Escrow Agreement Dated September 29, 1999

ESCROW AGREEMENT


by and between


State Street Bank and Trust Company of California, N.A.


and


Cisco Systems, Inc.


and


2M Invest A/S 2 This Escrow Agreement is made as of 29 September 1999 by and among State Street Bank and Trust Company of California, N.A. ("Escrow Agent"), Cisco Systems, Inc., a California corporation ("Cisco"), and 2M Invest A/S, a Danish corporation registered with the Companies' Registrar as company no. A/S 209.034, as agent ("Shareholders' Agent") of the Sellers under the Share Purchase Agreement of 14 September 1999, being the former shareholders, the lender under a convertible subordinated loan, and holders of warrants to subscribe for common stock of COCOM A/S, a Danish corporation registered with the Companies' Registrar as company no. A/S 220.522 (the "Company"). Terms not otherwise defined herein shall have the meaning set forth in the Share Purchase Agreement (as defined below), a copy of which is attached hereto.


WITNESSETH


WHEREAS, Cisco and the Sellers have entered into a Share Purchase Agreement of 14 September 1999 (the "Share Purchase Agreement") providing for the acquisition by Cisco of the Company Equity Capital by way of an exchange of shares; and


WHEREAS, pursuant to Section 12 of the Share Purchase Agreement, entitled "Escrow and Indemnification" (the "Escrow and Indemnification Terms"), an escrow fund (the "Escrow Fund") will be established to compensate Cisco for certain Damages (as defined in the Escrow and Indemnification Terms) arising out of any misrepresentation or breach or default in connection with any of the representations, warranties, covenants and agreements given or made by the Sellers in the Share Purchase Agreement, the Disclosure Schedule or any exhibit or schedule to the Share Purchase Agreement; and


WHEREAS, the Shareholders' Agent has been constituted as agent for and on behalf of the Sellers to undertake certain obligations specified herein and in the Escrow and Indemnification Terms; and


WHEREAS, the Escrow and Indemnification Terms provides for an Escrow Fund of 94,019 shares, being ten (10) per cent. of the Cisco Shares, exclusive of the Cisco Shares relating to the Company's treasury stock, such escrow to be held by the Escrow Agent; and


WHEREAS, the parties hereto desire to set forth further terms and conditions in addition to those set forth in the Escrow and Indemnification Terms relating to the operation of the Escrow Fund.


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NOW, THEREFORE, the parties hereto, in consideration of the mutual covenants contained herein, and intending to be legally bound, hereby agree as follows:


1. Escrow and Escrow Shares.


Pursuant to the Escrow and Indemnification Terms and subject to any
Cisco Recapitalization, Cisco shall deposit in escrow with the Escrow
Agent within five (5) business days of the Effective Date (as defined
in the Share Purchase Agreement), 94,019, in writing ninety four
thousand and nineteen, Cisco Shares (the "Escrow Shares") which shall
be registered in the name of the Escrow Agent as nominee for the
Sellers. The Escrow Shares shall be held and distributed by the Escrow
Agent in accordance with the terms and conditions of the Escrow and
Indemnification Terms and this Agreement. The number of Escrow Shares
beneficially owned by each Seller, the percentage interest of each
Seller in the Escrow Fund, the address of each Seller and the taxpayer
identification of each Seller are set forth in Annex 1 attached
hereto.


2. Rights and Obligations of the Parties.


The Escrow Agent shall be entitled to such rights and shall perform
such duties of the escrow agent as set forth herein and in the Escrow
and Indemnification Terms (collectively, the "Duties"), in accordance
with the terms and conditions of this Agreement and the Escrow and
Indemnification Terms. Cisco, the Company and the Shareholders' Agent
shall be entitled to their respective rights and shall perform their
respective duties and obligations as set forth herein and in the
Escrow and Indemnification Terms, in accordance with the terms hereof
and thereof. In the event that the terms of this Agreement conflict in
any way with the provisions of the Escrow and Indemnification Terms,
the Escrow and Indemnification Terms shall control.


-2- 4 3. Escrow Period.


The Escrow Period shall terminate (i) for those matters that are not
expected to be encountered and resolved in the audit of Cisco's
financial statements for its fiscal year because of materiality
considerations or otherwise, at the one year anniversary of the
Effective Date or (ii) for all other matters at the earlier of the one
year anniversary of the Effective Date or the date set forth in an
Officers' Certificate of Cisco, delivered to the Escrow Agent, as
being the date of the issuance of the audited consolidated financial
statements of Cisco for its fiscal year which include the results of
the Company; provided, however, that a portion of the Escrow Fund,
which is necessary to satisfy any unsatisfied claims specified in any
Officer's Certificate theretofore delivered to the Escrow Agent prior
to termination of the Escrow Period with respect to facts and
circumstances existing prior to expiration of the Escrow Period, shall
remain in the Escrow Fund until such claims have been resolved. Cisco
immediately shall deliver to the Escrow Agent a certificate specifying
the Effective Date and, later, shall deliver to the Escrow Agent a
certificate setting forth the date on which the Escrow Period
terminates. Upon the expiration of the Escrow Period, Cisco shall
deliver to the Escrow Agent a certificate setting forth as of the date
of such termination the Nasdaq National Market closing price of Cisco
Common Stock (the "Termination Stock Price").


4. Duties of Escrow Agent.


In addition to the Duties set forth in the Escrow and Indemnification
Terms, the Duties of the Escrow Agent shall include the following:


4.1 The Escrow Agent shall hold and safeguard the Escrow Shares during the
Escrow Period, shall treat such Escrow Fund as a trust fund in
accordance with the terms of this Agreement and the Escrow and
Indemnification Terms and not as the property of Cisco, and shall hold
and dispose of the Escrow Shares only in accordance with the terms
hereof.


4.2 The Escrow Shares shall be voted by the Escrow Agent in accordance
with the instructions received by the Escrow Agent from the beneficial


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owners of such shares. In the absence of such instructions, the Escrow
Agent shall be under no obligation to vote such shares. The Escrow
Agent need not forward proxy information, annual or other reports or
other information received from Cisco with respect to the Escrow
Shares.


4.3 Promptly following termination of the Escrow Period as set forth in
Section 3 hereof, if necessary, the Escrow Agent (i) shall deposit
with the Cisco's stock transfer agent (which is currently Boston
EquiServe LP) the number of Escrow Shares and other property in the
Escrow Fund which is in excess of the amount of such Escrow Shares or
other property (as set forth in a certificate of Cisco) which is
determined to be sufficient to satisfy any unsatisfied claims made by
Cisco and delivered to the Escrow Agent prior to termination of the
Escrow Period, and to pay expenses as provided in Section 9.2 hereof
and (ii) shall cause such transfer agent to transfer such Escrow
Shares and other property to the Sellers. As soon as all such claims
have been re ...