Document:

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                                                                   EXHIBIT 10.11

                         REGISTRATION RIGHTS AGREEMENT

    THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is entered into as of
            , 2000 by and between 724 Solutions Inc., a corporation amalgamated
under the laws of Ontario ("Parent"), each of the undersigned shareholders of
Parent, being the Founding Shareholder (as defined herein) and the Strategic
Partners (as defined herein), each of the undersigned shareholders of Tantau
Software, Inc. ("Tantau") (each, a "Tantau Shareholder" and collectively, the
"Tantau Shareholders") and each of the undersigned Affiliates (as defined
herein) of particular Strategic Partners (as defined herein).

                                    RECITALS

    A.  This Agreement is entered into in connection with that certain Agreement
and Plan of Merger, dated as of November 29, 2000 among Parent, Tantau and
Saturn Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of
Parent ("Merger Sub") (as the same may be amended, the "Merger Agreement"),
pursuant to which Merger Sub will be merged with and into Tantau. Capitalized
terms used in this Agreement and not otherwise defined herein shall have the
meanings ascribed to them in the Merger Agreement.

    B.  Each Tantau Shareholder holds shares of Tantau Capital Stock or other
securities or contractual rights representing the right to acquire or subscribe
for, or which are exercisable for or convertible into or exchangeable for,
shares of Tantau Capital Stock (collectively, "Tantau Securities").

    C.  Pursuant to the Merger Agreement, at the Effective Time each outstanding
share of Tantau Capital Stock will be converted into the right to receive a
number of Parent Shares (as defined herein) based upon the provisions of
Section 2.01(c) of the Merger Agreement and cash in lieu of any fractional
shares thereof.

    D.  The Parent Shares issued to the Tantau Shareholders pursuant to the
Merger will be registered with the SEC on Form F-4 prior to Closing, but will be
subject to the transfer restrictions set forth in Resale Restriction Agreement
between Parent and each of the Tantau Shareholders (the "Resale Restriction
Agreement") and as provided under applicable law.

    E.  Parent, the Founding Shareholder (as defined herein), the Strategic
Partners (as defined herein), together with Financial Technology Ventures (Q),
L.P. ("FTVQ") and Financial Technology Ventures, L.P. ("FTV") are parties to an
Amended and Restated Unanimous Shareholders' Agreement dated as of October 26,
1999 (the "Unanimous Shareholders' Agreement").

    F.  Most of the provisions of the Unanimous Shareholders' Agreement were
terminated effective as of January 27, 2000, being the date of Parent's initial
public offering; Articles 13, 14 and 17 thereof, survived this termination, all
in accordance with Section 1.12(d) of the Unanimous Shareholders' Agreement.

    G.  Articles 13 and 14 of the Unanimous Shareholders' Agreement currently
govern the registration rights of the Founding Shareholder (as defined herein)
and the Strategic Partners (as defined herein).

    H.  FTVQ and FTV have distributed their Parent Shares to their respective
participants and general partners, and have advised Parent that: (i) they no
longer have any registration rights under the Unanimous Shareholders' Agreement
or otherwise at law with respect to Parent Shares; (ii) they no longer have any
other rights under, entitlement to or interest in the Unanimous Shareholders'
Agreement; and (iii) accordingly, any such registration rights and any such
other rights which they may

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previously have had under, and any and all entitlement to and interest in, the
Unanimous Shareholders' Agreement, have terminated.

    I.  Sonera Corporation was a holder of Parent Shares (as defined herein) at
the time the Unanimous Shareholders' Agreement was executed, but it has since
transferred its beneficial interest in such Parent Shares to Sonera
SmartTrust Ltd. For the purposes of this Agreement, Sonera SmartTrust Ltd. is a
Strategic Partner (as defined herein) and Sonera Corporation is not a Strategic
Partner (as defined herein).

    J.  Parent, the Founding Shareholder (as defined herein) and the Strategic
Partners (as defined herein) have agreed to terminate Articles 13, 14 and 17 of
the Unanimous Shareholders' Agreement effective as of the date hereof in
consideration of the mutual covenants contained herein.

    K.  Parent and the Shareholders that are parties hereto agree that this
Agreement shall govern the rights of the Shareholders that are parties hereto to
cause Parent to register such Shareholders' Parent Shares (as defined herein)
for distribution to the public.

    L.  Each Shareholder is entering into this Agreement as a material
inducement to, and in consideration of, Parent's willingness to consummate the
transactions contemplated by the Merger Agreement.

                                   AGREEMENT

    NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement, the parties
mutually agree as follows:

                                   ARTICLE 1
                        DEFINITIONS AND INTERPRETATIONS

1.1  DEFINITIONS

    As used in this Agreement, the following terms shall have the following
meanings:

       (a)     "1319079" -- has the meaning given to such term in
               Section 1.1(p).

       (b)     "AFFILIATE" -- has the following meaning:

                (i)  one body corporate shall be affiliated with another body
                     corporate if, but only if, one of them is the Subsidiary of
                     the other or both are Subsidiaries of the same body
                     corporate or each of them is controlled by the same person;

                (ii)  for the purposes of the definition of "Affiliate" and
                      "Subsidiary", a body corporate shall be considered to be
                      controlled by a person or by two or more bodies corporate
                      if, but only if:

                   (A)  voting securities of the first-mentioned body corporate
                        carrying more than 50% of the votes for the election of
                        directors are held, other than by way of security only,
                        by or for the benefit of such other person or by or for
                        the benefit of such other bodies corporate; and

                   (B)  the votes carried by such securities are sufficient, if
                        exercised, to elect a majority of the board of directors
                        of the first-mentioned body corporate; and

               (iii)  an "Affiliate" of a specified person that is not a body
                      corporate is a person that directly, or indirectly through
                      one or more intermediaries, controls, or is controlled by,
                      or is under common control with, the person specified. In
                      this case, "control" (including the terms "controlled by"
                      and "under common control with") means the possession,
                      directly or indirectly, of the power to elect

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                      a majority of such specified person's board of directors
                      or similar governing body, or otherwise having the power
                      to direct the business and policies of such specified
                      person pursuant to the terms of the organizational
                      documents of such specified person.

       (c)     "AGREEMENT" -- has the meaning given to such term in the
               preamble.

       (d)     "BAC" -- has the meaning given to such term in Section 1.1(fff).

       (e)     "BLUE SKY" -- has the meaning given to such term in
               Section 1.1(p).

       (f)     "BMO" -- has the meaning given to such term in Section 1.1(fff).

       (g)     "BODY CORPORATE" -- has the meaning given to such term in
               Section 1.1(iii).

       (h)     "BUSINESS DAY" -- means any day other than a Saturday, Sunday or
               statutory holiday in Toronto (Ontario), New York (New York) or
               Helsinki (Finland).

       (i)     "CANADIAN SECURITIES LAWS" -- means the securities laws,
               regulations and rules of the provinces of Canada, the policy
               statements and companion policies of or administered by the
               Canadian Securities Regulators, and discretionary rulings or
               orders issued by the Canadian Securities Regulators pursuant to
               such laws, regulations, rules and policy statements, all as
               amended and in effect from time to time.

       (j)     "CANADIAN SECURITIES REGULATORS" -- means the British Columbia
               Securities Commission; the Alberta Securities Commission; the
               Saskatchewan Securities Commission; the Manitoba Securities
               Commission; the Ontario Securities Commission; the Commission des
               valeurs mobilieres du Quebec; the Nova Scotia Securities
               Commission; the Director of Securities, Department of Justice,
               Newfoundland; the Office of the Administrator, New Brunswick; the
               Registrar of Securities, Prince Edward Island; and any other
               person performing similar functions under Canadian Securities
               Laws.

       (k)     "COMPANY REGISTRATION" -- means an offering by Parent (on its
               behalf or on behalf of the Founding Shareholder or any Strategic
               Partner) of any of its equity shares or other securities to the
               public solely for cash proceeds pursuant to a prospectus or
               registration statement under the Securities Laws of one or more
               provinces of Canada and/or of the United States (including,
               without limitation, for the purpose of qualification or
               registration of securities held by the Founding Shareholder or
               any Strategic Partner pursuant to a Demand Registration, other
               than a Shareholder contemplating exercising its Piggyback
               Registration rights hereunder); provided, however, that a Company
               Registration shall not include: (i) a registration relating
               solely to participants in the Stock Option Plans or other
               employee incentive or benefit plans of Parent or its
               subsidiaries, such as a registration on Form S-1, Form S-8 or on
               similar forms that may be promulgated in the future; (ii) a
               registration relating solely to transactions covered by Rule 145
               under the SECURITIES ACT registered on Form F-4, Form S-4 or any
               other form for a limited purpose, or similar forms currently
               existing or that may be promulgated in the future; (iii) a
               registration on any form for a limited purpose relating solely to
               a matter which does not require a prospectus or registration
               statement to include (explicitly or through incorporation by
               reference) substantially the same information as would be
               required to be included in a registration statement covering the
               sale to the public of Parent Shares held by the Founding
               Shareholder or the Strategic Partners; and (iv) a registration in
               which the only equity securities being registered are those
               issuable upon conversion of debt securities which are also being
               registered.

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       (l)     "CSTC" -- has the meaning given to such term in
               Section 1.1(fff).

       (m)    "DEMAND REGISTRATION" -- means, individually or collectively, a
              Founding Shareholder Demand Registration and/or a Strategic
              Partner Demand Registration.

       (n)     "ETA" -- has the meaning given to such term in Section 11.5.

       (o)     "EXCHANGE ACT" -- means the SECURITIES EXCHANGE ACT OF 1934, as
               amended from time to time.

       (p)     "FOUNDING SHAREHOLDER" -- means, collectively, Greg Wolfond (the
               principal of Blue Sky Capital Corporation ("Blue Sky")), Blue Sky
               and 1319079 Ontario Inc. ("1319079"), Blue Sky and 1319079 each
               being an undersigned shareholder of Parent, and any Subsidiary or
               Affiliate of Blue Sky and 1319079, as the case may be, who
               acquires, directly or indirectly, from Blue Sky or 1319079 any
               Parent Shares together with an assignment of their Registration
               Rights hereunder, provided that the provisions of this Agreement
               permit the associated assignment of Blue Sky's and 1319079's
               Registration Rights, and entities which become shareholders of
               Parent in respect of which Greg Wolfond holds a material
               interest; and for the purposes of this definition, a material
               interest shall be deemed to be held by Greg Wolfond if he BONA
               FIDE directly or indirectly owns or holds a majority of the
               voting rights in such entity; and a "MEMBER OF THE FOUNDING
               SHAREHOLDER" means any person contemplated by this definition of
               Founding Shareholder.

       (q)     "FOUNDING SHAREHOLDER DEMAND REGISTRATIONS" -- has the meaning
               ascribed to it in Section 4.1(a).

       (r)     "FOUNDING SHAREHOLDER REGISTRATION REQUEST" -- has the meaning
               ascribed to it in Section 4.1(a).

       (s)     "FTV" -- has the meaning given to such term in the Recitals.

       (t)     "FTVQ" -- has the meaning given to such term in the Recitals.

       (u)     "GST" -- has the meaning given to such term in Section 11.5.

       (v)     "HSBC" -- has the meaning given to such term in
               Section 1.1(fff).

       (w)     "INDEMNIFIED PARTY" or "INDEMNIFYING PARTY" -- have the meaning
               given to such terms in Section 11.3.

       (x)     "INITIATING PARTY(IES)" -- means the Founding Shareholder (in the
               case of a Founding Shareholder Demand Registration) and the
               Strategic Partners (in the case of a Strategic Partner Demand
               Registration).

       (y)     "LONG-FORM REGISTRATIONS" -- has the meaning given to such term
               in Section 1.1(mm), including a long form prospectus under
               Canadian Securities Laws.

       (z)     "MEMBER OF THE FOUNDING SHAREHOLDER" -- has the meaning given to
               such term in Section 1.1(p).

       (aa)    "MINIMUM THRESHOLD" -- has the meaning given to such term in
               Section 7.2(a).

       (bb)    "MERGER AGREEMENT" -- has the meaning given to such term in the
               Recitals.

       (cc)    "MERGER SUB" -- has the meaning given to such term in the
               Recitals.

       (dd)    "NOTICES" -- has the meaning given to such term in
               Section 12.11.

       (ee)    "PAYMENT" -- has the meaning given to such term in Section 11.5.

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       (ff)     "PERSON" -- means an individual, partnership, unincorporated
                association, organization, syndicate, corporation, trust and a
                trustee, executor, administrator or other legal or personal
                representative.

       (gg)    "PIGGYBACK REGISTRATION" -- has the meaning given to such term in
               Section 4.2 and includes a reference to the equivalent rights
               exercisable pursuant to Sections 5.2 and 6.1.

       (hh)    "REGISTER", "REGISTERED" and "REGISTRATION" -- means a
               registration of Registrable Securities or qualification of a
               prospectus in respect of the issuance or sale of Registrable
               Securities effected by preparing and filing a Registration
               Statement in compliance with applicable Securities Laws and the
               declaration or ordering of the effectiveness of such Registration
               Statement by the appropriate Securities Regulators.

       (ii)     "REGISTRABLE SECURITIES" -- means any equity securities of
                Parent.

       (jj)     "REGISTRATION EXPENSES" -- means any and all expenses incidental
                to a Demand Registration or a Piggyback Registration, including
                without limitation: (i) all registration, filing and
                qualification fees of the Securities Regulators, the National
                Association of Securities Dealers, Inc. and other similar
                persons; (ii) all fees and expenses incurred in connection with
                compliance with provincial and state or "blue sky" Securities
                Laws (including reasonable fees and disbursements of counsel in
                connection with the "blue sky" qualification of any of the
                Registrable Securities); (iii) all expenses incurred by Parent
                in preparing, printing and distributing any Registration
                Statement, any prospectus, any amendments or supplements thereto
                or other documents incorporated by reference therein, and other
                documents relating to the Demand Registration or Piggyback
                Registration; (iv) all fees and expenses incurred by Parent in
                connection with the listing, if any, of the Registrable
                Securities on any securities exchange or quotation system;
                (v) the fees and disbursements of counsel for Parent and of the
                independent public accountants of Parent, including the expenses
                of any special audits or "cold comfort" letters required by or
                incidental to such performance and compliance; and (vi) the fees
                and expenses of one United States and one Canadian counsel to
                the Selling Shareholders (as a group); provided that
                Registration Expenses shall not include Selling Expenses.

       (kk)    "REGISTRATION REQUEST" -- means, in the case of the Founding
               Shareholder, a Founding Shareholder Registration Request, and in
               the case of the Strategic Partners, a Strategic Partner
               Registration Request.

       (ll)     "REGISTRATION RIGHTS" -- means (i) in the case of the Founding
                Shareholder and the Strategic Partners, the ability to compel a
                Demand Registration pursuant to Articles 4 and 5, respectively,
                or a Short-Form Registration pursuant to Article 9; or (ii) in
                the case of the Founding Shareholder, the Strategic Partners and
                the Tantau Shareholders, the ability to effect a Piggyback
                Registration pursuant to Articles 4, 5 and 6, as the case may
                be.

       (mm)   "REGISTRATION STATEMENT" -- means a registration statement of
              Parent: (I) on Form F-1, S-1 or any similar long-form registration
              ("Long-Form Registrations"); or (II) on Form F-2, F-3 or F-10 (or
              S-2, S-3 or S-10) or any similar short-form registration
              ("Short-Form Registrations") if Parent qualifies to use such a
              short form; or (III) (unless the context otherwise requires and
              subject to subparagraphs (i) to (iii) below) a prospectus of
              Parent (short-form or long-form) prepared in accordance with the
              Canadian Securities Laws, together with, in each case, all
              amendments and supplements to such document (including
              post-effective amendments), and all exhibits thereto and all
              materials incorporated by reference therein, and for the

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              purposes of this Agreement: (i) filing a preliminary prospectus
              prepared in accordance with the Canadian Securities Laws and
              obtaining a receipt therefor from each of the applicable Canadian
              Securities Regulators shall be deemed to constitute filing a
              Registration Statement under the Canadian Securities Laws;
              (ii) filing a (final) prospectus prepared in accordance with the
              Canadian Securities Laws and obtaining a receipt therefor from
              each of the applicable Canadian Securities Regulators shall be
              deemed to constitute causing a Registration Statement to be
              declared effective under the Canadian Securities Laws; and
              (iii) amending or supplementing a prospectus to the extent
              required by the Canadian Securities Laws during the period in
              which securities are being distributed pursuant to such prospectus
              shall be deemed to constitute maintaining the effectiveness of a
              Registration Statement under the Canadian Securities Laws.

       (nn)    "RESALE RESTRICTION AGREEMENT" -- has the meaning given to such
               term in the Recitals.

       (oo)    "S-3 SELLER" -- has the meaning given to such term in
               Section 9.1.

       (pp)    "PARENT" -- has the meaning given to such term in the preamble.

       (qq)    "PARENT ACTIVITY" -- has the meaning given to such term in
               Section 10.9.

       (rr)    "PARENT SHARE" -- means a fully paid and non-assessable common
               share, no par value, of Parent.

       (ss)    "SECURITIES ACT" -- means the SECURITIES ACT OF 1933, as amended
               from time to time.

       (tt)     "SECURITIES ACT (ONTARIO)" -- means the SECURITIES ACT
                (Ontario), as amended from time to time.

       (uu)    "SECURITIES LAWS" -- means Canadian Securities Laws and/or
               U.S. Securities Laws.

       (vv)    "SECURITIES REGULATORS" -- means any Canadian Securities
               Regulator and/or U.S. Securities Regulator.

       (ww)   "SELLING EXPENSES" -- means underwriting discounts and selling
              commissions, fees and expenses and any transfer taxes in respect
              of any Selling Shareholder's Registrable Securities incurred in
              connection with any registration and sale of Registrable
              Securities, but does not include fees and expenses of one United
              States and one Canadian counsel to the Selling Shareholders (as a
              group).

       (xx)    "SELLING SHAREHOLDERS" -- means each Shareholder participating in
               a Registration effected pursuant to this Agreement such that all
               or part of the Registrable Securities owned by the Shareholder
               are included among the securities offered by the Registration
               Statement.

       (yy)    "SHAREHOLDER" -- means any of the Founding Shareholder, a
               Strategic Partner, a Tantau Shareholder and any other person who
               becomes a shareholder of Parent and who holds or acquires
               Registration Rights in accordance with and pursuant to the terms
               hereof, in each case so long as they are shareholders of Parent
               and hold such Registration Rights; and "SHAREHOLDERS" shall have
               a corresponding meaning.

       (zz)    "SHARES" or "SECURITIES" or "EQUITY SHARES" or "EQUITY
               SECURITIES" -- means all shares, options, warrants, interests,
               participations or other equivalents (regardless of how
               designated) of or in Parent, whether voting or non-voting or
               participating or non-participating, including without limitation
               Parent Shares, or any securities, bonds, notes, debentures or
               other evidences of indebtedness that are convertible into or
               exchangeable for any of the foregoing.

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       (aaa)   "SHORT-FORM OFFERINGS" -- has the meaning given to such term in
               Section 9.1.

       (bbb)   "SHORT-FORM REGISTRATIONS" -- has the meaning given to such term
               in Section 1.1(mm) and includes a short-form prospectus under
               Canadian Securities Laws.

       (ccc)   "SMARTTRUST" -- has the meaning given to such term in
               Section 1.1(fff).

       (ddd)   "SONERA" -- means Sonera Corporation.

       (eee)   "STOCK OPTION PLANS" -- means Parent's 1997 Canadian Stock Option
               Plan, 1999 U.S. Stock Option Plan and Amended and Restated 2000
               Stock Option Plan, the Ezlogin.com 1999 Stock Option Plan assumed
               by Parent effective June 15, 2000 and the Tantau 1999 Stock Plan,
               which will be assumed by Parent in accordance with the Merger
               Agreement, and similar plans of Parent.

       (fff)    "STRATEGIC PARTNER" -- means, so long as they are a shareholder
                of Parent and hold Registration Rights hereunder, each of Bank
                of Montreal ("BMO"), Bank of America Corporation ("BAC"),
                Citicorp Strategic Technology Corporation ("CSTC"), Sonera
                SmartTrust Ltd. ("SmartTrust"), WFC Holdings Corporation ("WFC")
                and HSBC Investment Bank plc ("HSBC").

       (ggg)   "STRATEGIC PARTNER DEMAND REGISTRATION" -- has the meaning
               ascribed to it in Section 5.1(b).

       (hhh)   "STRATEGIC PARTNER REGISTRATION REQUEST" -- has the meaning
               ascribed to it in Section 5.1(a).

       (iii)    "SUBSIDIARY" -- means an incorporated body wherever or however
                incorporated (a "body corporate") that is a "SUBSIDIARY" of
                another body corporate. A body corporate shall be considered a
                subsidiary of another body corporate if, but only if:

                (i)  it is controlled (as defined in Section 1.1(b)(ii)) by:

                   (A)  that other body corporate, or

                   (B)  that other body corporate and one or more bodies
                        corporate each of which is controlled by that other body
                        corporate, or

                   (C)  two or more bodies corporate each of which is controlled
                        by that other body corporate; or

                (ii)  it is a subsidiary of a body corporate that is a
                      subsidiary of that other body corporate;

       (jjj)    "TANTAU" -- has the meaning given to such term in the preamble.

       (kkk)   "TANTAU QUALIFIED PARENT SHARES" -- has the meaning given to such
               term in Section 6.1.

       (lll)    "TANTAU SECURITIES" -- has the meaning given to such term in the
                Recitals.

       (mmm) "TANTAU SHAREHOLDER" or "TANTAU SHAREHOLDERS" -- have the meaning
             given to such terms in the preamble.

       (nnn)   "TRADING DAY" -- means any day that The Toronto Stock Exchange or
               The NASDAQ National Market are open for trading.

       (ooo)   "UNANIMOUS SHAREHOLDERS' AGREEMENT" -- has the meaning given to
               such term in the Recitals.

       (ppp)   "U.S. SECURITIES LAWS" -- means the Securities Act, the Exchange
               Act and such other state or "blue sky" securities laws of the
               states of the United States.

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       (qqq)   "U.S. SECURITIES REGULATOR" -- means the United States Securities
               and Exchange Commission, and any other person performing similar
               functions under the U.S. Securities Laws that are applicable to
               an offering of Registrable Securities hereunder.

       (rrr)    "WFC" -- has the meaning given to such term in
                Section 1.1(fff).

                                   ARTICLE 2
                    REPRESENTATIONS, WARRANTS AND COVENANTS

2.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF TANTAU SHAREHOLDERS

    Each Tantau Shareholder hereby severally, but not jointly, represents and
    warrants (and acknowledges that Parent and the other Shareholders are
    relying on such representations and warranties) that:

    (a) RESALE RESTRICTION AGREEMENT

       Such Tantau Shareholder understands that the Parent Shares issued to such
       Tantau Shareholder (and securities of Tantau assumed by Parent) in
       connection with the Merger, will be subject to contractual transfer
       restrictions, including a lock-up, as provided in the Resale Restriction
       Agreement and an escrow, as provided in the Escrow Agreement (as such
       term is defined in the Merger Agreement); and

    (b) MERGER AGREEMENT; DISCLOSURE DOCUMENT

       Such Tantau Shareholder has received and has had the opportunity to
       review copies of the Merger Agreement and the related agreements
       contemplated by the Merger Agreement (including the Resale Restriction
       Agreement and the Escrow Agreement), together with all exhibits and
       schedules thereto, and has had the opportunity to discuss such Agreements
       with counsel and other advisors.

2.2 REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS WHICH ARE CORPORATE OR
    OTHER ENTITIES

    Each Shareholder that is not an individual represents and warrants (and
    acknowledges that the other Shareholders are relying upon such
    representations and warranties in entering into this Agreement) that, at the
    date hereof:

    (a) the Shareholder is a corporation duly incorporated, or partnership or
       other entity duly formed, and in any case validly existing and in good
       standing under the laws of the jurisdiction of its organization;

    (b) the Shareholder has all necessary power, authority and approval to enter
       into this Agreement and to perform its obligations hereunder;

    (c) all necessary action has been taken by the Shareholder to authorize the
       execution and delivery of this Agreement and the performance of its
       obligations hereunder, and this Agreement has been duly executed and
       delivered by the Shareholder and constitutes a legal, valid and binding
       obligation of the Shareholder enforceable against it in accordance with
       its terms; and

    (d) neither the execution and delivery of this Agreement by the Shareholder,
       nor the performance of its obligations hereunder, will conflict with or
       result in the violation, contravention or breach of, or any default
       under, any of the terms or provisions of the charter, by-laws or other
       organizational documents of the Shareholder or of any agreement,
       obligation, contract, commitment, law or regulation to which the
       Shareholder is a party or by which it is bound.

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2.3 REPRESENTATIONS AND WARRANTIES OF PARENT

    Parent represents and warrants (and acknowledges that the Shareholders are
    relying upon such representations and warranties in entering into this
    Agreement) that, at the date hereof:

    (a) Parent is a corporation duly amalgamated and validly existing and in
       good standing under the laws of the Province of Ontario;

    (b) Parent has all necessary corporate power, authority and approval to
       enter into this Agreement and to perform its obligations hereunder;

    (c) all necessary corporate action has been taken by Parent to authorize the
       execution and delivery of this Agreement and the performance of its
       obligations hereunder, and this Agreement has been duly executed and
       delivered by Parent and constitutes a legal, valid and binding obligation
       of Parent enforceable against it in accordance with its terms; and

    (d) neither the execution and delivery of this Agreement by Parent, nor the
       performance of its obligations hereunder, will conflict with or result in
       the violation, contravention or breach of, or any default under, any of
       the terms or provisions of the constituant documents or by-laws of Parent
       or of any agreement, obligation, contract, commitment, law or regulation
       to which Parent is a party or by which it is bound.

2.4 QUALIFICATION OF REPRESENTATIONS AND WARRANTIES

    Any representation or warranty made by a party hereto as to the
    enforceability of any agreement against such party is subject to the
    following qualifications:

    (a) specific performance, injunction and other equitable remedies are
       discretionary and, in particular, may not be available where damages are
       considered an adequate remedy; and

    (b) enforcement may be limited by bankruptcy, insolvency, liquidation,
       reorganization, reconstruction and other laws generally affecting
       enforceability of creditors' rights.

2.5 COMPLIANCE WITH SECURITIES LAWS

    Shareholder will observe and comply with the Securities Laws, as now in
    effect and as from time to time amended, in connection with any offer, sale,
    pledge, transfer or other disposition of the Parent Shares, including
    without limitation, any Registration Statement delivery requirements.

                                   ARTICLE 3
                        TERMINATION OF PRIOR AGREEMENTS

3.1 TERMINATION OF SURVIVING PROVISIONS OF UNANIMOUS SHAREHOLDERS' AGREEMENT

    Articles 13, 14 and 17 of the Unanimous Shareholders' Agreement are hereby
terminated effective as of the date hereof. The parties hereto agree and confirm
that all other provisions of the Unanimous Shareholders' Agreement terminated
effective as of January 27, 2000, being the date of Parent's initial public
offering in accordance with Section 1.12(d) thereof.

3.2 TERMINATION OF FTVQ'S AND FTV'S RIGHTS UNDER, ENTITLEMENT TO AND INTEREST IN
    THE UNANIMOUS SHAREHOLDERS' AGREEMENT

    FTVQ and FTV have distributed their Parent Shares to their respective
    participants and general partners, and, as such, have advised Parent in
    written correspondence dated November 27, 2000, a copy of which is attached
    hereto as Exhibits "3.2-A" and "3.2-B", that:

    (a) FTVQ and FTV no longer have any Registration Rights under the Unanimous
       Shareholders' Agreement or otherwise at law with respect to Parent
       Shares;

                                       9
<PAGE>
    (b) FTVQ and FTV no longer have any other rights under, entitlement to or
       interest in the Unanimous Shareholders' Agreement; and

    (c) accordingly, any such Registration Rights and any such other rights
       which they may previously have had under, and any and all entitlement to
       and interest in, the Unanimous Shareholders' Agreement, have terminated.

3.3 CITICORP AND SONERA

    Each of Citicorp, an Affiliate of CSTC, and Sonera, an Affiliate of
    SmartTrust, each being an original party to the Unanimous Shareholders'
    Agreement, is a party to this Agreement solely for the purposes of
    acknowledging the termination of Articles 13, 14 and 17 of the Unanimous
    Shareholders' Agreement in accordance with this Article 3.

                                   ARTICLE 4
                    FOUNDING SHAREHOLDER REGISTRATION RIGHTS

4.1 DEMAND REGISTRATION

    (a) Subject to subsection (c) of this Section 4.1 and Section 4.4 hereof,
       the Founding Shareholder may at any time request in writing (such a
       written request being referred to herein as a "Founding Shareholder
       Registration Request") that Parent qualify a prospectus for, or effect
       the registration of, all or a part of the Parent Shares owned by the
       Founding Shareholder under, at the option of the Founding Shareholder,
       the Securities Laws of one or more of the Provinces of Canada and/or the
       United States. (All registrations pursuant to this Section 4.1 are
       referred to herein as "Founding Shareholder Demand Registrations".)

    (b) Upon receipt of a Founding Shareholder Registration Request, Parent
       shall, as soon as practicable, but in any event no later than 25 days
       prior to the filing of the applicable Registration Statement, give
       written notice of such request to the Strategic Partners and the Tantau
       Shareholders. Upon the written request of such Strategic Partners and/or
       such Tantau Shareholders made to Parent within 15 business days after the
       receipt of such notice from Parent, Parent shall use all reasonable
       efforts to prepare, execute and file such Registration Statement or
       Registration Statements as shall be necessary to effect such
       qualification or registration and include in such qualification or
       registration, as the case may be, the requested number of Parent Shares
       held by such Strategic Partners and the requested number of Tantau
       Qualified Parent Shares held by such Tantau Shareholders (pursuant to
       their respective Piggyback Registration rights under Article 5 and
       Article 6, respectively), all in accordance with and subject to the terms
       of this Agreement.

    (c) The Founding Shareholder may effect only two Founding Shareholder Demand
       Registrations pursuant to this Agreement.

4.2 PIGGYBACK REGISTRATION

    Whenever Parent proposes (other than pursuant to a Founding Shareholder
    Demand Registration) to effect a Company Registration, Parent shall furnish
    prompt (but in any event no later than 25 days prior to the filing of the
    applicable Registration Statement) written notice to the Founding
    Shareholder of its intention to effect such a Company Registration and the
    intended method of distribution in connection therewith. Such notice shall
    offer the Founding Shareholder the opportunity to qualify or register (on
    the same terms and conditions) such number of Parent Shares owned by the
    Founding Shareholder, as the Founding Shareholder may request (in this
    Article 4, a "Piggyback Registration"). Upon the written request of the
    Founding Shareholder made to Parent within 15 business days after the
    receipt of such notice from Parent, Parent shall

                                       10
<PAGE>
    include in such Company Registration the requested number of Parent Shares
    held by the Founding Shareholder, all in accordance with and subject to the
    terms of this Agreement.

4.3 SHORT-FORM PROSPECTUS REGISTRATIONS

    In addition, the Founding Shareholder may request the registration or
    qualification of its Parent Shares pursuant to a Short-Form Offering, as
    defined in and in accordance with and subject to the terms of Article 9
    hereof.

4.4 EXPIRY OF REGISTRATION RIGHTS

    Notwithstanding any of the foregoing provisions, Parent shall not be
    required to effect a Founding Shareholder Demand Registration or include in
    a Piggyback Registration securities which the Founding Shareholder has
    requested be included therein: (I) if the request of the Founding
    Shareholder is made at any time after January 27, 2004, being the date which
    is four years from Parent's initial public offering; or (II) if: (i) such
    securities have become freely tradable pursuant to Rule 144 of the
    Securities Act (i.e., are no longer subject to the volume and manner of sale
    restrictions applicable to "affiliates" of Parent (as defined under United
    States Securities Laws)), and have become freely tradable upon the
    expiration of any otherwise applicable hold period under Canadian Securities
    Laws (or any similar provision under other applicable Securities Laws); and
    (ii) an offering of such securities would not be deemed to constitute a
    "distribution" within the meaning of clause (c) of Subsection 1(1) of the
    Securities Act (Ontario) (or equivalent provisions of the other Canadian
    Securities Laws); and (iii) the Founding Shareholder holds less than 2.5% of
    the issued and outstanding equity shares of Parent at the date of the
    request (in the case of a Founding Shareholder Demand Registration) or less
    than 300,000 Parent Shares (in the case of a Piggyback Registration of the
    Founding Shareholder).

                                   ARTICLE 5
                   REGISTRATION RIGHTS OF STRATEGIC PARTNERS

5.1 DEMAND REGISTRATION RIGHTS OF STRATEGIC PARTNERS

    (a) Subject to subsection (c) of this Section 5.1 and Section 5.4 hereof,
       the Strategic Partners, acting collectively as described below, may at
       any time request in writing (such a written request being referred to
       herein as a "Strategic Partner Registration Request") that Parent qualify
       a prospectus for, or effect the registration of, all or a part of the
       Parent Shares owned by such Strategic Partners (PRO RATA based upon the
       number of Registrable Securities owned by such Strategic Partners who
       wish to participate in such qualification or registration, or on such
       other proportional basis or as otherwise allocated as such Strategic
       Partners may otherwise agree) under, at the option of the Strategic
       Partners, the Securities Laws of one or more of the Provinces of Canada
       and/or of the United States. Subject to the preceding sentence, the
       exercise of any such collective demand registration rights (each such
       exercise being referred to herein as a "Strategic Partner Demand
       Registration") shall be implemented, governed by and otherwise subject to
       the direction of those Strategic Partners that collectively hold a
       majority of the Parent Shares owned by all Strategic Partners.

    (b) Upon receipt of a Strategic Partner Registration Request, Parent shall,
       as soon as practicable, but in any event no later than 25 days prior to
       the filing of the applicable Registration Statement, deliver written
       notice of such request to the Founding Shareholder and the Tantau
       Shareholders. Upon the written request of the Founding Shareholder and/or
       such Tantau Shareholders made to Parent within 15 business days after the
       receipt of such notice from Parent, Parent shall use all reasonable
       efforts to effect such qualification or registration and include in such
       qualification or registration, as the case may be, the requested number
       of Parent Shares held by the Founding Shareholder and the requested
       number of Tantau

                                       11
<PAGE>
       Qualified Parent Shares (as defined herein) held by such Tantau
       Shareholders (pursuant to their respective Piggyback Registration rights
       under Article 4 and Article 6, respectively) all in accordance with and
       subject to the terms of this Agreement. (All registrations initiated
       pursuant to this Section 5.1 are referred to herein as "Strategic Partner
       Demand Registrations").

    (c) The Strategic Partners may effect only two Strategic Partner Demand
       Registrations.

5.2 PIGGYBACK REGISTRATION RIGHTS OF STRATEGIC PARTNERS

    Whenever Parent proposes to effect a Company Registration (other than
    pursuant to Section 5.1 hereof), Parent shall furnish prompt (but in any
    event no later than 25 days prior to the filing of the applicable
    Registration Statement) written notice to the Strategic Partners of its
    intention to effect such a Company Registration and the intended method of
    distribution in connection therewith. Such notice shall offer the Strategic
    Partners the opportunity to qualify or register (on the same terms and
    conditions) all or part of their Parent Shares or other equity shares,
    subject to the provisions of this Agreement (in this Article 5, a "Piggyback
    Registration"). Upon the written request of a Strategic Partner made to
    Parent within 15 business days of the receipt of such notice from Parent,
    Parent shall include in such Company Registration the requested number of
    Parent Shares held by such Strategic Partner (complying with the provisions
    of this Article 5) all in accordance with and subject to the terms of this
    Agreement.

