KODAK, LIVE PICTURE, INC. SIGN EQUITY, TECHNOLOGY AGREEMENT

ROCHESTER, N.Y. and SOQUEL, CA., January 17--Eastman Kodak Company and Live
Picture, Inc. (formerly FITS Imaging) today signed a broad technology and
product development agreement. It covers a range of imaging applications.

As part of the agreement, Kodak obtains a license to apply Live Picture's
new and advanced resolution-independent image viewing and editing
technology in future Kodak digital imaging products.

Future Digital Imaging Products

The combination of the Live Picture technology and Kodak's digital imaging
and color management science will make it easier to open and use high
quality images. In addition to requiring less computer power, this
combination of capabilities will greatly enable the utilization of images
on computer networks and common carriers.

Live Picture's FITS (Functional Interpolating Transformation System)
technology will also provide a strong complement to future Kodak digital
imaging products. With these applications, images will be opened and
displayed in seconds. Subsequent cropping, zooming, panning, and geometric
transformation can be accomplished with similar speed. This capability
will be provided for markets ranging all the way from the sophisticated
graphics arts user to consumers with less powerful equipment.

Photo CD: More Potent Bridge

"Later this year, when this new technology has been incorporated into Photo
CD applications, many more PC users with lower levels of random access
memory (RAM) will be able to manipulate high-resolution images," said Carl
Gustin, vice president and general manager of Kodak's Digital and Applied
Imaging business. "And those images will be available for immediate
printing or inclusion in compound documents with little or no delay.

"Photo CD technology will provide an even more potent bridge to digital
imaging. That will not change; and it will continue to be easily available
through local photo processors and other service providers," Gustin added.
"With the inclusion of FITS technology, and other steps we intend to take,
Photo CD will gain new power and utility."

Kodak and Live Picture will pursue an open licensing strategy as products
emerge from the alliance. Initially, software developer kits will be
available, as well as libraries that can be included in popular operating
systems such as Windows, Macintosh, UNIX, etc.

The Next Big Standard

Live Picture president Bruno Delean explained why his company is teaming
U]? with Kodak: "Most importantly, Kodak has a profound understanding of
our technology and the speed and quality advantages that it offers the
customer. Incorporating our technology with Photo CD and in other ways is
a natural step and shows that Kodak, with its new management, is truly a
leader in digital imaging.

"The combination of Kodak's market leadership and an open licensing
strategy will make this the next big standard in digital imaging," Delean
added. He noted that future versions of Live Picture, as well as
forthcoming applications from Live Picture, will support Photo CD and the
Kodak Color Management System.

New Way Of Manipulating Pixels

The Live Picture technology is a new way of formatting and manipulating the
millions of pixels--dots of color information--that digitally define an
image. Images are stored as a sequence of subimages (from full resolution
to low resolution) which are organized into discrete "tiles" or segments,
making it possible to quickly access only the information needed to fill
the screen and to smoothly and rapidly manipulate the image.

This formatting allows for high-quality image composing and editing. Image
edits are stored separately as commands that can be updated, deleted and
reordered prior to rendering the final image for printing, thus avoiding
cumulative error buildup from independent sequential edits. Speed loss
caused by the processing of unnecessary image data is also minimized.

Live Picture currently offers the new technology in the award-winning Live
Picture software product, a "high end" image editing and composition
system for photographers, graphic artists and other publishing
professionals. The software is published by HSC Software in North America,
Koyosha Graphics in Japan, and elsewhere by Live Picture, Inc.

As part of the agreement, Kodak will make an equity investment in Live
Picture. The size of the investment was not disclosed.

Eastman Kodak Company
343 State St
Rochester, NY 14650

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