City of San Diego and San Diego Data Processing Corp. Standardize on HP Technology.

Business Editors/High-Tech Writers

PALO ALTO, Calif.--(BUSINESS WIRE)--June 5, 2002

HP and Wareforce to Deploy and Support 8,000 Desktop

and Notebook Systems in Five-year Deal Estimated at $25 Million

HP (NYSE:HPQ), the City of San Diego and its technology arm, San Diego Data Processing Corp. (SDDPC), have entered a five-year purchase agreement -- with an estimated value of $25 million -- that makes HP and Wareforce, Inc., critical information technology (IT) providers for San Diego, the seventh largest city in the United States.

SDDPC is a world-class provider of government information technology and is the procurement and technology arm for San Diego.

HP and Wareforce, an authorized HP reseller, will provide a streamlined system for procurement and installation of desktop PCs, notebooks, printers and peripherals. Wareforce also will perform hardware maintenance on the installed base of 8,000 desktop PCs and notebooks, 2,000 printers and 300 industry-standard ProLiant servers throughout San Diego and SDDPC.

"We worked hard to understand the needs of San Diego and provide the municipality with a technology solution that helps them achieve their goals," said Jim Weynand, vice president, HP Public Sector. "We are indeed pleased that HP technology has been selected to be the standard throughout SDDPC and the city."

The contract calls for deployment and support of more than 8,000 PCs, including the award-winning Evo D500 ultra-slim and standard desktop PCs and Evo N600c and N400c notebooks. These systems will be deployed as the exclusive technology for the city and be used in many different departments.

SDDPC's technical analysts also are using iPAQ(TM) Pocket PCs to access their enterprise resource planning system. Trouble tickets for desk-side support can be updated and accessed from anywhere in the city using this solution.

San Diego also is standardized on market-leading industry-standard ProLiant DL380 servers and StorageWorks technology. This new agreement is a continuation of a long and productive business relationship between the newly merged HP, Wareforce and San Diego.

Strong Reseller Relationship

The contract was awarded through Wareforce, a comprehensive provider of information technology solutions based in El Segundo, Calif. In addition to its role in providing product deployment and support services, Wareforce also will implement its proprietary OpsTRACK technology product procurement system for streamlining the ordering process.

"We've enjoyed a long-standing relationship with both San Diego and the new HP and have worked hard to be a trusted technology solutions provider to the city," said Orie Rechtman, chief executive officer, Wareforce. "We believe that HP's reliability as a manufacturer, and the fact that HP products have routinely received higher customer satisfaction ratings than many other manufacturers, will make this a strong relationship."

The technology upgrade with San Diego is expected to begin with the deployment of about 50 new PCs a week in various departments throughout the city.

"Working with a reseller the caliber of Wareforce has been highly positive and efficient," said HP's Weynand. "The proven experience of the Wareforce team in successfully supporting SDDPC and the city's technology solution needs was vital in the awarding of this contract."

Wareforce is a high value-added technology solutions provider, offering a wide range of technical products and support services. Wareforce provides product fulfillment and work flow management via the company's proprietary OpsTRACK technology that streamlines supply chain management and permits Wareforce customers immediate access to online inventories of more than 140,000 IT products from 900 manufacturers.

About HP

HP is a leading global provider of products, technologies, solutions and services to consumers and businesses. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing. HP merged with Compaq Computer Corp. on May 3, 2002. The merged company had combined revenue of approximately $81.7 billion in fiscal 2001 and operations in more than 160 countries. More information about HP is available at http://www.hp.com.

This news release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause the results of HP and its consolidated subsidiaries to differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief and any statement of assumptions underlying any of the foregoing. The risks, uncertainties and assumptions referred to above include employee management issues; the timely development, production and acceptance of products and services and their feature sets; the challenge of managing asset levels, including inventory; the flow of products into third-party distribution channels; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks that are described from time to time in HP's Securities and Exchange Commission reports, including but not limited to HP's annual report on Form 10-K, as amended on January 30, 2002, for the fiscal year ended October 31, 2001, HP's quarterly report on Form 10-Q for the quarter ended January 31, 2002 (as filed with the SEC on March 12, 2002) and subsequently filed reports. HP assumes no obligation and does not intend to update these forward-looking statements.