SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: January 26, 2000
(Date of earliest event reported: January 18, 2000)
TekInsight.Com, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-11568 95-4228470
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
5 Hanover Square New York, NY 10004
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 271-8511
N/A
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(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Information.
Pursuant to a Letter of Intent, dated January 18, 2000, between TekInsight.Com,
Inc. ("Teks") and Data Systems Network Corporation ("Data Systems"), Teks and
Data Systems agreed to enter into a proposed acquisition transaction calling for
Data Systems to be merged into Astratek, Inc., a wholly owned and principal
operating subsidiary of Teks (the "Merger"). In consideration for the Merger,
Data Systems shareholders will receive a number of shares of a new class of Teks
convertible Preferred Stock (convertible into Teks common stock on a one-to-one
basis) proposed to be listed on the NasdaqSmall Cap market that will have a
market value of between $12,500,000 and $18,000,000, with such value to be based
upon the market price of Teks Common Stock at the time of Merger closing. The
Merger will be subject to the usual and customary conditions to closing,
including due diligence investigations, authorizing votes by the shareholders of
Teks and Data Systems, satisfactory "fairness opinions" addressed to each of
Teks and Data Systems and execution of a definitive agreement (the "Merger
Agreement"). Although no assurances can be given, the parties intend to close
the Merger by May 31, 2000.
Headquartered in Farmington Hills, Michigan, Data Systems has more than 13 years
of experience providing strategic technology solutions to Fortune 1000 companies
and over 16 state and local government agencies. Data Systems provides a wide
range of services, including Applications Development, Network Services,
Enterprise Management, Help Desk and Security Services. Management of Teks
believes that the Data Systems infrastructure is capable of further expansion,
moving from its current support of a $54 million annual revenue business, which
includes a technical group experienced in Internet and Intranet technologies, to
the support of a $100 million organization that can serve not only Data
Systems's current core business of serving state and local governments but also
Teks' electronic commerce and software development businesses.
FORWARD LOOKING STATEMENTS
THIS REPORT ON FORM 8-K CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION
21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, WHICH ARE INTENDED TO BE
COVERED BY THE SAFE HARBORS CREATED THEREBY. INVESTORS ARE CAUTIONED THAT
CERTAIN STATEMENTS IN THIS RELEASE ARE "FORWARD LOOKING STATEMENTS" WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND INVOLVE
KNOWN AND UNKNOWN RISK UNCERTAINTIES AND OTHER FACTORS. SUCH UNCERTAINTIES AND
RISKS INCLUDE, AMONG OTHERS, CERTAIN RISKS ASSOCIATED WITH THE CLOSING OF THE
TRANSACTIONS, GOVERNMENT REGULATION, AND GENERAL ECONOMIC BUSINESS CONDITIONS.
ACTUAL EVENTS, CIRCUMSTANCES, EFFECTS AND RESULTS MAY BE MATERIALLY DIFFERENT
FROM THE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THE
FORWARD-LOOKING STATEMENTS. CONSEQUENTLY, THE FORWARD LOOKING STATEMENTS
CONTAINED HEREIN SHOULD NOT BE REGARDED AS REPRESENTATIONS BY TEKINSIGHT.COM,
INC., OR ANY OTHER PERSON, THE PROJECTED OUTCOMES CAN OR WILL BE ACHIEVED.
Item 7. EXHIBITS
10.1 Letter of Intent, dated January 18, 2000, between TekInsight.Com, Inc.
and Data Systems Network Corporation.
99.1 Press Release, dated January 20, 2000
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: January 25, 2000 TEKINSIGHT.COM, INC.
By:/s/Michael Niles
-----------------------
Michael Niles, Secretary
<PAGE>
EXHIBIT INDEX
Exhibit Number Exhibit Name
-------------- ------------
10.1 Letter of Intent, dated January 18, 2000,
between TekInsight.Com, Inc. and Data
Systems Network Corporation.
99.1 Press Release, dated January 20, 2000
TEKINSIGHT.COM, INC.
