attempted Transfer of any
Securities in violation of any provision of this Agreement shall be void, and neither
the Corporation nor Holdings shall record any such Transfer on its books or
treat any purported transferee of such securities as the owner thereof for any
purpose.

 

ARTICLE V

TAKE-ALONG RIGHTS

ON APPROVED SALE

 

5.1           Take-Along Rights.

 

(a)           If Vestar elects to consummate, or to cause the Corporation
or Holdings to consummate, a transaction constituting a Sale of DynaVox, Vestar
shall notify the Corporation and Holdings and the other Securityholders in
writing of that election, the other Securityholders will consent to and raise
no objections to the proposed transaction, and the Securityholders and the
Corporation and Holdings will take all other actions reasonably necessary or
desirable to cause the consummation of such Sale of DynaVox on the terms proposed
by Vestar; provided, that no Securityholder shall be required to enter into any
non-compete or similar arrangement

 

8

 

without
their actual consent.  Without limiting
the foregoing, (i) if the proposed Sale of DynaVox is structured as a sale
of assets or a merger or consolidation, or otherwise requires equityholder
approval, the Securityholders will vote or cause to be voted all Securities
that they hold or with respect to which such Securityholder has the power to
direct the voting and which are entitled to vote on such transaction in favor
of such transaction and will waive any appraisal rights which they may have in
connection therewith, and (ii) if the proposed Sale of DynaVox is
structured as or involves a sale or redemption of Securities, the
Securityholders will agree to sell their pro-rata share of the Securities being
sold in such Sale of DynaVox on the terms and conditions approved by Vestar,
and the Securityholders will execute any merger, asset purchase, security
purchase, recapitalization or other sale agreement approved by Vestar in
connection with such Sale of DynaVox.

 

(b)           The obligations of each of the Securityholders with respect
to the Sale of DynaVox are subject to the satisfaction of the following
conditions:

 

(i)            upon
the consummation of the Sale of DynaVox, all of the holders of a particular
class or series of Securities shall receive the same form and amount of
consideration per share, unit or amount of Securities, or if any holders of a
particular class or series of Securities are given an option as to the form and
amount of consideration to be received, all holders of such class or series
will be given the same option;

 

(ii)           such
Securityholder shall be  given the
ability to exercise his or its  rights
pursuant to the Exchange Agreement prior to the consummation of the Sale, and
to receive in connection with such Sale the consideration which would be
received on account of the Securities issuable pursuant to such exchange
pursuant to the Exchange Agreement;

 

(iii)          any
representations and warranties to be made by such Securityholder in connection
with the Sale of DynaVox shall be limited to representations and warranties
related to authority, ownership and the ability to convey title to such
Securities and no Securityholder shall be liable for the inaccuracy of any
representation or warranty made by any other Person in connection with the Sale
of DynaVox, other than representations and warranties by or in respect of the
Corporation and/or Holdings;

 

(iv)          the
liability for indemnification, if any, of such Securityholder in the Sale of
DynaVox and for the inaccuracy of any representations and warranties made by or
in respect of  the Corporation or
Holdings in connection with such Sale of DynaVox, is several and not joint with
any other Person (except to the extent that funds may be paid out of an escrow
established to cover breach), and is pro rata in proportion to the amount of
consideration paid to such Securityholder in connection with such Sale of
DynaVox;  and

 

(v)           the
liability for indemnification shall be limited to such Securityholder’s
applicable share (determined  based on
the respective proceeds payable to each Securityholder in connection with such
Sale of DynaVox) of a negotiated aggregate indemnification amount that applies
equally to all Securityholders but that in

 

9

 

no event exceeds the amount of
consideration otherwise payable to such Securityholder in connection with such
Sale of DynaVox, except with respect to claims related to fraud or breaches of
representations or warranties by such Securityholder, the liability for which
need not be limited as to such Securityholder;

 

(c)           Each Securityholder will bear its or his pro-rata share
(based upon the relative amount of Securities sold) of the reasonable costs of
any sale of Securities pursuant to a Sale of DynaVox to the extent such costs
are incurred for the benefit of all Securityholders and are not otherwise paid
by the Corporation, Holdings or the acquiring party.  Costs incurred by or on behalf of a
Securityholder for its or his sole benefit will not be considered costs of the
transaction hereunder.  In the event that
any transaction that Vestar elects to consummate or cause to be consummated
pursuant to this Section 5.1 is not consummated for any reason, Holdings
will reimburse Vestar for all actual and reasonable expenses paid or incurred
by Vestar in connection therewith.

 

(d)           Notwithstanding any provision in this Agreement to the
contrary, Vestar and Park Avenue and/or their Affiliates shall be entitled to
be paid customary and reasonable fees by the Corporation and/or Holdings for
any investment banking services provided by them in connection with a Sale of
DynaVox.

 

ARTICLE VI

AMENDMENT AND TERMINATION

 

6.1   Amendment and Waiver.  Except as
otherwise provided herein, no modification, amendment or waiver of any
provision of this Agreement shall be effective against the Corporation,
Holdings or the Securityholders unless such modification, amendment or waiver
is approved in writing by each of the Corporation, Holdings, the Vestar
Majority Holders, the Park Avenue Majority Holders and the Other Investor
Majority Holders.  The failure of any
party to enforce any of the provisions of this Agreement shall in no way be
construed as a waiver of such provisions and shall not affect the right of such
party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.

 

6.2           Termination of Agreement. 
This Agreement will terminate (a) with the written consent of the
Corporation, Holdings, the Vestar Majority Holders, the Park Avenue Majority
Holders and the Other Investor Majority Holders, (c) upon the dissolution,
liquidation or winding-up of the Corporation and Holdings or (c) upon the
consummation of a Sale of DynaVox.

 

6.3           Termination as to a Party. 
Any Person who ceases to hold any Voting Securities or Holdings
Interests shall cease to be a Securityholder and shall have no further rights
or obligations under this Agreement.

 

ARTICLE VII

MISCELLANEOUS

 

7.1           Certain Defined Terms.  As used in
this Agreement, the following terms shall have the meanings set forth or as
referenced below:

 

10

 

“Affiliate” of any particular Person means
any other Person Controlling, Controlled by or under common Control with such
particular Person or, in the case of a natural Person, any other member of such
Person’s Family Group.

 

“Allocable Securities” has the meaning given
such term in Section 4.1(a).

 

“Control” (including, with correlative
meaning, all conjugations thereof) means with respect to any Person, the
ability of another Person to control or direct the actions or policies of such
first Person, whether by ownership of Voting Securities, by contract or
otherwise.

 

“Corporation” has the meaning given such term
in the preamble.

 

“Excluded Securities” has the meaning set
forth in Section 4.2(c).

 

“Exempt Individual Transfer” means a Transfer
of Vestar Securities held by a natural person (a) upon the death of the
holder pursuant to the applicable laws of descent and distribution, (b) solely
to or among such Person’s Family Group, or (c) to the Holdings incidental
to the exercise, conversion or exchange of such securities in accordance with
their terms, any combination of shares (including any reverse stock split) or
any recapitalization, reorganization or reclassification of, or any merger or
consolidation involving, the Holdings.

 

“Family Group” means, with respect to any
individual, such individual’s spouse and descendants (whether natural or
adopted) and any trust, partnership, limited liability company or similar
vehicle established and maintained solely for the benefit of (or the sole
members or partners of which are) such individual, such individual’s spouse
and/or such individual’s descendants.

 

“Holdings” has the meaning given such term in
the preamble.

 

“Holdings Interests” has the meaning given
such term in Section 2.2.

 

“Holdings LLC Agreement” means the Third
Amended and Restated Limited Liability Company Agreement of Holdings, dated on
or about the date hereof, as such agreement may be amended from time to time.

 

“Limited Partner” means a limited partner of
Vestar (excluding any such limited partner who is an employee either of the
general partner of Vestar or an Affiliate of the general partner of Vestar).

 

“Management Director” has the meaning given
such term in Section 2.1(a)(ii).

 

“Offered Securities” has the meaning given
such term in Section 4.1(a).

 

“Original Securityholders Agreement” has the
meaning given to such term in the recitals to this Agreement.

 

“Other Holder” has the meaning given to such
term in Section 4.1(a).

 

11

 

“Other Investor” has the meaning given such
term in the preamble.

 

“Other Investor Majority Holders” means the
Other Investors holding a majority in voting power of all of the Voting
Securities held by Other Investors collectively.

 

“Other Investor Securities” means,
collectively, the Securities issued to the Other Investors.

 

“Ownership Percentage” means, for each
Securityholder and with respect to a type and class of Security, the percentage
obtained by dividing the number of units or shares of such Security held by
such Securityholder by the total number of units or shares of such Security
(other than Excluded Securities) outstanding.

 

“Park Avenue” has the meaning given such term
in the preamble.

 

“Park Avenue Director” has the meaning given
such term in Section 2.1(a)(i).

 

“Park Avenue Investors” means each of Park
Avenue and any Affiliate of Park Avenue that acquires Voting Securities or
Holdings Interests after the date hereof.

 

“Park Avenue Majority Holders” means the Park
Avenue Investors holding a majority in voting power of all of the Voting
Securities held by Park Avenue Investors collectively.

 

“Park Avenue Securities” means, collectively,
the Securities issued to Park Avenue Investors.

 

“Person” means an
individual, a partnership, a joint venture, a corporation, an association, a
joint stock company, a limited liability company, a trust, an unincorporated
organization or a government or any department or agency or political
subdivision thereof.

 

“Public Sale” means a sale of Securities
pursuant to a Public Offering (not including an offering made in connection
with a business acquisition or combination or an employee benefit plan) or a Rule 144
Sale.

 

“Rule 144 Sale” means a sale of
Securities to the public through a broker, dealer or market-maker pursuant to
the provisions of Rule 144 adopted under the Securities Act (or any
successor rule or regulation).

 

“Sale of DynaVox” means the consummation of a
transaction, other than any transaction with Vestar or its Affiliates, whether
in a single transaction or in a series of related transactions that are
consummated contemporaneously (or consummated pursuant to contemporaneous
agreements), with any other Person or Persons on an arm’s-length basis,
pursuant to which such party or parties acquire (whether by merger, stock
purchase, recapitalization, reorganization, redemption, issuance of capital
stock or otherwise), directly or indirectly, (a) more than 50% of (I) the
total voting power of all the then outstanding Voting Securities, voting as a
single class or (II) the Holdings Interests or (b) assets and
property

 

12

 

constituting all or
substantially all of the assets and property of Holdings and its Subsidiaries
on a consolidated basis.

