Compaq Continues Litigation with Packard Bell.

HOUSTON--(BUSINESS WIRE)--Oct. 10, 1995--Compaq Computer Corporation (NYSE:CPQ) today confirmed that Packard Bell Electronics has filed counterclaims against Compaq in Federal Court in Delaware for false advertising and defamation.

In April, Compaq sued Packard Bell in Delaware, claiming that Packard Bell sells as new, without any suitable disclosure to the consuming public, computers that may contain used parts. Following the Compaq suit, numerous class action lawsuits were filed against Packard Bell raising identical charges. Packard Bell recently settled the class action lawsuits by agreeing to change its practices and to pay nearly $4 million in fees to the class action lawyers. Packard Bell and Compaq have not settled their dispute.

"The Packard Bell claims filed today are without merit," said William D. Coston, a partner in the Venable law firm in Washington representing Compaq in the matter. "Compaq's process for handling computer returns is exemplary and a model for the rest of the industry.

"Only after we filed our lawsuit in April did Packard Bell announce that it would disclose to consumers that Packard Bell computers contain used parts," Coston continued. "However, even now disclosure is only placed inside its boxes, so consumers learn of the Packard Bell practices only after they've paid for the computer. Consumers have a right to know if they are buying used goods before the purchase is made."

With respect to a separate claim made against Ross Cooley, a Compaq executive, Coston indicated that "the allegations made against Mr. Cooley merely rehash charges that have already been repeated many times by Packard Bell to the press. They represent an attempt to divert attention from the real issues in this case."

Company Background

Compaq Computer Corporation is the world's largest supplier of personal computers, offering desktop PCs, portable PCs and servers. Founded in 1982, the Company reported 1994 worldwide sales of $10.9 billion. Compaq products are sold and supported in more than 100 countries throughout the world. Compaq also sells directly to customers through Compaq Direct Plus at 1-800-888-5858. Compaq provides 24-hour customer support and can be reached through the Compaq forums on America Online, CompuServe, Internet (http://www.compaq.com), and Prodigy, or by calling 1-800-345-1518. -0-

Compaq, Registered U.S. Patent and Trademark Office. DirectPlus is a service mark of Compaq Computer Corporation. Product names mentioned herein may be trademarks and/or registered trademarks of their respective companies.

CONTACT: Compaq Computer Corporation

Yvonne Donaldson, Bob Beach

713-514-0484

or

Miller/Shandwick Technologies

Donna Ruane, Lisa Gilbert

617-536-0470

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