Exhibit 10.1

 
 
 
 

 

 

 
DECISIONPOINT SYSTEMS, INC.
 
– and –
 
COMAMTECH INC.
 
– and –
 
2259736 ONTARIO INC.
 

 
 

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ARRANGEMENT AGREEMENT
 

 

 

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FASKEN MARTINEAU DuMOULIN LLP
 

 

 

October 20, 2010
 
 
 
 
 
 

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TABLE OF CONTENTS
 
ARTICLE 1 INTERPRETATION
1
1.1
Definitions
1
1.2
Interpretation Not Affected by Headings
11
1.3
Knowledge
12
1.4
Number and Gender
12
1.5
Date for Any Action
12
1.6
Statutory References
12
1.7
Currency
12
1.8
Schedules
12
     
ARTICLE 2 THE ARRANGEMENT
13
2.1
Arrangement
13
2.2
Press Release Announcing the Arrangement
13
2.3
Implementation Steps by Comamtech and MergerCo
13
2.4
Implementation Steps by the Corporation
14
2.5
Interim Order
14
2.6
Articles of Arrangement Articles of Amalgamation; Closing
14
2.7
Circular
15
2.8
Preparation of Filings
15
2.9
Court Proceedings
17
2.10
Exchange and Cancellation of Shares and Preferred Shares
17
2.11
Public Communications
18
     
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF CORPORATION
18
3.1
Representations and Warranties
18
3.2
Disclosure Letter
36
3.3
Survival of Representations and Warranties
37
     
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF COMAMTECH
37
4.1
Representations and Warranties of Comamtech and MergerCo
37
4.2
Disclosure Letter
41
4.3
Survival of Representations and Warranties
41
     
ARTICLE 5 COVENANTS OF THE PARTIES
41
5.1
Covenants of the Corporation and Comamtech Regarding the Conduct of Business
41
5.2
Covenants of the Corporation Regarding the Arrangement
45
5.3
Covenants of Comamtech Regarding the Performance of Obligations
46
5.4
Mutual Covenants
47
     

 
 
 
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ARTICLE 6 CONDITIONS PRECEDENT
48
6.1
Mutual Conditions Precedent
48
6.2
Additional Conditions Precedent to the Obligations of Comamtech and MergerCo
49
6.3
Additional Conditions Precedent to the Obligations of the Corporation
51
6.4
Notice and Cure Provisions
52
6.5
Satisfaction of Conditions
53
     
ARTICLE 7 ADDITIONAL AGREEMENTS
53
7.1
Mutual Covenants Regarding Non-Solicitation
53
7.2
Provision of Information; Access
57
7.3
Agreement as to Damages
57
7.4
Fees and Expenses
59
7.5
Liquidated Damages, Injunctive Relief and No Liability of Others
59
7.6
Indemnification
59
7.7
Options and Warrants
59
     
ARTICLE 8 TERM, TERMINATION, AMENDMENT AND WAIVER
60
8.1
Term
60
8.2
Termination
60
8.3
Amendment
60
8.4
Waiver
60
     
ARTICLE 9 GENERAL PROVISIONS
61
9.1
Further Assurances
61
9.2
Notices
61
9.3
Governing Law
62
9.4
Injunctive Relief
62
9.5
Time of Essence
62
9.6
Entire Agreement, Binding Effect and Assignment
62
9.7
Severability
63
9.8
No Third Party Beneficiaries
63
9.9
Rules of Construction
63
9.10
Counterparts, Execution
63
     

 
 
 
 
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ARRANGEMENT AGREEMENT
 
THIS AGREEMENT is made as of October 20, 2010,

BETWEEN:
COMAMTECH INC., a corporation incorporated under the laws of the Province of
Ontario;
     
(hereinafter, “Comamtech”)
   
AND:
DECISIONPOINT SYSTEMS, INC., a corporation incorporated under the laws of the
State of Delaware;
     
(hereinafter, the “Corporation”)
   
AND:
2259736 ONTARIO INC., a corporation incorporated  under the laws of the Province
of Ontario;
     
(hereinafter, the “MergerCo”)
   

 
NOW THEREFORE, in consideration of the covenants and agreements herein
contained, the parties agree as follows:
 
ARTICLE 1 
INTERPRETATION
 
1.1  
Definitions

 
In this Agreement, unless something in the subject matter or the context is
inconsistent therewith:
 
“Acquisition Proposal” means any proposal or offer (written or oral) or any
public announcement of an intention to make any proposal or offer, with respect
to any of the following (excluding the Arrangement, the Harris Transaction and
the transactions contemplated by this Agreement): (i) any merger, consolidation,
amalgamation, take-over bid, tender offer, arrangement, recapitalization,
liquidation, dissolution, share exchange, reorganisation, compromise or business
combination, directly or indirectly involving any member of the Consolidated
Group, (ii) any sale or acquisition of assets representing 20% or more of the
net income or revenues of the assets of the Consolidated Group, taken as a whole
(or any lease, long-term supply agreement, exchange, mortgage, pledge or other
arrangement having a similar economic effect as a sale or acquisition of assets
representing 20% or more of the net income or revenues of the assets of the
Consolidated Group, taken as a whole) in a single transaction or a series of
related transactions, (iii) any sale or acquisition of beneficial ownership of
20% or more of any class of the Corporation’s shares or of the shares of any
other member of the Consolidated Group or rights or interests therein or thereto
in a single transaction or a series of related transactions, (iv) any
transaction, the consummation of which would reasonably be expected to impede,
interfere with, prevent or materially delay the consummation of the transactions
contemplated by this Agreement, or (v) any transaction having a similar economic
effect as any of the foregoing;
 
 
 
 
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“affiliate” has the meaning ascribed thereto in the OBCA or, in the case of the
Corporation, the meaning described in the Delaware General Corporation Law;
 
“Agreement” means this arrangement agreement as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof;
 
“Amalgamation” has the meaning ascribed thereto in Section 2.1;
 
“Arrangement” means an arrangement under Section 182 of the OBCA on the terms
and subject to the conditions set out in the Plan of Arrangement, subject to any
amendments or variations thereto made in accordance with the terms thereof or
made at the direction of the Court in the Interim Order or Final Order, as the
case may be and approved by Comamtech and the Corporation;
 
“Arrangement Resolution” means the special resolution of the Shareholders
approving the Arrangement, to be substantially in the form and content of
Schedule A attached hereto;
 
“Articles of Amalgamation” means: (a) the articles of amalgamation of MergerCo
to be filed with the Director in connection with the Amalgamation or (b) the
articles of arrangement to be filed in connection with the amalgamation, which
shall be in form and content satisfactory to the Parties acting reasonably;
 
“Articles of Arrangement” means the articles of arrangement of Comamtech to be
filed with the Director in connection with the Arrangement, which shall be in
form and content satisfactory to the Corporation and Comamtech, each acting
reasonably;
 
“Assets” means, at a particular time, all the assets, properties and
undertakings of the Corporation at such time whether real, personal, tangible or
intangible (including as a lessee of any real or personal property);
 
“Benefit Plan” has the meaning ascribed in Section 3.1.37(d);
 
“Business” shall mean the business conducted by the Corporation, Comamtech or
MergerCo before the Amalgamation.
 
“Business Day” means any day, other than a Saturday, Sunday or any other day on
which the principal chartered banks located in Montreal, Québec, or New York
City are not open for business during normal banking hours;
 
“Canadian GAAP” means Canadian generally accepted accounting principles from
time to time approved by the Canadian Institute of Chartered Accountants, or any
successor institute, consistently applied and applicable as at the date on which
such calculation or action is made or taken or required to be made or taken;
 
“Circular” means the notice of the Meeting and accompanying management
information circular, including all schedules, appendices and exhibits thereto,
to be sent to the Shareholders in connection with the Meeting, as same may be
amended, supplemented or otherwise modified;
 
 
 
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“Closing Date” has the meaning ascribed thereto in Section 2.6;
 
“Code” means the Internal Revenue Code of 1986, as amended;
 
“Comamtech Board” means the board of directors of Comamtech;
 
“Comamtech Continuance” means the application by Comamtech to the Secretary of
State for the State of Delaware requesting that Comamtech be continued as if it
had been incorporated under the laws of the State of Delaware, the whole as
prescribed by Section 181 of the OBCA;
 
“Comamtech Continuance Resolution” means the special resolution approving the
Comamtech Continuance of the Shareholders attached hereto as Schedule B;
 
“Comamtech Disclosure Letter” has the meaning ascribed thereto in Section 3.2;
 
“Comamtech Fairness Opinion” means the opinion of ModelCom Inc. as to the
fairness, from a financial point of view, of the consideration being offered
under the Arrangement to Comamtech;
 
“Comamtech Material Adverse Change” means any event or circumstance which is
reasonably likely to have a Comamtech Material Adverse Effect;
 
“Comamtech Material Adverse Effect” means any change, effect, event, violation,
circumstance or occurrence that, individually or in the aggregate with all other
changes, effects, events, violations, circumstances or occurrences, (a) is or
could reasonably be expected to be material and adverse to the business, assets,
liabilities, rights, obligations (whether absolute, accrued, conditional or
otherwise), affairs, results of operations or condition (financial or otherwise)
of the Consolidated Group of Comamtech, taken as a whole, or (b) could
reasonably be expected to materially impair or delay the ability of Comamtech to
perform its obligations under this Agreement (provided that the pendency of any
litigation seeking to restrain, enjoin or otherwise prohibit the consummation of
the Arrangement or other transactions contemplated by this Agreement will be
disregarded for the purposes of this clause), in each case, other than any
change, effect, event, violation, inaccuracy, circumstance or occurrence
resulting from (i) the announcement of the execution of this Agreement or the
transactions contemplated hereby or the performance of any obligation hereunder,
(ii) changes in the United States or Canadian economies or securities or
currency markets in general, (iii) changes generally affecting the industry in
which any member of the Consolidated Group of Comamtech carries on its business
in the United States or Canada, (iv) commencement, occurrence or continuation of
any war (whether or not declared), armed hostilities or acts of terrorism,
(v) any change in applicable Laws or regulations or in Canadian GAAP, or (vi)
any natural disaster, except in the case of clauses (ii), (iii), (iv), (v) and
(vi) to the extent any such change, effect, event or occurrence primarily
relates to (or has the effect of primarily relating to) the Consolidated Group
of Comamtech, taken as a whole, or has had a materially disproportionate effect
on the Consolidated Group of Comamtech, taken as a whole, as compared to other
persons in the industry in which the Consolidated Group of Comamtech carries on
its business in the U.S. or Canada, as the case may be; provided, however, that
none of (x) a failure to meet any earnings estimates previously made public by
Comamtech, or (y) any decrease in the market price or any decline in the trading
volume of the shares of Comamtech, in and of themselves, constitute a Comamtech
Material Adverse Effect;
 
 
 
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“Comamtech Options” means options to acquire common shares in the capital stock
of Comamtech pursuant to Comamtech’s stock option plan;
 
“Comamtech Convertible Preferred Shares” means preferred shares in the capital
stock of Comamtech convertible into Comamtech shares in accordance with the
provisions thereof;
 
“Comamtech Shares” means common shares in the capital stock of Comamtech;
 
“Comamtech Warrants” means warrants to acquire Comamtech Shares to be issued in
accordance with the provisions of this Agreement;
 
“Confidentiality Agreement” means the mutual confidentiality and non-disclosure
agreement dated July 19, 2010 entered into between Comamtech and the
Corporation;
 
“Consolidated Group” means, collectively, the Corporation or Comamtech (as the
case may be) and all of their respective subsidiaries and affiliates;
 
“Contracts” has the meaning ascribed in 3.1.34(a);
 
“Corporation” means DecisionPoint Systems, Inc.;
 
“Corporation Board” means the board of directors of the Corporation;
 
“Corporation Common Shares” has the meaning ascribed in the Plan of Arrangement;
 
“Corporation Financial Statements” means (i) the audited consolidated financial
statements of the Corporation as at and for the fiscal years ended December 31,
2009 and December 31, 2008,  and (ii) the unaudited interim consolidated
financial statements of the Corporation as at and for the periods ended June 30,
2010 and June 30, 2009;
 
“Corporation IP” means all Intellectual Property owned, conceived or developed
by the Corporation in connection with the business of the Corporation, including
the Software;
 
“Corporation Material Adverse Change” means any event or circumstance which is
reasonably likely to have a Corporation Material Adverse Effect;
 
“Corporation Material Adverse Effect” means any change, effect, event,
violation, circumstance or occurrence that, individually or in the aggregate
with all other changes, effects, events, violations, circumstances or
occurrences, (a) is or could reasonably be expected to be material and adverse
to the business, assets, liabilities, rights, obligations (whether absolute,
accrued, conditional or otherwise), affairs, results of operations or condition
(financial or otherwise) of the Consolidated Group of the Corporation, taken as
a whole, or (b) could reasonably be expected to materially impair or delay the
ability of the Corporation to perform its obligations under this Agreement
(provided that the pendency of any litigation seeking to restrain, enjoin or
otherwise prohibit the consummation of the Arrangement or other transactions
contemplated by this Agreement will be disregarded for the purposes of this
clause), in each case, other than any change, effect, event, violation,
inaccuracy, circumstance or occurrence resulting from (i) the announcement of
the execution of this Agreement or the transactions contemplated hereby or the
performance of any obligation hereunder, (ii) changes in the United States or
Canadian economies or securities or currency markets in general, (iii) changes
generally affecting the industry in which any member of the Consolidated Group
of the Corporation carries on its business in the United States or Canada,
(iv) commencement, occurrence or continuation of any war (whether or not
declared), armed hostilities or acts of terrorism, (v) any change in applicable
Laws or regulations or in Canadian GAAP, or (vi) any natural disaster, except in
the case of clauses (ii), (iii), (iv), (v) and (vi) to the extent any such
change, effect, event or occurrence primarily relates to (or has the effect of
primarily relating to) the Consolidated Group of the Corporation, taken as a
whole, or has had a materially disproportionate effect on the Consolidated Group
of the Corporation, taken as a whole, as compared to other persons in the
industry in which the Consolidated Group of the Corporation carries on its
business in the U.S. or Canada, as the case may be; provided, however, that none
of (x) a failure to meet any earnings estimates previously made public by the
Corporation, or (y) any decrease in the market price or any decline in the
trading volume of the shares of the Corporation, in and of themselves,
constitute a Corporation Material Adverse Effect;
 
 
 
 
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“Corporation Preferred Shares” has the meaning ascribed in the Plan Arrangement;
 
“Corporation Public Documents” all reports, registration statements, definitive
proxy statements and other documents and all amendments thereto and supplements
thereof required to be filed by it with the U.S. Securities and Exchange
Commission;
 
“Corporation Shareholders” means the holders of shares of the Corporation;
 
“Corporation Warrants” means all outstanding warrants to purchase shares of the
Corporation;
 
“Court” means the Ontario Superior Court of Justice, Commercial List;
 
“Developers” has the meaning ascribed thereto in Section 3.2(a);
 
“Director” has the meaning ascribed thereto by the OBCA on the date hereof;
 
“Disclosure Letter” has the meaning ascribed thereto in Section 3.2;
 
“Dissent Rights” has the meaning ascribed thereto in the Plan of Arrangement;
 
“Effective Date” has the meaning ascribed thereto in the Plan of Arrangement;
 
“Effective Time” has the meaning ascribed thereto in the Plan of Arrangement;
 
 
 
 
 
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“Employees” has the meaning ascribed in 3.1.37(a);
 
“Encumbrance”, in relation to any property or asset, means any encumbrance or
title defect of whatever kind or nature, regardless of form, whether or not
recorded or registered or consensual or statutory or arising by law, including
(i) any mortgage, charge, pledge, hypothec, security interest, security
agreement, assignment, lien (statutory or otherwise), privilege, easement,
servitude, right of way, lease, option, pre-emptive right or right of first
refusal, ownership or title retention agreement, restrictive covenant,
conditional sale agreement, sub-lease, encroachment, work-order or adverse claim
of any kind or character whatsoever and (ii) any other encumbrance of any kind
or nature or any other arrangement or condition which, in substance, secures
payment or performance of an obligation;
 
“End-user Customer” means a user to licensee of the Software;
 
“Final Order” means the final order of the Court in a form acceptable to the
Corporation and Comamtech, each acting reasonably, approving the Arrangement, as
such order may be amended by the Court (with the consent of both the Corporation
and Comamtech, each acting reasonably) at any time prior to the Effective Date
or, if appealed, then, unless such appeal is withdrawn or denied, as affirmed or
as amended (provided that any such amendment is acceptable to both the
Corporation and Comamtech, each acting reasonably) on appeal;
 
“Governmental Entity” means (a) any multinational, federal, provincial, state,
regional, municipal, local or other government, governmental or public
department, ministry, central bank, court, tribunal, arbitral body, commission,
commissioner, board, bureau or agency, domestic or foreign, (b) any subdivision,
agent or authority of any of the foregoing or (c) any quasi-governmental or
private body, including any tribunal, commission, regulatory agency or
self-regulatory organization, exercising any regulatory, expropriation or taxing
authority under or for the account of any of the foregoing;
 
“Harris Transaction” means the transaction among Copernic Inc., Comamtech and N.
Harris Computer Corporation as publically announced by Copernic Inc. on August
25, 2010 and as may be amended and supplemented from time to time;
 
“including” means including without limitation, and “include” and “includes”
have a corresponding meaning;
 
“Intellectual Property” means, in any jurisdiction: (i) patents and patent
rights, and the subject matter thereof, (ii) trademarks, trade names, service
marks, brand names, certification marks, trade dress and other indications of
origin, whether registered or not and the goodwill associated therewith, (iii)
copyrights, whether registered or not, and the subject matter thereof, (iv)
applications submitted to a Governmental Entity in any jurisdiction and all
supplements and amendments that may be filed with respect thereto in respect of
any of the foregoing filings, (v) an application submitted to a Governmental
Entity in any jurisdiction seeking approval to market and sell a product and all
supplements and amendments that may be filed in respect of such application,
including all regulatory information and other documentation related thereto,
(vi) trade secrets and other confidential or non-public information, including
inventions, discoveries, formulae, compositions, inventor’s notes, discoveries
and improvements, know-how, manufacturing and production processes and
techniques (including for scale up), research and development information,
drawings, schematics, specifications, plans, proposals and technical data, (vii)
internet protocol addresses and domain names, whether or not used or currently
in service, (viii) any intellectual or industrial property or proprietary rights
similar to the foregoing, including industrial designs and (ix) registrations
of, and applications to register any, of the foregoing, and any renewal,
extension, reissue, division, continuation, continuation in part, patent of
addition, re-examination, derivation or modification thereof;
 
 
 
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“Interim Order” means the interim order of the Court in a form acceptable to the
Corporation and Comamtech, each acting reasonably, providing for, among other
things, the calling and holding of the Meeting, as such order may be amended by
the Court (with the consent of the Corporation and Comamtech, each acting
reasonably) or, if appealed, then unless such appeal is withdrawn or denied, as
affirmed or as amended (provided that any such amendment is acceptable to both
the Corporation and Comamtech, each acting reasonably) on appeal;
 
“Law” or “Laws” means all laws, statutes, codes, ordinances, decrees, rules,
regulations, by-laws, statutory rules, judicial or arbitral or administrative or
ministerial or departmental or regulatory judgments, orders, decisions, rulings
or awards, including general principles of common and civil law, and terms and
conditions of any grant of approval, permission, authority or licence of any
Governmental Entity, statutory body or self-regulatory authority, and the term
“applicable” with respect to such Laws and in the context that refers to one or
more persons, means that such Laws apply to such person or persons or its or
their business, undertaking, property or securities and emanate from a
Governmental Entity having jurisdiction over the person or persons or its or
their business, undertaking or securities;
 
