I did a trademark search on them and they have registered the mark since March 12, 2002.
Lawyers always try to get you to give in even though you have rights too. They prey on people with little knowledge of the law. This can be a good experience for you to learn about law, lawyers, trademarks, and your rights, etc. I encourage to NOT give in. You are not a squatter. If you registered a domain of a really famous mark that would be different. But who the hell ever heard of N.E.A.R ARMADILLO SPEAKERS?
If they held the mark for ARMADILLO SPEAKERS without the "N.E.A.R " then I would think they 'might' have a case. But they have registered the mark as "N.E.A.R ARMADILLO SPEAKERS" and I 'suspect' they cannot go after someone using "ARMADILLO SPEAKERS."
If someone sent me a letter like that, I would consult a trademark lawyer. If you cannot afford it, at least go here for advice:
Drew, I hope you do not give up without a fight. With proper knowledge of the law, you can probably beat them without even going to court.