Applied Microsystems Sells Embedded Systems Development Tools Assets to Metrowerks

9/5/2002 - Metrowerks will acquire substantially all of the assets of Applied's embedded systems development tools business. The transaction is subject to approval by Applied's shareholders, among other customary closing conditions. Following the sale of its development tools business, Applied plans to pursue the enterprise data center market through the Company's Libra Networks division, which was formed following the Company's May 2002 acquisition of REBA Technologies.

The consideration to be paid to Applied in the sale transaction will be cash of approximately $3.7 to $3.9 million, which includes payment for certain inventories and tangible assets, as well as all intellectual property related to Applied's development tools business. In addition, Metrowerks will assume certain customer warranty and support obligations, and will offer employment to approximately 25 Applied personnel. The purchase price will be paid upon closing of the sale, except for $500,000 that will be held back for one year to secure certain indemnification obligations.

"This transaction is the result of a thorough assessment of our strategic alternatives, in light of continuing challenges for a company of our size in the development tools markets. We believe it represents a positive outcome for Applied's shareholders and customers, as well as for Metrowerks," said Stephen J. Verleye, President and CEO of Applied. "Metrowerks has global operations and very complementary product lines, so our customers will continue to receive strong support and an increased level of integration with its world-class tools offerings. Once our shareholders approve the transaction, Applied will be free to focus all of its attention and resources on the large and growing enterprise data center market that we have been pursuing since our formation of Libra Networks."

Following the sale of its development tools business and reduction of overall headcount not employed by Metrowerks, Applied will have approximately 20 to 25 employees and will be a pre-revenue development company. Applied plans to pursue additional funding to more fully develop its Libra Networks business.

About Applied Microsystems (
Applied has historically been a developer of tools for use by embedded systems developers. Applied's Libra Networks division represents an expansion into development of hardware and software products aimed at end-user markets - specifically, corporate data centers.

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