 

“Sale Notice” has the meaning given to such
term in Section 4.1(a).

 

“Securities” means, collectively, Voting
Securities and Holdings Interests.

 

“Securities Act” means the Securities Act of
1933, as amended from time to time.

 

“Securityholder” has the meaning given such
term in the preamble.

 

“Selling Holder” has the meaning given such
term in Section 4.1(a).

 

“Subsidiary” means any corporation, limited
liability company, partnership or other entity with respect to which another
specified entity has the power to vote or direct the voting of sufficient
securities to elect directors (or comparable authorized persons of such entity)
having a majority of the voting power of the board of directors (or comparable
governing body) of such entity.

 

“Tag-Along Notice” has the meaning given such
term in Section 4.1(a).

 

“Transfer” means (in
either the noun or the verb form, including with respect to the verb form, all
conjugations thereof within their correlative meanings) with respect to any
security, the gift, sale, assignment, transfer, pledge, hypothecation or other
disposition (whether for or without consideration, whether directly or
indirectly, and whether voluntary, involuntary or by operation of law) of such
Security or any interest therein.

 

“VCD Investors” has the meaning given such
term in the preamble.

 

“VCOC Investor” has the meaning given such
term in Section 3.1.

 

“VCP IV” has the meaning given such term in
the preamble.

 

“Vestar” has the meaning given such term in
the preamble.

 

“Vestar Directors” has the meaning given such
term in Section 2.1(a)(iii).

 

“Vestar Investors” means each of Vestar and
any Affiliate of Vestar that acquires Voting Securities or Holdings Interests
after the date hereof.

 

“Vestar Majority Holders” means the Vestar
Investors holding a majority in voting power of all of the Voting Securities
held by Vestar Investors collectively.

 

“Vestar Securities” means, collectively, the
Securities issued to the Vestar Investors.

 

“Voting Securities” means stock of the
Corporation entitled to vote generally in the election of directors.

 

13

 

7.2           Adjustments.

 

For the avoidance
of doubt, if there is any reclassification, reorganization, recapitalization or
other similar transaction in which “Voting Securities” or “Holdings Interests”
are converted or changed into another security or securities, this Agreement
shall continue to be applicable, mutatis mutandis,
with respect to such security or securities. 
This Agreement shall apply to, mutatis mutandis,
and all references to “Voting Securities” or “Holdings Interests” shall be
deemed to include, any security or securities which may be issued in respect
of, in exchange for or in substitution of Voting Securities or Holdings
Interests by reason of any distribution or dividend, split, reverse split,
combination, reclassification, reorganization, recapitalization, merger,
exchange or other transaction.

 

7.3           Legends.

 

(a)           Securityholders Agreement.  Each certificate or instrument, if any,
evidencing Voting Securities or Holdings Interests and each certificate or
instrument, if any, issued in exchange for or upon the Transfer of any such
securities (if such securities remain subject to this Agreement after such
Transfer) shall be stamped or otherwise imprinted with a legend (as
appropriately completed under the circumstances) in substantially the following
form:

 

“THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO A CERTAIN AMENDED AND RESTATED SECURITYHOLDERS
AGREEMENT DATED AS OF
[          ], 2010 AMONG
DYNAVOX INC., DYNAVOX SYSTEMS HOLDINGS LLC AND THE SECURITYHOLDERS FROM TIME TO
TIME PARTY THERETO AND, AS SUCH, ARE SUBJECT TO CERTAIN VOTING PROVISIONS AND
TRANSFER AND OTHER RESTRICTIONS SET FORTH IN SUCH SECURITYHOLDERS
AGREEMENT.  A COPY OF SUCH
SECURITYHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY DYNAVOX INC. OR
DYNAVOX SYSTEMS HOLDINGS LLC TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”

 

(b)           Restricted Securities.  Each instrument or certificate, if any,
evidencing Voting Securities or Holdings Interests and each instrument or
certificate, if any, issued in exchange or upon the Transfer of any such
securities shall, to the extent the Corporation shall in its sole discretion
determine, be stamped or otherwise imprinted with a legend substantially in the
following form:

 

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT
BE OFFERED OR SOLD UNLESS IT HAS BEEN REGISTERED UNDER THE SECURITIES ACT OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE (AND, IN SUCH CASE, AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO

 

14

 

THE CORPORATION SHALL HAVE BEEN DELIVERED TO
THE CORPORATION TO THE EFFECT THAT SUCH OFFER OR SALE IS NOT REQUIRED TO BE
REGISTERED UNDER THE SECURITIES ACT).”

 

(c)           Removal of Legends.  Whenever in the opinion of the Corporation
and counsel reasonably satisfactory to the Corporation (which opinion shall be
delivered to the Corporation in writing) the restrictions described in any
legend set forth above cease to be applicable to any Voting Securities or Holdings
Interests, the holder thereof shall be entitled, without expense to the holder,
to have such legend removed.

 

7.4           Severability.  Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other provision or any
other jurisdiction, but this Agreement shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.

 

7.5           Entire Agreement.  Except as
otherwise expressly set forth herein, this document embodies the complete
agreement and understanding among the parties hereto with respect to the
subject matter hereof and supersedes and preempts any prior understandings,
agreements or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way.

 

7.6           Successors and Assigns; Certain Transferees Bound
Hereby.  Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by each of
the Corporation and Holdings and their successors and assigns, and by the
Securityholders and their respective successors and assigns so long as they
hold Voting Securities or Holdings Interests.

 

7.7           Counterparts.  This
Agreement may be executed in separate counterparts each of which shall be an
original and all of which taken together shall constitute one and the same
agreement.

 

7.8           Remedies.  The
Corporation, Holdings and the Securityholders shall be entitled to enforce
their rights under this Agreement specifically, to recover damages by reason of
any breach of any provision of this Agreement (including costs of enforcement)
and to exercise all other rights existing in their favor.  The parties hereto agree and acknowledge that
money damages may not be an adequate remedy for any breach of the provisions of
this Agreement and that the Corporation, Holdings or any Securityholder may in
its or his sole discretion apply to any court of law or equity of competent
jurisdiction for specific performance or injunctive relief (without posting a
bond or other security) in order to enforce or prevent any violation of the
provisions of this Agreement.

 

7.9           Notices.  Any notice
provided for in this Agreement shall be in writing and shall be either
personally delivered, or mailed first class mail (postage prepaid) or sent by

 

15

 

reputable overnight courier service (charges prepaid)
to the Corporation and Holdings at the respective addresses set forth below and
to any other recipient at the address indicated on the Corporations or Holdings’
records, or at such address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending
party.  Notices will be deemed to have
been given hereunder when sent by facsimile (receipt confirmed) delivered
personally, five days after deposit in the U.S. mail and one day after deposit
with a reputable overnight courier service.

 

The Corporation’s address is:

 

DynaVox
Inc.

2100
Wharton Street

Suite 400

Pittsburgh,
PA 15203

Attention:  Chief Executive Officer

 

with
a copy to:

 

Simpson
Thacher & Bartlett LLP

425 Lexington Avenue

New
York, New York 10017-3954

Attention:  Joshua Ford Bonnie, Esq.

 

Holdings’ address is:

 

DynaVox
Systems Holdings LLC

2100
Wharton Street

Suite 400

Pittsburgh,
PA 15203

Attention:  Chief Executive Officer

 

with
a copy to:

 

Simpson
Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017-3954

Attention:  Joshua Ford Bonnie, Esq.

 

A copy of each notice given to the
Corporation or Holdings shall be given to Vestar (and no notice to the
Corporation or Holdings shall be effective until such copy is delivered to
Vestar) at the following addresse:

 

Vestar Capital Partners IV,
L.P.

245 Park Avenue, 41st Floor

New York, New York  10167

Attention:  General Counsel

 

16

 

with a copy to:

 

Simpson Thacher &
Bartlett LLP

425 Lexington Avenue

New York, New York 10017-3954

Attention:  Joshua Ford Bonnie, Esq.

 

7.10         Governing Law.  The Delaware Limited Liability Company Act
shall govern all questions arising under this Agreement concerning the relative
rights of Holdings and the holders of its limited liability company interests.  The Delaware General Corporation Law shall
govern all questions arising under this Agreement concerning the relative
rights of the Corporation and its stockholders. 
All other questions concerning the construction, validity and
interpretation of this Agreement shall be governed by and construed in
accordance with the domestic laws of the State of New York applicable to
contracts made and to be performed in the State of New York.

 

7.11         Descriptive Headings.  The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

17

 

IN WITNESS WHEREOF, the parties hereto have executed
this Securityholders Agreement on the day and year first above written.

 

 

	
   

  	
   

  	
  DYNAVOX
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DYNAVOX
  SYSTEMS HOLDINGS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VESTAR
  INVESTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VESTAR
  CAPITAL PARTNERS IV, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Vestar
  Associates IV, L.P.,

  
	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Vestar
  Associates Corporation IV,

  
	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Managing
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VCD
  INVESTORS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
   

  	
  PARK
  AVENUE INVESTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PARK
  AVENUE EQUITY PARTNERS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Park
  Avenue Equity GP, LLC,

  
	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  PAE
  GP, LLC,

  
	
   

  	
   

  	
   

  	
  its
  Managing Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Managing
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  OTHER INVESTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NEW
  YORK LIFE CAPITAL PARTNERS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  NYLCAP
  Manager LLC,

  
	
   

  	
   

  	
   

  	
  its
  Investment Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NEW
  YORK LIFE INVESTMENT MANAGEMENT MEZZANINE PARTNERS, LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  NYLIM
  Mezzanine GenPar LP,

  
	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  NYLIM
  Mezzanine GenPar, GP, LLC, its

  
	
   

  	
   

  	
   

  	
  General
  Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
   

  	
  NYLIM
  MEZZANINE PARTNERS PARALLEL FUND, LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  NYLIM
  Mezzanine GenPar LP,

  
	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  NYLIM
  Mezzanine GenPar, GP, LLC, its

  
	
   

  	
   

  	
   

  	
  General
  Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SQUAM
  LAKE INVESTORS VI, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  BGPI,
  INC.,

  
	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BAIN &
  COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BLINK
  TWICE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FRANK
  SELLMAN

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EDWARD
  L. DONNELLY, JR.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MICHELLE
  L. HEYING

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

	
   

  	
   

  	
  KENNETH
  D. MISCH

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ROBERT
  E. CUNNINGHAMExhibit 10.3

 

TAX RECEIVABLE AGREEMENT

 

This TAX RECEIVABLE AGREEMENT (as amended from time to time, this “Agreement”),
dated as of
                ,
2010, is hereby entered into by and among DynaVox Inc., a Delaware corporation
(the “Corporation”), DynaVox Systems Holdings LLC, a Delaware limited
liability company (“Holdings”), and each of the Members (as defined
herein).