“Leases” and “Leased Premises” has the meaning ascribed in Section 3.1.33(b);
 
“Licensed Technology” has the meaning ascribed in Section 3.1.25(a);
 
“Mass Market Software” means commercial “off-the-shelf” software available
through commercial distributors or in consumer retail stores or from the
internet;
 
“Material Contract” means any contract (i) that limits or otherwise restricts in
any material respect the activities of any member of the Consolidated Group or
any successor thereto or that would, after the Effective Time, limit or restrict
in any material respect the activities of any member of the Consolidated Group
from engaging or competing in any line of business in any location or with any
person, (ii) that includes any material exclusive dealing arrangement or any
other material arrangement that grants any material right of first refusal or
material right of first offer or similar material right or that limits or
purports to limit in any material respect the ability of any member of the
Consolidated Group to own, operate, sell, transfer, pledge or otherwise dispose
of any material assets or business, (iii) that is a material joint venture,
alliance or partnership agreement, (iv) that involves material payments to or
from any member of the Consolidated Group, (v) that involves the sale or
exclusive license of any material product of any member of the Consolidated
Group, (vi) that is a “material contract” as such term is defined in the
Securities Act, or (vii) that has obligations or liabilities thereunder to be
performed or paid by any member of the Consolidated Group (current, accrued,
contingent or otherwise) reasonably expected to be in excess of $100,000;
 
“material fact” has the meaning ascribed thereto in the Securities Act;
 
 
 
 
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“Meeting” means the special meeting of the Shareholders, including any
adjournment or postponement thereof, to be called and held in accordance with
the Interim Order to consider and, if deemed advisable, to, inter alia, approve
the Arrangement;
 
“Meeting of the Corporation” means the meeting or written consent of the
Corporation Shareholders, including any adjourned or postponement thereof to
consider, and if deemed advisable, to inter alia, approve the Arrangement;
 
“MergerCo” means 2259736 Ontario Inc. a wholly-owned subsidiary of Comamtech,
incorporated for the purposes of the amalgamation with the Corporation and,
after filing of the Articles of Amalgamation, means the Amalgamated Corporation
as such term is defined in the Plan of Amalgamation;
 
“MergerCo Board” means the board of directors of MergerCo;
 
“MergerCo Continuance” means the application by MergerCo to the Secretary of
State for the State of Delaware requesting that MergerCo be continued as if it
had been incorporated under the laws of the State of Delaware, the whole as
prescribed under Section 181 of the OBCA;
 
“MergerCo Continuance Resolution” means the special resolution of the sole
shareholder of MergerCo approving the MergerCo Continuance;
 
“OBCA” means the Ontario Business Corporations Act, as now in effect and as it
may be amended from time to time prior to the Effective Time;
 
“Open Source Software” shall mean (i) any Software that requires as a condition
of distribution of such software, that such software (1) be disclosed or
distributed in source code form, (2) be licensed under the condition that
modifications and the creation of derived works are allowed, (3) be
redistributable at no charge and/or (4) cannot be redistributed subject to
license or contractual conditions that are in addition to the conditions
contained in the original license, and/or (ii) any software that contains, is
derived from (in whole or in part), or statically or dynamically links against
any software specified under (i) in a manner such that the restrictions outlined
under (i) items (1), (2), (3) or (4) become applicable to such software. For the
purpose of this definition, by means of example and without limitation, any
software modules or packages licensed or distributed under any of the following
licenses or distribution models shall qualify as Open Source Software: (A) GNU's
General Public License (GPL) or Lesser/Library GPL (LGPL), (B) the Artistic
License, (C) the Mozilla Public License, (D) the Common Public License, (E) the
Sun Community Source License (SCSL), and (F) the Sun Industry Standards Source
License (SISSL);
 
“Options” means options, warrants, subscription rights or other rights to
acquire, or securities convertible into or exercisable for, any equity
securities of the Corporation, whether vested or not;
 
“Order” means any decree, decision, judgment, ruling, ordinance, arbitration
award, assessment, writ, injunction, notice or similar requirement or order of
any Governmental Entity (including building, environmental, fire, health,
labour, police or occupational health and safety authorities), in each such case
whether preliminary or final;
 
 
 
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“Ordinary Course of Business” means, in respect of the Corporation, an action
taken by the Corporation that is consistent with its past practices and is taken
in the ordinary course of its normal day-to-day operations, whether or not such
action is required to be authorized by the board of directors of the Corporation
(or by any Person or group of Persons exercising similar authority);
 
“Organizational Documents” means any and all articles and by-laws of a
corporation and all amendments thereto;
 
“OSC” means the Ontario Securities Commission;
 
“Outside Date” means December 31, 2010;
 
“Parties” means, collectively, Comamtech, the Corporation and MergerCo and
“Party” means any one of them;
 
“Permits” means all written permits, accreditations, consents, waivers,
licenses, certificates, approvals, authorizations, registrations, franchises,
rights, privileges and exemptions, or any document with a similar effect, issued
or granted by any Governmental Entity;
 
“Permitted Encumbrances” means the encumbrances listed in Schedule 6.2(k) of the
Disclosure Letter;
 
“Person” or “person” includes an individual, limited or general partnership,
limited liability company, limited liability partnership, trust, joint venture,
association, body corporate, unincorporated organization, trustee, executor,
administrator, legal representative, government (including any Governmental
Entity) or any other entity, whether or not having legal status;
 
“Plan of Arrangement” means the plan of arrangement to be agreed to between the
Parties hereto within five (5) Business Days of the execution of this Agreement
and as it may be amended pursuant to the terms thereof or at the direction of
the Court in the Interim Order or the Final Order, as the case may be and as
agreed to by the Corporation and Comamtech;
 
“Post-Arrangement Transaction Proposal” means any proposal or offer (written or
oral) or any public announcement of an intention to make any proposal or offer,
with respect to any merger, consolidation, amalgamation, take-over bid, reverse
take-over bid, tender offer, arrangement, private placement, recapitalization,
liquidation, dissolution, share exchange, reorganisation, compromise or business
combination, directly or indirectly involving the Corporation or Comamtech (as
the case may be);
 
‘‘Post-Signing Tax Returns’’ has the meaning ascribed thereto in
Section 5.1.6(a);
 
“Regulatory Approvals” means those sanctions, rulings, consents, approvals,
authorizations, orders, exemptions, permits and other approvals (including the
lapse, without objection, of a prescribed time under a statute or regulation
that states that a transaction may be implemented if a prescribed time lapses
following the giving of notice without an objection being made) required to be
obtained from, and all declarations or filings required to be made with, any
Governmental Entity or any other person by each member of the Consolidated Group
in connection with the execution and delivery of this Agreement or the
consummation by the Corporation of the transactions contemplated by this
Agreement, the whole as set forth in Schedule 3.1.8 of the Disclosure Letter;
 
 
 
 
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“Required Vote” has the meaning ascribed thereto in Section 2.5.2;
 
“Required Vote of the Corporation” means the requisite approval for the
amalgamation as set forth in this Agreement by the Corporation Shareholders and
shall be greater than 50% of such vote cast by such shareholders in person or
represented by proxy at the meeting of the Corporation;
 
“Returns” has the meaning ascribed thereto in Section 3.1.29(b);
 
“Reverse Termination Fee” has the meaning ascribed thereto in Section 7.3.2;
 
“Securities Act” means the Securities Act (Ontario) and the rules, regulations
and published policies made thereunder;
 
“Shareholders” means the holders of shares of Comamtech;
 
“Shares” means the common shares of the Corporation;
 
“Software” means all computer programs, excluding the Licensed Technology, owned
by the Corporation, and developed, licensed, marketed or supported in the course
of carrying on the business, including all versions thereof, and all related
documentation, manuals, source code and object code, program files, data files,
computer related data, field and data definitions and relationships, data
definition specifications, data models, program and system logic, interfaces,
program modules, routines, sub-routines, algorithms, program architecture,
design concepts, system designs, program structure, sequence and organization,
screen displays and report layouts, and all other material related to the said
computer programs, all as they exist at the Effective Time, whether under
development or as currently being marketed by the Corporation specifically with
respect to the business of the Corporation;
 
“Stock Option Plans” means the Corporation’s 2004 Incentive and Non-Incentive
Stock Option Plan and DecisionPoint Systems, Inc. Incentive Stock Plan, as
amended from time to time;
 
“subsidiary” has the meaning ascribed thereto in the OBCA;
 
“Superior Proposal” means any unsolicited bona fide written Acquisition Proposal
made by a third party to the Corporation or Comamtech (as the case may be) after
the date hereof: (i) that the relevant board of directors determines in good
faith (based upon written advice from its financial advisors and/or outside
legal counsel) is capable of being completed without undue delay, taking into
account all legal, financial, regulatory and other aspects of such proposal and
the third party making such proposal, (ii) in respect of which any required
financing to complete such Acquisition Proposal has been demonstrated to the
satisfaction of such board, acting in good faith (based upon written advice from
its financial advisors and/or outside legal counsel), (iii) which is offered or
made available to all shareholders and involves an offer to acquire or an
acquisition of all of the shares or all or substantially all of the assets of
the Corporation or of Comamtech (as the case may be), and (iv) that such board
determines in good faith (based upon advice from its financial advisors and/or
outside legal counsel) would, if consummated in accordance with its terms,
result in a more favourable transaction to the shareholders, solely in their
capacity as shareholders, from a financial point of view than the Arrangement
and other transactions contemplated herein;
 
 
 
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“Tax Act” means the Income Tax Act (Canada);
 
“Tax Returns” means all returns, reports, declarations, elections statements,
bills, schedules, forms or written information of, or in respect of, Taxes that
are, or are required to be, filed with or supplied to any Governmental Entity;
 
“Taxes” means all federal, state, provincial, territorial, county, municipal,
local or foreign taxes, duties, imposts, levies, assessments, tariffs and other
charges imposed, assessed or collected by a Governmental Entity including,
(i) any gross income, net income, gross receipts, business, royalty, capital,
capital gains, goods and services, value added, severance, stamp, franchise,
occupation, premium, capital stock, sales and use, real property, land transfer,
personal property, ad valorem, transfer, licence, profits, windfall profits,
environmental, payroll, employment, employer health, pension plan, anti-dumping,
countervail, excise, severance, stamp, occupation, or premium tax, (ii) all
withholdings on amounts paid to or by the relevant person, (iii) all employment
insurance premiums and Canada, Quebec and any other pension plan contributions
or premiums, (iv) any fine, penalty, interest, or addition to tax, (v) any tax
imposed, assessed, or collected or payable pursuant to any tax-sharing agreement
or any other contract relating to the sharing or payment of any such tax, levy,
assessment, tariff, duty, deficiency, or fee and (vi) any liability for any of
the foregoing as a transferee, successor, guarantor, or by contract or by
operation of Law;
 
“Termination Fee” has the meaning ascribed thereto in Section 7.3.1;
 
“third party” means any person other than the Corporation, Comamtech or
MergerCo;
 
“US GAAP” means generally accepted accounting principles from time to time
approved by the American Institute of Certified Public Accountants, or any
successor institute, consistently applied and applicable as at the date on which
such calculation or action is made or taken or required to be made or taken.
 
1.2  
Interpretation Not Affected by Headings

 
The division of this Agreement into Articles and Sections and the insertion of a
table of contents and headings are for convenience of reference only and do not
affect the construction or interpretation of this Agreement. The terms “hereof”,
“hereunder” and similar expressions refer to this Agreement and not to any
particular Article, Section or other portion hereof. Unless something in the
subject matter or context is inconsistent therewith, references herein to
Articles, Sections and Schedules are to Articles and Sections of, and Schedules
to, this Agreement.
 
 
 
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1.3  
Knowledge

 
Where any representation or warranty contained in this Agreement is expressly
qualified by reference to the “knowledge of the Corporation” or to any similar
expression, it shall be deemed to refer to the knowledge of the knowledge of the
Chief Executive Officer or of the Chief Financial Officer of the Corporation,
after reasonable internal investigation of the Corporation’s officers,
directors, employees and records, and to the extent that such persons do not
possess sufficient knowledge of the facts or matters relating to any such
representation or warranty, such persons have obtained and/or confirmed the
truth of the same through inquiries of other officers, directors or employees of
the Corporation or of the other members of its Consolidated Group who, having
regard to their positions, job descriptions and responsibilities, should
reasonably be expected to have knowledge and information relevant to the
representation and warranty in question.
 
1.4  
Number and Gender

 
In this Agreement, words importing the singular number include the plural and
vice versa, and words importing any gender include both genders.
 
1.5  
Date for Any Action

 
If the date on which any action is required to be taken hereunder by a Party is
not a Business Day, such action shall be required to be taken on the next
succeeding day which is a Business Day.
 
1.6  
Statutory References

 
In this Agreement, unless something in the subject matter or context is
inconsistent therewith or unless otherwise herein provided, a reference to any
statute is to that statute as now enacted or as the same may from time to time
be amended, re-enacted or replaced and includes any regulations made thereunder.
 
1.7  
Currency

 
Unless otherwise stated, all references in this Agreement to sums of money are
expressed in lawful money of United States and “$” refers to US dollars.
 
1.8  
Schedules

 
The following Schedules are attached to this Agreement and are incorporated by
reference into this Agreement and form a part hereof:
 
Schedule A                   –      Special Resolution of the Shareholders
Schedule B                   –      Special Resolution of the Shareholders –
Continuance
Schedule C                   –      Plan of Arrangement
 
 
 
 
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ARTICLE 2
THE ARRANGEMENT
 
2.1  
Arrangement

 
The Parties agree that the Arrangement will be implemented in accordance with
and subject to the terms and conditions contained in this Agreement and the Plan
of Arrangement.  It is agreed that the Arrangement shall consist of the
amalgamation of the Corporation with MergerCo which results in an amalgamated
corporation subject to the OBCA as set forth in the Plan of Arrangement (the
“Amalgamation”).
 
2.2  
Press Release Announcing the Arrangement

 
Subject to compliance with applicable Laws, immediately upon the execution of
this Agreement, each Party shall issue a press release announcing the entering
into of this Agreement, which press release will be satisfactory in form and
substance to the Parties, acting reasonably. The Parties will file such press
releases, together with a material change report (or equivalent document) in
prescribed form, with other applicable securities regulatory authorities.
 
2.3  
Implementation Steps by Comamtech and MergerCo

 
Comamtech shall:
 
2.3.1 subject to the terms of this Agreement, as soon as reasonably practicable
following the execution of this Agreement, but in any event within 35 Business
Days thereof, apply in a manner reasonably acceptable to the Corporation under
Section 182 of the OBCA for the Interim Order;
 
2.3.2 subject to the terms of this Agreement, including, for greater certainty,
the provisions of Section 2.7, and in accordance with the Interim Order, as soon
as reasonably practicable following the date of the Interim Order, convene and
hold the Meeting for the purpose of considering the Arrangement Resolution and
the Comamtech Continuance Resolution;
 
2.3.3 not cancel, adjourn or postpone the Meeting without the Corporation’s
prior written consent, not to be unreasonably withheld, delayed or conditioned;
 
2.3.4 subject to compliance by the directors of Comamtech with their fiduciary
duties, use commercially reasonable efforts to solicit from the Shareholders
proxies in favour of the approval of the Arrangement Resolution;
 
2.3.5 subject to obtaining such approvals as are required by the Interim Order,
proceed with and diligently pursue the application to the Court for the Final
Order; and
 
2.3.6 in accordance with the provisions of Section 2.6, file the Articles of
Arrangement  and the Articles of Amalgamation with the Director and such other
documents as may be required in connection therewith under the OBCA to give
effect to the Arrangement and the Amalgamation and forthwith diligently complete
the transactions contemplated by the Arrangement.
 
 
 
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2.4  
Implementation Steps by the Corporation

 
The Corporation shall, subject to compliance by the directors of the Corporation
with their fiduciary duties, use commercially reasonable efforts to solicit from
the Corporation Shareholders consents in favour of the amalgamation with
MergerCo;
 
2.5  
Interim Order

 
The notice of motion for the application referred to in Section 2.3.1 shall
request that the Interim Order provide:
 
2.5.1 that the class of persons to whom notice is to be provided in respect of
the Arrangement and the Meeting shall be the Shareholders and for the manner in
which such notice is to be provided;
 
2.5.2 that the requisite approval for the Arrangement Resolution shall be 662/3%
of the votes cast on the Arrangement Resolution by the Shareholders, present in
person or represented by proxy at the Meeting (the “Required Vote”);
 
2.5.3 that the terms, restrictions and conditions of the by-laws and articles of
Comamtech, including quorum requirements and all other matters, shall apply in
respect of the Meeting;
 
2.5.4 for the grant of the Dissent Rights; and
 
2.5.5 for the notice requirements with respect to the presentation of the
application to the Court for the Final Order required to implement the Plan of
Arrangement.
 
2.6  
Articles of Arrangement Articles of Amalgamation; Closing

 
The Articles of Arrangement and the Articles of Amalgamation shall, with such
other matters as are necessary to effect the Arrangement and all as subject to
the provisions of the Plan of Arrangement, implement the Plan of Arrangement. On
the second Business Day after the satisfaction or waiver (subject to applicable
Laws) of the conditions (excluding conditions that, by their terms, cannot be
satisfied until the Closing Date, but subject to the satisfaction or, where
permitted, waiver of those conditions as of the Closing Date) set forth in
Article 6, unless another date is agreed to in writing by Comamtech and the
Corporation (the “Closing Date”), the Articles of Arrangement and the Articles
of Amalgamation shall be filed with the Director. The Arrangement and the
Amalgamation will, from and after the Effective Time, have all of the effects
provided therein and by applicable Laws, including the OBCA. The closing of the
transactions contemplated by the Arrangement and the Amalgamation will take
place at the Montreal offices of Fasken Martineau DuMoulin LLP on the Closing
Date.
 
 
 
 
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2.7  
Circular

 
Subject to compliance with Section 2.8, as promptly as reasonably practicable
after the execution and delivery of this Agreement, but in any event within 20
Business Days thereof, Comamtech shall have prepared the Circular together with
any other documents required by the Securities Act or other applicable Laws in
connection with the Meeting required to be filed or prepared by Comamtech, and,
subject to Section 2.8.2, as promptly as is reasonably practicable after the
execution and delivery of this Agreement, but in any event within 37 Business
Days thereof, Comamtech shall, unless otherwise agreed by the Parties, cause the
Circular and other documentation required in connection with the Meeting to be
sent to the Shareholders and filed as required by the Interim Order and
applicable Laws. The Circular shall include the unanimous recommendation of the
Board that the Shareholders vote in favour of the Arrangement Resolution and the
Comamtech Continuance Resolution unless such recommendation has been withdrawn,
modified or amended in accordance with the terms of this Agreement, and will
include a copy of the Fairness Opinion.
 
2.8  
Preparation of Filings

 
2.8.1 The Parties shall co-operate with each other, and permit each other to
provide comments to the extent reasonably practicable, in the preparation of any
application for the Regulatory Approvals and any other orders, registrations,
consents, filings, rulings, exemptions, no-action letters and approvals and the
preparation of any documents reasonably deemed by any of the Parties to be
necessary to discharge its obligations or otherwise advisable under applicable
Laws in connection with the Arrangement and this Agreement as promptly as
practicable hereafter, including, for greater certainty, in the preparation,
filing and mailing of the Circular.
 
