Eagan, Minn. -- Silicon Graphics subsidiary Cray Research, Inc. announced
receipt of a letter-of-intent for Sun Microsystems Computer Company to
acquire Cray's Business Systems Division, based in Beaverton, Ore.

  The preliminary agreement, announced this morning, calls for Sun
Microsystems, based in Mountain View, Calif., to acquire the assets of the
Business Systems Division.

  The Cray Business Systems Division designs and manufactures the CS6400
enterprise server, a SPARC/Solaris system that scales to 64-processors and is
Solaris binary compatible with Sun's enterprise server product line. Upon
completion, the acquisition will extend Sun's involvement in enterprise-class
server solutions for large scale mission-critical network computing
applications. In addition, Cray's installed base of SPARC/Solaris customers
will gain access to Sun's sales and support organization.

  "Sun is bringing a whole new generation of technology and products to
market so that customers can build the network 'backbone' infrastructure
necessary to carry them into the next century," said Ed Zander, president of
Sun Microsystems Computer Company. "Sun's new Ultra Enterprise servers,
combined with last month's acquisition of fault-tolerant systems supplier
Integrated Micro Products (IMP) plus the anticipated Cray purchase, give Sun
the broadest, most scalable server line in the industry. We are squarely
positioned to be a major powerhouse for industrial-strength commercial
computing."

  "Cray's SPARC/Solaris server business does not fit Silicon Graphics' and
Cray's long-term MIPS-based product roadmap, but is a good fit with Sun,"
said Cray Research president and chief operating officer Robert H. Ewald.
"Today's announcement reflects our stated commitment to provide a compatible
path forward for our SPARC/Solaris system customers."

  Ewald noted that Silicon Graphics' Challenge product line has been highly
successful in addressing the needs of commercial and enterprise customers,
and that Cray's experience in designing systems for the commercial market
will benefit the Challenge product line.

  Cray Research introduced the CRAY CS6400 system in early 1994, pricing the
computer from about $400,000. The chips used in the CS6400 were upgraded to
85 MHz models in the fall of 1995. In early 1995 Cray was reorganized into
two business units, the Supercomputing Unit and the Business Systems Unit.

  A key strategic element in the development of the CS6400 was to base the
system on Sun Microsystem's SPARC technology -- a decision that provided Cray
with a popular technology free of chip development cost. It also opened the
door, or the architecture so to speak, allowing over 10,000 off-the-shelf
applications to run on the system with little or no modification. Later the
company enhanced the memory management and I/O capabilities and scalability
up to 64 processors.

  Among Cray's customer base for the CS6400 are Citibank, Bank of America,
MCI, Macklanburg-Duncan and the American Automobile Association.

   Upon completion of the acquisition, the Cray Business Systems Division
will report to Sun Microsystems Computer Company's Enterprise Server and
Storage Group.

  "With the acquisition of this division, Sun will gain an extremely talented
group of employees with expertise in delivering scalable and reliable
solutions for high-performance decision support, on-line transaction
processing, business analysis and technical computing," said John Shoemaker,
vice president and general manager of Sun Microsystems Computer Company's
Enterprise Server and Storage Group. "We are deeply committed to supporting
Cray's existing base of CS6400 customers and to providing a continuing flow
of future products for these customers."

  The letter-of-intent is subject to completion of a definitive agreement,
and to the receipt of government approvals. Pending approvals, Sun expects
this transaction to be finalized within 90 days; further details of the
intended acquisition will be released at that time.

  Last month, Sun completed its acquisition of Integrated Micro Products
(IMP), a U.K. based supplier of fault-tolerant computing products for
telecommunications companies. With the acquisition of the Cray Business
Systems Division, Sun will offer a range of systems, from low-end desktops to
scalable enterprise servers to fault-tolerant systems, in a single hardware
and software architecture that is fully Solaris binary compatible.

  An in-depth overview of Cray's business unit can be obtained by ordering
HPCwire article 8120, "CRAY UPS THE VOLUME ON ITS COMMERCIAL SOLUTIONS MARKET
STRATEGY", 12.01.95.