 

RECITALS

 

WHEREAS, the Members hold member interests (“Units”) in Holdings,
which is treated as a partnership for United States federal income tax
purposes;

 

WHEREAS, the Corporation is the managing member of, and holds and will
hold Units in, Holdings;

 

WHEREAS, the Corporation will be entitled to depreciation, amortization
and other recovery of cost or basis for Tax purposes in respect of the IPO Date
Intangible Assets (as defined below);

 

WHEREAS, as a result of the Members agreeing to hold Units rather than
transferring all of their Units in exchange for Class A Shares (as defined
below), the Corporation will incur significantly lower tax liabilities on an
ongoing basis with respect to the operations of Holdings;

 

WHEREAS, the Units held by the Members are exchangeable for Class A
common stock (the “Class A Shares”) of the Corporation;

 

WHEREAS, Holdings and each of its direct and indirect subsidiaries
treated as a partnership for United States federal income tax purposes will
have in effect an election under Section 754 of the United States Internal
Revenue Code of 1986, as amended (the “Code”), for each Taxable Year (as
defined below) in which an exchange of Units for Class A Shares occurs,
which election is intended to result in an adjustment to the tax basis of the
assets owned by Holdings and such subsidiaries (solely with respect to the
Corporation) at the time (such time, the “Exchange Date”) of a taxable
exchange of Units for Class A Shares or any other taxable acquisition of
Units for cash or otherwise (collectively, an “Exchange”) by reason of
such Exchange and the payments under this Agreement;

 

WHEREAS, the Corporation will purchase a number of Units from the
Members in connection with the IPO, which shall be treated as an Exchange for
all purposes of this Agreement;

 

WHEREAS, the income, gain, loss, expense and other Tax (as defined
below) items of (i) the Corporation, as a member of Holdings (and in
respect of each of Holdings’s direct and indirect subsidiaries treated as a
partnership for United States federal income tax purposes), with respect to the
IPO Date Intangible Assets and the Specified Assets, may be affected by the existing
Tax basis of the IPO Date Intangible Assets and by the Basis Adjustment
(defined below) with respect to the IPO Date Intangible Assets and the
Specified Assets and (ii) the Corporation may be affected by the Imputed
Interest (as defined below); and

 

 

WHEREAS, the parties to this Agreement desire to make certain
arrangements with respect to the actual or deemed effect of the Tax basis of
the IPO Date Intangible Assets, the Basis Adjustment and the Imputed Interest
on the liability for Taxes of the Corporation.

 

NOW, THEREFORE, in consideration of the foregoing and the respective
covenants and agreements set forth herein, and intending to be legally bound
hereby, the parties hereto agree as follows:

 

ARTICLE I.  DEFINITIONS

 

Definitions. As used in this Agreement, the terms set forth in this Article I
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined).

 

“Advisory Firm” means any “big four” accounting firm or any other
law or accounting firm that is nationally recognized as being expert in Tax
matters and that is agreed to by the Board of Directors of the Corporation.

 

“Advisory Firm Letter” shall mean a letter from the Advisory Firm
stating that the relevant schedule, notice or other information to be provided
by the Corporation to the Exchanging Member and all supporting schedules and
work papers were prepared in a manner consistent with the terms of this
Agreement and, to the extent not expressly provided in this Agreement, on a
reasonable basis in light of the facts and law in existence on the date such
schedule, notice or other information is delivered to the Exchanging Member.

 

“Affiliate” means, with respect to any Person, any other Person
that directly or indirectly, through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, such first Person.

 

“Agreed Rate” means LIBOR plus 100 basis points.

 

“Agreement” is defined in the preamble of this Agreement.

 

“Amended Schedule” is defined in Section 2.04(b) of
this Agreement.

 

“Amount Realized” means, in respect of an Exchange by an
Exchanging Member, the amount that is deemed for purposes of this Agreement to
be the amount realized by the Exchanging Member on the Exchange, which shall be
the sum of (i) the Market Value of the Class A Shares, the amount of
cash and the amount or fair market value of other consideration received (or
deemed received) by the Exchanging Member in the Exchange and (ii) the
Share of Liabilities attributable to the Units Exchanged.  The amount realized by an Exchanging Member,
as so determined, may differ from the amount realized by the Exchanging Member
for purposes of Section 1001 of the Code.

 

“Available Cash” means all cash and cash equivalents of the
Corporation on hand, less the amount of cash reserves reasonably established in
good faith by the Corporation to (i) provide for the proper conduct of the
business of the Corporation, (ii) comply with applicable law or any Senior
Obligations, or (iii) make payments under this 

 

2

 

Agreement that may not be deferred under Section 3.01(c);
provided,
however, that on any Payment Date the Corporation shall be deemed to have
Available Cash in amount no less than the remainder of (x) the aggregate
amount of tax distributions received by the Corporation from Holdings since the
first Exchange Date minus (y) the sum of (A) the aggregate amount of
all payments made by the Corporation in respect of taxes or under this Agreement
since the first Exchange Date plus (B) the aggregate amount due on such
Payment Date under this Agreement that may not be deferred under Section 3.01(c).

 

“Basis Adjustment” means the deemed adjustment to the Tax basis
of an IPO Date Intangible Asset or a Specified Asset, in each case, arising in
respect of an Exchange, as calculated under Section 2.01 of this
Agreement, under the principles of Section 732 of the Code (in a situation
where, as a result of one or more Exchanges, Holdings becomes an entity that is
disregarded as separate from its owner for tax purposes) or Sections 743(b) and
754 of the Code (including in situations where, following an Exchange, Holdings
remains in existence as an entity for tax purposes) and, in each case,
comparable sections of state, local and foreign Tax laws.  Notwithstanding any other provision of this
Agreement, the amount of any Basis Adjustment resulting from an Exchange of one
or more Units shall be determined without regard to any Pre-Exchange Transfer
of such Units and as if any such Pre-Exchange Transfer had not occurred.

 

A “Beneficial Owner” of a security is a Person who directly or
indirectly, through any contract, arrangement, understanding, relationship or
otherwise, has or shares: (i) voting power, which includes the power to
vote, or to direct the voting of, such security and/or (ii) investment
power, which includes the power to dispose of, or to direct the disposition of,
such security.  The terms “Beneficially
Own” and “Beneficial Ownership” shall have correlative meanings.

 

“Board” means the board of directors of the Corporation.

 

“Business Day” means Monday through Friday of each week, except
that a legal holiday recognized as such by the government of the United States
of America or the State of New York shall not be regarded as a Business Day.

 

“Change of Control” means the occurrence of any of the following
events:

 

(i)                                     any Person or any
group of Persons acting together which would constitute a “group” for purposes
of Section 13(d) of the Exchange Act, or any successor provisions
thereto (excluding (a) a corporation or other entity owned, directly or
indirectly, by the stockholders of the Corporation in substantially the same
proportions as their ownership of stock of the Corporation; (b) Vestar
Capital Partners IV, L.P., VCD Investors LLC and their affiliates; or (c) any
party from time to time to the Securityholders Agreement, dated as of or about
the date hereof, by and among the Corporation, Holdings and the Securityholders
from time to time parties thereto, as such agreement may be amended from time
to time, unless such party together with its affiliates is the holder of
securities representing more than fifty percent (50%) of the outstanding voting
securities of the Corporation or is deemed to beneficially own more than fifty
percent (50%) of the outstanding voting securities of the Corporation for
purposes of Rule 16a-1(a)(2) under the Exchange Act, or any “group”
(as such term is used in

 

3

 

Section 13(d)(3) of the Exchange Act)
to the extent that such group may be deemed to exist solely as a result of the
Securityholders Agreement) is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Corporation representing more than fifty
percent (50%) of the combined voting power of the Corporation’s then
outstanding voting securities; or

 

(ii)                                  the following
individuals cease for any reason to constitute a majority of the number of
directors of the Corporation then serving: individuals who, on the date of the
consummation of the initial public offering of Class A Shares, constitute
the Board and any new director (other than a director whose initial assumption
of office is in connection with an actual or threatened election contest,
including but not limited to a consent solicitation, relating to an election of
directors of the Corporation) whose appointment or election by the Board or
nomination for election by the Corporation’s shareholders was approved or
recommended by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors on the date of the consummation of the
initial public offering of Class A Shares or whose appointment, election
or nomination for election was previously so approved or recommended by the
directors referred to in this clause (ii); or

 

(iii)                               there is
consummated a merger or consolidation of the Corporation with any other
corporation or other entity, and, immediately after the consummation of such
merger or consolidation, either (x) the Board immediately prior to the
merger or consolidation does not constitute at least a majority of the board of
directors of the company surviving the merger or, if the surviving company is a
subsidiary, the ultimate parent thereof, or (y) all of the Persons who
were the respective Beneficial Owners of the voting securities of the
Corporation immediately prior to such merger or consolidation do not
Beneficially Own, directly or indirectly, more than 50% of the combined voting
power of the then outstanding voting securities of the Person resulting from
such merger or consolidation; or

 

(iv)                              the shareholders
of the Corporation approve a plan of complete liquidation or dissolution of the
Corporation or there is consummated an agreement or series of related
agreements for the sale or other disposition, directly or indirectly, by the
Corporation of all or substantially all of the Corporation’s assets, other than
such sale or other disposition by the Corporation of all or substantially all
of the Corporation’s assets to an entity, at least fifty percent (50%) of the
combined voting power of the voting securities of which are owned by
shareholders of the Corporation in substantially the same proportions as their
ownership of the Corporation immediately prior to such sale.

 

Notwithstanding the foregoing, except with respect to
clause (ii) and clause (iii)(x) above, a “Change of Control” shall
not be deemed to have occurred by virtue of the consummation of any transaction
or series of integrated transactions immediately following which the record
holders of the shares of the Corporation immediately prior to such transaction
or series of transactions continue to have substantially the same proportionate
ownership in an entity which owns all or substantially all of the assets of the
Corporation immediately following such transaction or series of transactions.

 

4

 

“Class A Shares” is defined in the Recitals of this
Agreement.

 

“Code” is defined in the Recitals of this Agreement.

 

“Control” means the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise.

 

“Corporation” is defined in the Preamble of this Agreement.

