News Release

Cisco Systems to Acquire Subsidiary of Seagull Semiconductior, Ltd.

Accelerating Development of Next Generation Terabit Performance Routers
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Apr 12, 2000

SAN JOSE, Calif., April 12, 2000 - Cisco Systems, Inc., today announced a definitive agreement to acquire a wholly owned subsidiary of privately-held Seagull Semiconductor, Ltd. The acquired subsidiary comprises Seagull's core technology development team. Based in Herzliya, Israel, Seagull is a leading developer of silicon technology. Seagull's development team brings high-speed silicon expertise to Cisco to accelerate the development of terabit performance routers. This is Cisco's third acquisition in Israel and underscores Cisco's growing global technology development. This acquisition also strengthens Cisco's New World strategy by enhancing its ability to provide next generation IP networking infrastructures to service providers.

Under the terms of the agreement, Cisco common stock and cash with an aggregate value of approximately $19 million will be exchanged for all the stock and options of Seagull's subsidiary. Due to the size of the transaction, Cisco does not expect to take a charge for in-process research and development expenses. The acquisition has been approved by the board of directors of each company and is expected to close in Q4 of Cisco's FY 2000. This transaction is subject to various closing conditions.

Seagull's core development team of about 17 engineers will join Cisco's Public Carrier IP Systems Group within Cisco's Service Provider Line of Business. The team will be relocated to Cisco's existing Herzliya development center, in close proximity to Seagull's existing offices.