Sun Microsystems, Inc. (NASDAQ:SUNW) has announced that it signed agreements under which it intends to acquire Integrity Arts, Inc., a San Mateo-based start-up company founded in 1995, for an undisclosed amount.

Subject to closing of the acquisition, the members of the company will join Sun's JavaSoft division.

"The Integrity Arts team represents a unique combination of skills and experience that will offer tremendous benefits to the smart card industry," said Alan Baratz, president of JavaSoft, a business unit of Sun Microsystems, Inc.

"Their combination of object-oriented programming skills, their ability to build trusted systems and virtual machines as well as their knowledge of the smart card environment makes Integrity Arts an extremely strong contributor to the Java™ Card platform."

"We are very excited to become part of Sun's team," said Patrice Peyret, president and CEO of Integrity Arts, Inc. "We believe that with Sun's Java technology and our smart card market expertise, we can effectively serve the card industry in bringing Java to smart cards."

"Gemplus is committed to driving the standardization of smart card operating environments. The decision to sell our majority stake in Integrity Arts to Sun was made because we are convinced that, as the custodian of Java Card platform, Sun is in the best position to achieve that objective," said Marc Lassus, chairman and CEO of Gemplus.

Integrity Arts specializes in the development of virtual machine and operating system technologies for smart cards and software development tools for creating applications written in Java for smart cards.

The Java Card API, a specialized application programming interface, was unveiled by Sun in October 1996. Sun's Java Card API has enabled a new generation of networking capabilities for electronic commerce, network access, affinity programs, gaming applications and authentication -- capitalizing on the power of smart card technology.

Since its introduction, the Java Card API has been licensed by companies representing more than 90 percent of the worldwide smart card manufacturing capacity, including Bull, De La Rue, Gemplus, Giesecke and Devrient and Schlumberger.

The consummation of this transaction is subject to various conditions to closing, including receipt of applicable regulatory approvals. Subject to and immediately following the closing of the transaction, Integrity Arts will become a part of Sun's JavaSoft division.

The above news release contains forward looking statements that involve risks and uncertainties. Sun's actual results may vary materially from the results discussed in the forward-looking statements. Factors that may cause such a difference include those risks surrounding the timely development, production and acceptance of new products and services, Sun's ability to compete in the highly competitive and rapidly changing marketplace and the other risks detailed from time to time in Sun's periodic reports filed with the Securities and Exchange Commission, including, but not limited to, its Report on Form 10-K for the fiscal year ended June 30, 1996, and its reports on Form 10-Q for its fiscal quarters ending September 29, 1996, December 29, 1996 and March 31, 1997.

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About Integrity Arts

Integrity Arts, Inc. was incorporated in May 1995 to bring together valuable European smart card technology and experience and the software excellence uniquely available in the Silicon Valley. Integrity Arts was founded to apply to smart cards among the best of today's software technologies.

About Gemplus

Gemplus is the world leading supplier of smart cards and magnetic cards, providing cards, readers, infrastructure components and personalization services to the telecommunications, banking, pay tv, electronic commerce, loyalty and transportation markets. With revenues in excess of $440 million in 1996, Gemplus has the manufacturing capacity to produce over 900 million cards per year.

About Sun

Since its inception in 1982, a singular vision, "The Network Is The Computer™" has propelled Sun Microsystems, Inc., (NASDAQ "SUNW") to its position as a leading provider of hardware, software and services for establishing enterprise-wide intranets and expanding the power of the Internet. With more than $8 billion in annual revenues, Sun can be found in more than 150 countries and on the World Wide Web at http://www.sun.com .