MegaPath Networks Inc. -- a leading provider of broadband access and managed IP network services for businesses – announced it has signed a definitive agreement to acquire TManage, Inc., a leading provider of managed access, VPN and security services. By combining their complementary services, resources and expertise, MegaPath and TManage collectively strengthen their ability to deliver the most comprehensive, cost-effective remote networking solutions available for connecting branch offices, mobile workers and home-based workers to centralized corporate applications and resources.

“Distributed enterprises are increasingly interested in obtaining global network services through a single management source in order to improve organizational efficiencies and reduce operational expenditures,” said John Girard, research vice president at Gartner, Inc. “Managed service providers that deliver integrated solutions, blending broadband access with VPN, security and network monitoring, can reduce the cost and complexity of managing and securing distributed enterprise networks.”

Under the terms of the agreement, MegaPath Networks will acquire privately-owned TManage in an all-stock transaction. Subject to shareholder approval, the transaction is expected to close on or about October 3, 2003. Along with its Pleasanton, CA headquarters, MegaPath will maintain TManage’s Austin, TX operations and several field sales offices located in major U.S. cities. After taking one-time acquisition related charges in the fourth quarter of 2003, MegaPath expects to be EBIDTA positive in Q1 2004 and remain profitable throughout 2004. Based on expected Q4 2003 run rates, MegaPath projects the combined companies will have annualized revenue of over $85 million.

“MegaPath is acquiring a company that is a recognized leader in providing managed remote access services to Fortune 1000 enterprises” said Dr. Harry Taxin, chairman and CEO, MegaPath Networks Inc. “Combining their managed network and security services with our business-class broadband access and private network will allow MegaPath to differentiate itself by providing managed end-to-end networking solutions versus pure last-mile access. In addition, we are gaining exceptional management and data communications experience and a partner that shares our passion for superior customer care and service delivery.”

“Enterprises want flexibility to make connections anytime, anywhere, with good support and independent of providers with uncertain futures. This is particularly true with the rapidly growing number of enterprise employees, who can be rightfully classified as ‘remote workers,’” said Eric Paulak, research vice president at Gartner, Inc. “To reduce complexity in meeting the needs of remote users, enterprises have turned to managed-service providers for secure remote networking solutions.”

Current and prospective customers of both companies can expect to see immediate benefits resulting from the acquisition through a larger nationwide broadband footprint and more extensive managed global remote access, VPN and security services. Through its strategic partnership with iPass (Nasdaq: IPAS), the leading provider of software-enabled enterprise connectivity services, TManage will extend MegaPath’s reach to also include thousands of analog dial-up, ISDN, and public wired and wireless points of presence spanning more than 150 countries, including over 3,500 Wi-Fi and Ethernet hotspots in airports, hotels, conference centers and coffee shops.

“By combining forces, TManage and MegaPath customers should see an improved caliber of managed remote network services,” said Ken Denman, iPass CEO. “As the merged entity continues to be a strategic partner of iPass, we’ll work together to provide large enterprises with the very best wired and wireless managed access and secure connectivity.”

“We have long believed that consolidation was critical to maintaining a market leadership position in managed remote access and networking,” said Carey Balzer, president and CEO of TManage. “We have evaluated many potential combination alternatives over the last year and firmly landed with MegaPath as the clear strategic fit. I’m excited to be part of the combined company and look forward to working with Harry and the entire MegaPath team to offer business customers of all sizes the most comprehensive, cost-effective remote networking solutions in the market.”

Through the TManage acquisition, MegaPath is adding:
Complementary and enhanced service offerings that will further enable it to offer business customers a managed end-to-end solution with business-class broadband access, VPN, security and global remote access services through a single-source provider;
Professional services capabilities that provide comprehensive design, deployment, management and support for remote access and site-to-site managed VPN and security solutions, including the availability of a user-friendly Web portal for managed network services performance monitoring and reporting;
A senior management team bringing deep expertise in data communications, networking, managed services and engineering;
Expanded customer service capabilities including additional levels of technical support and the benefits of redundant NOC and support facilities;
Over 20,000 VPN endpoints across many Fortune 1000 accounts, adding to an already strong customer base totaling hundreds of business customers;
Geographically distributed sales and account management resources which complement MegaPath’s strong centralized sales and support organization, and
Several significant channel relationships that will accelerate an increased focus on serving the rapidly growing enterprise market for managed networking services.


About TManage Ince.
TManage delivers managed access, VPN and security services that enable enterprises to securely and cost-effectively connect branch offices, mobile workers and home-based workers to centralized corporate applications and resources. As a leader in Gartner's Managed Remote Access Magic Quadrant, TManage provides remote networking solutions to several Fortune 1000 clients ranging from computer hardware manufacturers and pharmaceutical companies, to insurance firms, restaurant chains, retailers and financial institutions. TManage is a privately held company founded in 1998 and headquartered in Austin, Texas. For more information, visit www.tmanage.com or call 1-877-929-2967.

About MegaPath Networks Inc.
MegaPath Networks Inc. is a leading IP network services provider supplying high-speed access, network and security services over MegaPath’s private nationwide backbone. MegaPath offers the widest array of high-speed access services, including DSL, full and fractional T1, T3, ISDN and cable, as well as managed network services for IP Virtual Private Networks, security and remote access. MegaPath serves large distributed enterprise companies as well as small, mid-sized and home-based businesses and corporate telecommuters. Using a wide range of technologies and fully-integrated carriers, MegaPath provides service from more than 9,000 Central Office locations, connecting its customers over one of the largest business broadband networks in the country. MegaPath’s broadband services are available to 95 percent of the business population in the mainland United States and Hawaii. The company’s passion for customer care and product excellence is reflected in MegaPath’s award-winning managed services and in its top industry- and user-rated technical support and sales associates.