NORTH AMERICA

To: Valued Customers

From: Don Morris

Subject: Quantegy Discontinuation of Analog Tape

Dear Valued Customers,

I’m sure as you know by now, Quantegy has announced that they will discontinue the manufacturing of Analog recording tape, including audio, video and instrumentation tape. As a supplier of Analog recording media, we regret to hear that they have made this decision, as it has always been our position that two companies are better than one in order to give customers a choice as to what media they will use. I am also sure that ATR Magnetics will soon have their new formulations available, to fill the position of that second choice.

I feel that is appropriate at this time to respond to this announcement, by saying that RMGI in the Netherlands is committed to the continued manufacture of Analog Audio Tape. Over the past few months we have made great strides in reintroducing the former EMTEC formulations back into the professional recording market where it has been very well received. We also realized early in this process that the Analog tape market has become a boutique business, so we have structured our distribution model of the business as well as our manufacturing model to address the lower demand for analog tape.

The strength of RMGI rests in the efficient operation they maintain in Holland that is geared to today’s analog tape market. Not only do they manufacture Analog Studio Recording Tape, but audio cassette tape which still enjoys a strong market demand in many other parts of the world. Additionally, RMGI has a very strong customer base in the loading and packaging of numerous consumer brands of Video Cassettes for the European market, where VHS still has a strong presence.

Finally, we do not anticipate any of the rush to horde tape as we saw two years ago when Quantegy announced their closing. Today, RMGI tape is available and in stock. Also, this announcement by Quantegy gives customers’ time to make a decision as to their future needs.