Virtual Prototypes Inc. Completes Acquisition of LOOX Software S.A.

Business Editors

MONTREAL--(BUSINESS WIRE)--Jan. 16, 2001

VP (TSE:VP.)

Acquisition of award-winning company opens the door to

new markets for Virtual Prototypes

Virtual Prototypes Inc. today announced that it has completed the acquisition of LOOX

A memorandum of understanding relative to the acquisition had been signed by the two companies in October. Virtual Prototypes is a leading supplier of collaborative engineering development tools for mission-critical, safety-critical and business-critical applications. Virtual Prototypes acquired 100% of the shares of LOOX Software S.A. for a total consideration of $4M, including cash and stock. In addition, an estimated amount of $2M in cash is payable if certain financial performance criteria is achieved by LOOX over the next 3 years.

"The acquisition of LOOX Software allows VPI to enter commercial markets such as the telecommunications and networking markets," said Philippe Collard, President and Chief Executive Officer of Virtual Prototypes Inc. "Additionally, we intend to combine LOOX's expertise in the development of Java-based graphical applications and VPI's expertise in the area of high-reliability embedded software to enter the development tools market for mobile computing applications."

LOOX Software's flagship product, JLOOX, was awarded the Best Graphical/Multimedia Development Tool Award at the Java One 2000 conference, the world's largest Java developer conference. Furthermore, in December 2000, JLOOX also received the 2nd place award in the Java Report Magazine Writer's Choice Award for the best Class Library, (the 1st place went to Sun Microsystems, the creator of Java). Java is rapidly becoming the language of choice for the development of Web-based business- critical applications. Those awards demonstrate that LOOX has a recognized world-leading technology in this fast growing market.

LOOX already has an impressive list of customers in the telecommunication world such as Alcatel, Lucent, Extreme Networks, France Telecom, ITT Industries, Tellabs, Worldcom, Alstom and many others. It has an equally impressive list of customers in the GIS-based (Graphical Information Systems) market such as the Department Of Transportation for Illinois, Oregon and Utah, and Alcatel CGA Transport.

"We are very enthousiastic about our new relationship with VPI," said Christophe Schneider, President and Chief Executive Officer of LOOX Software S.A. "They really are the ideal partner to help us capture a large share of the Java market.

VPI gives us the advantages of a world leading supplier of software tools along with the image and clout of a public company, and will enable us to become a leader in our field within the telecommunications market. VPI is the perfect accelerator for our growth."

"There are a lot of synergies between LOOX and VPI," added Philippe Collard. "LOOX's product strategy fits in very well with our established objective to provide high-productivity tools to developers of mission-critical, safety-critical and business-critical applications. We believe that this acquisition will significantly contribute to our company's growth in the future and to its continued technological leadership."

About Loox Software, SA

Headquartered in Paris (France) and Burlingame (California), LOOX Software is dedicated to increasing customers' productivity by providing world-class development tools for Web-capable Java-based visualization applications. LOOX Software has over 150 customers worldwide, including leading companies in the telecommunications, GIS and other markets.

About Virtual Prototypes Inc.

Founded in 1985, Virtual Prototypes (VPI) is a leading international supplier of collaborative engineering development tools for mission-critical, safety-critical and business-critical applications. Headquartered in Montreal, VPI has two subsidiaries, Xtend in Salt Lake City and LOOX Software in Paris as well as offices and distributors throughout Canada, the United States, Europe and Asia. VPI has over 400 customers in the aerospace, defense, automobile, telecommunication, transportation and other markets in 27 countries around the world.