Re Agreement

Character Group PLC 3 July 2002 Issued by Citigate Dewe Rogerson, Birmingham Embargoed: 7am Date: Wednesday 3rd July 2002 Character Group secures License Agreement with Polaroid in North America The Character Group ('Character' or the 'Group') today has taken a significant step in the development of its digital imaging business with the signing of an exclusive license agreement with Polaroid Corporation Inc. ('Polaroid'). The agreement, which is initially for three years, between Polaroid and Character's Hong Kong subsidiary World Wide Licenses Limited ('WWL'), grants exclusive rights to WWL to design, develop, manufacture and sell digital cameras (other than single use digital cameras) under the Polaroid brand in the United States and Canada. WWL entered the digital camera market in 2000 with its in-house developed and branded Cool-iCam range. WWL has rapidly become a major supplier within this sector and has already shipped well in excess of 1 million units worldwide. The strength of the Polaroid brand is expected to further enhance WWL's position as a world-class supplier of digital cameras and related digital products. Commenting on this exciting agreement, Richard King, Chairman, said: 'Polaroid is one of the best known and respected names in the industry. With its innovative and strong brands, we look forward to working closely with them to ensure that the brand develops further in this rapidly growing sector.' 'This partnership will underpin our ability to grow our digital imaging product portfolio significantly through both the Polaroid and our own Cool-iCam brand.' It is expected that the Polaroid line of digital cameras will be scheduled for introduction in the last quarter of 2002. 'Polaroid' is a registered trademark of Polaroid Corporation, Cambridge, Mass. 02139 Enquiries: Richard King, Chairman Kiran Shah, Group Finance Director Fiona Tooley/Keith Gabriel The Character Group plc Citigate Dewe Rogerson Tel: 020 8949 5898 Tel: 0121 455 8370 Mobile: (RK) 07836 250150 (KS) 07956 278522 -2- Notes to Editors Market Forecasts Low End Digital Camera Unit Sales Grow to 18.7 Million Units By 2007 In North America A new study from InfoTrends Research Group shows that in 2002, low end digital camera unit sales are expected to reach 9.5 million units in North America. The five-year forecast for low end digital cameras shows that unit sales are expected to grow at a compound annual growth rate of 15% to 18.7 million units in 2007. Revenue is growing at a compounded annual growth rate of 3% to $3.6 billion in 2007. Polaroid Corporation is the worldwide leader in instant imaging. The company supplies instant photographic cameras and films; digital imaging hardware, software and media; secure identification systems; and sunglasses to markets worldwide. Additional information about Polaroid is available on the company's web site at www.polaroid.com. This information is provided by RNS The company news service from the London Stock Exchange