Roxio, Inc., The Digital Media Company, today announced that it has signed a definitive agreement to acquire all of the outstanding shares of MGI Software Corp., a leading global provider of visual media software, in a stock-for-stock transaction. The combination will result in the creation of one of the world's largest consumer digital media software companies. Under the terms of the agreement, approximately 2.3 million shares of Roxio stock will be issued to stockholders of MGI at the close of the transaction, yielding an approximate exchange ratio of 0.05269 shares of Roxio for each share of MGI. Based on Roxio's closing price and the exchange rate on December 3, 2001, this represents a purchase price of approximately $32.8 million U.S. or $51.7 million Canadian. On a per share basis, this represents a purchase price of approximately $0.75 U.S. or $1.18 Canadian. The transaction is subject to regulatory approval in Canada and approval by MGI shareholders and is expected to close within 90 days. The Boards of Directors of both companies have voted unanimously in favor of the transaction.