Dot Hill in Negotiations to Acquire Ciprico IPs

Dot Hill Systems Corp. is in negotiations with Ciprico Inc. to purchase Ciprico’s RAIDCore and NAS (Networked Attached Storage) intellectual property assets. Ciprico previously announced that, on July 28, 2008, it filed a voluntary petition pursuant to Chapter 11 of Title 11 of the United States Code (the ‘Bankruptcy Code’) in the United States Bankruptcy Court for the District of Minnesota (the ‘Bankruptcy Court’).

Under the proposed asset purchase, Dot Hill would acquire all of Ciprico’s rights to the RAIDCore technology. In addition, it would acquire a joint ownership interest with Ciprico in the NAS intellectual property.

Dot Hill is also negotiating to provide Ciprico with a debtor-in-possession (DIP) loan in an amount not to exceed $225,000. The terms of the DIP Loan would provide Dot Hill with a first priority security interest in all of Ciprico’s assets.

The proposed Asset Purchase and DIP Loan remain subject to Bankruptcy Court approval. Ciprico has filed motions seeking authority pursuant to Section 363 of the Bankruptcy Code to approve the proposed Asset Purchase pursuant to certain proposed sale procedures, and separately a motion to approve the DIP Loan from the Company.