 

“Corporation Return” means the United States federal, state,
local and/or foreign Tax Return, as applicable, of the Corporation filed with
respect to Taxes of any Taxable Year.

 

“Cumulative Net Realized Tax Benefit” for a Taxable Year means
the cumulative amount of Realized Tax Benefits for all Taxable Years of the
Corporation, up to and including such Taxable Year, net of the cumulative
amount of Realized Tax Detriments for the same period.  The Realized Tax Benefit and Realized Tax
Detriment for each Taxable Year shall be determined based on the most recent
Tax Benefit Schedule or Amended Schedule, if any, in existence at the time of
such determination.

 

“Default Rate” means LIBOR plus 500 basis points.

 

“Determination” shall have the meaning ascribed to such term in Section 1313(a) of
the Code or similar provision of state, local and foreign Tax law, as
applicable, or any other event (including the execution of an IRS Form 870-AD)
that finally and conclusively establishes the amount of any liability for Tax.

 

“Dispute” has the meaning set forth in Section 7.08(a).

 

“Early Termination Date” means the date of an Early Termination
Notice for purposes of determining the Early Termination Payment.

 

“Early Termination Notice” is defined in Section 4.02 of
this Agreement.

 

“Early Termination Payment” is defined in Section 4.03(b) of
this Agreement.

 

“Early Termination Rate” means LIBOR plus 100 basis points.

 

“Early Termination Schedule” is defined in Section 4.02 of
this Agreement.

 

“Exchange” is defined in the Recitals of this Agreement, and “Exchanged”
and “Exchanging” shall have correlative meanings.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Exchange Basis Schedule” is defined in Section 2.02 of this
Agreement.

 

“Exchange Date” is defined in the Recitals of this Agreement.

 

5

 

“Exchange Payment” is defined in Section 5.01.

 

“Exchanging Member” means a Member that Exchanges some or all of
its Units.

 

“Expert” is defined in Section 7.09 of this Agreement.

 

“Hypothetical Tax Liability” means, with respect to any Taxable
Year, the liability for Taxes of the Corporation (or Holdings, but only with
respect to Taxes imposed on Holdings and allocable to the Corporation) using
the same methods, elections, conventions and similar practices used on the
relevant Corporation Return, but using the Non-Stepped Up Tax Basis instead of
the Tax basis reflecting the Basis Adjustments of the IPO Date Intangible
Assets and the Specified Assets and excluding any deduction attributable to
Imputed Interest.

 

“Imputed Interest” shall mean any interest imputed under Section 1272,
1274 or 483 or other provision of the Code and any similar provision of state,
local and foreign Tax law with respect to the Corporation’s payment obligations
under this Agreement.

 

“IPO” means the initial public offering of Class A Shares by
the Corporation.

 

“IPO Date” means the date on which the Corporation contributes to
Holdings the net proceeds received by the Corporation in connection with the
IPO.

 

“IPO Date Intangible Asset” means each asset that is held by
Holdings, or by any of its direct or indirect subsidiaries treated as a
partnership or disregarded entity for purposes of the applicable Tax, immediately
prior to the IPO Date and is described in Section 197(d) of the Code.

 

“IRS” means the United States Internal Revenue Service.

 

“LIBOR” means for each month (or portion thereof) during any
period, an interest rate per annum equal to the rate per annum reported, on the
date two days prior to the first day of such month, on the Telerate Page 3750
(or if such screen shall cease to be publicly available, as reported on Reuters
Screen page “LIBO” or by any other publicly available source of such
market rate) for London interbank offered rates for United States dollar
deposits for such month (or portion thereof).

 

“LLC Agreement” means, with respect to Holdings, the Third Amended and Restated
Limited Liability Company Agreement of Holdings, dated on or about the date
hereof, as such agreement may be amended from time to time

 

“Market Value” shall mean the closing price of the Class A
Shares on the applicable Exchange Date on the national securities exchange or
interdealer quotation system on which such Class A Shares are then traded
or listed, as reported by the Wall Street Journal; provided that if the closing
price is not reported by the Wall Street Journal for the applicable Exchange
Date, then the Market Value shall mean the closing price of the Class A
Shares on the Business Day immediately preceding such Exchange Date on the
national securities exchange or interdealer quotation system on which such Class A
Shares are then 

 

6

 

traded or listed, as reported by the Wall Street
Journal; provided further, that if the Class A Shares are not then listed
on a National Securities Exchange or Interdealer Quotation System, “Market
Value” shall mean the cash consideration paid for Class A Shares, or the
fair market value of the other property delivered for Class A Shares, as
determined by the Board of Directors of the Corporation in good faith.

 

“Material Objection Notice” has the meaning set forth in Section 4.02.

 

“Members” means the parties hereto, other than the Corporation
and Holdings, and each other Person who from time to time executes a Joinder
Agreement in the form attached hereto as Exhibit A.

 

“Non-Stepped Up Tax Basis” means, with respect to any asset at
any time, the Tax basis that such asset would have had at such time if no Basis
Adjustment had been made, provided that the Non-Stepped Up Tax Basis of an IPO
Date Intangible Asset shall be assumed to be zero.

 

“Objection Notice” has the meaning set forth in Section 2.04(a).

 

“Original Members” means the members of Holdings on the date of,
but immediately preceding, the initial public offering of Class A Shares.

 

“Payment Date” means any date on which a payment is required to
be made pursuant to this Agreement.

 

“Person” means any individual, corporation, firm, partnership,
joint venture, limited liability company, estate, trust, business association,
organization, governmental entity or other entity.

 

“Pre-Exchange Transfer” means any transfer (including upon the
death of a Member) of one or more Units (i) that occurs prior to an
Exchange of such Units, and (ii) to which Section 743(b) of the
Code applies.

 

“Realized Tax Benefit” means, for a Taxable Year and for all
Taxes collectively, the net excess, if any, of the Hypothetical Tax Liability
over the “actual” liability for Taxes of the Corporation (or Holdings, but only
with respect to Taxes imposed on Holdings and allocable to the Corporation for
such Taxable Year), such “actual” liability to be computed with the adjustments
described in this Agreement.  If all or a
portion of the actual liability for Taxes of the Corporation (or Holdings, but
only with respect to Taxes imposed on Holdings and allocable to the Corporation
for such Taxable Year) for the Taxable Year arises as a result of an audit by a
Taxing Authority of any Taxable Year, such liability shall not be included in
determining the Realized Tax Benefit unless and until there has been a
Determination.

 

“Realized Tax Detriment” means, for a Taxable Year and for all
Taxes collectively, the net excess, if any, of the “actual” liability for Taxes
of the Corporation (or Holdings, but only with respect to Taxes imposed on
Holdings and allocable to the Corporation for such Taxable Year), such “actual”
liability to be computed with the adjustments described in this Agreement, over
the Hypothetical Tax Liability for such Taxable Year.  If all or a portion of the actual liability
for Taxes of the Corporation (or 

 

7

 

Holdings, but only with respect to Taxes imposed on
Holdings and allocable to the Corporation for such Taxable Year) for the
Taxable Year arises as a result of an audit by a Taxing Authority of any
Taxable Year, such liability shall not be included in determining the Realized
Tax Detriment unless and until there has been a Determination.

 

“Reconciliation Dispute” has the meaning set forth in Section 7.09.

 

“Reconciliation Procedures” shall mean those procedures set forth
in Section 7.09 of this Agreement.

 

“Schedule” means any Exchange Basis Schedule or Tax Benefit
Schedule and the Early Termination Schedule.

 

“Senior Obligations” is defined in Section 5.01 of this
Agreement.

 

“Share of Base Liabilities”, as to any Unit at the time of an
Exchange, means the product of (i) the lesser of (x) the aggregate
amount of the liabilities of Holdings, for purposes of Section 752 and Section 1001
of the Code, at the time of the Exchange and (y) the aggregate amount of
the liabilities of Holdings, for purposes of Section 752 and Section 1001
of the Code, immediately prior to the IPO Date and (ii) the percentage
share of the Unit in the liabilities of Holdings immediately prior to the IPO
Date, as set out on Annex A to this Agreement; provided, however, that for
purposes of this definition, the amount of the liabilities of Holdings at the
time of the Exchange shall be increased by any reduction in the liabilities of
Holdings at or after the time of the IPO arising from the use of the proceeds
of the IPO, or any other contribution to the capital of Holdings, to fund or repay
liabilities.

 

“Share of Excess Liabilities”, as to any Unit at the time of an
Exchange, means the product of (i) the excess, if any, of (x) the
aggregate amount of the liabilities of Holdings, for purposes of Section 752
and Section 1001 of the Code, at the time of the Exchange over (y) the
aggregate amount of the liabilities of Holdings, for purposes of Section 752
and Section 1001 of the Code, immediately prior to the IPO Date and (ii) the
percentage share of the Unit in the profits of Holdings at the time of the
Exchange; provided, however, that for purposes of this definition, the amount
of the liabilities of Holdings at the time of the Exchange shall be increased
by any reduction in the liabilities of Holdings at or after the time of the IPO
arising from the use of the proceeds of the IPO, or any other contribution to
the capital of Holdings, to fund or repay liabilities.

 

“Share of Liabilities”, as to any Unit at the time of an
Exchange, means the sum of (i) the Unit’s Share of Base Liabilities and (ii) the
Unit’s Share of Excess Liabilities, if any.

 

“Specified Asset” means each asset, other than an IPO Date
Intangible Asset, that is held by Holdings, or by any of its direct or indirect
subsidiaries treated as a partnership or disregarded entity for purposes of the
applicable Tax, at the time of an Exchange.

 

“Subsidiaries” means, with respect to any Person, as of any date
of determination, any other Person as to which such Person, owns, directly or
indirectly, or otherwise controls more than 50% of the voting shares or other
similar interests or the sole general partner interest or managing member or
similar interest of such Person.

 

8

 

“Tax Benefit Payment” is defined in Section 3.01(b) of
this Agreement.

 

“Tax Benefit Schedule” is defined in Section 2.03 of this
Agreement.

 

“Tax Return” means any return, declaration, report or similar
statement required to be filed with respect to Taxes (including any attached
schedules), including, without limitation, any information return, claim for
refund, amended return and declaration of estimated Tax.

 

“Taxable Year” means a taxable year of the Corporation as defined
in Section 441(b) of the Code or comparable section of state, local
or foreign Tax law, as applicable (and, therefore, for the avoidance of doubt,
may include a period of less than 12 months for which a Tax Return is
prepared), ending on or after the IPO Date.

