Cisco Capital Update Federal Leasing

1. Cisco Capital Update Federal Leasing COMSTOR teams with Cisco Capital for Federal Leasing Program Overview Mike Mankin, Federal Leasing Manager

2. Cisco Capital • Wholly-owned Cisco subsidiary since 1996 • Leader in Cisco Systems end-to-end financial services • Alignment of economic objectives • $4.0B+ in assets • $1.5 B WW Lease Volume (Over $1B US) • $4.9 B WW Channel Financing • $100m WW Remarketed Equipment • Global market presence with coverage in over 40 countries • Alignment with technology innovation (Market Residual Value) • Payment structures flexibility • Enable larger business solutions • Integrated element in Cisco’s business strategy • Dedicated programs to the Public Sector Market (Federal, State & Local) • Over $300M in Federal Leases active

3. Our Vision To deliver Cisco’s Customers, partners and resellers preferred access to attractive and flexible financing solutions designed to enable acquisition of technologies while help maximize company's profitability in the adoption and distribution of business critical solutions

4. Channel Financing Commercial or Federal PO financing A/R financing GSA Schedules Laboratory Lease Foundation Advantage Program Bid structures support Federal Assignment of Payments Full Sale Credit for Leases Leasing to the Agencies Federal Contract Vehicles Finance Lease - LTOP Operating lease - LWOO Step and delayed payments Technology Refreshment Advance Technology programs and promotions Competitive trade in programs Customized to Federal budget FLEXIBILITY Offerings at a Glance For Channels For End-Customer

5. Aggressive Cisco Capital Lease Programs • End Customer Benefits • Reduced total cost of ownership • Leverage budget dollars • Budget control • Accelerate technology adoption • Provides technology protection • Competitive lease rates • End Customer Offerings • Traditional lease offerings – LTOP, LWOO • Advanced technology lease programs • Several documentation approaches • GSA Lease documentation • Cisco bundled services • Services only financing

6. Cisco Capital Program Offering • Conforms to current FY2005 GSA Leasing T&Cs • Term length: 13 – 60 month terms • Available to all Cisco prime contractors • Size: $100,000 to $100M • T&C’s: SIN 132-3 • Contract Vehicles – GSA Schedule or almost any BOA • Protection: Termination for Convenience and Termination for Non Availability of Annual Funding is included • Flexibility: Technology Refreshment / Upgrades / Purchase available anytime • Flexibility: Bundle Services and non Cisco equipment • 4 End of Lease Options - Purchase; or Renewal; or upgrade by Technology Refreshment; or Terminate/ Return of equipment • Cisco Foundation Advantage Program applies for Federal • Sale Credit to the Federal AM and the Reseller for Leases

7. The 2 Federal payment strategies: • Lease to Ownership Plan “LTOP” • Installment & Services Purchase Plan – Uses Capital funds • Purchase Title passes upon final payment • Multi Year Maintenance Plans • Lease With Option to Own “LWOO” • All variations - Operating Lease with option to own - Lease payments with fixed purchase option buyout, Step Lease, Buyout anytime at Fair Market Value (FMV). • Uses Operating and Maintenance (O&M) funds • End of Term Options – Return, Renew, Buyout, Tech Refresh • Technology Refresh Upgrade before or at end of term

8. Capital vs. Operating Lease LTOP vs. LWOO Purchase Dollars $1,000,000 $1,000,000 LTOP LWOO $ Savings $ Savings 36 72 months

9. Active Agency Leases Organization Departments and Agencies • DOD • Homeland Security • Executive Departments • Veterans Administration • Other Civilian Agencies • Defense Information Systems Agency (5 deals), DITCO, Army Core of Engineers (3), Army Ft Belvoir, Air Force ACC, USAFE, PACAF, NAVY NMCI, NAVY Office of Naval Research, DLA, National Guard • FEMA, Inspector General, Nuclear Regulatory Commission, Department of Energy Laboratories, Coast Guard • US Senate, GAO (3 deals) • VA deals - VA VISNs – 3, 7, 8, 9, 10, 12, 14, 16, 17, 21, 22, 23 • Center for Disease Control, Department of Treasury (IRS), GSA, Federal Reserve System (11 deals), Bureau of Reclamation, Department of Agriculture, NASA, NIH, SEC, Smithsonian, Job Corps, Customs

10. LTOP Example – GSA Headquarters • GSA Purchase price = $3,333,541 • Intent to Own but not enough Money to Purchase • Will consider LTOP step payment structure • 1st annual payment = $ 447,000 delayed 3 Months to July • 2nd, 3rd Annual Pmt = $ 1,610,000 • Title passes upon receipt of final payment • Contract Vehicle – GSA Schedule

11. LWOO Example – DOD • Purchase price = $ 3,103,980 • Customer has no Capital money but has O&M • Vision for Technology Refreshment not ownership • Will consider LWOO and step payment structure • 41 Month Term with minimal down payment plus 3 payments in future Fiscal Years • 1st Annual payment $ 200,000 • Subject to Annual appropriations renewal • 2nd, 3rd, 4th Annual pmt $ 977,256 • At 41 months – Renew the lease at reduced price or Purchase or Tech Refresh upgrade or return with out further obligation • Contract Vehicle – DITCO - GSA Schedule

12. Channel Reimbursement Example – LTOP • GSA Purchase price = $3,333,541 • 1st annual payment = $ 447,000 delayed 3 Months to July • 2nd, 3rd Annual Pmt = $ 1,610,000 • Title passes upon receipt of final payment • Contract Vehicle – GSA Schedule • Sell at 7.0% vs Buy 6.0% rate • Program margin to Partner = $30,123

13. Cisco Capital Update for FY 2006 • FY 06 Federal - One Team, One Goal • Solves the Budget issue – Spread out the payments in multiple years • LTOP/LWOO - GSA or customized Terms and Conditions through KeyBank – Key Government Finance • Cisco Capital partners through COMSTOR • New Cisco Capital Products • Channel Reimbursement Program with SI’s • 2 – Tier Financing capability, Distributors, Alaska Native Corps’s or 8(a) • 0% Financing on some SW – CSA - Cisco Security Agent • Foundation Advantage Program with Residuals from Cisco Capital for Operating Leases (LWOO) • Cisco Capital commercial MLA with Federal Rider to meet Federal Termination protections • Multi Year SMARTnet programs • Cisco Lab Lease – 24 month term, 1% of list per month HW, • 1.5% of list for SMARTnet. jkbarber@cisco.com • Foundation Advantage Programs – Non Cisco Trade Ins • How to Engage – COMSTOR – David Ambrose – 703-345-5195 • Cisco Capital for Federal – Mike Mankin 703-484-5133 for leasing Proposals