5.3 SHORT-FORM OFFERING REGISTRATIONS

    In addition, the Strategic Partners, acting collectively as contemplated in
    Section 5.1(a), may request the registration or qualification of their
    Parent Shares pursuant to a Short-Form Offering as defined in and in
    accordance with and subject to the terms of Article 9 hereof.

5.4 EXPIRY OF REGISTRATION RIGHTS

    Notwithstanding any of the foregoing provisions, Parent shall not be
    required to include securities in a Demand Registration or Piggyback
    Registration, which a Strategic Partner has requested be included therein:
    (I) if such request is made at any time after January 27, 2004, being the
    day which is four years after Parent's initial public offering; or (II) if:
    (i) such securities have become freely tradable pursuant to Rule 144 of the
    SECURITIES ACT (i.e., are no longer subject to the volume and manner of sale
    restrictions applicable to "affiliates" of Parent (as defined under United
    States Securities Laws)), with respect to the Strategic Partner in question
    and have become freely tradable upon the expiration of any otherwise
    applicable hold period under Canadian Securities Laws (or any similar
    provision under applicable Securities Laws); (ii) an offering of such
    securities would not be deemed to constitute a "distribution" within the
    meaning of clause (c) of Subsection 1(1) of the SECURITIES ACT (Ontario) (or
    equivalent provisions of Canadian Securities Laws); and (iii) the Strategic
    Partner in question then holds less than 2.5% of the issued and outstanding
    equity shares of Parent at the date of the request (in the case of a
    Strategic Partner Demand Registration) or less than 300,000 Parent Shares
    (in the case of a Piggyback Registration of the Strategic Partners).

                                       12
<PAGE>
                                   ARTICLE 6
                     TANTAU SHAREHOLDER REGISTRATION RIGHTS

6.1 PIGGYBACK REGISTRATION RIGHTS

    (a) Subject to Section 6.1(c) and Section 6.2 hereof, whenever Parent
       proposes to effect a Company Registration that is an underwritten
       offering, and provided that either the Founding Shareholder or at least
       one of the Strategic Partners has exercised its Registration Rights in
       accordance with Article 4, Article 5 or Article 9 hereof, as the case may
       be, to include Parent Shares in such Company Registration, Parent shall
       furnish prompt (but in any event no later than 25 days prior to the
       filing of the applicable Registration Statement) written notice to each
       of the Tantau Shareholders of its intention to effect such a Company
       Registration and the intended method of distribution in connection
       therewith. Such notice shall offer the Tantau Shareholders the
       opportunity to qualify or register (on the same terms and conditions) all
       or part of the Parent Shares that were issued to each of them in
       connection with the Merger (subject to Section 6.1(b)) the transfer of
       which is not then prohibited by the Resale Restriction Agreement
       (collectively, "Tantau Qualified Parent Shares"), subject to the
       provisions of this Agreement (in this Article 6, a "Piggyback
       Registration"). Upon the written request of a Tantau Shareholder made to
       Parent within 15 business days after the receipt of such notice by
       Parent, Parent shall include in such Company Registration the requested
       number of Tantau Qualified Parent Shares, subject to the provisions
       hereof and other customary terms, conditions and limitations relating to
       the registration of securities generally.

    (b) Notwithstanding the foregoing, Parent shall not be required to register
       any Tantau Qualified Parent Shares the transfer of which is restricted by
       the terms of the Resale Restriction Agreement, or that are held in escrow
       in accordance with the Escrow Agreement (as that term is defined in the
       Merger Agreement), provided however that, if a Company Registration is
       effected prior to the day which is three months from the Effective Time
       (as defined in the Merger Agreement), the Tantau Shareholders may request
       that Parent include up to 15% of such Tantau Shareholder's Tantau
       Qualified Parent Shares in such Company Registration. In the event that a
       Tantau Shareholder makes such a request, the number of Tantau Qualified
       Parent Shares that are ultimately included in such Company Registration
       shall be deducted from the number of Tantau Qualified Parent Shares
       released from the Resale Restriction (as defined in the Resale
       Restriction Agreement) after the Three Month Reference Date (as defined
       in and in accordance with Section 2(b)(i) of the Resale Restriction
       Agreement).

    (c) If, in the opinion of counsel to Parent, the Tantau Qualified Parent
       Shares are not permitted to be included in a Company Registration in
       accordance with Section 6.1(a) hereof, either because of the rules and
       regulations of an applicable Securities Regulator, or because of written
       or oral directives of an applicable Securities Regulator to such effect,
       then Parent shall use reasonable efforts to cause the lead managing
       underwriter(s) of the offering to offer and sell the Tantau Qualified
       Parent Shares concurrently with, and at the same price and terms as
       applicable to, the sale of Parent Shares by the Founding Shareholder
       and/or Strategic Partner(s) that are participating in such Company
       Registration. Parent shall not be deemed to breach this Agreement if it
       effects such Registration notwithstanding the refusal of the lead
       managing underwriter(s) of the offering to take the actions described in
       the previous sentence. If an applicable Securities Regulator precludes or
       imposes substantial disclosure requirements with respect to the inclusion
       of the Tantau Qualified Parent Shares in such offering, then Parent will
       be deemed to have used reasonable efforts without further requirement
       that the Tantau Qualified Parent Shares be so included in the
       underwritten offering.

    (d) For the purposes of Section 6.1(c) hereof, the Tantau Shareholders shall
       use the same underwriter used by Parent for the offering in question, and
       shall cooperation and coordinate

                                       13
<PAGE>
       their efforts in good faith with those of Parent with a view to avoiding
       disruption or regulatory impediments to the Company Registration.

6.2 TERMINATION OF REGISTRATION RIGHTS

    All rights granted to the Tantau Shareholders pursuant to Section 6.1 shall
    terminate with respect to any Tantau Qualified Parent Shares held by a
    Tantau Shareholder upon the earliest to occur of (i) January 27, 2004, being
    the date which is four years from Parent's initial public offering;
    (ii) the acquisition of the Tantau Qualified Parent Shares by any person
    from a Tantau Shareholder in accordance with Section 12.2(c) hereof; or
    (iii) the Tantau Shareholder in question then holds: (x) with respect to the
    90 day period commencing on the date hereof, less than 50,000 Tantau
    Qualified Parent Shares; or (y) with respect to the period thereafter, less
    than 300,000 Tantau Qualified Parent Shares.

                                   ARTICLE 7
                  RULES RELATING TO DEMAND REGISTRATION RIGHTS

7.1 CONTENTS OF DEMAND REGISTRATION REQUEST

    (a) Any request for a Demand Registration shall specify the number of
       securities proposed to be sold by the Initiating Party(ies) and the
       intended method of disposition thereof (i.e. registration only, "best
       efforts" or firm underwriting). Parent shall not be obligated to effect a
       Demand Registration unless the Demand Registration is in respect of at
       least the lesser of: (i) 1,000,000 Parent Shares; and (ii) 25% of the
       Parent Shares then held by the Initiating Party(ies).

    (b) A Demand Registration shall not require a shelf registration or a shelf
       prospectus.

7.2 MINIMUM OFFERING SIZE FOR DEMAND REGISTRATION

    Notwithstanding the initiation of a Demand Registration, and in addition to
    the limitations set forth in Section 7.1(a), Parent shall not be obligated
    to effect such Demand Registration if:

    (a) Parent determines, after consultation with the proposed underwriters for
       the offering, that the aggregate expected gross proceeds in respect of:
       (i) the Parent Shares requested to be included in an offering pursuant to
       a Registration Request; and (ii) the Parent Shares and/or the Tantau
       Qualified Parent Shares requested to be included in such offering
       pursuant to the exercise of Piggyback Registration rights under
       Sections 4.2, 5.2 or 6.1 hereof, as the case may be, will be less than US
       $20,000,000 (the "Minimum Threshold"), unless the Initiating Party(ies)
       agree(s) to sell additional securities (to the extent that it retains any
       securities of Parent) to make up the deficiency; or

    (b) pursuant to the advisement of the lead managing underwriter(s) as
       contemplated in Section 10.2(b), there is a reduction in the number of
       Parent Shares (inclusive of all shares being sold in the offering by
       Parent and the Shareholders) to be included in the offering such that the
       reduced number of Parent Shares would not generate proceeds that are
       equal to or that exceed the Minimum Threshold;

    provided, however, that if the Initiating Party(ies) are proposing to sell
    all of their remaining securities of Parent, the Minimum Threshold
    requirement shall not apply. In addition, subject to the immediately
    preceding sentence, if a Demand Registration is not implemented because the
    Minimum Threshold has not been met, the Initiating Party(ies) shall be
    entitled to re-initiate such requested Demand Registration at a later time
    in accordance with the provisions of this Agreement.

                                       14
<PAGE>
7.3 NO OBLIGATION TO EFFECT DEMAND REGISTRATION RIGHT

    Notwithstanding anything to the contrary contained in this Agreement:

    (a) Parent shall not be obligated to effect a Founding Shareholder Demand
       Registration if, as of the date that such demand is delivered to the
       Company, the Founding Shareholder had the opportunity to utilize its
       Piggyback Registration rights in connection with a Registration of Parent
       Shares that became effective within the immediately preceding six month
       period and did not at that time exercise such rights by a request to have
       included in such Piggyback Registration at least 100,000 Parent Shares
       (it being acknowledged that as a result of the priority allocation rules
       contained herein, such request might not have been honored in full);

    (b) Parent shall not be obligated to effect any Demand Registration: (i) if
       Parent has, within the nine month period immediately preceding the
       delivery of the Registration Request, already caused a Registration
       Statement relating to a Demand Registration for the Initiating Party(ies)
       to be declared effective; or (ii) in any jurisdiction in which Parent
       would be required to qualify generally to do business or to execute a
       general consent to service of process in effecting such Registration,
       except to the extent required by applicable law of Canada, the United
       States or a political subdivision thereof in connection with the
       particular offering; and

    (c) Parent shall not be obligated to effect, or to take any action to
       effect, any Demand Registration: (i) during the period starting with the
       date 60 days prior to Parent's good faith estimate of the date of filing
       of, and ending on a date 180 days after the effective date of, a Company
       Registration; provided that Parent is actively employing in good faith
       all reasonable efforts to cause such Registration Statement to become
       effective; or (ii) if the Initiating Party(ies) proposes to dispose of
       Parent Shares that may be distributed pursuant to a Short-Form Offering
       pursuant to a request made pursuant to Article 9 hereof.

7.4 ABILITY OF PARENT TO SUSPEND A DEMAND REGISTRATION

    In addition, if, in connection with a Registration Request, Parent shall, no
    later than five days prior to the effectiveness of a Registration Statement,
    furnish to the Initiating Party(ies), a certificate signed by the Chief
    Financial Officer of Parent stating that, in the good faith judgment of the
    Board of Directors of Parent, it would be seriously detrimental to Parent
    and its shareholders to file a Registration Statement pursuant to such
    Registration Request and it is therefore essential to defer the filing of
    such Registration Statement, Parent shall have the right to defer taking
    action with respect to such filing for a period of not more than 120 days
    after receipt of the Registration Request of the Initiating Party(ies);
    provided, however, that Parent may utilize this right only once in respect
    of a Founding Shareholder Demand Registration and only once in respect of a
    Strategic Partner Demand Registration.

7.5 ASSIGNMENT OF FOUNDING SHAREHOLDER AND STRATEGIC PARTNER REGISTRATION RIGHTS

    (a) The Founding Shareholder shall be entitled to assign its Registration
       Rights relating to any of its Parent Shares being sold to any person
       (without prejudice to the Registration Rights attaching to the Parent
       Shares that the Founding Shareholder continues to hold), provided,
       however that:

        (i) the Founding Shareholder Demand Registration rights under
            Section 4.1 hereof may only be assigned in whole, and not in part,
            and the Founding Shareholder shall not retain any part of the
            Founding Shareholder Demand Registration rights once they have been
            assigned;

        (ii) the Founding Shareholder Piggyback Registration rights under
             Section 4.2 hereof may only be assigned if the purchaser of its
             Parent Shares acquires at least 5% of the issued and outstanding
             equity shares of Parent at the date of the transaction pursuant to
             which

                                       15
<PAGE>
             such purchaser first becomes a Shareholder and such Piggyback
             Registration rights may be exercised by such assignee as if it was
             a member of the Founding Shareholder (including in conjunction with
             the exercise of a Founding Shareholder Demand Registration);

       (iii) Parent is, within a reasonable time after such transfer, furnished
             with written notice of the name and address of such transferee or
             assignee and the securities with respect to which such registration
             rights are being assigned; and

        (iv) such transferee or assignee agrees in writing to be bound by and
             subject to the terms and conditions of this Agreement.

       For greater certainty, subject to Section 12.1(c) hereof, any assignee of
       the Founding Shareholder Registration Rights under this Section 7.5(a)
       shall have the same rights and benefits, and shall be subject to the same
       limitations and restrictions, applicable to the Founding Shareholders
       hereunder including, without limitation, Sections 4.4 and 9.4 hereof and
       the 300,000 Parent Shares threshold below which the Founding
       Shareholder's Piggyback Registration rights expire.

    (b) Subject to Section 12.2 and this Section 7.5(b), the Strategic Partner
       Demand Registration rights are meant to be exercised, collectively, by
       all Strategic Partners from time to time and no interest therein may
       accrue to the benefit of or be exercised by any other person. Any person
       who acquires from one or more Strategic Partners in a particular
       transaction (or series of related transactions) at least 5% of the
       outstanding equity shares of Parent at the date of such acquisition,
       accompanied by an assignment of Registration Rights hereunder in
       accordance with Section 12.2 hereof, shall be entitled to participate in
       a Strategic Partner Demand Registration under Article 5 hereof and a
       Short-Form Offering Registration initiated by a Strategic Partner under
       Article 9, and to exercise the Piggyback Registration rights under
       Article 5, as if it was a Strategic Partner (including in conjunction
       with the exercise of a Strategic Partner Demand Registration), provided
       that, subject to Section 12.1(c), any such person shall have the same
       rights and benefits, and shall be subject to the same limitations and
       restrictions applicable to Strategic Partners hereunder including,
       without limitation, Sections 5.4 and 9.4 hereof and the 300,000 Parent
       Shares threshold below which a Strategic Partner's Piggyback Registration
       rights expire.

    For greater certainty, subject to the provisions of the Agreement
    (including, without limitation, Section 5.4 and 9.4 hereof), the
    Registration Rights of a Strategic Partner hereunder shall remain unaffected
    and in full force and effect with respect to such Strategic Partner's
    remaining Parent Shares in the event of such an acquisition by a person of
    at least 5% of the outstanding equity shares of Parent.

                                   ARTICLE 8
                   PRIORITIES RELATING TO REGISTRATION RIGHTS

8.1 PRIORITIES FOR OFFERINGS INITIATED BY PARENT

    If a proposed Piggyback Registration relates to an underwritten primary
    registration on behalf of Parent and the lead managing underwriter(s)
    advises Parent in writing that, in its opinion, the number of Registrable
    Securities requested to be included in the Registration (inclusive of the
    securities proposed to be sold by Parent) exceeds the number which can be
    sold in such offering without adversely affecting the price of the
    Registrable Securities to be sold, then Parent shall include in such
    Registration, in order of priority: (i) first, the securities Parent
    proposes to sell; (ii) second, all (or a portion, as the case may be) of the
    Registrable Securities requested to be included in such Piggyback
    Registration by the Founding Shareholder, the Strategic Partners and the
    Tantau Shareholders, PRO RATA based upon the number of Registrable
    Securities requested by

                                       16
<PAGE>
    them to be included in such Piggyback Registration, except to the extent any
    of them may agree to a lower priority; and (iii) third, other securities of
    Parent requested to be included in such Registration.

8.2 PRIORITIES FOR OFFERINGS INITIATED BY THE FOUNDING SHAREHOLDER OR THE
    STRATEGIC PARTNERS

    If a Demand Registration relates to an underwritten offering and the lead
    managing underwriter(s) advise(s) Parent in writing that, in its opinion,
    the number of Registrable Securities requested to be included in such
    Registration (inclusive of all proposed Piggyback Registrations) exceeds the
    number which can be sold in such offering without adversely affecting the
    price of the Registrable Securities to be sold, then Parent shall include in
    such Registration, in order of priority: (i) first, securities Parent wishes
    to sell, to the extent of gross proceeds of US$25,000,000; (ii) second, all
    or a portion (as the case may be) of the Registrable Securities requested to
    be included in such offering by the Founding Shareholder and the Strategic
    Partners (whether pursuant to their Demand Registration Rights or their
    Piggyback Registration rights) and the Tantau Shareholders (pursuant to
    their Piggyback Registration rights), PRO RATA based upon the number of
    Registrable Securities requested by them to be included in such
    Registration, except to the extent any of them may agree to a lower
    priority; (iii) third, the balance of the securities Parent proposes to
    sell, if any; and (iv) fourth, other securities of Parent requested to be
    included in such Registration; provided, however, that if Parent's exercise
    of its priority causes the number of shares registrable by the Initiating
    Party(ies) to be reduced by more than 25%, then such Registration shall not
    be counted as a Registration for purposes of Sections 4.1, 5.1 or 9.3, as
    the case may be, and the Initiating Party(ies) shall retain its/their rights
    with respect to such Demand Registration.

8.3 PRIORITIES FOR OFFERINGS INITIATED BY A THIRD PARTY

    If a Piggyback Registration relates to an underwritten secondary offering on
    behalf of holders of Parent Shares (other than the Founding Shareholder
    under Article 4 or the Strategic Partners under Article 5 or the Tantau
    Shareholders under Article 6) and the lead managing underwriter(s) advise(s)
    Parent in writing that, in its opinion, the number of Registrable Securities
    requested to be included in such Registration (inclusive of all proposed
    Piggyback Registrations) exceeds the number which can be sold in such
    offering without adversely affecting the price of the Registrable Securities
    to be sold, then Parent shall include in such Registration, in order of
    priority: (i) first, securities Parent wishes to sell, to the extent of
    gross proceeds of US$25,000,000; (ii) second, the securities proposed to be
    sold by the sellers on whose behalf the offering was initiated;
    (iii) third, all or a portion (as the case may be) of the Registrable
    Securities requested to be included in such offering by the Founding
    Shareholder, the Strategic Partners and the Tantau Shareholders PRO RATA
    based upon the number of Registrable Securities requested by them to be
    included in such Registration, except to the extent any of them may agree to
    a lower priority; (iv) fourth, the balance of the securities Parent proposes
    to sell, if any; and (v) fifth, other securities of Parent requested to be
    included in such Registration.

                                   ARTICLE 9
                   FORM S-3, F-3, SHORT-FORM F-10, FORM S-10
                    AND SHORT-FORM PROSPECTUS REGISTRATIONS

9.1 PARENT'S OBLIGATIONS

    With a view to making available to the Founding Shareholder and the
    Strategic Partners acting collectively (each an "S-3 Seller") the benefits
    of Rule 144 promulgated under the Securities Act and any other rule or
    regulation of the U.S. Securities Regulator that may at any time permit an
    S-3 Seller to sell securities of Parent to the public without registration
    or pursuant to a registration on Form S-3, Form F-3, a short-form prospectus
    using Form F-10 and Form S-10 or other similar

                                       17
<PAGE>
    simplified offering documents under the applicable U.S. Securities Laws or
    the benefits of a short-form prospectus or similar simplified offering
    document pursuant to the National Policy No. 47 "Prompt Offering
    Qualification System" and, once in force, National Instrument 44-101 and
    analogous rules and policies applicable under Canadian Securities Laws
    (collectively, "Short-Form Offerings"), Parent agrees to:

    (a) make and keep public information available and current, as those terms
       are understood and defined in Rule 144(c) promulgated under the
       Securities Act, at all times that any party hereto may still exercise its
       registration rights hereunder;

    (b) take such action, including the filing of such reports and other
       documents as may be required under Section 12 of the Exchange Act, as is
       necessary to enable the S-3 Sellers to utilize Short-Form Offerings for
       the sale of Parent Shares, such action to be taken as soon as practicable
       after December 31, 2000 (the end of the fiscal year in which the first
       Registration Statement filed by Parent for the offering of its securities
       to the general public in the United States was declared effective);

    (c) file with the U.S. Securities Regulator in a timely manner all reports
       and other documents required to be filed by Parent under Sections 13, 14
       or 15(d) under the Exchange Act;

    (d) furnish to any S-3 Seller, so long as it owns any Parent Shares,
       forthwith upon request: (i) a written statement by Parent that it has
       complied with the reporting requirements of Rule 144(c) promulgated under
       the Securities Act (at any time that any party hereto may still exercise
       its Registration Rights hereunder) and the Exchange Act (at any time
       after it has become subject to such reporting requirements), or that it
       qualifies as a registrant whose securities may be resold pursuant to a
       Short-Form Offering (at any time after it so qualifies); (ii) a copy of
       the most recent annual or quarterly report of Parent and such other
       reports and documents so filed by Parent pursuant to the Exchange Act;
       and (iii) such other information as may be reasonably requested in
       availing any S-3 Seller of any rule or regulation of the U.S. Securities
       Regulator or U.S. Securities Laws which permits the selling of any such
       securities without registration or pursuant to such simplified
       Registration Statements; and

    (e) file with the Canadian Securities Regulators an Annual Information Form
       under the "Prompt Offering Prospectus System" (and, once in force,
       National Instrument 44-101) and thereafter file renewal Annual
       Information Forms and all required continuous disclosure and other
       documents required for Parent to make use of the "Prompt Offering
       Qualification System" as soon as it is otherwise eligible to do so (in
       which case the provisions of this Article 9 shall apply MUTATIS
       MUTANDIS).

9.2 SHORT-FORM REGISTRATION

    In case Parent shall receive from an S-3 Seller a written request or
    requests that Parent effect the qualification of, or registration for, a
    Short-Form Offering and any related qualification or compliance with respect
    to all or a portion of the Parent Shares owned by the proposed S-3 Seller,
    Parent will:

    (a) promptly give written notice of the proposed Registration, and any
       related qualification or compliance, to the Founding Shareholder, the
       Strategic Partners and the Tantau Shareholders; and

    (b) as soon as practicable, effect such qualification or registration and
       all such qualifications and compliance as may be so requested and as
       would permit or facilitate the sale and distribution of all or such
       portion of the proposed S-3 Seller's Parent Shares as are specified in
       such request, together with all or such portion of the Parent Shares of
       any other Shareholder joining in such request as are specified in a
       written request given within 15 days after receipt of such written notice
       from Parent.

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<PAGE>
9.3 LIMITS TO PARENT'S OBLIGATION TO EFFECT A SHORT-FORM REGISTRATION

    Parent shall not be obligated to effect any such Registration pursuant to
    this Article 9:

    (a) if the initiating S-3 Seller is not eligible for a Short-Form Offering;

    (b) if the initiating S-3 Seller, together with the holders of any other
       equity securities of Parent entitled to inclusion in such Registration,
       propose to sell Parent Shares at an aggregate price to the public (net of
       any underwriters' discounts or commissions) of less than
       U.S. $15,000,000;

    (c) if Parent shall, no later than five days prior to the effectiveness of
       such Registration, furnish to the initiating S-3 Seller a certificate
       signed by the Chief Financial Officer of Parent stating that, in the good
       faith judgement of the Board of Directors of Parent, it would be
       seriously detrimental to Parent and its shareholders for such Short-Form
       Offering Registration to be effected at such time, in which event Parent
       shall have the right to defer the filing of the Short-Form Offering
       Registration Statement for a period of not more than 60 days after
       receipt of the request of the initiating S-3 Seller; provided, however,
       that Parent shall not utilize this right more than once in any 12 month
       period;

    (d) if Parent has, within the 180 day period immediately preceding the
       request of the initiating S-3 Seller, caused a Registration Statement
       (for greater certainty including a Short-Form Offering) to be declared
       effective;

    (e) in any particular jurisdiction in which Parent would be required to
       qualify to do business or to execute a general consent to service of
       process in effecting such registration, qualification or compliance
       except to the extent required by applicable law of Canada, the United
       States or a political subdivision thereof in connection with the
       particular offering; or

    (f) pursuant to a shelf registration or a shelf prospectus.

9.4 EXPIRY OF SHORT-FORM REGISTRATION RIGHTS

    Notwithstanding any of the foregoing provisions, Parent shall not be
    required to effect registration pursuant to this Article 9:

    (a) if the request of the S-3 Seller is made at any time after January 27,
       2004, being the date which is four years from Parent's initial public
       offering; or

    (b) if, with respect to S-3 Seller: (I) such securities have become freely
       tradable pursuant to Rule 144 promulgated under the Securities Act
       (i.e. are no longer subject to the volume and manner of sale restrictions
       applicable to "affiliates" of Parent (within the meaning of the
       U.S. Securities Laws), and have become freely tradable upon the
       expiration of any otherwise applicable hold period under Canadian
       Securities Laws (or any similar provision under applicable Securities
       Laws); and (II) an offering of such securities would not be deemed to
       constitute a "distribution" within the meaning of clause (c) of
       Subsection 1(1) of the Securities Act (Ontario) (or equivalent provisions
       of Canadian securities laws); and (III) the applicable S-3 Seller holds
       less than 2.5% of the issued and outstanding equity shares of Parent at
       the date of the request.

    (c) Subject to the foregoing, Parent shall file a Registration Statement
       covering the Parent Shares so requested as soon as practicable after
       receipt of the request of the initiating S-3 Seller. All Registration
       Expenses incurred in connection with a registration requested pursuant to
       this Article 9, including (without limitation) all registration, filing,
       qualification, printer's and accounting fees and the reasonable fees and
       disbursements of one United States and one Canadian counsel for the
       initiating S-3 Seller or other Selling Shareholder(s) in addition to
       counsel for Parent, but excluding any underwriters' discounts or
       commissions associated with such disposition of Parent Shares, shall be
       paid by Parent.

    The provisions of Articles 7, 8, 10, and 11 shall apply, MUTATIS MUTANDIS,
    to such Short Form Offerings.

                                       19
<PAGE>
                                   ARTICLE 10
               GENERAL PROVISIONS RELATING TO REGISTRATION RIGHTS

10.1 CONDITIONS PRECEDENT TO PARENT'S OBLIGATIONS

    It shall be a condition precedent to the obligation of Parent to include any
    Registrable Securities in a Registration Statement pursuant this Agreement
    that a Selling Shareholder shall furnish to Parent such information
    regarding itself, the Registrable Securities held by it, and the intended
    method of disposition of such securities as shall be reasonably requested in
    writing by Parent and required pursuant to the Securities Laws to effect the
    Registration of the Registrable Securities held by such Selling Shareholder.
    Any such information, or any comments on any such information included in a
    draft of a Registration Statement provided to such Selling Shareholder for
    its comment, shall be provided to Parent within any reasonable time period
    requested by Parent.

10.2 PARTICIPATION IN UNDERWRITTEN REGISTRATION

    (a) A Selling Shareholder shall not participate in any underwritten
       Registration hereunder and Parent shall not be required to register any
       of Shareholder's Registrable Securities in connection with such an
       underwritten Registration unless such Selling Shareholder: (i) agrees to
       sell such Selling Shareholder's Registrable Securities on the basis
       provided in any underwriting arrangements approved by the person or
       persons entitled hereunder to approve such arrangements; (ii) accepts the
       underwriters selected by Parent; (iii) subject to sections 10.5 and 10.6
       below, executes an underwriting agreement with such underwriters
       containing provisions that are customary in an underwritten Registration
       (including a market stand-off agreement consistent with, and subject to
       the restrictions applicable to, the terms of Section 10.11 hereof, if
       required by such underwriters) that includes Parent Shares held by a
       Shareholder; and (ii) completes and executes all questionnaires, powers
       of attorney, indemnities, escrow agreements and other documents
       reasonably required and which are acceptable to such Selling Shareholder
       acting reasonably and in good faith under the terms of such underwriting
       arrangements and consistent with the provisions of this Agreement.

    (b) Registrable Securities shall be sold in such underwritten Registration
       only in such quantity as the lead managing underwriter(s) determine(s),
       in its sole discretion, will not jeopardize the success of the offering
       by Parent. To the extent that the lead managing underwriter(s) advised
       Parent in writing that, in its opinion, the number of securities proposed
       to be included in the offering exceeds the number that can be sold in
       such offering without adversely affecting the price of the securities to
       be sold, then the securities to be included shall be apportioned in
       accordance with the priorities described in Article 8. If a Selling
       Shareholder disapproves of the terms of any such underwriting, such
       Selling Shareholder may elect to withdraw therefrom by written notice to
       Parent and the underwriter(s), delivered at least five business days
       prior to the effective date of the Registration Statement. Any
       Registrable Securities excluded or withdrawn from such underwriting shall
       be excluded and withdrawn from the Registration.

    (c) If by the withdrawal of such Registrable Securities a greater number of
       Registrable Securities held by other Shareholders may be included in such
       Registration up to the maximum of any limitation imposed by the lead
       managing underwriter(s), then Parent shall offer to all Shareholders who
       have included Registrable Securities in the registration or to all, if
       any, whose Parent Shares have been excluded from the registration by
       Article 8 the right to include additional Registrable Securities in the
       same proportion used in determining priorities under Article 8.

                                       20
<PAGE>
10.3 REGISTRATION EXPENSES

    (a) Unless prohibited by applicable law, all Registration Expenses will be
       borne by Parent; provided, however, that Parent shall not be required to
       pay for any expenses of any Registration or prospectus process initiated
       pursuant to a Demand Registration if the Registration Request is
       subsequently withdrawn at the request of the Initiating Party, in which
       case, the particular Shareholder whose withdrawal resulted in the
       withdrawal of the Registration Request shall reimburse Parent for all
       such expenses, unless at the time of such withdrawal the Initiating Party
       indicates that since the date of the Registration Request, it has learned
       of a material adverse change of the condition, business or prospects of
       Parent from that known to the Initiating Party at the time of the
       Registration Request and provided that the Initiating Party withdraws the
       request with reasonable promptness following disclosure by Parent of such
       material adverse change (whereupon the Initiating Party shall not be
       required to pay any of such Registration Expenses).

    (b) All Selling Expenses will be borne by the Selling Shareholders PRO RATA
       on the basis of the number of shares Registered.

10.4 PARENT'S OBLIGATIONS

    If and whenever Parent is required to effect the Registration of any
    Registrable Securities under the applicable Securities Laws pursuant to this
    Agreement, Parent will, as expeditiously as possible:

    (a) prepare and file with the Securities Regulators the requisite
       Registration Statement to effect such Registration and thereafter use its
       best efforts to cause such Registration Statement to become effective;

    (b) prepare and file with the Securities Regulators such amendments and
       supplements to such Registration Statement as may be necessary to keep
       such Registration Statement effective (subject to the provisions of
       Section 7.1(b)) and to comply with the provisions of the applicable
       Securities Laws with respect to the disposition of all Registrable
       Securities offered by such Registration Statement until such time as all
       of such Registrable Securities have been disposed of in accordance with
       the intended methods of disposition by the Selling Shareholders set forth
       in such Registration Statement;

    (c) furnish to each Selling Shareholder such number of conformed copies of
       such Registration Statement and of each such amendment and supplement
       thereto (in each case including all exhibits and documents incorporated
       by reference, appropriately legended in the case of those exhibits filed
       on a confidential basis), and, so long as Parent is required to keep such
       Registration Statement effective pursuant to paragraph (b) above, such
       number of copies of the prospectus contained in such Registration
       Statement (including each preliminary prospectus and any summary
       prospectus) and any other prospectus filed pursuant to the applicable
       Securities Laws, in conformity with the requirements of the applicable
       Securities Laws, and such other documents, as such Selling Shareholder
       may reasonably request;

    (d) use its best efforts (x) to register or qualify all Registrable
       Securities offered by such Registration Statement under such other state
       or "blue sky" Securities Laws of such jurisdiction where an exemption is
       not available and as any Selling Shareholder shall reasonably request,
       (y) to keep such Registration or qualification in effect for so long as
       such Registration Statement remains in effect and (z) to take any other
       action that may be necessary or advisable to enable such Selling
       Shareholders to consummate the disposition in such jurisdictions of the
       Registrable Securities to be sold by such Selling Shareholders, except
       that Parent shall not for any such purpose be required to: (i) qualify
       generally to do business as a foreign corporation in any jurisdiction
       wherein it would not, but for the requirements of

                                       21
<PAGE>
       this paragraph, be obligated to be so qualified; (ii) become subject to
       taxation in any jurisdiction where it would not then be so subject; or
       (iii) take any action that would subject it to general service of process
       in any such jurisdiction (except to the extent required by the applicable
       laws of a particular jurisdiction in connection with the particular
       offering);

    (e) use its reasonable best efforts to cause all Registrable Securities
       offered by such Registration Statement to be registered with or approved
       by such other federal, provincial or state governmental agencies or
       authorities as may be necessary in the opinion of counsel to Parent and
       counsel to the Selling Shareholders to enable the Selling Shareholders to
       consummate the disposition of such Registrable Securities;

    (f) furnish at the effective date of such Registration Statement and the
       date of closing of the sale of the Registrable Securities (whether or not
       such sale is underwritten), to each Selling Shareholder, and each Selling
       Shareholder's underwriters, if any, a signed counterpart of:

        (i) an opinion of counsel for Parent, dated the effective date of such
            Registration Statement (or such date of closing, as applicable), and

        (ii) a "comfort" letter signed by the independent public accountants who
             have certified Parent's financial statements included or
             incorporated by reference in such Registration Statement,

       covering substantially the same matters with respect to such Registration
       Statement (and the prospectus included therein) and, in the case of the
       accountants' comfort letter, with respect to events subsequent to the
       date of such financial statements, as are customarily covered in opinions
       of issuer's counsel and in accountants' comfort letters delivered to the
       underwriters in underwritten public offerings of securities;

    (g) notify each Selling Shareholder at any time when a prospectus relating
       to the Registration is required to be delivered under the Securities
       Laws, upon discovery that, or upon the happening of any event known to
       Parent as a result of which, the prospectus included in such Registration
       Statement, as then in effect, includes an untrue statement of a material
       fact or omits to state any material fact required to be stated therein or
       necessary to make the statements therein not misleading, in the light of
       the circumstances under which they were made, and promptly prepare and
       furnish to each Selling Shareholder a reasonable number of copies of a
       supplement to or any amendment of such prospectus as may be necessary so
       that, as thereafter delivered to the purchasers of such securities, such
       prospectus shall not include an untrue statement of a material fact or
       omit to state a material fact required to be stated therein or necessary
       to make the statements therein not misleading in the light of the
       circumstances under which they were made;

    (h) otherwise use its reasonable best efforts to comply with all applicable
       rules and regulations of the Securities Laws and, if required, make
       available to its Shareholders, as soon as reasonably practicable, an
       earnings statement covering the period of at least twelve months, but not
       more than eighteen months, beginning with the first full calendar month
       after the effective date of such Registration Statement, which earnings
       statement shall satisfy the provisions of Securities Laws;

    (i) permit any Selling Shareholder to participate in the preparation of such
       Registration Statement and to include therein material, furnished to
       Parent in writing, which in the reasonable judgement of the Selling
       Shareholder should be included and which is reasonably acceptable to
       Parent;

    (j) if any proposed Registration Statement refers to a Selling Shareholder
       by name or otherwise as the holder of any securities of Parent then:
       (i) upon reasonable request Parent shall be

                                       22
<PAGE>
       required to insert therein language, in form and substance reasonably
       satisfactory to such Selling Shareholder, Parent and the lead managing
       underwriter(s), to the effect that the ownership by such Selling
       Shareholder of such securities is not to be construed as a recommendation
       by such Selling Shareholder as to the investment quality of Parent's
       securities offered thereby and that such ownership does not imply that
       such Selling Shareholder will assist in meeting any future financial
       requirements of Parent; or (ii) in the event that such reference to such
       Selling Shareholder by name or otherwise is not required by the
       applicable Securities Laws, any similar federal, provincial or state
       statute, or any rule or regulation of any other regulatory body having
       jurisdiction over the offering, then in force, Parent shall be required
       at the request of such Selling Shareholder to delete the reference to
       such Selling Shareholder;

    (k) provide and cause to be maintained a transfer agent and registrar for
       all Registrable Securities offered by such Registration Statement; and

    (l) use its best efforts to list all Registrable Securities covered by such
       Registration Statement on any securities exchange or trading market on
       which Parent's Registrable Securities are then listed.