 

“Taxes” means any and all United States federal, state, local and
foreign taxes, assessments or similar charges that are based on or measured
with respect to net income or profits, whether as an exclusive or on an
alternative basis, and any interest related to such Tax.

 

“Taxing Authority” shall mean any domestic, foreign, federal,
national, state, county or municipal or other local government, any
subdivision, agency, commission or authority thereof, or any quasi-governmental
body exercising any taxing authority or any other authority exercising Tax
regulatory authority.

 

“Treasury Regulations” means the final, temporary and proposed
regulations under the Code promulgated from time to time (including
corresponding provisions and succeeding provisions) as in effect for the
relevant taxable period.

 

“Units” is defined in the Recitals of this Agreement.

 

“Valuation Assumptions” shall mean, as of an Early Termination
Date, the assumptions that (1) in each Taxable Year ending on or after
such Early Termination Date, the Corporation will have taxable income
sufficient to fully use the deductions arising from any Basis Adjustment, IPO
Date Intangible Asset or Imputed Interest during such Taxable Year, (2) the
federal income tax rates and state, local and foreign income tax rates that
will be in effect for each such Taxable Year will be those specified for each
such Taxable Year by the Code and other law as in effect on the Early
Termination Date, (3) any loss carryovers generated by any Basis
Adjustment, IPO Date Intangible Asset or Imputed Interest and available as of
the date of the Early Termination Schedule will be used by the Corporation on a
pro rata basis from the date of the Early Termination Schedule through the
scheduled expiration date of such loss carryovers, (4) any non-amortizable
assets will be disposed of on the fifteenth anniversary of the earlier of the
Basis Adjustment and the Early Termination Date, provided, that in the event of
a Change of Control, non-amortizable assets shall be deemed disposed of at the
earlier of (i) the time of sale of the relevant asset or (ii) as
generally provided in this Valuation Assumption (4) and (5) if, at
the Early Termination Date, there are Units that have not been Exchanged, then
each such Unit shall be deemed to be Exchanged for the Market Value of the Class A
Shares and the amount of cash that would be transferred if the Exchange
occurred on the Early Termination Date.

 

9

 

ARTICLE II.  DETERMINATION OF CUMULATIVE REALIZED TAX
BENEFIT

 

Section 2.01.  Basis
Adjustment.

 

(a) IPO Date Intangible Assets. For purposes of this
Agreement, as a result of an Exchange, Holdings shall be deemed to be entitled
to a Basis Adjustment for each IPO Date Intangible Asset with respect to the
Corporation calculated by reference to the sum of (x) the Amount Realized
by the Exchanging Member in the Exchange, to the extent attributable to such
IPO Date Intangible Asset, plus (y) the amount of payments made pursuant
to this Agreement with respect to such Exchange, to the extent attributable to
such IPO Date Intangible Asset.  For purposes
of this Agreement, in computing the effect of the Basis Adjustment on the Tax
liability of the Corporation:

 

1. the actual basis adjustment to each IPO Date Intangible Asset under Section 732
or Section 743(b) of the Code shall be recovered by the Corporation
in accordance with its actual recovery for purposes of the applicable Tax; and

 

2. the portion of the Basis Adjustment for each IPO Date Intangible
Asset described in this Section 2.01(a) that exceeds the actual basis
adjustment to such IPO Date Intangible Asset under Section 732 or Section 743(b) of
the Code shall be deemed to be amortized by the Corporation on a straight-line
basis over the 13 years following the Exchange.

 

(b) Specified Assets. For purposes of this Agreement, as a
result of an Exchange, Holdings shall be deemed to be entitled to a Basis
Adjustment for each Specified Asset with respect to the Corporation, the amount
of which Basis Adjustment shall be the excess, if any, of (i) the sum of (x) the
Amount Realized by the Exchanging Member in the Exchange, to the extent
attributable to such Specified Asset, plus (y) the amount of payments made
pursuant to this Agreement with respect to such Exchange, to the extent
attributable to such Specified Asset, over (ii) the Corporation’s share of
Holdings’s Tax basis for such Specified Asset immediately after the Exchange,
attributable to the Units Exchanged, determined as if (x) Holdings remains
in existence as an entity for tax purposes, and (y) Holdings had not made
the election provided by Section 754 of the Code.  For the avoidance of doubt, the Corporation’s
share of Holdings’s Tax basis for such Specified Asset that is attributable to
the Units Exchanged shall be considered to be an amount of the Tax basis of the
Specified Asset, without regard to any Basis Adjustment, proportionate to the
ratio that the number of Units Exchanged bears to the number of outstanding
Units immediately prior to such Exchange. 
For purposes of this Agreement, in computing the effect of the Basis
Adjustment on the Tax liability of the Corporation:

 

1. the actual basis adjustment to each Specified Asset under Section 732
or Section 743(b) of the Code shall be recovered by the Corporation
in accordance with its actual recovery for purposes of the applicable Tax; and

 

2. the portion of the Basis Adjustment for each Specified Asset
described in this Section 2.01(b) that exceeds the actual basis
adjustment to such Specified Asset under Section 732 or Section 743(b) of
the Code shall be deemed to be amortized by the Corporation on a straight line
basis over the 13 years following the Exchange.

 

10

 

(c) Change in Law.  To
the extent that the adjustment to Holdings’s basis with respect to the
Corporation, in any of Holdings’s assets, that is expected to result from an
Exchange is limited because of a change in law, the Basis Adjustment shall be
correspondingly limited.

 

(d) Imputed Interest. 
For the avoidance of doubt, payments made under this Agreement shall not
be treated as resulting in a Basis Adjustment to the extent such payments are
treated as Imputed Interest.

 

Section 2.02.  Exchange
Basis Schedule.  Within 45 calendar
days after the filing of the United States federal income tax return of the
Corporation for each Taxable Year, the Corporation shall deliver to each
Exchanging Member a schedule (an “Exchange Basis Schedule”) that shows,
in reasonable detail, for purposes of Taxes, (i) the actual unadjusted Tax
basis of the Specified Assets as of each applicable Exchange Date, (ii) the
Basis Adjustment with respect to the Specified Assets as a result of the
Exchanges effected in such Taxable Year, calculated in the aggregate, (iii) the
Tax basis in the IPO Date Intangible Assets as a result of the Exchanges
effected in such Taxable Year, as provided in Section 2.01(a), (iv) the
period or periods, if any, over which the Specified Assets and the IPO Date
Intangible Assets are amortizable and/or depreciable and (v) the period or
periods, if any, over which each Basis Adjustment is amortizable and/or
depreciable (which, for non-amortizable assets shall be based on the Valuation
Assumptions).

 

Section 2.03.  Tax
Benefit Schedule.  Within 45 calendar
days after the filing of the United States federal income tax return of the
Corporation for any Taxable Year in which there is a Realized Tax Benefit or
Realized Tax Detriment, the Corporation shall provide to each Exchanging Member
a schedule showing, in reasonable detail, the calculation of the Realized Tax
Benefit or Realized Tax Detriment for such Taxable Year (a “Tax Benefit
Schedule”). The Schedule will become final as provided in Section 2.04(a) and
may be amended as provided in Section 2.04(b) (subject to the
procedures set forth in Section 2.04(b)).

 

Section 2.04.  Procedures,
Amendments.

 

(a) Procedure. Every time the Corporation delivers to an
Exchanging Member an applicable Schedule under this Agreement, including any
Amended Schedule delivered pursuant to Section 2.04(b), but excluding any
Early Termination Schedule or amended Early Termination Schedule, the
Corporation shall also (x) deliver to the Exchanging Member schedules and
work papers providing reasonable detail regarding the preparation of the
Schedule and an Advisory Firm Letter supporting such Schedule and (y) allow
the Exchanging Member reasonable access at no cost to the appropriate
representatives at the Corporation and the Advisory Firm in connection with a
review of such Schedule. The applicable Schedule shall become final and binding
on all parties unless the Exchanging Member, within 30 calendar days after
receiving an Exchange Basis Schedule or amendment thereto or a Tax Benefit Schedule
or amendment thereto, provides the Corporation with notice of a material
objection to such Schedule (“Objection Notice”) made in good faith. If
the parties, for any reason, are unable to successfully resolve the issues
raised in such notice within 30 calendar days of receipt by the Corporation of
an Objection Notice, if with respect to an Exchange Basis Schedule or a Tax
Benefit Schedule, the Corporation and the Exchanging Member shall employ the
reconciliation procedures as described in Section 7.09 of this Agreement
(the “Reconciliation Procedures”).

 

11

 

(b) Amended Schedule. The applicable Schedule for any
Taxable Year may be amended from time to time by the Corporation (i) in
connection with a Determination affecting such Schedule, (ii) to correct
material inaccuracies in the Schedule identified as a result of the receipt of
additional factual information relating to a Taxable Year after the date the
Schedule was provided to the Exchanging Member, (iii) to comply with the
Expert’s determination under the Reconciliation Procedures, (iv) to
reflect a material change in the Realized Tax Benefit or Realized Tax Detriment
for such Taxable Year attributable to a carryback or carryforward of a loss or
other tax item to such Taxable Year, (v) to reflect a material change in
the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year
attributable to an amended Tax Return filed for such Taxable Year, or (vi) to
adjust the Exchange Basis Schedule to take into account payments made pursuant
to this Agreement (such Schedule, an “Amended Schedule”). The Corporation shall provide
any Amended Schedule to the Exchanging Member. within 30 calendar days of the
occurrence of an event referred to in clauses (i) through (vi) of the
preceding sentence, and any such Amended Schedule shall be subject to approval
procedures similar to those described in Section 2.04(a).

 

ARTICLE III.  TAX BENEFIT PAYMENTS

 

Section 3.01.  Payments.

 

(a)  Payments. Subject to Section 3.01(c), within five (5) calendar
days of a Tax Benefit Schedule that was delivered to an Exchanging Member
becoming final in accordance with Section 2.04(a), the Corporation shall
pay to such Exchanging Member for such Taxable Year the Tax Benefit Payment
determined pursuant to Section 3.01(b). 
Each such Tax Benefit Payment shall be made by wire transfer of
immediately available funds to a bank account of the Exchanging Member
previously designated by such Member to the Corporation.  For the avoidance of doubt, no Tax Benefit
Payment shall be made in respect of estimated tax payments, including, without
limitation, federal income tax payments.

