VocalTec and Cisco to Deliver Hybrid End-to-End IP Telephony Solutions to Service Provider and Carrier Markets.

SAN JOSE, Calif. and HERZLIYA, Israel--(BUSINESS WIRE)--Sept. 29, 1999--

Partners Sign Joint Development, Marketing & Sales Agreement

Cisco Systems Inc. (Nasdaq: CSCO) and VocalTec Communications Ltd. (Nasdaq: VOCL) today announced a joint development, marketing and sales agreement to deliver Internet protocol (IP) telephony solutions to Internet service providers (ISPs), Internet telephony service providers (ITSPs) and carriers.

"This agreement puts both companies in a unique position for offering scaleable, manageable, and flexible end-to-end solutions for customers seeking innovative new services over cost-effective networks," said Mark Winther, group vice president of Worldwide Telecom for IDC. "It combines the best of both worlds by bringing together Cisco's experience as a leading manufacturer of data networking and voice gateway equipment and VocalTec's strong reputation as a software provider and focused research and development in the area of voice services."

"The VocalTec and Cisco agreement is a very positive development," said Thierry Gaillet, marketing director of Value Added IP Services at France Telecom. "These technology leaders understand the importance of open standards to the communications industry. For widescale adoption of VoIP, interoperability has to be a guarantee, not an option. As a carrier, we need standard and open platforms to design new and innovative multimedia solutions for our business customers."

The agreement capitalizes on the Cisco Open Packet Telephony framework for voice services over a data infrastructure and VocalTec's strength as an innovative, fast-moving developer of IP voice services and enhanced solutions such as the VocalTec Gatekeeper(TM). Joint development will be facilitated through the organizations' proven commitment to open standards solutions. Each will be able to promote the other's products via the Cisco New World Ecosystem program and through VocalTec's sales/marketing channels. VocalTec will also become a global reseller and integrator of Cisco's VoIP and data communications equipment, utilizing its expertise in VoIP network design, customization and deployment to create full turnkey solutions.

"Our existing relationship with VocalTec has been very successful; we're pleased to extend and expand it," said Alistair Woodman, director of marketing for Packet Telephony at Cisco Systems. "By making it easier to buy our joint solutions through VocalTec and by working together to provide robust, enhanced services we continue to move quickly to meet customers needs for true end-to-end IP telephony services."

"This relationship continues to evolve, enabling our companies to collectively provide greater value to customers, while moving the entire industry forward," said Dr. Elon Ganor, chairman of VocalTec Communications. "Already, our joint marketing and sales activities are being greeted very enthusiastically. And by working closely on projects, we are setting the stage for new introductions and even greater future success."

Cisco and VocalTec have been working together since both were founding members of the VoIP Forum. VocalTec and Cisco previously announced interoperability between their IP telephony solutions based on the International Telecommunications Union (ITU) H.323 standard. During the initial phase, the companies developed interoperability between the VocalTec Gatekeeper and Cisco voice-enabled gateways. Now underway, the second phase will introduce further interoperability to expedite the acceptance and deployment of new and enhanced services. Interoperable solutions for pre-paid phone-to phone service and additional applications will be made available in the fourth quarter of 1999.

About Cisco Systems

Cisco Systems, Inc. (Nasdaq: CSCO) is the worldwide leader in networking for the Internet. News and information are available at http://www.cisco.com.

About VocalTec Communications

VocalTec (Nasdaq: VOCL) develops and markets award-winning software enabling voice, fax and multimedia communications over packetized networks including private networks and the public Internet. VocalTec pioneered the commercial IP (Internet protocol) telephony industry in 1995 with the first commercial solution. Since, VocalTec has built one of the largest research and development teams dedicated to IP telephony; created one of the largest footprints of users in the carrier and consumer markets; played a leading role in developing industry standards. VocalTec's technical expertise continues to drive the industry forward with end-to-end, standards-compliant solutions for global multi-service deployments for all classes of carriers. For further information, visit VocalTec at http://www.vocaltec.com.

NOTE: VocalTec, Internet Phone, Internet Phone Lite, Internet Phone Call Waiting, VocalTec Ensemble Architecture, VocalTec Ensemble Sound, VocalTec Telephony Gateway, Surf&Call, VocalTec Gatekeeper, VocalTec Network Manager, VocalTec Conference Server, PassaFax and PassaPort are trademarks or registered trademarks of VocalTec Communications Ltd. Other trademarks are the property of their respective holders.

Certain statements contained in this release may contain forward-looking information with respect to plans, projections or the future performance of VocalTec Communications, the occurrence of which involves certain risks and uncertainties, including, but not limited to, product and market acceptance risks, the impact of competitive pricing, competitive products, product development, commercialization and technological difficulties, and other risks detailed in the Company's reports filed from time to time with the Securities and Exchange Commission.