2.8.2 Comamtech shall provide the Corporation and its representatives with a
reasonable opportunity to review and comment on the Circular, including by
providing on a timely basis a description of any information required to be
supplied by the Corporation for inclusion in the Circular, prior to its mailing
to the Shareholders and filing in accordance with the Interim Order and
applicable Laws, and will accept the reasonable comments of the Corporation and
its legal counsel with respect to the Circular. Except as provided in the
immediately preceding sentence, the Corporation acknowledges that whether or not
such comments are appropriate or any revisions will be made as a result thereof
to the Circular will be determined solely by Comamtech, acting reasonably.
 
2.8.3 The Corporation shall provide Comamtech with any information for inclusion
in the Circular which may be required under applicable Law or which is
reasonably requested by Comamtech, including all required financial statements
in order for Comamtech to comply with the Securities Act;
 
2.8.4 Comamtech shall ensure that the Circular (other than disclosure relating
to and provided by the Corporation) complies with the Interim Order and all
applicable Laws and, without limiting the generality of the foregoing, that the
Circular does not, at the time of mailing, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements contained therein not misleading in light of
the circumstances under which they are made (other than with respect to any
information relating to and provided by the Corporation).
 
 
 
 
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2.8.5 The Corporation shall ensure that the information provided by it and
included in the Circular will, at the time of the mailing, not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or that is necessary to make the statements contained
therein, not misleading in light of the circumstances under which they are made.
 
2.8.6 Each of the Parties shall promptly notify the other if, at any time before
the Effective Time, it becomes aware that the Circular, an application for a
Regulatory Approval, any of the Corporation Public Documents, or any other
order, registration, consent, ruling, exemption, no-action letter or approval,
any registration statement or any circular or other filing under applicable Laws
made or obtained in connection with the transactions contemplated by this
Agreement contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or that is necessary to make the
statements contained therein not misleading in light of the circumstances under
which they are made, or of information that otherwise requires an amendment or
supplement to the Circular, such application, documents, registration statement,
circular or filing, and the Parties shall co-operate in the preparation of such
amendment or supplement as required, including the distribution and filing of
such amendment or supplement by the Corporation.
 
2.8.7 Comamtech will promptly inform the Corporation of any requests or comments
made by the OSC or any other securities commission or stock exchange in
connection with the Circular. Each of the Parties will use its respective
commercially reasonable efforts to resolve all requests or comments made by the
OSC or any other securities commission or stock exchange with respect to the
Circular and any other required filings under applicable Laws as promptly as
practicable after receipt thereof.
 
2.8.8 Comamtech will furnish promptly to the Corporation a copy of each notice,
report, schedule or other document delivered, filed or received by Comamtech in
connection with:
 
(a) the Arrangement;
 
(b) the Amalgamation;
 
(c) the Meeting;
 
(d) any filings under applicable Laws in connection with the transactions
contemplated hereby; and
 
(e) any dealings with Governmental Entities in connection with the transactions
contemplated hereby.
 
2.8.9 Comamtech will advise the Corporation as the Corporation may reasonably
request, and on a daily basis on each of the last ten Business Days prior to the
Meeting, as to the aggregate tally of the proxies received by Comamtech in
respect of the Arrangement Resolution and any other matters to be considered at
the Meeting.
 
 
 
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2.8.10 Comamtech will promptly advise the Corporation of any written notice of
Dissent Rights exercised or purported to have been exercised by any Shareholder
received by Comamtech in relation to the Meeting and the Arrangement Resolution
and any withdrawal of Dissent Rights received by Comamtech and, subject to
applicable Laws, any written communications sent by or on behalf of Comamtech to
any Shareholder exercising or purporting to exercise Dissent Rights in relation
to the Arrangement Resolution.
 
2.8.11 Comamtech will give notice to the Corporation of the Meeting and allow
the Corporation’s representatives and legal counsel to attend the Meeting.
 
2.9  
Court Proceedings

 
Comamtech will provide Corporation and its legal counsel with reasonable
opportunity to review and comment upon drafts of all material to be filed with
the Court in connection with the Arrangement, including by providing on a timely
basis a description of any information required to be supplied by the
Corporation for inclusion in such material, prior to the service and filing of
that material, and will accept the reasonable comments of the Corporation and
its legal counsel with respect to such material. Comamtech will ensure that all
material filed with the Court in connection with the Arrangement is consistent
in all material respects with the terms of this Agreement and the Plan of
Arrangement. In addition, Comamtech will not object to legal counsel to the
Corporation making such submissions on the hearing of the motion for the Interim
Order and the application for the Final Order as such counsel considers
appropriate, provided that Comamtech is advised of the nature of any submissions
prior to the hearing and such submissions are consistent with this Agreement,
the agreements that it contemplates and the Plan of Arrangement. Comamtech will
also provide legal counsel to the Corporation on a timely basis with copies of
any notice of appearance and evidence served on Comamtech or its legal counsel
in respect of the application for the Final Order or any appeal therefrom.
Subject to applicable Laws, Comamtech will not file any material with the Court
in connection with the Arrangement or serve any such material, and will not
agree to modify or amend materials so filed or served, except as contemplated
hereby or with the Corporation’s prior written consent, such consent not to be
unreasonably withheld or delayed; provided, however, that nothing herein shall
require Comamtech to agree or consent to any increased purchase price or other
consideration or other modification or amendment to such filed or served
materials that expands or increases Comamtech’s obligations set forth in any
such filed or served materials or under this Agreement.
 
2.10  
Exchange and Cancellation of Shares and Preferred Shares

 
Upon the Amalgamation on the Effective Date:
 
2.10.1 The 33,230,417 Corporation Common Shares outstanding immediately prior to
the Effective Date shall be exchanged for 4,153,802 fully paid and
non-assessable Comamtech Shares.  No fractional Comamtech Shares will be issued
in connection with the Amalgamation;
 
2.10.2 The 975 Corporation Preferred Shares outstanding immediately prior to the
Effective Date shall be exchanged for 243,750 fully paid and non-assessable
Comamtech Convertible Preferred Shares exchangeable into 243,750 Comamtech
Shares.  No fractional Comamtech Convertible Preferred Shares will be issued in
connection with the Amalgamation;
 
 
 
 
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2.10.3 Each common share of MergerCo outstanding immediately prior to the
Effective Date shall be converted into one fully paid and non-assessable common
share in the share capital of the Amalgamated Corporation.
 
2.11  
Public Communications

 
The Parties agree to co-operate in the preparation of presentations, if any, to
the Shareholders regarding the Arrangement or to the shareholders of the
Corporation, and no Party shall issue any press release or otherwise make public
statements or any nature whatsoever with respect to the Arrangement or this
Agreement, without the consent of the other Party (which consent shall not be
unreasonably withheld or delayed), and Comamtech shall not make any filing with
any Governmental Entity with respect to the Arrangement without prior
consultation with the Corporation, provided, however, that the foregoing shall
be subject to each Party’s overriding obligation to make any disclosure or
filing required under applicable Laws, and the Party making any such disclosure
shall use all commercially reasonable efforts to give prior oral or written
notice to the other Party and reasonable opportunity for the other Party to
review or comment on the disclosure or filing (other than with respect to
confidential information contained in such disclosure or filing), and provided
further, that, except as otherwise required by Article 7, the Comamtech shall
have no obligation to consult with the Corporation prior to any disclosure by
Comamtech with regard to an Acquisition Proposal.
 
ARTICLE 3                      
 
REPRESENTATIONS AND WARRANTIES OF CORPORATION
 
3.1  
Representations and Warranties

 
The Corporation represents and warrants to and in favour of Comamtech, as of the
date hereof, and acknowledges that Comamtech is relying upon such
representations and warranties in connection with the entering into of this
Agreement, as follows:
 
3.1.1 Corporation Board Approval. The Corporation Board, after consultation with
its financial and legal advisors, has determined unanimously that the
Amalgamation is fair to the shareholders and is in the best interests of the
Corporation and has resolved unanimously to recommend to the Corporation
Shareholders that they vote their Shares in favour of the Amalgamation. The
Corporation Board has unanimously approved the Amalgamation and the execution
and performance of this Agreement.
 
3.1.2 Status, Constating Documents and Licences.  The Corporation is a
corporation duly incorporated and organized and validly subsisting in all
respects under the laws of the Delaware, and each of the other members of the
Consolidated Group is a corporation incorporated or constituted and validly
subsisting under the laws of its jurisdiction of constitution. Each member of
the Consolidated Group has all necessary corporate power to own its properties
and to carry on its business, as currently conducted by it.
 
 
 
 
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3.1.3 Authorization and Compliance with Constating Documents, Agreements and
Laws.  The Corporation has all requisite corporate power and authority to enter
into this Agreement and to perform its obligations hereunder. Other than as set
forth in Schedule 3.1.3 of the Disclosure Letter, the execution, delivery and
performance of this Agreement by the Corporation and the completion of the
transactions contemplated hereby do not:
 
(a) result in the breach of or violate any term or provision of the articles, by
laws or other constating documents of any member of its Consolidated Group;
 
(b) result in the creation of any Encumbrance upon any of the assets of any
member of its Consolidated Group which would have a Corporation Material Adverse
Effect; and
 
(c) require any consent, approval or notice under, conflict with, result in a
material breach of, constitute a material default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or
accelerate or permit the acceleration of the performance required by, or result
in granting to a third party a right to increase fees or other payments by any
member of the Consolidated Group or a right to reduce any payments that would
otherwise become payable to any member of its Consolidated Group, or result in
granting to a third party a right of first refusal, first opportunity, or other
right or option in respect of the assets of any member of its Consolidated
Group, or result in a right of termination, cancellation or acceleration under,
or cause any obligation or indebtedness to come due before its stated maturity,
or cause any credit commitment to cease to be available, or cause any payment or
other obligation to be imposed upon any member of the Consolidated Group
pursuant to, any material agreement, indenture, instrument or other obligation
to which any member of the Consolidated Group is a party or by which any of them
is bound or to which any of their respective property is subject and has the
corporate power and authority to amalgamate with MergerCo as set forth herein
and the Plan of Arrangement; or
 
(d) violate any term or provision of any order of any court or Governmental
Entity or any licenses, registrations or qualifications of any member of its
Consolidated Group or any applicable Law.
 
3.1.4 Securities Laws Matters.  The Corporation has filed all of the
Corporation’s Public Documents which have complied in all material respects with
the applicable requirements of the Exchange Act and the rules and regulations
promulgated thereunder.
 
3.1.5 No Other Purchase Agreements.  No member of the Consolidated Group of the
Corporation is a party to any agreements of any nature for the purchase or other
acquisition of any of its undertaking, property or assets, other than in the
Ordinary Course of Business in accordance with past practise or in connection
with a Post-Arrangement Transaction Proposal.
 
3.1.6 Shareholder Rights Plan.  The Corporation does not maintain a shareholder
rights plan.
 
3.1.7 Compliance with Laws.  Each member of the Consolidated Group of the
Corporation has conducted and is conducting its business in compliance in all
material respects with all applicable Laws in each jurisdiction in which it
carries on business.
 
 
 
 
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3.1.8 Approvals and Consents. Schedule 3.1.8 of the Disclosure Letter sets out
all Regulatory Approvals.
 
3.1.9 No Broker, etc.  No finder, broker, agent or other intermediary has acted
for or on behalf of any member of the Consolidated Group of the Corporation in
connection with the negotiation or consummation of the transactions contemplated
hereby, and no fee will be payable by any member of the Consolidated Group of
the Corporation to any such person in connection with such transactions.
 
3.1.10 Enforceability of Obligations.  This Agreement has been duly authorized,
executed and delivered by the Corporation and all documents to be executed and
delivered by the Corporation pursuant hereto shall be duly executed and
delivered.
 
3.1.11 No Claims, etc.  There are no claims, investigations or other
proceedings, including appeals and applications for review, in progress or
pending or, to the knowledge of the Corporation, threatened against or relating
to any member of the Consolidated Group of the Corporation, before any
Governmental Entity, which, if determined adversely to any member of the
Consolidated Group of the Corporation, would:
 
(a) prevent the Corporation from completing the transactions contemplated
hereunder; or
 
(b) delay, restrict or prevent the Corporation from fulfilling any of its
obligations set out in or arising from this Agreement,
 
and the Corporation does not have any knowledge of any existing ground on which
any such action, suit, litigation or proceeding might be commenced with any
reasonable likelihood of success.
 
3.1.12 Options; No Agreements.
 
(a) Except as set forth in Schedule 3.1.13 and except for the rights of holders
of options to subscribe to Shares issued under the Corporation’s stock option
plans and the rights of Comamtech contained in this Agreement, no Person has any
contract, or any option, call, right, commitment, understanding or arrangement
capable of becoming a contract, for the purchase, transfer or sale of any of the
Shares or any right, title, benefit or interest therein or thereto and, upon the
completion of the deliveries required to be made at or before the Closing Date
pursuant to this Agreement, all of the Shares will have been sold, transferred
and delivered to Comamtech free and clear of all Encumbrances.
 
(b) Except for the rights of holders of options to subscribe to Shares issued
under the Corporation’s stock option plans, no Person has any right of first
refusal, pre-emptive right, subscription right or similar right with respect to
the Shares.
 
3.1.13 Authority.  The Corporation has all requisite corporate power and
authority to enter into and deliver this Agreement and to perform its
obligations hereunder. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereunder have been duly
and validly authorized and approved by all necessary corporate action of the
Corporation. The execution, delivery and performance of this Agreement by the
Corporation, and the completion of the transactions contemplated hereby, do not
and will not:
 
 
 
 
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(a) result in the breach of or violate any term or provision of the
Organisational Documents of the Corporation;
 
(b) result in the creation of any Encumbrance on any of the Shares or upon any
of the Assets;
 
(c) require any consent, approval or notice under, conflict with, result in a
material breach of, constitute a material default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or
accelerate or permit the acceleration of the performance required by, or result
in granting to a third party of a right to increase fees or other payments by
the Corporation under, or a right to reduce any payments that would otherwise
become payable to the Corporation under, or result in granting to a third party
of a right of first refusal, first opportunity, or other right or option in
respect of any of the Assets, or result in a right of termination, cancellation
or acceleration under, or cause any obligation or indebtedness to come due
before its stated maturity, or cause any credit commitment to cease to be
available, or cause any payment or other obligation to be imposed upon the
Corporation pursuant to, any Contract; or
 
(d) violate any term or provision of any Order or any applicable Law, except
where such violation would not result in a Corporation Material Adverse Change.
 
3.1.14 Binding Nature.  This Agreement has been duly executed and delivered by
the Corporation and is a legal, valid and binding obligation of the Corporation,
enforceable against the Corporation in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency and other Laws affecting
the rights of creditors generally and except that equitable remedies may be
granted only in the discretion of a court of competent jurisdiction.
 
3.1.15 Consents.  There are no consents, authorizations, approvals, waivers,
releases, Permits or the like from, or filings with or notices to, any
Governmental Entity, or any other Person with whom the Corporation has entered
into a Contract, that are required in connection with the execution, delivery or
performance of this Agreement.
 
3.1.16 Insolvency.  No order has been made or petition presented or resolution
passed for the winding up of the Corporation nor has any distress execution or
other process been levied against the Corporation or action taken to repossess
goods in the possession of the Corporation. No steps have been taken for the
appointment of an administrator or receiver of any part of the property of the
Corporation or its business. The Corporation has made or proposed any
arrangement, reorganisation or compromise with its creditors or any class of its
creditors. The Corporation has not been party to a transaction pursuant to or as
a result of which an asset owned, purportedly owned or otherwise held by it is
liable to be transferred or re-transferred to another Person or which gives or
may give rise to a right of compensation or other payment in favour of another
Person under the provisions of any bankruptcy or equivalent legislation in
Canada or the United States.
 
 
 
 
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3.1.17 Organization.  The Corporation is duly incorporated, validly existing and
in good standing under the Laws of its jurisdiction of incorporation, with the
full corporate power to own all of its assets and to carry on its business as
currently conducted, and has made all necessary filings under all Laws to which
it is subject. A copy of the Organizational Documents of the Corporation is
attached hereto as Schedule 3.1.17.
 
3.1.18 Capitalization
 
(a) Schedule 3.1.18(a) contains a complete description of the issued and
authorized capital of the Corporation as at the Closing Date;
 
(b) The Shares have been validly issued and are outstanding as fully paid and
non assessable; and
 
(c) There are no unpaid or outstanding dividends in respect of the Shares.
 
3.1.19 Commitments on Securities.  Except as set forth in Schedule 3.1.13 and
other than pursuant to the Arrangement or pursuant to options granted under the
Corporation’s stock option plans, there is no Option, contract or any other
right of another binding upon or which at any time in the future may become
binding upon the Corporation to:
 
(a) allot or issue any of its unissued shares or to create any additional class
of its shares;
 
(b) purchase, redeem or otherwise acquire any shares in its capital or any
interests therein; or
 
(c) pay any dividend or make any distribution in respect thereof.
 
3.1.20 Subsidiaries and Affiliates.  Except as set forth in Schedule 3.1.13, the
Corporation (i) does not have any subsidiaries or affiliates, (ii) does not own,
directly or indirectly, nor has it agreed to acquire, directly or indirectly,
any of the outstanding shares or securities convertible into shares or other
equity interest or investment of any kind (including by way of loan) of any
other corporation, partnership, joint venture, limited liability corporation or
other business enterprise and (iii) is not a party to any partnership, joint
venture or other agreement of a similar nature.
 
3.1.21 Financial
 
(a) The Corporation Financial Statements:
 
(i) are in accordance with the books and accounts of the Corporation as at and
for the years or the period reflected therein;
 
(ii) present fairly, in all material respects, the financial position of the
Corporation as at and for the years or period reflected therein; and
 
 
 
 
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(iii) present fairly, in all material respects, all of the Assets and all of the
liabilities of the Corporation, including all contingent liabilities of the
Corporation.
 
(b) The Corporation Financial Statements have been prepared in accordance with
US GAAP.
 
(c) Other than pursuant to the transactions contemplated by the Arrangement
there has been no change in the financial condition or results of operations of
the Corporation since June 30, 2010 which has or is reasonably likely to have a
Corporation Material Adverse Effect.
 
(d) The accounts receivable and work in process of the Corporation reflected in
the Corporation Financial Statements are valid and genuine and have arisen
solely out of bona fide sales and delivery of goods, performance of services,
and other business transactions, including contract billings in the Ordinary
Course of Business.
 
(e) The Corporation prepares and keeps books and records reflecting its assets,
liabilities and financial transactions which are accurate in all material
respects and maintains internal accounting controls that provide reasonable
assurance that transactions are recorded as necessary to permit the preparation
of the Corporation Financial Statements and to maintain accountability for the
assets of the Corporation.
 
3.1.22 Intellectual Property
 
(a) Schedule 3.1.22(a) sets forth a complete and accurate description of the
Corporation IP that is necessary for the Corporation to carry on the business of
the Corporation as such business has been and is currently being carried on,
including the Software, and, when applicable, specifies the jurisdictions in
which such Corporation IP has been registered or in which an application for
such registration has been filed, the dates of such applications and
registrations, the respective registration or application numbers and the names
of all registered owners. The Corporation IP described in Schedule 3.1.22(a) as
well as the Licensed Technology listed in Schedule 3.1.25(a) constitute all of
the Intellectual Property necessary for the proper carrying on of the Business.
The Corporation is the sole and exclusive owner of the Corporation IP. The
Corporation IP is held by the Corporation free and clear of any and all
Encumbrances.
 
(b) No director, shareholder, employee, consultant or independent contractor of
the Corporation or any other Person holds, without an obligation to assign,
whether directly or indirectly, any right whatsoever in any Corporation IP.
 