    The Shareholders shall not have any right to obtain or seek an injunction
    restraining or otherwise delaying any registration as the result of any
    controversy that might arise with respect to the interpretation or
    implementation of this Section 10.4.

10.5 DEMAND REGISTRATION -- UNDERWRITING AGREEMENT/REPRESENTATIONS AND
     WARRANTIES

    If requested by the underwriters for any underwritten offering of
    Registrable Securities pursuant to a Demand Registration, Parent will use
    all reasonable efforts to enter into an underwriting agreement with such
    underwriters for such Demand Registration, such agreement to be reasonably
    satisfactory in substance and form to Parent, the Selling Shareholders and
    the underwriters and to contain such representations and warranties by
    Parent and such other terms as are customary in agreements of that type,
    including, without limitation, indemnities to the effect and to the extent
    provided in Article 11 hereof. The Selling Shareholders will reasonably
    cooperate with Parent in the negotiation of the underwriting agreement. Such
    Selling Shareholders shall be parties to such underwriting agreement. All of
    the representations and warranties by, and the other agreements on the part
    of, Parent to and for the benefit of such underwriters shall also be made to
    and for the benefit of such Selling Shareholders and any or all of the
    conditions precedent to the obligations of such underwriters under such
    underwriting agreement shall also be conditions precedent to the obligations
    of such Selling Shareholders. No Selling Shareholder shall be required to
    make any representations or warranties to or agreements with Parent other
    than representations, warranties or agreements regarding such Selling
    Shareholder, matters pertaining to the Selling Shareholder's contractual or
    other arrangements with Parent, such Selling Shareholder's Registrable
    Securities and such Selling Shareholder's intended method of distribution or
    any other representations required by the applicable Securities Laws.

10.6  PIGGYBACK REGISTRATION -- UNDERWRITING AGREEMENT/REPRESENTATIONS AND
     WARRANTIES

    If requested by the underwriters for any underwritten offering of
    Registrable Securities pursuant to a Piggyback Registration, the Selling
    Shareholders shall be parties to the underwriting agreement between Parent
    and such underwriters. All of the representations and warranties by, and the
    other agreements on the part of, Parent to and for the benefit of such
    underwriters shall also be made to and for the benefit of the Selling
    Shareholders, and any or all of the conditions precedent to the obligations
    of such underwriters under such underwriting agreement shall also be
    conditions precedent to the obligations of the Selling Shareholders. No
    Selling Shareholder shall be required

                                       23
<PAGE>
    to make any representations and warranties to, or agreements with, Parent or
    such underwriters other than those representations, warranties or agreements
    regarding the Selling Shareholder, matters pertaining to the Selling
    Shareholder's contractual or other arrangements with Parent, the Selling
    Shareholder's Securities, the Selling Shareholder's intended method of
    distribution and any other representations required by the applicable
    Securities Laws.

10.7  ABILITY OF SELLING SHAREHOLDER TO PARTICIPATE IN DUE DILIGENCE

    In connection with the preparation and filing of each Registration Statement
    under the Securities Laws, Parent will give the Selling Shareholders,
    provided such Selling Shareholder is not a Tantau Shareholder, their
    underwriters, if any, and their respective counsel the opportunity to
    participate in the preparation of such Registration Statement, each
    prospectus included therein or filed with the Securities Regulators, and
    each amendment thereof or supplement thereto, and will give each of them
    such reasonable access to the books and records of Parent and such
    opportunities to discuss the business of Parent with its officers and the
    independent public accountants who have certified its financial statements
    as shall be necessary, in the opinion of such holders, and such underwriters
    and their respective counsel, to conduct a reasonable investigation. Parent
    shall promptly notify such holders and their counsel of any stop order
    issued or threatened by the Securities Regulators and take all reasonable
    actions required to prevent the entry of such stop order or to remove it if
    entered.

10.8  CONTINUOUS DISCLOSURE OBLIGATIONS OF PARENT

    If Parent becomes subject to the reporting requirements of a jurisdiction
    where the Registrable Securities become qualified, Parent will use its best
    efforts to file with the applicable Securities Regulators such information
    as the applicable Securities Regulators may require in a timely fashion; and
    in such event, Parent shall use its best efforts to take all action as may
    be required in order to maintain the Registration of such Registrable
    Securities in good standing and not in default. Parent shall furnish to the
    Selling Shareholders forthwith upon request: (i) a written statement by
    Parent as to its compliance with the reporting requirements of applicable
    Securities Regulators; (ii) a copy of the most recent annual or quarterly
    report of Parent as filed with the applicable Securities Regulators; and
    (iii) such other reports and documents as the Selling Shareholders may
    reasonably request in availing themselves of any rule or regulation of the
    Securities Regulators allowing the Selling Shareholders to sell any such
    Registrable Securities without qualifying a prospectus or completing a
    registration.

10.9  RIGHT TO SUSPEND A REGISTRATION RIGHT

    Parent may suspend a Registration Right at any time prior to such
    Registration Statement becoming effective if Parent determines in good faith
    (and, as soon as reasonably practicable, so certifies in writing to such
    Selling Shareholder) that the public disclosure requirements imposed on
    Parent under the applicable Securities Laws in connection with the
    Registration Statement would require disclosure of any activity or
    transaction or preparations or negotiations for any activity or transaction
    (the "Parent Activity") that Parent in good faith desires to keep
    confidential for business reasons, or during which there exists any other
    material non-public information relating to Parent which Parent determines
    in good faith should not be disclosed; provided that: (i) Parent shall use
    commercially reasonable efforts to minimize the length of any such period of
    suspension; and (ii) any such suspension shall be applied in the same manner
    to all other security holders included in such Registration Statements and
    to any other Registration Statement or proposed offering of Parent's
    securities proposed or then in effect.

                                       24
<PAGE>
10.10  SELLING SHAREHOLDER DUTY TO UPDATE

    A Selling Shareholder shall notify Parent, at any time when a prospectus is
    required to be delivered under applicable Securities Laws, of the happening
    of any event as a result of which the prospectus included in the applicable
    Registration Statement, as then in effect, with respect to information
    provided or confirmed by such Shareholder in writing, includes an untrue
    statement of a material fact or omits to state a material fact required to
    be stated therein or necessary to make the statements therein not misleading
    in light of the circumstances then existing. Such Selling Shareholder shall
    immediately upon the occurrence of any such event cease using such
    prospectus. If so requested by Parent, such Selling Shareholder shall
    promptly return to Parent any copies of any prospectus in its possession
    (other than permanent file copies) that contains an untrue statement of a
    material fact or omits to state a material fact required to be stated
    therein or necessary to make the statements therein not misleading in light
    of the circumstances then existing, and shall not sell any Parent Shares
    pursuant to such Registration Statement until it receives from Parent a
    Registration Statement that cures such untrue statement or omission.

10.11  MARKET STAND-OFF

    (a) The Shareholders each hereby agree that, during the period of duration
       specified in writing by the lead managing underwriter(s) of Parent
       Shares, commencing two trading days prior to the establishment of the
       proposed pricing range for the offering and following the effective date
       of a Company Registration filed under applicable Securities Laws, each of
       them shall not, to the extent requested by such underwriter(s), directly
       or indirectly sell, offer to sell, contract to sell (including, without
       limitation, any short sale), grant any option to purchase or otherwise
       transfer or dispose of (other than to donees who agree to be similarly
       bound) any securities of Parent held by it at any time during such period
       except Parent Shares included in such Registration; provided, however,
       that:

        (i) such agreement shall be applicable only to the first of such
            underwritten Company Registrations; and

        (ii) such agreement shall not apply unless Parent and, if requested by
             the underwriter(s), all officers and directors of Parent and all
             other persons with Registration Rights (whether or not pursuant to
             this Agreement) enter into similar agreements;

       (iii) such agreement shall not provide for a market stand-off time period
             which exceeds 90 days from the effectiveness of the Registration
             Statement; and

        (iv) any such agreement shall be substantially in the form of the
             lock-up undertaking delivered by the Strategic Partners at the time
             of Parent's initial public offering.

       Parent shall provide the Shareholders with reasonable notice of when the
       establishment of the proposed pricing range for the offering is expected
       to occur. In order to enforce the foregoing covenant, Parent may impose
       stop-transfer instructions with respect to the Parent Shares of the
       Founding Shareholder and the Strategic Partners and Tantau Shareholders
       until the end of such period.

    (b) Notwithstanding the provisions of Section 10.11(a) hereof, the
       provisions of this Section 10.11 shall apply to a Selling Shareholder
       each time such Selling Shareholder elects to participate in an
       underwritten Registration hereunder and has complied with the
       requirements of Section 10.2(a) hereof.

                                       25
<PAGE>
10.12  ABILITY OF PARENT TO GRANT ADDITIONAL REGISTRATION RIGHTS

    (a) Parent may grant additional ranking or PARI PASSU registration rights
       only with the prior written agreement of the Founding Shareholder and
       each of the Strategic Partners whose Registration Rights have not expired
       or terminated in accordance with the terms of this Agreement, provided
       that such additional registration rights do not affect the Piggyback
       Registration rights of the Tantau Shareholders under Section 6.1 hereof
       in a manner different than the Piggyback Registration rights of the
       Founding Shareholder and of the Strategic Partners under Sections 4.2 and
       5.2 hereof, respectively. If the later proviso is not satisfied, then the
       granting of such additional registration rights shall require the consent
       of the Tantau Shareholders whose Registration Rights have not expired or
       terminated in accordance with the terms of this Agreement and who hold
       more than 50% of the Tantau Qualified Parent Shares held by all such
       Tantau Shareholders.

    (b) Notwithstanding the provisions of Section 10.12(a), Parent may grant
       registration rights PARI PASSU to those granted to the Shareholders under
       this Agreement to its directors and senior management and the directors
       and senior management of its Subsidiaries with the consent of the
       Founding Shareholder and each of the Strategic Partners.

    (c) Notwithstanding the provisions of Section 10.12(a), Parent may, without
       the consent of any of the Shareholders, grant ranking registration rights
       in respect of equity securities issued on a private placement basis to
       securityholders of a company or business acquired by Parent, where the
       contractual right and entitlement to a distribution or registration on
       From F-1 or F-3 (or Form S-1 or S-3, or similar short-form prospectus or
       registration statement), is granted to such equity holders at the time
       and in conjunction with such acquisition. For greater certainty, the
       exercise of such ranking registration rights shall be considered to be a
       Company Registration such that the Shareholders shall be entitled to
       exercise their Piggyback Registration rights under Sections 4.2, 5.2 or
       6.1, as the case may be, in connection therewith.

                                   ARTICLE 11
           INDEMNIFICATION PROVISIONS RELATING TO REGISTRATION RIGHTS

11.1  PARENT INDEMNITY OBLIGATION

    In connection with any Registration, Parent agrees to indemnify, to the full
    extent permitted by law, each Selling Shareholder, each other person or
    entity which participates as an underwriter in the offering or sale of such
    Registrable Securities and each other person or entity which controls such
    Selling Shareholder or any such underwriter, and their respective directors,
    officers, partners, agents and Affiliates, against all losses, claims,
    damages, liabilities and expenses (including legal fees and disbursements on
    a solicitor and client basis) to which such Selling Shareholder or
    underwriter or any such director, officer, partner, agent, Affiliate or
    controlling person or entity may become subject under applicable law or
    otherwise, insofar as such losses, claims, damages or liabilities arise out
    of or are based upon any untrue or alleged untrue statement of a material
    fact contained in any Registration Statement (or any amendment or supplement
    thereto) or any omission or alleged omission to state therein a material
    fact required to be stated therein or necessary to make the statements
    therein, in the light of the circumstances under which they were made, not
    misleading, except insofar as the same are caused by any untrue statement or
    alleged untrue statement or any such omission or alleged omission if
    (i) such untrue statement or omission is completely corrected in an
    amendment or supplement to such Registration Statement prepared in a timely
    fashion by Parent and Parent has furnished such Selling Shareholder (or
    underwriter, if any) with a sufficient number of copies of the same, the
    Selling Shareholder (or underwriter, if any) having an obligation under the
    Securities Laws to deliver a prospectus or prospectus supplement in
    connection with such sale of Registrable Securities thereafter fails to
    deliver such

                                       26
<PAGE>
    prospectus or prospectus supplement as so amended or supplemented prior to
    or concurrently with the sale of Registrable Securities to the person
    asserting such loss, claim, damage or liability, or (ii) such untrue
    statement or omission is caused by or contained in any information with
    respect to any Selling Shareholder which was furnished in writing to Parent
    by the Selling Shareholder expressly for use therein, or caused by the
    Selling Shareholder's failure to deliver (contrary to the requirements of
    the applicable Securities Laws or contrary to an undertaking given by the
    Selling Shareholder) to a prospective purchaser a copy of the Registration
    Statement or any amendment or supplement thereto. Such indemnity shall
    remain in full force and effect regardless of any investigation made by or
    on behalf of such Selling Shareholder or any such director, officer,
    partner, employee, agent, Affiliate or controlling person and shall survive
    the transfer of Registrable Securities by such Selling Shareholder (or
    underwriter, if any).

11.2  SELLING SHAREHOLDER INDEMNITY OBLIGATION

    Each Selling Shareholder agrees to indemnify, to the full extent permitted
    by law, Parent, its directors and officers and each person who controls
    Parent (within the meaning of the Securities Laws) and, in connection with
    an underwritten offering, each underwriter and each person who controls the
    underwriters (within the meaning of the Securities Laws) against any losses,
    claims, damages, liabilities and expenses (including attorneys' fees and
    disbursements) caused by any untrue or alleged untrue statement of a
    material fact contained in any Registration Statement or any omission or
    alleged omission to state therein a material fact required to be stated
    therein or necessary to make the statements therein, in the light of the
    circumstances under which they were made, not misleading, to the extent, but
    only to the extent, that such untrue statement or omission is in conformity
    with and contained in any information with respect to such Selling
    Shareholder so furnished in writing by such Selling Shareholder expressly
    for use therein, provided, however, that (i) such Selling Shareholder shall
    not be liable in any such case to the extent that any such statement or
    omission is completely corrected in the final Registration Statement, in the
    case of a preliminary Registration Statement, or in an amendment or
    supplement to a Registration Statement or Registration Statement supplement
    and (ii) the liability of such Selling Shareholder under this section shall
    be limited to the amount of proceeds received by such Selling Shareholder in
    the offering giving rise to such liability. Such indemnity shall remain in
    full force and effect, regardless of any investigation made by or on behalf
    of Parent or any such director, officer or controlling person and shall
    survive the transfer of Registrable Securities by such Selling Shareholder.

11.3  INDEMNIFICATION -- PROCEDURES

    Any person entitled to indemnification hereunder (the "Indemnified Party")
    agrees to give prompt written notice to the indemnifying party as provided
    at Section 12.11 hereof (the "Indemnifying Party") after the receipt by such
    person of any written notice of the commencement of any action, suit,
    proceeding or investigation or threat thereof made in writing for which such
    person will claim indemnification or contribution pursuant to this Agreement
    (provided, however, that the failure of any Indemnified Party to give such
    notice shall not relieve the Indemnifying Party of its obligations except to
    the extent that the Indemnifying Party is materially prejudiced by such
    failure to give notice) and, unless in the reasonable judgement of such
    Indemnified Party a conflict of interest may exist between such Indemnified
    Party and the Indemnifying Party with respect to such claim, permit the
    Indemnifying Party to assume the defence of such claim with counsel
    reasonably satisfactory to such Indemnified Party. Provided, however, that
    if the Indemnifying Party does not inform the Indemnified Party of its
    decision to defend the claim within five business days after receipt of
    notice of the claim from the Indemnified Party (and as soon as practicable
    thereafter the identity of counsel retained for the defence), or thereafter
    abandons the defence or fails to pursue the defence in good faith, then the
    Indemnified Party (in conjunction with all other Indemnified

                                       27
<PAGE>
    Parties) may retain counsel and conduct the defence of the claim in good
    faith and at the Indemnifying Party's cost and expense. Subject to the
    provisions of the last sentence of this paragraph, in such circumstances the
    Indemnifying Party shall be bound by the results obtained by the Indemnified
    Party (unless and until the Indemnifying Party shall thereafter request to
    participate in the defence of the claim, after which the parties shall
    jointly conduct the defence of the claim). If the Indemnifying Party is not
    entitled to, or elects not to, assume the defence of a claim (or thereafter
    abandons such defence or does not pursue such defence in good faith), it
    will not be obligated to pay the fees and expenses of more than one counsel
    with respect to such claim, unless in the reasonable judgement of any
    Indemnified Party a conflict of interest may exist between such Indemnified
    Party and any other of such Indemnified Parties with respect to such claim,
    in which event the Indemnifying Party shall be obligated to pay the fees and
    expenses of such additional counsel or counsels. The Indemnifying Party will
    not be subject to any liability for any settlement made without its written
    consent, which consent shall not be unreasonably withheld or delayed.

11.4  CONTRIBUTION IN LIEU OF INDEMNITY

    (a) If the indemnification provided for in this Article 11 from an
       Indemnifying Party is unavailable to an Indemnified Party hereunder in
       respect of any losses, claims, damages, liabilities or expenses referred
       to therein, then the Indemnifying Party, in lieu of indemnifying such
       Indemnified Party, shall contribute, subject to the same restrictions and
       limitations applicable to such indemnification to the amount paid or
       payable by such Indemnified Party as a result of such losses, claims,
       damages, liabilities or expenses in such proportion as is appropriate to
       reflect the relative fault of the Indemnifying Party and Indemnified
       Party in connection with the actions which resulted in such losses,
       claims, damages, liabilities or expenses, as well as any other relevant
       equitable considerations. The relative fault of such Indemnifying Party
       and Indemnified Party shall be determined by reference to, among other
       things, whether any action in question, including any untrue or alleged
       untrue statement of a material fact or omission or alleged omission to
       state a material fact, has been made by, or relates to information
       supplied by, such Indemnifying Party or Indemnified Party, and the
       party's relative intent, knowledge, access to information and opportunity
       to correct or prevent such action.

    (b) The parties hereto agree that it would not be just and equitable if
       contribution pursuant to this Section 11.4 were determined by pro rata
       allocation or by any other method of allocation which does not take into
       account the equitable considerations referred to above. No person guilty
       of fraudulent misrepresentation (as defined in the applicable Securities
       Laws) shall be entitled to contribution from any person who was not
       guilty of such fraudulent misrepresentation.

11.5  TAXES APPLICABLE TO INDEMNIFICATION

    The amount paid or payable by a party as a result of the losses, claims,
    damages, liabilities and expenses referred to above shall be deemed to
    include, subject to the limitations set forth in this Article 11, any legal
    or other fees or expenses reasonably incurred by such party in connection
    with any investigation or proceeding. If an Indemnified Party, acting
    reasonably, determines that any payment in respect of indemnification or
    contribution (the "Payment") made pursuant to this Article 11 is subject to
    taxes payable under the EXCISE TAX ACT (Canada) ("GST") or under any
    provincial or other legislation similar to the EXCISE TAX ACT, or under any
    successor legislation of like or similar effect (collectively, the "ETA"),
    or if any sales or similar tax under any provincial, state or other
    legislation not substantially harmonised with the ETA is applicable to such
    Payment, the amount of the Payment shall be increased by the amount of all
    applicable taxes to the extent necessary to compensate the Indemnified party
    for any net GST or similar tax cost not recoverable as input tax credit or
    similar tax recoveries.

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<PAGE>
11.6  THIRD PARTY BENEFICIARIES

    The Selling Shareholders shall be deemed to be acting as agent and attorney
    herein for their respective controlling persons or entities, their
    respective underwriters (and persons or entities which control such
    underwriters) and the respective directors, officers, partners, agents and
    Affiliates thereof with respect to the rights of indemnification and
    contribution herein contained.

11.7  SURVIVAL

    The indemnification provisions of this Article 11, shall survive the
    completion of any offering of Registrable Securities in a Registration
    Statement and the termination of this Agreement.

11.8  CONFLICT WITH UNDERWRITING AGREEMENT

    To the extent that the provisions on indemnification and contribution in the
    underwriting agreement entered into in connection with an underwritten
    public offering Registration pursuant to this Agreement, are in conflict
    with this Article 11, the provisions of Article 11 shall prevail. Provided,
    however that the provisions of this Section 11.8 only apply to the relative
    rights of Parent and the Shareholders and shall not affect or amend the
    provisions of the underlying underwriting agreement as they apply to the
    underwriters.

                                   ARTICLE 12
                                 MISCELLANEOUS

12.1 AMENDMENT, MODIFICATION AND WAIVER

    (a) Except as otherwise expressly provided, this Agreement may be amended or
       modified only upon the written consent of the Founding Shareholder and
       all the Strategic Partners, in each case, whose Registration Rights have
       not expired or terminated in accordance with the terms of this Agreement.
       Notwithstanding the foregoing, any amendment that would adversely affect
       the Tantau Shareholders in a manner different than the Founding
       Shareholder and the Strategic Partners shall require the written consent
       of the Tantau Shareholders whose Registration rights have not expired or
       terminated in accordance with the terms of this Agreement and who hold
       more than 50% of the Tantau Qualified Parent Shares held by all such
       Tantau Shareholders.

    (b) Except as otherwise expressly provided herein, the obligations of Parent
       and the rights of the Founding Shareholder and the Strategic Partners,
       under this Agreement may be waived only with the written consent of the
       Founding Shareholder and each Strategic Partner whose Registration Rights
       have not expired or terminated in accordance with the terms of this
       Agreement. Notwithstanding the foregoing, any waiver that would adversely
       affect the Tantau Shareholders in a manner different than the Founding
       Shareholder and the Strategic Partners shall require the written consent
       of the Tantau Shareholders whose Registration Rights have not expired or
       terminated in accordance with the terms of this Agreement and who hold
       more than 50% of the Tantau Qualified Parent Shares held by all such
       Tantau Shareholders.

    (c) The Subject to Section 12.1(d) hereof, the consent of persons who have
       purchased Parent Shares from the Founding Shareholder under
       Section 7.5(a) hereof or from one or more Strategic Partners under
       Section 7.5(b), accompanied by an assignment of Registration Rights
       hereunder, (collectively, the "Assignee Shareholders"), shall not be
       required to: (i) amend this Agreement in accordance with 12.1(a) hereof;
       or (ii) waive the obligations of Parent and the rights of the Founding
       Shareholder and the Strategic Partners in accordance with
       Section 12.1(b) hereof or to otherwise consent to any matter with respect
       to this Agreement. Notwithstanding the foregoing, any amendment,
       modification or waiver, as the case may be,

                                       29
<PAGE>
       that would adversely affect the Assignee Shareholders in a manner
       different than the Founding Shareholder and the Strategic Partners shall
       require written consent of the Assignee Shareholders whose Registration
       Rights have not expired or terminated in accordance with this Agreement
       and who hold more than 50% of the Parent Shares held by all such Assignee
       Shareholders.

    (d) In the event that the Founding Shareholder shall assign Registration
       Rights in accordance with the provisions of this Agreement to an
       Affiliate of Gregory Wolfond, such Affiliate shall be treated in a manner
       similar to the Founding Shareholder and the Strategic Partners for the
       purposes of consents required for amendments, modifications and waivers
       under this Section 12.1. Similarly, in the event that a Strategic Partner
       shall assign Registration Rights in accordance with the provisions of
       this Agreement to an Affiliate of such Strategic Partner, such Affiliate
       shall be treated as a Strategic Partner for purposes of consents required
       for amendments, modifications and waivers under this Section 12.1.
       Provided, however, that the immediately preceding two sentences shall
       apply only so long as the assignee remains an Affiliate of the assignor.

12.2 ASSIGNMENT

    (a) This Agreement will be binding upon, and inure to the benefit of, the
       persons or entities who are permitted, by the terms of this Agreement, to
       be successors, assigns and personal representatives of the respective
       parties hereto.

    (b) If any person shall acquire Parent Shares from the Founding Shareholder
       or a Strategic Partner, in any manner, whether by operation of law or
       otherwise, accompanied by a purported assignment of Registration Rights
       hereunder, such shares shall, subject to the provisions of Section 7.5
       hereof, be held subject to all of the terms of this Agreement, and such
       person shall be entitled to receive the benefits hereof, provided that
       such person agrees in writing to be bound by and to perform all of the
       terms and provisions of this Agreement.

    (c) If any person shall acquire Tantau Qualified Parent Shares from a Tantau
       Shareholder, in any manner, whether by operation of law or otherwise,
       such shares shall cease to be subject to the terms of this Agreement and
       all Registration Rights in respect of such shares shall terminate
       effective on the date of such acquisition. The rights and obligations of
       the Tantau Shareholders, under this Agreement are not assignable (whether
       by operation of law or otherwise).

12.3 TERMINATION

    This Agreement shall terminate upon:

    (a) the written agreement of the Founding Shareholder and each of the
       Strategic Partners whose Registration Rights have not expired or
       terminated in accordance with the terms of this Agreement;

    (b) the written agreement of the Tantau Shareholders whose Registration
       Rights have not expired or terminated in accordance with the terms of
       this Agreement, holding more than 50% of the Tantau Qualified Parent
       Shares; and

    (c) the expiry or termination of all the Shareholders' Registration Rights
       hereunder in accordance with the terms of this Agreement.

                                       30
<PAGE>
12.4 RESOLUTION OF DISPUTES

    (a) The following procedure will be adhered to in all disputes arising under
       this Agreement which the parties cannot resolve informally. An aggrieved
       party shall notify Parent, the Board of Directors of Parent, the
       Strategic Partners, the Founding Shareholder and the Tantau Shareholders
       in writing of the nature of the dispute, with as much detail as possible
       with respect thereto. Parent (on behalf of all of the parties hereto
       other than the aggrieved party), on the one hand, and the aggrieved
       party, on the other, shall each appoint a representative to meet (in
       person or by telephone) within seven days after the date of such written
       notification, to attempt to reach an agreement about the nature of the
       dispute and the corrective action to be taken by the respective parties.
       Similarly, if Parent is the aggrieved party, then it, on the one hand,
       and the particular Shareholder(s) in respect of which it has the dispute,
       on the other hand, shall appoint representatives to meet. If the
       respective representatives are unable to agree on corrective action,
       senior executives of the parties to the dispute having authority to
       resolve the dispute without the further consent of any other person shall
       meet or otherwise act to facilitate an agreement within 14 days of such
       written notification. If such senior executives cannot resolve the
       dispute or agree upon a written plan of corrective action to do so within
       seven days after their initial meeting or other action, or if the
       agreed-upon completion dates in the written plan of corrective action are
       exceeded, either party may request arbitration as provided for below.
       Except as otherwise specifically provided, neither party to the dispute
       shall initiate arbitration unless and until this dispute resolution
       procedure has been employed or waived.

    (b) Either party to the dispute shall submit any dispute arising from or
       relating to this Agreement, including any failure to agree on a matter
       requiring agreement, to arbitration in accordance with the provisions of
       Schedule "12.4" hereto.

    (c) No Shareholder shall have any right to obtain or seek an injunction or
       otherwise delay any Company Registration or Demand Registration as a
       result of any controversy that may arise with respect to the
       interpretation or implementation of this Agreement. Provided, however,
       that the provisions of the immediately preceding sentence shall not
       preclude any Shareholder from claiming damages for breach of the
       provisions of this Agreement, provided that such Shareholder has
       otherwise complied with the provisions of this Section "12.4".

12.5 COSTS OF ENFORCEMENT

    If any party to this Agreement seeks to enforce its rights under this
    Agreement by legal proceedings or otherwise, the non-prevailing party will
    pay all costs and expenses incurred by the prevailing party, including,
    without limitation, all reasonable attorneys' and experts' fees.

12.6 COUNTERPART EXECUTION; FACSIMILE DELIVERY

    This Agreement may be executed in several counterparts and delivered by
    facsimile, each of which shall be an original, but all of which together
    shall constitute one and the same agreement.

12.7 INTERPRETATION

    Words importing the singular number shall include the plural and VICE VERSA
    and words importing the use of any gender shall include all genders. The
    division of this Agreement into paragraphs, subparagraphs, sections,
    subsections, clauses and subclauses are for convenience of reference only
    and shall not affect the construction or interpretation of this Agreement.
    Expressions such as "hereof", "herein", "hereto", "hereunder", "hereby" and
    similar expressions shall be construed as referring to this Agreement in its
    entirety and not only to the particular paragraph, subparagraph, section,
    subsection, clause or subclause in which such words appear. Time is of the
    essence.

                                       31
<PAGE>
12.8 ENTIRE AGREEMENT

    This Agreement and the exhibits hereto contains the entire understanding of
    the parties in respect of the subject matter hereof, and supersede all prior
    negotiations and understandings between the parties with respect to such
    subject matter.

12.9 FURTHER ASSURANCES

    Shareholder agrees to execute and deliver, before or after the Effective
    Time (as such term is defined in the Merger Agreement), any additional
    documents reasonably necessary or desirable to carry out the purposes and
    intent of this Agreement.

12.10  GOVERNING LAW

    This Agreement shall be governed by and construed in accordance with the
    laws of the Province of Ontario and the federal laws of Canada applicable
    therein (excluding any conflict of laws rule or principles that might refer
    such construction to the laws of another jurisdiction) and shall be treated,
    in all respects, as an Ontario contract. Subject to the provisions of
    Section 12.4 hereof, the parties hereto agree to submit to the exclusive
    jurisdiction of the courts of the Province of Ontario. In any such dispute,
    subject to the provisions of Section 12.4 hereof, the parties shall act
    reasonably and in good faith with a view to having such dispute heard by a
    judge of the Commercial List of the Ontario Superior Court of Justice. EACH
    OF THE PARTIES IRREVOCABLY WAIVES THE RIGHT TO A JURY TRIAL IN CONNECTION
    WITH ANY LEGAL PROCEEDING RELATING TO THIS AGREEMENT OR THE ENFORCEMENT OF
    ANY PROVISION OF THIS AGREEMENT.

12.11  NOTICES.

    All notices, requests, demands or other communications (collectively
    "Notices") that are required or may be given pursuant to the terms of this
    Agreement shall be in writing and shall be deemed to have been duly given if
    delivered by hand or mailed by registered or certified mail, postage
    prepaid, as follows:

    If to the Shareholder, at the address set forth in Schedule "12.11" hereto,
    with a copy to such Shareholder's counsel at the address set forth therein.

    If to Parent:

    4101 Yonge Street
    Suite 702
    Toronto, Ontario M2P 1N6
    Attn: Corporate Secretary
    Fax: (416) 228-8199
    Phone: (416) 226-2900

    With a copy to:

       Ogilvy Renault
       Suite 2100, P.O. Box 141
       Royal Trust Tower, TD Centre
       Toronto, Ontario M5K 1H1
       Attn: Brian Ludmer
       Fax: (416) 216-3930
       Phone: (416) 216-4000

    and

                                       32
<PAGE>
       Morrison & Foerster LLP
       425 Market Street
       San Francisco, California 94105-2482
       Attn: Robert Townsend
       Fax: (415) 268-7522
       Phone: (415) 268-7080

    or to such other address as any party hereto may designate for itself by
    notice given as herein provided.

    All such Notices shall be deemed to have been received when delivered or
    transmitted (or, if delivered or transmitted after regular business hours in
    Toronto on a business day, then on the next succeeding business day) or, if
    mailed, 72 hours after 12:01 a.m. on the day following the day of the
    mailing thereof. If any Notice shall have been mailed and if regular mail
    service shall be interrupted by strikes or other irregularities, such Notice
    shall be deemed to have been received 72 hours after 12:01 a.m. on the day
    following the resumption of normal mail service, provided that during the
    period that regular mail service shall be interrupted, all Notices shall be
    given by personal delivery or by facsimile transmission.

    Notwithstanding anything to the contrary contained in this Agreement, any
    notice to be given by one or more members of the Founding Shareholder to the
    other Shareholders or Parent shall be deemed to be properly given and
    binding if the Notice is given on behalf of the members of the Founding
    Shareholder by a duly appointed representative of the Founding Shareholder.

12.12  SEVERABILITY

    If any provision of this Agreement is held to be unenforceable for any
    reason, such provision and all other related provisions shall be modified
    rather than voided, if possible, in order to achieve the intent of the
    parties to this Agreement to the extent possible. In any event, all other
    unrelated provisions of this Agreement shall be deemed valid and enforceable
    to the full extent.

12.13  SPECIFIC PERFORMANCE; INJUNCTIVE RELIEF

    The parties hereto acknowledge that Parent will be irreparably harmed and
    that there will be no adequate remedy at law for a violation of any of the
    covenants or agreements of Shareholder set forth herein. Therefore, it is
    agreed that, in addition to any other remedies that maybe available to
    Parent upon any such violation, Parent shall have the right to enforce such
    covenants and agreements by specific performance, injunctive relief or by
    any other means available to Parent at law or in equity and the Shareholder
    hereby waives any and all defenses which could exist in its favor in
    connection with such enforcement and waives any requirement for the security
    or posting of any bond in connection with such enforcement.

                            [SIGNATURE PAGE FOLLOWS]

                                       33
<PAGE>
    IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.

                                          724 SOLUTIONS INC.

                                          By: __________________________________

                                            Its   -

                                          SHAREHOLDER:

                                          ______________________________________

                                          Name: ________________________________

                                          Address: _____________________________

                                          ______________________________________

                                          ______________________________________

                                          Fax: _________________________________

         [COUNTERPART SIGNATURE PAGE FOR REGISTRATION RIGHTS AGREEMENT]

                                       34
<PAGE>
                                SCHEDULE "12.4"
                             ARBITRATION PROCEDURES

1.1 DISPUTES COVERED BY THESE RULES

    The disputes to be covered by the provisions of these rules of procedures
    (the "Rules") are those disputes referred to in Section 12.4 of the
    Agreement to which this Schedule 12.4 is attached and which arise out of or
    relate to or are in connection with any of the formation, interpretation,
    application, operation, and enforcement of the Agreement.

1.2 EXCLUSIVE JURISDICTION

    Subject to the provisions of Section 12.10 (Governing Law) of the Agreement,
    it shall be a condition precedent to the bringing of any legal proceedings
    with respect to any dispute arising out of, or relating to, or in connection
    with, any of the formation, interpretation, application, operation and
    enforcement of the Agreement and provided that the settlement procedures set
    forth in Section 12.4 of the Agreement has been pursued, that the settlement
    procedure provided for in these Rules shall have been followed and
    completed.

1.3 APPOINTMENT OF ARBITRATION BOARD

    (a) If any party to the Agreement (a "Party") wishes to have any matter
       under this Agreement arbitrated in accordance with the provisions of this
       Agreement, it shall give notice ("Arbitration Notice") to the other
       Parties specifying particulars of the matter or matters in dispute and
       proposing the name of its nominee.

    (b) Arbitration shall be carried out by an Arbitration Board of three
       persons. If the Parties agree in writing, the Arbitration Board may be
       composed of a single arbitrator.

    (c) Each side to the dispute being arbitrated in accordance with these
       procedures, shall select an independent arbitrator as selected in
       accordance with paragraph (d), and then the two arbitrators shall select
       a third independent arbitrator. If the two arbitrators cannot agree to a
       mutually acceptable third independent arbitrator, who is willing to act,
       within 15 days of the giving of the Arbitration Notice, either Party may
       request an Ontario court of competent jurisdiction to do so. Any Party
       may request that such court, before making such appointment, consult with
       the President of the Computer Law Association as to the identity of
       suitable nominees as Arbitration Board.

