NetOctave Closes Second-Round Funding of $7.8 Million

Research Triangle Park, NC. Feb 11, 2002 – NetOctave, Inc., a developer of security processors and security accelerator boards for the SSL (Secure Sockets Layer), IPsec (Internet Protocol Security), and IP Storage markets, announced today that it has secured a second round of equity funding of $7.8 Million. The round was led by Intersouth Partners and includes investments by Intel Communications Fund, Kitty Hawk Capital, MCNC, North Carolina Enterprise Fund, L.P and Wakefield Group.

NetOctave’s products employ chip architectures that offload security processing, allowing OEM customers to deliver network equipment that provides line-rate performance for encrypted traffic. The company’s enterprise equipment products-the NSP2000-SSL and NSP3000-IPsec Accelerator Board Product Families-are currently shipping to customers. New security processors for the OC-48 network equipment and IP Storage markets will be delivered later this year.

“NetOctave has established a technology leadership position in the security processor market by delivering a complete PCI-based security acceleration solution,” said NetOctave CEO Rick Hegberg. “The new funding will be used to provide additional support to NSP2000 and NSP3000 series’ customers and accelerate development of industry leading security processors for the OC-48 networking and IP Storage markets in 2002.”

“The Intel Communications Fund made this investment in NetOctave to help facilitate development of high-performance security components,” said Doug Davis, general manager of the Intel Network Processor Division. “We believe that intelligent network services, including security, will continue to become more important to a range of enterprise and service-provider equipment. NetOctave’s products complement Intel’s hardware and software building blocks for programmable network services in network equipment.”

White papers about the security processor market and about NetOctave’s security solutions are available at www.netoctave.com/whitepapers.asp.

About The Intel Communications Fund

The $500 million Intel Communications Fund invests in companies supporting Intel’s key programs and initiatives in voice and data communications, as well as wireless communications and computing efforts. The fund, which makes minority equity investments of typically less than $10 million, is focused on companies developing solutions based on CT Media(TM), Intel(R) Internet Exchange Architecture, Intel(R) Xscale(TM) Microarchitecture and Intel(R) Personal Internet Client Architecture. The fund, created in 1999, is managed and controlled by Intel. For more information, visit www.intel.com/capital/investment/icf.htm.

About NetOctave, Inc.

NetOctave, Inc., The Network Security Processor Company, builds security processors and security accelerator add-in cards for the SSL, IPsec, and IP Storage markets. NetOctave employs innovative silicon architectures to deliver market-leading system-level performance for OEM manufacturers of network equipment. NetOctave’s security products deliver complete protocol offload at line rates, enabling high-speed performance for encrypted traffic. NetOctave is a fabless semiconductor company headquartered in Research Triangle Park, NC. The Company is funded by Intel Communications Fund, Intersouth Partners, Kitty Hawk Capital, MCNC, North Carolina Enterprise Fund, L.P., and Wakefield Group. More information about NetOctave can be found at www.netoctave.com.

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