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DATAPOINT CORPORATION ANNOUNCES MODIFIED TERMS OF PROPOSED EXCHANGE OFFER FOR PREFERRED STOCK

            DATAPOINT CORPORATION ANNOUNCES MODIFIED TERMS OF
               PROPOSED EXCHANGE OFFER FOR PREFERRED STOCK
    SAN ANTONIO, Texas, Feb. 5 /PRNewswire/ -- Datapoint Corporation (NYSE: DPT) announced today that it was modifying the terms of the proposed exchange offer announced in November 1991 for its preferred stock.
    As previously announced, Datapoint's proposed exchange offer contemplates that each share of Datapoint's $4.94 exchangeable preferred stock, $38 liquidation preference per share, will be exchanged for one share of new $1.00 preferred stock, $20 liquidation preference per share and two shares of Datapoint common stock.  Issuance of such consideration, however, is conditioned on approval by the holders of at least two-thirds of the old preferred stock of an amendment which would permit the required exchange of any untendered old preferred stock for three-quarters of a share of new preferred stock and two shares of common stock.  The foregoing pending terms have not been modified.
    However, under the proposed exchange offer as now modified, if less than two-thirds of the outstanding shares of preferred stock are tendered and the amendment is not approved, then the exchange offer still may be consummated but the consideration to be issued will be $20 principal amount of Datapoint's new 5 percent junior subordinated debentures due June 1, 2022 and two shares of Datapoint common stock. In this event, untendered shares of old preferred stock will remain outstanding.
    The terms of the new preferred stock have not been modified.  In the event that the new debt securities instead are issued, interest will be payable semi-annually at an annual rate of $1.00 for each $20 principal amount and Datapoint will obtain from a major money-center bank for the benefit of holders of the new debt securities a letter of credit which will secure interest payments for at least the six semi-annual interest payments (with the exact number of payments so secured being dependent on the number of shares of old preferred stock tendered).  The new debt securities will be subordinated to senior indebtedness, as defined, including Datapoint's 8-7/8 percent Debentures, and will be redeemable in whole or in part at any time at the option of Datapoint at their principal amount plus accrued interest.  The indenture under which the new debt securities will be issued will prohibit the payment of dividends on Datapoint's equity securities for three years, subject to certain exceptions.  If the new debt securities are issued, non- tendering holders of old preferred stock will retain the right to elect two directors, voting separately as a class, at Datapoint's annual meetings until dividend arrearages have been discharged.
    The Datapoint Board approved the modified proposed exchange offer following the receipt of fairness opinions from its investment bankers.
    The modified exchange offer will be conditioned, among other things, on receipt of the consent of the company's senior lender and approval by the holders of at least a majority of the outstanding shares of the company's common stock to a technical amendment.
    Datapoint is filing with the Securities and Exchange Commission an amendment to its registration statement on Form S-4 relating to the exchange offer, which includes a preliminary prospectus detailing the modified terms.
    This announcement does not constitute an offer to sell or to buy any security or the solicitation of any proxies, which offer and proxy solicitation shall only be made by means of a proxy statement/prospectus filed by Datapoint with the Securities and Exchange Commission. Datapoint intends to commence the exchange offer immediately following the effectiveness of its S-4 registration statement.
    Datapoint is principally engaged in the development, manufacture, acquisition, marketing and servicing of computer and communication products -- both hardware and software -- for integrated network systems worldwide.  Datapoint provides a full spectrum of network-based solutions that both support and incorporate industry standards:  local and wide area networking, UNIX networking, video networking, image distribution, telephony, relational database management, distributed data processing, multi-vendor connectively and large-scale network data systems.
    -0-                2/5/92
    /CONTACT:  Patricia Coble of Datapoint Corporation, 512-593-7910/
    (DPT) CO:  Datapoint Corporation ST:  Texas IN:  CPR SU:  OFR SM -- NY079 -- 7391 02/05/92 17:13 EST
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Publication:PR Newswire
Date:Feb 5, 1992
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