    (d) No member of the Arbitration Board may be a director, officer, an
       employee or shareholder of any Party or of any affiliate or associate of
       such Party or any associate of any such director, officer, employee or
       shareholder or any other person who has a direct financial interest in
       such Party or in any associate or affiliate of such Party or of a
       director, officer, employee, or shareholder of such Party or who has a
       direct financial interest in the matter in dispute. The terms "associate"
       and "affiliate" shall have the respective meanings ascribed to such terms
       by the BUSINESS CORPORATIONS ACT (Ontario) on the date hereof.

    (e) Subject to Section 1.8 of this Schedule 12.4, the expenses of the
       Arbitration Board shall be borne equally by the Parties.

1.4 QUALIFICATIONS OF ARBITRATION BOARD.

    The Arbitration Board shall consist of three individuals, one of which shall
    have not less than 10 years experience as a licensed practising corporate or
    securities lawyer, and one of which shall have not less than 10 years
    experience in or with investment or merchant banking for the computer
    software industry. If the Arbitration Board consists of only one person, as
    agreed by the

                                       35
<PAGE>
    Parties, then the sole arbitrator shall have not less than 10 years
    experience in or with corporate or securities law with significant exposure
    to the computer software industry during the previous 5 years and must have
    acted as an arbitrator or mediator within the previous 5 years. Without
    limiting the generality of the foregoing, the Arbitration Board shall be at
    arm's length from both Parties and no member of the Arbitration Board shall
    be a member of the audit or legal firm or firms who advise either Party, nor
    shall he/she be a person who is otherwise regularly retained by such
    Parties.

1.5 SUBMISSION OF WRITTEN STATEMENTS

    (a) Within 20 days of the appointment of the Arbitration Board, the Party
       initiating the arbitration (the "Claimant") shall send the other Parties
       (collectively, the "Respondent") a Statement of Claim setting out in
       sufficient detail the facts and any contentions of law on which it
       relies, and the relief that it claims.

    (b) Within 20 days of the receipt of the Statement of Claim, the Respondent
       shall send the Claimant a Statement of Defence stating in sufficient
       detail which of the facts and contentions of law in the Statement of
       Claim it admits or denies, on what grounds, and on what other facts and
       contentions of law he relies.

    (c) Within 20 days of receipt of the Statement of Defence, the Claimant may
       send the Respondent a Statement of Reply.

    (d) All Statements of Claim, Defence and Reply shall be accompanied by
       copies (or, if they are especially voluminous, lists) of all essential
       documents on which the Party concerned relies and which have not
       previously been submitted by any Party, and (where practicable) by any
       relevant samples.

    (e) After submission of all the Statements, the Arbitration Board will give
       directions for the further conduct of the arbitration.

1.6 MEETINGS AND HEARINGS

    (a) The arbitration shall take place in the City of Toronto, Ontario or in
       such other place as the Claimant and the Respondent shall agree upon in
       writing. The arbitration shall be conducted in English unless otherwise
       agreed by such Parties and the Arbitration Board. Subject to any
       adjournments which the Arbitration Board allows, the final hearing will
       be continued on successive working days until it is concluded.

    (b) All meetings and hearings will be in private unless the Parties
       otherwise agree.

    (c) Any Party may be represented at any meetings or hearings by legal
       counsel.

    (d) Each Party may examine, cross-examine and re-examine all witnesses at
       the arbitration.

1.7 POWERS OF ARBITRATOR

    By submitting a dispute to settlement under these Rules, the Parties shall
    be taken to have conferred on the Arbitration Board the following
    jurisdiction and powers, to be exercised by the Arbitration Board so far as
    the relevant law allows, and in its absolute and unfettered discretion, if
    the Arbitration Board shall judge it to be expedient for the purpose of
    ensuring the just, expeditious, economical and final determination of the
    dispute. The Arbitration Board shall have jurisdiction to:

    (a) determine any question of fact and law;

    (b) determine any question as to its own jurisdiction;

                                       36
<PAGE>
    (c) determine any question of good faith, dishonesty or fraud arising in the
       dispute;

    (d) order any Party to furnish such further details of the Party's case, in
       fact or in law, as it may require;

    (e) proceed notwithstanding the failure or refusal of any Party to comply
       with these Rules or with its orders or directions, or to attend any
       meeting or hearing, but only after giving that Party written notice that
       it intends to do so;

    (f) order the Parties to produce to the Arbitration Board, and to each other
       for inspection, and to supply copies of, any documents in their
       possession or power which it determines to be relevant. Notwithstanding
       the foregoing, the Arbitration Board shall allow discovery only to the
       extent of a single request for production of documents; oral depositions
       or other discovery requests shall not be permitted unless the Arbitration
       Board finds and informs the Parties that denial of such requests would be
       manifestly unjust;

    (g) receive and take into account such written or oral evidence as it shall
       determine to be relevant, whether or not strictly admissible in law;

    (h) hold meetings and hearings (at which the Parties may be represented by
       legal counsel) and consider written and oral evidence and make his/her
       award (including any interim award considered necessary by the
       Arbitration Board, and the final award) in Ontario, and, with the
       concurrence of the Parties thereto, elsewhere; and

    (i) make any other interim or final orders which it considers to be
       appropriate in all the circumstances for any of the above purposes.

    In addition, the Arbitration Board shall have such further jurisdiction and
    powers as may be allowed to it by the INTERNATIONAL COMMERCIAL ARBITRATIONS
    ACT (Ontario), the Agreement, the specific submission referred to herein,
    the Rules of the Institute and the arbitral laws of any place in which it
    holds hearings or in which witnesses attend, and of any place in which it
    gives any directions or makes any orders or any award.

1.8 THE AWARD

    The Arbitration Board shall include in its award an order as to the payment
    of the costs of the proceedings and reasonable counsel fees, and, subject to
    the discretion of the Arbitration Board, costs will follow success unless,
    in the opinion of the Arbitration Board, there is a compelling reason to
    depart from such result. Any Party ordered to pay costs may avail itself of
    any procedure for the taxing of costs, provided, however, that the Parties
    specifically agreed that the officer taxing such costs need not be bound by
    any statutory scale of costs.

    The Arbitration Board will make its decision in writing and, unless the
    Parties otherwise agree, the Arbitration Board's reasons will be set out in
    the award. The Arbitration Board will send such award to the Parties as soon
    as practicable after the conclusion of the proceedings. The award shall be
    final and binding on the Parties and shall not be subject to any appeal or
    review procedure whatsoever, provided that the Arbitration Board followed
    the Rules in good faith. The Arbitration Board shall reconsider its findings
    once at the request and expense of a Party, but in such event shall limit
    the Parties to a single memorandum stating any relevant new evidence, points
    and authorities, unless doing so would be manifestly unjust.

1.9 ACCESS TO COURTS FOR ENFORCEMENT AND INTERIM REMEDIES

    The Parties consent to the award of the Arbitration Board being entered in
    any Court having jurisdiction for the purposes of enforcement. In addition,
    if it appears to any Party that the

                                       37
<PAGE>
    Arbitration Board lacks the power to give effective interim relief, such
    Party may apply to any appropriate Court for such relief.

1.10 CONFIDENTIALITY

    All meetings and hearings of or by the Arbitration Board shall be in
    private. All matters in dispute, all claims, submissions, evidence and
    findings, and the award itself (collectively, the "Information") shall be
    kept confidential by the Arbitration Board, and no information regarding any
    of the foregoing will be released to any third party or otherwise made
    public without the written consent of the Parties, except as otherwise
    contemplated herein and except for such information which is not
    confidential information.

                                       38<PAGE>
                                                                   EXHIBIT 10.18

                AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

                                     AMONG

                              724 SOLUTIONS INC.,

                           SERPENT MERGER SUB, INC.,

                               SPYONIT.COM, INC.

                                      AND

                     THE STOCKHOLDERS OF SPYONIT.COM, INC.

                          LISTED ON SCHEDULE I HERETO

                         DATED AS OF SEPTEMBER 12, 2000
<PAGE>
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                              PAGE
                                                                              -----
<S>             <C>                                                           <C>

<CAPTION>
                                     ARTICLE I
                                    DEFINITIONS
Section 1.01    Certain Defined Terms.                                            1
<S>             <C>                                                           <C>

<CAPTION>
                                    ARTICLE II
                                    THE MERGER
Section 2.01    The Merger.                                                       4
<S>             <C>                                                           <C>
Section 2.02    Closing.....................................................      4
Section 2.03    Effective Time..............................................      4
Section 2.04    Effect of the Merger........................................      4
Section 2.05    Certificate of Incorporation; Bylaws; Directors and Officers
                  of Surviving Corporation..................................      4
Section 2.06    Consideration for Parent Common Stock.......................      5

<CAPTION>
                                    ARTICLE III
                CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 3.01    Conversion of Shares.                                             5
<S>             <C>                                                           <C>
Section 3.02    Exchange of Shares Other than Treasury Shares...............      6
Section 3.03    Stock Transfer Books........................................      7
Section 3.04    No Fractional Share Certificates............................      8
Section 3.05    Certain Adjustments.........................................      8
Section 3.06    Lost, Stolen or Destroyed Certificates......................      8
Section 3.07    Exemption from Registration.................................      8
Section 3.08    Taking of Necessary Action; Further Action..................      8

<CAPTION>
                                    ARTICLE IV
        REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDERS
Section 4.01    Organization and Qualification; No Subsidiaries.                  9
<S>             <C>                                                           <C>
Section 4.02    Certificate of Incorporation and Bylaws.....................      9
Section 4.03    Capitalization..............................................      9
Section 4.04    Authority Relative to This Agreement........................      9
Section 4.05    No Conflicts; Required Filings and Consents.................      9
Section 4.06    Permits; Compliance with Laws...............................     10
Section 4.07    Financial Statements........................................     10
Section 4.08    Absence of Certain Changes or Events........................     11
Section 4.09    Employee Benefit Plans; Labor Matters.......................     11
Section 4.10    Certain Tax Matters.........................................     14
Section 4.11    Contracts...................................................     14
Section 4.12    Litigation..................................................     15
Section 4.13    Environmental Matters.......................................     15
Section 4.14    Intellectual Property.......................................     15
Section 4.15    Taxes.......................................................     17
Section 4.16    Insurance...................................................     19
</TABLE>

                                       i
<PAGE>

<TABLE>
<CAPTION>
                                                                              PAGE
                                                                              -----
<S>             <C>                                                           <C>
Section 4.17    Properties..................................................     19
Section 4.18    Affiliates..................................................     19
Section 4.19    Brokers.....................................................     20
Section 4.20    Certain Business Practices..................................     20
Section 4.21    Section 203 of the DGCL Not Applicable......................     20
Section 4.22    Business Activity Restriction...............................     20
Section 4.23    Accounts Receivable.........................................     20
Section 4.24    Customers and Suppliers.....................................     20
Section 4.25    Employee Matters............................................     20
Section 4.26    Compliance with Securities Act; Stockholders................     21
Section 4.27    Representations Complete....................................     21

<CAPTION>
                                     ARTICLE V
              REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Section 5.01    Organization and Qualification; Subsidiaries.                    21
<S>             <C>                                                           <C>
Section 5.02    Capitalization..............................................     21
Section 5.03    Authority Relative to this Agreement........................     22
Section 5.04    No Conflict; Required Filings and Consents..................     22
Section 5.05    SEC Filings; Financial Statements...........................     22
Section 5.06    Absence of Certain Changes or Events........................     23
Section 5.07    Certain Tax Matters.........................................     23
Section 5.08    Brokers.....................................................     23
Section 5.09    Representations Complete....................................     23

<CAPTION>
                                    ARTICLE VI
                                     COVENANTS
Section 6.01    Conduct of Business by the Company Pending the Closing.          23
<S>             <C>                                                           <C>
Section 6.02    Notices of Certain Events...................................     25
Section 6.03    Access to Information; Confidentiality......................     25
Section 6.04    No Solicitation of Transactions.............................     26
Section 6.05    Tax-Free Transaction........................................     26
Section 6.06    Further Action; Consents; Filings...........................     26

<CAPTION>
                                    ARTICLE VII
                               ADDITIONAL AGREEMENTS
Section 7.01    Public Announcements.                                            26
<S>             <C>                                                           <C>
Section 7.02    Employee Benefit Matters....................................     27
Section 7.03    Stockholder Investment Representations......................     27
Section 7.04    Stock Options...............................................     28
Section 7.05    Legends.....................................................     28
Section 7.06    Other Employment Agreements.................................     28
Section 7.07    Director Indemnification....................................     29
Section 7.08    Information Statement.......................................     29
Section 7.09    Termination of Agreements...................................     29
</TABLE>

                                       ii
<PAGE>

<TABLE>
<CAPTION>
                                                                              PAGE
                                                                              -----
<S>             <C>                                                           <C>

<CAPTION>
                                        ARTICLE VIII
                                  CONDITIONS TO THE MERGER
Section 8.01    Conditions to the Obligations of Each Party to Consummate the Merger.     29
<S>             <C>                                                                    <C>
Section 8.02    Conditions to the Obligations of the Company....................          30
Section 8.03    Conditions to the Obligations of Parent.........................          30

<CAPTION>
                                         ARTICLE IX
                             TERMINATION, AMENDMENT AND WAIVER
Section 9.01    Termination.                                                              31
<S>             <C>                                                                    <C>
Section 9.02    Effect of Termination...........................................          32
Section 9.03    Amendment.......................................................          32
Section 9.04    Waiver..........................................................          32
Section 9.05    Expenses........................................................          32

<CAPTION>
                                         ARTICLE X
                                      INDEMNIFICATION
Section 10.01   Indemnification.                                                          33
<S>             <C>                                                                    <C>
Section 10.02   Damage Limitations..............................................          33
Section 10.03   Procedures......................................................          34
Section 10.04   Escrow Fund; Non-Exclusive Remedy...............................          34
Section 10.05   Payment of Claims...............................................          35

<CAPTION>
                                         ARTICLE XI
                                     GENERAL PROVISIONS
Section 11.01   Duration of Survival of Representations and Warranties.                   35
<S>             <C>                                                                    <C>
Section 11.02   Notices.........................................................          35
Section 11.03   Severability....................................................          36
Section 11.04   Assignment; Binding Effect; Benefit.............................          36
Section 11.05   Incorporation of Exhibits.......................................          37
Section 11.06   Governing Law...................................................          37
Section 11.07   Waiver of Jury Trial............................................          37
Section 11.08   Headings; Interpretation........................................          37
Section 11.09   Counterparts....................................................          37
Section 11.10   Entire Agreement................................................          37

                                     ANNEXES AND SCHEDULES

                ANNEX A -- Form of Lock-up Agreement
                ANNEX B -- Form of Escrow Agreement
                ANNEX C -- Form of Employment Agreement

                SCHEDULE -- Stockholders
                SCHEDULE -- Exchange of Shares
                SCHEDULE -- Employees
</TABLE>

                                      iii
<PAGE>
                AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

    AGREEMENT AND PLAN OF MERGER AND REORGANIZATION, dated as of September 12,
2000 (as amended, supplemented or otherwise modified from time to time, this
"AGREEMENT"), among 724 SOLUTIONS INC., a corporation amalgamated under the laws
of Ontario ("PARENT"), SERPENT MERGER SUB, INC., a Delaware corporation and a
direct wholly owned subsidiary of Parent ("MERGER SUB"), SPYONIT.COM, INC., a
Delaware corporation (the "COMPANY"), and each of the persons listed on
SCHEDULE I hereto (each, a "STOCKHOLDER" and collectively, the "STOCKHOLDERS"):

                              W I T N E S S E T H:

    WHEREAS, the boards of directors of Parent, Merger Sub and the Company have
determined that it is advisable and in the best interests of their respective
companies and stockholders to enter into a business combination by means of the
merger of Merger Sub with and into the Company (the "MERGER") and have approved
and adopted this Agreement;

    WHEREAS, by virtue of their execution of a stockholder consent, the
stockholders of the Company have approved the Merger and this Merger Agreement
in accordance with the General Corporation Law of the State of Delaware (the
"DGCL");

    WHEREAS, upon the terms and subject to the conditions of this Agreement and
in accordance with the DGCL, Parent will acquire all of the common stock of the
Company through the Merger; and

    WHEREAS, for United States Federal income tax purposes, it is intended that
the Merger shall qualify as a tax-free reorganization under Section 368(a) of
the Internal Revenue Code of 1986, as amended (together with the rules and
regulations promulgated thereunder, the "CODE"), and that this Agreement shall
be, and hereby is, adopted as a plan of reorganization for purposes of Section
368 of the Code;

    NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements set forth herein, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
hereby agree as follows:

                                   ARTICLE I
                                  DEFINITIONS

    SECTION 1.01  CERTAIN DEFINED TERMS  Unless the context otherwise requires,
the following terms, when used in this Agreement, shall have the respective
meanings specified below (such meanings to be equally applicable to the singular
and plural forms of the terms defined):

    "AFFILIATE" shall mean, with respect to any person, any other person that
controls, is controlled by or is under common control with the first person.

    "BLUE SKY LAWS" shall mean state securities or "blue sky" laws.

    "BUSINESS DAY" shall mean any day on which the principal offices of the SEC
in Washington, D.C. are open to accept filings, or, in the case of determining a
date when any payment is due, any day on which banks are not required or
authorized by law or executive order to close in New York.

    "COMPANY DISCLOSURE SCHEDULE" shall mean the disclosure schedule delivered
by the Company to Parent prior to the execution of this Agreement and forming a
part hereof.

    "COMPANY INTELLECTUAL PROPERTY" shall mean all patents (including, without
limitation, all U.S. and foreign patents, patent applications, patent
disclosures, and any and all divisions, continuations, continuations-in-part,
reissues, re-examinations and extensions thereof), design rights, trademarks,
trade names and service marks (whether or not registered), trade dress, Internet
domain names, copyrights (whether or not registered) and any renewal rights
therefor, SUI GENERIS database rights, statistical models, technology,
inventions, supplier lists, trade secrets, know-how, computer software programs
or applications in both source and object code form, databases, technical
documentation of such software programs ("TECHNICAL DOCUMENTATION"),
registrations and applications for any of the foregoing and all
<PAGE>
other tangible or intangible proprietary information or materials that were
material to the Company's business or are currently used in the Company's
business in any product, technology or process (i) currently being or formerly
manufactured, published or marketed by the Company or (ii) previously or
currently under development for possible future manufacturing, publication,
marketing or other use by the Company.

    "COMPANY MATERIAL ADVERSE EFFECT" shall mean any change in or effect on the
business of the Company that, individually or in the aggregate (taking into
account all other such changes or effects), is, or is reasonably likely to be,
materially adverse to the business, assets, liabilities, financial condition,
results of operations or prospects of the Company.

    "COMPANY STOCK PLAN" shall mean the Company's 2000 Long-Term Incentive Plan.

    "COMPETING TRANSACTION" shall mean any of the following involving the
Company (other than the Merger):

    (i) any merger, consolidation, share exchange, business combination or other
        similar transaction;

    (ii) any sale, lease, exchange, mortgage, pledge, transfer or other
         disposition of 20% or more of the assets of the Company and its
         subsidiaries, taken as a whole, in a single transaction or series of
         transactions;

   (iii) any tender offer or exchange offer for 20% or more of the outstanding
         voting securities of the Company or the filing of a registration
         statement under the Securities Act in connection therewith;

    (iv) any person having acquired beneficial ownership or the right to acquire
         beneficial ownership of, or any "group" (as such term is defined under
         Section 13(d) of the Exchange Act) having been formed that beneficially
         owns or has the right to acquire beneficial ownership of, 20% or more
         of the outstanding voting securities of the Company;

    (v) any solicitation in opposition to the approval of this Agreement by the
        stockholders of the Company; or

    (vi) any public announcement of a proposal, plan or intention to do any of
         the foregoing or any agreement to engage in any of the foregoing.

    "CONFIDENTIALITY AGREEMENT" shall mean the mutual non-disclosure agreement,
dated June 16, 2000, between Parent and the Company.

    "$" shall mean United States dollars.

    "ENVIRONMENTAL LAW" shall mean any Law and any enforceable judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to pollution or protection of the
environment or natural resources, including, without limitation, those relating
to the use, handling, transportation, treatment, storage, disposal, release or
discharge of Hazardous Material, as in effect as of the date hereof.

    "ENVIRONMENTAL PERMIT" shall mean any permit, approval, identification
number, license or other authorization required under or issued pursuant to any
applicable Environmental Law.

    "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.

    "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended,
together with the rules and regulations promulgated thereunder.

    "EXPENSES" shall mean, with respect to any party hereto, all out-of-pocket
expenses (including, without limitation, all fees and expenses of counsel,
accountants, investment bankers, experts and consultants to a party hereto and
its Affiliates) incurred by such party or on its behalf in connection with or
related to the authorization, preparation, negotiation, execution and
performance of its

                                       2
<PAGE>
obligations pursuant to this Agreement and the consummation of the Merger, the
filings of HSR Act notice and all other matters related to the transactions
contemplated hereby and the closing of the Merger.

    "GOVERNMENTAL ENTITY" shall mean any United States Federal, state or local
or any foreign governmental, regulatory or administrative authority, agency or
commission or any court, tribunal or arbitral body.

    "GOVERNMENTAL ORDER" shall mean any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Entity.

    "HAZARDOUS MATERIAL" shall mean (i) any petroleum, petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials or polychlorinated biphenyls or (ii) any chemical, material or
substance defined or regulated as toxic or hazardous or as a pollutant or
contaminant or waste under any applicable Environmental Law.

    "HSR ACT" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, together with the rules and regulations promulgated
thereunder.

    "IRS" shall mean the United States Internal Revenue Service.

    "LAW" shall mean any Federal, state, foreign or local statute, law,
ordinance, regulation, rule, code, order, judgment, decree, other requirement or
rule of law of the United States or any other jurisdiction, and any other
similar act or law.

    "OBCA" shall mean the Business Corporations Act (Ontario), as amended from
time to time.

    "PARENT COMMON STOCK" shall mean the common shares of Parent.

    "PARENT MATERIAL ADVERSE EFFECT" shall mean any change in or effect on the
business of Parent and the Parent Subsidiaries that, individually or in the
aggregate (taking into account all other such changes or effects), is, or is
reasonably likely to be, materially adverse to the business, assets,
liabilities, financial condition or results of operations of Parent and the
Parent Subsidiaries, taken as a whole; PROVIDED, HOWEVER, that any change in the
market price or trading volume of Parent's common stock from the date hereof
shall not be taken into account in determining whether there has been a Parent
Material Adverse Effect.

    "PERSON" shall mean an individual, corporation, partnership, limited
partnership, limited liability company, limited liability partnership,
syndicate, person (including, without limitation, a "person" as defined in
Section 13(d)(3) of the Exchange Act), trust, association, entity or government
or political subdivision, agency or instrumentality of a government.

    "SECURITIES ACT" shall mean the Securities Act of 1933, as amended, together
with the rules and regulations promulgated thereunder.

    "SEC" shall mean the Securities and Exchange Commission.

    "SUBSIDIARY" shall mean, with respect to any person, any corporation,
partnership, limited partnership, limited liability company, limited liability
partnership, joint venture or other legal entity of which such person (either
alone or through or together with any other subsidiary of such person) owns,
directly or indirectly, a majority of the stock or other equity interests.

    "TAX" shall mean (i) any and all taxes, fees, levies, duties, tariffs,
imposts and other charges of any kind (together with any and all interest,
penalties, additions to tax and additional amounts imposed with respect thereto)
imposed by any Governmental Entity or taxing authority, including, without
limitation, taxes or other charges on or with respect to income, franchises,
windfall or other profits, gross receipts, property, sales, use, capital stock,
payroll, employment, social security, workers' compensation, unemployment
compensation or net worth; taxes or other charges in the nature of excise,
withholding, ad valorem, stamp, transfer, value-added or gains taxes; license,
registration and

                                       3
<PAGE>
documentation fees; and customers' duties, tariffs and similar charges;
(ii) any liability for the payment of any amounts of the type described in (i)
as a result of being a member of an affiliated, combined, consolidated or
unitary group for any taxable period; and (iii) any liability for the payment of
amounts of the type described in (i) or (ii) as a result of being a transferee
of, or a successor in interest to, any Person or as a result of an express or
implied obligation to indemnify any person.

    "TAX RETURN" shall mean any return, statement or form (including, without
limitation, any estimated tax reports or return, withholding tax reports or
return and information report or return) required to be filed with respect to
any Taxes.

                                   ARTICLE II
                                   THE MERGER

    SECTION 2.01  THE MERGER  Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the DGCL, at the Effective Time
(as defined in Section 2.03), Merger Sub shall be merged with and into the
Company. As a result of the Merger, the separate corporate existence of Merger
Sub shall cease and the Company shall continue as the surviving corporation of
the Merger as a wholly owned Subsidiary of Parent (the "SURVIVING CORPORATION").
The name of the Surviving Corporation shall be Spyonit.com, Inc.

    SECTION 2.02  CLOSING  Unless this Agreement shall have been terminated and
the Merger herein contemplated shall have been abandoned pursuant to Section
9.01 and subject to the satisfaction or waiver of the conditions set forth in
Article VIII, the consummation of the Merger shall take place as promptly as
practicable (and in any event within three Business Days) after satisfaction or
waiver of the conditions set forth in Article VIII, at a closing (the "CLOSING")
to be held at the offices of Chapman and Cutler, 111 West Monroe Street,
Chicago, Illinois 60603, unless another date, time or place is agreed to by
Parent and the Company.

    SECTION 2.03  EFFECTIVE TIME  At and after the time of the Closing, the
parties shall cause the Merger to be consummated by filing a certificate of
merger (the "CERTIFICATE OF MERGER") with the Secretary of State of the State of
Delaware in such form as required by, and executed in accordance with the
relevant provisions of, the DGCL (the date and time of such filing, or such
later date and time as may be set forth therein, being the "EFFECTIVE TIME").

    SECTION 2.04  EFFECT OF THE MERGER  At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of the DGCL. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, except as otherwise provided herein, all the property, rights, privileges,
powers and franchises of the Company and Merger Sub shall vest in the Company as
the Surviving Corporation, and all debts, liabilities and duties of the Company
and Merger Sub shall become the debts, liabilities and duties of the Company as
the Surviving Corporation.

    SECTION 2.05  CERTIFICATE OF INCORPORATION; BYLAWS; DIRECTORS AND OFFICERS
OF SURVIVING CORPORATION Unless otherwise agreed by Parent and the Company
before the Effective Time, at the Effective Time:

    (a) the certificate of incorporation and the bylaws of Merger Sub in effect
       immediately prior to the Effective Time shall be the certificate of
       incorporation and the bylaws of the Surviving Corporation, until
       thereafter amended as provided by Law and such certificate of
       incorporation or bylaws;

    (b) the officers of Merger Sub immediately prior to the Effective Time shall
       serve in their respective offices of the Surviving Corporation from and
       after the Effective Time, in each case until their successors are elected
       or appointed and qualified or until their resignation or removal; and

                                       4
<PAGE>
    (c) the directors of Merger Sub immediately prior to the Effective Time
       shall serve as the directors of the Surviving Corporation from and after
       the Effective Time, in each case until their successors are elected or
       appointed and qualified or until their resignation or removal.

    SECTION 2.06  CONSIDERATION FOR PARENT COMMON STOCK  Merger Sub shall, in
consideration for Parent's issuance and delivery of Parent Common Stock in the
Merger and the Cash Consideration, as defined in Section 3.01(b) herein, in
accordance with this Agreement, validly issue 8,000 fully paid and
non-assessable shares of common stock of Merger Sub to Parent; provided that
such shares shall be deemed fully paid for upon Parent's issuance of the Parent
Common Stock in the Merger.

                                  ARTICLE III
               CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES

    SECTION 3.01  CONVERSION OF SHARES  By virtue of the Merger, and without any
action on the part of Parent, Merger Sub, the Company or the holders of any of
the following securities, subject to Sections 3.04 and 3.05:

    (a) Each share of common stock, par value $0.01 per share, of the Company
       ("COMPANY COMMON STOCK") issued and outstanding immediately prior to the
       Effective Time (excluding those to be canceled in accordance with
       Section 3.01(d)), and all rights in respect thereof, shall forthwith
       cease to exist and be converted into and become exchangeable into, in
       accordance with SCHEDULE II hereto, consideration consisting of: (x) the
       fraction of a share of Parent Common Stock (A) the numerator of which
       shall equal such number of shares of Parent Common Stock which, when
       multiplied by the Parent Stock Price (as defined below), is equivalent to
       $38,000,000, and (B) the denominator of which shall be the number of
       Fully Diluted Shares (as defined below); and (y) a cash payment of
       $0.1720677 per share (it being understood that such amount is equal to
       the quotient of $2,000,000 divided by the number of Fully Diluted
       Shares), to be issued and delivered to the Stockholders as set forth
       below:

        (i) At the Effective Time, Parent shall issue, with respect to each
            share of Company Common Stock, consideration (the "INITIAL
            CONSIDERATION") consisting of: (i) the fraction of a share of Parent
            Common Stock (x) the numerator of which shall equal such number of
            shares of Parent Common Stock which, when multiplied by the Parent
            Stock Price (as defined below), is equivalent to $5,000,000, and (y)
            the denominator of which shall be the number of Fully Diluted Shares
            (as defined below); and (ii) a cash payment of $0.1720677 per share.
            In addition, Parent shall issue, with respect to each share of
            Company Common Stock, consideration (the "FIRST ADDITIONAL
            CONSIDERATION") consisting of: the fraction of a share of Parent
            Common Stock (x) the numerator of which shall equal such number of
            shares of Parent Common Stock which, when multiplied by the Parent
            Stock Price, is equivalent to $5,000,000, and (y) the denominator of
            which shall be the number of Fully Diluted Shares (as defined
            below). The First Additional Consideration, along with the Second
            Additional Consideration (as defined below) and the Third Additional
            Consideration (as defined below) shall be subject to the Lock-Up
            Agreement described in paragraph (b) below.

        (ii) At the Effective Time, Parent shall issue, with respect to each
             share of Company Common Stock, consideration (the "SECOND
             ADDITIONAL CONSIDERATION") consisting of: the fraction of a share
             of Parent Common Stock (x) the numerator of which shall equal such
             number of shares of Parent Common Stock which, when multiplied by
             the Parent Stock Price, is equivalent to $13,000,000, and (y) the
             denominator of which shall be the number of Fully Diluted Shares.

       (iii) At the Effective Time, Parent shall issue, with respect to each
             share of Company Common Stock, consideration (the "THIRD ADDITIONAL
             CONSIDERATION") consisting of: the

                                       5
<PAGE>
             fraction of a share of Parent Common Stock (x) the numerator of
             which shall equal such number of shares of Parent Common Stock
             which, when multiplied by the Parent Stock Price, is equivalent to
             $15,000,000, and (y) the denominator of which shall be the number
             of Fully Diluted Shares.

    (b) The aggregate number of shares of Parent Common Stock to be issued
       pursuant to Section 3.01(a) as Initial Consideration, First Additional
       Consideration, Second Additional Consideration and Third Additional
       Consideration shall be collectively referred to herein as "MERGER
       SHARES". The shares of Parent Common Stock issued to the stockholders as
       First Additional Consideration, Second Additional Consideration and Third
       Additional Consideration shall be subject to restrictions on transfer in
       accordance with the terms of the Lock-Up Agreement, substantially in the
       form of ANNEX A HERETO (THE "LOCK-UP AGREEMENT"). The shares of Parent
       Common Stock issued to the Stockholders as Third Additional Consideration
       shall be subject to escrow pursuant to Article X hereof. The aggregate
       amount of cash to be paid by Parent pursuant to Section 3.01(a) shall
       equal $2,000,000 and shall be referred to herein as the "CASH
       CONSIDERATION".

    (c) As used herein, (i) "PARENT STOCK PRICE" shall mean the average of the
       closing prices for a share of Parent Common Stock as quoted on the Nasdaq
       Stock Market for the thirty (30) trading days immediately preceding the
       date hereof and (ii) "FULLY DILUTED SHARES" shall mean all of the issued
       and outstanding shares of Company Common Stock at the Effective Time,
       plus the number of shares of Company Common Stock issuable upon exercise,
       exchange or conversion of all vested and unvested options, warrants,
       convertible securities or other rights or obligations of the Company
       whether or not exercisable that may, at any time, require the Company to
       issue shares of its capital stock.

    (d) Each share of Company Common Stock held in the treasury of the Company
       or owned by any wholly owned subsidiary of the Company immediately prior
       to the Effective Time shall be canceled and retired and no shares of
       stock or other securities of Parent, the Surviving Corporation or any
       other corporation shall be issuable, and no payment of other
       consideration shall be made, with respect thereto.

    (e) Each issued and outstanding share of capital stock of Merger Sub shall
       continue unchanged and remain outstanding as a share of capital stock of
       the Surviving Corporation.

    SECTION 3.02  EXCHANGE OF SHARES OTHER THAN TREASURY SHARES

    (a) EXCHANGE AGENT. Parent shall act as exchange agent for the Merger (the
       "EXCHANGE AGENT").

    (b) PARENT TO PROVIDE COMMON SHARES AND CASH. As soon as reasonably
       practicable after the Effective Time, Parent shall make available for the
       benefit of the Stockholders, in accordance with SCHEDULE II hereto, (i)
       certificates of Parent Common Stock ("PARENT CERTIFICATES") representing
       the number of whole Merger Shares issuable to the Stockholders pursuant
       to Section 3.01(a) in exchange for shares of Company Common Stock
       outstanding immediately prior to the Effective Time in the amounts set
       forth opposite the Stockholders' names on SCHEDULE II hereto and
       (ii) the Cash Consideration in the amounts set forth opposite the
       Stockholders' names on SCHEDULE II hereto.

    (c) EXCHANGE PROCEDURES. After the Effective Time, each holder of record of
       a certificate or certificates (the "COMPANY CERTIFICATES") which
       immediately prior to the Effective Time represented outstanding shares of
       Company Common Stock whose shares were converted into the right to
       receive Merger Shares pursuant to Section 3.01(a) shall surrender each
       such Company Certificate for cancellation to the Exchange Agent or to
       such other agent or agents as may be appointed by Parent, together with a
       letter of transmittal (which shall specify that delivery shall be
       effected, and risk of loss and title to the Company Certificates shall
       pass, only upon receipt of the Company Certificates by the Exchange
       Agent, and shall be in such

                                       6
<PAGE>
       form and have such other provisions as Parent may reasonably specify),
       duly completed and validly executed, and such other documents as may be
       reasonably required by Parent. The holder of such Company Certificate
       shall be entitled to receive in exchange therefor, and Parent shall cause
       to be delivered to such holder (or its nominee), in accordance with
       SCHEDULE II hereto, (i) a certificate representing the number of whole
       Merger Shares which such holder has the right to receive pursuant to
       Section 3.01(a) and (ii) that portion of the Cash Consideration which
       such holder has the right to receive pursuant to Section 3.01(a), and the
       Company Certificate so surrendered shall forthwith be canceled. Until so
       surrendered, each outstanding Company Certificate that, prior to the
       Effective Time, represented shares of Company Common Stock will be deemed
       from and after the Effective Time, for all corporate purposes other than
       the payment of dividends, to evidence the ownership of the number of full
       Merger Shares into which such shares of Company Common Stock shall have
       been so converted.

    (d) DISTRIBUTION WITH RESPECT TO UNEXCHANGED SHARES. No dividends or other
       distributions with respect to Parent Common Stock with a record date
       after the Effective Time will be paid to the holder of any unsurrendered
       Company Certificate with respect to the Merger Shares represented thereby
       until the holder of record of such Company Certificate shall surrender
       such Company Certificate. Subject to the effect of applicable escheat or
       similar laws, following surrender of any such Company Certificate, there
       shall be paid to the record holder of the Parent Certificates issued in
       exchange therefor, without interest, at the time of such surrender, the
       amount of any such dividends or other distributions with a record date
       after the Effective Time theretofore payable (but for the provisions of
       this Section 3.02(d)) with respect to the Merger Shares theretofore
       issued.

