Imagine Communications Closes $15 Million Venture Capital Round to Accelerate Deployments and Growth in Digital Video Markets

Funding Led by Court Square Ventures, with all Previous Investors Participating Court Square Ventures’ Managing General Partner James B. Murray Joins Imagine’s BOD

SAN DIEGO, Calif . — Imagine Communications, developer of the industry’s most powerful and scalable digital video platform, today announced the completion of a $15 million Series B round of expansion financing, bringing total venture capital investment in Imagine Communications to more than $24 million. The round was led by Court Square Ventures, a top venture capital firm, with participation by all existing investors including Columbia Capital and Carmel Ventures. The new financing will be used to accelerate Imagine’s growth and commercial deployments in digital video markets with its breakthrough VBR/Statmux (Variable Bit Rate and Statistical Multiplexing) technology, which offers 50 percent more bandwidth and improved video quality of digital video signals.

“The timing of this funding is critical as service providers launch and scale HDTV, VOD, SDV (Switched Digital Video), IPTV and other advanced PersonalizedTV™ services and applications. These services will become key for operators to compete in an environment that includes Cable, DBS, Telco and Wireless service providers,” said Imagine’s President and CEO, Jamie Howard. “As the demand grows for these new services, Imagine’s solutions will allow operators to rapidly deploy and scale while delivering optimal video quality with bandwidth efficiency.”

The company also announced that James B. Murray, Jr., the managing general partner at Court Square Ventures, has been appointed to its board of directors.

Howard continues, “I am thrilled to welcome Jim Murray, a highly respected leader in the venture capital community. His business savvy and extensive experience will be a strong addition to our world class board of directors.”

Court Square Ventures’ James Murray commented, “We are excited about Imagine and its prospects for dramatically enhancing video delivery for cable operators as well as other global service providers.”

“Carmel Ventures is increasing its investment in Imagine because Imagine’s technology has repeatedly proven to be superior to other solutions that make similar claims regarding bandwidth efficiency and video quality, and they’ve demonstrated to operators that their solution is the most cost-effective approach to bandwidth optimization,” said Ori Bendori, general partner of Carmel Ventures.

“Since our last investment, Imagine has proven its ability to innovate and execute on a game-changing vision and business and product strategy,” stated Phil Herget, partner at Columbia Capital. “Imagine is well positioned for tremendous growth and success.”

Imagine is scheduled to commercially launch its first product in the fourth quarter of 2007. The company’s innovative solutions will enable system operators to dramatically improve bandwidth efficiency without sacrificing video quality, allowing them to rapidly deploy advanced digital video services such as HDTV, VOD and SDV. Imagine’s software architecture runs on carrier-grade, off-the-shelf hardware and plugs seamlessly into existing infrastructure.