Cisco Systems to Acquire Tasmania Network Systems; Extends Cisco's Commitment to Network Caching Market.

SAN JOSE, Calif.--(BUSINESS WIRE)--Oct. 26, 1999--

Cisco Systems, Inc. today announced a definitive agreement to acquire privately-held Tasmania Network Systems, Inc. of San Jose, Calif. Tasmania is a leading developer of network caching software technology. This acquisition underscores Cisco's commitment to offer its service provider and enterprise customers leading edge content networking services, including content-aware network caching. Tasmania technologies will be integrated into Cisco's current Cache Engine 500 series products.

Under the terms of the agreement, Cisco common stock worth $25 million will be exchanged for all outstanding shares, warrants and options of Tasmania. In connection with the acquisition, Cisco expects a one-time charge against after-tax earnings of up to $.01 per share for purchased in-process research and development expenses in the second quarter of fiscal 2000. This acquisition has been approved by the board of directors of each company and is subject to certain conditions, including shareholder approval by Tasmania shareholders.

Network caching technology accelerates content delivery and overall network performance by localizing traffic patterns. It uses the intelligence of the network to move frequently accessed content closer to the user, increasing the cost effectiveness and performance of data networks.

Tasmania was founded in 1999. The 16 employees will become part of Cisco's new Content Services business unit in the Enterprise line of business.

Cisco Systems, Inc. (NASDAQ: CSCO) is the worldwide leader in networking for the Internet.

This release may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company that involve risks and uncertainties. Readers are cautioned that these statements are only predictions and may differ materially from actual future events or results. Readers are referred to the documents filed by Cisco with the SEC, specifically the most recent reports on Form 10-K and 10-Q, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including risks associated with acquisition strategy, dependence on new product offerings, competition, patents, intellectual property and licensing, future growth, rapid technological and market change, manufacturing and sourcing risks, Internet infrastructure and regulation, international operations, volatility of stock price, financial risk management and potential volatility in operating results, among others.

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