Cisco Systems to Acquire Airespace; Helps Address Broader Market Segments and Accelerate Delivery of Future Wireless Technologies.

SAN JOSE, Calif. -- Cisco Systems, Inc. (NASDAQ:CSCO), today announced a definitive agreement to acquire privately-held Airespace, Inc. of San Jose, Calif. Airespace is a provider of wireless local area networking ("WLAN") systems, which provide a secure, flexible, and cost effective solution for enterprise and commercial customers. Airespace's product portfolio will expand Cisco's WLAN solution portfolio, accelerating delivery of key WLAN features and capabilities for Cisco's entire customer base. Airespace's product portfolio includes WLAN controllers, Access Points, WLAN Management and Location Software, and Security capabilities, including IDS. The acquisition will allow Cisco to address a broader set of market segments and integrate advanced capabilities into current Cisco products.

Under the terms of the agreement, Cisco will pay approximately $450 million in stock and assumed options for Airespace. The acquisition is subject to various standard closing conditions, including approval under the Hart-Scott-Rodino Antitrust Improvements Act, and is expected to close in the third quarter of Cisco's fiscal year 2005 ending April 30, 2005.

"As part of our global systems approach to networking, we continually look for complementary technology that offers new value to our customers. Airespace is a strong technological and cultural fit with an outstanding team," said Luca Cafiero, Senior Vice President, Data Center, Switching and Wireless Technology Group, Cisco Systems. "Cisco and Airespace are both committed to helping our customers take advantage of the productivity benefits of seamless mobility and computing by accelerating the adoption of intelligent, adaptive WLAN infrastructure."

The WLAN business market is expanding rapidly in part because wireless networks enable customers to move toward a more agile and efficient work environment that fosters collaboration and accelerates the pace of business. Acquiring a proven team of leading WLAN system experts will accelerate time to market for new products and help Cisco to maintain its technology leadership in this area. Airespace's centralized WLAN architecture was designed from the ground up for ease of deployment and use, manageability, and location. Airespace's products include capabilities in areas such as wireless IDS, a broad standards-based WLAN security portfolio, and reduced operational complexity.

With the addition of Airespace's products and technology, Cisco will offer customers the strongest and most comprehensive suite of WLAN solutions in the industry, spanning a wide range of customer sizes and needs. In the near term, Cisco will continue to offer and support both the existing Cisco Structured Wireless-Aware Network framework (SWAN) and Airespace product lines.

Upon close of the transaction, Airespace will join Cisco's Data Center, Switching and Wireless Technology Group, led by Senior Vice President Luca Cafiero. Airespace was founded in July 2001 and has approximately 175 employees.

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