Gensym Announces Proposed Rights Offering.

Business/Technology Editors

BURLINGTON, Mass.--(BUSINESS WIRE)--Aug. 24, 2001

Gensym Corporation (OTC Bulletin Board: GNSM), a leading provider of software and services for expert operations management, announced today that it has filed a registration statement with the U.S. Securities and Exchange Commission relating to a proposed offering of its common stock through the distribution of subscription rights to all of its shareholders and holders of vested stock options.

Under the terms of the offering, which remain subject to change, each shareholder would receive, at no charge, 1.25 subscription rights to purchase one share of common stock for every share of common stock owned as of the record date for the distribution. Additionally, holders of Gensym stock options would receive, at no charge, 1.25 subscription rights to purchase one share of common stock for every shares of common stock underlying the vested portion of those stock options as of the record date for the distribution. The subscription price and record date would be established immediately prior to the commencement of the rights offering, which is anticipated to begin as soon as the registration statement relating to the offering is declared effective. The offering is expected to have a 20-business day subscription period for exercise of rights. An over-subscription privilege would be offered to shareholders and vested optionholders to purchase shares not subscribed for pursuant to the basic subscription rights. The net proceeds of the offering are to be used for working capital and other general corporate expenses, including expenses associated with Gensym's recently announced restructuring.

Commenting on the offering, President and CEO Lowell B. Hawkinson said, "The rights offering is designed to provide additional working capital and liquidity to the Company by giving each shareholder and vested optionholder a chance to buy additional shares and the opportunity to avoid dilution of their ownership interests. The Company is in the process of seeking commitments to purchase shares in the rights offering from directors and other shareholders in order to provide the Company with a minimum subscription amount."

A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State.

About Gensym:

Gensym Corporation (www.gensym.com) is a leading provider of expert software products that model, simulate and manage critical operations across a broad range of industries. Gensym software is powered by G2(TM), the company's unique, high-performance reasoning-engine technology. Since 1986, Gensym has sold more than 15,000 product licenses to organizations in communications, manufacturing, aerospace, transportation, government and other industries. Gensym and G2 are registered trademarks of Gensym Corporation.

This news release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such risks and uncertainties include, but are not limited to, the failure to successfully consummate the proposed rights offering, the failure of the restructuring and reorganization to improve Gensym's profitability, the failure to successfully negotiate strategic business combinations or partnerships relating to the NetCure product, the rapidly changing nature of network management technology, the introduction of new hardware or software products into the marketplace, changes in current hardware or software with which G2 interoperates, intensity of competition from other solutions vendors, as well as other risks included on Form 10-Q for the quarter ended June 30, 2001, as filed with the Securities and Exchange Commission and available online at http://www.gensym.com. Although Gensym believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Gensym Corporation disclaims any intent or obligation to update any forward-looking statement.