5 Hanover Square
New York, New York 10004
(212) 271-8550
January 18, 2000
VIA FACSIMILE TRANSMISSION
(248) 489-1007
Mr. Michael Grieves
President and CEO
Data Systems Network Corporation
34705 W. 12 Mile Road, Suite 300
Farmington Hills, MI 48331
Dear Michael:
Subject to completion of our due diligence investigation and
satisfaction of the other conditions set forth below, this letter will serve to
outline the intention of TekInsight.Com, Inc. ("TEKS") to acquire 100% of the
capital stock of Data Systems Network Corporation, a Michigan corporation (the
"Company") by the merger of the Company with Astratek, Inc., a wholly-owned
subsidiary of TEKS incorporated under New York law ("MergerCo"). The proposed
transaction may be summarized as follows:
I. The Transaction.
1.1 The Merger. It is contemplated that the Company will merge with
MergerCo in a statutory merger under New York law (the "Merger"),with MergerCo.
as the surviving corporation of the Merger.
1.2 Merger Consideration.
(a) As consideration for the Merger, subject to the provisions of
Sections 1.2(b) and 1.3 below, all outstanding shares of Company capital stock
will be exchanged for that number of shares of a newly-created series of TEKS
preferred stock (the "Series A Preferred Stock") that is equal to that number of
shares of TEKS common stock having a market value at Merger closing of
$12,500,000 (the "Purchase Price"). The market value of TEKS common stock at
Merger closing will be equal to the average closing sale price for TEKS common
stock, as reported by the Nasdaq Smallcap Market, for the ten (10) consecutive
trading days ending on the trading day that immediately precedes the closing
date of the Merger (the "Average Price"). On the
<PAGE>
Mr. Michael Grieves
January 18, 2000
Page 2
assumption that there are 5,509,224 outstanding shares of Company capital stock
on the closing date of the Merger (the "Closing Date"), the following table sets
forth the ratios applicable to determining the number of shares of Series A
Preferred Stock to be issued to Company shareholders on the Closing Date:
<TABLE>
-------------------------------------------------------------------------------------------------------
<CAPTION>
Conversion Ratio for
number of shares of
Number of Series A Number of outstanding Company capital stock
Average Price TEKS Preferred Stock shares shares of Company exchanged for one
Common issuable to Company capital stock at Closing share of Series A
Stock Shareholders Date Preferred Stock
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2 1/2 5,000,000 5,509,224 1.10
-------------------------------------------------------------------------------------------------------
3 4,166,666 5,509,224 1.32
-------------------------------------------------------------------------------------------------------
3 1/2 3,571,428 5,509,224 1.54
-------------------------------------------------------------------------------------------------------
4 3,125,000 5,509,224 1.76
-------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
Example at Closing
---------------------------------------------------------------------------------------------------------
<CAPTION>
Number of shares of TEKS
Average Price Number of shares of Number of shares Common Stock into which
at Closing Company Of Series A Preferred the Series A Preferred
Date capital stock Stock Stock is Convertible
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2 1/2 1.10 for 1 1
---------------------------------------------------------------------------------------------------------
3 1.32 for 1 1
---------------------------------------------------------------------------------------------------------
3 1/2 1.54 for 1 1
---------------------------------------------------------------------------------------------------------
4 1.76 for 1 1
---------------------------------------------------------------------------------------------------------
</TABLE>
(b) Notwithstanding the provisions of Section 1.2(a): (i) in the
event that the Average Price is equal to a price that is $5.00 or more but less
than $7.00, the Purchase Price shall be adjusted to equal $16,000,000 (the
"First Increased Purchase Price"); and (ii) in the event that the Average Price
is equal to $7.00 or more, the Purchase Price shall be adjusted to equal
$18,000,000 (the "Second Increased Price"). As a result of any such increase in
the Average Price, the number of Series A Preferred Stock shares issuable to
Company shareholders shall be proportionately increased based upon the examples
set forth below:
<PAGE>
Mr. Michael Grieves
January 18, 2000
Page 3
<TABLE>
I. First Increased Purchase Price
-------------------------------------------------------------------------------------------------------
<CAPTION>
Conversion Ratio for
number of shares of
Number of Series A Number of outstanding Company capital stock
Average Price TEKS Preferred Stock shares shares of Company exchanged for one
Common issuable to Company capital stock at Closing share of Series A
Stock Shareholders Date Preferred Stock
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
5 3,200,000 5,509,224 1.72
