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FREMONT, Calif.

NTT Leasing, Comtec, and NextCom Join Inkra's Virtualization

Revolution, Bringing Total Financing to Over $67 Million

Inkra Networks announced today the second closing of its second funding round with additional strategic investments from NTT Leasing Co. Ltd., Comtec Systems Company, Ltd., and NextCom K.K. These companies represent some of Asia's leading investors and systems integrators in the network and telecommunications products and services industry. The second closing brings Inkra's total funding to date to over $67 million. NTT Leasing, Comtec, and NextCom join Inkra's syndicate of leading investors, which include Battery Ventures, Greenstone Venture Partners, Morgenthaler Ventures, Norwest Venture Partners, and Storm Ventures.

"Inkra is very pleased to add recognized network telecommunications investors and leaders like NTT Leasing, Comtec, and NextCom to its investment team," said Sanjay Dhawan, president, CEO, and co-founder of Inkra Networks. "This strategic investment, along with the recent purchase of Inkra systems by IBM to power its e-Business on Demand service, is a huge endorsement of Inkra's product strategy and vision and is a testament to Inkra's market leadership in network virtualization."

"Inkra pioneered the network service virtualization revolution with its Virtual Service Architecture and HardWall virtualization technology," said Tomoharu Inoue, senior manager of Strategic Technology Investment Department, NTT Leasing Co., Ltd. "Virtualization is viewed in the industry today as an integral step toward achieving on-demand, cost-effective IP service delivery in the data center. Investing in Inkra allows us to help bring an industry-changing technology to the mass market."

NTT Leasing Co. Ltd. (http://www.nttl.co.jp) is a financial subsidiary of Japan's NTT Group. NTT Leasing's business strategy includes seeking out and providing funding to domestic and international start-up companies developing innovative technologies. NTT Group (http://www.ntt.co.jp) is the world's largest provider of telecommunications services with 60 million customers in Japan alone. The company's primary lines of business include: telecommunications, group support, management resources development, and advanced data communications services. Major NTT subsidiaries include NTT East and NTT West, domestic communication carriers; NTT Communications, a global data communications service provider; NTT DoCoMo, a mobile communications carrier; and NTT Data Corp., Japan's largest systems integrator with annual operating revenues of $86.7 billion.

Comtec (http://www.comtec.co.kr/), Korea's leading independent communications and networking systems integrator, provides end-to-end solutions including applications, services, management, and infrastructure to Korea's largest enterprises and service providers. NextCom K.K. (http://www.nextcom.co.jp) is a recognized network integrator in Japan, providing comprehensive service with system-network deployment and other related services including network consultation, product sales, network design, R&D, network building, installation, maintenance, and educational services.

Inkra's 1500 and 4000 VSS products virtualize and integrate the functionality of multiple IP service appliances such as firewalls, load balancers, SSL accelerators, intrusion detection, and VPN systems, into a single, high-performance switch. Backed by HardWall(TM), Inkra's unique hardware-based virtualization technology, a VSS supports multiple dedicated network topologies called Virtual Racks. HardWall guarantees separation, fault-isolation, and system resources for every Virtual Rack on the system. While other multi-function products simply consolidate features, a single VSS delivers the same performance and integrity as hundreds of dedicated IP service appliances, at a fraction of the cost. The VSS enables data centers to dynamically scale-up IP services on-demand, automate management processes, and dramatically reduce ongoing operational costs.

Customers wanting more information about Inkra Networks and its VSS product family should review Inkra's Web site (http://www.inkra.com/) or contact Inkra Networks at 510/623-4200.

About Inkra Networks

Inkra Networks offers the most dynamic, cost-effective virtualized network security, performance, and business continuity service solution in the industry, enabling IT organizations to fully automate service management, and reduce network infrastructure costs by an order of magnitude. Inkra's Virtual Service Architecture (VSA) and Virtual Service Switch (VSS) product family virtualizes and integrates security and performance services such as firewall, load balancing, SSL, and VPN in scalable hardware platforms. Together with HardWall, Inkra's hardware-based virtualization technology, the VSS enables organizations to deliver scalable network services with the same performance and integrity as hundreds of physical appliances, at a fraction of the cost. Inkra Networks is a Red Herring 100 company, a distinction awarded to the top companies contributing to business innovation. Headquartered in Fremont, Calif., Inkra is funded by Battery Ventures, Morgenthaler Ventures, Norwest Venture Partners, Storm Ventures, and Greenstone Venture Partners.

CONTACT: Inkra Networks Dave Roberts, 510/623-4225 dave@inkra.com or Engage PR Meghan O'Driscoll, 510/748-8200 ext. 228 modriscoll@engagepr.com 08:01 EST DECEMBER 13, 2002