PRESS RELEASES

First Union's eVentures group makes strategic equity investments in emerging, Internet-related technology companies. The eVentures group has invested $7 million in Arcot, leading a group of investors that includes ONSET Ventures, Accel Partners, Raza Ventures, Oracle Ventures, and Novell, Inc.

"Arcot's unique, convenient and mobile secure digital identity solutions address a real security need in the e-commerce marketplace," said Don MacLeod, Executive Vice President of the eVentures Group. "They have a strong management team that has established an impressive list of customers in their key vertical markets, and the company is poised to capture a significant portion of a large and growing market."

Arcot Systems, Inc. provides secure digital identity solutions to leaders in a variety of industries, including online commerce, financial services and healthcare industries. Arcot's software-based solutions provide any-device, anywhere, anytime capabilities for users that demand convenience and mobility. Arcot technology is significantly more secure than existing user ID/password solutions without the burden of smart cards, tokens, or other hardware.

"Arcot is honored to have First Union as the lead investor. We also value the advice and counsel of David Carroll as a member of our Executive Advisory Board," said Chet Silvestri, President and CEO of Arcot Systems. "First Union has a proven track record of selecting corporations that have become industry-leaders. Their support of Arcot technology will help us accelerate our business strategy of broadly deploying secure digital identity solutions."

First Union recently announced that it licensed Arcot Secure Digital Identity to enhance user privacy and confidentiality of web-based financial services.

About Arcot Systems
Arcot Systems, Inc., located in Santa Clara, CA, provides secure digital identity solutions to ensure privacy and reduce fraud in enterprise and Internet transactions. Only Arcot can provide a software-based solution with any-device, anywhere, anytime capabilities for users that demand mobility, security and convenience. For more information, please see our web site www.arcot.com, contact us at 408-969-6100 or e-mail at info@arcot.com.

About First Union
First Union (NYSE: FTU), with $258 billion in assets and stockholders' equity of $14 billion at June 30, 2000, is a leading provider of financial services to 15 million retail and corporate customers throughout the East Coast and the nation. The company operates full-service banking offices in 12 East Coast states and Washington, D.C., and full-service brokerage offices in 41 states and international offices worldwide. Online banking products and services can be accessed through www.firstunion.com.

First Union's eVentures Group makes strategic investments in emerging Internet-related technology companies. This enables First Union to gain early or exclusive access to new technologies and markets, expand Internet products and services, and increase web presence and distribution channels.