Document:

DISCOP

DISCOP

EVENTS AND INTELLIGENCE DEDICATED TO

NEW ENTERTAINMENT BUSINESS OPPORTUNITIES proposal

M. Mark RUTLEDGE

INTERNETSTUDIOS.com INC.

207 - 1040 Hamilton Street - Vancouver BC

V6V 2R9 Canada

VIA FAX: +1 604 632 1606

	
REF -
	
Marketing partnership between www.discop.com and OFTVS

Paris 11 March 2002

Dear Sir,

Following our correspondence and my meeting with Rob K. MacLean, I hereby confirm that we are ready to provide members of the DISCOP community with the possibility to access referenced discounted TV Program & Films via an online service available on www.discop.com.

We understand that we will together develop the most appropriate online solutions on the basis of your technical experience mixed with our own appreciation of our community's needs, buyers and sellers included.

The general idea remains to provide producers, distributors and buyers of television content with an online information and promotional tool that offers:

	
(1)
	
Products at a price below general market value

	
(2)
	
Products indexed by various categories and genres

	
(3)
	
Trailers downloading services

	
(4)
	
Contractual booking services

	
(5)
	
Payment systems

	
(6)
	
Physical and digital deliveries

	
(7)
	
Script translation services

	
(8)
	
Dubbing and subtitling services

As stated in the sales project memo presented to Robert on the 7th of March, our main concern is not to cannibalize our face-to-face industry business events by initially strictly promoting low-cost products for non-prime time programming periods.

Our general objective is to adapt the successful '99 CENTS STORES' marketing concept to the sale of programs and films whose licensing fees are extremely attractive, and set-up on www.discop.com a section providing listings of companies offering programs under $500 per hour with in some instances a video presentation of these programs.

This section (as described above) would also assist BUYERS and SELLERS wanting to do business online by providing online business and logistical support to facilitate the sale. In regards to our existing services, this would not jeopardize our position as a facilitator of face-to-face business as this new section would be perceived as an added value service in sync with our strategy to initiate and promote business opportunities for television processionals in emerging marketplaces.

market potential

Following the initial results of our on-going research there are about (200 TELEVISION OPERATORS) (excluding cable and satellite Pay TV services) active in the (41 COUNTRIES) that the DISCOP Organization covers and about (est. 350 QUALIFIED BUYERS) representing these television forces. The 41 countries are:

	
Latvia
	
Ukraine
	
Egypt

	
Afghanistan
	
Czech Republic
	
Belarus

	
Lithuania
	
Slovakia
	
Georgia

	
Estonia
	
Hungary
	
Azerbaijan

	
China
	
Romania
	
Armenia

	
Taiwan
	
Bulgaria
	
Kazakhstan

	
Cyprus
	
Albania
	
Cambodia

	
Greece
	
Moldova
	
Uzbekistan

	
Turkey
	
Macedonia
	
Tajikistan

	
Lebanon
	
Croatia
	
Kyrgistan

	
Israel
	
Slovenia
	
Turkmenistan

	
Mongolia
	
Bosnia Herzegovina
	
Laos

	
Vietnam
	
Yugoslavia
	
Jordan

	
Poland
	
Russia
	
 

On the basis of our understanding of the market and the fair assumptions which can be made, the needs for these operators for non-prime time programming could be evaluated as follows:

	
1.
	
Average of 12 hours of non-prime time programming - taking into consideration operators who broadcast less than 24 hours of programs per day.

	
2.
	
Total of 4380 hours per year on the basis of 365 days per year and per operator.

	
3.
	
Total of 876,000 hours of non-prime time programming broadcast per year for the +/- 200 operators targeted in these 41 countries.

The average licensing cost for non-prime time programming is about $350 per hour (low estimate) which comes out to a total market potential of over est. $500 million per year.

We see our plan develop in two distinct stages:

	
1.
	
First 1-year initial stage during which potential sellers and buyers are being 'educated' on the value of this online service as a platform dedicated to the sale of low-cost programming.

	
 
	
 

	
2.
	
Second 1-year stage during which potential sellers and buyers are being 'educated' on the value of applying new digital downloading technologies to the overall sale and marketing processes

Over the course of this 2-year plan, we are prepared to direct our own resources to the sales and marketing of this online service by providing the following support:

	
a.
	
Set-up of an apparent section on the home-page of www.discop.com visited monthly by +/- 5,000 television professionals involved in the 41 emerging television markets that we cover

	
b.
	
