Progress Software Corporation, a global supplier of application infrastructure software used to develop, deploy, integrate and manage business applications,  announced that it has commenced, through its wholly owned subsidiary Noble Acquisition Corp., a cash tender offer to purchase all of the outstanding shares of common stock of NEON Systems, Inc., a leader in mainframe integration.The tender offer is being made pursuant to the previously announced definitive merger agreement between Progress and NEON dated December 19, 2005. Upon the closing of the tender offer, NEON stockholders will receive $6.20 in cash for each share of NEON common stock tendered. Following the purchase of shares in the tender offer, Noble Acquisition Corp. and NEON will merge, and NEON will become a wholly owned subsidiary of Progress. Owners of NEON shares not purchased in the tender offer will be entitled to receive $6.20 per share in cash in the merger. Upon the closing of the transaction, NEON will become part of DataDirect Technologies, the software industry leader in standards-based data connectivity and an operating unit of Progress Software Corporation.

Progress today has filed with the Securities and Exchange Commission a tender offer statement on Schedule TO setting forth in detail the terms of the tender offer. NEON today has filed with the Commission a solicitation/recommendation statement on Schedule 14D-9 setting forth, among other things, the recommendation of NEON's board of directors that NEON stockholders accept the tender offer and tender their shares pursuant to the tender offer, as well as the conclusion of NEON's board of directors that the merger agreement and the transactions contemplated thereby (including the tender offer and the merger) are advisable and are fair to and in the best interests of NEON and NEON's stockholders.

The tender offer will expire at 12:00 midnight on January 27, 2006, unless extended in accordance with the merger agreement and the applicable regulations of the Securities and Exchange Commission. Consummation of the tender offer is subject to customary conditions, including the tender of a majority of the shares of common stock of NEON, termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and other customary conditions. The holders of approximately 44 percent of NEON's outstanding common stock, including its executive officers, directors and John J. Moores, have agreed to support the transaction and to tender their shares in the tender offer, subject to the terms of their voting and tender agreements.

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