SAN JOSE, Calif., December 9, 2004 - Cisco Systems, Inc., today announced that it has finalized a definitive agreement to acquire privately held BCN Systems, Inc. of Santa Clara, Calif. BCN Systems is a provider of networking software design and has developed a unique networking software architecture for routing applications. BCN's technology and expertise will contribute to the continued evolution of Cisco's routing platforms and will support Cisco's ongoing efforts to speed the delivery of next-generation data, voice and video services over a converged network.

Cisco's right to acquire BCN, and a summary of the transaction's basic terms, were disclosed in Cisco's Form 10-K filed on September 20, 2004. The acquisition was completed today. Under the terms of the agreement, Cisco will pay approximately $34 million in cash for all outstanding equity interests of BCN. In addition, the acquisition price may be increased by as much as $122M depending on the degree to which certain development and product milestones are met after close.

"The addition of BCN's talent to Cisco's world class engineering team will help drive continued innovation for Cisco's portfolio of routing products," said Mike Volpi, senior vice president for Cisco's Routing Technology Group. "BCN's network infrastructure design and thinking are truly unique, and that is good news for our customers and the industry at large."

BCN's architecture will eventually be incorporated across Cisco's broad routing portfolio and will contribute to the evolution of Cisco's next-generation IP technology. The design is entirely complementary to Cisco's existing OS platforms and will allow the optimization of those platforms to further improve reliability and offer enhanced features. In the future, this architecture will also allow additional hardware acceleration for advanced features such as Quality of Service (QoS) and security.

The BCN team will become a part of Cisco's Routing Technology Group, under senior vice presidents Prem Jain and Mike Volpi. BCN Systems was founded in April 2004 and has 45 employees.

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