Magnolia Broadband Raises Additional $1.5 Million In Funding; Radio Chip Developer To Complete Design and Testing.

Business Editors

CLINTON, N.J.--(BUSINESS WIRE)--June 11, 2002

Magnolia Broadband, Inc., a developer of integrated, multi-transceiver, low-power RF chips for mobile phones, has raised an additional $1.5 million as part of an oversubscribed Series B round.

The funding was provided by Draper Fisher Jurvetson Gotham Ventures of New York ("DFJ Gotham"), and supplements the $6 million raised in April by Magnolia Broadband in a round led by ECentury Capital Partners of McLean, Virginia and SCP Private Equity Partners of Wayne, Pennsylvania. Proceeds of the round will be used to complete customer trials of Magnolia's flagship chipset.

In connection with the round, the Board of Directors has been increased from five to six members, with the addition of Danny Schultz of DFJ Gotham. As part of the first closing last month, Win Churchill of SCP and Jim Broder of ECentury joined the Board.

Magnolia is pioneering development of radio chips for cell phones that employ smart antennas. Smart antenna technology represents a major breakthrough for the wireless industry. The company's unique radio chip will reduce power drain and increase capacity, coverage and user data rates for existing and future mobile protocols. Magnolia's solutions require no changes to the physical layer of the network.

"Magnolia has all the right elements to be an enormous success," commented Danny Schultz, Managing Partner of DFJ Gotham Ventures. "Strong management and their proprietary, elegant and cost effective solution for alleviating bottlenecks in the wireless arena were all very persuasive for us. We are very happy to be backing Haim Harel and his team."

Magnolia was founded by Haim Harel, a wireless industry veteran who previously founded Nexus Telelocation (NXUS, Nasdaq) and Wireless Online, a Silicon Valley-based wireless company. Magnolia was first funded in April 2000 by Silverstar Holdings and received additional funding from Silverstar Holdings, CIP Capital and Selway Partners in March and October 2001.

About CIP Capital

CIP Capital ("CIP") is a private investment firm that acquires equity positions in high growth technology-related businesses. CIP currently manages CIP Capital L.P., a Small Business Investment Company licensed by the US Small Business Administration.

About Draper Fisher Jurvetson Gotham

Draper Fisher Jurvetson Gotham (DFJ Gotham) is an early-stage, IT venture capital fund focusing on IT infrastructure, broadband and wireless communications, network security and storage technology, enterprise software and other emerging technology sectors. DFJ Gotham concentrates on opportunities in the greater New York area and looks for breakthrough solutions to fundamental needs in fast growing markets.

DFJ Gotham has approximately $100 million of capital under management. As a Draper Fisher Jurvetson affiliate fund, DFJ Gotham shares the knowledge, resources and contacts of over 11 DFJ-network funds, which have over $3 billion under management and over 250 portfolio companies. For more information about Draper Fisher Jurvetson Gotham please visit www.dfjgotham.com.

About ECentury

ECentury is a $90 million early-stage technology venture fund sponsored by the Rothschild Group in partnership with Allied Capital, Hitachi and Mitsubishi. ECentury invests principally in the Mid-Atlantic region in new companies with outstanding potential and global growth prospects. ECentury's primary focus is to add value to early stage companies whose technology solutions address critical commercial needs in large markets. ECentury is well positioned to make important contributions to the growth of its portfolio companies. Its strategic partners are poised to explore licensing, distribution, co-investment and other growth opportunities with ECentury's companies. Additional information on ECentury can be found at www.ecenturycapital.com.

About SCP

SCP Private Equity Partners ("SCP") is a diversified private equity investment firm with $800 million under management focused on making mid and late stage venture investments in rapidly growing infrastructure technology companies. A number of these companies are positioned to capitalize on the convergence of the IT and security markets. SCP supports its investment portfolio with a rich base of strategic, operating and financial expertise and an extensive networking capacity to access capital, recruit management and facilitate favorable strategic alliances. Areas of particular focus in which SCP has made investments include peer-to-peer technologies, IT services, wireless technologies, streaming media, content management, e-learning, and application integration. Additional information on SCP and a summary of representative investments can be found at www.scppartners.com.

About Selway

Selway Partners LLC is a holding and operating company that builds and funds a select number of promising projects within the information technology and telecommunication markets. Selway provides strategic and operational management, technology expertise, and capital at the earliest stages, thus adding maximum value when it's needed most. In this period of market uncertainty, when many investors are scaling back or closing down operations, all of Selway's Partner companies continue to show consistent growth. Moreover, several of Selway's Partner companies have recently achieved profitability.

About Silverstar

Silverstar Holdings Ltd. (Nasdaq SSTR) is a publicly traded company, focusing on acquiring controlling positions in high growth sports and media related businesses that stand to benefit from the economies of scale generated by Internet and other technology related platforms. It currently owns Fantasy Sports, Inc., a dominant provider of fee based NASCAR related and other fantasy sports games, as well as Student Sports, Inc, the nation's leading provider of media and marketing services to the high school teen sports market.