-------------------------------------------------------------------------------------------------------
6 2,666,667 5,509,224 2.07
-------------------------------------------------------------------------------------------------------
6 1/2 2,461,539 5,509,224 2.24
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
Example at Closing
---------------------------------------------------------------------------------------------------------
<CAPTION>
Number of shares of TEKS
Average Price Number of shares of Number of shares Common Stock into which
at Closing Company Of Series A Preferred the Series A Preferred
Date capital stock Stock Stock is Convertible
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
5 1.72 for 1 1
---------------------------------------------------------------------------------------------------------
6 2.07 for 1 1
---------------------------------------------------------------------------------------------------------
6 1/2 2.24 for 1 1
---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Mr. Michael Grieves
January 18, 2000
Page 4
<TABLE>
II. Second Increased Purchase Price
-------------------------------------------------------------------------------------------------------
<CAPTION>
Conversion Ratio for
number of shares of
Number of Series A Number of outstanding Company capital stock
Average Price TEKS Preferred Stock shares shares of Company exchanged for one
Common issuable to Company capital stock at Closing share of Series A
Stock Shareholders Date Preferred Stock
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
7 2,571,429 5,509,224 2.14
-------------------------------------------------------------------------------------------------------
8 2,250,000 5,509,224 2.45
-------------------------------------------------------------------------------------------------------
8 1/2 2,117,647 5,509,224 2.61
-------------------------------------------------------------------------------------------------------
9 2,000,000 5,509,224 2.76
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
Example at Closing
---------------------------------------------------------------------------------------------------------
<CAPTION>
Number of shares of TEKS
Average Price Number of shares of Number of shares Common Stock into which
at Closing Company Of Series A Preferred the Series A Preferred
Date capital stock Stock Stock is Convertible
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7 2.14 for 1 1
---------------------------------------------------------------------------------------------------------
8 2.45 for 1 1
---------------------------------------------------------------------------------------------------------
8 1/2 2.61 for 1 1
---------------------------------------------------------------------------------------------------------
9 2.76 for 1 1
---------------------------------------------------------------------------------------------------------
</TABLE>
(c) Between the date of execution of the definitive agreement with
respect to the Merger (the "Merger Agreement"), and the Closing Date, to the
extent that any options or warrants are exercised the exercise price therefor
will be added to the Purchase Price, the First Increased Purchase Price, or the
Second Increased Purchase Price, as relevant (the "Adjusted Purchase Price"),
and the conversion ratios for Company shares to Series A Preferred Stock will be
adjusted in accordance with the formula and examples set forth in subparagraph
(a) above. For example, if prior to the Closing Date warrants to acquire 100,000
shares of Company capital stock were exercised for an aggregate exercise price
of $250,000, and assuming an Average Price less than $5.00, the Adjusted
Purchase Price would be $12,750,000, and the number of
<PAGE>
Mr. Michael Grieves
January 18, 2000
Page 5
outstanding shares of DSN capital stock on the Closing Date would now be
5,609,224 shares. On the assumption that the Average Price is $2.50 per share,
in making the above calculations, the ratio of the number of Company shares
necessary to obtain one share of Series A Preferred Stock would now be .91
shares of Company capital stock (e.g., $12,750,000 divided by $2.50 = 5,100,000
shares of Series A Preferred Stock to be issued to Company stockholders; given
that there are 5,609,224 outstanding shares of Company capital stock, 1.10
shares of outstanding Company capital stock will be exchanged for each share of
Series A Preferred Stock.
(d) Application to The Nasdaq Stock Market, Inc. will be made for
inclusion of the Series A Preferred Stock for trading on the Nasdaq Smallcap
Market on the Closing Date. The Series A Preferred Stock will commence being
convertible into TEKS common stock on the first anniversary of the Closing Date.
Any shares of Series A Preferred Stock that have not been converted to TEKS
common stock prior to the fifth anniversary of the Closing Date will be
mandatorily converted to TEKS common stock, or redeemed for a cash payment equal
to the Average Price per share, at the option of TEKS.
(e) The liquidation price per share of Series A Preferred Stock will
also be the Average Price. The Series A Preferred Stock will not pay dividends.
