Applied Science Fiction Issues $6 Million in Royalty Backed Annuity Bond to Silicon Valley Bank.

AUSTIN, Texas--(BUSINESS WIRE)--Nov. 2, 1998--

Silicon Valley Bank Structures Innovative New Financial

Solution to Support Emerging Technology Companies

For the first time, a technology company, Applied Science Fiction (ASF), has issued a Royalty Backed Annuity Bond (RBAB) to Silicon Valley Bank.

The $6 million bond is secured by future royalty payments made to ASF, a leading developer of advanced digital imaging technologies, from licensing agreements currently in place with its Original Equipment Manufacturer (OEM) partners. The bond is similar to asset-backed securities that have been issued in the music businehe issuance of the RBAB provides Applied ScienceRBAB as a viable option to leverage royalty income to accelerate a company's growth. We are confident that the RBAB will enable ASF to focus on the business of developing and commercializing technology," said Doug Mangum, senior vice president and manager of Silicon Valley Bank, Texas Office.

"Applied Science Fiction is an intellectual property company that licenses proprietary technology, such as Digital Image Correction and Enhancement Technology (Digital ICE), to scanner manufacturers and receives royalty payments for product shipments. The RBAB purchased by Silicon Valley Bank was a perfect fit for our company, and enables us to leverage a strong relationship with Silicon Valley Bank to fuel our growth," said Mark Urdahl, president of Applied Science Fiction.

About Silicon Valley Bank

Silicon Valley Bank serves emerging-growth and middle-market companies in targeted niches, focusing on technology and life sciences industries, while also identifying and capitalizing on opportunities to serve companies in other industries whose financial services needs are underserved.

The bank operates offices throughout the Silicon Valley: Santa Clara, Palo Alto and 3000 Sand Hill Road, Menlo Park, the center of the venture capital community in California. Other regional offices within California include Irvine, San Diego, St. Helena and West Los Angeles. Other regional offices outside of California include Phoenix; Boulder, Colo.; Atlanta; Rosemont, Ill.; Rockville, Md.; Wellesley, Mass.; Beaverton, Ore.; Austin, Texas; and Bellevue, Wash.

About Applied Science Fiction

Applied Science Fiction, based in Austin, is an intellectual property technology company founded in 1995 to create products that facilitate the transition from direct to digital photography, and to create photographic technologies that permanently link the traditional photo industry infrastructure to the rapidly developing digital imaging industry.

The company's flagship product, Digital ICE, is integrated into commercially available scanners enabling them to remove all surface defects from images during the scanning process. The company licenses and brands its technology through OEMs and software companies that provide products for professional, retail and consumer imaging markets. Sevin Rosen, CenterPoint and Interwest venture capital firms fund the company.

Note to Editors: Digital ICE is a trademark of Applied Science Fiction.