(c) All Persons having participated in any way in the creation or development of
the Corporation, including all current and former employees, consultants and
independent contractors of the Corporation, have executed an IP assignment
agreement; such assignments are valid and sufficient to vest all rights, titles
and interests (including the right to seek past and future damages with respect
thereto) in the Corporation IP with the Corporation and the Corporation has
recorded each such or similar assignment with the relevant Governmental Entity
in accordance with all applicable Laws to the extent the recordation is
necessary to maintain the Corporation IP in good standing.
 
 
 
 
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(d) Except as set forth in Schedule 3.1.22(d), the Corporation has the exclusive
right to use, license or otherwise exploit all the Corporation IP and the
Corporation has not conveyed, assigned or licensed to any Person any of its
rights in or to the Corporation IP. All of the Corporation’s rights in the
Corporation IP are fully transferable and there are no restrictions on the
ability of the Corporation to use or otherwise exploit its rights in the
Corporation IP.
 
(e) To the Knowledge of the Corporation IP does not infringe upon or violate any
Intellectual Property of any third party. There does not exist any pending or,
to the Knowledge of the Corporation, threatened, suit, proceeding, claim,
demand, action or investigation of any nature or kind against or by the
Corporation relating to the Corporation IP, or claim of adverse ownership,
invalidity or other opposition to or conflict with regard to any of the
Corporation IP and the Corporation is not aware of any fact that could give rise
to any such suit, proceeding, claim, notice, demand, action or investigation.
 
(f) To the Knowledge of the Corporation, no Person is infringing or otherwise
violating any of the Corporation IP and the Corporation has not taken any action
towards any Person with respect of any such infringement or violation.
 
(g) No Governmental Entity has provided any funding to the Corporation that
would give such Governmental Entity any right, title or interest in or to the
Corporation IP and no university, academic institution or similar type of entity
nor any of their employees has any right, title or interest in or to the
Corporation IP.
 
(h) Except as set forth in Schedule 3.1.22(h), no registered Corporation IP and
no Corporation IP for which an application for registration has been filed has
expired, been cancelled, been expunged or elapsed for failure to be renewed or
maintained and no maintenance fees or similar annuity payments have been missed
in each of the jurisdictions requiring such payments; provided, however, that no
item set forth in Schedule 3.1.22(h) shall, either alone or when taken together
with any other item set forth in such schedule, result in or could reasonably be
expected to result in, a Corporation Material Adverse Effect.
 
(i) The Corporation is not a party to any non competition covenant with respect
to its use of the Corporation IP or its ability to grant rights therein.
 
(j) The Corporation has taken all commercially reasonable measures and
precautions to protect and maintain the confidentiality, secrecy and value of
the Corporation IP.
 
3.1.23 Software
 
(a) Except as set forth in Schedule 3.1.23(a), the Software was written only by
the individuals (the “Developers”) listed in Schedule 3.1.23(b), other than
minor components of the Software which, in the aggregate, do not comprise more
than 5% of the source code of the current version of any individual Software
program; provided, however, that no item set forth in Schedule 3.1.23(a) shall,
either alone or when taken together with any other item set forth in such
schedule, result in or could reasonably be expected to result in, a Corporation
Material Adverse Effect.
 
 
 
 
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(b) Except as set forth in Schedule 3.1.23(b) and except for any source code
within, or on, computers used by employees of the Corporation, the source code
for the Software has not been made available by the Corporation to any Person
and the Corporation has not agreed to or undertaken to or in any other way
promised to provide such source code to any Person; provided, however, that no
item set forth in Schedule 3.1.23(b) shall, either alone or when taken together
with any other item set forth in such schedule, result in or could reasonably be
expected to result in, a Corporation Material Adverse Effect.
 
(c) Neither the transactions contemplated by this Agreement nor those
contemplated by the Arrangement Agreement will entitle any customer to obtain a
copy of the source code for the Software, nor will it result in any third party
being granted any right with respect to the Software.
 
(d) The Software correctly processes date information.
 
(e) Schedule 3.1.23(e) accurately describes the current development plans for
the Software (including major activities, schedules, resources and milestones
for the development of the Software). Such current development plans do not
contemplate any major upgrades or new releases within nine months following the
Effective Time.
 
(f) To the Knowledge of the Corporation, the Software is free of all viruses,
worms, Trojan horses or any other malicious or disabling code and does not
contain any bugs, errors or problems of a material nature that would have an
adverse impact on or disrupt the operation of the Software or any other aspect
of the Business.
 
(g) Except as set forth in Schedule 3.1.23(g), there are no distributors, joint
venturers, partners, sales agents, representatives or any other Persons,
including VARs, OEMs or resellers, who have rights to market, distribute or
license the Software. No entity that previously had rights to distribute the
Software, has or had exclusive rights to do so in any geographic, product or
customer market.
 
(h) The Software neither contains nor embodies nor uses nor requires any third
party software programs, including development tools and utilities, other than
the Licensed Technology and Mass Market Software.
 
(i) To the Knowledge of the Corporation, the Software does not require mandatory
government, regulatory, technical and similar approvals in the jurisdictions
where the Software is sold or may otherwise be required, in each case as at the
Effective Time.
 
(j) The Software does not contain, and is not integrated or bundled with, Open
Source Software.
 
3.1.24 Customer Licenses and Other Agreements
 
(a) Schedule 3.1.24(a) sets forth a list of each Contract between the
Corporation End-user Customers for which the Corporation has received $100,000
or more on an annual basis (for the twelve months ending June 30, 2010).
 
 
 
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(b) Except as set forth in Schedule 3.1.24(b), no maintenance agreement between
the Corporation and End-user Customers for which the Corporation has received
$100,000 or more on an annual basis (for the twelve months ending June 30, 2010)
has a term greater than 12 months.
 
3.1.25 Licensed Technology
 
(a) Schedule 3.1.25(a) sets forth a list of all material third party software
and any other technology and technical information licensed to the Corporation
by third parties that is necessary to conduct the Corporation’s business in all
material respects in the manner currently conducted, to the exclusion of any
agreement concerning the provision to the Corporation by third parties of
tangible products, equipment, hosting services or telecommunication services
(the “Licensed Technology”).
 
(b) To the Knowledge of the Corporation, copies of all Contracts relating to the
Licensed Technology that are necessary to conduct the Corporation’s business in
all material respects in the manner currently conducted have been provided by
the Corporation to Comamtech, except in respect of Mass Market Software.
 
(c) Except as set forth in Schedule 3.1.25(c), the Corporation has not been
advised by one of its licensors that it is in breach of any licenses forming
part of the Licensed Technology or has been in breach within the two years
immediately preceding the Effective Date, and such licenses are in full force
and effect.
 
(d) No software used in, incorporated into, integrated or bundled with any of
the Software is licensed pursuant to an Open Source Software license, nor is any
such software a derivative of software that includes Open Source Software code
or is licensed pursuant to an Open Source Software license.
 
3.1.26 Accounts Receivable. Except as set forth in Schedule 3.1.26, the accounts
receivable of the Corporation were created in the Ordinary Course of Business,
are good and collectible within 120 days following the Effective Date and are
not subject to any defence, counterclaim or set-off.
 
3.1.27 Absence of Liabilities. The Corporation has no liabilities, indebtedness
or obligations of any nature whatsoever, whether contingent or otherwise
(including (i) any liabilities, indebtedness or obligations of the Corporation
for Taxes due, together with any penalties or interest, in connection with any
period ending on or prior to the Closing Date, (ii) any balances of purchase
price, purchase price adjustments, earn outs or any other consideration relating
to the acquisition of assets, companies or businesses completed by the
Corporation on or prior to the Closing Date and (iii) any Claims in respect of
services provided by the Corporation on or prior to the Closing Date), except as
reflected in the Corporation Financial Statements and for those incurred in the
Ordinary Course of Business since June 30, 2010.
 
3.1.28 Prior Transactions. Except as provided for pursuant to this Agreement (or
the Disclosure Letter, there are no outstanding obligations of the Corporation,
or due to the Corporation, in connection with any transaction concluded prior to
the Closing Date involving the acquisition by the Corporation of the shares or
assets of any company.
 
 
 
 
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3.1.29 Taxes
 
(a) For purposes of this Section, “Tax” or “Taxes” refers to:  (i) any and all
federal, state, local and foreign taxes, assessments and other governmental
charges, duties, impositions and liabilities relating to taxes, including taxes
based upon or measured by gross receipts, income, profits, sales, use and
occupation, and value added, ad valorem, transfer, franchise, withholding,
payroll, recapture, employment, excise and property taxes and escheatment
payments, together with all interest, penalties and additions imposed with
respect to such amounts and any obligations under any agreements or arrangements
with any other person with respect to such amounts and including any liability
for taxes of a predecessor entity; (ii) any liability for the payment of any
amounts of the type described in clause (i) as a result of being or ceasing to
be a member of an affiliated, consolidated, combined or unitary group for any
period (including, without limitation, any liability under Treas. Reg.
Section 1.1502-6 or any comparable provision of foreign, state or local law);
and (iii) any liability for the payment of any amounts of the type described in
clause (i) or (ii) as a result of any express or implied obligation to indemnify
any other person or as a result of any obligations under any agreements or
arrangements with any other person with respect to such amounts and including
any liability for taxes of a predecessor entity.
 
(b) The Corporation has timely filed all federal, state, local and foreign
returns, estimates, information statements and reports (“Returns”) relating to
Taxes required to be filed by the Corporation with any Tax authority effective
through the Closing Date.  All such Returns are true, correct and complete in
all respects.  The Corporation has paid all Taxes shown to be due on such
Returns.  Except as listed on Schedule 3.1.29 hereto, the Corporation is not
currently the beneficiary of any extensions of time within which to file any
Returns. The Corporation have furnished and made available to Comamtech and
MergerCo complete and accurate copies of all income and other Tax Returns and
any amendments thereto filed by the Corporation in the last three (3) years.
 
(c) The Corporation, as of the Closing Date, will have withheld and accrued or
paid to the proper authority all Taxes required to have been withheld and
accrued or paid.
 
(d) The Corporation has not been delinquent in the payment of any Tax nor is
there any Tax deficiency outstanding or assessed against the Corporation.  The
Corporation has not executed any unexpired waiver of any statute of limitations
on or extending the period for the assessment or collection of any Tax.
 
(e) There is no dispute, claim, or proposed adjustment concerning any Tax
liability of the Corporation either (A) claimed or raised by any Tax authority
in writing or (B) based upon personal contact with any agent of such Tax
authority, and there is no claim for assessment, deficiency, or collection of
Taxes, or proposed assessment, deficiency or collection from the Internal
Revenue Service or any other governmental authority against the Corporation
which has not been satisfied.  The Corporation is not a party to nor has it been
notified in writing that it is the subject of any pending, proposed, or
threatened action, investigation, proceeding, audit, claim or assessment by or
before the Internal Revenue Service or any other governmental authority. Except
as set forth on Schedule 3.1.29, since January 1, 2005, neither the Internal
Revenue Service nor any state or local taxation authority has audited any income
tax return of the Corporation.  The Corporation has not filed any requests for
rulings with the Internal Revenue Service.  Except as provided to the
Corporation’s accountants, no power of attorney has been granted by the
Corporation or its affiliates with respect to any matter relating to Taxes of
the Corporation.  There are no Encumbrances for Tax of any kind upon any
property or assets of the Corporation, except for inchoate liens for Taxes not
yet due and payable.
 
 
 
 
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(f) Except for immaterial amounts which would not have a Corporation Material
Adverse Effect, the Corporation has no liability for any unpaid Taxes which has
not been paid or accrued for or reserved on the Corporation Financial Statements
in accordance with US GAAP, whether asserted or unasserted, contingent or
otherwise.
 
(g) There is no contract, agreement, plan or arrangement to which the
Corporation is a party as of the date of this Agreement, including but not
limited to the provisions of this Agreement, covering any employee or former
employee of the Corporation that, individually or collectively, would reasonably
be expected to give rise to the payment of any amount that would not be
deductible pursuant to Sections 280G, 404 or 162(m) of the Internal Revenue Code
of 1986, as amended (the “Code”). There is no contract, agreement, plan or
arrangement to which the Corporation is a party or by which it is bound to
compensate any individual for excise taxes paid pursuant to Section 4999 of the
Code.
 
(h) The Corporation has not filed any consent agreement under Section 341(f) of
the Code or agreed to have Section 341(f)(2) of the Code apply to any
disposition of a subsection (f) asset (as defined in Section 341(f)(4) of the
Code) owned by the Corporation.
 
(i) The Corporation is not a party to, nor has any obligation under any
tax-sharing, tax indemnity or tax allocation agreement or arrangement.
 
(j) None of the Corporation’s assets are tax exempt use property within the
meaning of Section 168(h) of the Code.
 
3.1.30 Absence of Changes. Except as set forth in Schedule 3.1.29(a) and other
than pursuant to the transactions contemplated by the Arrangement or as
otherwise reflected in the Corporation Financial Statements:
 
(a) there has been no Corporation Material Adverse Change, whether arising as a
result of any legislative or regulatory change, revocation of any Permit or
right to do business, fire, explosion, accident, casualty, labour dispute,
flood, drought, riot, storm, condemnation, force majeure, public force or
otherwise, whether or not covered by insurance;
 
(b) the Corporation has carried on the Business in the Ordinary Course of
Business and has not entered into any material transaction out of the Ordinary
Course of Business or any transaction which could reasonably be expected to
result in a Corporation Material Adverse Change;
 
 
 
 
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(c) the Corporation has not incurred any new debts, nor has made any payments
other than those made in the Ordinary Course of Business;
 
(d) the Corporation has not contracted any loan in excess of $100,000;
 
(e) the Corporation has not declared, set aside, or paid or undertaken to pay
any dividends or made or undertaken to make any other distribution in respect of
its share capital, or made or undertaken to make any direct or indirect
redemption, purchase or other acquisition of its share capital for the benefit
of any of its shareholders;
 
(f) except for capital expenditures made in the Ordinary Course of Business not
exceeding $100,000 in the aggregate, the Corporation has not made or authorized
any new capital expenditures;
 
(g) the Corporation has not made any change or incurred any obligation to make a
change in its Organizational Documents or authorized or issued Shares or any
other of its securities;
 
(h) there has been no change in the accounting methods or tax practices or
elections used by the Corporation or its accountants;
 
(i) except as set forth in Schedule 3.1.30(i), the Corporation has not made nor
agreed to make any purchase, sale or disposition of any asset or property other
than in the Ordinary Course of Business, nor has it subjected its assets to
Encumbrances of any kind;
 
(j) neither the Corporation nor any other Person has accelerated, terminated,
modified, or cancelled any Contract (or series of related Contracts) which is
material to the carrying on of the Business or involving more than $10,000;
 
(k) the Corporation has not prepaid any loans from its shareholders, officers or
directors or made any change in its borrowing arrangements;
 
(l) the Corporation has not disposed or agreed to dispose of any capital assets
or made or agreed to make any capital investment that is out of the Ordinary
Course of Business;
 
(m) the Corporation has not committed to any of the foregoing; and
 
(n) no customer or supplier of the Corporation has indicated that it intends to
decrease its business with the Corporation and, to the Knowledge of the
Corporation, no customer or supplier intends to change its relationship with the
Corporation, in a manner that would result in a Corporation Material Adverse
Change, including following completion of the transactions contemplated in this
Agreement.
 
3.1.31 Conduct of Business
 
(a) The Corporation is duly licensed or qualified to conduct the Business and is
in good standing in each of the jurisdictions wherein it conducts the Business.
Schedule 3.1.31(a) sets forth each location where the Corporation (i) has a
place of business and (ii) owns or leases property.
 
 
 
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(b) The Corporation is conducting the Business in compliance in all material
respects with all applicable Laws, is not in breach in any material respect of
any such applicable Laws and duly possesses all Permits to enable the Business
to be carried on as now conducted and the Assets to be owned, leased or
operated, as the case may be, and all such Permits are valid and subsisting and
in good standing and none of the same contains or is subject to any term,
provision, condition or limitation which has or may have a Corporation Material
Adverse Effect or which may adversely change or terminate such Permit by virtue
of the completion of the transactions contemplated in this Agreement.
 
(c) There are no outstanding Orders, notices of infraction (written or oral) or
similar requirements relating to the Corporation issued by any building,
environmental, fire, health, labour or police authorities or from any other
Governmental Entity, and there are no matters under discussion between the
Corporation and any such Governmental Entities relating to Orders, notices of
infraction (written or oral) or similar requirements.
 
3.1.32 Assets
 
(a) Except as set forth in Schedule 3.1.32(a), the Corporation has legal and
beneficial ownership and has good and marketable title, free and clear of any
Encumbrances, to all of the Assets on its books and reflected in the Corporation
Financial Statements or acquired in the Ordinary Course of Business since June
30, 2010 which would have been required to be reflected on such Corporation
Financial Statements if acquired prior to June 30, 2010, other than Assets
disposed of by the Corporation (i) in the Ordinary Course of Business or
(ii) pursuant to the Arrangement
 
(b) The assets owned by the Corporation at the Effective Time include all assets
and property necessary to enable the Corporation to carry on its business after
the Effective Time substantially in the same manner as it was conducted prior to
the Effective Time.
 
(c) Other than pursuant to the transactions contemplated by the Arrangement
there is no agreement, option, understanding or commitment, or any right or
privilege capable of becoming an agreement, for the purchase from the
Corporation of its Business or any of the Assets, other than in the Ordinary
Course of Business.
 
(d) All equipment owned or used by the Corporation has been properly maintained
and is in good working order for the purposes of ongoing operation or use in the
Ordinary Course of Business, subject to ordinary wear and tear for equipment of
comparable age.
 
3.1.33 Real Property and Leased Premises
 
(a) The Corporation does not own any immovable or real property.
 
(b) Other than its interest as a tenant in respect of the premises leased by the
Corporation pursuant to the leases set forth in Schedule 3.1.33(b), copies of
which have been provided to Comamtech (the “Leases”), and located where
indicated in Schedule 3.1.33(b) (collectively, the “Leased Premises”), the
Corporation does not hold any interest in real property.
 
 
 
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(c) There are no other agreements, including any security agreements, which have
been entered into in relation to the Leased Premises.
 
(d) The Corporation has received all approvals of Governmental Entities
(including Permits) required in connection with the operation of the Leased
Premises pursuant to applicable Laws and, since June 30, 2010, the Leased
Premises have been operated and maintained in accordance with applicable Laws.
 
3.1.34 Contracts, Agreements and Commitments
 
(a) Schedule 3.1.34(a) sets forth a complete and accurate list of all material
written and oral contracts, agreements and commitments (including undertakings
or commitments to any Governmental Entity) pursuant to which the Corporation is
currently bound to perform, or is otherwise subject to, obligations of any
nature whatsoever, including all: (i) contracts with customers, (ii) contracts
with suppliers or manufacturers for products sold by the Corporation in the
Ordinary Course of Business, (iii) leases as lessor or lessee, (iv) advertising
or public relations contracts, (v) conditional sales contracts, security
agreements, pledge agreements, trust receipts or any other agreements or
arrangements whereby any of the Corporation’s property is subject to any
Encumbrance, (vi) hypothecs, mortgages, indentures, notes or other instruments
for or relating to any borrowing of money or the extension of credit or the
deferred purchase of property, (vii) guarantees of any obligations for the
borrowing of money or otherwise, or any other agreements of guarantee or
obligations for the borrowing of money or otherwise, or any other agreements of
guarantee or indemnification (other than endorsements made for collection in the
Ordinary Course of Business), (viii) agreements or arrangements for the purchase
or sale of any assets other than in the Ordinary Course of Business,
(ix) licenses, (x) continuing contracts for future purchase of materials,
supplies or equipment, (xi) agreements, contracts or commitments relating to the
acquisition of assets, capital stock or ownership interests of any business
enterprise, (xii) agreements, contracts or commitments with any officer,
director or shareholder of the Corporation, and (xiii) contracts restricting the
carrying on of business in any areas or in any way limiting competition
(collectively, the “Contracts”).
 