(f) In the event that the Average Price is less than $2.00 per
share, or the holders of more than 5% of the outstanding capital shares of the
Company perfect dissenter's rights in connection with the Merger under Michigan
Law, TEKS and Astratek can terminate the Merger Agreement, and in the event that
the Average Price is less than $2.00 per share the Company can terminate the
Merger Agreement; provided, that in the event a party or any of its affiliates
has engaged in short selling of TEKS common stock, or has engaged in any means
of market manipulation with respect to TEKS common stock, in either case (i) at
any time following the date of execution of the Merger Agreement and (ii) with
the intent of causing a reduction in the market price of TEKS common stock, then
that short selling or manipulating party forfeits its ability to terminate the
Merger Agreement on the grounds that the Average Price is less than $2.00 per
share.
1.3 Corporate Structure of the Company.
(a) Steven Ross will become the Chief Executive Officer of MergerCo
following the Merger, and Alexander Kalpaxis will become the Chief Executive
Officer and Chief Technology Officer of TEKS following the Merger. The Company
will be entitled to designate three (3) members to the TEKS Board of Directors,
to take office following the Closing Date (the "DSN Designees"). For a period of
three years following the Closing Date, the three (3) DSN Designees (one of whom
is intended to be Michael Grieves) will nominate the four (4) existing TEKS
board members [or those four (4) persons designated by vote of such of those
four (4) board members who are still members of the TEKS board (the "TEKS
Designees")] for reelection to the
<PAGE>
Mr. Michael Grieves
January 18, 2000
Page 6
Company Board. For the same three (3) year period, the TEKS Designees will
nominate the Company Designees (or those three (3) persons designated by vote of
such of those three (3) DSN Designee board members who are still members of the
TEKS board) for reelection to the TEKS Board.
(b) TEKS will provide a guarantee of collection , rather than of
payment, to Foot Hill Capital with respect to $2,000,000 of indebtedness
outstanding under the Foot Hill Capital credit agreement between the Company and
Foot Hill Capital on the date of execution of the Merger Agreement on terms to
be mutually acceptable to TEKS and Foot Hill Capital; provided, that under no
circumstances will TEKS be required to escrow funds in order to support this
guarantee.
II. Conditions to Completion of the Merger.
2.1 Conditions to Obligations of Each Party to Effect the Merger.
Among other usual and customary conditions to closing of transactions similar to
the Merger, the respective obligations of each party to effect the Merger shall
be subject to the satisfaction of the following conditions:
(a) Due Diligence. The completion of a satisfactory due diligence
investigation of the other party.
(b) Shareholder Approval. The Merger Agreement shall have been
approved and adopted, and the Merger shall have been duly approved, by the
requisite vote under applicable law by the shareholders of each of TEKS and the
Company.
(c) Registration Statement Effective; TEKS Proxy Statement. The SEC
shall have declared the Registration Statement with respect to the distribution
to Company shareholders of the Series A Preferred Stock (the "Registration
Statement") effective. No stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose, and no similar proceeding in respect of the proxy
statement provided to TEKS shareholders in connection with their vote on
approval of the Merger (the "TEKS Proxy Statement"), shall have been initiated
or threatened in writing by the SEC.
(d) No Order; Approvals. No Governmental Entity shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and which has the effect of making
the Merger illegal or otherwise prohibiting consummation of the Merger. All
consents, approvals, orders or other actions by or in respect of or filings with
any Governmental Entity required to permit the consummation of the Merger and
the transactions contemplated hereby shall have been obtained.
<PAGE>
Mr. Michael Grieves
January 18, 2000
Page 7
(e) Nasdaq Listing. The shares of TEKS Series A Preferred Stock
issuable to shareholders of the Company pursuant to the Merger Agreement shall
have been authorized for listing on the Nasdaq Small Cap Market subject to
official notice of issuance.
(f) Third Party Consents. The Company shall have obtained such
consents and approvals as are required pursuant to the Foothill Capital Credit
agreement; provided, that the Company shall not have the right to assert any
such failure to obtain such consents and approvals as a condition to close if
any act or failure to act by the Company or its affiliates caused the failure of
such condition.
