DUBAI, United Arab Emirates, 22nd August 2007 - HP today announced that it has signed a definitive merger agreement to purchase Neoware Inc. (Nasdaq: NWRE), a provider of thin client computing and virtualization solutions, at a price of $16.25 per share, or an enterprise value (net of existing cash) of approximately $214 million on a fully diluted basis.

The acquisition is part of HP's strategy to expand in growth markets and further its leadership in personal computing. Acquiring Neoware is intended to accelerate the growth of HP's thin client business by boosting its Linux software, client virtualization and customization capabilities, expanding its regional sales footprint and broadening its hardware portfolio.

"Our objective is to become the preferred brand of thin clients and software for virtualized client computing," said Anil Kumar, Consumer and Commercial Category Manager, Personal Systems Group, HP. "Thin clients are an important component in today's overall computing strategy and play a critical role in HP's virtualization strategy. Acquiring Neoware confirms our commitment to thin client computing and client virtualization solutions."

Thin clients provide reduced maintenance costs, minimal application updates and a higher level of security compared to other desk-based computing products. The solid-state devices connect over a network to a server where all processing and storage takes place.

The transaction will combine the respective strengths of each company: Neoware's Linux-based thin client solutions and software with HP's thin clients based on Microsoft Windows® XPe and Windows CE and its virtualized client solutions, such as blade PCs, blade workstations, virtual desktop infrastructure and server-based computing. HP plans to leverage the acquisition to remain an industry leader in reducing its environmental footprint through reduced noise, power and packaging versus desktop PCs.

"Acquiring our company will further strengthen HP's PC business as it extends its portfolio of remote client solutions and delivers secure, low-cost access to centralized personal computing," said Klaus Besier, president and chief executive officer, Neoware Inc. "We are proud to be joining HP, where together we will continue to promote the shift to virtualized client computing."

Following completion of the transaction, HP plans to integrate Neoware into the Business Desktop Unit of HP's Personal Systems Group.

Under the terms of the merger agreement, Neoware stockholders will receive $16.25 for each share of Neoware stock that they hold at the closing of the merger. The acquisition is subject to a number of customary closing conditions, including regulatory approvals and the approval of Neoware's stockholders. HP expects the closing to occur in the fourth quarter of calendar year 2007.

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About HP
HP focuses on simplifying technology experiences for all of its customers - from individual consumers to the largest businesses. With a portfolio that spans printing, personal computing, software, services and IT infrastructure, HP is among the world's largest IT companies, with revenue totaling $97.1 billion for the four fiscal quarters ended April 30, 2007. More information about HP (NYSE: HPQ) is available at www.hp.com.

Note to editors: More news from HP, including links to RSS feeds, is available at www.hp.com/hpinfo/newsroom/.

About HP Middle East
HP is the largest technology and solutions provider in the Middle East with 670 employees and subsidiaries in Dubai, Abu Dhabi, Riyadh, Jeddah, Khobar, Cairo, Ramallah, Oman and 2 service Joint Ventures in Kuwait and Bahrain servicing the GCC, Egypt and the Levant. HP has been present in the Middle East since 1968 and opened its first regional office in 1994. HP Middle East is the market leader for enterprise, small and medium business and consumer technology products and offers a large portfolio of solutions and services in various business domains.

Microsoft and Windows are U.S. registered trademarks of Microsoft Corp. Neoware is a trademark of Neoware, Inc.

Neoware intends to file with the Securities and Exchange Commission a proxy statement and other relevant materials in connection with the merger. The proxy statement will be mailed to the stockholders of Neoware. Before making any voting or investment decision with respect to the merger, investors and stockholders of Neoware are urged to read the proxy statement and the other relevant materials when they become available because they will contain important information about the merger. The proxy statement and other relevant materials (when they become available), and any other documents filed by Neoware with the SEC, may be obtained free of charge at the SEC's website at www.sec.gov. In addition, investors and stockholders of Neoware may obtain free copies of the documents filed with the SEC from Cameron Associates, 1370 Avenue of the Americas, New York, NY 10019, +1 212 245 8800.

Participants in the solicitation
Neoware and HP and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the Neoware stockholders in connection with the merger. Information about HP's directors and executive officers is set forth in the proxy statement on Schedule 14A for HP's 2007 Annual Meeting of Stockholders filed with the SEC on Jan. 23, 2007. Information about Neoware's directors and executive officers is set forth in the proxy statement on Schedule 14A for Neoware's 2006 Annual Meeting of Stockholders filed with the SEC on Oct. 30, 2006. Additional information regarding the interests of participants in the solicitation of proxies in connection with the merger will be included in the proxy statement that Neoware intends to file with the SEC.

For more information please contact:
Lisa Welsh
Impact Porter Novelli for HP
Hewlett?Packard Middle East
PO Box 17295
Dubai Internet City
Dubai
Tel: +971 4 330 4030
Email: l.welsh@ipn.ae
Website: www.hp.com/me

© Press Release 2007