 

(b)  A “Tax Benefit Payment” means an amount, not less than
zero, equal to the sum of the Net Tax Benefit and the Interest Amount.  The “Net Tax Benefit” for each Taxable
Year shall be an amount equal to the excess, if any, of 85% of the Cumulative
Net Realized Tax Benefit as of the end of such Taxable Year over the total
amount of payments previously made under this Section 3.01, excluding
payments attributable to Interest Amount; provided, however, that for the
avoidance of doubt, no Member shall be required to return any portion of any
previously made Tax Benefit Payment.  The
“Interest Amount” for a given Taxable Year shall equal the interest on
the Net Tax Benefit for such Taxable Year calculated at the Agreed Rate from
the due date (without extensions) for filing the Corporation Return with
respect to Taxes for the most recently ended Taxable Year until the Payment
Date.  Notwithstanding the foregoing, for
each Taxable Year ending on or after the date of a Change of Control, all Tax
Benefit Payments, whether paid with respect to Units that were Exchanged (i) prior
to the date of such Change of Control or (ii) on or after the date of such
Change of Control, shall be calculated by using Valuation Assumptions (1), (3),
and (4), substituting in each case the terms “the date on which a Change of
Control becomes effective” for an “Early Termination Date.”  The Net Tax Benefit and the Interest Amount
shall be determined separately with respect to each separate Exchange, on a
Unit-by-Unit 

 

12

 

basis by reference to the Amount Realized by the
Exchanging Member on the Exchange of a Unit and the resulting Basis Adjustment
to the Corporation.

 

(c)  If on any Payment Date the Corporation does not have
sufficient Available Cash to pay the IPO Date Portion of the Tax Benefit
Payment that is due on such Payment Date as specified in Section 3.01(a),
the Corporation may elect to defer payment of that portion of the IPO Date
Portion of the Tax Benefit Payment that is in excess of the Available
Cash.  The “IPO Date Portion” of
the Tax Benefit Payment for a Taxable Year is an amount equal to the excess, if
any, of (i) the Tax Benefit Payment for such Taxable Year determined
pursuant to Section 3.01(b) over (ii) the Tax Benefit Payment
for such Taxable Year that would be due if (A) the Hypothetical Tax
Liability were calculated assuming the proviso in the definition of Non-Stepped
Up Tax Basis did not apply and (B) the Basis Adjustment had not been
increased by any amounts that would not have been paid pursuant to this
Agreement but for the application of  the
proviso in the definition of Non-Stepped Up Tax Basis.  If the Corporation elects to defer payment of
any amount pursuant to this Section 3.01(c), interest shall accrue on such
amount at the Default Rate from the Payment Date specified in Section 3.01(a) until
such amount is paid.  While any amounts
are deferred pursuant to this Section 3.01(c), the Corporation shall be
required, within thirty (30) calendar days of obtaining Available Cash, to make
payments to Exchanging Members with respect to such deferred amounts to the
extent of such Available Cash.  Upon a
Change of Control, any amounts deferred pursuant to this Section 3.01(c) (including
interest) shall become due, and no further amounts may be deferred pursuant to
this Section 3.01(c).

 

(d)  The Corporation shall use good faith efforts to ensure that it
has sufficient Available Cash to make all payments due under this Agreement
without regard to Section 3.01(c).

 

Section 3.02.  No
Duplicative Payments. 
Notwithstanding anything in this Agreement to the contrary, it is
intended that the provisions of this Agreement will not result in duplicative
payment of any amount (including interest) required under this Agreement. It is
also intended that the provisions of this Agreement will result in 85% of the
Corporation’s Cumulative Net Realized Tax Benefit, and the Interest Amount
thereon, being paid to the Members pursuant to this Agreement.  The provisions of this Agreement shall be
construed in the appropriate manner so that these fundamental results are
achieved.

 

Section 3.03.  Pro
Rata Payments.  For the avoidance of
doubt, to the extent that (i) the Corporation’s deductions with respect to
any Basis Adjustment is limited in a particular Taxable Year or (ii) the
Corporation lacks sufficient funds to satisfy its obligations to make all Tax
Benefit Payments due in a particular taxable year, the limitation on the
deduction, or the Tax Benefit Payments that may be made, as the case may be,
shall be taken into account or made for the Exchanging Member in the same
proportion as Tax Benefit Payments would have been made absent the limitations
in clauses (i) and (ii) of this paragraph, as applicable.

 

13

 

ARTICLE IV.  TERMINATION

 

Section 4.01.  Early
Termination and Breach of Agreement.

 

(a)  The Corporation may terminate this Agreement with respect to
all of the Units held (or previously held and Exchanged) by all Members at any
time by paying to the Members the Early Termination Payment; provided, however,
that this Agreement shall only terminate upon the receipt of the Early
Termination Payment by all Members, and provided, further, that the Corporation
may withdraw any notice to execute its termination rights under this Section 4.01(a) prior
to the time at which any Early Termination Payment has been paid.  Upon payment of the Early Termination
Payments by the Corporation, neither the Members nor the Corporation shall have
any further payment obligations under this Agreement, other than for any (a) Tax
Benefit Payment agreed to by the Corporation and the Member as due and payable
but unpaid as of the Early Termination Notice and (b) Tax Benefit Payment
due for the Taxable Year ending with or including the date of the Early
Termination Notice (except to the extent that the amount described in clause (b) is
included in the Early Termination Payment). 
For the avoidance of doubt, if an Exchange occurs after the Corporation
makes the Early Termination Payments with respect to all Members, the
Corporation shall have no obligations under this Agreement with respect to such
Exchange, and its only obligations under this Agreement in such case shall be
its obligations to all Members under Section 4.03(a).

 

(b)  In the event that the Corporation breaches any of its material
obligations under this Agreement, whether as a result of failure to make any
payment when due, failure to honor any other material obligation required
hereunder or by operation of law as a result of the rejection of this Agreement
in a case commenced under the Bankruptcy Code or otherwise, then all
obligations hereunder shall be accelerated and such obligations shall be
calculated as if an Early Termination Notice had been delivered on the date of
such breach and shall include, but shall not be limited to, (1) the Early
Termination Payment calculated as if an Early Termination Notice had been
delivered on the date of a breach, (2) any Tax Benefit Payment agreed to
by the Corporation and any Members as due and payable but unpaid as of the date
of a breach, and (3) any Tax Benefit Payment due for the Taxable Year
ending with or including the date of a breach. 
Notwithstanding the foregoing, in the event that the Corporation
breaches this Agreement, the Members shall be entitled to elect to receive the
amounts set forth in clauses (1), (2) and (3) above or to seek
specific performance of the terms hereof. 
The parties agree that the failure to make any payment due pursuant to
this Agreement within three months of the date such payment is due shall be
deemed to be a breach of a material obligation under this Agreement for all
purposes of this Agreement, and that it will not be considered to be a breach
of a material obligation under this Agreement to make a payment due pursuant to
this Agreement within three months of the date such payment is due.

 

(c)  The Corporation, Holdings and each of the Members hereby
acknowledge that, as of the date of this Agreement, the aggregate value of the
Tax Benefit Payments cannot reasonably be ascertained for United States federal
income tax or other applicable Tax purposes.

 

Section 4.02.  Early
Termination Notice.  If the
Corporation chooses to exercise its right of early termination under Section 4.01
above, the Corporation shall deliver to each present or former Member notice of
such intention to exercise such right (“Early Termination Notice”) and a
schedule (the “Early Termination Schedule”) specifying the Corporation’s
intention to exercise such right and showing in reasonable detail the
calculation of the Early Termination Payment for that Member. The Early Termination
Schedule shall become final and binding on all parties unless the Member,
within 30 calendar days after 

 

14

 

receiving the Early Termination Schedule, provides the
Corporation with notice of a material objection to such Schedule made in good
faith (“Material Objection Notice”). If the parties, for any reason, are
unable to successfully resolve the issues raised in such notice within 30
calendar days after receipt by the Corporation of the Material Objection
Notice, the Corporation and the Member shall employ the Reconciliation
Procedures as described in Section 7.09 of this Agreement.

 

Section 4.03.  Payment
upon Early Termination.  (a) Within
three calendar days after agreement between the Member and the Corporation of
the Early Termination Schedule, the Corporation shall pay to the Member an
amount equal to the Early Termination Payment. Such payment shall be made by
wire transfer of immediately available funds to a bank account designated by
the Member.

 

(b)  The “Early Termination Payment” as of the date of the
delivery of an Early Termination Schedule shall equal with respect to any
Member the sum of (i) the present value, discounted at the Early
Termination Rate as of such date, of all Tax Benefit Payments that would be
required to be paid by the Corporation to the Member beginning from the Early
Termination Date and assuming that the Valuation Assumptions are applied and (ii) without
duplication of any amounts referred to in (i), amounts deferred pursuant to Section 3.01(c) (including
interest).

 

ARTICLE V.  SUBORDINATION AND LATE PAYMENTS

 

Section 5.01.  Subordination.  Notwithstanding any other provision of this
Agreement to the contrary, any Tax Benefit Payment or Early Termination Payment
required to be made by the Corporation to the Members under this Agreement (an “Exchange
Payment”) shall rank subordinate and junior in right of payment to any
principal, interest or other amounts due and payable in respect of any
obligations in respect of indebtedness for borrowed money of the Corporation
and its Subsidiaries (“Senior Obligations”) and shall rank pari passu
with all current or future unsecured obligations of the Corporation that are
not Senior Obligations.

 

Section 5.02.  Late
Payments by the Corporation.  The
amount of all or any portion of any Exchange Payment not made to any Member
when due under the terms of this Agreement shall be payable together with any
interest thereon, computed at the Default Rate and commencing from the date on
which such Exchange Payment was due and payable.

 

ARTICLE VI.  NO DISPUTES; CONSISTENCY; COOPERATION

 

Section 6.01.  Original
Member Participation in the Corporation’s and Holdings’s Tax Matters.
Except as otherwise provided herein, the Corporation shall have full
responsibility for, and sole discretion over, all Tax matters concerning the
Corporation and Holdings, including without limitation the preparation, filing
or amending of any Tax Return and defending, contesting or settling any issue
pertaining to Taxes. Notwithstanding the foregoing, the Corporation shall
notify the applicable Original Member of, and keep the applicable Original
Member reasonably informed with respect to, the portion of any audit of the
Corporation and Holdings by a Taxing Authority the outcome of which is
reasonably expected to affect the applicable Original Member’s rights and
obligations under this Agreement, and shall provide to the applicable Original
Member reasonable opportunity to 

 

15

 

provide information and other input to the
Corporation, Holdings and their respective advisors concerning the conduct of
any such portion of such audit; provided, however, that the Corporation and
Holdings shall not be required to take any action that is inconsistent with any
provision of the LLC Agreement.