    (e) TRANSFER OF OWNERSHIP. If any Parent Certificate is to be issued in a
       name other than that in which the Company Certificate surrendered in
       exchange therefor is registered, it will be a condition of the issuance
       thereof that the Company Certificate so surrendered will be properly
       endorsed and otherwise in proper form for transfer and that the person
       requesting such exchange will have paid to Parent or any agent designated
       by it any transfer or other taxes required by reason of the issuance of a
       Parent Certificate for Merger Shares in any name other than that of the
       registered holder of the Company Certificate surrendered, or established
       to the satisfaction of Parent or any agent designated by it that such tax
       has been paid or is not payable.

    (f) NO LIABILITY. Notwithstanding anything to the contrary in this Section
       3.02, none of the Exchange Agent, the Surviving Corporation or any party
       hereto shall be liable to any person in respect of any Merger Shares
       delivered to a public official pursuant to any applicable abandoned
       property, escheat or similar law.

    SECTION 3.03  STOCK TRANSFER BOOKS

    (a) At the Effective Time, the stock transfer book of the Company shall be
       closed, and there shall be no further registration of transfers of shares
       of the Company Common Stock thereafter on the records of any such stock
       transfer books. In the event of a transfer of ownership of shares of
       Company Common Stock that is not registered in the stock transfer records
       of the Company at the Effective Time, a certificate or certificates
       representing the number of full Merger Shares into which such shares of
       Company Common Stock shall have been converted shall be issued to the
       transferee if the certificate or certificates representing such shares of
       Company Common Stock is or are surrendered as provided in Section
       3.02(c) hereof, accompanied by all documents required to evidence and
       effect such transfer and by evidence of payment of any applicable stock
       transfer tax.

                                       7
<PAGE>
    SECTION 3.04  NO FRACTIONAL SHARE CERTIFICATES  No scrip or fractional share
of Parent Common Stock shall be issued upon the surrender for exchange of
Company Certificates. In lieu thereof, each holder of shares of Company Common
Stock who would otherwise be entitled to a fraction of a share of Parent Common
Stock (after aggregating all fractional shares of Parent Common Stock to be
received by such holder) shall receive from Parent the nearest whole number of
shares of Parent Common Stock.

    SECTION 3.05  CERTAIN ADJUSTMENTS  If, between the date of this Agreement
and the Effective Time, the outstanding shares of Parent Common Stock or Company
Common Stock shall be changed into a different number of shares by reason of any
reclassification, recapitalization, split-up, combination or exchange of shares,
or any dividend payable in stock or other securities shall be declared thereon
with a record date within such period, or the number of shares of Company Common
Stock on a fully diluted basis is in excess of that specified in Section 4.03
and disclosed in Section 4.03 of the Company Disclosure Schedule (regardless of
whether such excess is a result of an additional issuance of capital stock or a
correction to such Section), then the number of Merger Shares to be issued
pursuant to the provisions of Section 3.01 shall be adjusted accordingly to
provide to Parent and the Stockholders the same economic effect as contemplated
by this Agreement prior to such reclassification, recapitalization, split-up,
combination, exchange, dividend or increase.

    SECTION 3.06  LOST, STOLEN OR DESTROYED CERTIFICATES  In the event any
Company Certificates shall have been lost, stolen or destroyed, the Exchange
Agent shall issue in exchange for such lost, stolen or destroyed Company
Certificates, upon the making of an affidavit of that fact by the holder
thereof, such shares of Parent Common Stock as may be required pursuant to
Section 3.01; PROVIDED, HOWEVER, that Parent may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed Company Certificates to deliver a bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against
Parent, the Surviving Corporation or the Exchange Agent with respect to the
Company Certificates alleged to have been lost, stolen or destroyed.

    SECTION 3.07  EXEMPTION FROM REGISTRATION  The Merger Shares will be issued
in a transaction exempt from registration under the Securities Act and may not
be re-offered or resold other than in conformity with the registration
requirements of the Securities Act and such other Laws or pursuant to an
exemption therefrom. The Parent Certificates shall be legended to the effect
described above and shall include such additional legends as necessary to comply
with applicable Law, Blue Sky Laws and other applicable restrictions, including
the requirements of The Toronto Stock Exchange (the "TSE").

    SECTION 3.08  TAKING OF NECESSARY ACTION; FURTHER ACTION  If, at any time
after the Effective Time, any further action is necessary or desirable to carry
out the purposes of this Agreement and to vest the Surviving Corporation with
full right, title and possession to all assets, property, rights, privileges,
powers and franchises of the Company, the officers and directors of the Company
are fully authorized in the name of their corporation or otherwise to take, and
will use good faith efforts to take, all such lawful and necessary action, so
long as such action is not inconsistent with this Agreement.

                                   ARTICLE IV
       REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDERS

    The Company and the Stockholders, severally and not jointly (except with
respect to Richard W. Costolo, Eric Lunt and Stephen J. Olechowski III, who
jointly and severally among themselves), hereby represent and warrant to Parent,
subject to the exceptions specifically disclosed in writing in the Company
Disclosure Schedule, all such exceptions to be referenced to a specific section
set forth in this Article IV, that:

                                       8
<PAGE>
    SECTION 4.01  ORGANIZATION AND QUALIFICATION; NO SUBSIDIARIES

    (a) The Company has been duly organized and is validly existing and in good
       standing under the laws of the jurisdiction of its incorporation and has
       the requisite corporate power and authority to own, lease and operate its
       properties and to carry on its business as it is now being conducted. The
       Company is duly qualified or licensed to do business, and is in good
       standing, in each jurisdiction where the character of the properties
       owned, leased or operated by it or the nature of its business makes such
       qualification or licensing necessary, except for such failures to be so
       qualified or licensed and in good standing that could not reasonably be
       expected to have, individually or in the aggregate, a Company Material
       Adverse Effect.

    (b) The Company does not own an equity interest in any corporation,
       partnership or joint venture arrangement or other business entity.

    SECTION 4.02  CERTIFICATE OF INCORPORATION AND BYLAWS  True, complete and
correct copies of the Company's certificate of incorporation and bylaws, each as
amended, are included in Section 4.02 of the Company Disclosure Schedule. Such
certificate of incorporation and bylaws are in full force and effect. The
Company is not in violation of any of the provisions of its certificate of
incorporation or bylaws.

    SECTION 4.03  CAPITALIZATION  The authorized capital stock of the Company
consists of 100,000,000 shares of Company Common Stock. As of the date hereof,
11,623,331 shares of Company Common Stock are issued and outstanding, all of
which are duly authorized, validly issued, fully paid and nonassessable. Except
for the Company Common Stock, there are no shares of capital stock or other
equity securities of the Company outstanding. There are no options, warrants or
other rights, agreements, arrangements or commitments of any character to which
the Company is a party or by which the Company is bound relating to the issued
or unissued capital stock of the Company or obligating the Company to issue or
sell any shares of capital stock of, or other equity interests in, the Company.
There are no outstanding contractual obligations of the Company to repurchase,
redeem or otherwise acquire any shares of Company Common Stock. There are no
material outstanding contractual obligations of the Company to provide funds to,
or make any material investment (in the form of a loan, capital contribution or
otherwise) in, any other person.

    SECTION 4.04  AUTHORITY RELATIVE TO THIS AGREEMENT  The Company has all
necessary corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the Company
and the consummation by the Company of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action, and no other
corporate proceedings on the part of the Company are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby (other than the
filing and recordation of the Certificate of Merger as required by the DGCL).
This Agreement has been duly and validly executed and delivered by the Company
and the Stockholders and, assuming the due authorization, execution and delivery
by the other parties hereto, constitutes legal, valid and binding obligations of
the Company and the Stockholders, enforceable against each of them in accordance
with its terms, except to the extent that its enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of creditors' rights generally or by general equitable principles.

    SECTION 4.05  NO CONFLICTS; REQUIRED FILINGS AND CONSENTS

    (a) The execution and delivery of this Agreement by the Company and the
       Stockholders do not, and the performance by the Company and the
       Stockholders of their respective obligations hereunder and the
       consummation of the Merger will not, (i) conflict with or violate any
       provision of the certificate of incorporation or bylaws of the Company,
       (ii) conflict with or violate any Law applicable to the Company or by
       which any property or asset of the Company is bound or affected or
       (iii) result in any breach of or constitute a default (or an event which

                                       9
<PAGE>
       with the giving of notice or lapse of time or both could reasonably be
       expected to become a default) under, or give to others any right of
       termination, amendment, acceleration or cancellation of, or result in the
       creation of a lien or other encumbrance on any property or asset of the
       Company or any Stockholder pursuant to, any note, bond, mortgage,
       indenture, contract, agreement, lease, license, permit, franchise or
       other instrument or obligation.

    (b) No filing or registration with, or notification to, and no permit,
       authorization, consent or approval of, any Government Entity is necessary
       for the execution and delivery of this Agreement by the Company or the
       consummation by the Company of the transactions contemplated by this
       Agreement except, (i) the filing of the Delaware Certificate of Merger
       with the Secretary of State of the State of Delaware, (ii) such filings,
       registrations, notifications, permits, authorizations, consents or
       approvals that result from the specific legal or regulatory status of
       Parent or as a result of any other facts that specifically relate to the
       business or activities in which Parent is engaged other than the business
       of the Company and (iii) such other filings, registrations, notices,
       permits, authorizations, consents and approvals that if not obtained,
       made or given would not, individually or in the aggregate, have a Company
       Material Adverse Effect or impair the Company's ability to consummate the
       transactions contemplated hereby.

    (c) No consent of any third party is required by reason of the transactions
       contemplated by this Agreement.

    SECTION 4.06  PERMITS; COMPLIANCE WITH LAWS  The Company is in possession of
all franchises, grants, authorizations, licenses, establishment registrations,
product listings, permits, easements, variances, exceptions, consents,
certificates, identification and registration numbers, approvals and orders of
any Governmental Entity necessary for the Company to own, lease and operate its
properties or to offer or perform its services or to develop, produce, store,
distribute and market its products or otherwise to carry on its business as it
is now being conducted (collectively, the "COMPANY PERMITS"), and, as of the
date of this Agreement, none of the Company Permits has been suspended or
cancelled nor is any such suspension or cancellation pending or, to the
knowledge of the Company and each of the Stockholders, threatened. The Company
is not in conflict with, or in default or violation of, (i) any Law applicable
to the Company or by which any property or asset of the Company is bound or
affected or (ii) any Company Permits. Section 4.06 of the Company Disclosure
Schedule sets forth, as of the date of this Agreement, all actions, proceedings,
investigations or surveys pending or, to the knowledge of the Company and each
of the Stockholders, threatened against the Company that could reasonably be
expected to result in the suspension or cancellation of any other Company
Permit. Since January 1, 1998, the Company has not received from any
Governmental Entity any written notification with respect to possible conflicts,
defaults or violations of Laws. The Merger will not result in the suspension or
cancellation of any Company Permit.

    SECTION 4.07  FINANCIAL STATEMENTS

    (a) Section 4.07 of the Company Disclosure Schedule includes copies of (x)
       the unaudited balance sheet of the Company at December 31, 1999, together
       with the related statement of operations, stockholders' equity and cash
       flows for the period ended December 31, 1999, and the notes thereto (the
       "COMPANY 1999 FINANCIAL STATEMENTS"), and (y) the unaudited interim
       balance sheet of the Company at August 31, 2000, together with the
       related unaudited statements of operations for the nine-month period then
       ended (the "COMPANY INTERIM FINANCIAL STATEMENTS" and, together with the
       Company 1999 Financial Statements, the "COMPANY FINANCIAL STATEMENTS").
       The Company Financial Statements, including the notes thereto: (i) were
       prepared in accordance with United States generally accepted accounting
       principles ("GAAP") applied on a consistent basis throughout the periods
       covered thereby (except for the lack of notes to the financial
       statements); (ii) present fairly the financial position, results of
       operations and cash flows of the Company as of such dates and for the

                                       10
<PAGE>
       periods then ended (subject, in the case of the Company Interim Financial
       Statements, to normal year-end audit adjustments consistent with prior
       periods); and (iii) are correct and complete in all material respects,
       and can be reconciled with the books of account and records of the
       Company. The Company maintains an adequate system of internal controls
       established and administered in accordance with GAAP.

    (b) Except as and to the extent set forth or reserved against on the balance
       sheets of the Company as reported in the Company Financial Statements,
       including the notes thereto, the Company does not have any liabilities or
       obligations of any nature (whether accrued, absolute, contingent or
       otherwise) that would be required to be reflected on a balance sheet or
       in notes thereto prepared in accordance with GAAP, except for immaterial
       liabilities or obligations incurred in the ordinary course of business.

    SECTION 4.08  ABSENCE OF CERTAIN CHANGES OR EVENTS  Since August 31, 2000,
the Company has conducted its business only in the ordinary course consistent
with past practice and, since such date, there has not been (i) any Company
Material Adverse Effect, (ii) any event that could reasonably be expected to
prevent or materially delay the performance of the Company's obligations
pursuant to this Agreement and the consummation of the Merger by the Company,
(iii) any change by the Company in its accounting methods, principles or
practices, (iv) any declaration, setting aside or payment of any dividend or
distribution in respect of the shares of Company Common Stock or any redemption,
purchase or other acquisition of any of the Company's securities, (v) any
increase in the compensation or benefits or establishment of any bonus,
insurance, severance, deferred compensation, pension, retirement, profit
sharing, stock option (including, without limitation, the granting of stock
options, stock appreciation rights, performance awards or restricted stock
awards), stock purchase or other employee benefit plan, or any other increase in
the compensation payable or to become payable to any employees, officers,
consultants or directors of the Company, (vi) any issuance or sale of any stock,
notes, bonds or other securities, or entering into any agreement with respect
thereto, (vii) any amendment to the Company's certificate of incorporation or
bylaws, (viii) other than in the ordinary course of business consistent with
past practice, any (x) purchase, sale, assignment or transfer of any material
assets, (y) mortgage, pledge or existence of any lien, encumbrance or charge on
any material assets or properties, tangible or intangible, except for liens for
Taxes not yet delinquent and such other liens, encumbrances or charges which do
not, individually or in the aggregate, have a Company Material Adverse Effect,
or (z) waiver of any rights of material value or cancellation or any material
debts or claims, (ix) any incurrence of any material liability (absolute or
contingent), except for current liabilities and obligations incurred in the
ordinary course of business consistent with past practice, (x) any incurrence of
any damage, destruction or similar loss, whether or not covered by insurance,
materially affecting the business or properties of the Company, (xi) any
entering into any transaction of a material nature other than in the ordinary
course of business, consistent with past practice, or (xii) any negotiation or
agreement by the Company to do any of the things described in the preceding
clauses (i) through (xi).

    SECTION 4.09  EMPLOYEE BENEFIT PLANS; LABOR MATTERS

    (a) Section 4.09 of the Company Disclosure Schedule lists each employee
       benefit fund, plan, program, arrangement and contract (including, without
       limitation, any "pension" plan, fund or program, as defined in
       Section 3(2) of ERISA, and any "employee benefit plan", as defined in
       Section 3(3) of ERISA and any plan, program, arrangement or contract
       providing for severance; medical, dental or vision benefits; life
       insurance or death benefits; disability benefits, sick pay or other wage
       replacement; vacation, holiday or sabbatical; pension or profit-sharing
       benefits; stock options or other equity compensation; bonus or incentive
       pay or other material fringe benefits), whether written or not
       maintained, sponsored or contributed to or required to be contributed to
       by the Company (the "COMPANY BENEFIT PLANS"). With respect to each
       Company Benefit Plan, the Company has delivered or made available to

                                       11
<PAGE>
       Parent a true, complete and correct copy of (i) such Company Benefit Plan
       (or, if not written, a written summary of its material terms) and the
       most recent summary plan description, if any, related to such Company
       Benefit Plan, (ii) each trust agreement or other funding arrangement
       relating to such Company Benefit Plan, (iii) the most recent annual
       report (Form 5500) filed with the IRS with respect to such Company
       Benefit Plan (and, if the most recent annual report is a Form 5500R, the
       most recent

       Form 5500C filed with respect to such Company Benefit Plan), (iv) the
       most recent actuarial report or financial statement relating to such
       Company Benefit Plan and (v) the most recent determination letter, if
       any, issued by the IRS with respect to such Company Benefit Plan and any
       pending request for such a determination letter. Neither the Company, nor
       to the knowledge of the Company and each of the Stockholders, any other
       person or entity, has any express or implied commitment, whether legally
       enforceable or not, to modify, change or terminate any Company Benefit
       Plan, other than with respect to a modification, change or termination
       required by ERISA or the Code.

    (b) Each Company Benefit Plan has been administered in all material respects
       in accordance with its terms and all applicable laws, including ERISA and
       the Code, and contributions required to be made under the terms of any of
       the Company Benefit Plans as of the date of this Agreement have been
       timely made or, if not yet due, have been properly reflected on the most
       recent consolidated balance sheet prior to the date of this Agreement.
       With respect to the Company Benefit Plans, no event has occurred and, to
       the knowledge of the Company and each of the Stockholders, there exists
       no condition or set of circumstances in connection with which the Company
       could be subject to any material liability (other than for routine
       benefit liabilities) under the terms of, or with respect to, such Company
       Benefit Plans, ERISA, the Code or any other applicable Law.

    (c) The Company hereby represents that: (i) each Company Benefit Plan which
       is intended to qualify under Section 401(a), Section 401(k),
       Section 401(m) or Section 4975(e)(6) of the Code has received a favorable
       determination letter from the IRS as to its qualified status, and each
       trust established in connection with any Company which is intended to be
       exempt from federal income taxation under Section 501(a) of the Code has
       received a determination letter from the IRS that it is so exempt, and to
       the knowledge of the Company and each of the Stockholders, no fact or
       event has occurred that could adversely affect the qualified status of
       any such Company Benefit Plan or the exempt status of any such trust;
       (ii) to the knowledge of the Company and each of the Stockholders there
       has been no prohibited transaction (within the meaning of Section 406 of
       ERISA or Section 4975 of the Code and other than a transaction that is
       exempt under a statutory or administrative exemption) with respect to any
       Company Benefit Plan that could result in liability to the Company and
       (iii) each Company Benefit Plan can be amended, terminated or otherwise
       discontinued after the Effective Time in accordance with its terms,
       without liability (other than (A) liability for ordinary administrative
       expenses typically incurred in a termination event or (B) if the Company
       Benefit Plan is pension benefit plan subject to Part 2 of Title I of
       ERISA, liability for the accrued benefits as of the date of such
       termination (if and to the extent required by ERISA) to the extent that
       either there are sufficient assets set aside in a trust or insurance
       contract to satisfy such liability or such liability is reflected on the
       most recent balance sheet included in the Company Financial Statements
       prior to the date of this Agreement). No suit, administrative proceeding,
       action or other litigation has been brought, or to the knowledge of the
       Company and each of the Stockholders, is threatened, against or with
       respect to any such Company Benefit Plan, including any audit or inquiry
       by the Internal Revenue Service or United States Department of Labor
       (other than routine benefits claims).

                                       12
<PAGE>
    (d) No Company Benefit Plan is a multiemployer pension plan (as defined in
       Section 3(37) of ERISA) or other pension plan subject to Title IV of
       ERISA and the Company has not sponsored or contributed to or been
       required to contribute to a multiemployer pension plan or other pension
       plan subject to Title IV of ERISA. No material liability under Title IV
       of ERISA has been incurred by the Company that has not been satisfied in
       full, and no condition exists that presents a material risk to the
       Company of incurring or being subject (whether primarily, jointly or
       secondarily) to a material liability thereunder. None of the assets of
       the Company is or may reasonably be expected to become, the subject of
       any lien arising under ERISA or Section 412(n) of the Code.

    (e) With respect to each Benefit Plan required to be set forth in the
       Company Disclosure Schedule that is subject to Title IV or Part 3 of
       Title I of ERISA or Section 412 of the Code, (i) no reportable event
       (within the meaning of Section 4043 of ERISA, other than an event that is
       not required to be reported before or within 30 days of such event) has
       occurred or is expected to occur, (ii) there was not an accumulated
       funding deficiency (within the meaning of Section 302 of ERISA or
       Section 412 of the Code), whether or not waived, as of the most recently
       ended plan year of such Company Benefit Plan; and (iii) there is no
       "unfunded benefit liability" (within the meaning of Section 4001(a)(18)
       of ERISA).

    (f) The Company has delivered to Parent true, complete and correct copies of
       (i) all employment agreements with officers and all consulting agreements
       of the Company, (ii) all severance plans, agreements, programs and
       policies of the Company with or relating to its employees, directors or
       consultants, and (iii) all plans, programs, agreements and other
       arrangements of the Company with or relating to their respective
       employees, directors or consultants which contain "change of control"
       provisions. No payment or benefit which may be required to be made by the
       Company or which otherwise may be required to be made under the terms of
       any Company Benefit Plan or other arrangement will constitute a parachute
       payment under Section 280(G)(1) of the Code, and the consummation of the
       transactions contemplated by this Agreement will not, alone or in
       conjunction with any other possible event (including termination of
       employment), (i) entitle any current or former employee or other service
       provider of the Company to severance benefits or any other payment,
       compensation or benefit (including forgiveness of indebtedness), except
       as expressly provided by this Agreement, or (ii) accelerate the time of
       payment or vesting, or increase the amount of compensation or benefit due
       any such employee or service provider.

    (g) The Company is not a party to, and does not have any obligations under
       or with respect to, any collective bargaining or other labor union
       contract applicable to persons employed by the Company and no collective
       bargaining agreement is being negotiated by the Company or any person or
       entity that may obligate the Company thereunder. As of the date of this
       Agreement, there is no labor dispute, strike, union organizing activity
       or work stoppage against the Company pending or, to the knowledge of the
       Company and each of the Stockholders, threatened which may interfere with
       the business activities of the Company. As of the date of this Agreement,
       to the knowledge of the Company and each of the Stockholders, none of the
       Company or any of its representatives or employees has committed any
       unfair labor practice in connection with the operation of the businesses
       of the Company, and there is no charge or complaint filed against the
       Company by or with the National Labor Relations Board or any comparable
       Governmental Entity pending or threatened in writing.

    (h) Except as required by Law, no Company Benefit Plan provides any of the
       following retiree or post-employment benefits to any person: medical,
       disability or life insurance benefits. To the knowledge of the Company
       and each of the Stockholders, the Company is in compliance with (i) the
       requirements of the applicable health care continuation and notice
       provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985,
       as amended ("COBRA") and the

                                       13
<PAGE>
       regulations (including proposed regulations) thereunder and (ii) the
       applicable requirements of the Health Insurance Portability and
       Accountability Act of 1996, as amended, and the regulations (including
       the proposed regulations) thereunder.

    SECTION 4.10  CERTAIN TAX MATTERS  Neither the Company nor, to the knowledge
of the Company and each of the Stockholders, any of its Affiliates has taken or
agreed to take any action (other than actions contemplated by this Agreement)
that could be expected to prevent the Merger from constituting a
"reorganization" under Section 368(a) of the Code. Neither the Company nor any
of the Stockholders is aware of any agreement or plan to which the Company or
any of its Affiliates is a party or other circumstances relating to the Company
or any of its Affiliates that could reasonably be expected to prevent the Merger
from so qualifying as a reorganization under Section 368(a) of the Code.

    SECTION 4.11  CONTRACTS  Except for the contracts and agreements described
in Section 4.11 of the Company Disclosure Schedule (collectively, the "MATERIAL
CONTRACTS"), the Company is not a party to or bound by any material contract or
agreement, including without limitation:

    (a) any sales, advertising or agency contract in excess of $10,000 over the
       life of the contract;

    (b) any continuing contract for the purchase of materials, supplies,
       equipment or services involving in the case of any such contact more than
       $10,000 over the life of the contract;

    (c) any contract that expires or may be renewed at the option of any person
       other than the Company so as to expire more than one year after the date
       of this Agreement;

    (d) any trust indenture, mortgage, promissory note, loan agreement or other
       contract for the borrowing of money, any currency exchange, commodities
       or other hedging arrangement or any leasing transaction of the type
       required to be capitalized in accordance with GAAP;

    (e) any contract for capital expenditures in excess of $10,000 in the
       aggregate;

    (f) any contract limiting the freedom of the Company to engage in any line
       of business or to compete with any other corporation, partnership,
       limited liability company, trust, individual or other entity, or any
       confidentiality, secrecy or non-disclosure contract;

    (g) any contract pursuant to which the Company is a lessor of any machinery,
       equipment, motor vehicles, office furniture, fixtures or other personal
       property, pursuant to which payments in excess of $10,000 remain
       outstanding;

    (h) any contract with an Affiliate;

    (i) any agreement of guarantee, support, indemnification, assumption or
       endorsement of, or any similar commitment with respect to, the
       obligations, liabilities (whether accrued, absolute, contingent or
       otherwise) or indebtedness of any other person;

    (j) any distribution contract; or

    (k) any employment contract, arrangement or policy (including without
       limitation any collective bargaining contract or union agreement) which
       may not be immediately terminated without penalty (or any augmentation or
       acceleration of benefits).

    The Company has performed all of the obligations required to be performed by
it and is entitled to all benefits under, and is not alleged to be in default in
respect of any Material Contract. Each of the Material Contracts is valid and
binding and in full force and effect, and there exists no default or event of
default or event, occurrence, condition or act, with respect to the Company, or
to the knowledge of the Company and each of the Stockholders, with respect to
the other contracting party, which, with the giving of notice, the lapse of the
time or the happening of any other event or conditions, would become a default
or event of default under any Material Contract. True, correct and complete
copies of all Material Contracts have been delivered to Parent.

                                       14
<PAGE>
    SECTION 4.12  LITIGATION  There is no private or governmental action, suit,
proceeding, claim, arbitration or investigation pending before any agency, court
or tribunal, foreign or domestic, or, to the knowledge of the Company and each
of the Stockholders, threatened against the Company or any of its properties or
any of its officers or directors (in their capacities as such). Neither the
Company nor any of the Stockholders are aware of any facts or circumstances
which could reasonably be expected to result in the denial of insurance coverage
under policies issued to the Company in respect of such suits, claims, actions,
proceedings and investigations. There is no judgment, decree or order against
the Company or, to the knowledge of the Company and each of the Stockholders,
any of its directors or officers (in their capacities as such), that could
prevent, enjoin, or materially alter or delay any of the transactions
contemplated by this Agreement, or that could reasonably be expected to have a
Company Material Adverse Effect. Section 4.12 of the Company Disclosure Schedule
also lists all litigation that the Company has pending against other parties.

    SECTION 4.13  ENVIRONMENTAL MATTERS  The Company is in compliance with all
applicable Environmental Laws and all Company Permits required by Environmental
Laws. All past noncompliance, if any, of the Company with Environmental Laws or
Environmental Permits has been resolved without any pending, ongoing or future
obligation, cost or liability. The Company has not released a Hazardous Material
at, or transported a Hazardous Material to or from, any real property currently
or formerly owned, leased or occupied by the Company, in violation of any
Environmental Law.

    SECTION 4.14  INTELLECTUAL PROPERTY

    (a) Section 4.14(a) of the Company Disclosure Schedule contains a true,
       accurate and complete list of the Company's and its Subsidiaries' United
       States, foreign or international patents, patent applications, invention
       registrations, and invention disclosures (collectively, "PATENTS");
       trademarks and service marks (whether registered or unregistered),
       trademark and service mark applications, trade names, Internet domain
       names, and Internet domain name registrations and applications therefor
       (collectively, "TRADEMARKS"); registered copyrights (collectively,
       "COPYRIGHTS"); and any other filings or registrations made, or other
       formal actions taken, pursuant to Federal, state, local, foreign or
       international laws by the Company or any of its Subsidiaries to protect
       their respective interests in the Company Intellectual Property.
       Section 4.14(a) of the Company Disclosure Schedule includes details of
       any filings or payments which must be made, or other actions which must
       be taken, in respect of the Company Intellectual Property within twelve
       (12) months of the Effective Time in order to protect the Company
       Intellectual Property or preserve existing rights in the same.

    (b) Each component of the Company Intellectual Property (including without
       limitation the items set forth in Section 4.14(a) of the Company
       Disclosure Schedule) is: (i) owned solely and exclusively by the Company
       or its Subsidiaries, free and clear of any and all mortgages, pledges,
       liens, security interests, conditional sale agreements, encumbrances or
       charges of any kind; or (ii) rightfully used or otherwise enjoyed by the
       Company or its Subsidiaries pursuant to a valid and enforceable license
       agreement (a "LICENSE-IN AGREEMENT"). A true, accurate and complete list
       of all License-In Agreements is set forth in Section 4.14(b)(2) of the
       Company Disclosure Schedule. Without limiting the foregoing, the Company
       and its Subsidiaries have all rights in the Company Intellectual Property
       necessary to carry out the activities currently conducted, or currently
       proposed or planned to be conducted, by the Company or its Subsidiaries.

    (c) Neither the Company nor any of its Subsidiaries is in breach, violation
       or default of any License-In Agreement or other license, sublicense,
       instrument or agreement relating to the Company Intellectual Property to
       which the Company or any of its Subsidiaries is a party or otherwise
       bound, nor will execution or delivery of this Agreement, or performance
       of the

                                       15
<PAGE>
       Company's or its Subsidiaries' obligations hereunder, result in such a
       default nor cause the diminution, termination or forfeiture of any of the
       Company Intellectual Property.

    (d) Neither the manufacture, use, sale, reproduction, modification,
       adaptation, creation of derivative works, translation, distribution,
       transmission, display, performance, or other exercise of rights under,
       nor the licensure of, any of the Company Intellectual Property, nor the
       conduct of the Company's or its Subsidiaries' businesses in the manner
       currently conducted or currently proposed or planned to be conducted,
       breaches or otherwise violates any License-In Agreement or other license
       or other agreement to which the Company or a Subsidiary is a party, or
       conflicts with or infringes on any intellectual property or other right
       of any person anywhere in the world. No allegation of such a violation or
       infringement has been made prior to the date of this Agreement, and there
       is no colorable basis for any such claim. No Person has infringed,
       misappropriated, or misused any of the Company Intellectual Property and
       neither the Company nor any of its Subsidiaries has asserted any claim of
       infringement, misappropriation, or misuse against any Person within the
       past three (3) years.

    (e) Section 4.14(e) of the Company Disclosure Schedule contains a true,
       accurate and complete list of each agreement under which the Company or
       its Subsidiaries grants rights or licenses under any of the Company
       Intellectual Property (each a "LICENSE-OUT AGREEMENT").

    (f) Neither the Company nor any of its Subsidiaries has entered into or is
       otherwise bound by any consent, forbearance to sue, settlement agreement
       or other agreement which limits the Company's or its Subsidiaries' rights
       to use, reproduce, display, perform, modify, adapt, distribute, license,
       sell or otherwise exploit any of the Company Intellectual Property.

    (g) All of the Company's Patents, Trademarks, Copyrights and other
       registrations and applications included in the Company Intellectual
       Property are (i) standing in the name of the Company or one of its
       Subsidiaries, which ownership has been properly recorded where and as
       required to secure or ensure full rights to the same, (ii) valid,
       subsisting and in good standing without any fees or filings due with
       respect thereto, and (iii) not subject to any pending or actual or
       threatened interference, opposition, cancellation or other proceeding
       before any court or registration authority. No facts or circumstances
       exist which could render any of the Company Intellectual Property
       invalid, unenforceable, unprotectable or otherwise ineffectual.

    (h) The Company and its Subsidiaries have taken all reasonably necessary
       steps to maintain and protect the Company Intellectual Property. In
       particular, and without limiting the foregoing, all employees, agents,
       consultants, contractors and other Persons who have contributed to or
       participated in the creation, conception or development of the Company
       Intellectual Property (the "COMPANY INTELLECTUAL PROPERTY DEVELOPMENT
       PERSONNEL") have executed agreements obligating them to maintain the
       Company Intellectual Property in confidence. Each of the Company
       Intellectual Property Development Personnel have executed an agreement,
       in a form substantially as provided in Section 4.14(h)(2) of the Company
       Disclosure Schedule in all material respects, assigning to the Company or
       a Subsidiary any rights or claims they may have to any Company
       Intellectual Property.

    (i) Section 4.14(i) of the Company Disclosure Schedule contains a true and
       complete list of all computer programs, software programs and
       applications (including both source and object code), modules, models,
       tools, algorithms, databases and related materials currently used, or
       currently proposed or planned to be used, in conducting the business of
       the Company and its Subsidiaries (the "COMPANY SOFTWARE PROGRAMS").
       Except as otherwise expressly stated in Section 4.14(i) of the Company
       Disclosure Schedule, Section 4.14(i) of the Company Disclosure Schedule
       contains a true and complete copy of each of the Licenses-In pertaining
       to the Company Software Programs. Except with respect the Company
       Software Programs that are licensed to the Company, as set forth
       separately in Section 4.14(i) of the Company

                                       16
<PAGE>
       Disclosure Schedule, the Company or one of its Subsidiaries is the sole
       and exclusive owner of the Company Software, free and clear of all
       mortgages, pledges, liens, security interests, conditional sales
       agreements, encumbrances or charges of any kind. Without limiting the
       foregoing, the Company and its Subsidiaries have all rights in the
       Company Software Programs necessary to carry out the activities currently
       conducted, or currently proposed or planned to be conducted, by the
       Company or its Subsidiaries.

    (j) All source code and system documentation relating to the Company
       Software Programs have been maintained in strict confidence and (i) have
       been disclosed by the Company only to those of their respective employees
       who have a "need to know" the contents thereof in connection with the
       performance of their duties to the Company or a Subsidiary and who have
       executed a nondisclosure agreement with the Company or a Subsidiary
       substantially in the form provided in Section 4.14(j)(1) of the Company
       Disclosure Schedule, and (ii) have been disclosed only to those third
       parties who have executed a nondisclosure agreement with the Company or a
       Subsidiary substantially in the form provided in Section 4.14(j)(2) of
       the Company Disclosure Schedule.

    (k) The Company Software Programs are designed to be "Year 2000 Compliant",
       meaning that each Company Software Program is designed to:

        (i) correctly and unambiguously handle and process date information
            before, during and after January 1, 2000. This includes, without
            limitation, the ability to correctly and unambiguously accept date
            input, provide date output, store and retrieve dates, and perform
            calculations of dates or portions of dates;

        (ii) correctly process functions that are programmed to commence and/or
             end on a particular date, including, without limitation, month-end,
             year-end, and leap year dates and any combination thereof,
             irrespective of a change in the century identifier;

       (iii) function accurately and without interruption before, during and
             after January 1, 2000 without any change in operations and/or
             parameters associated with the advent of the new century; and

        (iv) respond to two-digit date input in a way that resolves the
             ambiguity as to the century in a disclosed, defined and
             predetermined manner; and to store and provide the output of date
             information in a way that is unambiguous as to the century.

    (l) Neither the Company nor any of its Subsidiaries owes or will owe any
       royalties or fees or other payments to third parties in respect of any
       Company Intellectual Property or any use thereof. All royalties, fees or
       other payments that have accrued prior to the Effective Time will have
       been timely paid by the Company or a Subsidiary prior to the Effective
       Time.

    (m) The Company Software Programs do not contain any, program, routine,
       device, or other undisclosed feature that is designed to delete, disable,
       deactivate, interfere with or otherwise harm the Company Software
       Programs or any system in which the Company Software Programs may
       operate, including without limitation a bomb, virus, software lock,
       drop-dead device, malicious logic, worm, trojan horse, robot, clock,
       timer, back door or trap door.

