Kodak and Lexar Join Forces

Kodak and Lexar Join Forces In Drive For Removable Digital Memory Market Leadership ROCHESTER, N.Y. and FREMONT, CA., May 17-Eastman Kodak Company (NYSE: EK) and Lexar Media, Inc. (Nasdaq: LEXR) today announced they have formed a long-term agreement to gain a larger share of the market for removable digital memory products, driven by surging demand from the mass-market adoption of digital cameras, mobile phone cameras, portable music players and other consumer electronics devices.  As part of the exclusive multi-year agreement, Lexar Media will manufacture and distribute a full range of KODAK branded memory cards and will work with Kodak to provide consumers with a wide variety of reliable, high quality, mass-market memory cards worldwide.  Kodak will contribute to the partnership its brand power and global distribution network, while Lexar Media will contribute removable memory products known for their quality, reliability and speed, and its demonstrated retail category management. Both companies will market the products worldwide. "This agreement is ideal for both parties," said Bernard Masson, president, Digital & Film Imaging Systems, and senior vice president, Eastman Kodak Company. "For Kodak, it represents another step in our effort to accelerate the growth of our digital businesses by providing customers and our retail partners a full suite of KODAK branded memory cards that will work with virtually any product and system. Lexar will benefit from Kodak's worldwide brand presence and massive global distribution network."  "We recognize the power of the KODAK brand across photography and imaging fields and we are pleased that they have selected Lexar to help drive the KODAK brand into this fast-growing category," said Eric Stang, chairman, president and CEO, Lexar Media, Inc.  "Lexar's superior controller technology and retail focus combined with Kodak's brand strength and worldwide distribution network will enable us to deliver memory cards with the quality and performance that consumers have come to expect from Kodak."With this agreement Lexar and Kodak will develop strategies for each segment of the memory card market and drive the KODAK branded memory cards into a broad range of channels worldwide. According to IDC, worldwide digital camera sales are expected to top 68 million units in 2004, a 39% growth over 2003, and grow to over 87 million units in 2007. In addition, worldwide camera phone unit shipments are expected to reach 186 million in 2004 and grow to more than 422 million units in 2007. This year alone, digital camera sales will drive retail sales of more than 100 million memory cards with an expected retail sales value of over $4 billion."With the rapid and consistent adoption of digital technology in cameras and cell phones and with ever increasing resolutions, we expect digital memory cards to become one of the primary storage devices for most consumers worldwide," said Chris Chute, senior analyst for Worldwide Digital Imaging Program of IDC.Consumers can expect to see a full suite of KODAK branded memory cards on store shelves in the fourth quarter of 2004. The product line-up will include Secure Digital (SD), Mini-SD, Multimedia Cards (MMC), CompactFlash(tm), and additional media formats will be offered in the future.  The companies did not disclose the financial terms of the agreement.  For more information, please visit www.lexarmedia.com.