Shawn Abbott Named President of New Division That Combines Rainbow iVEA and Digital Rights Management Group

IRVINE, CA, July 27, 2001 – Rainbow Technologies, Inc. (Nasdaq: RNBO), a leading provider of high-performance security solutions for the Internet and eCommerce, today announced the creation of Rainbow eSecurity, a new division focusing on the commercial security industry which combines all of the desktop, software security, and Internet and network infrastructure security solutions into a single business unit. Shawn Abbott, president of Rainbow iVEA, was named president of this new business unit, reporting directly to Walt Straub, Rainbow CEO. Rainbow Technologies now has three core divisions, Rainbow eSecurity for commercial security markets, Rainbow Mykotronx for custom and high-assurance security technologies, and Rainbow Spectria for eBusiness services.

Rainbow eSecurity was created through the consolidation of Rainbow iVEA, which manufactures and markets the Company’s award-winning CryptoSwift eCommerce accelerator product family, and Rainbow’s Digital Rights Management group, which produce Rainbow’s iKey authentication token and the Sentinel family of software security and license management solutions. Rainbow eSecurity will be based in Rainbow’s corporate headquarters in Irvine and has offices around the world.

“Rainbow eSecurity’s core products are market leaders which allow Rainbow the opportunity to market a complete client/server and software security solution to customers who recognize that security is a strategic investment that protects business-critical information and applications,” said Shawn Abbott, president, Rainbow eSecurity. “While Rainbow eSecurity will be operating in a difficult technology business environment, we have outstanding products, technology, intellectual property, market presence and solid customer relationships. I am excited about the opportunities before us.”

“In today’s challenging market, it is essential for Rainbow to adapt our organization to best position the Company for success in the business opportunities of today,” said Walt Straub, president and CEO, Rainbow Technologies. “The creation of Rainbow eSecurity better positions our resources, core products and solutions, and strategic relationships to help Rainbow achieve success in our target markets.”

About Rainbow Technologies, Inc.

Founded in 1984, Rainbow Technologies is a leading provider of security solutions for the Internet and eCommerce. Rainbow applies its core technology to a variety of Internet applications from securing software to the acceleration of secure communication for eCommerce and Virtual Private Networks (VPNs). Rainbow’s products include secure Web server and VPN acceleration boards; anti-piracy and Internet software distribution solutions; PKI-based security solutions; voice, data and satellite security systems; smart cards and USB-based authentication tokens. The company’s headquarters are in Irvine, California, with offices throughout the United States, United Kingdom, France, Germany, Australia, China, India, The Netherlands, Brazil and Taiwan. A network of nearly 80 authorized distributors sell Rainbow products worldwide. For more information, visit the Rainbow Web site at www.rainbow.com. The new Rainbow eSecurity Web site will debut later this summer.

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Rainbow Technologies, iKey, Sentinel and CryptoSwift are trademarks of Rainbow Technologies. All other product and company names are trademarks of their respective organizations.

Statements made in this news release, including those relating to the company’s ability to market a complete client/server and software security solution to customers, customer perception that security is a strategic investment that protects business-critical information and applications, and strength of customer relationships, are forward-looking and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Words such as “will,” “should,” “believe,” “expect,” “anticipate,” “outlook,” “forecast,” and other similar expressions that predict or indicate future events or trends, or that are not statements of historical matters, identify forward-looking statements. Investors should not rely upon forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from our expectations, and the company expressly does not undertake any duty to update forward-looking statements that speak only as of the date of this news release. In addition to the factors set forth elsewhere in this release, the economic, competitive, technological, and other factors identified in Rainbow’s filings with the Securities and Exchange Commission could affect the forward looking statements contained in this news release.




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