PREVENTIA INC.

36 Toronto St., Suite 1150, Toronto, Ontario M5C 2C5

July 25, 2012

 

Mr. Alan Mintzer
DRM INFORMATICS CORP.
17208 Skylands Court
Freehold, N.J. 07728

Dear Alan:

Re:

Acquisition of DRM Informatics Corp.

This letter of intent (this "LOI") sets out the basic terms of arrangements
under which Preventia Inc. (“Preventia”) shall purchase all but not less than
all of the outstanding shares in the capital of DRM Informatics Corp. (“DRMI”).

While it is recognized that further discussions and negotiations must occur
between the parties hereto and that a definitive agreement must be prepared and
executed in regard to the subject matter hereof, the parties hereto hereby
acknowledge and agree that Sections ,  and , below, are binding on the parties
regardless of whether any such definitive agreement is prepared and/or executed.

1.

Acquisition: Preventia shall acquire one hundred percent (100%) of DRMI (the
“Acquired Shares”) from you, Mr. Alan Mintzer, of DRMI (the “Acquisition”).

2.

Compensation:

(a)

Upon execution of the definitive agreement, Preventia shall issue to you, a
total of 25,000,000 common shares in the capital of Preventia (the “Initial
Tranche of Payment Shares”).  For clarity, upon such issuance, the Acquisition
shall be deemed closed and complete.

(b)

Upon creation by DRMI of the prototype contemplated in Section  of this LOI,
Preventia shall issue to you, a total of an additional 25,000,000 common shares
in the capital of Preventia (the “Second Tranche of Payment Shares”, and
collectively with the Initial Tranche of Payment Shares, the “Payment Shares”).

3.

Condition Precedent:  As at closing of the Acquisition, DRMI shall own a
worldwide, non-exclusive, perpetual, irrevocable, royalty-free, non-assignable
and fully paid up license, without the right to sublicense, under U.S. Patent
No. 6,857,067, to make, have made, use, sell, offer for sale, have sold, lease,
import, export, and/or otherwise transfer any DRMI branded product or service,
and to practice or have practiced any method or process for the manufacture or
use of any DRMI branded product or service.

4.

Restrictions of Transfer:  The Payment Shares shall be issued on a restricted
basis, subject to all SEC and other applicable laws, rules and regulations with
respect to the issuance of securities.

5.

Funding:  

(a)

Preventia shall provide a maximum of USD $400,000 to DRMI, in accordance with a
budget to be prepared by DRMI and approved by Preventia, by way of loan or
further capital investment, for the purpose of funding the development and
building of a prototype of the device(s) referenced and protected under U.S.
Patent No. 6,857,067, such prototype to be operational and suitable for
demonstrating proof of concept;

(b)

Upon the completion of a working and successful prototype, Preventia shall
provide further funding, by way of loan or further capital investment, up to a
maximum of USD $13,200,000, in accordance with a budget to be prepared by DRMI
and approved by Preventia, to: (i) complete BETA testing of the product; and
(ii) produce a full and complete ‘production grade’ product which provides a
solution to the software piracy problem targeted and referenced in previous
discussions (the “Product”);

6.

Legal Counsel:  Preventia shall retain counsel and pay for all filings required
to be made by you as a shareholder of Preventia, as such filings are required
with respect to Preventia.

7.

Re-Purchase Option:  You shall have the option to re-purchase the Acquired
Shares as follows:

(a)

After successful completion of the prototype and BETA testing contemplated in
Section  but prior to any IPO or sale of DRMI, you may repurchase up to 49.999%
of DRMI.

(b)

The purchase price for the shares repurchased in accordance with subsection
 shall be the “fair market value” for same, being (i) the median assessment of
the market value of such shares as determined by two (2) independent investment
bank grade reports and opinions (with 1 valuator chosen by you and 1 valuator
chosen by Preventia) less (ii) 10% of the amount determined in accordance with
(i).

8.

Third Party Acquisition:  In the event of an accepted bona fide third party
offer to purchase all of the shares in the capital of DRMI, regardless of the
shareholdings of either Preventia or you, the proceeds from such sale shall be
split between you and Preventia, 67% and 33%, respectively.

9.

Due Diligence:  There shall be a ten (10) day period commencing from the date
first above written during which each party may conduct due diligence (the "Due
Diligence Period").

10.

Definitive Agreement:  Provided that the parties hereto are satisfied with
respect to the aforementioned due diligence, full terms and conditions in regard
to the matter referenced herein shall be mutually agreed upon and finalized by
entering into a definitive agreement.  Notwithstanding the aforementioned length
of the Due Diligence Period, the parties may enter into a definitive agreement
at any time during the Due Diligence Period.

11.

Term of LOI:  Unless otherwise indicated, the terms and conditions of this LOI
and the agreement contained herein shall remain in force for seven (7) days from
the date first above written (the "Term") and shall be renewable for subsequent
thirty (30) day terms, on written agreement of both parties, to be agreed upon
at least three (3) days prior to the expiry of the Term or any seven (7) day
extension thereof.  It is the intent of the parties to enter into a definitive
agreement prior to August 3, 2012.

12.

Confidentiality:  Preventia and DRMI (which, for the purposes of this Section
 includes their respective parents, subsidiaries and sister companies) shall
each hold all information provided by the other (the "Disclosing Party") in the
strictest of confidence and all information provided by the Disclosing Party
shall be deemed to be confidential unless otherwise indicated by the Disclosing
Party.  Should no definitive agreement be executed in regard to the matters
referenced in this LOI, Preventia shall return and/or destroy, in accordance
with DRMI’s directions, all information and materials provided by DRMI to
Preventia and all work product derived and/or created from, and/or in connection
with the matters referenced herein.  Notwithstanding and without limiting any
other term or Section in this LOI, this Section  of this LOI shall remain in
full force and effect until the earlier of: (i) the effective date of the
definite agreement and (ii) in perpetuity.

13.

Breach:  In the event of any breach or threatened breach of any term or
condition contained herein or any illegal act committed by either party hereto,
the other party shall be entitled to equitable relief by way of injunction in
addition to any other rights and remedies available to it, including but not
limited to termination of this Agreement.

14.

Assignment:  This LOI is not assignable without the written consent of both
parties.  Any attempt to assign any of the rights, duties or obligations of this
LOI without written consent is void.

15.

Jurisdiction:  This LOI is and shall be governed by the laws of the Province of
Ontario and the federal laws of Canada applicable therein and each party hereby
attorns and submits to the exclusive jurisdiction of the Province of Ontario and
the courts therein.

Should you be in agreement with the terms of this LOI, please sign the
acknowledgement below and return said signed copy of this LOI to Preventia, via
email or courier.  

We look forward to finalizing the definitive agreement and to a long and
mutually beneficial relationship.

 

Many thanks,

PREVENTIA INC.

_____________________________

Robert J. Stevens
President, CEO, CFO & Secretary

---------------------------------------------------------------------------------------------------------------------

We hereby acknowledge and accept the terms and conditions of this LOI.

DRM INFORMATICS CORP.

Alan Mintzer
President & Chief Executive Officer