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Smartmatic Corporation and Sequoia Voting Systems move to align corporate structures with future business goals

Smartmatic Corporation and Sequoia Voting Systems move to align corporate structures with future business goals




Boca Raton, Florida December 22, 2006 - Smartmatic Corporation and Sequoia Voting Systems will be charting new corporate directions in 2007 that will position both companies for enhanced growth in the world marketplace.

Smartmatic Corporation today announced that it has withdrawn from the U.S. Committee on Foreign Investment in the United States (CFIUS) review process with the approval of CFIUS, a U.S. government inter-agency group led by the U.S. Department of Treasury.

The company also today announced its intent to seek an acquirer for Oakland-based Sequoia Voting Systems, a leading provider of voting technology in the United States that Smartmatic has owned since March 2005.

"We are very proud of our company?s performance in U.S. and international elections, and the technological achievements and financial growth that both Sequoia and Smartmatic have enjoyed since our partnership began almost two years ago," said Antonio Mugica, chief executive officer, Smartmatic. "Sequoia?s customer base has grown substantially and its revenues have increased four-fold. However, given the current climate of the United States marketplace with so much public debate over foreign ownership of firms in an area that is viewed as critical U.S. infrastructure ? election technology - we feel it is in both companies? best interests to move forward as separate entities with separate ownership. As part of this process, we plan to sell our Sequoia Voting Systems ownership."

Smartmatic and Sequoia expect significant interest in the purchase of the company, given Sequoia?s strong market position and track record of performance.

"Sequoia?s equipment meets the highest industry standards for security and accuracy, and we believe Sequoia is well positioned to become the undisputed leader in the U.S. elections market," said Jack A. Blaine, president, Sequoia Voting Systems. "As it has for the past 100 years, Sequoia will continue to provide the same excellent level of service and innovation that the company?s customers have come to know and expect."

On October 29, 2006, Messrs. Mugica and Blaine announced that the companies had voluntarily submitted a notice to CFIUS in order to allow the U.S. Government to review Smartmatic?s acquisition of Sequoia and put to rest the baseless rumors about the parent company?s ownership.

No foreign government or entity has ever held an ownership stake in Smartmatic Corporation or Sequoia Voting Systems. Smartmatic is owned primarily by four young entrepreneurs and their families. Smartmatic?s chief executive officer and majority investor Antonio Mugica is a dual Spanish/Venezuelan National and the other three main investors are a dual French/Venezuelan National and two Venezuelan Nationals. Sequoia Voting Systems is a 100 year-old American company based in Oakland, California.

As part of the CFIUS process, Smartmatic and Sequoia voluntarily provided significant information to CFIUS on all aspects of the two firms? businesses and ownership, and the security and integrity of Sequoia?s voting solutions.

The U.S. Election Assistance Commission (EAC) has not raised any issues about Sequoia?s equipment in the 2006 elections, and the EAC requires that all voting systems receive extensive federal and state testing. Specifically, significant federal, state and local electoral safeguards were in place during the 2006 elections, and even more robust federal safeguards will come into effect in 2007. Sequoia takes these requirements very seriously and has complied with all applicable federal and state requirements.

"Sequoia and Smartmatic are two great companies with very bright futures and we do not want the companies? ownership to be a distraction," said Mugica. "Therefore, we prefer to sell Sequoia to U.S. interests in order to give both companies the best possible futures."

Facts about Smartmatic & Sequoia
Sequoia?s performance

Secure:
In the November 2006 election, 16 states and the District of Columbia successfully used Sequoia?s electronic, touchscreen, and optical scan voting systems.

Auditable: Over 51% of Sequoia?s electronic voting systems used a Voter-Verified Paper Audit Trail (VVPAT) ? a widely recognized important safety feature that ensures the reliability and auditability of the systems. For the remaining systems, upgrades are available at the time the customers decide to adopt VVPAT technology.


Smartmatic performance


Certified: In the last international election (December 2006 Venezuelan Presidential election), Smartmatic?s systems performed flawlessly, and the results were certified by the National Election Commission (CNE), as well as by international observers from the Organization of American States and the European Union.

Reliable: Perhaps, more important, the results were accepted by all relevant political parties and players as accurate and as representing the will of the Venezuelan people.


Voter-Verified Paper Audit Trail (VVPAT) Pioneers


Pioneers: Both Smartmatic and Sequoia were the first companies to successfully implement an electronic voting system with a VVPAT internationally (Venezuela) and the United States respectively.

Accuracy: Sequoia?s VVPAT, used statewide in Nevada for the 2004 presidential election, produced the lowest residual vote rate in the country at 0.3%.


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About Smartmatic
Smartmatic is a multinational company that specializes in the design and end-to-end deployment of complex purpose-specific technology solutions. With an unsurpassed technology base, continuous innovation, and quality in processes and results, Smartmatic is organized around three business areas: Electronic voting systems, intelligent and integrated security systems for large enterprises and governments, and advanced solutions for people registration and authentication for a wide range of government applications.

Smartmatic is a privately held company with offices in the US, Mexico, Venezuela, Barbados, Spain, Philippines and Taiwan. It has more than 200 employees worldwide. Its capacity for innovation and wide range of products and services have earned Smartmatic extensive recognition in the technology community worldwide.

Contact Information:
For additional information on this press release, please write us to
press@smartmatic.com.

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About Sequoia Voting Systems
Sequoia Voting Systems is an American company, based in Oakland, California with a 100-year history of providing accurate, reliable, state-of-the-art voting solutions dating back to the nation's first lever-based mechanical voting equipment in the 1890s. Sequoia provides election technology, services and support to state and local government including precinct-based optical scan ballot readers, high-speed central count optical scan ballot readers, ballot layout and printing services, and full-face and paginating electronic voting equipment with optional printers that produce voter verifiable paper records. The company has hundreds of customers throughout 16 states and the District of Columbia.

Contact Information:
Michelle M. Shafer
VP, Communications & External Affairs
mshafer@sequoiavote.com