AWM Investment Company, Inc. - News Release

NEW YORK, Nov. 3 /CNW/ - AWM Investment Company, Inc. ("AWM") announced today that three funds advised by it have acquired additional shares ("Shares") and warrants of Xebec Adsorption Inc. ("Xebec") as part of a private placement from treasury of units at a price of Cdn. $0.40 per unit, with each unit consisting of one Share and a warrant to acquire one Share.

The three funds (the "Funds") are the Special Situations Fund III QP, L.P., the Special Situations Private Equity Fund, L.P., and the Special Situations Cayman Fund, L.P.

2,500,000 Shares of Xebec, and warrants to purchase 2,500,00 Shares, were purchased by the Funds, representing approximately 10.5% of the outstanding Shares subsequent the completion of the offering and assuming the exercise of all warrants issued under the offering held by the Funds . The Special Situations Fund III QP, L.P. purchased 1,750,000 Shares and warrants to purchase 1,750,000 Shares, the Special Situations Private Equity Fund, L.P. purchased 200,000 Shares and warrants to purchase 200,000 Shares, and the Special Situations Cayman Fund, L.P. purchased 550,000 Shares and warrants to purchase 550,000 Shares.

Following this purchase, the Funds own 10,744,900 Shares of Xebec, and warrants to purchase 4,166,700 Shares, representing approximately 30.2% of the outstanding Shares assuming the exercise of all warrants held by the Funds. The Special Situations Fund III QP, L.P. holds 7,542,162 Shares and warrants to purchase 2,776,246 Shares, the Special Situations Private Equity Fund, L.P. holds 866,666 Shares and warrants to purchase 533,333 Shares, and the Special Situations Cayman Fund, L.P. holds 2,336,072 Shares and warrants to purchase 857,121 Shares. The Funds own the securities, and AWM controls such securities.

AWM holds the Shares on behalf of the Funds for investment purposes. AWM and/or the Funds may purchase additional Shares and/or warrants and/or other securities, or dispose of Shares and/or warrants and/or other securities, of Xebec from time to time as circumstances warrant. AWM and the Funds may be considered to act jointly or in concert.

AWM's address is 527 Madison Avenue, Suite 2600, New York, New York  10022.

For further information:

Rose Carling at 212-319-6670