(b) For the purposes of this Section 3.1.34(b), a Contract, whether written or
oral, will be deemed to be material if such Contract (i) would, if breached by
any party thereto, (A) have, or would reasonably be expected to have, a
Corporation Material Adverse Effect, or (B) result in a cost or expense to the
Corporation of $10,000 or more, (ii) has a value of $100,000 or more, or (iii)
contains any non-competition or other restrictive covenant.
 
(c) A true, correct and complete copy of each of the Contracts has been provided
to Comamtech. For all oral Contracts, Comamtech has been provided with a true,
correct and complete description of the material terms and conditions of such
Contracts.
 
(d) The execution of this Agreement, the consummation of the transactions
contemplated herein and the performance by the Corporation of its obligations
hereunder do not result in the breach or violation of, or conflict with, or
allow any other Person to exercise any rights under, any of the Contracts.
 
 
 
 
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(e) To the Knowledge of the Corporation, the Corporation is not a party to any
material executory oral Contract.
 
(f) The Corporation is not in breach or default under any of the Contracts and,
to the Knowledge of the Corporation, no other party is in breach or default
under any of the Contracts.
 
(g) To the Knowledge of the Corporation, no event has occurred which, with
notice or lapse of time or both, could constitute a breach or default under any
of the Contracts or could accelerate any obligation or create any Encumbrance
under any of the Contracts.
 
(h) The Corporation has not assigned any interest in the Contracts.
 
(i) The Corporation has not received notice of the intention of any customer to
terminate any Contract between the customer and the Corporation, prior to the
end of its stated term in a manner that would result in a Corporation Material
Adverse Change.
 
(j) No Claim has been asserted or, to the Knowledge of the Corporation, exists
that is adverse to the rights of the Corporation under any of the Contracts.
 
3.1.35 Warranty
 
(a) No product (including Software) or service sold or delivered by the
Corporation is subject to any guarantee, warranty or other indemnity beyond the
applicable standard terms and conditions of sale and those applicable by virtue
of applicable Laws (including quality assurance under services contracts).
 
(b) The Corporation has not received notice of the intention of any customer or
any distributor to make any warranty Claims in excess of current reserves
provided therefore.
 
(c) There is no outstanding liability for claims made to the Corporation in
respect of products (including Software) or services provided by the Corporation
above historical levels or outside of the Ordinary Course of Business.
 
3.1.36 Non-Arm’s Length Transactions
 
Except as disclosed in the Corporation Financial Statements,
 
(a) the Corporation does not have any investments, loans or accounts receivable
or payable, held by or owed to the Corporation; and
 
(b) there are no material transactions, Contracts or other agreements between
the Corporation and any affiliate of the Corporation or any director, officer,
shareholder or employee of the Corporation.
 
 
 
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3.1.37 Employment Matters
 
(a) Schedule 3.1.37(a) contains a list of all employees of the Corporation as at
the date immediately preceding the Closing Date (the “Employees”).
 
(b) The Corporation has provided to Comamtech all material details in respect of
the following:
 
(i) each Employee’s current total compensation (including salary and bonus or
incentive compensation entitlement and any other monetary compensation), as well
as their total length of employment with the Corporation (including any prior
employment that would affect calculation of years of service for any purpose,
including statutory entitlements, contractual entitlements (express or implied),
benefit entitlements, or pension entitlements);
 
(ii) the terms and conditions of each Contract between the Corporation and each
Employee, whether such contracts are in writing or oral; and
 
(iii) the terms and conditions of each Contract between the Corporation and each
independent contractor who is retained to provide services to the Corporation as
at the date immediately preceding the Closing Date, whether such contracts are
in writing or oral.
 
(c) No current or former director, officer, shareholder, employee or independent
contractor of the Corporation is indebted to the Corporation.
 
(d) Schedule 3.1.37(d) contains a complete and accurate list of all benefit
plans or agreements (whether oral or written, formal or informal, funded or
unfunded) sponsored, maintained or contributed to or required to be contributed
to by the Corporation for the benefit of any Employee, whether or not insured
and whether or not subject to any Law, including (i) bonus, incentive, deferred
compensation, share purchase, share appreciation and share option plans,
(ii) medical and disability benefit plans, (iii) life or other insurance plans,
(iv) dental plans, and (v) pension, retirement or supplemental retirement plans
or agreements (including any defined benefit or defined contribution pension
plans and any group registered retirement savings plans) (collectively, the
“Benefit Plans”).
 
(e) Copies of all Benefit Plan descriptions provided by a third party carrier to
the Corporation have been made available by the Corporation for, or are
available for, review by Comamtech.
 
(f) The Corporation is in compliance with all applicable Laws, including those
relating to employment standards, pay equity, termination of employment,
discrimination and the payment of social security and other payroll-related
Taxes, and has not received any written notice alleging failure to comply in any
material respect with any such Laws. Without limiting the generality of the
foregoing, the Corporation is in compliance with all Laws relating to
occupational health and safety and workers’ compensation, and there are no
outstanding Claims, charges, assessments, levies, penalties or Orders thereunder
against the Corporation.
 
(g) No material disputes or proceedings are pending or, to the Knowledge of the
Corporation, threatened against the Corporation in relation to the employment of
any Employee or any former employee of the Corporation. There are no actual,
pending or, to the Knowledge of the Corporation, threatened organizing
activities of any trade union, council of trade unions, employee bargaining
agency or affiliated bargaining agent or any actual, threatened or pending
unfair labour practice complaints, strikes, work stoppages, picketing,
lock-outs, hand-billings, boycotts, slowdowns, arbitrations, grievances,
complaints, charges or similar labour-related disputes or proceedings pertaining
to the Corporation, and there have not been any such activities or disputes or
proceedings within the last year.
 
 
 
 
 
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(h) Since June 30, 2010, except in the Ordinary Course of Business or as
required by Law, there have been no increases or decreases in staffing levels of
the Corporation and there have been no changes in the terms and conditions of
employment of any of the Employees, including their salaries, remuneration and
any other payments to them, and there have been no changes in any remuneration
payable or benefits provided to any officer, director, consultant, independent
contractor or agent of the Corporation, and the Corporation has not agreed or
otherwise become committed to change any of the foregoing since such date.
 
(i) The Corporation is not bound by or a party to any collective bargaining
agreement.
 
(j) No trade union, council of trade unions, employee bargaining agency or
affiliated bargaining agent:
 
(i) holds bargaining rights with respect to any Employees by way of
certification, interim certification, voluntary recognition, designation or
successor rights;
 
(ii) has applied to be certified as the bargaining agent of any of the
Employees; or
 
(iii) has applied to have the Corporation declared a related employer or
successor employer pursuant to applicable Laws.
 
3.1.38 Litigation. Except as set forth in Schedule 3.1.38, there are no actions,
claims, complaints, investigations, arbitrations or other proceedings pending
or, to the Knowledge of the Corporation, threatened against, with respect to, or
affecting in any manner the Corporation or any of the Assets; provided, however,
that no item set forth in Schedule 3.1.38 shall, either alone or when taken
together with any other item set forth in such schedule, result in or could
reasonably be expected to result in, a Corporation Material Adverse Effect.
 
3.1.39 Personal Information. The collection, use, disclosure and storage by the
Corporation of personal information complies in all material respects with all
privacy laws to the extent the Corporation is currently required to do so.
 
3.1.40 Compliance with Privacy Laws
 
(a) To the Knowledge of the Corporation, the Corporation is in compliance with
applicable privacy laws and Contracts, if any, related to the protection of
Personal Information as of the date hereof and has taken appropriate action to
obtain such consents or provide such notices as may be required under such
applicable privacy laws or Contracts, if any, to permit Comamtech and its
authorized employees, agents, counsel and accountants or other representatives
such access to the Corporation, the books and records, data, information and
documentation relating to the Corporation and to the Employees as Comamtech was
given to evaluate the business transaction pursuant to this Agreement and to
negotiate the terms of this Agreement.
 
 
 
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(b) Disclosure or transfer to third parties by the Corporation on the Closing
Date and transfer to Comamtech by the Corporation as part of Comamtech’s due
diligence and as contemplated by this Agreement or any ancillary agreements of
personal information complies with all applicable privacy laws. There are no
restrictions on the use of personal information by the Corporation except as
provided by applicable privacy laws.
 
(c) The Corporation does not have any privacy policies.
 
3.1.41 Insurance
 
(a) True and complete copies of all insurance policies maintained by the
Corporation have been made available by the Corporation for, or are available
for, review by Comamtech.
 
(b) Schedule 3.1.41(b) contains a list of all Claims made under the insurance
policies maintained by the Corporation within the three consecutive years
immediately prior to the Closing Date as well as a description of each such
Claim.
 
(c) The Corporation is not in default with respect to payment of premiums on any
insurance policy maintained by it and no event has occurred that, with notice or
the lapse of time or both, would constitute a breach or default, or permit
termination, modification, or acceleration, under such policy.
 
3.1.42 Books and Records. The books and records of the Corporation, including
the books of account, minute books, share certificate books and share ledgers,
are complete and up-to-date, have been maintained in accordance with sound and
prudent business practice and accurately reflect the conduct of the business of
the Corporation. The Corporation has delivered to Comamtech true, correct and
complete copies of all such books and records in its possession, including
accurate and complete copies of any actions, whether taken at a meeting or by
written consent, of its shareholders or board of directors or any committee of
the board of directors. There have been no meetings or other proceedings of the
shareholders or board of directors of the Corporation or any committee of the
board of directors the Corporation that are not reflected in all material
respects in such books and records. All such books and records are under the
control of the Corporation.
 
3.1.43 Environmental Matters. The Corporation, its operations, activities,
equipment and Leased Premises are and have at all times been in compliance with
all applicable environmental laws. There are no Permits required under
applicable environmental laws for the business of the Corporation or its
operations and activities. There are not and there never have been any waste,
effluents or air emissions generated by the operations or the activities of the
Corporation or contaminants in any premises used by the Corporation in violation
of applicable environmental laws. The Corporation has not received any written
or oral notice of an infraction under environmental laws or any request for
information or been involved in any proceedings in the context of any
environmental investigation, inspection or litigation by or before any
Governmental Entities.
 
 
 
 
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3.1.44 Lenders. Schedule 3.1.44 contains a list of all existing instruments or
agreements currently in force pursuant to which the Corporation has borrowed any
money, incurred any other indebtedness, established a line of credit or
guaranteed the indebtedness or obligation of another Person. True, correct and
complete copies of all such instruments and agreements have been provided to
Comamtech.
 
3.1.45 Bank Accounts. Schedule 3.1.45 contains a list of each bank or other
financial institution where the Corporation maintains an account or safe deposit
box, the account or box number, as applicable, and the names of all Persons
authorized to draw thereon or to have access thereto.
 
3.1.46 Powers of Attorney. No Person holds a general or special power of
attorney from the Corporation.
 
3.1.47 Brokers. No broker, finder or similar intermediary has acted for or on
behalf of the Corporation, or is entitled to any broker’s, finder’s or similar
fee or other commission in connection with this Agreement or the transactions
contemplated herein.
 
3.1.48 Outstanding Options and Warrants.  The exchange of the currently
outstanding Options of the Corporation and of the outstanding Corporation
Warrants into the equivalent Comamtech Options and Comamtech Warrants, as
provided for in Section 7.7, shall not require any consent or approval by their
respective holders.
 
3.1.49 Accuracy of Information and Full Disclosure
 
(a) No representation or warranty of the Corporation contained in this Agreement
contains any untrue statement of a material fact or omits any material fact
necessary to make the statements contained herein, in light of the circumstances
under which made, not misleading.
 
(b) The Corporation has disclosed to Comamtech all events, conditions or facts
related to the Corporation, including the Business and the Assets, which, to the
Knowledge of the Corporation, materially affect the condition (financial or
otherwise) of the Corporation, including its business and the Assets.
 
3.2  
Disclosure Letter

 
3.2.1 Contemporaneously with the execution and delivery of this Agreement, the
Corporation is delivering to Comamtech a disclosure letter (the “Disclosure
Letter”) required to be delivered pursuant to this Agreement, which is deemed to
constitute an integral part of this Agreement and to modify the representations
and warranties of the Corporation contained in this Agreement.
 
3.2.2 The information disclosed in any schedule to the Disclosure Letter will be
disclosure only against the representation and warranty to which such schedule
expressly relates.
 
 
 
 
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3.3  
Survival of Representations and Warranties

 
No investigation by or on behalf of Comamtech or any of its affiliates will
mitigate, diminish or affect the representations or warranties made by the
Corporation in this Agreement or any certificate delivered by the Corporation
pursuant to this Agreement. Except for the representations and warranties
contained in Section 3.1, neither the Corporation nor any other persons on
behalf of the Corporation makes any express or implied representation or
warranty with respect to the Corporation or with respect to any other
information provided or otherwise made available to Comamtech in connection with
the transactions contemplated hereby. The representations and warranties of the
Corporation contained in this Agreement shall not survive the completion of the
Arrangement and shall expire and terminate on the earlier of: (i) the Effective
Time, and (ii) the date on which this Agreement is terminated in accordance with
its terms. This Section 3.3 shall not limit any covenant or agreement of any
member of the Consolidated Group which, by its terms, contemplates performance
after the Effective Time or date on which this Agreement is terminated, as the
case may be.
 
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF COMAMTECH
 
4.1  
Representations and Warranties of Comamtech and MergerCo

 
Comamtech and MergerCo hereby jointly and severally represent and warrant to and
in favour of the Corporation, as of the date hereof, and acknowledges that the
Corporation is relying upon such representations and warranties in connection
with the entering into of this Agreement, as follows:
 
4.1.1 Corporate Authority and Binding Obligation.  Each of Comamtech and
MergerCo is a corporation duly incorporated and organized and validly subsisting
in all respects under the laws of the Province of Ontario. Comamtech and
MergerCo have all requisite corporate power and authority to enter into this
Agreement and to perform all of its obligations under this Agreement. This
Agreement has been duly authorized, executed and delivered by Comamtech and
MergerCo and all documents to be executed and delivered by Comamtech and
MergerCo pursuant hereto shall be duly executed and delivered. Subject to the
terms and conditions hereof, this Agreement is a legal, valid and binding
obligation of Comamtech and MergerCo, enforceable against Comamtech and MergerCo
in accordance with its terms, subject to: (i) bankruptcy, insolvency,
moratorium, reorganization and other laws relating to or affecting the
enforcement of creditors’ rights generally, and (ii) the fact that equitable
remedies, including the remedies of specific performance and injunction, may be
granted only in the discretion of a court. The Comamtech Board, after
consultation with its financial and legal advisors, has determined unanimously
that the Arrangement is fair to the shareholders of Comamtech and in its best
interests and has resolved unanimously to recommend to its shareholders that
they vote their shares in favour of the Arrangement, each of the Comamtech Board
and the MergerCo Board has unanimously approved the Arrangement and the
execution and performance of this Agreement. The Comamtech Board has received a
Fairness Opinion.
 
4.1.2 Compliance with Constating Documents, Agreements and Laws.  The execution,
delivery and performance of this Agreement by Comamtech and MergerCo, and the
completion of the transactions contemplated hereby, will not result in the
creation of any Encumbrance upon any of the assets of any member of its
Consolidated Group which would have a Comamtech Material Adverse Effect or
constitute or result in a violation or breach of or default under:
 
 
 
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(a) any term or provision of any of the articles, by-laws or other constating
documents of Comamtech and of MergerCo;
 
(b) the terms of any indenture, agreement (written or oral), instrument or
understanding or other obligation or restriction to which Comamtech is a party
or by which it is bound; or
 
(c) any term or provision of any licences, registrations or qualifications of
Comamtech and of MergerCo or any order of any court or Governmental Entity or
any applicable Law.
 
4.1.3 No Claims, etc.  There are no claims, investigations or other proceedings,
including appeals and applications for review, in progress or pending or, to the
knowledge of Comamtech or MergerCo, threatened against or relating to Comamtech,
before any Governmental Entity, which, if determined adversely to Comamtech,
would:
 
(a) prevent Comamtech or MergerCo from completing the transactions contemplated
hereunder; or
 
(b) delay, restrict or prevent Comamtech or MergerCo from fulfilling any of its
obligations set out in or arising from this Agreement,
 
and Comamtech does not have any knowledge of any existing ground on which any
such action, suit, litigation or proceeding might be commenced with any
reasonable likelihood of success.
 
4.1.4 Capitalization.  At the Effective Date, Comamtech shall have the issued
and authorized capital as set forth in Schedule 4.1.4 hereto and at such date
the shares of Comamtech shall have been issued and outstanding as fully paid and
non-assessable shares.
 
4.1.5 Assets and Liabilities.  At the Effective Date, Comamtech shall have those
Assets and Liabilities set forth in Schedule 4.1.5 hereto and the value of those
Assets and Liabilities shall be stated in accordance with Canadian GAAP.  At the
Effective Date, Comamtech shall have legal and beneficial ownership and has good
and marketable title, free and clear of any Encumbrances, to all of the Assets
on its books
 
4.1.6 Securities Laws Compliance.  All reports, registration statements,
definitive proxy statements and other documents and all amendments thereto and
supplements thereof required to be filed by Comamtech and MergerCo with the U.S.
Securities and Exchange Commission shall, at the Closing Date, have been duly
filed and effective; and subject to the issuance of the Interim Order and the
Final Order, and the issuance of a determination of no action in response to the
letters of Comamtech to the U.S. Securities and Exchange Commission, all
exemptions upon which Comamtech and MergerCo are relying in respect of the
prospective issuance of securities without registration under the Securities Act
of 1933, as amended, in reliance upon the exemption provided by Section 3(a)(10)
thereunder, and compliance with the Securities Exchange Act of 1934, as amended,
in reliance upon the exemption from registration provided by Rule 12g-3
promulgated thereunder, shall respectively be of full force and effect.  Upon
the closing of the Harris Transaction, Comamtech will be a reporting issuer in
Ontario and not in default under Canadian Securities laws.
 
 
 
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4.1.7 No Other Purchase Agreements.  Other than the Harris Transaction, neither
Comamtech or MergerCo is a party to any agreements of any nature for the
purchase or other acquisition of any of its undertaking, property or assets,
other than in the Ordinary Course of Business in accordance with past practise
or in connection with a Post-Arrangement Transaction Proposal.
 
4.1.8 Approvals and Consents. Schedule 3.1.8 of the Disclosure Letter sets out
all Regulatory Approvals.
 
4.1.9 No Broker, etc.  Except as set forth on Schedule 4.1.9, no finder, broker,
agent or other intermediary has acted for or on behalf of Comamtech or MergerCo
in connection with the negotiation or consummation of the transactions
contemplated hereby, and no fee will be payable by any member of the Comamtech
or MergerCo to any such person in connection with such transactions.
 
4.1.10 Organization. Comamtech and MergerCo are duly incorporated, validly
existing and in good standing under the Laws of its jurisdiction of
incorporation, with the full corporate power to own all of its assets and to
carry on its business as currently conducted, and has made all necessary filings
under all Laws to which it is subject.
 
