TEK Microsystems and QinetiQ Form Commercial Alliance for Product Development and Distribution

CHELMSFORD, Mass.--Jan. 12, 2005--TEK Microsystems, Inc. of Chelmsford MA and QinetiQ's Real Time Embedded Systems Group based in Malvern, UK, today jointly announced a multi-tiered commercial alliance to jointly develop and distribute innovative embedded systems solutions. Together, TEK Microsystems and QinetiQ will provide advanced Field Programmable Gate Array (FPGA)-based system solutions for data recording and high performance embedded streaming applications.

Said Andrew Reddig, President and CEO/CTO of TEK Microsystems, "The combination of digitizer/ DSP FPGA boards and best-in-class FPGA cores from QinetiQ along with Tekmicro's innovative fabric agnostic boards and systems, provides developers with solutions which truly reduce the development time and cost of complex real time embedded systems. The multi-tiered alliance between Tekmicro and QinetiQ is a milestone in our corporate development. Coming off a record year for new orders, we are now able to dramatically increase our revenue

targets for 2005."

Multi-Level Alliance

TEK Microsystems will bundle pre-compiled Quixilica(R) FPGA cores developed by QinetiQ, widely regarded as the best cores in the world, into its Jazz Family of VXS-based products. With the QinetiQ cores, integrating advanced FPGA-based boards and systems is no longer an engineering resource drain. With cores for both simple and complex FIRs, FFTs and other common functions, FPGA programming is dramatically simplified. When bundled with TEK Microsystems' VXS Jazz Family of products, these cores have been demonstrated to further directly reduce customer development time by up to a man month. TEK Microsystems will also independently resell the advanced QinetiQ FPGA cores in the United States.

TEK Microsystems will re-sell the QinetiQ Quixilica(R) VXS family of FPGA-based processing hardware in the United States. The Quixilica(R) VXS family provides a complete range of flexible analogue and digital I/O products in the VITA 41.0 VXS form factor. The Quixilica(R) family couples high performance analogue and digital I/O front ends with a scalable FPGA based processing architecture. QinetiQ and Tekmicro have jointly developed a powerful data recording system based on each company's advanced technologies. This system will be demonstrated at the Bus and Board Conference in Long Beach on January 17-18.

The Real Time Embedded Systems Group of QinetiQ will market and integrate TEK Microsystems' Jazz Family of VXS-based fabric agnostic data recording systems, powerful FPGA-based carrier boards and XMC modules.

"Tekmicro and QinetiQ share a similar culture of customer innovation and commitment," comments Bill Smith, Manager of the Real Time Embedded Systems Group at QinetiQ. "This alliance is a natural fit for us to jointly create, develop, and distribute advanced embedded systems based on our individual expertise. Our alliance with Tekmicro will help us obtain a strong presence in the US markets and a strong partner in technology co-development."

TEK Microsystems is planning to announce its first new product jointly developed with QinetiQ and using the pre-compiled FPGA cores in early February 2005.

TEK Microsystems' CEO/CTO Andy Reddig and Steve Birch CTO of the Real Time Embedded Systems Group at QinetiQ will offer the first public demonstration of their co-developments at the Bus and Board Conference in San Diego. Andy Reddig is a featured speaker at the Bus and Board conference and will discuss, the board business from a small company perspective.

About QinetiQ

QinetiQ (pronounced ki' ne tik as in 'kinetic energy') is Europe's largest science and technology solutions company with unrivalled expertise in the defence and security sectors. Founded In July 2001 from the majority of DERA (Defence

Evaluation and Research Agency) the laboratories of the UK MOD, QinetiQ employs nearly 10,000 people, including many of the UK's leading scientists and internationally acclaimed experts. Today QinetiQ operates in markets as diverse as defence, security, automotive, information technology, health, aerospace, rail, telecommunications, electronics, space, marine, energy and oil & gas.

In late February 2003, The Carlyle Group, one of the world's leading private equity firms, was confirmed by the MOD as the strategic partner to invest in QinetiQ as a stepping stone to its eventual flotation. It holds 31% with the MOD retaining a 56% stake and the balance with staff.

Building on its defence and security expertise, QinetiQ is now developing an impressive overseas customer base. As part of this process it has established a US based sales operation in Arlington to forge closer links with this potentially massive market. In September 2004 it also acquired the businesses of Foster-Miller Inc for GBP 91.8m ($163m) and Westar Aerospace & Defense Group for GBP 72.2m ($130m). Both will become wholly-owned subsidiaries of QinetiQ North America but will remain autonomous, retaining their names, core management teams, employees and US facilities.

About TEK Microsystems, Inc.

Founded in 1981 and headquartered in Chelmsford, Massachusetts, TEK Microsystems, Inc., designs, manufactures and markets a wide range of advanced high-performance boards and systems for embedded real-time computing systems. Tekmicros comprehensive product line includes advanced carrier boards based on widely adopted industry standards and more than 30 XMC cards. These products are used in real-time systems designed for data acquisition, instrumentation, control systems and signal processing in customer applications such as reconnaissance, signals intelligence, satellite telemetry, mine detection, medical imaging, radar, sonar, semiconductor inspection and seismic research.