Co-advertising in all print campaigns promoting www.discop.com and other DISCOP services in offline and online trade publications

	
c.
	
Co-participation in all industry markets where DISCOP is represented (about 12 international, national and regional TV Programs & Film markets around the world)

	
d.
	
Production and design of a dedicated presentation and sales kit to be used by our network of sales agents across the 41 emerging television markets that we cover

	
e.
	
Multilingual localized telemarketing campaigns aimed at building traffic amongst potential BUYERS in the 41 emerging television markets that we cover

	
f.
	
On-site promotion of our joint online service during all DISCOP managed industry events (3 major events and several 1-day conferences across the 41 emerging television markets that we cover)

	
g.
	
Coordination of the telephone, faxing, emailing, and mailing campaigns aimed at potential SELLERS across the world

	
h.
	
Invoicing, administrative management and reporting of sales

We evaluate the DISCOP goodwill investment at about $60,000 over this 2-year period.

PRE-DISCOP Budapest 2002 PLANNING

Our objective is to set this online service up between MIPTV in mid April and DISCOP Budapest 2002 at the end of June. We would like to officially launch this service at the time of DISCOP Budapest 2002 and deploy at that time a marketing campaign aimed at presenting the online service to the +/- 750 television professionals attending the 3-day event in Budapest.

Initially, the most adequate set-up would be the following:

	
(1)
	
The services should be well defined, even the ones which may not be implemented by the time of DISCOP Budapest 2002

	
(2)
	
The indexing system should be implemented

	
(3)
	
The cost structure of the service should be clear for the SELLER

	
(4)
	
There should be +/- 100 programs and films available coming from app. 10 distributors offering 10 products or groups of products

	
(5)
	
There should be +/- 20 video trailers available coming from 2 distributors offering - on top of their other products - 10 programs or films via a 3 minute trailer

These initial targeted SELLERS will be companies with extensive libraries whose business with emerging television markets has become more important that ever considering the fact that most of them have to find ways to offset the business downturn in more developed markets.

These initial targeted 10 SELLERS will be offered a FREE license to place 10 products or groups of products and 20 x 30 min video trailers, for an initial period of 6 months. These initial targeted 10 SELLERS will be chosen on the basis of the following criteria:

	
1.
	
Access to massive libraries of programs

	
2.
	
Willing to license their products at a low costs

	
3.
	
Experience in emerging television marketplaces

	
4.
	
Existing relationship with The DISCOP Organization

We will select these SELLERS primarily from the United Kingdom, Germany, France, the United States, India, China, and we will also select national TV stations from Central & Eastern Europe, as these broadcasters have massive amounts of programs that they hardly sell.

cost structure for the seller

We believe that the following 2-stage cost structure would be the most appropriate:

During the first 1-year period:

	
1.
	
A yearly $1000 subscription fee to the online service of $1000 which would include the right to be indexed as a distributor ready to sell products under $500 per hour and the possibility to reference up to 10 various products or groups of products, with basic product information

	
2.
	
A fee of $2000 to present 10 x 3 minute digitized video trailers for a 1-year period

During the second 1-year period:

	
1.
	
A yearly $1000 subscription fee to the online service of $1000 which would include the right to be indexed as a distributor ready to sell products under $500 per hour and the possibility to reference up to 10 various products or groups of products, with basic product information

	
2.
	
A fee of $2000 to present 10 x 3 minute digitized video trailers for a 1-year period

	
3.
	
A commission of 10% on all sales generated via www.discop.com

revenue sharing

On the basis of our various conversations, we agree on the fact that our combined goodwill amounts to $185,000 and we also agree on the fact that his investment should be 'reimbursed' to each party involved on the pro-rata of our respective goodwill i.e. $125,000 for OFTVS (67%) and $60,000 for the DISCOP Organization (33%).

We also assume that reimbursements should be made after the sales and technical costs of setting up each new subscriber have been paid for. Specifically:

	
1.
	
We assume that the technical costs to implement a new subscriber and its 10 products will be $200 for the data-entry processes, and $300 for the digitalization of the 10x 3 minute trailers

	
2.
	
We assume that the marketing costs associated to each new subscriber amounts to 10% of the overall sale

	
3.
	
On the basis of a subscriber the net revenues will be:

a. For the $1000 subscription - the net revenues will be $700 ($200 for data-entry and $100 for marketing costs)

b. For the $2000 additional video package - the net revenues will be $1500 ($300 for the digitalization process and $200 for the marketing costs

	
4.
	
