SPIRIT and MadWaves announce MP3 software product licensing agreement

LONDON, England - MOSCOW, Russia (July 24, 2002) - Today, SPIRIT (www.spiritcorp.com ), the largest DSP software developer for TI platform in continental Europe and MadWaves UK, Ltd. ( www.madwaves.com ), generative and interactive music solutions provider announced an agreement whereby SPIRIT will license its MP3 software decoding product to MadWaves for use in the MadPlayerT - a hand-held, multi-functional, exceptional-sounding portable music player/recorder with numerous unique features that, until now, have not existed in a single music product. The MadPlayer allows users to listen to, create, interact with, compose and transport professional-quality, copyright-free digital music without the need for a PC or Internet connection. The MadPlayer also is a fully-functional MP3 player, karaoke machine and FM radio. The SPIRIT MP3 decoder will provide the mechanism by which the MadPlayer allows users to play back MP3 songs stored on the unit's SmartMediaT card.

"We're excited to be involved with MadWaves in partnership. SPIRIT is committed to provide manufacturers of telecommunication equipment and portable devices such as MadPlayer with high-quality DSP software products optimized and tuned for their specific needs as well as provide extensive timely support and technical consulting," said Andrew Sviridenko, CEO of SPIRIT.

SPIRIT provided MadWaves complete software - the SPIRIT MP3 decoder, which was tailored for the exact configuration of the ARM7 based processor used in the MadPlayer. The SPIRIT MP3 decoder software enables the playback of MP3 music on the MadPlayer.

SPIRIT MP3 decoder supports MPEG 1, 2 Audio Layer III standards and their low bit rate extension MPEG 2.5. The decoder features some of the lowest MIPS and memory requirements available today, which leads to more economical power consumption and lower production costs, extremely high robustness to damaged MP3 bit streams. SPIRIT MP3 decoder is already available for C54x DSP and ARM7 RISC processors and can be easily ported to any RISC or DSP platform and can be used in a broad range of applications where MP3 decoder is needed, such as Portable Audio Systems, Wireless, Mobile, Car Audio, Set Top Boxes, Internet Appliances, PDAs and others.

"MadWaves has been very impressed with the quality of SPIRIT's products, their expertise in this area, and their attention to us as their customer. We are most pleased that SPIRIT has joined us in this agreement, and we look forward to a long, mutually beneficial business relationship," said MadWaves' President, Voislav Damevski.

About SPIRIT

SPIRIT Corp. ( www.spiritcorp.com ) is a prominent supplier of high-quality DSP software products for telephony, speech compression, speech and audio processing, data communication and more. With a strong position on the DSP software market SPIRIT has among its clients such industry giants as Atmel, NEC, Nortel Networks, Panasonic, Samsung and Texas Instruments and more Software from SPIRIT is used in 50 countries worldwide. In 2001 Texas Instruments is shipping SPIRIT's software bundled with TI C54 CST processor

About MadWaves

MadWaves designs, develops, markets and licenses software and hardware solutions that bring interactivity to digital music. The Company delivers generative and interactive music solutions and interactive products and software, for application to the web, personal computers, consumer/business products and wireless devices. The Company sells and licenses its products to companies that want to add interactivity and generative music features to their consumer digital audio-related products. MadWaves is headquartered in London, with offices in New York, California and Sophia Antipolis, France.