Muzak and Klipsch Establish Exclusive Partnership

INDIANAPOLIS (January 8, 2003) - Muzak and Klipsch Audio Technologies have reached an agreement that makes Muzak an exclusive provider of Klipsch loudspeakers for the commercial music subscription industry. Klipsch loudspeakers will be installed with Muzak music programs at The Gap, Eddie Bauer and Oakley stores as well as at Quick Trip and BP Amoco gas stations across the nation to name a few. The new strategic alliance is valued at more than $9 million over three years.

Kenny Kahn, senior vice president of owned operations for Muzak, said the exclusive partnership is significant not only because of its scope and value to Muzak and Klipsch, but that bringing together two market leaders is a real benefit to the commercial music subscription industry, and ultimately to the customers and employees themselves.

"Businesses have a greater understanding of how music creates an experience for their customers and employees. Now they're looking for ways to deliver that experience in a more tangible and emotional way," said Kahn. "Quality sound is the most logical place to go as a means to communicate the full integrity of the music programs we design for our clients. People in the industry know that Klipsch is the place to go for quality sound."

According to Lance Jones, Klipsch's senior vice president of corporate development, Klipsch is eager to increase its commercial audio market share, bringing the business segment up to the high-performance operating level of its other loudspeaker categories. Currently, Klipsch has the number one selling home theater system in America, is the number one supplier of professional cinema stage and screen systems in the U.S. and Mexico, and continues to earn critical acclaim that matches the sales success of its ProMedia® line of multimedia speakers.

"Klipsch shares a best-of-class philosophy with Muzak along with a sincere passion for music and quality sound," said Jones. "We are excited that Muzak will help Klipsch to greatly expand its presence in the commercial marketplace, and I believe that together we will raise the bar for the quality of sound in the subscription industry."

Primarily, Muzak is installing UL-certified Klipsch IC-5T and IC-6T in-ceiling loudspeakers with integrated back cans and 70/100 volt transformers, and Klipsch All-purpose Series CA-5T, CA-6T and CA-8T indoor/outdoor loudspeakers with 70/100 volt transformers. To celebrate their new strategic alliance, Muzak is launching a new promotion that provides music and Klipsch sound systems at a discounted price.

About Muzak:

Muzak is the leading provider of music and on-hold messaging for businesses. Other products and services include sound system design and installation, in-store messaging, satellite commercial television, drive-thru system sales and maintenance, closed circuit video, and sound masking. The company has the industry's largest national network with more than 200 sales and service locations, serving approximately 350,000 client locations in the United States and 14 foreign countries. More than 100 million people hear Muzak programs each day.