    SECTION 4.15  TAXES

    (a) The Company, and any consolidated, combined, unitary or aggregate group
       for Tax purposes of which the Company is or has been a member, have
       (i) properly completed and timely filed all Tax Returns required to be
       filed by them and all such Tax Returns are true, correct and complete in
       all material respects, and (ii) duly paid in full or made adequate
       accruals in accordance with GAAP in the Company Financial Statements for
       the payment of all Taxes that are due and payable for all periods ending
       on or before the date hereof. The Company

                                       17
<PAGE>
       does not have any material liability for unpaid Taxes accruing after the
       date of the Company Financial Statements.

    (b) There is (i) no material claim for Taxes that is a lien against the
       property or assets of the Company or is being asserted against the
       Company other than liens for Taxes not yet due and payable, (ii) no
       audit, administrative proceeding or court proceeding with respect to any
       Taxes or Tax Returns of the Company is being conducted or is pending and
       no Governmental Entity responsible for the imposition of any Tax (a "TAX
       AUTHORITY") has asserted against the Company any deficiency or claim for
       Taxes; (iii) no extension of the statute of limitations on the assessment
       of any Taxes granted by the Company and currently in effect, and (iv) no
       agreement, contract or arrangement to which the Company is a party that
       may result in the payment of any amount that would not be deductible by
       reason of Sections 162(m), 280G or 404 of the Code.

    (c) No claim or notice has ever been submitted by a Tax Authority in a
       jurisdiction where the Company has not filed Tax Returns that any of them
       is or may be subject to taxation by that jurisdiction.

    (d) There has been no change in ownership of the Company that has caused the
       utilization of any losses of the Company to be limited pursuant to
       Section 382 of the Code, and any loss carryovers reflected on the Company
       Financial Statements are properly computed and reflected.

    (e) The Company has not been nor will be required to include any material
       adjustment in Taxable income for any Tax period (or portion thereof)
       pursuant to Section 481 or 263A of the Code or any comparable provision
       under state or foreign Tax laws as a result of transactions, events or
       accounting methods employed prior to the Merger.

    (f) The Company has not filed and will not file any consent to have the
       provisions of paragraph 341(f)(2) of the Code (or comparable provisions
       of any state Tax laws) apply to the Company or any of its Subsidiaries.

    (g) The Company is not a party to any Tax sharing or Tax allocation
       agreement nor does the Company have any liability or potential liability
       to another party under any such agreement, and has not incurred any
       liability for Taxes of any Person under Treas. Reg. Section 1.1502.6 (or
       any similar provision of state, local or foreign law), as a transferee or
       successor, by contract or otherwise.

    (h) The Company has withheld and paid all Taxes required to have been
       withheld and paid in connection with amounts paid or owing to any
       employee, independent contractor, creditor, stockholder or other third
       party.

    (i) No power of attorney has been granted by the Company with respect to any
       matters relating to Taxes that is currently in effect.

    (j) The Company has settled any claim, audit or administrative or court
       proceeding with respect to Taxes.

    (k) The Company is a cash basis taxpayer.

    (l) The Company has not filed any disclosures under Section 6662 of the Code
       or comparable provisions of state, local or foreign law to prevent the
       imposition of penalties with respect to any Tax reporting position taken
       on any Tax Return.

    (m) The Company has not ever been a member of a consolidated, combined or
       unitary group of which the Company was not the ultimate parent
       corporation.

    (n) The Company has in its possession receipts for any Taxes paid to foreign
       Tax authorities. The Company has not ever been a "personal holding
       company" within the meaning of Section 542

                                       18
<PAGE>
       of the Code or a "United States real property holding corporation" within
       the meaning of Section 897 of the Code.

    (o) The Company has made an effective election pursuant to Section 1362 of
       the Code to be an "s corporation" commencing with the Company's first
       taxable year, and such election has remained and will remain valid and
       effective (without termination) continually up to but not following the
       Effective Time.

    SECTION 4.16  INSURANCE  The Company is presently insured, and since
inception has been insured, against such risks as companies engaged in a similar
business would, in accordance with good business practice, customarily be
insured. The policies of fire, theft, liability and other insurance maintained
with respect to the assets or businesses of the Company provide adequate
coverage against loss. There is no material claim pending under any of such
policies as to which coverage has been questioned, denied or disputed by the
underwriters of such policies. The Company has heretofore furnished to Parent a
complete and correct list as of the date hereof of all insurance policies
maintained by the Company, and has made available to Parent complete and correct
copies of all such policies, together with all riders and amendments thereto.
All such policies are in full force and effect and all premiums due thereon have
been paid to the date hereof. The Company has complied in all material respects
with the terms of such policies. Neither the Company nor the Stockholders has
knowledge of any threatened termination of, or material premium increase with
respect to, any of such policies.

    SECTION 4.17  PROPERTIES  The Company has good and marketable title, free
and clear of all material mortgages, liens, pledges, charges or other
encumbrances to all its properties and assets, whether tangible or intangible,
real, personal or mixed, reflected in the Company Financial Statements for the
fiscal year ended December 31, 1999, as being owned by the Company and as of the
date thereof, other than (i) any properties or assets that have been sold or
otherwise disposed of in the ordinary course of business since the date of such
financial statements, (ii) liens disclosed in the notes to such financial
statements and (iii) liens arising in the ordinary course of business after the
date of such financial statements. All properties used in the Company's
operations are reflected in the balance sheets included in the Company Financial
Statements to the extent GAAP require the same to be reflected. All buildings,
and all fixtures, equipment and other property and assets that are material to
its business on a consolidated basis, held under leases or sub-leases by the
Company are held under valid instruments enforceable in accordance with their
respective terms, subject to applicable laws of bankruptcy, insolvency or
similar laws relating to creditors' rights generally and to general principles
of equity (whether applied in a proceeding in law or equity). Substantially all
of the Company's equipment in regular use has been reasonably maintained and is
in serviceable condition, reasonable wear and tear excepted. The Company owns or
has the valid and subsisting right to use all assets and properties necessary or
advisable to operate the Company's business in the manner presently conducted.

    SECTION 4.18  AFFILIATES  The Company is not indebted to, nor does it owe
any contractual commitment or arrangement to, with or for the benefit of, any
director, officer, employee, Affiliate or agent of the Company (except for
amounts due as normal salaries and bonuses and in reimbursement of ordinary
expenses). No current or former director, officer, employee, Affiliate or agent
of the Company is presently or at the Effective Time shall be, or, in the last
three years has been, the direct or indirect owner of an interest in any
corporation, firm, association, or business organization which is a present (or
potential) competitor, supplier or customer of the Company. Except for normal
salaries and bonuses and reimbursement of ordinary expenses, since December 31,
1999, the Company has not made any payments, loans or advances of any kind, or
paid any dividends or distributions of any kind, to or for the benefit of the
Stockholders, or any of their respective Affiliates, associates or family
members.

                                       19
<PAGE>
    SECTION 4.19  BROKERS  No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the Merger
based upon arrangements made by or on behalf of the Company.

    SECTION 4.20  CERTAIN BUSINESS PRACTICES  Neither the Company nor any
directors, officers, agents or employees of the Company (in their capacities as
such) has (i) used any funds for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity, (ii) made any unlawful
payment to foreign or domestic government officials or employees or to foreign
or domestic political parties or campaigns or violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended, or (iii) made any other
unlawful payment.

    SECTION 4.21  SECTION 203 OF THE DGCL NOT APPLICABLE  The Board of Directors
of the Company has approved the Merger and this Agreement and such approval is
sufficient to render inapplicable to the Merger and this Agreement and the
transactions contemplated by this Agreement and the Stockholder Agreements and
the provisions of Section 203 of the DGCL. No other state takeover statute or
similar statute or regulation applies or purports to apply to the Merger, this
Agreement or the transactions contemplated by this Agreement.

    SECTION 4.22  BUSINESS ACTIVITY RESTRICTION  There is no non-competition or
other similar agreement, commitment, judgment, injunction, order or decree to
which the Company is a party or subject to that has or could reasonably be
expected to have the effect of prohibiting or impairing the conduct of business
by the Company. The Company has not entered into any agreement under which the
Company is restricted from selling, licensing or otherwise distributing any of
its technology or products to, or providing services to, customers or potential
customers or any class of customers, in any geographic area, during any period
of time or in any segment of the market or line of business.

    SECTION 4.23  ACCOUNTS RECEIVABLE  Subject to any reserves set forth in the
Company Financial Statements, the accounts receivable shown on the Company
Financial Statements represent and will represent bona fide claims against
debtors for sales and other charges, and are not subject to discount except for
normal cash and immaterial trade discounts. The amount carried for doubtful
accounts and allowances disclosed in the Company Financial Statements was
calculated in accordance with GAAP and in a manner consistent with prior periods
and is sufficient to provide for any losses which may be sustained on
realization of the receivables.

    SECTION 4.24  CUSTOMERS AND SUPPLIERS  No customer which individually
accounted for more than 1% of the Company's gross revenues during the 12-month
period preceding the date hereof has canceled or otherwise terminated, or made
any written threat to the Company to cancel or otherwise terminate or decrease
its relationship with the Company, or has decreased materially its relationship
with the Company or its usage of the services or products of the Company, as the
case may be.

    SECTION 4.25  EMPLOYEE MATTERS  The Company is in compliance in all material
respects with all currently applicable laws and regulations respecting
employment, discrimination in employment, terms and conditions of employment,
wages, hours and occupational safety and health and employment practices, and is
not engaged in any unfair labor practice. The Company has withheld all amounts
required by Law or by agreement to be withheld from the wages, salaries, and
other payments to employees; and is not liable for any arrears of wages or any
taxes or any penalty for failure to comply with any of the foregoing. The
Company is not liable for any payment to any trust or other fund or to any
Governmental Entity, with respect to unemployment compensation benefits, social
security or other benefits or obligations for employees (other than routine
payments to be made in the normal course of business and consistent with past
practice). There are no pending claims against the Company under any workers
compensation plan or policy or for long term disability. There are no
controversies pending or, to the knowledge of the Company and each of the
Stockholders, threatened, between the Company and any of its employees, which
controversies have or could reasonably be expected to result in an action, suit,
proceeding, claim, arbitration or investigation before any Governmental Entity.
The

                                       20
<PAGE>
Company is not a party to any collective bargaining agreement or other labor
union contract nor does the Company or any Stockholder know of any activities or
proceedings of any labor union to organize any Company employees. To the
knowledge of the Company and each of the Stockholders, no employees of the
Company are in violation of any term of any employment contract, non-disclosure
agreement, noncompetition agreement, or any restrictive covenant to a former
employer relating to the right of any such employee to be employed by the
Company because of the nature of the business conducted or presently proposed to
be conducted by the Company or to the use of trade secrets or proprietary
information of others. No employees of the Company have given notice to the
Company, nor is the Company or any Stockholder otherwise aware, that any such
employee intends to terminate his or her employment with the Company.

    SECTION 4.26  COMPLIANCE WITH SECURITIES ACT; STOCKHOLDERS  The Company is
aware that the Merger Shares to be issued pursuant to the Merger will constitute
"restricted securities" within the meaning of the Securities Act. Neither the
Company nor, to the knowledge of the Company, any Stockholder has been presented
with or solicited by or through any leaflet, public promotional meeting,
television advertisement or any other form of general advertising or
solicitation in connection and concurrently with the Merger. No more than
thirty-five (35) stockholders of the Company are not "accredited investors" as
defined in Rule 501 of the rules and regulations promulgated under the
Securities Act.

    SECTION 4.27  REPRESENTATIONS COMPLETE  None of the representations or
warranties made by the Stockholders or the Company herein or in any Company
Disclosure Schedule hereto, or certificate furnished by the Stockholders or the
Company pursuant to this Agreement, when all such documents are read together in
their entirety, contains or will contain at the Effective Time any untrue
statement of a material fact, or omits or will omit at the Effective Time to
state any material fact necessary in order to make the statements contained
herein or therein, in the light of the circumstances under which made, not
misleading.

                                   ARTICLE V
            REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

    Parent hereby represents and warrants to the Company and the Stockholders
that:

    SECTION 5.01  ORGANIZATION AND QUALIFICATION; SUBSIDIARIES  Parent and each
directly and indirectly owned subsidiary of Parent (the "PARENT SUBSIDIARIES")
has been duly organized and is validly existing and in good standing (to the
extent applicable) under the laws of the jurisdiction of its incorporation or
organization, as the case may be, and has the requisite corporate power and
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted. Parent and
each Parent Subsidiary is duly qualified or licensed to do business, and is in
good standing (to the extent applicable), in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its
business makes such qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing that could not
reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect.

    SECTION 5.02  CAPITALIZATION

    (a) The authorized capital stock of Parent consists of an unlimited number
       of shares of Parent Common Stock, of which 36,551,258 shares were issued
       and outstanding as of March 31, 2000 and an unlimited number of
       preference shares, none of which were issued and outstanding as of
       March 31, 2000. All of the outstanding shares of Parent Common Stock have
       been validly issued and are fully paid and nonassessable and not subject
       to preemptive rights.

                                       21
<PAGE>
    (b) All of the Merger Shares, when issued in accordance with this Agreement,
       will be duly authorized, validly issued, fully paid and nonassessable and
       not subject to preemptive rights or similar contractual rights granted by
       Parent.

    SECTION 5.03  AUTHORITY RELATIVE TO THIS AGREEMENT  Each of Parent and
Merger Sub has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation by Parent and Merger Sub of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action, and no other corporate proceedings on the part of Parent or
Merger Sub are necessary to authorize this Agreement or to consummate such
transactions (other than the filing and recordation of the Certificate of Merger
as required by the DGCL). This Agreement has been duly executed and delivered by
each of Parent and Merger Sub and, assuming the due authorization, execution and
delivery by the Company and the Stockholders, constitutes a legal, valid and
binding obligation of each of Parent and Merger Sub enforceable against Parent
and Merger Sub in accordance with its terms, except to the extent that its
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors' rights
generally or by general equitable principles.

    SECTION 5.04  NO CONFLICT; REQUIRED FILINGS AND CONSENTS

    (a) The execution and delivery of this Agreement by Parent and Merger Sub do
       not, and the performance by Parent and Merger Sub of their obligations
       hereunder and the consummation of the Merger will not, (i) conflict with
       or violate any provision of the articles of incorporation or bylaws of
       Parent or any equivalent organizational documents of any Parent
       Subsidiary, (ii) conflict with or violate any Law applicable to Parent or
       any other Parent Subsidiary or by which any property or asset of Parent
       or any Parent Subsidiary is bound or affected or (iii) result in any
       breach of or constitute a default (or an event which with the giving of
       notice or lapse of time or both could reasonably be expected to become a
       default) under, or give to others any right of termination, amendment,
       acceleration or cancellation of, or result in the creation of a lien or
       other encumbrance on any property or asset of Parent or any Parent
       Subsidiary pursuant to, any note, bond, mortgage, indenture, contract,
       agreement, lease, license, permit, franchise or other instrument or
       obligation.

    (b) Assuming the accuracy of the representations and warranties of the
       Company set forth in Article IV, the execution and delivery of this
       Agreement by Parent and Merger Sub do not, and the performance by Parent
       and Merger Sub of their obligations hereunder and the consummation of the
       Merger will not, require any consent, approval, authorization or permit
       of, or filing by Parent with or notification by Parent to, any
       Governmental Entity, except pursuant to applicable requirements of the
       Exchange Act, Blue Sky Laws, the OBCA, applicable Canadian securities
       laws, if any, the rules and regulations of the TSE, if any, the
       requirements of the Investment Canada Act, if any, and the requirements
       of the Competition Act (Canada), if any.

    SECTION 5.05  SEC FILINGS; FINANCIAL STATEMENTS

    (a) Parent has timely filed all forms, reports, statements and documents
       required to be filed by it with the SEC, the Nasdaq National Market and
       the TSE since January 27, 2000 (collectively, together with any such
       forms, reports, statements and documents Parent may file subsequent to
       the date hereof until the Effective Time, the "PARENT REPORTS"). Each
       Parent Report (i) was prepared in accordance with the requirements of the
       Securities Act, the Exchange Act, the Nasdaq National Market or the TSE,
       as the case may be, and (ii) did not at the time it was filed contain any
       untrue statement of a material fact or omit to state a material fact
       required to be stated therein or necessary in order to make the
       statements made therein, in the light of the circumstances under which
       they were made, not misleading. No Subsidiary of Parent is

                                       22
<PAGE>
       subject to the periodic reporting requirements of the Exchange Act or
       required to file any form, report or other document with the SEC, the
       Nasdaq National Market, any stock exchange or any other comparable
       Governmental Entity.

    (b) Except as is provided in the Parent Reports, each of the consolidated
       financial statements (including, in each case, any notes thereto)
       contained in the Parent Reports complied as to form in all material
       respects with applicable accounting requirements, was prepared in
       accordance with GAAP applied on a consistent basis throughout the periods
       indicated (except as may be indicated in the notes thereto) and each
       presented fairly, in all material respects, the consolidated financial
       position of Parent and the consolidated Subsidiaries of Parent as at the
       respective dates thereof and the consolidated results of operations and
       cash flows of Parent and the consolidated Subsidiaries of Parent for the
       respective periods indicated therein, except as otherwise noted therein
       (subject, in the case of unaudited statements, to normal and recurring
       year-end adjustments).

    SECTION 5.06  ABSENCE OF CERTAIN CHANGES OR EVENTS  Except as disclosed in
the Parent Reports filed prior to the date of this Agreement, since March 31,
2000, there has not been (a) any condition, event, occurrence or development
that has had or would reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect or which would reasonably be
expected to prevent, hinder or materially delay the ability of Parent or Merger
Sub to consummate the Merger, (b) any material change by Parent in its
accounting methods, principles or practices, or (c) any event pursuant to which
Parent has incurred any material liabilities (direct, contingent or otherwise)
or engaged in any material transaction or entered into any material agreement,
in each case, outside of the ordinary course of business which, individually or
in the aggregate, would be reasonably expected to have a Parent Material Adverse
Effect.

    SECTION 5.07  CERTAIN TAX MATTERS  Neither Parent nor, to the knowledge of
Parent, any of its Affiliates has taken or agreed to take any action (other than
actions contemplated by this Agreement) that could reasonably be expected to
prevent the Merger from constituting a "reorganization" under Section 368 of the
Code. Parent is not aware of any agreement, plan or other circumstance that
could reasonably be expected to prevent the Merger from so qualifying as a
reorganization under Section 368 of the Code.

    SECTION 5.08  BROKERS  No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the Merger
based upon arrangements made by or on behalf of Parent.

    SECTION 5.09  REPRESENTATIONS COMPLETE  None of the representations or
warranties made by Parent herein or in any certificate furnished by Parent
pursuant to this Agreement, when all such documents are read together in their
entirety, contains or will contain at the Effective Time any untrue statement of
a material fact, or omits or will omit at the Effective Time to state any
material fact necessary in order to make the statements contained herein or
therein, in the light of the circumstances under which made, not misleading.

                                   ARTICLE VI
                                   COVENANTS

    SECTION 6.01  CONDUCT OF BUSINESS BY THE COMPANY PENDING THE CLOSING  The
Company and the Stockholders agree that, between the date of this Agreement and
the Effective Time, unless Parent shall otherwise agree in writing, (x) the
businesses of the Company shall be conducted only in, and the Company shall not
take any action except in, the ordinary course of business consistent with past
practice and (y) the Company shall use all reasonable efforts to keep available
the services of such of the current officers, significant employees and
consultants of the Company and to preserve the current relationships of the
Company with such of the corporate partners, customers, suppliers and other

                                       23
<PAGE>
persons with which the Company has significant business relations in order to
preserve substantially intact its business organization. By way of amplification
and not limitation, the Company shall not, between the date of this Agreement
and the Effective Time, directly or indirectly, do, or agree to do, any of the
following without the prior written consent of Parent:

    (a) amend or otherwise change its certificate of incorporation or bylaws or
       equivalent organizational documents;

    (b) issue, sell, pledge, dispose of, grant, transfer, lease, license,
       guarantee or encumber, or authorize the issuance, sale, pledge,
       disposition, grant, transfer, lease, license or encumbrance of (i) any
       shares of capital stock of the Company of any class, or securities
       convertible into or exchangeable or exercisable for any shares of such
       capital stock, or any options, warrants or other rights of any kind to
       acquire any shares of such capital stock, or any other ownership interest
       (including, without limitation, any phantom interest), of the Company or
       (ii) any property or assets of the Company except sales of inventory in
       the ordinary course of business consistent with past practice;

    (c) (i) acquire (including, without limitation, by merger, consolidation, or
       acquisition of stock or assets) any interest in any corporation,
       partnership, other business organization or person or any division
       thereof; (ii) incur any indebtedness for borrowed money or issue any debt
       securities or assume, guarantee or endorse, or otherwise as an
       accommodation become responsible for, the obligations of any person for
       borrowed money or make any loans or advances material to the business,
       assets, liabilities, financial condition or results of operations of the
       Company; (iii) terminate, cancel or request any material change in, or
       agree to any material change in, any Material Contract or License
       Agreement; (iv) make or authorize any capital expenditure, other than
       capital expenditures in the ordinary course of business consistent with
       past practice that are not, in the aggregate, in excess of $25,000 for
       the Company; or (v) enter into or amend any contract, agreement,
       commitment or arrangement that, if fully performed, would not be
       permitted under this Section 6.01(c);

    (d) declare, set aside, make or pay any dividend or other distribution,
       payable in cash, stock, property or otherwise, with respect to any of its
       capital stock;

    (e) reclassify, combine, split, subdivide or redeem, purchase or otherwise
       acquire, directly or indirectly, any of its capital stock;

    (f) amend the terms of, repurchase, redeem or otherwise acquire, any of its
       securities or any securities or propose to do any of the foregoing;

    (g) increase the compensation payable or to become payable to its directors,
       officers, consultants or employees, grant any rights to severance or
       termination pay to, or enter into any employment or severance agreement
       which provides benefits upon a change in control of the Company that
       would be triggered by the Merger with, any director, officer, consultant
       or other employee of the Company who is not currently entitled to such
       benefits from the Merger, establish, adopt, enter into or amend any
       collective bargaining, bonus, profit sharing, thrift, compensation, stock
       option, restricted stock, pension, retirement, deferred compensation,
       employment, termination, severance or other plan, agreement, trust, fund,
       policy or arrangement for the benefit of any director, officer,
       consultant or employee of the Company, except to the extent required by
       applicable Law or the terms of a collective bargaining agreement, or
       enter into or amend any contract, agreement, commitment or arrangement
       between the Company and any of the Company's directors, officers,
       consultants or employees;

    (h) pay, discharge or satisfy any claims, liabilities or obligations
       (absolute, accrued, asserted or unasserted, contingent or otherwise),
       other than the payment, discharge or satisfaction in the ordinary course
       of business and consistent with past practice of liabilities reflected or
       reserved

                                       24
<PAGE>
       against on the balance sheet of the Company dated as of August 31, 2000
       previously presented to Parent and only to the extent of such reserves;

    (i) make any change with respect to the Company's accounting policies,
       principles, methods or procedures, including, without limitation, revenue
       recognition policies, other than as required by GAAP;

    (j) make any material Tax election or settle or compromise any material Tax
       liability;

    (k) permit any insurance policy naming it as a beneficiary or a loss payee
       to be cancelled or terminated, except in the ordinary and usual course of
       business;

    (l) maintain the books and records of the Company in a manner not consistent
       with past business practices;

    (m) take any action which would materially adversely affect the goodwill of
       its suppliers, customers and others with whom it has business relations;

    (n) fail to pay and perform all of its debts, obligations and liabilities as
       and when due and all leases, agreements, contracts and other commitments
       to which it is a party in accordance with the terms and provisions
       thereof;

    (o) fail to comply in all material respects with all Laws that may be
       applicable to its business; or

    (p) authorize or enter into any formal or informal agreement or otherwise
       make any commitment to do any of the foregoing or to take any action
       which would make any of the representations or warranties of the Company
       contained in this Agreement untrue or incorrect or prevent the Company
       from performing or cause the Company not to perform its covenants
       hereunder or result in any of the conditions to the Merger set forth
       herein not being satisfied.

    SECTION 6.02  NOTICES OF CERTAIN EVENTS  Each of Parent and the Company
shall give prompt notice to the other of (i) any notice or other communication
from any person alleging that the consent of such person is or may be required
in connection with the Merger; (ii) any notice or other communication from any
Governmental Entity in connection with the Merger; (iii) any actions, suits,
claims, investigations or proceedings commenced or, to its knowledge, threatened
against, relating to or involving or otherwise affecting Parent or the Company,
or that relate to the consummation of the Merger; (iv) the occurrence of a
default or event that, with the giving of notice or lapse of time or both, will
become a default under any Material Contract; and (v) any change that could
reasonably be expected to have a Parent Material Adverse Effect or a Company
Material Adverse Effect, or to delay or impede the ability of either Parent or
the Company to perform their respective obligations pursuant to this Agreement
and to effect the consummation of the Merger.

    SECTION 6.03  ACCESS TO INFORMATION; CONFIDENTIALITY

    (a) Except as required pursuant to any confidentiality agreement or similar
       agreement or arrangement to which Parent or the Company or any of the
       Parent Subsidiaries is a party or pursuant to applicable Law or the
       regulations or requirements of any stock exchange or other regulatory
       organization with whose rules a party hereto is required to comply, from
       the date of this Agreement to the Effective Time, Parent and the Company
       shall (i) provide to the other (and its officers, directors, employees,
       accountants, consultants, legal counsel, agents and other representatives
       (collectively, "REPRESENTATIVES")) access at reasonable times upon prior
       notice to its officers, employees, agents, properties, offices and other
       facilities and to the books and records thereof, and (ii) furnish
       promptly such information concerning its business, properties, contracts,
       assets, liabilities and personnel as the other party or its
       Representatives may reasonably request. Except as provided in
       Section 10.02(c) hereof, no investigation conducted pursuant to this
       Section 6.03 shall affect or be deemed to modify any representation or
       warranty made in this Agreement.

                                       25
<PAGE>
    (b) The parties hereto shall comply with, and shall cause their respective
       Representatives to comply with, all of their respective obligations under
       the Confidentiality Agreement with respect to the information disclosed
       pursuant to this Section 6.03 or pursuant to the Confidentiality
       Agreement.

    SECTION 6.04  NO SOLICITATION OF TRANSACTIONS  The Company and the
Stockholders shall not, directly or indirectly, and shall cause the Company's
Representatives not to, directly or indirectly, solicit, initiate or encourage
(including by way of furnishing nonpublic information), any inquiries or the
making of any proposal or offer (including, without limitation, any proposal or
offer to its stockholders) that constitutes, or may reasonably be expected to
lead to, any Competing Transaction, or enter into or maintain or continue
discussions or negotiate with any person in furtherance of such inquiries or to
obtain a Competing Transaction, or agree to or endorse any Competing
Transaction, or authorize or permit any of the Company's Representatives to take
any such action. Any violation of the restrictions set forth in this Section
6.04 by any Representative of the Company, whether or not such Person is
purporting to act on behalf of the Company or otherwise, shall be deemed to be a
breach of this Section 6.04 by the Company. The Company shall notify Parent
promptly if any proposal or offer, or any inquiry or contact with any person
with respect thereto, regarding a Competing Transaction is made, such notice to
include the identity of the person making such proposal, offer, inquiry or
contact, and the terms of such Competing Transaction, and shall keep Parent
apprised, on a current basis, of the status of such Competing Transaction. The
Company immediately shall cease and cause to be terminated all existing
discussions or negotiations with any parties conducted heretofore with respect
to a Competing Transaction. The Company shall not release any third party from,
or waive any provision of, any confidentiality or standstill agreement to which
it is a party.

    SECTION 6.05  TAX-FREE TRANSACTION  From and after the date of this
Agreement, each party hereto shall use all reasonable efforts to cause the
Merger to qualify, and shall not knowingly take any actions or cause any actions
to be taken which could reasonably be expected to prevent the Merger from
qualifying as a "reorganization" under Section 368(a) of the Code.

    SECTION 6.06  FURTHER ACTION; CONSENTS; FILINGS

    (a) Upon the terms and subject to the conditions hereof, each of the parties
       hereto shall use all reasonable efforts to (i) take, or cause to be
       taken, all appropriate action, and do, or cause to be done, all things
       necessary, proper or advisable under applicable Law or otherwise to
       consummate and make effective the Merger, (ii) obtain from Governmental
       Entities any consents, licenses, permits, waivers, approvals,
       authorizations or orders required to be obtained or made by Parent or the
       Company in connection with the authorization, execution and delivery of
       this Agreement and the consummation of the Merger and (iii) make all
       necessary filings, and thereafter make any other required or appropriate
       submissions, with respect to this Agreement and the Merger required under
       any applicable Laws. The parties hereto shall cooperate and consult with
       each other in connection with the making of all such filings.

    (b) Each of the Company and Parent will give any notices to third persons,
       and use reasonable efforts to obtain any consents from third persons
       necessary, proper or advisable (as determined in good faith by Parent
       with respect to such notices or consents to be delivered or obtained by
       the Company) to consummate the transactions contemplated by this
       Agreement.

                                  ARTICLE VII
                             ADDITIONAL AGREEMENTS

    SECTION 7.01  PUBLIC ANNOUNCEMENTS  Until the earlier of termination of this
Agreement or the Effective Time, Parent and Merger Sub, on the one hand, and the
Company, on the other hand, will consult with each other before issuing any
press release or otherwise making any public statements with

                                       26
<PAGE>
respect to the Agreement or the Merger and shall not issue any such press
release or make any such public statement that is not approved by the other
party, except as may be required by Law or the rules of the Nasdaq National
Market or the TSE, in which case the parties will make reasonable efforts to
consult with each other prior to the making of such public statement.

    SECTION 7.02  EMPLOYEE BENEFIT MATTERS  Unless Parent requests otherwise in
writing, the Company shall take all action necessary to terminate, or cause to
terminate, immediately before the Effective Time, any Company Benefit Plan that
is a 401(k) plan or other defined contribution retirement plan (the
"COMPANY 401(K) PLAN"). At the Closing, the Company shall provide Parent
(a) executed resolutions of the Board of Directors of the Company authorizing
such termination and (b) an executed amendment to the Company 401(k) Plan
sufficient to assure compliance with all applicable requirements of the Code and
regulations thereunder so that the tax-qualified status of the Company 401(k)
Plan will be maintained at the time of termination.

    SECTION 7.03  STOCKHOLDER INVESTMENT REPRESENTATIONS

    (a) Each Stockholder understands that the shares of the Parent Common Stock
       issued in the Merger will not be registered under the Securities Act nor
       qualified under the Blue Sky Laws of any state; and that the Parent
       Common Stock is being offered and sold to the Stockholders pursuant to an
       exemption from such registration and qualification based in part upon the
       representations of such Stockholder contained herein.

    (b) Each Stockholder represents and warrants to Parent that he or she is
       either an "accredited investor," as defined in Rule 501 under the
       Securities Act, or, either alone or with his or her purchaser
       representative(s), has such knowledge and experience in financial and
       business matters that he or she is capable of evaluating the merits and
       risks of an investment such as the Parent Common Stock.

    (c) Each Stockholder acknowledges and agrees with Parent that he or she has
       received and reviewed this Agreement and has received and reviewed all
       further information, if any, regarding Parent necessary to make an
       informed investment decision to invest in the Parent Common Stock,
       including information requested to verify other information received, and
       has received, all information that he or she has requested from Parent,
       and has been afforded a reasonable opportunity to ask questions about
       Parent, the Parent Common Stock and the terms and conditions of this
       Agreement, and has received satisfactory answers to all such questions.

    (d) Each Stockholder acknowledges to Parent that he or she is fully aware of
       the applicable transfer restrictions of the Parent Common Stock to be
       issued in the Merger, recognizes that it may be necessary to hold the
       Parent Common Stock indefinitely and can bear the economic risk of his or
       her investment in the Parent Common Stock (including a complete loss of
       the investment).

    (e) Each Stockholder acknowledges and agrees with Parent that he or she is
       acquiring the Parent Common Stock issued in the Merger for investment for
       his or her own account and not with a view to, or for resale in
       connection with, the distribution or other disposition thereof. Each
       Stockholder agrees with Parent that he or she will not, directly or
       indirectly, offer, transfer, sell, assign, pledge, hypothecate or
       otherwise dispose of (hereinafter, "TRANSFER") any of the Parent Common
       Stock issued in the Merger unless (i) (A) the Transfer is pursuant to an
       effective registration statement under the Securities Act or (B) counsel
       for such Stockholder (which counsel shall be reasonably acceptable to
       Parent) shall have furnished Parent with an opinion, satisfactory in form
       and substance to Parent, to the effect that no such registration is
       required because of the availability of an exemption from registration
       under the Securities Act and (ii) such Transfer complies with the
       provisions of the Lock-up Agreement.

                                       27
<PAGE>
    SECTION 7.04  STOCK OPTIONS  The Company shall take all reasonable actions
necessary so that, immediately prior to the Effective Time, the options granted
by the Company to purchase Company Common Stock ("COMPANY STOCK OPTIONS"), which
are outstanding and unexercised immediately prior to the Effective Time, shall
be cancelled.

    SECTION 7.05  LEGENDS.  Each Parent Certificate shall bear the following
legends:

    (a) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
       UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
       TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE
       ABSENCE OF (i) AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES
       UNDER SAID ACT OR (ii) AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
       THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."

    Parent agrees to remove legend (a), above, from any certificate issued
pursuant to (i) or (ii), above.

    (b) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE
       TORONTO STOCK EXCHANGE, HOWEVER, The Said SECURITIES CANNOT BE TRADED
       THROUGH THE FACILITIES OF SUCH EXCHANGE SINCE THEY ARE NOT FREELY
       TRANSFERABLE, AND CONSEQUENTLY, ANY CERTIFICATE REPRESENTING SUCH
       SECURITIES IS NOT "GOOD DELIVERY" IN SETTLEMENT OF SUCH TRANSACTIONS ON
       THE TORONTO STOCK EXCHANGE. A NEW CERTIFICATE BEARING NO LEGEND, DELIVERY
       OF WHICH WILL CONSTITUTE "GOOD DELIVERY", MAY BE OBTAINED FROM
       COMPUTERSHARE INVESTOR SERVICES UPON DELIVERY OF THIS CERTIFICATE AND A
       DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO COMPUTERSHARE
       INVESTOR SERVICES AND THE COMPANY, TO THE EFFECT THAT THE SALE OF THE
       SECURITIES REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH APPLICABLE
       SECURITIES LAWS.".

    Parent agrees to remove legend (b), above, if Parent becomes obligated to
remove or removes legend (a), above, and legend (c), below.

    In addition, each Parent Certificate representing shares issued as First
Additional Consideration, Second Additional Consideration and Third Additional
Consideration shall also bear the following legend:

    (c) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
       RESTRICTIONS ON TRANSFER PURSUANT TO A LOCK-UP AGREEMENT RELATING TO SUCH
       SECURITIES, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN
       COMPLIANCE WITH THE TERMS OF SUCH AGREEMENT."

    Parent agrees to remove the foregoing legend on those stock certificates
representing Parent Common Stock which are no longer subject to the transfer
restrictions contained in the Lock-up Agreement.

    SECTION 7.06  OTHER EMPLOYMENT AGREEMENTS

    (a) The Company will use reasonable efforts to assist Parent in causing the
       employees listed on SCHEDULE III hereto to enter into employment
       agreements substantially in the form attached hereto as ANNEX C.

    (b) Parent agrees, and each of the Stockholders agree and acknowledge, that
       the employment agreements will provide for bonuses in the aggregate
       amount of $5,000,000 to certain Stockholders, which amounts will be paid
       to such Stockholders in accordance with their respective Employment
       Agreements.

