LifeFX Announces Licensing Agreement with IBM; LifeFX Stand-In Virtual People Add Human-Like Quality to IBM's e-business Solutions

Business Wire, Jan 22, 2001

Business/Technology Editors

NEWTON, Mass.--(BUSINESS WIRE)--Jan. 22, 2001

LifeFX(TM), Inc. (NASDAQ: LEFX), a leading developer of Stand-In(TM) virtual people for the Internet, today announced a licensing agreement with IBM Corporation (NYSE: IBM). This agreement calls for IBM to supply its ViaVoice (TM) Text-to-Speech engine to LifeFX. The agreement also calls for the two companies to jointly pursue potential technology opportunities involving customer relationship management (CRM) through IBM Websphere, Lotus, Pervasive and IBM ThinkPad offerings.

LifeFX will embed the ViaVoice engine in its proprietary player software. The LifeFX player is used to run LifeFX Stand-In virtual people, which can be used in LifeFX (TM) Facemail or on web sites as customer care representatives, celebrity spokespeople, web guides and salespeople. The player can be downloaded free of charge at www.lifefx.com for use in facemail and with LifeFX powered web sites.

William "Ozzie" Osborne, General Manager, IBM Voice Systems stated, "We are excited to work with LifeFX to integrate our voice technology with its innovative Stand-In (TM) technology for creating believable, life-like faces to significantly enhance online communications and our offerings to customers."

"This agreement represents a major advancement in CRM solutions, establishes a new benchmark for the industry and validates the use of LifeFX technology for CRM applications. We are proud of this agreement with IBM - the dominant player in e-business," said Lucie Salhany, CEO and Co-President of LifeFX. "This validates the LifeFX product suite and the relevancy of adding human-like interfaces to the Internet using LifeFX Stand-Ins."

LifeFX's Stand-In technology allows consumers to have a new level of human interaction and engaging communications online. As a front-end application, Stand-Ins will enable personalized customer managed relationships using a human-like quality that has previously been missing on the Internet.

"We believe LifeFX Stand-In technology can help web sites reduce costs and increase sales by offering better online customer service, attract more visitors and decrease shopping cart abandonment," said Michael Rosenblatt, Chairman and Co-President of LifeFX. "Our bundled offer will provide a significant enhancement to online communications."

The licensing agreement between LifeFX and IBM represents a commitment to share resources and technologies. Specifically, under the terms of the agreement:

--LifeFX receives the ViaVoice Text-To-Speech technology from IBM, which will enable the LifeFX Facemail (TM) application to evolve with the most advanced voice solution technology.

--IBM receives two LifeFX Stand-In (TM) virtual people, which will be incorporated into existing e-business applications.

The launch of the Preview Version of LifeFX Facemail on December 13, 2000 represented the first milestone in LifeFX's aggressive plan to provide a face for all Internet communications. Today's agreement with IBM signals the beginning of LifeFX's second business development stage -- to provide Stand-In technology to CRM vendors as a front-end application that will enable personalized customer-managed relationships.

About IBM

With over 40 years of delivering voice solutions and over 100 voice technology patents, IBM is the global leader in providing access to data through end-to-end voice integrated solutions that enable organizational effectiveness for e-business development. For more information about IBM Voice Systems, visit http://www.ibm.com/software/voice.> About LifeFX

LifeFX, Inc., a Safeguard Scientifics (NYSE:SFE) partner company, is creating the face of the Internet by developing photo-realistic, digital human faces, or Stand- Ins, that can interact in real time. LifeFX Stand-Ins will be used by Web businesses as life-like customer-service and sales representatives, guides, teachers and entertainers, while consumer applications will include e-mail, instant messaging and chat rooms. The LifeFX technology was originally developed for professional medical applications by the University of Auckland, with which LifeFX has an exclusive, worldwide, perpetual license. LifeFX holds three patents and has four pending. For more information about LifeFX, visit http://www.lifefx.com

Statements made in this news release, other than those concerning historical information, should be considered forward-looking and subject to various risks and uncertainties. Such forward-looking statements are made based on management's belief as well as assumptions made by, and information currently available to, management pursuant to the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. Lifef/x, Inc. is a development-stage company with no current revenue. LifeFX Inc.'s future results may differ materially from the results anticipated in these forward-looking statements because of a variety of factors, including the ability of the company to implement its business strategy; the ability of the company to achieve the intended benefits of this strategy; the ability of the company to complete development of its technology; the ability of the company to achieve success in forging strategic relationships; adoption of the technology by major consumer and commercial Web sites; the ability of the company to commercialize the technology before competitors; the ability of the company to retain key employees; and those factors identified in Lifef/x, Inc.'s annual report on Form 10-KSB for the fiscal year ended December 31, 1999, and its quarterly reports on Form 10-QSB and subsequent reports filed with the Securities and Exchange Commission.