Neoware to Acquire TeleVideo's Thin Client Business

FREQUENTLY ASKED QUESTIONS

•  Specifics of the Announcement

1.   What did Neoware and TeleVideo announce?

On January 12, 2005 Neoware Systems (Nasdaq:NWRE) and TeleVideo (OTC BB: TELV.PK) announced that the companies have entered into a Definitive Agreement under which Neoware will purchase TeleVideo's thin client business including all thin client assets, certain contract obligations, a trademark license, product brands, customer lists, customer contracts and non-competition agreements for $5.0 million in cash plus a potential earn-out based upon performance. From today until closing, TeleVideo has retained Neoware as its exclusive distributor. Effective immediately, all TeleVideo thin client products are available to Televideo customers directly from Neoware.

2.   Why is Neoware acquiring TeleVideo's thin client business?

Acquiring TeleVideo's thin client business increases Neoware's market share and distribution channels, and broadens Neoware's product offerings in the thin client appliance market. The TeleVideo products will continue to be available through the existing channel of TeleVideo authorized distributors and resellers.

3.   When will the transaction close?

Subject to regulatory approval, the acquisition is expected to close before the end of March 2005.

4.   Who is TeleVideo?

TeleVideo, Inc. (OTC BB: TELV.PK) is a publicly held company specializing in the development and manufacturing of Windows-based and network terminals. Founded in 1975, TeleVideo established itself as a leading supplier in the video display terminal industry. The company pioneered a new generation of computer terminals with the introduction of its first “smart” terminals, based on the Intel microprocessor, at a time when dumb terminals were the industry standard. For more information, please visit www.televideo.com .

5.   Who is Neoware?

Neoware is a leader in thin client computing. Neoware's software, services, and thin client appliances make computing more secure, manageable, reliable and affordable by enabling global enterprises to fully leverage server-based computing. By incorporating open, standards-based technologies and eliminating the obsolescence built into standard PC architectures, Neoware provides enterprises with increased flexibility and choice, as well as lower up-front and total costs.

Neoware's software products enable enterprises to gain control of their desktops, and to integrate mainframe, midrange, UNIX and Linux applications with Windows® and the web. Neoware's thin client appliances enable enterprises to run applications on servers, and display them across wired or wireless networks on secure, managed, reliable appliances that cost as little as one-fourth the price of today's typical business PC.

Neoware's products are available worldwide from IBM, as well as from select, dedicated resellers. More information about Neoware can be found on the Web at http://www.neoware.com .

6.   Does Neoware have experience successfully executing acquisitions like this?

Yes. Neoware has completed seven acquisitions in the last four years, all of which have been successfully integrated into the Company. In 2001, Neoware acquired the Capio thin client business from Boundless and the business of ACTIV-e Solutions. In 2002, Neoware acquired the ThinStar thin client business of NCD. In 2003, Neoware entered into a strategic partnership with IBM and acquired the TeemTalk host access software business from Pericom. In 2004, Neoware acquired Visara's thin client business .

TeleVideo Thin Client Product Line

•  Will there be any changes in TeleVideo's product line as a result of this announcement?

No. All existing TeleVideo products will continue in full, volume production without any changes. As new Neoware thin client products are introduced as part of a normal product introduction cycle, the product lines will be merged. Consistent with Neoware's past practice in the Capio, NCD, IBM and Visara thin client business acquisitions, customers' investments in their products will be protected.

•  How do I purchase TeleVideo's thin client products?

Effective January 12, 2005, TeleVideo has retained Neoware as its exclusive reseller and sales agent. Effective immediately, all TeleVideo thin client products are available directly from Neoware. Existing Televideo resellers and customers should contact their current Televideo sales people to begin transitioning their purchase orders.

•  Whom do I contact for sales of TeleVideo thin client products?

For End Customers

Please continue to purchase your TeleVideo products from your current TeleVideo distributor or reseller. You can also continue to contact your TeleVideo sales representative.

If you have additional questions regarding this transaction, please call Bill McCurdie, Director of Channel Sales for Neoware at 1-800-NEOWARE (1-800-636-9273) ext. 122 or +1-610-277-8300 ext. 122. For sales of the TeleVideo products in Europe, the Middle East, and Africa, please contact Ian Summers at +44-134 438 2164.

For Resellers

Please contact your TeleVideo salesperson or Neoware as noted above.

•  Whom do I contact to purchase TeleVideo green screen terminals?

For sales of the TeleVideo green screen terminal products, please contact your TeleVideo sales representative as noted above.

