Bluepoint and Sed to Jointly Develop Embedded Cash Register.

Business Editors & Technology Writers

LOS ANGELES--(BUSINESS WIRE)--July 31, 2001

Bluepoint Linux Software Corp. (OTCBB:BLPT) today announced that it has signed an agreement with Shenzhen Sed Logic Business Equipment Co. Ltd. (Sed), the largest POS (Point of Sale) hardware supplier in China.

According to the agreement, the two parties will jointly develop a Bluepoint Embedded Linux-based cash register. The cash register will be used in the government tax control project. Bluepoint will provide Sed with Bluepoint Embedded Development Kit, provide Bluepoint Embedded System development training courses to Sed engineers, and provide technical support, upgrade and consulting services.

Sed will pay Bluepoint for the Bluepoint Embedded development system, training courses, and project development fee. Once the development is complete, Sed will also pay Bluepoint license fees for each embedded cash register.

Shenzhen Sed Logic Business Equipment Co. Ltd. (http://www.sedpos.com/) is a joint venture between Shenzhen Sed Industry Co. Ltd. (http://www.sedind.com/) and a U.S. company, Logic Controls Inc. (http://www.logiccontrols.com/). Sed produces more than 20,000 POS systems per year. Eighty percent of its products are exported. Sed also supplies POS components to other POS markets in China, such as Haixin, Lipmans, and Xinuoda. Logic Controls is the component supplier to well-known companies such as IBM, NCR, and EPSON.

Bluepoint Linux Software is the developer of Chinese Linux operating systems, named Bluepoint. The company is a leading provider of Linux platform technology and embedded Linux system solutions in the Chinese market. The company develops embedded Linux systems for handheld devices (such as PDAs), Set-top box, WebTV, Thin-Clients and other applications.

Forward-looking statements in this release are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, continued acceptance of the company's products and technological changes, the company's dependence upon third-party suppliers, intellectual-property rights and other risks detailed from time to time in the company's periodic reports filed with the Securities and Exchange Commission.