4.1.11 Commitments on Securities. Except as set forth in Schedule 4.1.11  and
other than pursuant to the Arrangement and other than with respect to broker’s
finder’s fee set forth in Schedule 4.1.9, there is no Option, contract or any
other right of another binding upon or which at any time in the future may
become binding upon the Comamtech or MergerCo to:
 
(a) allot or issue any of its unissued shares or to create any additional class
of its shares;
 
(b) purchase, redeem or otherwise acquire any shares in its capital or any
interests therein; or
 
(c) pay any dividend or make any distribution in respect thereof.
 
4.1.12 Subsidiaries and Affiliates. Except as set forth in Schedule 4.1.12,
Comamtech and MergerCo (i) do not have any Subsidiaries or Affiliates, (ii) do
not own, directly or indirectly, nor has it agreed to acquire, directly or
indirectly, any of the outstanding shares or securities convertible into shares
or other equity interest or investment of any kind (including by way of loan) of
any other corporation, partnership, joint venture, limited liability corporation
or other business enterprise and (iii) are not a party to any partnership, joint
venture or other agreement of a similar nature.
 
 
 
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4.1.13 Accounts Receivable. Except as set forth in Schedule 4.1.13 and at the
Closing Date, all receivables of Comamtech shall be good and collectible and
shall not subject to any defence, counterclaim or set-off.
 
4.1.14 Absence of Liabilities. Comamtech and MergerCo have no liabilities,
indebtedness or obligations of any nature whatsoever, whether contingent or
otherwise.
 
4.1.15 Prior Transactions. Except as provided for the Harris Transaction
pursuant to the Arrangement Agreement, there are no outstanding obligations of
Comamtech or MergerCo in connection with any transaction concluded prior to the
Closing Date involving the acquisition by Comamtech or MergerCo of the shares or
assets of any company.
 
4.1.16 Contracts, Agreements and Commitments
 
(a) Schedule 4.1.16 sets forth a complete and accurate list of all material
written and oral contracts, agreements and commitments (including undertakings
or commitments to any Governmental Entity) pursuant to which Comamtech and
MergerCo will be bound to perform at the Closing Date, or is otherwise subject
to, obligations of any nature whatsoever.
 
4.1.17 Non-Arm’s Length Transactions
 
(a) Except as set forth in Schedule 4.1.17, there are no material transactions,
Contracts or other agreements between Comamtech and MergerCo and any affiliate
of Comamtech and MergerCo or any director, officer, shareholder or employee of
Comamtech and MergerCo.
 
4.1.18 Employment Matters
 
(i) Schedule 4.1.18 contains a list of all employees of Comamtech and MergerCo
as at the Closing Date.
 
4.1.19 Litigation.  Except as set forth in Schedule 4.1.19, there are no
actions, claims, complaints, investigations, arbitrations or other proceedings
pending or, to the best of the knowledge of Comamtech or MergerCo, threatened
against, with respect to, or affecting in any manner the Assets of Comamtech and
MergerCo; provided, however, that no item set forth in Schedule 4.1.19 shall,
either alone or when taken together with any other item set forth in such
schedule, result in or could reasonably be expected to result in, a Comamtech
Material Adverse Effect.
 
4.1.20 Lenders.  Schedule 4.1.20 contains a list of all existing instruments or
agreements currently in force pursuant to which Comamtech and MergerCo have
borrowed any money, incurred any other indebtedness, established a line of
credit or guaranteed the indebtedness or obligation of another Person. True,
correct and complete copies of all such instruments and agreements have been
provided to the Corporation.
 
4.1.21 Bank Accounts. Schedule 4.1.21 contains a list of each bank or other
financial institution where Comamtech or MergerCo maintains an account or safe
deposit box, the account or box number, as applicable, and the names of all
Persons authorized to draw thereon or to have access thereto.
 
 
 
 
 
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4.1.22 Accuracy of Information and Full Disclosure
 
(a) No representation or warranty of Comamtech and MergerCo contained in this
Agreement contains any untrue statement of a material fact or omits any material
fact necessary to make the statements contained herein, in light of the
circumstances under which made, not misleading.
 
(b) Comamtech and MergerCo have disclosed to the Corporation all events,
conditions or facts related to the Corporation, including the Business and the
Assets, which materially affect the condition (financial or otherwise) of
Comamtech and MergerCo, including its business and the Assets.
 
4.2  
Disclosure Letter

 
4.2.1 Contemporaneously with the execution and delivery of this Agreement,
Comamtech is delivering to the Corporation a disclosure letter (the “Comamtech
Disclosure Letter”) required to be delivered pursuant to this Agreement, which
is deemed to constitute an integral part of this Agreement and to modify the
representations and warranties of the Comamtech contained in this Agreement.
 
4.2.2 The information disclosed in any schedule to the Disclosure Letter will be
disclosure only against the representation and warranty to which such schedule
expressly relates.
 
4.3  
Survival of Representations and Warranties

 
Except for the representations and warranties contained in Section 4.1, neither
Comamtech nor any other persons on behalf of Comamtech makes any express or
implied representation or warranty with respect to Comamtech or with respect to
any other information provided or otherwise made available to the Corporation in
connection with the transactions contemplated hereby. The representations and
warranties of Comamtech contained in this Agreement shall not survive the
completion of the Arrangement and shall expire and terminate on the earlier of:
(i) the Effective Time, and (ii) the date on which this Agreement is terminated
in accordance with its terms. This Section 4.3 shall not limit any covenant or
agreement of Comamtech which, by its terms, contemplates performance after the
Effective Time or date on which this Agreement is terminated, as the case may
be.
 
ARTICLE 5 
COVENANTS OF THE PARTIES
 
5.1  
Covenants of the Corporation and Comamtech Regarding the Conduct of Business

 
Each of the Corporation and Comamtech covenants and agrees that, from the date
of this Agreement until the earlier of (i) the Effective Time and (ii) the time
that this Agreement is terminated in accordance with its terms, except with the
prior written consent of Comamtech, such consent not to be unreasonably withheld
or delayed, or except as is otherwise expressly permitted or contemplated by
this Agreement or the Plan of Arrangement, or as is otherwise required by
applicable Law or as required under the Harris Transaction;
 
 
 
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5.1.1 the Business of each member of its Consolidated Group will be conducted
only, and no member of its Consolidated Group will take any action except, in
the Ordinary Course of Business in accordance with past practice, and each
member of its Consolidated Group will use commercially reasonable efforts to
maintain and preserve its current business organization, Assets, properties,
employees, goodwill and business relationships;
 
5.1.2 the Corporation and Comamtech will not, and will not permit any member of
its respective Consolidated Group to:
 
(a) amend its Organizational Documents other than, in the case of Comamtech in
respect of the Harris Transaction;
 
(b) split, divide, consolidate, combine, exchange or reclassify any shares of
any member of its Consolidated Group, except as contemplated by this Agreement;
 
(c) adopt a plan of liquidation or resolutions providing for the liquidation or
dissolution of any member of its Consolidated Group;
 
(d) except as contemplated by this Agreement, amalgamate, merge or otherwise
combine any member of its Consolidated Group with any other person or complete
an arrangement, restructuring, recapitalization, reorganization or other
business combination transaction; or
 
(e) enter into or modify any contract, agreement, commitment or arrangement to
do any of the foregoing;
 
5.1.3 the Corporation and Comamtech will not, and will not permit any member of
its Consolidated Group to:
 
(a) declare, set aside or pay any dividend or other distribution or payment or
return of capital (whether in cash, shares or property) in respect of the
outstanding shares of any member of its Consolidated Group;
 
(b) issue, grant, sell or pledge any shares or other securities of any member of
its Consolidated Group, including securities convertible into or exchangeable or
exercisable for, or otherwise evidencing a right to acquire, shares of any
member of its Consolidated Group (other than the issuance of Shares on the
exercise of currently outstanding options issued pursuant to the Stock Option
Plans);
 
(c) redeem, purchase or otherwise acquire any of the outstanding shares or other
securities of any member of its Consolidated Group;
 
(d) alter or amend the term of any of the outstanding securities of any member
of its Consolidated Group; or
 
 
 
 
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(e) enter into or modify any contract, agreement, commitment or arrangement to
do any of the foregoing;
 
5.1.4 except as contemplated by this Agreement, the Corporation and Comamtech
will not, and will not permit any member of its Consolidated Group to:
 
(a) sell, pledge, lease, licence, dispose of or encumber any Assets or
properties of any member of its Consolidated Group;
 
(b) acquire (by consolidation or acquisition of shares or assets or otherwise)
any corporation, trust, partnership or other business organization or division
thereof, which is not a subsidiary or affiliate of any member of its
Consolidated Group, or make any investment therein either by purchase of shares
or securities, contributions of capital or property transfer or otherwise;
 
(c) incur any indebtedness for borrowed money that is not repaid prior to the
Effective Time or incur any other material liability or obligation;
 
(d) issue any debt securities or assume, guarantee, endorse or otherwise become
responsible for, the obligations of any other person;
 
(e) except in the Ordinary Course of Business in accordance with past practice,
pay, discharge or satisfy any claim, liability or obligation, other than the
payment, discharge or satisfaction of liabilities reflected or reserved against
in the Corporation Financial Statements, or waive, release, grant or transfer
any rights of material value;
 
(f) enter into any hedges, swaps or other financial instruments or like
transactions;
 
(g) enter into, terminate or amend in any material respect any Material
Contract;
 
(h) take any action that would render, or that may reasonably be expected to
render, any representation or warranty (except any representation or warranty
which speaks solely as of a date prior to the occurrence of such action) to be
made by the Corporation, as the case may be, in this Agreement untrue at any
time on or prior to the Effective Time;
 
(i) make any changes to any of the accounting policies, principles, methods,
practices or procedures (including by adopting any new accounting policies,
principles, methods, practices or procedures) of any member of its Consolidated
Group, except as required by applicable Laws or under US GAAP;
 
(j) make or change any material Tax election, change any annual Tax accounting
period, adopt or change any method of Tax accounting, amend any material Returns
or file claims for Tax refunds, enter into any closing agreement, enter into (or
offer to enter into) any agreement (including any waiver) with any Governmental
Entity relating to Taxes, settle (or offer to settle) any Tax claim, audit or
assessment, or surrender any right to claim a Tax refund, offset or other
reduction in Tax liability;
 
 
 
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(k) voluntarily waive, release, assign, settle or compromise (i) any material
proceeding or any material claim or material liability or (ii) any proceeding
that is brought by any current, former or purported holder of any securities of
any member of its Consolidated Group in its capacity as such and that
(A) requires any payment by any member of its Consolidated Group or
(B) adversely affects in any material respect the ability of any member of its
Consolidated Group to conduct its business in a manner consistent with past
practice; or
 
(l) authorize or propose any of the foregoing, or enter into or modify any
contract, agreement, commitment or arrangement to do any of the foregoing;
 
5.1.5 except as contemplated by this Agreement, the Corporation and Comamtech
will not, and will not permit any member of its Consolidated Group to, except in
the Ordinary Course of Business in accordance with past practice, or where
required pursuant to any existing contracts to which a member of its
Consolidated Group is a party and that is in effect on the date hereof, and
except as is necessary to comply with applicable Laws:
 
(a) grant to any senior employee, officer or director of any member of its
Consolidated Group an increase in compensation in any form;
 
(b) grant any general salary increase to the Employees of any member of its
Consolidated Group;
 
(c) take any action with respect to the grant of any severance or termination or
change of control pay or benefits, except as directed by Comamtech in writing;
 
(d) enter into any employment, deferred compensation or other similar agreement
or amend any such existing agreement, with any senior employee, officer or
director of any member of its Consolidated Group;
 
(e) increase any benefits payable under its current severance or termination or
change of control pay policies; or
 
(f) adopt or materially amend or make any contribution to any employee Benefit
Plan of any member of its Consolidated Group or other similar plan, agreement,
trust, fund or arrangement or take any action to accelerate any rights or
benefits or fund or secure the payment of compensation or benefits under any
employee Benefit Plan, or make any person a beneficiary of any retention or
severance plan which would entitle such person to payments, vesting,
acceleration or any other right as a consequence of consummation of the
transactions contemplated by this Agreement and/or termination of employment;
 
5.1.6 the Corporation and each member of its Consolidated Group will:
 
(a) prepare and timely file all material Returns required to be filed by it on
or before the Effective Time (“Post-Signing Tax Returns”) in a manner
consistent, in all material respects, with past practice, except as otherwise
required by applicable Law;
 
(b) fully and timely pay all Taxes due and payable in respect of such
Post-Signing Tax Returns that are so filed; and
 
 
 
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(c) properly reserve (and reflect such reserve in its books and records and
financial statements), for all Taxes payable by it for which no Post-Signing
Return is due prior to the Effective Time in a manner consistent with past
practice;
 
5.1.7 the Corporation will use its commercially reasonable efforts to cause the
current insurance (or re-insurance) policies maintained by each member of its
Consolidated Group, including directors’ and officers’ insurance, not to be
cancelled or terminated or any of the coverage thereunder permitted to lapse,
unless at the time of such termination, cancellation or lapse, replacement
policies underwritten by insurance or re-insurance companies of nationally
recognized standing having comparable deductions and providing coverage
comparable to or greater than the coverage under the cancelled, terminated or
lapsed policies for substantially similar premiums are in full force and effect;
 
5.1.8 the Corporation and Comamtech will not take any action that could
reasonably be expected to preclude, delay or have an adverse effect on the
Arrangement or would render, or may reasonably be expected to render, any
representation or warranty made by it in this Agreement untrue in any material
respect;
 
5.1.9 the Corporation will promptly disclose in writing to Comamtech the
occurrence of any event or circumstance which has or is reasonably likely to
have a Corporation Material Adverse Effect, any change in any material fact set
forth in the Corporation’s Public Documents, or any change in any representation
or warranty provided by the Corporation in this Agreement which change is or may
be of such a nature to render any representation or warranty misleading or
untrue in any material respect and the Corporation shall in good faith discuss
with Comamtech any change in circumstances (actual, anticipated, contemplated,
or to the knowledge of the Corporation, threatened) which is of such a nature
that there may be a reasonable question as to whether disclosure in writing
needs to be given to Comamtech pursuant to this provision;
 
5.1.10 the Corporation will ensure that it has available funds under its lines
of credit or other bank facilities to permit the payment of the amounts which
may be required under Section 7.3 and shall take all such actions as may be
necessary to ensure that it maintains such availability to ensure that it is
able to pay such amount if required; and
 
5.1.11 the Corporation will use its reasonable commercial efforts to satisfy or
cause satisfaction of the conditions set forth in Article 6 as soon as
reasonably possible following execution of this Agreement to the extent that the
satisfaction of the same is within the control of the Corporation.
 
5.2  
Covenants of the Corporation Regarding the Arrangement

 
The Corporation shall perform, and shall cause each other member of its
Consolidated Group to perform, all obligations required or desirable to be
performed by each member of its Consolidated Group under this Agreement,
co-operate with Comamtech in connection therewith, and do all such other acts
and things as may be necessary or desirable in order to consummate and make
effective, as soon as reasonably practicable, the transactions contemplated in
this Agreement and, without limiting the generality of the foregoing, the
Corporation shall and, where appropriate, shall cause each other member of its
Consolidated Group to:
 
 
 
 
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5.2.1 unless this Agreement shall have been terminated in accordance with
Section 8.2, submit the Amalgamation for approval by the Corporation
Shareholders at the Meeting of the Corporation;
 
5.2.2 promptly inform Comamtech in writing of any change that could have a
Corporation Material Adverse Effect;
 
5.2.3 use all commercially reasonable efforts to obtain all necessary waivers,
consents and approvals required to be obtained by each member of its
Consolidated Group in connection with the Arrangement from other parties to
contracts to which any member of its Consolidated Group is a party without
paying, and without committing itself or Comamtech to pay any consideration or
incur any liability or obligation to or in respect of any such other party
without the prior written consent of Comamtech;
 
5.2.4 use its commercially reasonable efforts to effect all necessary
registrations, filings and submissions of information required by Governmental
Entities from any member of its Consolidated Group relating to the Arrangement;
 
5.2.5 apply for and use all commercially reasonable efforts to obtain, and use
all commercially reasonable efforts to assist Comamtech to obtain, all
Regulatory Approvals and, in doing so, keep Comamtech reasonably informed as to
the status of the proceedings related to obtaining the Regulatory Approvals,
including providing Comamtech with copies of all related applications and
notifications (other than confidential information contained in such
applications and notifications), in draft form, in order for Comamtech to
provide its comments thereon; and
 
5.2.6 defend all lawsuits or other legal, regulatory or other proceedings
against any member of its Consolidated Group challenging or affecting this
Agreement or the consummation of the transactions contemplated hereby.
 
5.3  
Covenants of Comamtech Regarding the Performance of Obligations

 
Except as contemplated in this Agreement, Comamtech shall perform all
obligations required or desirable to be performed by it under this Agreement,
co-operate with the Corporation in connection therewith, and do all such other
acts and things as may be necessary or desirable in order to consummate and make
effective, as soon as reasonably practicable, the transactions contemplated in
this Agreement and, without limiting the generality of the foregoing, Comamtech
shall:
 
5.3.1 Unless this Agreement shall have been terminated in accordance with
Section 8.2.2, submit the Arrangement Resolution for approval by the
Shareholders at the Meeting in accordance with Section 2.3.2;
 
5.3.2 Unless this Agreement shall have been terminated in accordance with
Section 8.2.2, submit the Comamtech Continuance Resolution for approval by the
Shareholders at the Meeting in accordance with Section 2.3.2;
 
5.3.3 Comamtech and MergerCo shall each file a certificate of corporate
domestication and a certificate of incorporation to become domesticated in the
State of Delaware under the Delaware General Corporation Law.  Comamtech and
MergerCo shall become subject to the Delaware General Corporation Law on the
date of domestication, but will be deemed for the purposes of the Delaware
General Corporation Law to have commenced its existence in Delaware on the date
it originally incorporated under the laws of the Province of Ontario;
 
 
 
 
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5.3.4 Comamtech shall at the Effective Date change its name to DecisionPoint
Systems, Inc. and the following persons shall act as its directors: Nicholas R.
Toms, Donald W. Rowley, David M. Rifkin, Jay B. Sheehy, Marc Ferland and
Lawrence Yelin, such directors shall be appointed at the Meeting and shall act
as directors of Comamtech until the next annual meeting of the shareholders of
Comamtech.
 
5.3.5 comply with the provisions of the Confidentiality Agreement;
 
5.3.6 not take any action that would render, or that may reasonably be expected
to render, any material representation or warranty (except any representation
and warranty which speaks solely as of a date prior to the occurrence of such
action) made by Comamtech in this Agreement untrue at any time prior to the
Effective Time;
 
5.3.7 promptly notify the Corporation in writing of any change that could have a
Comamtech Material Adverse Effect;
 
5.3.8 apply for and use all commercially reasonable efforts to obtain all
Regulatory Approvals relating to it and, in doing so, keep the Corporation
reasonably informed as to the status of the proceedings related to obtaining the
Regulatory Approvals, including providing the Corporation with copies of all
related applications and notifications in draft form (other than confidential
information contained in such applications and notifications), in order for the
Corporation to provide its reasonable comments thereon, provided, however, that
nothing in this Agreement shall require Comamtech to take any action to obtain
any Regulatory Approval that could materially adversely affect the activities of
Comamtech or any affiliate of Comamtech;
 
5.3.9 use its commercially reasonable efforts to effect all necessary
registrations, filings and submissions of information required by Governmental
Entities from Comamtech or any of its affiliates relating to the Arrangement;
and
 
5.3.10 defend all lawsuits or other legal, regulatory or other proceedings
against it challenging or affecting this Agreement or the consummation of the
transactions contemplated hereby.
 