 

Section 6.02.  Consistency.  Except upon the written advice of an Advisory
Firm, and except for items that are explicitly described as “deemed” or in
similar manner by the terms of this Agreement, the Corporation and the
Exchanging Member agree to report and cause to be reported for all purposes,
including federal, state, local and foreign Tax purposes and financial
reporting purposes, all Tax-related items (including without limitation the
Basis Adjustment and each Tax Benefit Payment) in a manner consistent with that
specified by the Corporation in any Schedule required to be provided by or on
behalf of the Corporation under this Agreement. Any dispute concerning such
advice shall be subject to the terms of Section 7.09; provided, however,
that only an Original Member shall have the right to object to such advice
pursuant to this Section 6.02. In the event that an Advisory Firm is
replaced with another firm acceptable to the Corporation and the Exchanging
Member, such replacement Advisory Firm shall be required to perform its
services under this Agreement using procedures and methodologies consistent
with the previous Advisory Firm, unless otherwise required by law or the
Corporation and the Exchanging Member agree to the use of other procedures and
methodologies.

 

Section 6.03.  Cooperation.
The Exchanging Member shall (a) furnish to the Corporation in a timely
manner such information, documents and other materials as the Corporation may
reasonably request for purposes of making any determination or computation
necessary or appropriate under this Agreement (including whether an exchange of
units is taxable or tax-free, preparing any Tax Return or contesting or
defending any audit, examination or controversy with any Taxing Authority, (b) make
itself available to the Corporation and its representatives to provide
explanations of documents and materials and such other information as the
Corporation or its representatives may reasonably request in connection with
any of the matters described in clause (a) above, and (c) reasonably
cooperate in connection with any such matter, and the Corporation shall
reimburse the Exchanging Member for any reasonable third-party costs and
expenses incurred pursuant to this Section.

 

ARTICLE VII.  MISCELLANEOUS

 

Section 7.01.  Notices.
All notices, requests, claims, demands and other communications hereunder shall
be in writing and shall be deemed duly given and received (a) on the date
of delivery if delivered personally, or by facsimile upon confirmation of
transmission by the sender’s fax machine if sent on a Business Day (or
otherwise on the next Business Day) or (b) on the first Business Day
following the date of dispatch if delivered by a recognized next-day courier
service. All notices hereunder shall be delivered as set forth below, or
pursuant to such other instructions as may be designated in writing by the
party to receive such notice:

 

if to the Corporation, to:

 

16

 

DynaVox Inc.

2100 Wharton Street

Suite 400

Pittsburgh, PA 15203

Attention: Chief Financial Officer

Fax: (412) 381-5241

 

with a copy (which shall not constitute notice to the Corporation) to:

 

Simpson Thacher &
Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention: Joshua Ford
Bonnie

Facsimile: (212) 455-2502

 

if to Holdings, to:

 

DynaVox Systems Holdings LLC

2100 Wharton Street

Suite 400

Pittsburgh,
PA 15203

Attention:
Chief Financial Officer

Fax:
(412) 381-5241

 

with a copy (which shall not constitute notice to the Corporation) to:

 

Simpson Thacher &
Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention: Joshua Ford
Bonnie

Facsimile: (212) 455-2502

 

If to the Exchanging Member, to:

 

The address and facsimile number set forth in the records of Holdings.

 

Any party may change its address or fax number by giving the other party
written notice of its new address or fax number in the manner set forth above.

 

Section 7.02.  Counterparts.
This Agreement may be executed in one or more counterparts, all of which shall
be considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart. Delivery of an executed signature page to this Agreement by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement.

 

17

 

Section 7.03.  Entire
Agreement; No Third Party Beneficiaries. This Agreement constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof.
This Agreement shall be binding upon and inure solely to the benefit of each
party hereto and their respective successors and permitted assigns, and nothing
in this Agreement, express or implied, is intended to or shall confer upon any
other Person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.

 

Section 7.04.  Governing
Law. This Agreement shall be governed by, and construed in accordance with,
the law of the State of Delaware, without regard to the conflicts of laws
principles thereof that would mandate the application of the laws of another
jurisdiction.

 

Section 7.05.  Severability.
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any law or public policy, all other terms and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible.

 

Section 7.06.  Successors;
Assignment; Amendments; Waivers. No Member may assign this Agreement to any
person without the prior written consent of the Corporation; provided, however,
that (i) to the extent Units are effectively transferred in accordance
with the terms of the LLC Agreement, the transferring Member shall have the
option to assign to the transferee of such Units the transferring Member’s
rights under this Agreement with respect to such transferred Units, as long as
such transferee has executed and delivered, or, in connection with such
transfer, executes and delivers, a joinder to this Agreement, in form and
substance reasonably satisfactory to the Corporation, agreeing to become a “Member”
for all purposes of this Agreement, except as otherwise provided in such
joinder, and (ii) once an Exchange has occurred, any and all payments that
may become payable to a Member pursuant to this Agreement with respect to the
Exchanged Units may be assigned to any Person or Persons, including a
liquidating trust, as long as any such Person has executed and delivered, or,
in connection with such assignment, executes and delivers, a joinder to this
Agreement, in form and substance reasonably satisfactory to the Corporation,
agreeing to be bound by Section 7.12 and acknowledging specifically the
terms of the next paragraph. For the avoidance of doubt, if a Person transfers
Units (regardless of whether the transferee is a “Permitted Transferee” under
the terms of the LLC Agreement) but does not assign to the transferee of such
Units such Person’s rights, if any, under this Agreement with respect to such
transferred Units, such Person shall be entitled to receive the Tax Benefit
Payments, if any, due hereunder with respect to, including any Tax Benefit
Payments arising in respect of a subsequent Exchange of, such Units.

 

Notwithstanding the foregoing provisions of this Section 7.06, no
transferee described in clause (i) of the immediately preceding paragraph
shall have the right to enforce the provisions of Section 2.04, 4.02, 6.01
or 6.02 of this Agreement, and no assignee described in clause (ii) of the
immediately preceding paragraph shall have any rights under 

 

18

 

this Agreement except for the right to enforce its
right to receive payments under this Agreement.

 

No provision of this Agreement may be amended unless such amendment is
approved in writing by each of the Corporation and Holdings and by Original
Members who would be entitled to receive at least two-thirds of the Early
Termination Payments payable to all Original Members hereunder if the
Corporation had exercised its right of early termination on the date of the
most recent Exchange prior to such amendment (excluding, for purposes of this
sentence, all payments made to any Original Member pursuant to this Agreement
since the date of such most recent Exchange); provided, that no such amendment
shall be effective if such amendment will have a disproportionate effect on the
payments certain Members will or may receive under this Agreement unless all
such Members disproportionately affected consent in writing to such amendment.
No provision of this Agreement may be waived unless such waiver is in writing
and signed by the party against whom the waiver is to be effective.

 

All of the terms and provisions of this Agreement shall be binding upon,
shall inure to the benefit of and shall be enforceable by the parties hereto
and their respective successors, assigns, heirs, executors, administrators and
legal representatives. The Corporation shall require and cause any direct or
indirect successor (whether by purchase, merger, consolidation or otherwise) to
all or substantially all of the business or assets of the Corporation, by
written agreement, expressly to assume and agree to perform this Agreement in
the same manner and to the same extent that the Corporation would be required
to perform if no such succession had taken place.  Notwithstanding anything to the contrary
herein, in the event an Original Member transfers his Units to a Permitted
Transferee (as defined in the LLC Agreement), excluding any other Original
Member, such Original Member shall have the right, on behalf of such
transferee, to enforce the provisions of Sections 2.04, 4.02 or 6.01 with
respect to such transferred Units.

 

Section 7.07.  Titles
and Subtitles.  The titles of the
sections and subsections of this Agreement are for convenience of reference
only and are not to be considered in construing this Agreement.

 

Section 7.08.  Resolution
of Disputes.

 

(a)  Any and all disputes which are not governed by Section 7.09,
including but not limited to any ancillary claims of any party, arising out of,
relating to or in connection with the validity, negotiation, execution,
interpretation, performance or non-performance of this Agreement (including the
validity, scope and enforceability of this arbitration provision) (each a “Dispute”)
shall be finally settled by arbitration conducted by a single arbitrator in New
York in accordance with the then-existing Rules of Arbitration of the
International Chamber of Commerce. If the parties to the Dispute fail to agree
on the selection of an arbitrator within ten (10) days of the receipt of
the request for arbitration, the International Chamber of Commerce shall make
the appointment. The arbitrator shall be a lawyer admitted to the practice of
law in the State of New York and shall conduct the proceedings in the English
language. Performance under this Agreement shall continue if reasonably
possible during any arbitration proceedings. 
In addition to monetary damages, the arbitrator shall be empowered to
award equitable relief, including, but not limited to an injunction and
specific performance of any obligation under this Agreement. The arbitrator is
not empowered to award damages in excess of compensatory damages, and each
party hereby irrevocably waives any right to recover punitive, exemplary or
similar damages with respect to any 

 

19

 

Dispute.   The
award shall be final and binding upon the parties as from the date rendered,
and shall be the sole and exclusive remedy between the parties regarding any
claims, counterclaims, issues, or accounting presented to the arbitral
tribunal.  Judgment upon any award may be
entered and enforced in any court having jurisdiction over a party or any of
its assets.

 

(b)  Notwithstanding the provisions of paragraph (a), the
Corporation may bring an action or special proceeding in any court of competent
jurisdiction for the purpose of compelling a party to arbitrate, seeking
temporary or preliminary relief in aid of an arbitration hereunder, and/or
enforcing an arbitration award and, for the purposes of this paragraph (b),
each Member (i) expressly consents to the application of paragraph (c) of
this Section 7.08 to any such action or proceeding, (ii) agrees that
proof shall not be required that monetary damages for breach of the provisions
of this Agreement would be difficult to calculate and that remedies at law
would be inadequate, and (iii) irrevocably appoints the Corporation as
such Member’s agent for service of process in connection with any such action
or proceeding and agrees that service of process upon such agent, who shall
promptly advise such Member of any such service of process, shall be deemed in
every respect effective service of process upon the Member in any such action
or proceeding.