                                       28
<PAGE>
    SECTION 7.07  DIRECTOR INDEMNIFICATION  From and after the Effective Time,
Parent and the Surviving Corporation shall indemnify and hold harmless each
present and former director and officer of the Company, against any costs or
expenses (including reasonable attorneys' fees and disbursements), judgments,
fines, losses, claims, damages or liabilities incurred in connection with any
claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to matters
relating to their service as such an officer or director existing or occurring
at or prior to the Effective Time, whether asserted or claimed prior to, at or
after the Effective Time, to the fullest extent that the Company would have been
permitted under Delaware Law and its charter documents (each as in effect on the
date hereof) to indemnify such persons.

    SECTION 7.08  INFORMATION STATEMENT  On or about August 31 2000, the Company
mailed or delivered an information statement to stockholders of the Company in
connection with the transactions contemplated hereby (the "INFORMATION
STATEMENT"). The Company mailed the Information Statement to all stockholders of
the Company entitled to receive such notice under the DGCL. The Information
Statement constitutes a disclosure document for the offer and issuance of the
shares of Parent Common Stock to be received by the Stockholders in the Merger
and a proxy statement for solicitation of stockholder approval of the Merger.
The Information Statement did not, at the time it was mailed to stockholders of
the Company and at all times subsequent thereto (through and including the
Effective Time), contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The Information Statement includes the recommendation of
the Board of Directors of the Company in favor of this Agreement and the Merger
and the conclusion of the Board of Directors that the terms and conditions of
the Merger are fair and reasonable to the Stockholders. Parent agrees that none
of the information supplied by it for inclusion or incorporation by reference in
the Information Statement or any amendment or supplement to the foregoing did,
at the time the Information Statement was first mailed to the stockholders of
the Company and at all times subsequent thereto (through and including the
Effective Time), contain any statement which, at such time and in such light of
the circumstances under which it was made, is false and misleading with respect
to any material fact, or omits to state any material fact necessary in order to
make the statements made in the Information Statement not false or misleading or
omits to state any material fact necessary to correct any statement made by
Parent in such information supplied which has become false or misleading.

    SECTION 7.09  TERMINATION OF AGREEMENTS  Each Stockholder who is a party to
the Stockholders Agreement dated October 9, 1999, by and among the Company and
the Stockholders named therein agrees that such agreement is hereby terminated
and of no further force or effect.

                                  ARTICLE VIII
                            CONDITIONS TO THE MERGER

    SECTION 8.01  CONDITIONS TO THE OBLIGATIONS OF EACH PARTY TO CONSUMMATE THE
MERGER  The obligations of the parties hereto to consummate the Merger are
subject to the satisfaction or, if permitted by applicable Law, waiver of the
following conditions:

    (a) no court of competent jurisdiction shall have issued or entered any
       order, writ, injunction or decree, and no other Governmental Entity shall
       have issued any order, which is then in effect and has the effect of
       making the Merger illegal or otherwise prohibiting its consummation; and

    (b) all consents, approvals and authorizations legally required to be
       obtained to consummate the Merger shall have been obtained from all
       Governmental Entities, except where the failure to obtain any such
       consent, approval or authorization could not reasonably be expected to
       result in a Parent Material Adverse Effect or a Company Material Adverse
       Effect.

                                       29
<PAGE>
    SECTION 8.02  CONDITIONS TO THE OBLIGATIONS OF THE COMPANY  The obligations
of the Company to consummate the Merger, or to permit the consummation of the
Merger are subject to the satisfaction or, if permitted by applicable Law,
waiver of the following further conditions:

    (a) each of the representations and warranties of Parent contained in this
       Agreement shall be true, complete and correct in all material respects
       (other than representations and warranties subject to "materiality" or
       "material adverse effect" qualifiers, which shall be true, complete and
       correct in all respects) both when made and on and as of the Effective
       Time as if made at and as of the Effective Time (other than
       representations and warranties which address matters only as of a certain
       date which shall be so true, complete and correct as of such certain
       date), and, if the Effective Time shall occur on a date other than the
       date hereof, the Company shall have received a certificate of an officer
       of Parent to such effect;

    (b) Parent shall have performed or complied in all material respects with
       all covenants required by this Agreement to be performed or complied with
       by it on or prior to the Effective Time and, if the Effective Time shall
       occur on a date other than the date hereof, the Company shall have
       received a certificate of an officer of Parent to such effect;

    (c) there shall have been no Parent Material Adverse Effect, and no event
       shall have occurred which could reasonably be expected to result in a
       Parent Adverse Effect, since June 30, 2000; and

    (d) as of the Effective Time, the Company shall have received from Parent
       and Merger Sub the following documents:

        (i) a certificate of existence/status and good standing from the
            province or state of incorporation as to the corporate status of
            each of Parent and Merger Sub;

        (ii) a true and complete copy of the resolutions, certified by the
             Secretary of Parent and Merger Sub, adopted on behalf of each of
             Parent and the Merger Sub authorizing the execution, delivery and
             performance of this Agreement and all transactions contemplated
             hereby; and

       (iii) a certificate from each of Parent and Merger Sub's Secretary as to
             the incumbency and signatures of any of its officers who will
             execute documents at the Closing or who have executed the
             Agreement.

    SECTION 8.03  CONDITIONS TO THE OBLIGATIONS OF PARENT  The obligations of
Parent to consummate the Merger are subject to the satisfaction or waiver of the
following further conditions:

    (a) each of the representations and warranties of the Company and the
       Stockholders contained in this Agreement shall be true, complete and
       correct in all material respects (other than representations and
       warranties subject to "materiality" or "material adverse effect"
       qualifiers, which shall be true, complete and correct in all respects)
       both when made and on and as of the Effective Time as if made at and as
       of the Effective Time (other than representations and warranties which
       address matters only as of a certain date which shall be so true,
       complete and correct as of such certain date), and, if the Effective Time
       shall occur on a date other than the date hereof, Parent shall have
       received a certificate of the Stockholders and an officer of the Company
       to such effect;

    (b) the Company and the Stockholders shall have performed or complied in all
       material respects with all covenants required by this Agreement to be
       performed or complied with by them on or prior to the Effective Time and,
       if the Effective Time shall occur on a date other than the date hereof,
       Parent shall have received a certificate of the Stockholders and an
       officer of the Company to such effect;

                                       30
<PAGE>
    (c) the Stockholders shall have entered into the Lock-up Agreement;

    (d) Parent shall have received a legal opinion from Chapman and Cutler,
       counsel to the Company, in form and substance reasonably satisfactory to
       Parent;

    (e) there shall have been no Company Material Adverse Effect, and no event
       shall have occurred which could reasonably be expected to result in a
       Company Material Adverse Effect, since June 30, 2000;

    (f) all consents of third parties required pursuant to the terms of any
       Material Contract as a result of the Merger shall have been obtained;

    (g) the employees listed on SCHEDULE III hereto shall have accepted
       employment with Parent and shall have entered into employment agreements
       substantially in the form of ANNEX C hereto;

    (h) the Company shall have terminated the Company Stock Plan; and

    (i) as of the Effective Time, the Parent shall have received from the
       Company the following documents:

        (i) a certificate of existence and good standing from the state of
            incorporation as to the corporate status of the Company;

        (ii) a true and complete copy of the certificate of incorporation of the
             Company and all amendments thereto certified by the state of
             incorporation of the Company;

       (iii) a true and complete copy of the bylaws of the Company certified by
             the Secretary of the Company;

        (iv) a true and complete copy, certified by the Secretary of the
             Company, of the resolutions adopted on behalf of the Company
             authorizing the execution, delivery and performance of this
             Agreement and all transactions contemplated hereby;

        (v) a certificate from the Secretary of the Company that its certificate
            of incorporation has not been amended since the date of the
            certificate described in subsection (ii) above and that nothing has
            occurred since the date of issuance of the good standing certificate
            specified in subsection (i) above that would adversely affect its
            corporate good standing;

        (vi) a certificate from the Company's Secretary as to the incumbency and
             signatures of any of the Company's officers who will execute
             documents at the Closing or who have executed this Agreement; and

       (vii) any other documents and instruments as Parent may reasonably
             require or desire in order to effectuate the transactions
             contemplated by this Agreement.

                                   ARTICLE IX
                       TERMINATION, AMENDMENT AND WAIVER

    SECTION 9.01  TERMINATION  This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time, notwithstanding any
requisite adoption and approval of this Agreement, as follows:

    (a) by mutual written consent duly authorized by the boards of directors of
       each of Parent and the Company;

                                       31
<PAGE>
    (b) by either Parent or the Company, if any Governmental Order, writ,
       injunction or decree preventing the consummation of the Merger shall have
       been entered by any court of competent jurisdiction and shall have become
       final and nonappealable;

    (c) by Parent, upon a breach of any representation, warranty, covenant or
       agreement on the part of the Company set forth in this Agreement, or if
       any representation or warranty of the Company shall have become untrue,
       incomplete or incorrect, in either case such that the conditions set
       forth in Section 8.03 would not be satisfied (a "TERMINATING COMPANY
       BREACH"); PROVIDED, HOWEVER, that if such Terminating Company Breach is
       curable by the Company through the exercise of its reasonable efforts
       within ten (10) days and for so long as the Company continues to exercise
       such reasonable efforts, Parent may not terminate this Agreement under
       this Section 9.01(c); or

    (d) by the Company, upon breach of any representation, warranty, covenant or
       agreement on the part of Parent set forth in this Agreement, or if any
       representation or warranty of Parent shall have become untrue, incomplete
       or incorrect, in either case such that the conditions set forth in
       Section 8.02 would not be satisfied (a "TERMINATING PARENT BREACH");
       PROVIDED, HOWEVER, that if such Terminating Parent Breach is curable by
       Parent through the exercise of its reasonable efforts within ten
       (10) days and for so long as Parent continues to exercise such reasonable
       efforts, the Company may not terminate this Agreement under this Section
       9.01(d).

    The right of any party hereto to terminate this Agreement pursuant to this
Section 9.01 will remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any person
controlling any such party or any of their respective officers, directors,
representatives or agents, whether prior to or after the execution of this
Agreement.

    SECTION 9.02  EFFECT OF TERMINATION  Except as provided in Section 9.05, in
the event of termination of this Agreement pursuant to Section 9.01, this
Agreement shall forthwith become void, there shall be no liability under this
Agreement on the part of any party hereto or any of its Affiliates or any of its
or their officers or directors, and all rights and obligations of each party
hereto shall cease; PROVIDED, HOWEVER, that nothing herein shall relieve any
party hereto from liability for the breach of any provisions of this Agreement
prior to its termination; and PROVIDED, FURTHER, that the provisions of Section
6.03 (CONFIDENTIALITY), this Section 9.02, Section 9.05 (EXPENSES) and
Article XI shall remain in full force and effect and survive any termination of
this Agreement.

    SECTION 9.03  AMENDMENT  This Agreement may be amended by Parent and the
Company by action taken by or on behalf of their respective boards of directors
at any time prior to the Effective Time; PROVIDED, HOWEVER, that, an amendment
made subsequent to the adoption of the agreement by the stockholders of any
constituent corporation shall not (i) alter or change the amount or kind of
shares, securities, cash, property and/or rights to be received in exchange for
or on conversion of the Company Common Stock, (ii) alter or change any term of
the certificate of incorporation of the surviving corporation to be effected by
the merger, or (iii) alter or change any of the terms and conditions of this
Agreement if such alteration or change would adversely affect the Stockholders.
This Agreement may not be amended except by an instrument in writing signed by
Parent and the Company.

    SECTION 9.04  WAIVER  At any time prior to the Effective Time, any party
hereto may (a) extend the time for or waive compliance with the performance of
any obligation or other act of any other party hereto, (b) waive any inaccuracy
in the representations and warranties contained herein or in any document
delivered pursuant hereto and (c) waive compliance by the other party with any
of the agreements or conditions contained herein. Any such extension or waiver
shall be valid if set forth in an instrument in writing signed by the party or
parties to be bound thereby.

    SECTION 9.05  EXPENSES  All Expenses incurred in connection with this
Agreement and the Merger shall be paid by the party incurring such Expenses,
whether or not the Merger is consummated;

                                       32
<PAGE>
PROVIDED, HOWEVER, that if the transactions are consummated, all Expenses up to
$100,000 incurred on behalf of the Company shall be paid by the Company. Any
Expenses incurred by the Company in excess of such $100,000 (including any fees
and expenses of legal counsel, financial advisors and accountants) shall be the
obligation of the Stockholders.

                                   ARTICLE X
                                INDEMNIFICATION

    SECTION 10.01  INDEMNIFICATION

    (a) Subject to the limitations set forth in this Article X, the Stockholders
       will, severally and not jointly (except with respect to Richard W.
       Costolo, Eric Lunt and Stephen J. Olechowski III, who will jointly and
       severally among themselves), indemnify and hold harmless Parent, Merger
       Sub and the Surviving Corporation and each of their respective officers,
       directors, advisors, Affiliates, agents, employees, and each person, if
       any, who controls or may control Parent within the meaning of the
       Securities Act (hereinafter referred to individually as an "INDEMNIFIED
       PERSON" and collectively as "INDEMNIFIED PERSONS") from and against any
       and all losses, damages, judgments, settlements, claims, liabilities,
       costs and expenses , including, without limitation, Legal Expenses (as
       defined below) (collectively, "DAMAGES") arising out of, based upon or
       resulting from any misrepresentation or breach of or default in
       connection with any representations, warranties, covenants and agreements
       given by or made by any of the Stockholders or the Company in this
       Agreement, the Company Disclosure Schedule or any Annex to this Agreement
       or certificate delivered pursuant to this Agreement. "LEGAL EXPENSES" of
       an Indemnified Person shall mean any and all reasonable out-of-pocket
       fees, costs and expenses of any kind incurred by such Indemnified Person
       and its counsel in investigating, preparing for, defending against or
       providing evidence, producing documents or taking other action with
       respect to any threatened or asserted claim of a third party or
       Governmental Entity.

    (b) Nothing in this Agreement shall limit the liability of the Stockholders
       for any willful breach of any representation, warranty or covenant.

    (c) Subject to the terms and conditions of this Article X, Parent will
       indemnify and hold harmless the Stockholders from and against any and all
       Damages arising out of, based upon or resulting from any
       misrepresentation or breach of or default in connection with any
       representations, warranties, covenants and agreements given by or made by
       Parent or Merger Sub in this Agreement or any Annex to this Agreement or
       certificate delivered pursuant to this Agreement.

    SECTION 10.02  DAMAGE LIMITATIONS

    (a) Notwithstanding the foregoing, neither an Indemnified Person nor any
       Stockholder may make a claim for Damages until the aggregate amount of
       claims by Indemnified Persons or the Stockholders, as the case may be,
       exceeds $100,000; PROVIDED, HOWEVER, that once the aggregate amount of
       Damages exceed such threshold amount, then the Indemnified Persons and
       the Stockholders, as the case may be, shall have the right to recover the
       full amounts due without regard to the threshold. In determining the
       amount of any Damage attributable to a breach, any materiality standard
       contained in a representation, warranty or covenant of the Stockholders
       or the Company shall be disregarded.

    (b) Except with respect to any claim based on fraud, for which there shall
       be no limit, in no event shall the aggregate liability of the
       Stockholders, on one hand, and Parent and Merger Sub on the other hand,
       with respect to all claims of indemnification exceed the aggregate amount
       of $30,000,000.

                                       33
<PAGE>
    (c) Neither Parent nor any Indemnified Party may make a claim against any of
       the Stockholders for a breach of any representation or warranty if Parent
       had actual knowledge prior to the Effective Time that said representation
       or warranty was untrue.

    SECTION 10.03  PROCEDURES

    (a) Promptly after receipt by any Indemnified Person of notice of the
       commencement of any action in respect of which the Indemnified Person
       will seek indemnification hereunder, the Indemnified Person shall notify
       the Stockholders (the "INDEMNIFYING PARTY") thereof in writing, but any
       failure to so notify an Indemnifying Party shall not relieve it from any
       liability that it may have to the Indemnified Person except to the extent
       the Indemnifying Party shall be materially prejudiced by such failure.
       The Indemnifying Party shall be entitled to participate in the defense of
       such action and to assume control of such defense with counsel reasonably
       acceptable to the Indemnified Person; PROVIDED, HOWEVER, that:

        (i) the Indemnified Person shall be entitled to participate in the
            defense of such claim and to employ counsel at its own expense to
            assist in the handling of such claim;

        (ii) the Indemnifying Party shall obtain the prior written approval of
             the Indemnified Person before entering into any settlement of such
             claim or ceasing to defend against such claim, if, pursuant to or
             as a result of such settlement or cessation, injunctive or other
             equitable relief would be imposed against the Indemnified Person or
             would otherwise restrict the future activity or conduct of the
             Indemnified Person; and

       (iii) the Indemnifying Party shall not consent to the entry of any
             judgment or enter into any settlement that does not include as an
             unconditional term thereof the giving by the claimant or plaintiff
             to each Indemnified Person of a release from all liability in
             respect of such claim.

    (b) After written notice by the Indemnifying Party to the Indemnified Person
       of its election to assume control of the defense of any such action, the
       Indemnifying Party shall not, except as otherwise provided, be liable to
       such Indemnified Person hereunder for any Legal Expenses subsequently
       incurred by such Indemnified Person in connection with the defense
       thereof. If the Indemnifying Party does not assume control of the defense
       of such claims by promptly notifying the Indemnified Person of such
       assumption, the Indemnified Person shall have the right to defend such
       claim in such manner as it may reasonably deem appropriate at the cost
       and expense of the Indemnifying Party, and the Indemnifying Party will
       promptly reimburse the Indemnified Person therefor in accordance with the
       terms hereof. The reimbursement of fees, costs and expenses required by
       this Section 10.03 shall be made by periodic payments during the course
       of the investigation or defense, as and when bills are received or
       expenses incurred.

    SECTION 10.04  ESCROW FUND; NON-EXCLUSIVE REMEDY

    (a) In accordance with Section 3.02 hereof, Parent shall deliver to the
       Escrow Agent those Merger Shares which, in the aggregate, constitute the
       Third Additional Consideration (the "ESCROW FUND"). The Escrow Fund shall
       be held by the Escrow Agent under the Escrow Agreement, substantially in
       the form of Annex B hereto (the "ESCROW AGREEMENT") pursuant to the terms
       set forth herein. The Escrow Fund shall be available to compensate Parent
       and the other Indemnified Persons pursuant to the indemnification
       obligations of the Stockholders and any Damages shall be paid first out
       of the Escrow Fund to the extent available therefor; provided, however,
       that the parties expressly agree that the Escrow Fund is not intended to
       limit the remedies or recovery of such parties in connection with any
       breach of any representation, warranty, covenant or agreement made by the
       Company or the Stockholders under this

                                       34
<PAGE>
       Agreement, and recovery under the Escrow Fund shall neither be the sole
       nor exclusive remedy hereunder.

    (b) Richard W. Costolo, Eric M. Lunt and Stephen J. Olechowski III are
       hereby appointed as representatives (the "STOCKHOLDERS REPRESENTATIVES")
       for and on behalf of the Stockholders to take all actions necessary or
       appropriate in the judgment of the Stockholders Representatives for the
       accomplishment of the terms of this Agreement and the Escrow Agreement.
       The holders of a majority in interest of the shares of Company Common
       Stock held in the Escrow Fund may replace any Stockholders Representative
       upon not less than 10 days' prior written notice to Parent. The
       Stockholders Representatives shall not be liable for any act done or
       omitted in such capacity while acting in good faith and in the exercise
       of reasonable judgment, and any act done or omitted pursuant to the
       advice of counsel shall be conclusive evidence of such good faith. The
       Stockholders shall severally indemnify each Stockholders Representative
       and hold him harmless against any loss, liability or expense incurred
       without gross negligence or bad faith on the part of such Stockholders
       Representative and arising out of or in connection with the acceptance or
       administration of his duties hereunder. Any decision, act, consent or
       instruction of a majority of the Stockholders Representatives shall
       constitute a decision of all and shall be final, binding and conclusive
       upon every Stockholder, and the

    Escrow Agent and Parent may rely upon any decision, act, consent or
instruction of the Stockholders Representatives. The Escrow Agent and Parent are
hereby relieved from any liability to any person for acts done by them in
accordance with such decision, act, consent or instruction of the Stockholders
Representatives.

    SECTION 10.05  PAYMENT OF CLAIMS

    (a) For the purpose of compensating Parent for its Damages pursuant to this
       Agreement, the value of the Parent Common Stock in the Escrow Fund (or as
       provided in paragraph (b) below) shall be determined at the time of such
       release based on the average closing sale price on the Nasdaq National
       Market of a share of Parent Common Stock as reported in THE WALL STREET
       JOURNAL or, if not available, such other authoritative publication as may
       be reasonably selected by Parent, for the ten consecutive trading days
       ending on and including the last trading date immediately preceding such
       date of release.

    (b) With respect to any claims for Damages by Parent or any Indemnified
       Party in excess of the Escrow Fund, a Stockholder may elect to compensate
       Parent or such Indemnified Party for its Damages through the delivery of
       shares of Parent Common Stock owned by such Stockholder unless such
       shares are held by such Stockholder without any restrictions on transfer.

                                   ARTICLE XI
                               GENERAL PROVISIONS

    SECTION 11.01  DURATION OF SURVIVAL OF REPRESENTATIONS AND WARRANTIES  The
representations and warranties set forth in Articles IV and V will survive until
the second anniversary of the Effective Time. This Section 11.01 shall not limit
any covenant or agreement of the parties hereto that by its terms contemplates
performance after the Effective Time.

    SECTION 11.02  NOTICES  All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy
or facsimile, by registered or certified mail (postage prepaid, return receipt
requested) or by a nationally recognized courier service to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 11.02):

                                       35
<PAGE>
    (a) if to the Company or the Stockholders:

           Richard W. Costolo, Eric M. Lunt and
           Stephen J. Olechowski III
           c/o Spyonit.com, Inc.
           434 West Ontario Street, Suite 410
           Chicago, Illinois 60610
           Telecopier: (312) 642-9051
           with a copy to:
           Chapman and Cutler
           111 West Monroe Street
           Chicago, Illinois 60603
           Attention: Michael P. Barrett, Esq.
           Telecopier: (312) 701-2361

    (b) if to Parent or Merger Sub:

           724 Solutions Inc.
           4101 Yonge Street, Suite 702
           Toronto, Ontario, Canada M2P 1N6
           Attention: Vice President, Legal and
           Business Affairs
           Telecopier: (416) 226-4456
           with a copy to:
           Brobeck, Phleger & Harrison LLP
           1633 Broadway, 47th Floor
           New York, New York 10019
           Attention: Mark L. Mandel, Esq.
           Telecopier: (212) 586-7878
           with a copy to:
           Ogilvy Renault
           Suite 2100, P.O. Box 141
           Royal Trust Tower, TD Centre
           Toronto, Ontario M5K 1H1
           Attention: Brian Ludmer
           Telecopier: (416) 216-3930

    SECTION 11.03  SEVERABILITY  If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of 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 Merger 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 hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner to the fullest
extent permitted by applicable Law in order that the Merger may be consummated
as originally contemplated to the fullest extent possible.

    SECTION 11.04  ASSIGNMENT; BINDING EFFECT; BENEFIT  Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto (whether by

                                       36
<PAGE>
operation of Law or otherwise) without the prior written consent of the other
parties hereto. Subject to the preceding sentence, this

    Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
Notwithstanding anything contained in this Agreement to the contrary, other than
Article X, nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto or their respective
successors and permitted assigns any rights or remedies under or by reason of
this Agreement.

    SECTION 11.05  INCORPORATION OF EXHIBITS  The Company Disclosure Schedule
and all Annexes and Schedules attached hereto and referred to herein are hereby
incorporated herein and made a part of this Agreement for all purposes as if
fully set forth herein.

    SECTION 11.06  GOVERNING LAW  This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware
other than conflict of laws principles thereof directing the application of any
law other than that of Delaware.

    SECTION 11.07  WAIVER OF JURY TRIAL  Each party hereto hereby irrevocably
waives all right to trial by jury in any proceeding (whether based on contract,
tort or otherwise) arising out of or relating to this agreement or any
transaction or agreement contemplated hereby or the actions of any party hereto
in the negotiation, administration, performance or enforcement hereof.

    SECTION 11.08  HEADINGS; INTERPRETATION  The descriptive headings contained
in this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement. The parties
have participated jointly in the negotiation and drafting of this Agreement. In
the event any ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.

    SECTION 11.09  COUNTERPARTS  This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.

    SECTION 11.10  ENTIRE AGREEMENT  This Agreement (including the Annexes, the
Schedules and the Company Disclosure Schedule) and the Confidentiality Agreement
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings among the
parties with respect thereto. No addition to or modification of any provision of
this Agreement shall be binding upon any party hereto unless made in writing and
signed by all parties hereto.

                 [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       37
<PAGE>
    IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.

                                          724 SOLUTIONS INC.,

                                          by /s/ CHRIS ERICKSON
                                            ------------------------------------

                                          Name: Chris Erickson
                                          Title: President

                                          SERPENT MERGER SUB, INC.

                                          by /s/ KAREN BASIAN
                                            ------------------------------------

                                          Name: Karen Basian
                                          Title: Chief Financial Officer

                                          SPYONIT.COM, INC.

                                          by /s/ STEPHEN OLECHOWSKI
                                            ------------------------------------

                                          Name: Stephen Olechowski
                                          Title: Chief Operating Officer

                                          by /s/ MICHAEL CLORAN
                                            ------------------------------------

                                          Michael Cloran

                                          by /s/ RICHARD W. COSTOLO
                                            ------------------------------------

                                          Richard W. Costolo

                                          by /s/ ROBERT CURREY
                                            ------------------------------------

                                          Robert Currey

                                          by /s/ LARRY DOWNES
                                            ------------------------------------

                                          Larry Downes

                                          by /s/ KEN EVERETT
                                            ------------------------------------

                                          Ken Everett

                                          by /s/ JOYCE KIM
                                            ------------------------------------

                                          Joyce Kim

                                          by /s/ BRECKENRIDGE KLING
                                            ------------------------------------

                                          Breckenridge Kling

                                       38
<PAGE>
                                          by /s/ CHRISTIAN LUNT
                                          --------------------------------------

                                          Christian Lunt

                                          by /s/ ERIC M. LUNT
                                            ------------------------------------

                                          Eric M. Lunt

                                          by /s/ STEPHEN J. OLECHOWSKI III
                                            ------------------------------------

                                          Stephen J. Olechowski III

                                          by /s/ TOM REILLY
                                            ------------------------------------

                                          Tom Reilly

                                          by /s/ MARC RETTIG
                                            ------------------------------------

                                          Marc Rettig

                                          by /s/ MATTHEW N. SHOBE
                                            ------------------------------------

                                          Matthew N. Shobe

                                          by /s/ TRACY SNELL
                                            ------------------------------------

                                          Tracy Snell

                                          by /s/ JENNY SONDAG
                                            ------------------------------------

                                          Jenny Sondag

                                          by /s/ KAROL TOWNS
                                            ------------------------------------

                                          Karol Towns

                                          by /s/ ETHAN WAGNER
                                            ------------------------------------

                                          Ethan Wagner

                                          by /s/ RONALD WAGNER
                                            ------------------------------------

                                          Ronald Wagner

                                          by /s/ THEA WESTREICH
                                            ------------------------------------

                                          Thea Westreich

                                          by /s/ ANDREW WILLIAMS
                                            ------------------------------------

                                          Andrew Williams

                                          by /s/ GORDON WILLIAMS
                                            ------------------------------------

                                          Gordon Williams

                                       39
<PAGE>
                         STOCKHOLDER LOCK-UP AGREEMENT

                                                            SEPTEMBER     , 2000

724 Solutions Inc.
4101 Yonge Street, Suite 702
Toronto, Ontario M2P 1N6
Canada

Ladies and Gentlemen:

    The undersigned, a stockholder (the "STOCKHOLDER") of Spyonit.com, Inc.
("SPYONIT"), understands that 724 Solutions Inc., a corporation amalgamated
under the laws of Ontario (the "COMPANY"), intends to acquire all of the
outstanding common stock of Spyonit pursuant to the terms and conditions of an
Agreement and Plan of Merger and Reorganization (the "AGREEMENT"), under which
the Stockholder will receive a combination of common shares of the Company
("COMPANY COMMON SHARES") and cash. Capitalized terms used herein but not
defined herein shall have the meanings given them in the Agreement.

    In order to induce the Company to enter into the Agreement and to consummate
the transactions contemplated thereby, the Stockholder hereby agrees as follows:

    Except as otherwise provided in Article X of the Agreement, the Stockholder,
without the prior written consent of the Company, agrees not to (x) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
Company Common Shares or any securities convertible into or exercisable or
exchangeable for Company Common Shares (including, without limitation, shares of
Company Common Shares or securities convertible into or exercisable or
exchangeable for Company Common Shares that may be deemed to be beneficially
owned by the Stockholder in accordance with the rules and regulations of the
Securities and Exchange Commission) or (y) enter into any swap or other
arrangement that transfers all or a portion of the economic consequences
associated with the ownership of any Company Common Shares (regardless of
whether any of the transactions described in clause (x) or (y) is to be settled
by the delivery of Company Common Shares, or such other securities, in cash or
otherwise), during the following periods:

    (i) with respect to the First Additional Consideration, the period
        commencing on the date hereof and ending on the first anniversary of the
        Effective Time;

    (ii) with respect to the Second Additional Consideration, the period
         commencing on the date hereof and ending on the second anniversary of
         the Effective Time; and

   (iii) with respect to the Third Additional Consideration, the period
         commencing on the date hereof and ending on the third anniversary of
         the Effective Time.

    The Stockholder hereby authorizes the Company to cause its transfer agent to
decline to transfer and/or to note stop transfer restrictions on the transfer
books and records of the Company with respect to any Company Common Shares and
any securities convertible into or exercisable or exchangeable for Company
Common Shares for which the Stockholder is the record holder and, in the case of
any such shares or securities for which the Stockholder is the beneficial but
not the record holder, agrees to cause the record holder to cause the transfer
agent to decline to transfer and/or to note stop transfer restrictions on such
books and records with respect to such shares or securities.

    Notwithstanding the foregoing, the Stockholder may transfer any or all of
the Company Common Shares owned or held by the Stockholder without the prior
written consent of the Company, (i) by bona fide gift, will or intestacy or
(ii) to any member or members of his or her immediate family or to a trust the
beneficiaries of which are exclusively the Stockholder and/or any member or
members of his

                                      A-1
<PAGE>
or her immediate family; provided that prior to such transfer or distribution
each transferee or distributee shall have executed and delivered a lock-up
agreement in the form of this lock-up agreement to 724 Solutions Inc., 4101
Yonge Street, Suite 702, Toronto, Ontario, Canada M2P 1N6 (Attention: Vice
President, Legal and Business Affairs). For purposes of this lock-up agreement,
"immediate family" shall mean any relationship by blood, marriage or adoption,
not more remote than first cousin, and any Company Common Shares held by the
Stockholder and by any permitted transferee thereof shall be aggregated.

    The Stockholder hereby represents and warrants that:

    (i) The Stockholder has full legal right, power and authority to enter into,
        execute and deliver the Agreement and to consummate the transactions
        contemplated thereby. The Agreement has been duly executed and delivered
        by the Stockholder and, assuming the due authorization and delivery
        thereof by the other parties thereto, constitutes a valid and legally
        binding agreement of the Stockholder, enforceable against the
        Stockholder in accordance with its terms, except as such enforceability
        may be limited by bankruptcy, fraudulent conveyance, insolvency,
        reorganization, moratorium and other laws relating to or affecting
        creditors' rights generally and by general equitable principles. All
        authority herein conferred or agreed to be conferred shall survive the
        death or incapacity of the Stockholder and any obligations of the
        Stockholder shall be binding upon the heirs, personal representatives,
        successors, and assigns of the Stockholder.

    (ii) Neither the execution and delivery of the Agreement or any of the
         documents to be delivered thereunder, nor compliance with the terms and
         provisions hereof or thereof, will violate any statute, regulation or
         ordinance of any Governmental Entity, or conflict with or result in the
         breach of any term, condition or provision of any agreement, deed,
         contract, mortgage, indenture, writ, order, decree, legal obligation or
         instrument to which the Stockholder is a party or by which the
         Stockholder is or may be bound.

   (iii) Except as set forth in the Agreement, no consent, approval, order,
         authorization of, or registration, qualification, designation,
         declaration or filing with, any federal, state or local Governmental
         Entity or any non-governmental third party on the part of the
         Stockholder is required in connection with the execution, delivery and
         performance by the Stockholder of the Agreement or the consummation of
         the transactions contemplated thereby.

    (iv) The Stockholder is the lawful owner of record and beneficially of the
         number of shares of common stock of Spyonit as indicated below his or
         her signature to this lock-up agreement (the "SHARES"). Such Shares
         constitute all of the shares of the common stock of Spyonit owned by
         the Stockholder, either directly or indirectly. No other person or
         entity other than such Stockholder has or will have, as of the
         effective time of the Merger contemplated by the Agreement, a
         beneficial interest in or a right to acquire such Shares or any portion
         of such Shares (except, with respect to Stockholders which are
         partnerships, partners of such Stockholders). Such Shares are also not
         subject to any lien, claim, encumbrance or restriction of any type,
         kind or nature in favor of any third party or any third party
         interests. The Stockholder is not a party to any option, warrant,
         purchase right, voting trust, proxy or other contract, agreement or
         commitment with respect to the common stock of Spyonit or the voting
         thereof.

    (v) The Stockholder further understands that the Company Common Shares to be
        received by the Stockholder in connection with the Agreement have not
        been registered under the Securities Act of 1933, as amended (the
        "SECURITIES ACT"), or under any state securities laws, is being offered
        and sold in reliance upon federal and state exemptions for transactions
        not involving any public offering, and may not be resold in the absence
        of registration unless such sale is exempt from registration under the
        Securities Act and any applicable state securities

                                      A-2
<PAGE>
        laws. The Stockholder has received certain information concerning the
        Company and has had the opportunity to obtain additional information as
        desired in order to evaluate the merits and the risks inherent in
        holding the Company Common Shares and is able to bear the economic risk
        and lack of liquidity inherent in holding the Company Common Shares. The
        issuance of Company Common Shares to the Stockholder pursuant to the
        Agreement is made to the Stockholder in reliance upon the Stockholder's
        representations to the Company herein. The Company Common Shares to be
        received by the Stockholder will be acquired for investment for the
        Stockholder's own account, not as a nominee or agent, and not with a
        view to the resale or distribution of any part thereof, and that the
        Stockholder has no present intention of selling, granting any
        participation in, or otherwise distributing the same. By executing this
        lock-up agreement, the Stockholder further represents that the
        Stockholder does not have any contract, undertaking, agreement or
        arrangement with any person to sell, transfer or grant participation to
        such person or to any third person, with respect to the Company Common
        Shares to be received by the Stockholder. If other than an individual,
        such Stockholder has not been organized for the purpose of acquiring
        Company Common Shares.

    (vi) The Stockholder either (1) is an "accredited investor" within the
         meaning of Securities and Exchange Commission ("SEC") Rule 501 of
         Regulation D, as presently in effect, or (2) alone or with his or her
         purchaser representative, as defined in SEC Rule 501 of Regulation D,
         has such knowledge or experience in financial or business matters that
         he or she is capable of evaluating the merits and risks of such
         Stockholder's investment in the Merger Shares.

   (vii) The Stockholder will observe and comply with the Securities Act and the
         general rules and regulations thereunder, as now in effect and as from
         time to time amended and including those hereafter enacted or
         promulgated, in connection with any offer, sale, exchange, transfer,
         pledge or other disposition of Company Common Shares or any part
         thereof.

  (viii) The Stockholder agrees that it is solely responsible for understanding
         and evaluating the tax risks and consequences of the Merger and other
         transactions contemplated by the Agreement, and has either consulted
         with its tax advisor or determined not to consult with its tax advisor.

    This Agreement shall terminate upon any merger, consolidation or exchange
offer to which the Company is a party which results in the Company Common Shares
being exchanged for or converted into different securities and/or cash or other
property.