Revenues for the $1000 and the $2000 subscriptions will be shared 67% / 33%

	
5.
	
Initial goodwill investment will then be reimbursed theoretically as follows:

a. 115 subscriptions @ $10000 = $80,500 in net revenues

b. 70 subscriptions @ $2000 = $105,000 in net revenues

Our objective is to recover the costs of our respective goodwill investments after the 1st year period, and from then on split the net revenues in half (50/50) assuming that all revenues derived from www.discop.com generated sales (after the 1st year period) will be considered as net revenues altogether with no other costs associated.

We understand that there is no cash investment involved or expected from either party to further develop the service other than the expenses associated to each party's efforts to successfully fulfill its obligations as described in this proposal.

We also understand that neither party will be authorized to provide a comparable online TV programs and Films sales service in one form or another without the prior consent of each party involved in this joint partnership.

Should you find this proposal suitable, I would welcome your soonest response so that we could begin the implementation of this new service.

Best regards,

/s/Patrick JUCAID

Patrick Jucaid

General Manager

The DISCOP Organization

Agreed to and accepted this 20th day of March, 2002

/s/Mark Rutledge

Mark RutledgeExhibit

10.44

 

SECOND MODIFICATION AGREEMENT

 

THIS SECOND MODIFICATION AGREEMENT

dated as of June 30, 2002 (the “Second Modification”) is entered into among BOGEN

COMMUNICATIONS INTERNATIONAL, INC. and BOGEN COMMUNICATIONS, INC.,

each a Delaware Corporation (singly, a “Borrower” or collectively, the

“Borrowers”) and KEYBANK NATIONAL ASSOCIATION (“Key”) both in its individual

capacity and, as Agent for the “Banks” [as that term is defined in a “Credit

Agreement” dated as of April 21, 1998 between the Borrowers, the Banks and Key

(the “Credit Agreement”)].

 

R E C I T A L S

 

A.            The Borrowers and

Key previously modified the Credit Agreement by Modification Agreement dated as

of June 30, 2001 (the “First Modification Agreement”).

 

B.            The Borrowers and

Key have negotiated and agreed to further modify certain of the terms of the

Credit Agreement and the Loan Documents (as each of those terms are defined in

the Credit Agreement).

 

In consideration

of the premises and the mutual agreements herein contained and for other good

and valuable consideration, the receipt and sufficiency of which are hereby

acknowledged, the parties hereto agree as follows:

 

1.                                       DEFINITIONS.

 

(a)                                  Except

as otherwise defined herein, capitalized terms used in this Second Modification

shall have those meanings set forth in the Credit Agreement as modified in the

First Modification.

 

(b)                                 The

following definition set forth in the Credit Agreement are modified as follows:

 

Loan Documents

means the Credit Agreement, the Notes, the Guaranty, the L/C Applications, the

Collateral Documents, the First Modification and this Second Modification.

 

Termination Date

means the earlier to occur of (a) June 30, 2003, or such later date to which

the Termination Date may be extended at the request of the Borrowers and with

the consent of each Bank, or (b) such other date on which the Commitment shall

terminate pursuant to Sections 6 or 12.

 

Working Capital

Sublimit means Seven Million and NO/100ths ($7,000,000.00)

Dollars.

 

 

2.             MODIFICATIONS TO CREDIT

AGREEMENT.  In addition to the

modifications to the DEFINITIONS set forth in SECTION 1 of the Credit

Agreement, the Credit Agreement is further modified as followed:

 

(a)                                  Borrowers

and the Agent have agreed pursuant to the provisions of Section 6.1 of the

Credit Agreement that the Borrowers have requested that the Agent and the Banks

agree that the Working Capital Sublimit is increased from Five Million and

NO/100ths ($5,000,000.00) Dollars to Seven Million and NO/100ths

($7,000,000.00) Dollars.

 

(b)                                 The

Facility Fee set forth in Section 5.1 is increased from Twelve Thousand Five

Hundred and NO/100ths ($12,500.00) Dollars to Seventeen Thousand Five Hundred

and NO/100ths ($17,500.00) Dollars and said increased amount shall be payable

on the date of execution of this document.

 

3.             AFFIRMATION OF LOAN DOCUMENTS.  The Borrowers and the Guarantors hereby

covenant and agree that all of the promises made in this Second Modification,

the First Modification and in the other Loan Documents, except to the extent

the same have been modified by this Second Modification, are in all respects

valid and binding promises of the parties making the same, enforceable in

accordance with their terms.

