Acquisition: Unisys to Acquire PulsePoint Communications — Will Target New-breed Communications Services Providers With Solutions That Leverage Network Convergence - Company Business and Marketing

Cambridge Telcom Report, June 21, 1999

Unisys Corporation (NYSE: UIS) and PulsePoint Communications (NASDAQ: PLPT) Tuesday announced that they have signed an agreement for Unisys to acquire PulsePoint, a leading developer of carrier-class enhanced services solutions for the communications industry, in a tax-free, stock-for-stock merger. The purchase price will be dependent on the value of the Unisys common stock to be issued in the transaction at the closing. Based on yesterday's closing price of Unisys stock, the value of the transaction would be approximately $100 million on a fully diluted basis, or $6.60 per PulsePoint common share.

PulsePoint has developed the industry's first "next-generation" messaging platform based on Microsoft Windows NT Server and an open-standards architecture to provide carrier-class -- that is, ultra-high-reliability -- performance. Unisys will use the PulsePoint solutions as multimedia messaging solutions designed for new-breed communications services providers, who are emerging as the result of telecommunications industry deregulation worldwide and leveraging the convergence of voice and data networking.

These solutions will give customers easy access to all their messages -- voice, FAX and e-mail -- from a single mailbox using a variety of devices: conventional telephones, cellular and smart phones and personal computers. For example, consumers or business users will be able to retrieve a voice message through their PC's e-mail client or have an e-mail message read to them over the telephone.

The acquisition will significantly expand Unisys portfolio of repeatable messaging solutions from those applicable in large telephony companies to those used by small/mid-size and "next-generation" services providers, who represent a substantial portion of the worldwide market, while accelerating the addition of new features to Unisys current messaging solutions. Unisys repeatable solutions for communications and other key market sectors combine consulting and integration services with software components that can be assembled and modified quickly and cost-effectively to meet the customer's specific business requirements.

"Best-in-class repeatable solutions for Unisys strategic markets are a key driver in the growth of our information services business and our overall success," said Lawrence A. Weinbach, Unisys chairman and chief executive officer. "By pairing the leading-edge PulsePoint technology with our comprehensive suite of information services, Unisys will be poised to take our repeatable messaging solutions in a new and exciting direction to address the needs of new-breed services providers who are revolutionizing the communications marketplace."

These providers specialize in "next-generation" solutions that exploit emerging network technologies - such as Internet Protocol (IP) telephony - that are different from the conventional telephony networks used by traditional carriers. The PulsePoint solutions will provide a platform for rapid application development and customization, enabling Unisys to respond to clients' requirements for applications deployable across all networks.

"The executives and employees of PulsePoint are excited to join the Unisys team," said Mark C. Ozur, PulsePoint president and chief executive officer. "The combination of our technologies and services positions Unisys to lead the industry in delivering value added solutions to the new-breed communications services providers while continuing to provide leading-edge solutions to telephony providers as well. Together, we can seize this unique opportunity to help all customers benefit quickly and economically from the explosive growth of IP telephony and network convergence."

In the merger, each PulsePoint share will be converted into Unisys common stock using an exchange ratio based on the average price of Unisys common stock during a 20-trading-day period preceding the PulsePoint shareholder meeting to approve the transaction. The ratio will provide for a maximum consideration of $6.60 (if the average price of Unisys common stock is above $33) and a minimum consideration of $5.40 (if the average price is below $27) for each PulsePoint common share. If the Unisys average price is between $27 and $33, PulsePoint shareholders will receive 0.2 Unisys common shares for each PulsePoint share. PulsePoint convertible preferred stock will be converted into PulsePoint common stock prior to the merger.

Based on yesterday's closing price of $37.4375 per Unisys common share, PulsePoint shareholders would receive the maximum consideration of $6.60, or 0.176 shares of Unisys common stock for each PulsePoint common share. This would result in a total of approximately 2.4 million Unisys shares being issued in the merger. In addition, all outstanding PulsePoint options and warrants will be converted into Unisys options and warrants. On a fully diluted basis, the value of the transaction would be approximately $100 million.

The acquisition, which will be accounted for as a pooling of interests, is expected to close in the third quarter of 1999. The transaction is subject to approval by PulsePoint common and preferred shareholders, each class voting separately, as well as regulatory approvals, including registration of the Unisys shares to be issued in the merger and Hart-Scott-Rodino Act review, and customary closing conditions.