Sun Microsystems, Inc. today announced that it has signed a definitive agreement with Diba, Inc., whereby it intends to acquire all of the outstanding shares of capital stock of Diba. Diba is a leading technology supplier for the Information Appliance industry. Together, Sun and Diba intend to aid consumer electronics manufacturers in developing end-to-end solutions aimed at accelerating the delivery of Java™-enabled information appliances into the hands and homes of consumers worldwide.

Subject to completion of the acquisition, Diba will become a new Sun business unit, the Consumer Technologies Group, within Sun's Microelectronics division. This group will work with major consumer electronics companies and manufacturers to provide technologies for building consumer products such as Internet-enabled TVs, Internet-enabled set top and satellite boxes, and smart phones.

"Information Appliances represent an enormous opportunity for manufacturers who can deliver the right products at the right time," said Scott McNealy, chairman, CEO and president of Sun. "By leveraging the Java software platform and Java-enabled microprocessors with Diba's experience in assembling technology components into complete solutions, Sun hopes to enable OEMs to take advantage of the market's vast potential sooner rather than later."

"Sun and Diba plan to offer all of the ingredients necessary to create Information Appliance solutions into tightly integrated packages - resulting in a significant time-to-market advantage for OEMs," said Chet Silvestri, president of Sun Microelectronics. "We expect that such modular, open, standards-based platforms will benefit both OEMs and customers because they will have the power to choose the solutions that best fit their needs."

"This union will be our dream realized: to democratize information access by making it available to the full spectrum of consumers," said Farzad Dibachi, president and CEO of Diba, Inc. "Together, Sun and Diba can work on closing the information gap between the technically-elite and the rest of society. As a recognized industry leader and innovator, Sun has the resources and complementary technologies needed to accelerate the process of getting networked Information Appliances into consumers' hands."

"Diba would bring a leading Internet appliance infrastructure delivery capability to Sun," said Andrew Allison, editor and publisher of Inside the New Computer Industry. "The combination of the Diba expertise, Java and picoJava processors could well give Sun a significant advantage in driving the Information Appliance market."

About the Acquisition

Since its inception in 1995, Diba has been a leading provider of enabling technology for the Information Appliance market. The company was founded and is run by Farid Dibachi, Chairman, and Farzad Dibachi, president and CEO. Diba currently employs 79 people and is headquartered in Menlo Park, California.

Under the terms of the agreement, Sun's Microelectronics division will acquire all of Diba's technology, engineering, products and brands as well as all of Diba's employees. Both Farzad Dibachi and Farid Dibachi will report directly to division President, Chet Silvestri, and will head up the division's new business unit, the Consumer Technologies Group (CTG). Financial terms of the deal were not disclosed. The consummation of this transaction is subject to various conditions to closing, including approval by Diba's shareholders.

Sun plans to divulge specific plans and strategies for the CTG in late August at the Java Internet Business Expo in New York (August 26-28, 1997, Jacob Javits Center).

About Information Appliances

Information Appliances are a new class of computer-based devices for the consumer, business and education markets that combine powerful software applications with the convenience and affordability of household appliances. Diba is working with a wide range of customers and partners to bring Information Appliances to market. Diba has also created a portfolio of Information Appliance concepts that illustrate the broad range of appliances possible with the company's innovative technology. These devices include a financial assistant, a web browser that hooks up to a standard TV, a phone that offers email and fax and a personal travel device.

About Diba

Diba, Inc. is a leading technology provider for the Information Appliance marketplace. Dedicated to making information more accessible to more people, Diba has created an open, end-to-end architecture for the development and delivery of Information Appliances and services. Diba licenses its technologies to consumer electronics companies, appliance manufacturers and service providers. Using Diba's technologies, these companies can quickly and affordably create a wide range of Information Appliances for homes, schools and offices.

About Sun

Since its inception in 1982, a singular vision, "The Network IS The Computer(TM)" 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 .