COSINE COMMUNICATIONS SECURES $58 MILLION FINANCING, BRINGING TOTAL RAISED TO $92.5 MILLION

Preeminent Investment Team Aligns with Company, Forging the Next Wave of Internet VPN Services

REDWOOD CITY, Calif., September 13, 1999 - Cosine Communications, the developer of a new class of IP service delivery solutions that allow carrier-class business IP service providers to realize higher profits, announced today that it has secured $58 million in a fourth round of financing, bringing the total amount raised by the company to $92.5 million. Cosine will use the money to move its flagship product, the IP Service Delivery Platform from development into volume production and to build out the organization for first customer shipments.

Hambrecht & Quist, which is a new investor in Cosine, managed the private placement. Technology Crossover Ventures and Charter Growth Capital leads CoSine's prestigious list of new investors, which include Goldman Sachs, Capital Research Company, Tudor Investment Corporation, Amerindo Investment Advisors, Telesoft Partners, AT&T Ventures and Rader Reinfrank & Co. Most of the company's existing investors - Kleiner Perkins Caufield & Byers, Norwest Venture Partners, Communications Ventures, Crescendo Ventures, Worldview Technology Partners, Lucent Venture Partners and BCE Capital, Inc. - reinvested in the fourth round.

"We are delighted to be a lead investor in the current financing round," said Rick Kimball, a founding managing director of Technology Crossover Ventures (TCV). "Our analysis indicates the market opportunity for IP services delivered over public IP networks will approach $20 billion by the year 2004. We believe the company has the managerial depth and expertise to exploit this extraordinary market opportunity. Furthermore, Cosine's flagship IP Service Delivery Platform is a generation-plus ahead of the competition."

"Cosine's technology represents a significant positive in the IP networking space," said James H. Boettcher, general partner of Charter Growth Capital. "Its deployment will be a major step toward enabling lower-cost IP networks to be as reliable, flexible and manageable as today's circuit-switched infrastructure."

"Cosine not only has an interesting market solution, it also has a management team capable of executing on its vision," said Joe DiSabato, vice president at Goldman Sachs. "This combination is why we rate Cosine so highly among all the emerging companies in the managed IP service market."

"The investment community is tremendously excited about Cosine," said Mark Zanoli, managing director for Hambrecht and Quist's commercial banking practice. "You don't often see such a strong reaction to other investment opportunities. There is unprecedented enthusiasm for Cosine in our company, and it is readily apparent that this enthusiasm is shared by the rest of Cosine's stellar - and growing - team of investors."

"The quality of this investment team is an overwhelming validation of both Cosine's product and strategic direction," said Dean Hamilton, chief executive officer for Cosine "We believe that there is an enormous demand for the next wave of value-added business Internet services such as Virtual Private Networks (VPNs), intranets and extranets. Our IP Service Delivery Platform is the first of its kind to include the scalability, management and processing power needed to effectively deliver these new services with a high return on investment for our Service-Provider customers."

According to Hamilton, the company is on target for delivering the IP Service Delivery Platform to the marketplace. The Cosine product is currently in beta trials in some of the largest carrier networks in the world.

About Cosine Communications

Founded in 1997 and based in Redwood City, Calif., Cosine Communications is the developer of a new class of IP service delivery platforms designed specifically to enable carrier-class service providers, including Competitive Local Exchange Carriers (CLECs) and interexchange carriers, to quickly and reliably turn up services to their wholesale and retail subscribers.

For more information about Cosine Communications, visit the company's Web site at www.cosinecom.com, or contact Suzanne Panoplos at 877-4COSINE.