News release

Compaq and Systech Join to Drive Retail Point-of-Sale Systems Based on Open Industry Standards

Retailers will be adding the benefits of leading-edge wireless and Internet technologies to existing point-of-sale (POS) systems thanks to a new partnership between Compaq Computer Corporation (NYSE: CPQ) and Systech Retail Systems (TSE: SYS). The two companies have signed a multi-year agreement to jointly offer specialized and cost-effective technology solutions for the retailing industry based on market-leading Compaq ProLiant™ industry standard server platforms and innovative iPAQ™ and Evo™ access devices. Compaq officials said the partnership adds a key element to a much broader Retail strategy that now enables the company to offer complete end-to-end solutions and services to the retailing industry, from Web-enabled POS systems to real-time "extreme" CRM capabilities.

Under the agreement, Compaq will provide priority access to its cutting-edge technologies—such as ProLiant server clustering and high-availability solutions—to Systech, and Systech will provide Compaq with specialized retail industry expertise. The two companies will engineer IT solutions tailored for the retail environment, speeding development of POS systems on open, industry-standard platforms.

"Consistent with our Retail vertical strategy, Compaq is building a portfolio of back office and 'in store' retailing solutions, from supply chain management to electronic storefronts, from CRM to kiosks and POS systems. We have a strong presence in the 'back offices' of retailing, and Systech brings us immense knowledge and specialized capabilities to integrate our core technologies into innovative, store-level solutions," said Mike Winkler, executive vice president, Global Business Units, Compaq. "The partnership between Compaq and Systech will bring retailers Compaq's global services reach, innovative capabilities in wireless and Web technologies, and enterprise server systems combined with Systech's store-systems software and specialized services."

"In our years of experience integrating systems for retail companies, customers are looking for the chance to marry new technology with existing POS systems, but their investments in those systems often made replacement a non-starter," said Systech CEO William Moore. "This partnership will bring the latest of Compaq's innovative technologies to retailers with those requirements, and Systech will continue to support them in our role as the leading systems integrator in North America retailing. Just as importantly, we're pleased to partner with Compaq because we share a common vision for retailing."

Both companies will sell their jointly developed solutions in the United States and Canada and provide seamless, single-contact support to their shared customers. More than 500 Systech customer service engineers will deliver industry expertise to support specialty retail technologies, complemented by the broad IT infrastructure support provided by Compaq Global Services.

"The retail industry will profit from Compaq's years of experience developing open architecture systems and industry standards for technology," added Randy DeMont, vice president of Compaq's newly formed Global Solutions Group, which is driving the company's vertical strategies. "There is huge opportunity for enhancing efficiency in operations and building business once the POS system and the storefront are enabled for wireless, Internet and database management."

The first jointly developed, co-branded solution will supplement existing proprietary point-of-sale systems with wireless, Internet, and in-store SQL database capabilities. Based on Systech-developed applications running Microsoft® Windows® 2000 on market-leading Compaq ProLiant servers, the new retail platform will complement existing POS systems to preserve customers' investments. Initially marketed in the United States and Canada, the companies will launch the new offerings in Australia, Germany, France, the Netherlands, Scandinavia, and the U.K. early in 2002.

Reseller Relationship and Investment

The companies estimate the value of joint sales under this agreement at well over $100 million over three years. Systech will become a Compaq authorized reseller and service provider, with associated economies of scale that will benefit shared customers, while continuing their relationships with other technology providers to support current customers employing those companies' products. In addition, Compaq will acquire approximately a 25 percent interest in Systech with an investment of US$20 million ($31.4 million Canadian) and will receive preferred shares which will be convertible into Systech common according to details of the agreement. Systech will use the proceeds of the investment to reduce debt, strengthen working capital, and for marketing and promotion of the partnership.

About Systech

Based in Raleigh and Toronto, Systech offers a unique and comprehensive combination of retail technology, including software, systems and services, to large retailers throughout North America. Its StoreEnterprise open architecture software suite (O/S Migration, OpenField, RetailConnector and StoreCentral) enables e-commerce and other powerful new technology to be applied in the retail environment. The company's significant cross-platform capability and 500-plus technical service force allow it to address any in-store systems requirement—regardless of project size or scope. Information on Systech and its products and services is available at www.srspos.com.

About Compaq

Founded in 1982, Compaq Computer Corporation ("Compaq") is a leading global provider of enterprise technology and solutions. Compaq designs, develops, manufactures and markets hardware, software, solutions and services, including industry-leading enterprise storage and computing solutions, fault-tolerant business-critical solutions, communication products, and desktop and portable personal computers that are sold in more than 200 countries. Information on Compaq and its products and services is available at http://www.compaq.com.

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