(g) Company Shareholder Vote. At the Company Shareholders' Meeting
held to authorize and approve the Merger, no less than a mutually agreed
specified percentage of the outstanding shares of Company capital stock entitled
to vote at such meeting shall vote to authorize consummation of the Merger based
on the terms of the Merger Agreement.
(h) Fairness Opinions. Each party shall receive a fairness opinion
satisfactory to its Board of Directors, to the effect that the Merger is fair,
from a financial point of view, to the public shareholders of such party.
III. Miscellaneous.
3.1 Information. Each party will provide the other, its employees
and all other interested parties, copies of all financial information, other due
diligence information and related filings made by it under the Securities
Exchange Act of 1934, as amended, as requested.
3.2 Confidentiality. Each of the parties hereto agrees and
acknowledges that it has previously executed a letter agreement regarding the
confidentiality of information provided in connection with the due diligence
investigations contemplated by this letter of intent and the Merger Agreement,
and both parties do hereby agree that such agreement will continue in full force
and effect in accordance with its terms.
3.3 Public Disclosure. The Company and TEKS will consult and
mutually agree with each other before issuing any press release or otherwise
making any public statement with respect to the Merger or this letter of intent
and will not issue any such press release or make any such public statement
prior to such consultation and agreement, except as may be required by law or
any listing agreement with a national securities exchange or the Nasdaq Stock
Market.
3.4 No Solicitation. (a) From and after the date of this letter of
intent until the earlier of March 1, 2000 (the "Termination Date") or the date
of execution of the Merger Agreement (the "Execution Date"), the Company shall
not, and will instruct its directors, officers, employees, representatives,
investment bankers, agents and affiliates (including any subsidiaries)
<PAGE>
Mr. Michael Grieves
January 18, 2000
Page 8
not to, directly or indirectly, (i) initiate, solicit, encourage, negotiate or
accept the making, submission or announcement of, any Acquisition Proposal (as
defined below) by any person, entity or group (other than TEKS and its
affiliates, agents and representatives), or (ii) participate in any discussions
or negotiations with, or disclose any non-public information concerning the
Company to, or afford any access to the properties, books or records of the
Company to, or otherwise assist or facilitate, or enter into any agreement or
understanding with, any person, entity or group (other than TEKS and its
affiliates, agents and representatives), in connection with any Acquisition
Proposal with respect to the Company. Without limiting the generality of the
foregoing, the Company acknowledges and agrees that any violation of any of the
restrictions set forth in the preceding sentence by any director or officer of
the Company, or by any employee, representative, investment banker, agent or
affiliate of the Company having direct or indirect authority from the Company or
any director or officer of the Company, shall be deemed to constitute a breach
of this Section 3.4 by the Company. For the purposes of this letter of intent,
an "Acquisition Proposal" with respect to an entity means any proposal, inquiry
or offer relating to or which the entity has reason to believe relates to (i)
any merger, consolidation, combination, sale, dividend or other disposition of
substantial assets or properties or similar transactions or series of
transactions involving the entity or any subsidiaries of the entity, (ii) sale,
dividend, split, or other disposition of 10% or more of the shares of capital
stock or other equity interests of the entity (including without limitation by
way of a tender offer or an exchange offer), (iii) the acquisition by any person
of beneficial ownership or a right to acquire beneficial ownership of, or the
formation of any "group" (as defined under Section 13(d) of the Exchange Act and
the rules and regulations thereunder) which beneficially owns, or has the right
to acquire beneficial ownership of, 10% or more of the then outstanding shares
of capital stock of the entity; or (iv) any public announcement of a proposal,
plan or intention to do any of the foregoing or any agreement to engage in any
of the foregoing. As of the date hereof, the Company will immediately cease and
cause to be terminated any and all existing activities, discussions or
negotiations with any parties with respect to any Acquisition Proposal. The
Company will (i) notify TEKS as promptly as practicable if it receives any
proposal or inquiry or request for the Company in connection with an Acquisition
Proposal or potential Acquisition Proposal and (ii) as promptly as practicable
deliver to TEKS a copy of such proposal, inquiry or request if it is in written
form terms and conditions of any such Acquisition Proposal, as well as the
identity of the third party submitting such Acquisition Proposal. In addition,
subject to the other provisions of this Section 3.4, from and after the date of
this letter of intent until the earlier of the Termination Date or the Execution
Date, the Company will not, and will instruct its directors, officers,
employees, representatives, investment bankers, agents and affiliates (including
any subsidiaries) not to, directly or indirectly, make or authorize any public
statement, recommendation or solicitation in support of any Acquisition Proposal
made by any person, entity or group (other than TEKS); provided, however, that
nothing herein shall prohibit the Company's Board of Directors from taking and
disclosing to the Company's shareholders a
<PAGE>
Mr. Michael Grieves
January 18, 2000
Page 9
position with respect to a tender offer pursuant to Rules 14d-9 and 14e-2
promulgated under the Exchange Act.