 

(c)  (i)  EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF COURTS LOCATED IN NEW YORK, NEW YORK FOR THE PURPOSE OF ANY
JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH (B) OF
THIS SECTION 7.08, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION
OR CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS
AGREEMENT. Such ancillary judicial proceedings include any suit, action or
proceeding to compel arbitration, to obtain temporary or preliminary judicial
relief in aid of arbitration, or to confirm an arbitration award. The parties
acknowledge that the fora designated by this paragraph (c) have a
reasonable relation to this Agreement, and to the parties’ relationship with
one another; and

 

(ii)  The parties hereby waive, to the fullest extent permitted by
applicable law, any objection which they now or hereafter may have to personal
jurisdiction or to the laying of venue of any such ancillary suit, action or
proceeding brought in any court referred to in paragraph (c)(i) of this Section 7.08
and such parties agree not to plead or claim the same.

 

Section 7.09.  Reconciliation.
In the event that the Corporation and the Exchanging Member are unable to
resolve a disagreement with respect to the matters governed by Sections 2.04,
4.02 and 6.02 within the relevant period designated in this Agreement (“Reconciliation
Dispute”), the Reconciliation Dispute shall be submitted for determination
to a nationally recognized expert (the “Expert”) in the particular area
of disagreement mutually acceptable to both parties. The Expert shall be a
partner in a nationally recognized accounting firm or a law firm (other than
the Advisory Firm), and the Expert shall not, and the firm that employs the
Expert shall not, have any material relationship with either the Corporation or
the Exchanging Member or other actual or potential conflict of interest. If the
parties are unable to agree on an Expert within fifteen (15) days of receipt by
the respondent(s) of written notice of a Reconciliation Dispute, the
Expert shall be appointed by the International Chamber of Commerce Centre for
Expertise. The Expert shall resolve any matter relating to the Exchange Basis
Schedule or an amendment

 

20

 

thereto or the Early Termination Schedule or an
amendment thereto within 30 calendar days and shall resolve any matter relating
to a Tax Benefit Schedule or an amendment thereto within 15 calendar days or as
soon thereafter as is reasonably practicable, in each case after the matter has
been submitted to the Expert for resolution. 
Notwithstanding the preceding sentence, if the matter is not resolved
before any payment that is the subject of a disagreement would be due (in the
absence of such disagreement) or any Tax Return reflecting the subject of a
disagreement is due, the undisputed amount shall be paid on such date and such
Tax Return may be filed as prepared by the Corporation, subject to adjustment
or amendment upon resolution.  The costs
and expenses relating to the engagement of such Expert or amending any Tax
Return shall be borne by the Corporation except as provided in the next
sentence.  The Corporation and each
Exchanging Member shall bear their own costs and expenses of such proceeding,
unless an Exchanging Member has a prevailing position that is more than 10% of
the payment at issue, in which case the Corporation shall reimburse such
Exchanging Member for any reasonable out-of-pocket costs and expenses in such
proceeding.  Any dispute as to whether a
dispute is a Reconciliation Dispute within the meaning of this Section 7.09
shall be decided by the Expert.  The
Expert shall finally determine any Reconciliation Dispute and the
determinations of the Expert pursuant to this Section 7.09 shall be binding
on the Corporation and the Exchanging Member and may be entered and enforced in
any court having jurisdiction.

 

Section 7.10.  Withholding.
The Corporation shall be entitled to deduct and withhold from any payment
payable pursuant to this Agreement such amounts as the Corporation is required
to deduct and withhold with respect to the making of such payment under the
Code or any provision of state, local or foreign tax law. To the extent that
amounts are so withheld and paid over to the appropriate Taxing Authority by
the Corporation, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the Exchanging Member.

 

Section 7.11.  Admission
of the Corporation into a Consolidated Group; Transfers of Corporate Assets.

 

(a)  If the Corporation becomes a member of an affiliated or
consolidated group of corporations that files a consolidated income tax return
pursuant to Sections 1501 et seq. of the Code or any corresponding provisions
of state, local or foreign law, then: (i) the provisions of this Agreement
shall be applied with respect to the group as a whole; and (ii) Tax
Benefit Payments, Early Termination Payments and other applicable items
hereunder shall be computed with reference to the consolidated taxable income
of the group as a whole.

 

(b)  If any entity that is obligated to make an Exchange Payment
hereunder transfers one or more assets to a corporation with which such entity
does not file a consolidated tax return pursuant to Section 1501 of the
Code, such entity, for purposes of calculating the amount of any Exchange
Payment (e.g., calculating the gross income of the entity and determining the
Realized Tax Benefit of such entity) due hereunder, shall be treated as having
disposed of such asset in a fully taxable transaction on the date of such
contribution.  The consideration deemed
to be received by such entity shall be equal to the Fair Market Value of the
contributed asset, plus (i) the amount of debt to which such asset is
subject, in the case of a contribution of an encumbered asset or (ii) the
amount of debt allocated to such asset, in the case of a contribution of a
partnership interest.

 

21

 

Section 7.12.  Confidentiality.  Each Member and assignee acknowledges and
agrees that the information of the Corporation is confidential and, except in
the course of performing any duties as necessary for the Corporation and its
Affiliates, as required by law or legal process or to enforce the terms of this
Agreement, such person shall keep and retain in the strictest confidence and
not disclose to any Person any confidential matters, acquired pursuant to this
Agreement, of the Corporation and its Affiliates and successors, concerning
Holdings and its Affiliates and successors or the other Members, learned by the
Member heretofore or hereafter.  This
clause 7.12 shall not apply to (i) any information that has been made
publicly available by the Corporation or any of its Affiliates, becomes public
knowledge (except as a result of an act of such Member in violation of this
Agreement) or is generally known to the business community and (ii) the
disclosure of information to the extent necessary for a Member to prepare and
file his or her Tax returns, to respond to any inquiries regarding the same
from any taxing authority or to prosecute or defend any action, proceeding or
audit by any taxing authority with respect to such returns.  Notwithstanding anything to the contrary
herein, each Member and assignee (and each employee, representative or other
agent of such Member or assignee, as applicable) may disclose to any and all
Persons, without limitation of any kind, the tax treatment and tax structure of
the Corporation, Holdings, the Members and their Affiliates, and any of their
transactions, and all materials of any kind (including opinions or other tax
analyses) that are provided to the Members relating to such tax treatment and
tax structure.

 

If a Member or assignee commits a breach, or threatens to commit a
breach, of any of the provisions of this Section 7.12, the Corporation
shall have the right and remedy to have the provisions of this Section 7.12
specifically enforced by injunctive relief or otherwise by any court of
competent jurisdiction without the need to post any bond or other security, it
being acknowledged and agreed that any such breach or threatened breach shall
cause irreparable injury to the Corporation or any of its Subsidiaries or the
other Members and the accounts and funds managed by the Corporation and that
money damages alone shall not provide an adequate remedy to such Persons.  Such rights and remedies shall be in addition
to, and not in lieu of, any other rights and remedies available at law or in
equity.

 

Section 7.13.  LLC
Agreement. This Agreement shall be treated as part of the partnership
agreement of Holdings as described in Section 761(c) of the Internal
Revenue Code of 1986, as amended, and Sections 1.704-1(b)(2)(ii)(h) and
1.761-1(c) of the Treasury Regulations.

 

Section 7.14.  Partnerships.
The Corporation hereby agrees that, to the extent it acquires a general
partnership interest, managing member interest or similar interest in any
Person after the date hereof, it shall cause such Person to execute and deliver
a joinder to this Agreement and such Person shall be treated as a “partnership”
for all purposes of this Agreement.

 

Section 7.15.  Independent Nature of Members’ Rights and
Obligations.  The obligations of each
Member hereunder are several and not joint with the obligations of any other
Member, and no Member shall be responsible in any way for the performance of
the obligations of any other Member under hereunder.  The decision of each Member to enter into to
this Agreement has been made by such Member independently of any other Member.
Nothing contained herein, and no action taken by any Member pursuant hereto,
shall be deemed to constitute the Members as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Members are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated hereby and the Corporation
acknowledges that the Members are not acting in concert or as a group, and the
Corporation will not assert any such claim, with respect to such obligations or
the transactions contemplated hereby.

 

22

 

IN WITNESS WHEREOF, the Corporation, Holdings and each Member have duly
executed this Agreement as of the date first written above.

 

 

	
   

  	
  DYNAVOX INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  DYNAVOX SYSTEMS HOLDINGS LLC

  
	
   

  	
  By its Managing Member, DynaVox Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  MEMBERS

  
	
   

  	
   

  
	
   

  	
  Each Member set forth on Annex A hereto

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: Attorney-in-fact

  

 

23

 

EXHIBIT A

 

JOINDER

 

This JOINDER (this “Joinder”) to the Tax Receivable Agreement, dated as
of            , by and among DynaVox
Inc., a Delaware corporation (the “Corporation”), DynaVox Systems Holdings LLC,
a Delaware limited liability company (“Holdings”) and 
                                (“Permitted Transferee”).

 

WHEREAS, on            , Permitted
Transferee acquired (the “Acquisition”)      
Units in Holdings and the corresponding shares of Class B common
stock of the Corporation (collectively, “Interests” and, together with all
other Interests hereinafter acquired by Permitted Transferee from Transferor
and its Permitted Transferees (as defined in the Tax Receivable Agreement), the
“Acquired Interests”) from
                          
(“Transferor”); and

 

WHEREAS, Transferor, in connection with the Acquisition, has required
Permitted Transferee to execute and deliver this Joinder pursuant to Section 7.06
of the Tax Receivable Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and the agreements
contained herein, Permitted Transferee hereby agrees as follows:

 

Section 1.1.  Definitions.  To the extent capitalized words used in this
Joinder are not defined in this Joinder, such words shall have the meaning set
forth in the Tax Receivable Agreement.

 

Section 1.2.  Joinder.  Permitted Transferee hereby acknowledges and
agrees to become a “Member” (as defined in the Tax Receivable Agreement) for
all purposes of the Tax Receivable Agreement, including but not limited to,
being bound by Sections 7.12, 2.04, 4.02, 6.01 and 6.02 of the Tax Receivable
Agreement, with respect to the Acquired Interests, and any other Interests
Permitted Transferee acquires hereafter.

 

Section 1.3.  Notice.  All notices, requests, consents and other
communications hereunder to Permitted Transferee shall be deemed to be
sufficient if contained in a written instrument delivered in person or sent by
facsimile (provided a copy is thereafter promptly delivered as provided in this
Section 1.3) or nationally recognized overnight courier, addressed to
Permitted Transferee at the address or facsimile number set forth below or such
other address or facsimile number as may hereafter be designated in writing by
Permitted Transferee:

 

Section 1.4.  Governing
Law.  THIS JOINDER SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE,
WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.

 

 

IN WITNESS WHEREOF, this Joinder has been duly executed and delivered by
Permitted Transferee as of the date first above written.

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

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