5.4  
Mutual Covenants

 
Each of the Parties covenants and agrees that, except as contemplated in this
Agreement, during the period from the date of this Agreement until the earlier
of the Effective Time and the time that this Agreement is terminated in
accordance with its terms:
 
5.4.1 it shall, and shall cause its subsidiaries and affiliates to, use
commercially reasonable efforts to satisfy (or cause the satisfaction of) the
conditions precedent to its obligations hereunder as set forth in Article 6 to
the extent the same is within its control and to take, or cause to be taken, all
other action and to do, or cause to be done, all other things necessary, proper
or advisable under all applicable Laws to consummate the Arrangement, including
using its commercially reasonable efforts to:
 
 
 
 
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(a) oppose, lift or rescind any injunction or restraining order against it or
other order or action against it seeking to stop, or otherwise adversely
affecting its ability to make and complete, the Arrangement; and
 
(b) co-operate with the other Party in connection with the performance by it and
its subsidiaries and affiliates of their obligations hereunder;
 
5.4.2 it shall (i) not take any action or permit any action to be taken or
commercially reasonable action to not be taken, and (ii) refrain from taking any
action, which is inconsistent with this Agreement or which would reasonably be
expected to significantly impede the consummation of the Arrangement or to
prevent or materially delay the consummation of the transactions contemplated
hereby, in each case, except as permitted by this Agreement; and
 
5.4.3 it shall promptly notify the other Parties of (i) any communication from
any person alleging that the consent of such person (or another person) is or
may be required in connection with the transactions contemplated by this
Agreement (and the response thereto from such Party, its subsidiaries,
affiliates or its representatives), (ii) any material communication from any
Governmental Entity in connection with the transactions contemplated by this
Agreement (and the response thereto from such Party, its subsidiaries,
affiliates or its representatives), and (iii) any material legal actions
threatened or commenced against or otherwise affecting such Party or any of its
subsidiaries or affiliates that are related to the transactions contemplated by
this Agreement.
 
ARTICLE 6 
CONDITIONS PRECEDENT
 
6.1  
Mutual Conditions Precedent

 
The respective obligations of the Parties to complete the transactions
contemplated by this Agreement, and in particular the Arrangement, are subject
to the fulfillment, on or before the Effective Date or such other time specified
herein, of each of the following conditions:
 
6.1.1 the Interim Order shall have been granted in form and content satisfactory
to each of the Parties, acting reasonably, and shall not have been set aside or
modified in a manner unacceptable to the Parties, acting reasonably, on appeal
or otherwise;
 
6.1.2 the Arrangement Resolution and the Comamtech Continuance Resolution shall
have been passed at the Meeting by not less than the Required Vote;
 
6.1.3 the Corporation Shareholders shall have approved the Amalgamation;
 
6.1.4 the Final Order shall have been granted in form and content satisfactory
to each of the Parties, acting reasonably, and shall not have been set aside or
modified in a manner unacceptable to the Parties, acting reasonably, on appeal
or otherwise;
 
 
 
 
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6.1.5 the Articles of Arrangement shall be in form and substance satisfactory to
each of the Parties, acting reasonably, and be capable of being filed in
sufficient time to ensure that the Arrangement may become effective on or prior
to the Outside Date;
 
6.1.6 The approval by the OSC and the Minister of Finance (Ontario) of the
Comamtech Continuance;
 
6.1.7 all Regulatory Approvals shall have been obtained or concluded or, in the
case of waiting or suspensory periods, expired or been terminated;
 
6.1.8 no Governmental Entity shall have enacted, issued, promulgated, applied
for (or advised either the Corporation or Comamtech that it has determined to
make such application), enforced or entered any Law (whether temporary,
preliminary or permanent) that (i) restrains, enjoins or otherwise prohibits
consummation of, or dissolves, the Arrangement or the other transactions
contemplated by this Agreement;
 
6.1.9 the consummation of the Harris Transaction; and
 
6.1.10 this Agreement shall not have been terminated.
 
The conditions in this Section 6.1 are for the mutual benefit of each of the
Parties and may be asserted by each of the Parties regardless of the
circumstances or may be waived by each of the Parties (each Party with respect
to itself) in its sole discretion, in whole or in part, at any time and from
time to time without prejudice to any other rights which the Parties may have.
 
6.2  
Additional Conditions Precedent to the Obligations of Comamtech and MergerCo

 
The obligations of Comamtech and MergerCo to complete the transactions
contemplated by this Agreement, and in particular the Arrangement, shall also be
subject to the fulfillment, on or before the Effective Date or such other time
specified herein, of each of the following conditions:
 
6.2.1 all covenants of the Corporation under this Agreement to be performed or
complied with on or before the Effective Date shall have been duly performed or
complied with by the Corporation in all material respects, and Comamtech shall
have received a certificate of the Corporation, addressed to Comamtech and dated
the Effective Date, signed on behalf of the Corporation by two senior executive
officers of the Corporation (on the Corporation’s behalf and without personal
liability), confirming the same as at the Effective Date after having made
reasonable inquiry;
 
6.2.2 the representations and warranties of the Corporation set forth in this
Agreement shall be true and correct in all material respects as of the Effective
Date, as though made on and as of the Effective Date (except for representations
and warranties made as of a specified date, the accuracy of which shall be
determined as of that specified date); provided, however, that any such
representation and warranty that is qualified by a reference to materiality or
Corporation Material Adverse Effect shall be true and correct in all respects as
of the Effective Date, as though made on and as of the Effective Date (except
for representations and warranties made as of a specified date, the accuracy of
which shall be determined as of that specified date), and Comamtech shall have
received a certificate of the Corporation, addressed to Comamtech and dated the
Effective Date, signed on behalf of the Corporation by two senior executive
officers of the Corporation (on the Corporation’s behalf and without personal
liability), confirming the same as at the Effective Date after having made
reasonable inquiry;
 
 
 
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6.2.3 Comamtech shall not have become aware of any untrue statement of a
material fact, or an omission to state a material fact that is required to be
stated or that is necessary to make a statement not misleading in the light of
the circumstances in which it was made and at the date it was made (after giving
effect to all subsequent filings made on or prior to the date of this Agreement
in relation to all matters covered in earlier filings) in the Corporation’s
Public Documents;
 
6.2.4 neither the Corporation nor any member of the Consolidated Group shall
have entered into or announced its intention to enter into any Post-Arrangement
Transaction Proposal that could reasonably be expected to impair or delay in any
manner whatsoever the completion of the Arrangement and any of the transactions
contemplated thereby or otherwise affect the Arrangement or any of the
transactions contemplated thereby;
 
6.2.5 neither the Corporation nor any member of the Consolidated Group shall
have completed a Post-Arrangement Transaction Proposal prior to the completion
of the Arrangement and all transactions contemplated thereby;
 
6.2.6 between the date hereof and the Effective Time, there shall not have
occurred a Corporation Material Adverse Effect;
 
6.2.7 the aggregate number of the Shares held, directly or indirectly, by the
Shareholders who have validly exercised Dissent Rights in connection with the
Arrangement shall not exceed 10% of the outstanding Shares immediately prior to
the Effective Date;
 
6.2.8 the aggregate number of the Shares held, directly or indirectly by the
Shareholders who have validly exercised Dissent Rights in connection with the
Continuance shall not exceed 10% of the outstanding Shares immediately prior to
the Effective Date;
 
6.2.9 the completion by Comamtech of due diligence relating to the business and
affairs of the Corporation, the whole to the satisfaction of Comamtech;
 
6.2.10 except for the Permitted Encumbrances, there shall be no security
registrations against the Corporation under any security registration
legislation in other jurisdictions, with the exception of registrations relating
to specific goods which, for greater certainty, excludes registrations relating
to equipment or other categories of personal property where no specific good is
listed, or such other arrangements shall have been made with respect to the
discharge of such security registrations as are satisfactory to Comamtech;
 
6.2.11 Comamtech shall have received from the Corporation all of the information
and documents set forth in Schedule 6.2.11 of the Disclosure Letter;
 
6.2.12 the Plan of Arrangement shall not have been modified or amended in a
manner adverse to Comamtech; and
 
 
 
 
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6.2.13 Legal counsel to the Corporation shall have provided the opinion required
by Section 4 of Regulation 289/00 to the Business Corporations Act (Ontario) in
sufficient time to obtain the approvals in Section 6.1.6.
 
The conditions in this Section 6.2 are for the exclusive benefit of Comamtech
and MergerCo and may be asserted by Comamtech and MergerCo regardless of the
circumstances or may be waived by Comamtech and MergerCo in their sole
discretion, in whole or in part, at any time and from time to time without
prejudice to any other rights which Comamtech and MergerCo may have.
 
6.3  
Additional Conditions Precedent to the Obligations of the Corporation

 
The obligations of the Corporation to complete the transactions contemplated by
this Agreement, and in particular the Arrangement, shall also be subject to the
fulfillment, on or before the Effective Date or such other time specified
herein, of each of the following conditions:
 
6.3.1 all covenants of Comamtech and MergerCo under this Agreement to be
performed or complied with on or before the Effective Date shall have been duly
performed or complied with by Comamtech and MergerCo in all material respects,
and the Corporation shall have received a certificate of Comamtech, addressed to
the Corporation and dated the Effective Date, signed on behalf of Comamtech by
two of its senior executive officers (on Comamtech’s behalf and without personal
liability), confirming the same as of the Effective Date after having made
reasonable inquiry;
 
6.3.2 the representations and warranties of Comamtech set forth in this
Agreement shall be true and correct in all material respects as of the Effective
Date, as though made on and as of the Effective Date (except for representations
and warranties made as of a specified date, the accuracy of which shall be
determined as of that specified date); provided, however, that any such
representation and warranty that is qualified by a reference to materiality or
Comamtech Material Adverse Effect shall be true and correct in all respects as
of the Effective Date, as though made on and as of the Effective Date (except
for representations and warranties made as of a specified date, the accuracy of
which shall be determined as of that specified date), and the Corporation shall
have received a certificate of Comamtech, addressed to the Corporation and dated
the Effective Date, signed on behalf of Comamtech by the chief executive
officers of Comamtech (on Comamtech’s behalf and without personal liability),
confirming the same as at the Effective Date after having made reasonable
inquiry;
 
6.3.3 the Corporation shall not have become aware of any untrue statement of a
material fact, or an omission to state a material fact that is required to be
stated or that is necessary to make a statement not misleading in the light of
the circumstances in which it was made and at the date it was made;
 
6.3.4 neither Comamtech nor any member of the Consolidated Group shall have
entered into or announced its intention to enter into any Post-Arrangement
Transaction Proposal that could reasonably be expected to impair or delay in any
manner whatsoever the completion of the Arrangement and any of the transactions
contemplated thereby or otherwise affect the Arrangement or any of the
transactions contemplated thereby;
 
 
 
 
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6.3.5 neither Comamtech nor any member of the Consolidated Group shall have
completed a Post-Arrangement Transaction Proposal, other than the Harris
Transaction, prior to the completion of the Arrangement and all transactions
contemplated thereby;
 
6.3.6 between the date hereof and the Effective Time, there shall not have
occurred a Comamtech Material Adverse Effect;
 
6.3.7 Comamtech shall have received resignations and mutual releases, in the
form settled between the Corporation and Comamtech, from the directors and
executive officers of the members of Comamtech;
 
6.3.8 the Plan of Arrangement shall not have been modified or amended in a
manner adverse to the Corporation;
 
6.3.9 the representations and warranties of Comamtech and MergerCo set forth in
this Agreement shall be true and correct in all material respects as of the
Effective Date, as though made on and as of the Effective Date (except for
representations and warranties made as of a specified date, the accuracy of
which shall be determined as of that specified date); provided, however, that
any such representation and warranty that is qualified by a reference to
materiality or Comamtech Material Adverse Effect shall be true and correct in
all respects as of the Effective Date, as though made on and as of the Effective
Date (except for representations and warranties made as of a specified date, the
accuracy of which shall be determined as of that specified date), and the
Corporation shall have received a certificate of Comamtech, addressed to the
Corporation and dated the Effective Date, signed on behalf of Comamtech by two
of its senior executive officers (on Comamtech’s behalf and without personal
liability), confirming the same as of the Effective Date after having made
reasonable inquiry.
 
6.4  
Notice and Cure Provisions

 
6.4.1 Each Party will give prompt notice to the other of the occurrence, or
failure to occur, at any time from the date hereof until the earlier to occur of
the termination of this Agreement and the Effective Date, of any event or state
of facts the occurrence of which or failure thereof would, or would be likely
to:
 
(a) cause any of the representations or warranties of any Party contained herein
to be untrue or inaccurate in any material respect; or
 
(b) result in the failure to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by any Party hereunder;
 
provided, however, that no such notification will affect the representations or
warranties of the Parties or the conditions to the obligations of the Parties
hereunder.
 
6.4.2 Neither Party may exercise its right to terminate this Agreement unless
the Party seeking to terminate the Agreement shall have delivered a written
notice to the other Party specifying in reasonable detail all breaches of
covenants, representations and warranties or other matters which the Party
delivering such notice is asserting as the basis for the termination right. If
any such notice is delivered, provided that a Party is proceeding diligently to
cure such matter and such matter is capable of being cured (except matters
arising out of the failure to make appropriate disclosure in the Disclosure
Letter), no Party may exercise such termination right, until the earlier of
(i) the Outside Date, and (ii) the date that is 15 days following receipt of
such notice by the Party to whom the notice was delivered, if such matter has
not been cured by such date. If such notice has been delivered prior to the date
of the Meeting, the Meeting shall, unless the Parties agree otherwise, be
postponed or adjourned until the expiry of such period (without causing any
breach of any other provision contained herein). If such notice has been
delivered prior to the filing of the Articles of Arrangement with the Director,
such filing shall be postponed until two Business Days after the expiry of such
period.
 
 
 
 
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6.5  
Satisfaction of Conditions

 
The conditions set out in this Article 6 are conclusively deemed to have been
satisfied, waived or released when, with the agreement of the Parties, the
Articles of Arrangement are filed with the Director to give effect to the
Arrangement.
 
ARTICLE 7 
ADDITIONAL AGREEMENTS
 
7.1  
Mutual Covenants Regarding Non-Solicitation

 
7.1.1 The Parties hereto shall immediately cease and cause to be terminated all
existing discussions and negotiations (including through any advisors or other
parties on its behalf), with any parties (other than with each other and any of
their respective representatives and the Harris Transaction) conducted before
the date of this Agreement with respect to any proposal that constitutes, or may
reasonably be expected to constitute or lead to, an Acquisition Proposal. The
Corporation or Comamtech (as the case may be) shall not modify or release any
third party from any existing confidentiality agreement (including, for greater
certainty, any existing standstill provisions). The Corporation or Comamtech (as
the case may be) shall discontinue access to any of its confidential information
(and not establish or allow access to any of its confidential information, or
any data room, virtual or otherwise) and shall as soon as possible request and
exercise all rights it has to require (i) the return or destruction of all
confidential information provided to any third parties who have entered into a
confidentiality agreement with the Corporation or Comamtech (as the case may be)
relating to an Acquisition Proposal and (ii) the destruction of all material
including or incorporating or otherwise reflecting any confidential information
regarding the Corporation or Comamtech (as the case may be) provided to such
third parties, and shall use all reasonable commercial efforts to ensure that
such requests are honoured. Without limiting the foregoing, it is understood
that any violation of the restrictions set forth in this Section 7.1.1 by the
Corporation or Comamtech (as the case may be) or their respective officers,
directors, employees, representatives and agents shall be deemed to be a breach
of this Section 7.1.1 by the Corporation or Comamtech (as the case may be).
 
7.1.2 Neither the Corporation nor Comamtech shall, directly or indirectly, do,
or authorize or permit any of their respective officers, directors or employees
or any financial advisor, expert, agent or other representative retained by it
to do, any of the following:
 
 
 
 
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(a) solicit, assist, initiate, encourage or in any way facilitate (including by
way of furnishing information, or entering into any form of written or oral
agreement, arrangement or understanding) any Acquisition Proposal or inquiries,
proposals or offers regarding an Acquisition Proposal;
 
(b) enter into or participate in any discussions or negotiations regarding an
Acquisition Proposal, or furnish to any other person any information with
respect to its businesses, properties, operations, prospects or conditions
(financial or otherwise) in connection with an Acquisition Proposal or otherwise
cooperate in any way with, or assist or participate in, facilitate or encourage,
any effort or attempt of any other person to do or seek to do any of the
foregoing;
 
(c) waive, or otherwise forbear in the enforcement of, or enter into or
participate in any discussions, negotiations or agreements to waive or otherwise
forbear in respect of, any rights or other benefits under confidentiality
agreements, including any “standstill provisions” thereunder; or
 
(d) accept, recommend, approve, agree to, endorse, or propose publicly to
accept, recommend, approve, agree to, or endorse any Acquisition Proposal or
agreement in respect thereto;
 
provided, however, that notwithstanding any other provision hereof, the
Corporation or Comamtech and their respective officers, directors, employees and
advisors or other representatives may prior to the Meeting of the Corporation or
Meeting (as the case may be):
 
(e) enter into or participate in any discussions or negotiations with a third
party who (without any solicitation, initiation or encouragement, directly or
indirectly, after the date of this Agreement, by the Corporation or by Comamtech
or any of their respective officers, directors or employees or any financial
advisor, expert, agent or other representative retained by it) seeks to initiate
such discussions or negotiations with the Corporation or Comamtech that does not
result from a breach of this Section 7.1 and, subject to execution of a
confidentiality and standstill agreement substantially similar to the
Confidentiality Agreement (provided that such confidentiality agreement shall
provide for disclosure thereof (along with all information provided thereunder)
to the Corporation or Comamtech as set out below), may furnish to such third
party information concerning the Corporation or Comamtech and its business,
properties and assets, in each case if, and only to the extent that:
 
(i) the third party has first made a written bona fide Acquisition Proposal
which is a Superior Proposal; and
 
(ii) prior to furnishing such information to or entering into or participating
in any such discussions or negotiations with such third party, the Corporation
or Comamtech (as the case may be) provides prompt notice to Comamtech or the
Corporation to the effect that it is furnishing information to or entering into
or participating in discussions or negotiations with such person together with a
copy of the confidentiality agreement referenced above and, if not previously
provided to Comamtech or the Corporation, copies of all information provided to
such third party concurrently with the provision of such information to such
third party; and
 
 
 
 
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(f) accept, recommend, approve or enter into an agreement to implement a
Superior Proposal from a third party, but only if prior to such acceptance,
recommendation, approval or implementation, the relevant board shall have
concluded in good faith, after considering all proposals to adjust the terms and
conditions of this Agreement as contemplated by Section 7.1.4 and after
receiving the written advice of outside counsel, that the taking of such action
is necessary for such board in the discharge of its fiduciary duties under
applicable Laws and the Corporation or Comamtech (as the case may be) complies
with its obligations set forth in Section 7.1.4 and terminates this Agreement in
accordance with the terms of this Agreement and concurrently therewith pays the
Termination Fee.
 
7.1.3 Each Party shall promptly (and in any event within 24 hours of receipt
thereof) notify the other (at first orally and then in writing) of any
Acquisition Proposal or of any inquiries, offers, proposals or requests with
respect to any Acquisition Proposal (or, in each case, any amendment thereto) or
any request for non-public information relating to any member of the
Consolidated Group or their respective assets, or any amendments to the
foregoing. Such notice shall include a copy of any written Acquisition Proposal
(and any amendment thereto) which has been received or, if no written
Acquisition Proposal has been received, a description of the material terms and
conditions of, and the identity of the person making any inquiry, proposal,
offer or request. Each Party shall also provide the other such further and other
details of any Acquisition Proposal made to it or of the inquiry, offer,
proposal or request in respect of an Acquisition Proposal made to it, or any
amendment thereto, as such Party may reasonably request. Each Party shall
promptly and fully informed of the status, including any change to material
terms, of any Acquisition Proposal made to it or of any inquiries, offers,
proposals or requests with respect to any Acquisition Proposal made to it, or
any amendment thereto, shall respond promptly to all inquiries by either
Party  (as the case may be) with respect thereto, and shall provide either Party
(as the case may be) copies of all material correspondence and other written
material sent to or provided to either Party (as the case may be) by any person
in connection with such inquiry, proposal, offer or request or sent or provided
by either Party to any person in connection with such inquiry, proposal, offer
or request, and all other information reasonably requested by either Party (as
the case may be) in respect thereto.
 