(b) Notwithstanding the foregoing provisions of subparagraph (a) of
this Section 3.4, the Company's Board of Directors shall be free to take any
action or authorize the taking of any action with respect to unsolicited
inquiries, proposals or offers received by the Company after the date hereof
with respect to an Acquisition Proposal, including, without limitation,
responding thereto and providing information to third parties in connection
therewith, as may be required in the exercise of their fiduciary duties to the
Company or its shareholders; provided, that to the extent that (i) the Company
fails to execute a definitive Merger Agreement that materially conforms to the
terms and conditions of this letter of intent prior to the Execution Date,
despite the execution thereof by TEKS, and (ii) the Company has breached the
provisions of Section 3.4(a) prior thereto, then within fifteen (15) days of the
Execution Date the Company shall pay to TEKS $250,000 as liquidated damages to
compensate TEKS for the estimated lost value of the proposed Merger to TEKS and
to defray the estimated expenses incurred by TEKS in connection with the
performance of its due diligence investigation and the preparation and
negotiation of agreements and other documentation related to the Merger,
including but not limited to this letter of intent and any Merger Agreement and
related instruments and other agreements.
(c) In the event that (i) TEKS fails to execute a definitive Merger
Agreement that materially conforms to the terms and conditions of this letter of
intent prior to the Execution Date, despite the execution thereof by the
Company, and (ii) TEKS has solicited an Acquisition Proposal with respect to a
business that is operationally and financially similar to the Company, then
within fifteen (15) days of the Execution Date TEKS shall pay to the Company
$250,000 as liquidated damages to compensate the Company for the estimated lost
value of the proposed Merger to the Company and to defray the estimated expenses
incurred by the Company in connection with the performance of its due diligence
investigation and the preparation and negotiation of agreements and other
documentation related to the Merger, including but not limited to this letter of
intent and any Merger Agreement and related instruments and other agreements.
3.5 No Binding Agreement. Except as set forth in Sections 3.1, 3.2,
3.3 and 3.4 of this letter of intent, which shall represent legal and binding
obligations of the Company and TEKS, as relevant, this letter of intent
represents only an expression of our mutual intentions at this time and shall
not be construed or deemed to represent an agreement or agreement to agree as to
any of the above terms and conditions. It is expressly understood and agreed
that the legal rights and obligations of the parties, except as set forth above,
shall arise only pursuant to a definitive Merger Agreement, containing customary
representations, warranties, covenants and agreements of the parties thereto and
in form and content mutually satisfactory to such parties and their legal
counsel.
<PAGE>
Mr. Michael Grieves
January 18, 2000
Page 10
If the foregoing accurately reflects the substance of our mutual
agreement and understanding, please so indicate by executing and dating in the
spaces provided below and returning a copy of this letter to the undersigned.
This letter of intent may be executed in any number of counterparts, all of
which will be taken together as the same instrument.
Very truly yours,
TEKINSIGHT.COM,INC.
By:/s/Brian Bookmeier
---------------------------
Brian Bookmeier, President
ACCEPTED AND AGREED TO:
DATA SYSTEMS NETWORK CORPORATION
By:/s/Michael Grieves
------------------------
Michael Grieves,
President and Chief
Executive Officer
[LOGO]
TEKINSIGHT.COM SIGNS LETTER OF INTENT TO
ACQUIRE DATA SYSTEMS NETWORK CORPORATION
New York, New York, January 20, 2000-- TekInsight.com (NASDAQ:TEKS), a provider
of advanced Internet and e-commerce products and solutions, and Data Systems
Network Corporation (OTC BB: DSYS), a leading provider of enterprise services,
today jointly announce that they have signed a letter of intent for
TekInsight.com to acquire Data Systems Corporation.
