FOR IMMEDIATE RELEASE

Netifice Communications Merges with MegaPath to Create Leading Provider of Managed IP Services

Establishes Netifice As The Largest U.S. Managed Service Provider With Over $125 Million In Revenue

COSTA MESA, CA - February 21, 2006 - Netifice Communications Inc. and MegaPath Networks, Inc., leading providers of Virtual Private Network (VPN) solutions and other managed IP services to businesses worldwide, today announced that they are merging. The transaction, which involves Netifice's acquisition of MegaPath for an undisclosed amount in stock and cash, includes $35 million in additional funding from existing investors of both companies.  The merger establishes Netifice Communications as the largest independent provider of managed broadband VPNs in North America, with over $125 million in revenue and the only U.S. Managed Service Provider capable of providing a full range of integrated security, remote access and site-to-site IP VPN services, including SSL, IPSec and MPLS.

"This is an important next step in our strategy to grow the business through organic sales, product expansion and acquisitions," said Craig Young, Chairman and Chief Executive Officer of Netifice Communications. As a leading provider of managed IP data, voice and security services, Netifice is now in a powerful position to leverage the size and scale this combination provides, and our solid financial foundation allows us to further expand our market leadership. This merger brings together two highly competitive managed IP service companies with a shared strategic vision and a passion to serve our customers."

Netifice is now positioned to capitalize on the expanding U.S. Managed IP VPN and Hosted IP Voice services markets, which according to IDC Research are expected to grow at a Compounded Annual Growth Rate (CAGR) of over 26% and reach $24.6 billion  between 2005 and 2008. The merger also strengthens Netifice's service offerings by combining the best of each company's security, VoIP and managed network services and significantly expands the company's distribution channels including direct sales, wholesale, integrators and Value-Added Resellers.
 
"This combination is a 'win-win' for both companies, as it enables us to provide customers a wider selection of innovative managed IP services, greater network reach and unmatched expertise. In doing so, it enhances our ability to serve both small-to-medium size businesses and large enterprises," said Brian Service, Chief Executive Officer of MegaPath. "The MegaPath team is excited about the possibilities of what can be achieved by combining the strengths of our two companies."

Customers will benefit from the combined companies' wide range of service offerings, expanded resources and robust network infrastructure. The merger also establishes one of the industry's largest deployment and support capabilities for customers with distributed offices and workers throughout North America. Netifice is now the undisputed leader in key vertical markets, including retail, manufacturing, healthcare and financial services/insurance.

As more and more companies are looking to deploy business critical applications to their remote locations and workers, they require reliable, high performance networks, but are often deterred by challenging network implementation and management issues," said Zeus Kerravala, Vice President of Research, Security Practice, Yankee Group.  "The combination of Netifice and MegaPath promises to provide users with one of the industry's most robust suites of managed IP services, which simplifies network management and enables companies to improve operating efficiencies."

"Enterprise demand for IP-based services, such as IP VPNs and VoIP, is increasing dramatically, and companies are looking to providers that specialize in these innovative offerings," said Johna Till Johnson, President and Senior Founding Partner at Nemertes Research. "In a recent Nemertes benchmark on next-generation WAN services, we found that 76% of respondents are looking beyond their traditional carriers to Managed Service Providers, such as MegaPath and Netifice." 

The associated round of funding includes certain of Netifice's existing investors, including Boston Millennia Partners, Columbia Capital, Dolphin Equity Partners, Fidelity Ventures, H.I.G. Capital and Rho Ventures along with certain of MegaPath's existing investors, including Comcast Interactive Capital, Performance Equity Management, Trident Capital and U.S. Venture Partners.  Netifice will use this funding to accelerate the growth of its managed IP service business and expand its portfolio of value-added services organically and through strategic acquisitions.  The transaction is subject to shareholder and regulatory approval and is expected to close in April 2006; however, this date is subject to change.

About Netifice Communications
Netifice Communications is a global provider of flexible IP VPN solutions that enable businesses to lower costs, increase scalability and expand the deployment of enterprise applications and communication systems. Netifice customizes its clients IP VPNs using the widest selection of access, security and communication options, combined with advanced systems for managing and monitoring their IP VPN. Customers can easily deploy expansive networks so that their corporate headquarters, regional offices, remote workers, and retail outlets can communicate with each other as if they were in the same location.  Netifice is recognized by customers for delivering the highest quality service and support with industry-leading Service Level Agreements that guarantee site-to-site performance and reliability.  For more information go to www.netifice.com or call 1-877-NETIFICE (638-4342). About MegaPath
MegaPath Networks delivers secure access and managed network solutions that enable businesses to cost-effectively connect branch offices, storefronts, mobile workers and home-based workers to centralized corporate resources. By offering comprehensive managed network access, VPN and security services, MegaPath is the single source of contact for the design, deployment, monitoring, reporting and support of remote connectivity solutions. Founded in 1999, MegaPath is privately held and headquartered in Pleasanton, California. For more information, visit www.megapath.net or call 1-877-MEGAPATH (634-2728)