RAE Systems Awarded $5 Million Contract by U.S. Environmental Protection Agency

SUNNYVALE, Calif. July 19, 2004 RAE Systems Inc. (AMEX: RAE), a leading global developer and manufacturer of rapidly-deployable, multi-sensor chemical and radiation detection monitors and networks for homeland security and industrial applications, today announced that the U.S. Environmental Protection Agency has signed a contract to acquire AreaRAE, toxic gas, Rapid Deployment Kits for use in environmental protection and remediation activities. The contract term is five years and is worth approximately $5 million.

The EPA has the need to respond rapidly to accidents and terrorist events at different locations throughout the nation with state of the art, toxic gas detection technologies. This instrument will allow EPA personnel to detect and identify, in real time, hazardous gases and volatile chemicals from a remote location. The EPA is already using AreaRAEs to monitor incidents and to prevent injury. In November 2003, the agency responded to an incident in which a barge carrying 235,000 gallons of sulfuric acid capsized near Texas City, Texas. Rather than assigning people to monitor the hazardous site, the EPA deployed a wireless network of AreaRAEs to provide around-the-clock data. When ocean water seeped into the barge, it reacted with the metal and sulfuric acid to create a hazardous steam cloud. As the steam cloud spread and dispersed, the AreaRAE network was destroyed but as a result saved monitoring crews from potential injury and death.

The AreaRAE Rapid Deployment Kit (RDK) is designed for quick assessment and management of gaseous threats. The kit includes four wireless, 5-gas, AreaRAE monitors with in-case charging and a Host Controller to provide remote monitoring from a command center that can be located up to two miles away. The AreaRAE can detect gaseous volatile organic compounds (VOCs), Lower Explosive Limit (LEL), Oxygen Level (O2), Hydrogen Sulfide (H2S), and Carbon Monoxide (CO) or up to nine other specific toxic threats including ammonia and chlorine. The units also include datalogging for event documentation. The RDK is available with a global positioning satellite (GPS) option that includes the ability to track and display readings from up to 32 remotely located detectors on a GPS map.

The mission of the EPA is to protect human health and the environment, and we are proud that RAE Systems sensing networks are supporting their work that is vital to all of us, said Robert I. Chen, CEO of RAE Systems. The AreaRAE monitors can be rapidly deployed and redeployed in situations that require a quick and adaptable response and can help response teams gain control over potentially perilous situations by assessing the environment and determining the geographic disbursement of hazardous gases and chemicals.

About RAE Systems
RAE Systems is a leading global developer and manufacturer of rapidly-deployable, multi-sensor chemical detection monitors and networks for homeland security and industrial applications. In addition, RAE Systems offers a full line of portable single-sensor chemical and radiation detection products. RAE Systems products enable the military and first responders such as firefighters, law enforcement and other emergency management personnel to detect and provide early warning of weapons of mass destruction and other hazardous materials. Industrial applications include the detection of toxic industrial chemicals, volatile organic compounds and petrochemicals. RAE Systems products are used by many U.S. government agencies, including the Department of Homeland Security, the Department of Justice, and the Department of State, as well as all branches of the U.S. military, and by numerous city and state agencies. Our end users also include many of the worlds leading corporations in the airline, automotive, computer and oil industries. Our products are used in civilian and government atmospheric monitoring programs in over 50 countries. For more information about RAE Systems, please visit www.RAESystems.com