News Release

Cisco Completes Acquisition of Telebit's MICA Technologies

Dial Market Offerings Expand Through Digital Modem Personnel
Oct 25, 1996

Dial Market Offerings Expand Through Digital Modem Personnel and Technology

SAN JOSE, Calif. - October 25, 1996 - Cisco Systems, Inc. today announced it has completed the purchase of Telebit Corp. and its Modem ISDN Channel Aggregation (MICA(TM) technologies.

By the terms of the July 22 agreement, Telebit sold its analog modem business, NetBlazer and MicaBlazerproducts and other assets and liabilities to a new entity formed via a Telebit management buyout, for a $31.5 million promissory note and $3.5 million in redeemable preferred stock. Under the subsequentdefinitive agreement, Cisco then purchased the remaining Telebit Corp., which consisted of Telebit patents, MICA intellectual property and MICA personnel, and assumed the $35 million financing for the management buyout. The total transaction value was worth approximately $200 million in cash, net of option proceeds. The new entity created by the management buyout assumes the name Telebit Corp. with James D. Norrod as president and CEO.

The addition of MICA digital modem technology provides Cisco with high density modem technologies ideally suited for the enterprise networking customer and Internet service provider network environments. By providing higher dial densities, product flexibility, faster time-to-market and investment protection for both new and existing customers, MICA technology enables the simultaneous support of remote access users through both analog modems and ISDN devices.

Cisco Systems (NASDAQ:CSCO) is the leading global supplier of internetworking solutionsfor corporate intranets and the global Internet. Cisco's products---includingrouters, LAN and WAN switches, dial-up access servers and network managementsoftware---are integrated by Cisco IOSTM software tolink geographically dispersed LANs, WANs and IBM networks. Company news andproduct/service information are available at World Wide Web site Cisco is headquartered in San Jose,Calif.

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