                                      A-3
<PAGE>
    IN WITNESS WHEREOF, the undersigned has executed this Stockholder Lock-Up
Agreement as of the date first above written.

<TABLE>
<S>                                         <C>   <C>
                                            Very truly yours,

                                            -----------------------------------------------
                                                     (Name -- please print or type)

                                                                  By:
                                            ------------------------------------------------
                                                              (Signature)

                                            ------------------------------------------------
                                                               (Address)

                                            ------------------------------------------------
                                                               (Address)

                                            ------------------------------------------------
                                            (Social Security Or Taxpayer Identification No.)

                                            ------------------------------------------------
                                            (Number of shares of Spyonit stock beneficially
                                                          held by stockholder)
</TABLE>

                                      A-4
<PAGE>
                                ESCROW AGREEMENT

    THIS ESCROW AGREEMENT (this "AGREEMENT") is entered into as of
September   , 2000, by and among 724 Solutions Inc., a corporation amalgamated
under the laws of Ontario ("724"), First Union National Bank (the "ESCROW
AGENT"), Spyonit.com, Inc., a Delaware corporation ("SPYONIT") and the
stockholders of Spyonit (collectively, the "STOCKHOLDERS").

    WHEREAS, 724, Serpent Merger Sub, Inc., a Delaware corporation and a
wholly-owned subsidiary of 724, Spyonit and the Stockholders have entered into
an Agreement and Plan of Merger and Reorganization dated as of the date hereof
(the "MERGER AGREEMENT");

    WHEREAS, the Merger Agreement provides that an escrow account will be
established to secure various obligations of Spyonit and the Stockholders on the
terms and conditions set forth in the Merger Agreement and set forth herein; and

    WHEREAS, 724, the Escrow Agent, Spyonit and the Stockholders (each a "PARTY"
and collectively, the "PARTIES") desire to establish the terms and conditions
pursuant to which such escrow account will be established and maintained.

    NOW, THEREFORE, the Parties hereto hereby agree as follows:

1.  DEFINED TERMS.  Capitalized terms used in this Agreement and not otherwise
    defined shall have the meanings given them in the Merger Agreement.

2.  APPOINTMENTS.  First Union National Bank hereby accepts its appointment as
    Escrow Agent hereunder. 724 hereby appoints the Vice President, Legal and
    Business Affairs and the Vice President, Corporate Finance, to act, either
    jointly or individually, on behalf of 724 for all purposes hereunder (each a
    "724 REPRESENTATIVE"). Each of the Stockholders has appointed Richard W.
    Costolo, Eric M. Lunt and Stephen J. Olechowski III as its representatives
    to act on behalf of the Stockholders on all matters relating to this
    Agreement (the "STOCKHOLDERS REPRESENTATIVES"). The actions of a 724
    Representative or the Stockholders Representatives under or pursuant to this
    Agreement shall be binding on 724 and the Stockholders, respectively.

3.  CONSENT OF SPYONIT.  Pursuant to the Merger Agreement, Spyonit has consented
    to the establishment of this escrow to secure certain obligations under
    Article X of the Merger Agreement and certain other obligations in the
    manner set forth therein.

4.  ESCROW AND INDEMNIFICATION.

    (a) ESCROW OF COMMON SHARES OF 724.  At the Effective Time (or within a
       reasonable time thereafter), 724 shall deposit, on behalf of the
       Stockholders, with the Escrow Agent one or more certificates representing
       an aggregate of 411,162 common shares of 724 (the "ESCROW SHARES") as
       specified in SCHEDULE I to the Merger Agreement, issued in the name of
       the Stockholders in the respective amounts set forth on SCHEDULE A
       hereto, together with executed stock powers regarding the portion of the
       Escrow Shares issued in the name of the Stockholders. The Escrow Agent
       agrees to accept delivery of the Escrow Shares and to hold the Escrow
       Shares in an escrow account (the "ESCROW ACCOUNT"), subject to the terms
       and conditions of this Agreement.  The Escrow Account, unless it holds
       cash, shall not be an interest bearing account. Cash, if any, held in the
       Escrow Account shall be invested in a money market account mutually
       acceptable to a 724 Representative and the Stockholders Representatives,
       as specified in written instructions from such Representatives.

    (b) DISTRIBUTIONS AND DIVIDENDS.  All cash dividends and other distributions
       on Escrow Shares, when and if received by the Escrow Agent, shall be
       remitted and paid by the Escrow Agent directly to the Stockholders and
       shall not be subject to this Agreement or any indemnification claims of
       724 under this Agreement. Notwithstanding the foregoing, additional
       shares of

                                      B-1
<PAGE>
       capital stock issued on or with respect to the Escrow Shares as a result
       of stock splits, stock dividends or other similar capital adjustments to,
       or recapitalizations on, the Escrow Shares shall be delivered by 724 to
       the Escrow Agent and retained in the Escrow Account subject to the terms
       hereof and shall constitute Escrow Shares.

    (c) VOTING OF SHARES.  All voting rights with respect to Escrow Shares may
       be exercised by the Stockholders in accordance with their proportionate
       interests therein, and the Escrow Agent shall from time to time execute
       and deliver to the Stockholders such proxies, consents, or other
       documents as may be necessary to enable the Stockholders to exercise such
       rights. In the absence of any exercise of such voting rights with respect
       to Escrow Shares by the Stockholders, the Escrow Agent shall not vote any
       of the Escrow Shares.

    (d) TRANSFERABILITY; SALE.  The interest of the Stockholders in the Escrow
       Shares and any other property comprising the Escrow Account
       (collectively, the "ESCROW PROPERTY") shall not be assignable or
       transferable inter vivos so long as such Escrow Property is held by the
       Escrow Agent hereunder; PROVIDED, HOWEVER, that the Escrow Agent may
       sell, transfer, or otherwise dispose of the Escrow Property pursuant to
       Section 5 and 6 hereof, and as otherwise provided in this Agreement.

5.  RELEASE OF ESCROW PROPERTY.

    (a) At any time, and from time to time, prior to the second anniversary
       after the Effective Time (the "TERMINATION DATE"), 724 may make claims,
       in the manner set forth in Section 6 hereof, for payment against the
       Escrow Property if it (or any other Indemnified Person) has paid or
       incurred Damages and is entitled to indemnification under Article X of
       the Merger Agreement.

    (b) If the Escrow Agent has either (i) not received any Claim Notice (as
       such term is hereinafter defined) prior to the Termination Date or
       (ii) received a Claim Notice prior to the Termination Date but has
       distributed Escrow Shares to 724 for the full amount of the corresponding
       Claimed Amount prior to the Termination Date, then within three business
       (3) days after the Termination Date the Escrow Agent shall deliver all of
       the Escrow Shares then held by the Escrow Agent (and any and all
       additional shares of capital stock issued on or in respect to the Escrow
       Shares and other property then held by the Escrow Agreement) to the
       Stockholders whose respective names appear on the stock certificates
       representing said shares or who are otherwise entitled to such other
       property as a result of their ownership of said shares.

    (c) If the Escrow Agent has received a Claim Notice (as such term is
       hereinafter defined) prior to the Termination Date and the full amount of
       the applicable Claimed Amount has not been distributed to 724 prior to
       the Termination Date, then the Escrow Agent shall retain that number of
       Escrow Shares which has an aggregate Fair Market Value equal to the
       Claimed Amount (the "RETAINED ESCROW SHARES") and within three business
       days after the Termination Date shall deliver the balance of the Escrow
       Shares then held by the Escrow Agent (and any and all additional shares
       of capital stock issued on or in respect to the Escrow Shares and other
       property then held by the Escrow Agent) to the Stockholders whose
       respective names appear on the stock certificates representing said
       shares or who are otherwise entitled to such other property as result of
       their ownership of said shares.

    (d) The Retained Escrow Shares shall be held by the Escrow Agent until it
       receives a written direction to distribute the Retained Escrow Shares
       which is signed by both a 724 Representative and the Stockholder
       Representatives and shall promptly distribute the remaining Escrow
       Account in accordance with said joint written direction.

                                      B-2
<PAGE>
6.  ADMINISTRATION OF ESCROW ACCOUNT FOR INDEMNIFICATION CLAIMS.  With respect
    to indemnification claims, the Escrow Agent shall administer the Escrow
    Account as follows:

    (a) If an Indemnified Person has incurred or suffered Damages for which it
       is entitled to indemnification under the Merger Agreement, the
       Indemnified Person shall, prior to the Termination Date with respect to a
       particular claim, give written notice of such claim (a "CLAIM NOTICE") to
       the Stockholders Representatives (with a copy to the Escrow Agent). Each
       Claim Notice shall state the amount of Claimed Damages (the "CLAIMED
       AMOUNT") and the basis for such claim.

    (b) Claims for indemnification involving a claim or legal proceeding by a
       third party shall be made in accordance with the procedures set forth in
       the Merger Agreement and the provisions of this Section 6. For
       indemnification claims not involving any claim or legal proceeding by a
       third party, the procedures herein alone shall apply. Within twenty (20)
       business days of receipt by the Stockholders Representatives of a Claim
       Notice, the Stockholders Representatives receiving the Claim Notice shall
       provide to a 724 Representative (with a copy to the Escrow Agent) a
       written response (the "RESPONSE NOTICE") in which the Stockholders
       Representatives shall: (i) agree that Escrow Property having a Fair
       Market Value (as computed pursuant to Section 7 below) equal to the full
       Claimed Amount may be released from the Escrow Account to the Indemnified
       Person, (ii) agree that Escrow Property having a Fair Market Value equal
       to part, but not all, of the Claimed Amount may be released from the
       Escrow Account to the Indemnified Person, or (iii) contest that any of
       the Escrow Property may be released from the Escrow Account to the
       Indemnified Person. If no Response Notice is delivered to, and received
       by the Escrow Agent and a 724 Representative prior to twenty (20)
       business days of receipt of the Claim Notice, the Stockholders
       Representatives shall be deemed to have agreed that Escrow Property
       having a Fair Market Value equal to all of the Claimed Amount may be
       released to the Indemnified Person from the Escrow Account.
       Notwithstanding any terms of this Agreement to the contrary, no Claim
       Notice or Response Notice shall be deemed to have been delivered to the
       Escrow Agent until it is actually received by the Escrow Agent at the
       address set forth in Section 12 hereof.

    (c) If the Stockholders Representatives in the Response Notice agree (or are
       deemed to have agreed) that Escrow Property having a Fair Market Value
       equal to all of the Claimed Amount may be released from the Escrow
       Account to the Indemnified Person, the Escrow Agent shall, promptly
       thereafter transfer, deliver and assign to the Indemnified Person the
       Escrow Property having a Fair Market Value equal to the Claimed Amount
       (or such lesser amount of Escrow Property as is then held in the Escrow
       Account).

    (d) If the Stockholders Representatives in the Response Notice agree (or are
       deemed to have agreed) that Escrow Property having a Fair Market Value
       equal to part, but not all, of the Claimed Amount (the "PARTIAL AGREED
       AMOUNTS") may be released from the Escrow Account to the Indemnified
       Person, the Escrow Agent promptly shall transfer, deliver and assign to
       the Indemnified Person Escrow Property having a Fair Market Value equal
       to the sum of all Partial Agreed Amounts (or such lesser amount of Escrow
       Property as is then held in the Escrow Account).

    (e) If the Stockholders Representatives in the Response Notice contest the
       release of Escrow Property having a Fair Market Value equal to all or
       part of the Claimed Amount (the "CONTESTED AMOUNT"), the Stockholders
       Representatives and the Indemnified Person shall attempt promptly and in
       good faith to agree upon the rights of the parties with respect to the
       Contested Amount. If the Stockholders Representatives and the Indemnified
       Person should so agree, a memorandum setting forth such agreement shall
       be prepared and signed by both parties and delivered to the Escrow Agent
       and, if such agreement provides that all or a

                                      B-3
<PAGE>
       portion of the Contested Amount is to be paid to the Indemnified Person,
       the Escrow Agent shall promptly transfer, assign and deliver to the
       Indemnified Person from the Escrow Account an amount of Escrow Property
       having a Fair Market Value equal to the amount so agreed. If no such
       agreement can be reached within 30 days, the matter shall be settled by
       binding arbitration in Chicago, Illinois. Notwithstanding the foregoing,
       the parties may mutually agree to defer arbitration to a mutually
       agreeable later date. All claims shall be settled by a single arbitrator
       mutually agreeable to a 724 Representative and the Stockholders
       Representatives, or if they cannot agree on a single arbitrator in 45
       days, by three arbitrators, in accordance with the Commercial Arbitration
       Rules then in effect of the American Arbitration Association (the "AAA
       RULES"). Within 15 days after the expiration of said 45-day period, each
       of the Parent and the Stockholders Representatives will select one
       arbitrator and the two selected arbitrators will be instructed to choose
       a third arbitrator within 10 days after the expiration of said 15-day
       period. The Stockholders on the one hand, and 724, on the other hand,
       shall bear equally the fees and expenses of the arbitrator (or of the
       arbitrators, in the event three arbitrators decide the matter). The
       arbitrator's decision shall relate solely to whether the Indemnified
       Person is entitled to receive the Contested Amount (or a portion thereof)
       pursuant to the applicable terms of the Merger Agreement and this
       Agreement. The final decision of the arbitrator, or a majority of the
       arbitrators in the case of three arbitrators, shall be furnished to the
       Stockholders Representatives and a 724 Representative in writing and
       shall constitute a conclusive determination of the issue in question,
       binding upon the Stockholders and 724, and shall not be contested by any
       of them. Such decision may be used in a court of law only for the purpose
       of seeking enforcement of the arbitrator's award. Either the Stockholders
       Representatives or a 724 Representative may deliver a memorandum to the
       Escrow Agent setting forth such arbitrator's decision in accordance with
       the second sentence of this paragraph.

7.  VALUATION OF ESCROW SHARES.  For purposes of this Agreement, the Fair Market
    Value of each of the Escrow Shares shall be based on the average closing
    sale price on the Nasdaq National Market of a share of 724's Common Stock as
    reported in THE WALL STREET JOURNAL or, if not available, such other
    authoritative publication as may be reasonably selected by 724, for the ten
    consecutive trading days ending on and including the last trading date
    immediately preceding the date the applicable Escrow Shares are distributed
    by the Escrow Agent to either 724 or the Stockholders.

8.  FEES AND EXPENSES OF THE ESCROW AGENT.  724 agrees to pay to the Escrow
    Agent the Escrow Agent's reasonable fees and expenses, including attorneys
    fees, travel expenses, postal and delivery charges, and all other
    out-of-pocket expenses, in accepting and performing its appointment as
    escrow agent hereunder (collectively, the "ESCROW AGENT EXPENSES").

9.  GENERAL TERMS AND STANDARDS REGARDING THE ESCROW AGENT.  Notwithstanding any
    terms of this Agreement to the contrary, each term of this Agreement,
    including without limitation each of the stated duties and responsibilities
    of the Escrow Agent set forth herein, shall be subject to the following
    terms and conditions:

    (a) The duties, responsibilities and obligations of the Escrow Agent shall
       be limited to those expressly set forth in this Agreement (and the duty
       to exercise reasonable care in the physical safekeeping of any property
       held in escrow hereunder), and no implied duties, responsibilities or
       obligations shall be read into this Agreement against the Escrow Agent.
       Without limiting the generality of the foregoing, the Escrow Agent shall
       have no duty to take action to preserve or exercise rights in any
       property held by it hereunder (including, without limitation, against
       prior parties or otherwise).

    (b) The Escrow Agent shall not be subject to, bound by, charged with notice
       of or be required to comply with or interpret any agreement or document
       (including without limitation the Merger

                                      B-4
<PAGE>
       Agreement) between or among the interested parties (whether or not
       reference to any such other agreement or documents is expressed herein)
       other than this Agreement.

    (c) The Escrow Agent shall in no instance be under any duty to give any
       property held by it hereunder any greater degree of care than it gives
       its own similar property. The Escrow Agent shall not be required to
       invest any funds held hereunder, and shall not be obligated to pay
       interest on uninvested funds. All amounts received by the Escrow Agent
       (and any credits to the Escrow Account) shall be conditional upon
       collection (and actual receipt by the Escrow Agent of final payment). In
       no event shall the Escrow Agent have any obligation to advance funds.

    (d) The Escrow Agent may rely upon, and shall be protected in acting or
       refraining from acting upon, any written notice, instruction, statement,
       request, waiver, order, judgement, certification, consent, receipt or
       other paper or document furnished to it (not only as to genuineness, but
       also as to its due execution and validity, the genuineness of signatures
       appearing thereon and as to the truth and accuracy of any information
       therein contained), which it in good faith believes to be genuine and
       signed or presented by the proper person.

    (e) Neither the Escrow Agent nor any of its directors, officers or employees
       shall be liable to anyone for any error of judgment, or for any act done
       or step taken or omitted to be taken by it or any of its directors,
       officers or employees, or for any mistake of fact or law, or for anything
       which it, or any of its directors, officers or employees, may do or
       refrain from doing in connection with or in the administration of this
       Agreement, unless and except to the extent the same constitutes gross
       negligence, bad faith or willful misconduct on the part of the Escrow
       Agent. In no event shall the Escrow Agent be liable for any indirect,
       punitive, special or consequential damages, or any amount in excess of
       the value of the Escrow Property (as of the date of the action or
       omission giving rise to liability).

    (f) The Escrow Agent shall not be deemed to have notice of any fact, claim
       or demand with respect hereto unless actually known by an officer charged
       with responsibility for administering this Agreement or unless in writing
       received by the Escrow Agent and making specific reference to this
       Agreement.

    (g) No provision of this Agreement shall require the Escrow Agent to expend
       or risk its own funds, or to take any legal or other action hereunder
       which might in its judgement involve it in, or require it to incur in
       connection with the performance of its duties hereunder, any expense or
       any financial liability unless it shall be furnished with indemnification
       acceptable to it.

    (h) Any permissive right of the Escrow Agent to take any action hereunder
       shall not be construed as duty.

    (i) All indemnifications contained in this Agreement shall survive the
       resignation or removal of the Escrow Agent, and shall survive the
       termination of this Agreement.

    (j) The Escrow Agent is not responsible for the recitals appearing in this
       Agreement. The recitals shall be deemed to be statements of the
       interested parties to this Agreement.

    (k) The Escrow Agent has no responsibility for the sufficiency of this
       Agreement for any purpose. Without limiting the foregoing, if any
       security interest is referred to herein, the Escrow Agent shall have no
       responsibility for, and makes no representation or warranty as to, the
       creation, attachment or perfection of any such security interest or the
       sufficiency of this Agreement therefor.

    (l) Nothing in this Agreement shall obligate the Escrow Agent to qualify to
       do business or act in any jurisdiction in which it is not presently
       qualified to do business, or be deemed to impose

                                      B-5
<PAGE>
       upon the Escrow Agent the duties of a trustee. The duties of the Escrow
       Agent under this Agreement are strictly ministerial in nature.

    (m) In no event shall the Escrow Agent have any liability for any failure or
       inability of any of the interested Parties to perform or observe his or
       its duties under the Agreement, or by reason of a breach of this
       Agreement by any of the interested Parties. In no event shall the Escrow
       Agent be obligated to take any action against any of the interested
       Parties to compel performance hereunder.

    (n) The Escrow Agent shall in no instance be obligated to commence,
       prosecute or defend any legal proceedings in connection herewith. The
       Escrow Agent shall be authorized and entitled, however, in any instance
       to commence, prosecute or defend any legal proceedings in connection
       herewith, including without limitation any proceeding it may deem
       necessary to resolve any matter or dispute, to obtain a necessary
       declaration of rights, or to appoint a successor upon resignation (and
       after failure by the interested Parties to appoint a successor, as
       provided in Section 13).

    (o) Whenever the terms hereof call for any notice, payment or other action
       on a day which is not a business day, such payment or action may be
       taken, or such notice given, as the case may be, on the next succeeding
       business day. As used herein, "BUSINESS DAY" shall mean any day other
       than a Saturday or Sunday, or any other day on which the Escrow Agent is
       closed for business.

    (p) In the event of any ambiguity or uncertainty under this Agreement, or in
       any notice, instruction, or other communication received by the Escrow
       Agent hereunder, the Escrow Agent may, in its reasonable discretion,
       refrain from taking action, and may retain the Escrow Property, until and
       unless it receives written instruction signed by all interested parties,
       or a decision by a court of competent jurisdiction which eliminates such
       uncertainty or ambiguity.

    (q) If at any time Escrow Agent is served with any judicial or
       administrative order, judgement, decree, writ or other form of judicial
       administrative process which in any way relates to or affects the Escrow
       Property (including but not limited to orders of attachment or
       garnishment or other forms of levies or injunctions or stays relating to
       the Escrow Property), Escrow Agent is authorized to comply therewith in
       any manner as it or its legal counsel reasonably deems appropriate; and
       if the Escrow Agent complies with any such judicial or administrative
       order, judgement, decree, writ or other form of judicial or
       administrative process, Escrow Agent shall not be liable to any of the
       Parties hereto or to any other person or entity notwithstanding that
       though such order, judgement, decree, writ or process may be subsequently
       modified, annulled, set aside, vacated, found to have been without proper
       jurisdiction, or otherwise determined to have been without legal force or
       effect.

    (r) The Escrow Agent shall have no liability for the actions or omissions of
       any transfer agent, book-entry depository, nominee, correspondent,
       subagent or subcustodian, except to the extent that such action or
       omission of any transfer agent, book-entry depository, nominee,
       correspondent, subagent or subcustodian was caused by the Escrow Agent's
       own gross negligence, bad faith or willful misconduct.

    (s) The Parties understand that the Escrow Shares are not subject to an
       effective registration statement at the time of this Agreement, and that
       the Escrow Agent shall not be responsible for fluctuations in the market
       in connection with any transfer of the shares.

INDEMNIFICATION.

10. GENERAL.  Each of 724 and the Stockholders agree to indemnify the Escrow
    Agent for, and to defend and hold harmless the Escrow Agent from and
    against, any and every loss, liability,

                                      B-6
<PAGE>
    damage, claim, cost and expense of any nature incurred or suffered by the
    Escrow Agent and arising out of or in connection with this Agreement or the
    administration of this Agreement or the performance or observance by the
    Escrow Agent of its responsibilities or services under this Agreement
    (including but not limited to reasonable attorneys fees and other costs and
    expenses of defending or preparing to defend against any claim or
    liability), unless and except to the extent such loss, liability, damage,
    cost or expense shall be caused by the Escrow Agent's own willful
    misconduct, bad faith or gross negligence.

11. TAX-RELATED MATTERS.  Each of 724 and the Stockholders agree to assume any
    and all obligations imposed now or hereafter by any applicable tax law with
    respect to the payment of Escrow Property under this Agreement, and, without
    limiting the generality of Section 10(a) above, hereby agree to indemnify
    and hold the Escrow Agent harmless from and against any taxes, additions for
    late payment, interest, penalties and other expenses, that may be assessed
    against the Escrow Agent on any such payment or other activities under this
    Agreement. 724 and each of the Stockholders undertake to instruct the Escrow
    Agent in writing with respect to the Escrow Agent's responsibility for
    withholding and other taxes, assessments or other governmental charges,
    certifications and governmental reporting in connection with its acting as
    Escrow Agent under this Agreement. Each of 724 and the Stockholders agree to
    indemnify and hold the Escrow Agent harmless from any liability on account
    of taxes, assessments or other governmental charges, including without
    limitation the withholding or deduction or the failure to withhold or deduct
    same, and any liability for failure to obtain proper certifications or to
    properly report to governmental authorities, to which the Escrow Agent may
    be or become subject in connection with or which arises out of this
    Agreement, including costs and expenses (including reasonable legal fees),
    interest and penalties. The interested Parties shall each promptly provide
    to Escrow Agent with appropriate IRS Forms W-9 for taxpayer identification
    number certifications, or Forms W-8 for nonresident alien certifications in
    connection with any payments to be made to them.

12. TERMINATION.  If this Agreement is not terminated pursuant to Section 5
    above, this Agreement shall terminate upon the later of the Termination Date
    or the distribution by the Escrow Agent of all of the Escrow Account in
    accordance with this Agreement, provided that the provisions of Sections 9
    and 10 above shall survive such termination.

13. NOTICES.  All notices, requests, demands, and other communications under
    this Agreement shall be in writing and shall be deemed to have been duly
    given on the date of service if served personally on the party to whom
    notice is to be given, on the date of transmittal of service via telecopy to
    the party to whom notice is to be given, on the first day after deposit with
    a nationally recognized overnight courier, if specified for overnight
    delivery, to the Party to whom notice is to be given, or on the third day
    after mailing if mailed to the Party to whom notice is to be given, by first
    class

                                      B-7
<PAGE>
    mail, registered or certified, postage prepaid, and properly addressed as
    follows (or at such other address for a party as shall be specified by like
    notice):

<TABLE>
<C>                            <S>
             To 724 at:        724 Solutions Inc.
                               4101 Yonge Street, Suite 702
                               Toronto, Ontario, Canada M2P 1N6
                               Attention: Vice President, Legal and Business Affairs
                               Telecopy No.: (416) 226-4456

        With a copy to:        Brobeck, Phleger & Harrison LLP
                               1633 Broadway, 47th Floor
                               New York, NY 10019
                               Attention: Mark Mandel, Esq.
                               Telecopy No.: (212) 586-7878

        With a copy to:        Ogilvy Renault
                               Suite 2100, P.O Box 141
                               Royal Trust Tower, TD Centre
                               Toronto, Ontario M5K 1H1
                               Attention: Brian Ludmer
                               Telecopy No.: (416) 216-3930
To the Stockholders at:        Spyonit.com, Inc.
                               434 West Ontario Street, Suite 410
                               Chicago, IL 60610
                               Attention: Richard W. Costolo, Eric M. Lunt
                               and Stephen J. Olechowski III
                               Telecopy No.: (312) 642-9051

        With a copy to:        Chapman and Cutler
                               111 West Monroe Street
                               Chicago, Illinois 60603
                               Attention: Michael P. Barrett, Esq.
                               Telecopy No.: (312) 701-2361

    To Escrow Agent at:        First Union National Bank
                               21 South Street, 3rd Floor
                               Morristown, New Jersey 07960
                               Attention: Corporate Trust Administrator
</TABLE>

    Notwithstanding anything herein to the contrary, any Party may give any
    notice, request, demand, claim or other communication hereunder by personal
    delivery or telecopy, but no such notice, request, demand, claim or other
    communication shall be deemed to have been duly given unless and until it
    actually is received by the Party for whom it is intended. Any Party may
    change the address to which notices, requests, demands, claims and other
    communications hereunder are to be delivered by giving the other Parties
    notice in the manner herein set forth. Copies of any notice, request,
    demand, claim or other communication hereunder by personal delivery or
    telecopy given to the Escrow Agent by any Party, shall be delivered to the
    other Parties as soon thereafter as practicable.

14. SUCCESSOR ESCROW AGENT.  In the event the Escrow Agent becomes unavailable
    or unwilling to continue in its capacity herewith, the Escrow Agent may
    resign and be discharged from its duties or obligations hereunder by
    delivering a resignation to the Parties, not less than 60 days prior to the
    date when such resignation shall take effect. 724 may appoint a successor
    Escrow Agent with the consent of the Stockholders Representatives, which
    shall not be unreasonably withheld. If,

                                      B-8
<PAGE>
    within such notice period, 724 provides to the Escrow Agent written
    instructions with respect to the appointment of a successor Escrow Agent and
    directions for the transfer of any Escrow Property then held by the Escrow
    Agent to such successor, the Escrow Agent shall act in accordance with such
    instructions and promptly transfer such Escrow Property to such designated
    successor. Any successor Escrow Agent shall agree to be bound by the terms
    of this Agreement. If no successor is so appointed, the Escrow Agent may
    apply to a court of competent jurisdiction for such appointment.

15. GENERAL.

    (a) GOVERNING LAW, ASSIGNS.  This Agreement shall be governed by and
       construed in accordance with the internal laws of the State of Illinois
       without regard to conflict-of-law and choice of law principles and shall
       be binding upon, and inure to the benefit of, the Parties and their
       respective successors and assigns.

    (b) COUNTERPARTS.  This Agreement may be executed in two or more
       counterparts, each of which shall be deemed an original, but all of which
       together shall constitute one and the same instrument.

    (c) ENTIRE AGREEMENT.  Except for the provisions of the Merger Agreement
       referenced herein, this Agreement constitutes the entire understanding
       and agreement of the Parties with respect to the subject matter of this
       Agreement and supersedes all prior agreements or understandings, written
       or oral, between the Parties with respect to the subject matter hereof.

    (d) WAIVERS.  No waiver by any Party hereto of any condition or of any
       breach of any provision of this Escrow Agreement shall be effective
       unless in writing. No waiver by any party of any such condition or
       breach, in any one instance, shall be deemed to be a further or
       continuing waiver of any such condition or breach or a waiver of any
       other condition or breach of any other provision contained herein.

    (e) AMENDMENT.  This Agreement may be amended only with the written consent
       of a 724 Representative, the Escrow Agent and the Stockholders
       Representatives.

                 [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                      B-9
<PAGE>
    IN WITNESS WHEREOF, the Parties have duly executed this Escrow Agreement as
of the day and year first above written.

                                        724 SOLUTIONS INC.

                                        By: ____________________________________

                                        Name: __________________________________

                                        Title: _________________________________

                                        SPYONIT.COM, INC.

                                        By: ____________________________________

                                        Name: __________________________________

                                        Title: _________________________________

                                        FIRST UNION NATIONAL BANK,
                                        AS ESCROW AGENT:

                                        By: ____________________________________

                                        Name: __________________________________

                                        Title: _________________________________

                                        STOCKHOLDER REPRESENTATIVES:

                                        ________________________________________

                                        Richard W. Costolo

                                        ________________________________________

                                        Eric M. Lunt

                                        ________________________________________

                                        Stephen J. Olechowski III

                                        STOCKHOLDERS:

                                        ________________________________________

                                        Michael Cloran

                                      B-10
<PAGE>
                                        ________________________________________

                                        Richard W. Costolo

                                        ________________________________________

                                        Robert Currey

                                        ________________________________________

                                        Larry Downes

                                        ________________________________________

                                        Ken Everett

                                        ________________________________________

                                        Joyce Kim

                                        ________________________________________

                                        Breckenridge Kling

                                        ________________________________________

                                        Christian Lunt

                                        ________________________________________

                                        Eric M. Lunt

                                        ________________________________________

                                        Stephen J. Olechowski III

                                        ________________________________________

                                        Tom Reilly

                                        ________________________________________

                                        Marc Rettig

                                        ________________________________________

                                        Matthew N. Shobe

                                        ________________________________________

                                        Tracy Snell

                                      B-11
<PAGE>
                                        ________________________________________

                                        Jenny Sondag

                                        ________________________________________

                                        Karol Towns

                                        ________________________________________

                                        Ethan Wagner

                                        ________________________________________

                                        Ronald Wagner

                                        ________________________________________

                                        Thea Westreich

                                        ________________________________________

                                        Andrew Williams

                                        ________________________________________

                                        Gordon Williams

                                      B-12
<PAGE>
                                   SCHEDULE A

                                 ESCROW SHARES

<TABLE>
<CAPTION>
NAME OF REGISTERED HOLDER                                     NUMBER OF SHARES
-------------------------                                     ----------------
<S>                                                           <C>
Michael Cloran..............................................        4,599

Richard W. Costolo..........................................       94,920

Robert Currey...............................................        4,245

Larry Downes................................................        7,193

Ken Everett.................................................        3,537

Joyce Kim...................................................       15,529

Breckenridge Kling..........................................        5,660

Christian Lunt..............................................           35

Eric M. Lunt................................................       94,920

Stephen J. Olechowski III...................................       94,920

Tom Reilly..................................................        3,537

Marc Rettig.................................................        1,769

Matthew N. Shobe............................................       50,467

Tracy Snell.................................................        4,245

Jenny Sondag................................................        2,122

Ethan Wagner and Thea Westreich.............................        8,844

Ronald Wagner...............................................        4,009

Ronald Wagner and Karol Towns...............................        3,537

Andrew Williams.............................................        3,537

Gordon Williams.............................................        3,537
                                                                  -------

                                                      Total:      411,162
                                                                  =======
</TABLE>

                                      B-13
<PAGE>
                                   SCHEDULE I
                                  STOCKHOLDERS

Michael Cloran
Richard W. Costolo
Robert Currey
Larry Downes
Ken Everett
Joyce Kim
Breckenridge Kling
Christian Lunt
Eric M. Lunt
Stephen J. Olechowski III
Tom Reilly
Marc Rettig
Matthew N. Shobe
Tracy Snell
Jenny Sondag
Ethan Wagner and Thea Westreich
Ronald Wagner
Ronald Wagner and Karol Towns
Andrew Williams
Gordon Williams

                                      B-14
<PAGE>
                                  SCHEDULE II
                               EXCHANGE OF SHARES

<TABLE>
<CAPTION>
                                                                                 1ST              2ND              3RD
                            COMPANY       INITIAL CASH    INITIAL STOCK      ADDITIONAL        ADDITIONAL       ADDITIONAL
NAME                     COMMON STOCK    CONSIDERATION    CONSIDERATION     CONSIDERATION    CONSIDERATION    CONSIDERATION
----                     -------------   --------------   --------------   ---------------   --------------   --------------
<S>                      <C>             <C>              <C>              <C>               <C>              <C>
Michael Cloran.........       130,000    $   22,368.80         1,533             1,533            3,985            4,599

Richard W. Costolo.....     2,683,333    $  461,714.98        31,640            31,640           82,264           94,920

Robert Currey..........       120,000    $   20,648.13         1,415             1,415            3,679            4,245

Larry Downes...........       203,333    $   34,987.04         2,398             2,398            6,234            7,193

Ken Everett............       100,000    $   17,206.77         1,179             1,179            3,066            3,537

Joyce Kim..............       439,000    $   75,537.73         5,176             5,176           13,459           15,529

Breckenridge Kling.....       160,000    $   27,530.83         1,887             1,887            4,905            5,660

Christian Lunt.........         1,000    $      172.07            12                12               31               35

Eric M. Lunt...........     2,683,333    $  461,714.98        31,640            31,640           82,264           94,920

Stephen J. Olechowski
  III..................     2,683,333    $  461,714.98        31,640            31,640           82,264           94,920

Tom Reilly.............       100,000    $   17,206.77         1,179             1,179            3,066            3,537

Marc Rettig............        50,000    $    8,603.39           590               590            1,533            1,769

Matthew N. Shobe.......     1,426,666    $  245,483.16        16,823            16,823           43,739           50,467

Tracy Snell............       120,000    $   20,648.13         1,415             1,415            3,679            4,245

Jenny Sondag...........        60,000    $   10,324.06           707               707            1,839            2,122

Ethan Wagner and Thea
  Westreich............       250,000    $   43,016.93         2,948             2,948            7,664            8,844

Ronald Wagner..........       113,333    $   19,500.95         1,336             1,336            3,475            4,009

Andrew Williams........       100,000    $   17,206.77         1,179             1,179            3,066            3,537

Gordon Williams........       100,000    $   17,206.77         1,179             1,179            3,066            3,537

Ronald Wagner and Karol
  Towns................       100,000    $   17,206.77         1,179             1,179            3,066            3,537
                          -----------    -------------       -------           -------          -------          -------

    TOTAL:.............    11,623,331    $2,000,000.00       137,055           137,055          356,344          411,162
                          ===========    =============       =======           =======          =======          =======
</TABLE>

    The parties hereto agree that the Parent Stock Price is $36.48.

                                  SCHEDULE III
                                   EMPLOYEES

Richard W. Costolo
Ken Everett
Andrew Goldstein
Joyce Kim
Eric M. Lunt
Stephen J. Olechowski III
Matthew N. Shobe
Jenny Sondag
Krista Von Ritter

                                      B-15

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