The letter of intent details the conditions to the completion of the
acquisition. The proposed transaction calls for Data Systems to be merged into
Astratek, Inc., a wholly owned and principal operating subsidiary of
TekInsight.com (the "Acquisition"). In consideration for the Acquisition, Data
Systems shareholders will receive a number of shares of a new class of
TekInsight.com Preferred Stock proposed to be listed on the NASDAQ Small Cap
market that will have a market value of between $12,500,000 and $18,000,000,
with such value to be based upon the market price of TekInsight.com Common Stock
at the time of the Acquisition closing. The Acquisition will give TekInsight.com
access to additional Fortune 1000 clientele, a sales force and a help desk which
will be critical components to rolling out the Company's proprietary XML based
products and services. This network of accounts and relationships including 16
state and local government agencies accounted for over $54 million sales last
year. The Acquisition Agreement will be subject to the usual and customary
conditions to closing, including due diligence investigations, authorizing votes
by the shareholders of TekInsight.com and Data Systems, satisfactory "fairness
opinions" addressed to each of TekInsight.com and Data Systems and execution of
a definitive Acquisition Agreement. Although no assurances can be given, the
parties intend to close the Acquisition by May 31, 2000.
"TekInsight.com has been using its resources to develop the technology and
methodology, especially around XML, to build robust, scalable e-commerce
applications, capable of sustainable high-volume transaction rates. It is now
time to expand its roll out to the marketplace. Data Systems brings an
infrastructure capable of supporting a $100 million organization and a technical
group experienced in Internet and Intranet technologies. In addition, Data
Systems's core business of serving state and local governments should provide us
with a receptive clientele for our e-commerce capabilities," said Alex Kalpaxis,
Director and Chief Technology Officer of TekInsight.com.
"While Data Systems has been involved with Internet and Intranet projects for
its clients, TekInsight.com's technical capabilities will allow us to provide a
total enterprise solution in the e-commerce marketspace," said Data Systems' CEO
Michael Grieves. "TekInsight's superior development capabilities in the Internet
and e-commerce arena, along with Data Systems' enterprise management,
applications development and network services will address a wide range of our
clients' technology needs. This will allow our clients to leverage the
investment they have previously made in infrastructure with the latest
e-commerce technology. We have already begun working with TekInsight.com in
addressing a few selected clients' Internet requirements."
ABOUT TEKINSIGHT.COM
TekInsight.com is a world-class XML Internet technology developer and software
engineering company. . The company's proprietary products include various
web-based diagnostic software agents and web-based e-commerce performance and
analysis tools. TekInsight.com is currently using this expertise to build highly
scalable web-based e-commerce/portal sites. For more information on
TekInsight.com visit www.tekinsight.com.
<PAGE>
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ABOUT DATA SYSTEMS NETWORK CORPORATION
Data Systems Network Corporation, the Computer Associates 1999 New Business
Partner of the Year, has more than 13 years of experience providing strategic
technology solutions to Fortune 1000 companies and over 16 state and local
government agencies. The company provides a wide range of services, including
Applications Development, Network Services, Enterprise Management, Help Desk and
Security Services. To learn more about Data Systems Network, please call (248)
489-8700 or visit the company web site at www.datasystems.com.
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Forward Looking Statements
This press release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to be
covered by the safe harbors created hereby. Investors are cautioned that certain
statements in this release are "forward looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995 and involve known and
unknown risk uncertainties and other factors. Such uncertainties and risks
include, among others, certain risks associated with the closing of the
transactions, government regulation, and general economic business conditions.
Actual events, circumstances, effects and results may be materially different
from the results, performance or achievements expressed or implied by the
forward-looking statements. Consequently, the forward looking statements
contained herein should not be regarded as representations by Data Systems
Network Corporation, or any other person, the projected outcomes can or will be
achieved.
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Contact: Michael Jansen Contact: Alexander Kalpaxis
Data Systems Network Corporation TekInsight.com
(248) 489-8700 (212) 271-8520
(800) 544-2086 [email protected]
[email protected]