7.1.4 Each Party shall give to the other, orally and in writing, at least two
Business Days advance notice of any decision by its respective board of
directors to accept, recommend, approve or enter into an agreement to implement
a Superior Proposal, shall set out such board’s reasonable determination of the
financial value of the consideration offered by such third party to their
respective shareholders under such Superior Proposal, which notice shall confirm
that such board has determined that such Acquisition Proposal constitutes a
Superior Proposal, shall identify the third party making the Superior Proposal
and provide a copy thereof and any amendments thereto to the other. During the
two Business Day period commencing on the delivery of such notice, each Party
agrees not to accept, recommend, approve or enter into any agreement to
implement such Superior Proposal and not to release the party making the
Superior Proposal from any standstill provisions and shall not withdraw,
redefine, modify or change its recommendation in respect of the Arrangement (in
the case of Comamtech) or the Amalgamation (in the case of the Corporation). In
addition, during such two Business Day period, each Party shall, and shall cause
its respective financial and legal advisors to, negotiate in good faith with the
other Party (as the case may be) and its respective financial and legal advisors
to make such adjustments in the terms and conditions of this Agreement and the
Arrangement as would enable each Party to proceed with the Arrangement and
amalgamation as amended rather than the Superior Proposal. In the event
Comamtech or the Corporation (as the case may be) proposes to amend this
Agreement and the Arrangement or the Amalgamation such that the Superior
Proposal ceases to be a Superior Proposal and so advises such board of directors
prior to the expiry of such two Business Day period, such board of directors
shall not accept, recommend, approve or enter into any agreement to implement
such Superior Proposal, shall not release the party making the Superior Proposal
from any standstill provisions and shall not withdraw, redefine, modify or
change its recommendation in respect of the Arrangement or in respect of the
Amalgamation, as the case may be.
 
 
 
 
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7.1.5 Each Party shall reaffirm its recommendation of the Arrangement or the
Amalgamation by press release promptly and in any event within five Business
Days of any written request to do so by Comamtech or the Corporation (or, in the
case of Comamtech, in the event that the Meeting to approve the Arrangement is
scheduled to occur within such five Business Day period, prior to the scheduled
date of the Meeting in the event that (i) any Acquisition Proposal which is
publicly announced is determined not to be a Superior Proposal; or (ii) the
Parties have entered into an amended agreement pursuant to Section 7.1.4 which
results in any Acquisition Proposal not being a Superior Proposal.
 
7.1.6 Comamtech agrees that all information that may be provided to it by the
Corporation (and vice-versa) with respect to any Acquisition Proposal pursuant
to this Section 7.1 shall be treated as if it were “Confidential Information” as
that term is defined in the Confidentiality Agreement and shall not be disclosed
or used except in accordance with the provisions of the Confidentiality
Agreement or in order to enforce its rights under this Agreement in legal
proceedings.
 
7.1.7 The Corporation and Comamtech shall (i) each ensure that their respective
officers, directors and employees and any investment bankers or other advisors
or representatives retained by it are aware of the provisions of this
Section 7.1 and shall (ii) be responsible for any breach of this Section 7.1 by
any of them.
 
7.1.8 Nothing contained in this Section 7.1 shall prohibit any of the respective
board of the Parties from making any disclosure to their respective shareholders
prior to the Effective Time if, in the good faith judgment of such board, after
consultation with outside legal counsel, such disclosure is necessary for such
board to act in a manner consistent with its fiduciary duties; provided,
however, that each Party will be provided with reasonable opportunity to review
and comment upon any such disclosure prior to it being made to their respective
shareholders.
 
7.1.9 Nothing in this Agreement shall prevent the Board from complying with
Section 2.17 of Multilateral Instrument 62-104 and similar provisions under
applicable Laws relating to the provision of directors’ circulars in respect of
an Acquisition Proposal that is not a Superior Proposal but only following the
Corporation’s compliance with this Article 7.
 
7.1.10 Nothing in this Agreement shall prevent the Comamtech Board to consummate
the Harris Transaction.
 
 
 
 
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7.2  
Provision of Information; Access

 
Until the Effective Date or termination of this Agreement, the Corporation shall
provide Comamtech and its representatives access, during normal business hours
and at such other time or times as Comamtech may reasonably request, to its
premises (including field offices and sites), books, contracts, records,
computer systems, properties, employees and management personnel and shall
furnish to Comamtech all information concerning its business, properties and
personnel as Comamtech may reasonably request, which information shall remain
subject to the Confidentiality Agreement, in order to permit Comamtech to be in
a position to expeditiously and efficiently integrate the business and
operations of the Corporation immediately upon but not prior to the Effective
Date. Without limitation, the Corporation agrees to keep Comamtech fully
appraised in a timely manner of every circumstance, action, occurrence or event
occurring or arising after the date hereof that would be relevant and material
to a prudent operator of the business and operations of the Corporation. The
Corporation shall confer with and obtain Comamtech’s approval (not to be
unreasonably withheld or delayed), prior to taking action (other than in
emergency situations) with respect to all operational matters involved in its
business.
 
7.3  
Agreement as to Damages

 
7.3.1 If at any time after the execution of this Agreement:
 
(a) Comamtech Board withdraws, amends, changes or qualifies, or proposes
publicly to withdraw, amend, change or qualify, in any manner adverse to the
Corporation, any of its recommendations or determinations referred to in
Section 4.1.1;
 
(b) Comamtech Board shall have failed to publicly reaffirm any of its
recommendations or determinations referred to in Section 4.1.1 in accordance
with Section 7.1.5 (or, in the event that the Meeting to approve the Arrangement
is scheduled to occur within such five Business Day period, prior to the
scheduled date of the Meeting);
 
(c) a bona fide Acquisition Proposal is publicly announced, proposed, offered or
made to the Shareholders or to Comamtech and has not expired or been withdrawn
at the time of the Meeting or the Arrangement is not submitted for their
approval;
 
(d) Comamtech Board or any committees of the Comamtech Board accepts,
recommends, approves or enters into an agreement, understanding or letter of
intent to implement a Superior Proposal; or
 
(e) subject to Section 6.4, if the Corporation is not in material breach of its
obligations under this Agreement and Comamtech breaches any of its covenants
contained in this Agreement, including the covenant contained in Section 7.1,
which breach would give rise to the failure of a condition set forth in
Section 6.3.1;
 
(each of the above being a “Corporation Damages Event”) then, in the event of
the termination of this Agreement pursuant to Article 8, Comamtech shall pay by
wire transfer to Corporation (or to whom Corporation may direct in writing)
$500,000 (the “Termination Fee”) in immediately available funds to an account
designated by Corporation within two Business Days after the first to occur of
the events described above. Following the occurrence of a Comamtech Damages
Event, but prior to payment of the Termination Fee, Comamtech shall be deemed to
hold such applicable payment in trust for the Corporation. The Corporation shall
only be obligated to make one payment pursuant to this Section 7.3.1.
 
 
 
 
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7.3.2 If, at any time after the execution of this Agreement:
 
(a) the Corporation Board withdraws, amends, changes or qualifies, or proposes
publicly to withdraw, amend, change or qualify, in any manner adverse to the
Corporation, any of its recommendations or determinations referred to in
Section 3.1.1;
 
(b) the Corporation Board shall have failed to publicly reaffirm any of its
recommendations or determinations referred to in Section 3.1.1 in accordance
with Section 7.1.5 (or, in the event that the Meeting of the Corporation to
approve the Amalgamation is scheduled to occur within such five Business Day
period, prior to the scheduled date of the Meeting of the Corporation);
 
(c) a bona fide Acquisition Proposal is publicly announced, proposed, offered or
made to the Corporation Shareholders or to the Corporation and has not expired
or been withdrawn at the time of the Meeting of the Corporation;
 
(d) the Corporation Shareholders do not approve the Amalgamation or the
Amalgamation is not submitted for their approval;
 
(e) the Corporation Board or any committees of the Corporation Board accepts,
recommends, approves or enters into an agreement, understanding or letter of
intent to implement a Superior Proposal;
 
(f) subject to Section 6.4, if Comamtech is not in material breach of its
obligations under this Agreement and the Corporation breaches any of its
covenants contained in this Agreement, including the covenant contained in
Section 7.1, which breach would give rise to the failure of a condition set
forth in Section 6.2.1;
 
(g) subject to Section 6.4, if Comamtech is not in material breach of its
obligations under this Agreement and the Corporation is in breach of any of its
representations and warranties contained in this Agreement, which breach would
give rise to the failure of a condition set forth in Section 6.2.2; or
 
(h) either the Corporation or any member of the Consolidated Group has entered
into or announced its intention to enter into, or completed, any
Post-Arrangement Transaction Proposal in breach of the conditions set forth in
Sections 6.2.4 or 6.2.5;
 
(each of the above being a “Comamtech Damages Event”) then, in the event of the
termination of this Agreement pursuant to Article 8, the Corporation shall pay
by wire transfer to Comamtech (or to whom Comamtech may direct in writing)
$500,000 (the “Reverse Termination Fee”) in immediately available funds to an
account designated by the Corporation within two Business Days after the first
to occur of the events described above. Following the occurrence of a Comamtech
Damages Event, but prior to payment of the Reverse Termination Fee, the
Corporation shall be deemed to hold such applicable payment in trust for
Comamtech. The Corporation shall only be obligated to make one payment pursuant
to this Section 7.3.2.
 
 
 
 
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7.4  
Fees and Expenses

 
Each Party shall pay its fees, costs and expenses incurred by such Party in
connection with this Agreement and the Arrangement.
 
7.5  
Liquidated Damages, Injunctive Relief and No Liability of Others

 
Each Party acknowledges that the payments set out in Section 7.3 are payments of
liquidated damages which are a genuine pre-estimate of the damages a Party will
suffer or incur as a result of the event giving rise to such damages and the
resultant termination of this Agreement and are not penalties. Each Party
irrevocably waives any right it may have to raise as a defence that any such
liquidated damages are excessive or punitive. For greater certainty, the Parties
agree that the payment of the amounts set forth in Section 7.3 in the manner
provided therein is the sole and exclusive remedy of the Parties in respect of
the event giving rise to such payments; provided, however, that this limitation
shall not apply in the event of fraud or intentional breach of this Agreement by
the Parties. Nothing herein shall preclude a Party from seeking injunctive
relief in accordance with Section 9.4 hereof to restrain any breach or
threatened breach of the covenants or agreements set forth in this Agreement or
the Confidentiality Agreement or otherwise to obtain specific performance of any
of such acts, covenants or agreements.
 
7.6  
Indemnification

 
7.6.1 From and after the Effective Date, Comamtech shall indemnify and hold
harmless, and provide advancement of expenses to, all past and present
directors, officers and employees of Comamtech to the same extent as such
persons are indemnified or have the right to advancement of expenses as of the
date hereof by the Corporation, as the case may be, pursuant to the articles,
by-laws and indemnity agreements, if any, in existence immediately prior to the
Effective Date, for acts or omissions occurring on or prior to the execution of
this Agreement (including, for greater certainty, acts or omissions occurring in
connection with the approval of this Agreement and consummation of the
transactions contemplated herein).
 
7.7  
Options and Warrants

 
7.7.1 The Parties shall ensure that within three Business Days after the
Closing, the following exchange shall occur: (i) the outstanding 3,605,472
Corporation Options shall be exchanged for an aggregate of 450,684 Comamtech
Options and (ii) the 3,105,000 outstanding Corporation Warrants shall be
exchanged for an aggregate of 388,125 outstanding Comamtech Warrants.
 
 
 
 
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ARTICLE 8 
TERM, TERMINATION, AMENDMENT AND WAIVER
 
8.1  
Term

 
This Agreement shall be effective from the date hereof until the earlier of:
(i) the Effective Time and (ii) the termination of this Agreement in accordance
with its terms.
 
8.2  
Termination

 
8.2.1 This Agreement may be terminated at any time prior to the Effective Time:
 
(a) by mutual written consent of the Parties hereto;
 
(b) as provided in Sections 6.1, 6.2 and 6.3; provided that the terminating
Party is not in material default of its representations, warranties, covenants
or other agreements under this Agreement;
 
(c) by the Corporation upon the occurrence of the Corporation Damages Event
provided in Section 7.3.1;
 
(d) by Comamtech upon the occurrence of the Corporation Damages Event provided
in Section 7.3.1(d) (in accordance with Section 7.1.2(f)) and provided Comamtech
has complied with its obligations set forth in Section 7.1.4 and the payment by
Comamtech to the Corporation of the Termination Fee; and
 
(e) by either Comamtech or the Corporation if the Effective Date does not occur
on or prior to the Outside Date, except that the right to terminate the
Agreement under this Section 8.2.1(e) shall not be available to any Party whose
failure to fulfill any of its obligations has been a principal cause of, or
resulted in, the failure of the Effective Date to occur on or prior to the
Outside Date.
 
8.2.2 Effect of Termination. If this Agreement is terminated in accordance with
the foregoing provisions of this Section, this Agreement shall forthwith become
void and of no further force or effect and no Party shall have any further
obligations or liability hereunder except as provided in Sections 7.3, 7.4, 9.2,
9.6, 9.7, 9.8 and 9.9 and this Section 8.2.2 and the Confidentiality Agreement
and as otherwise expressly contemplated hereby.
 
8.3  
Amendment

 
This Agreement may, at any time and from time to time before or after the
holding of the Meeting but not later than the Effective Time, be amended by
mutual written agreement of the Parties.
 
8.4  
Waiver

 
Any Party may (i) extend the time for the performance of any of the obligations
or acts of any other Party, (ii) waive compliance with any of any other Party’s
agreements or the fulfillment of any conditions to its own obligations contained
herein, or (iii) waive inaccuracies in any of any other Party’s representations
or warranties contained herein or in any document delivered by any other Party;
provided, however, that any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such Party and, unless
otherwise provided in the written waiver, will be limited to the specific breach
or condition waived.
 
 
 
 
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ARTICLE 9
GENERAL PROVISIONS
 
9.1  
Further Assurances

 
Each of the Parties will from time to time execute and deliver all such further
documents and instruments and do all acts and things as another Party may,
either before or after the Effective Time, reasonably require to effectively
carry out or better evidence or perfect the full intent and meaning of this
Agreement.
 
9.2  
Notices

 
All notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made as of the date
delivered or sent if delivered personally or sent by facsimile or e-mail
transmission, or as of the following Business Day if sent by prepaid overnight
courier, to the Parties at the following addresses (or at such other addresses
as shall be specified by any Party by notice to the other given in accordance
with these provisions):
 
9.2.1 if to Comamtech:
 
Comamtech Inc.
 
c/o Lawrence Yelin, Attorney
2000 McGill College Avenue, Suite 1460
Montréal (Québec)  H3A 3H3
 
Attention: Marc Ferland
Facsimile No.: (514) 907-5896
 
with a copy (which shall not constitute notice) to:
 
Fasken Martineau DuMoulin LLP
Stock Exchange Tower
Suite 3700, P.O. Box 242
800 Place Victoria
Montréal, Quebec  H4Z 1E9
 
Attention: Peter Villani
Facsimile No.: (514) 397-7600
 
9.2.2 if to the Corporation:
 
 
 
 
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DecisionPoint Systems, Inc.
19655 Descartes
Foothill Ranch, CA  92610
Attn:  Nicholas Toms
Phone:  (949) 465-0065
 
with a copy (which copy shall not constitute notice) to:

Sichenzia Ross Friedman Ference LLP
61 Broadway
New York, New York 10006
 
Attention: Peter DiChiara
Facsimile No.: (212) 930-9725
 
9.3  
Governing Law

 
This Agreement (which, for the purposes of this Section 9.3, shall not include
the Schedules hereto) shall be governed, including as to validity,
interpretation and effect, by the laws of the construed in accordance with the
laws of the Province of Ontario, without giving effect to any choice or conflict
of law provision or rule thereof.
 
9.4  
Injunctive Relief

 
The Parties agree that irreparable harm would occur for which money damages
would not be an adequate remedy at law in the event that any of the provisions
of this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the Parties shall be
entitled to an injunction or injunctions and other equitable relief to prevent
breaches of this Agreement.
 
9.5  
Time of Essence

 
Time shall be of the essence in this Agreement.
 
9.6  
Entire Agreement, Binding Effect and Assignment

 
9.6.1 This Agreement shall be binding on and shall enure to the benefit of the
Parties and their respective successors and permitted assigns.
 
9.6.2 This Agreement (including the schedules hereto), the Disclosure Letter and
the Confidentiality Agreement, constitute collectively the entire agreement, and
supersede all other prior agreements and understandings, both written and oral,
between the Parties with respect to the subject matter hereof and thereof,
including the letter of intent entered into between the Corporation and
Comamtech on August 25, 2010.
 
9.6.3 Except as expressly permitted by the terms hereof, neither this Agreement
nor any of the rights, interests or obligations hereunder may be assigned by any
of the Parties without the prior written consent of the other Parties..
 
 
 
 
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9.7  
Severability

 
If any term or provision of this Agreement is invalid, illegal or incapable of
being enforced by any rule or Law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any Party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the Parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the Parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the fullest extent possible.
 
9.8  
No Third Party Beneficiaries

 
Except as provided for in Section 7.6, which provisions are intended as
stipulations for the benefit only of the third parties mentioned therein, this
Agreement is not intended to confer any rights or remedies upon any person other
than the Parties and no person other than the Parties shall be entitled to rely
on the provisions of this Agreement in any action, suit, proceeding, hearing or
other forum.
 
9.9  
Rules of Construction

 
The Parties to this Agreement have been represented by counsel during the
negotiation and execution of this Agreement and waive the application of any
Laws or rule of construction providing that ambiguities in any agreement or
other document shall be construed against the party drafting such agreement or
other document.
 
9.10  
Counterparts, Execution

 
This Agreement may be executed in two or more counterparts, each of which shall
be deemed to be an original but all of which together shall constitute one and
the same instrument. The Parties shall be entitled to rely upon delivery of an
executed facsimile or similar executed electronic copy of this Agreement, and
such facsimile or similar executed electronic copy shall be legally effective to
create a valid and binding agreement between the Parties.
 
[Signature Page Follows]
 
 
 
 
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IN WITNESS WHEREOF the Parties have caused this Agreement to be executed as of
the date first written above by their respective officers thereunto duly
authorized.
 

   
COMAMTECH INC.
               
Per:
(s) Marc Ferland
     
Name:
Title:
Marc Ferland
President

 

 
DECISIONPOINT SYSTEMS, INC.
 
Per:
(s) Nicholas R. Toms
   
Name:
Title:
Nicholas R. Toms
Chief Executive Officer
 

 

 
2259736 ONTARIO INC.
   
Per:
(s) Marc Ferland
     
Name:
Title:
Marc Ferland
Chief Executive Officer
 

 

 

 

 
[Signature page to that certain Acquisition Agreement dated October 20, 2010
between DecisionPoint Systems, Inc. , Comamtech Inc. and 2259736 Ontario Inc.]
 
 
 
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