 

4.             CONFLICT RESOLUTION.  The Borrowers and the Guarantors hereby

agree that should there be a conflict between the terms of this Second

Modification and any of the other Loan Documents, the provisions of this Second

Modification shall prevail.

 

5.             AFFIRMATION OF LIENS AND

SECURITY INTERESTS.  The Borrowers

and the Guarantors hereby covenant and agree that the liens and security

interests granted to the Agent and the Banks pursuant to the Collateral

Documents shall continue to remain in full force and effect and shall also

continue as collateral for all of the obligations of the Borrowers under the Loan

Documents.

 

6.             AFFIRMATION OF GUARANTYS.  The Guarantors affirm their obligations as

guarantors of payment.

 

7.             AMENDMENT.  This Agreement may not be changed or

modified orally but only by an agreement in writing signed by the party or

parties against whom enforcement of any waiver, change, modification or

discharge is sought.

 

8.             ENTIRE AGREEMENT.   This Agreement constitutes the complete

agreement of the parties with respect to the subject matter referred to herein

and supercedes all prior or contemporaneous negotiations, promises, covenants,

agreements or representations of every nature whatsoever with respect thereto

all of which have been merged and finely integrated into this Agreement.  Each of the parties hereto understands that

in the event of any subsequent litigation, controversy or dispute concerning

any of the terms, conditions or provisions of this Agreement, no party shall be

permitted to offer or to introduce any oral evidence concerning any

 

2

 

oral promises or

oral agreements between the parties relating to the subject matter of this

Second Modification not included or referred to herein and not reflected by a

writing.

 

9.     GOVERNING LAW.  This Second Modification shall be construed

in accordance with the Laws of the State of New York.

 

IN WITNESS WHEREOF, the parties hereto have set their hands and seals

as of the day, month and year first above written.

 

	

   

  	

  BOGEN COMMUNICATIONS INTERNATIONAL, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Maureen A. Flotard

  
	

   

  	

   

  	

  Name: Maureen A. Flotard

  
	

   

  	

   

  	

  Title: Chief Financial Officer

  
	

   

  	

   

  	

   

  
	

   

  	

  BOGEN COMMUNICATIONS, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Maureen A. Flotard

  
	

   

  	

   

  	

  Name: Maureen A. Flotard

  
	

   

  	

   

  	

  Title: Chief Financial Officer

  
	

   

  	

   

  	

   

  
	

   

  	

  BOGEN CORPORATION

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Maureen A. Flotard

  
	

   

  	

   

  	

  Name: Maureen A. Flotard

  
	

   

  	

   

  	

  Title: Chief Financial Officer

  
	

   

  	

   

  	

   

  
	

   

  	

  APOGEE SOUND INTERNATIONAL, LLC

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Maureen A. Flotard

  
	

   

  	

   

  	

  Name: Maureen A. Flotard

  
	

   

  	

   

  	

  Title: Chief Financial Officer

  
	

   

  	

   

  	

   

  
	

   

  	

  KEYBANK NATIONAL ASSOCIATION

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ William B. Palmer

  
	

   

  	

   

  	

  Name: William B. Palmer

  
	

   

  	

   

  	

  Title: Vice President

  

 

3

 

STATE

OF NEW JERSEY

 

COUNTY

OF BERGEN       ss:

 

On the 15th day of July in the year 2002 before me, the

undersigned, a notary public in and for said state, personally appeared Maureen

A. Flotard, personally known to me or

proved to me on the basis of satisfactory evidence to be the individual whose

name is subscribed to the within instrument and acknowledged to me that she

executed the same in her capacity, and that by her signature on the instrument,

the individual or the person upon behalf of which the individual acted,

executed this instrument.

 

 

	

   

  	

   

  	

   

  	

   

  	

   

  	

  Roberta

  B. May

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

  NOTARY

  PUBLIC

  

 

 

STATE

OF NEW YORK

 

COUNTY

OF ALBANY       ss:

 

On the 15th day of July in the year 2002 before me, the

undersigned, a notary public in and for said state, personally appeared William

B. Palmer, personally known to me or proved to me on the basis of satisfactory

evidence to be the individual whose name is subscribed to the within instrument

and acknowledged to me that he executed the same in his capacity, and that by

his signature on the instrument, the individual or the person upon behalf of

which the individual acted, executed this instrument.

 

 

	

   

  	

   

  	

   

  	

   

  	

   

  	

  Richard C. Van Auken

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

  NOTARY

  PUBLIC

  

 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00041-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00041-of-00352.parquet"}]]