TORONTO, ONT and SANTA CRUZ, CA--August 23, 2001--MGI (TSE:MGI), a leading global provider of visual media software and infrastructure solutions, and Zoomify, Inc. today announced an out-of-court settlement concerning MGI's U.S. Patent No. 5,968,120 and any foreign counterparts of the same which cover interactive display of electronic imagery over computer networks.

Both parties entered into an agreement to settle the litigation. Zoomify has affirmed the validity of the MGI Patent and has entered into a license agreement with MGI. The agreement is effective immediately and shall remain in effect until the expiration of the Patent. No other terms were disclosed.

MGI obtained U.S. patent No. 5,968,120 entitled "Method and System for Providing On-Line Interactive Display of Digital Image Stored as Tiles at Plurality of Resolutions over a Server-Client Network" on October 19, 1999.

About Zoomify
Founded in 1999, Zoomify makes high-quality images useful for Web businesses, digital imaging vendors and image-sharing enthusiasts. Zoomify`s advanced user interface technologies and unique image streaming solution make large images easy to acquire, edit, stream, share and view. Zoomify streaming images are used just like JPEGs - simply save and host - no licensing strings, no server software, no limits on viewing alternatives. More information may be obtained on the Company at www.zoomify.com.

About MGI
MGI is a leading global provider of visual media software and infrastructure solutions that enable individuals and businesses to maximize their use of digital images and video. The Company's products are distributed in over 40 countries through original equipment manufacturers (OEMs), value-added resellers (VARs), as well as leading computer and electronic retail stores, and websites. Shipments of MGI's flagship PhotoSuite and VideoWave products have surpassed 39 million units and its image server technologies and web tools are used by leading commercial websites worldwide. The Company's offerings include proprietary technologies supported by over 90 patents and patent pending applications.

With headquarters in Richmond Hill, Canada, MGI maintains branch offices in the United Kingdom, France, Germany, Japan, Taiwan and Korea. MGI is a public company whose shares are traded on the Toronto Stock Exchange under the symbol 'MGI'. More information may be obtained on the Company at www.mgisoft.com.

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