•  Will there be any interruption in deliveries during the transition period?

No. Because the TeleVideo thin client products will continue to be manufactured in the same facilities, it is not expected that there will be any interruption in deliveries during this transition period.

•  Whom do I contact for support of the TeleVideo products?

For post-sales technical support and warranty service, continue to contact TeleVideo.

•  Technical Support: ts_support@televideo.com , (408) 955-7711

•  Customer Service: custservice@televideo.com or (408) 955-7448.

Neoware Product Line

•  What will happen to Neoware's thin client products?

Neoware's acquisition of the TeleVideo thin client business will have no impact on Neoware's existing product offerings. Neoware will continue to produce, service, and support all of its existing thin client products.

2.    Whom do I contact for sales of Neoware thin client products?

For Sales in the US please call 1-800-Neoware (1-800-636-9273) or +1-610-277-8300 and follow the voice prompts, or contact the Neoware sales representative you have had contact with in the past. For sales in other countries, visit http://www.neoware.com/contact.html

3.   Whom do I contact for support of Neoware thin client products?

There has been no change in the support, service, or warranty of Neoware thin client products.

•  Technical Support, call 1-610-277-8300 ext. 4

•  Neoware Service Department (Repairs), call 1-610-277-8300 ext. 3

•  Or visit www.neoware.com/support.html

Neoware & TeleVideo Thin Client Product Comparison

1.   When would I want to purchase a Neoware or TeleVideo thin client appliance?

If you are currently purchasing TeleVideo thin client appliances, you should continue to purchase these products from Neoware. Neoware is committed to your continued success with TeleVideo thin client products.

If you are currently purchasing Neoware thin client appliances, then you should continue purchasing these products.

TeleVideo Distribution Channel Questions

•  Where should I place/send my orders for TeleVideo thin client products?

Effective January 12, 2005, orders for TeleVideo thin client products should be sent to Neoware by fax at +610-275-5739 or via email to orders@neoware.com

•  Where should I place/send my orders for TeleVideo green-screen terminal products?

Orders for TeleVideo green screen terminal products should continue to be sent to TeleVideo based upon your geographic location as noted above.

•  Will TeleVideo thin client pricing, warranties, lead times or other terms and conditions be affected?

Neoware and TeleVideo's intent is to make the transition of the TeleVideo business as seamless as possible. Neoware intends to apply the same general business practices to the TeleVideo thin client products as TeleVideo did. Pricing, warranties and lead times are not expected to change. Other standard Neoware terms and conditions will apply.

Neoware Forward-Looking Statements

This FAQ contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding: the consummation of the acquisition of TeleVideo's thin client business; the increase in our market share and distribution channels; our broadened product offerings; the belief that there will be no interruption in deliveries; our continued development and support of thin client products. These forward-looking statements involve risks and uncertainties. Factors that could cause actual results to differ materially from those predicted in any such forward-looking statement include: our ability to consummate the acquisition and successfully integrate the TeleVideo thin client business; our timely development and customers' acceptance of our products, including the former TeleVideo products ; our ability to continue to lower our costs; pricing pressures; rapid technological changes in the industry; growth of the thin client computing segment of the PC market; growth of the host access software market; increased competition; our ability to attract and retain qualified personnel; our ability to identify and successfully consummate and integrate future acquisitions; adverse changes in customer order patterns; adverse changes in general economic conditions in the U.S. and internationally, risks associated with foreign operations and political and economic uncertainties associated with current world events. These and other risks are detailed from time to time in Neoware's periodic reports filed with the Securities and Exchange Commission, including, but not limited to, its report on Form 10-K for its fiscal year ended June 30, 2004 and Form 10-Q for the quarter ended September 30, 2004.

TeleVideo Forward-Looking Statements

This FAQ includes forward-looking statements, which are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically indicated by the presence of words such as "expect," "anticipate," "believe," "intend," "may," "predict," "will be," and other similar expressions. These forward-looking statements cover, among other items, statements regarding the consummation of any transaction. Any forward-looking statements are not guarantees of future performance and actual results could differ materially from those anticipated as a result of certain risks and uncertainties, some of which are beyond the control of the Company. A description of the risk factors affecting the Company's business can be found in TeleVideo, Inc.'s Safe Harbor Compliance Statement included as Exhibit 99.1 to its Annual Report on Form 10-K for the fiscal year ended October 31, 2003.

For more information concerning Neoware's purchase of TeleVideo's thin client business, visit www.neoware.com.