KODAK INTRODUCES FIRST COMMERCIAL RELATIONSHIP
OF KODAK PICTURE EXCHANGE

New Kodak Image Storage and Transmission
Business Establishes First Commercial Relationship

    NEW YORK, Aug. 25__Applied Graphics Technologies (AGT), one 
of the leaders in the graphic arts and prepress industry, will 
work with Kodak to market a new over-the-phone image-leasing 
business. AGT will invite its clients in the magazine, 
commercial publishing, and advertising markets to participate in 
the creation of an extensive news and illustrative image 
collection that will be maintained by AGT. These pictures will 
then be marketed by Kodak over the newly announced Kodak Picture 
Exchange image transmission system.
    "AGT's business clients' photographs are scanned by AGT as 
part of its full-service package and represent some of the 
highest-impact and most newsworthy images available," said 
Stephen S. Stepnes, general manager and vice president of CD 
Imaging at Kodak. "By using Kodak's Photo CD and Picture 
Exchange technologies, AGT will help create new revenues for its 
magazine and advertising agency clients by mid-1993."
Creative Marketing Effort to Be Employed
    As AGT begins to capture and index collections of images for 
its clients, Kodak has agreed to market them through its Kodak 
Picture Exchange service. AGT will initiate the process by 
inviting its 200-plus publishing clients to participate. Today, 
AGT's clients' images are rarely used again following 
publication.
                             - 2 -

    With the advent of the Kodak Picture Exchange system and 
AGT's image collection, these images can have value to AGT's 
current clients and new image users.  Some of AGT's clients 
include Business Week, Newsweek, US News & World Report, 
Glamour, and Vogue, as well as many of the major advertising 
agencies.
    "Today we are providing a broad range of pre-press services 
with revenues of $150 million annually and managing thousands of 
images every week for many of the country's leading publishers 
and advertisers," said Fred Drasner, chairman and chief executive 
officer of AGT. "We are working closely with Kodak to develop a 
service that will allow our publishing and advertising clients to 
add a new dimension to their global marketing efforts by offering 
their images through the Kodak Picture Exchange worldwide."
    AGT will transfer these images to the Kodak Photo CD format 
and store them with an index that is consistent with the new 
Kodak Shoebox search and retrieval software and Kodak 
Professional Photo CD Image Library systems. These images will 
then be made available for lease to potential image user clients. 
AGT's publication and advertising clients can also lease images 
from other sources on the Kodak Picture Exchange.
    The Kodak Picture Exchange represents Kodak's vision for a 
global imaging services network, similar to text and data 
networks. Kodak Picture Exchange will link the distributors of 
images, such as photo stock houses, with the customers they 
serve, including advertising agencies and publishers.

Optimistic about Prospects for Future Growth
    Kodak and AGT believe that the business growth potential for 
the Kodak Picture Exchange is considerable. "High-impact 
photography is being sought by picture-users worldwide for news, 
education, entertainment, and advertising," said Stepnes. 
"Kodak's leadership in image technology, and AGT's color imaging 
expertise and breadth of clients suggest that this relaltionship 
will result in image services with far-reaching benefits."
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[Note: Kodak and Shoebox are trademarks.]