Document:

exv10w1

Exhibit 10.1

EXECUTION COPY

AMENDED AND RESTATED

MANAGEMENT AGREEMENT

by and between

CARE INVESTMENT TRUST INC.

And

CIT HEALTHCARE LLC

Dated as of January 15, 2010

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	SECTION 1. DEFINITIONS
	 	 	1	 
	 
	SECTION 2. APPOINTMENT AND DUTIES OF THE MANAGER
	 	 	4	 
	 
	SECTION 3. ADDITIONAL ACTIVITIES OF THE MANAGER
	 	 	10	 
	 
	SECTION 4. BANK ACCOUNTS
	 	 	10	 
	 
	SECTION 5. RECORDS; CONFIDENTIALITY
	 	 	10	 
	 
	SECTION 6. COMPENSATION
	 	 	12	 
	 
	SECTION 7. EXPENSES OF THE COMPANY
	 	 	14	 
	 
	SECTION 8. LIMITS OF THE MANAGER’S RESPONSIBILITY
	 	 	17	 
	 
	SECTION 9. NO JOINT VENTURE
	 	 	19	 
	 
	SECTION 10. TERM; TERMINATION
	 	 	19	 
	 
	SECTION 11. ASSIGNMENTS
	 	 	20	 
	 
	SECTION 12. TERMINATION FOR CAUSE
	 	 	20	 
	 
	SECTION 13. ACTION UPON TERMINATION
	 	 	22	 
	 
	SECTION 14. RELEASE OF MONEY OR OTHER PROPERTY UPON WRITTEN REQUEST
	 	 	22	 
	 
	SECTION 15. REPRESENTATIONS AND WARRANTIES
	 	 	23	 
	 
	SECTION 16. EFFECTIVE DATE; BUYOUT; RELEASE
	 	 	25	 
	 
	SECTION 17. MISCELLANEOUS
	 	 	26	 
	 
	EXHIBIT A. CONFLICTS OF INTEREST POLICY
	 	 	A-1	 
	 
	EXHIBIT B. TERMINATION AGREEMENT
	 	 	B-1	 

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TABLE OF CONTENTS
(continued)

	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	EXHIBIT C. GENERAL MUTUAL RELEASE
	 	 	C-1	 
	 
	SCHEDULE 1. EXISTING INVESTMENTS
	 	 	D-1	 

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     AMENDED AND RESTATED MANAGEMENT AGREEMENT, dated as of January 15, 2010, by and between Care
Investment Trust Inc., a Maryland corporation (the “Company”) and CIT Healthcare LLC, a Delaware
limited liability company (or its permitted assignees, the “Manager”).

W I T N E S S E T H:

     WHEREAS, on June 27, 2007, the Company retained the Manager to manage the business and
investment affairs of the Company and its Subsidiaries and to perform services for the Company in
the manner and on the terms set forth in that certain Management Agreement dated June 27, 2007 (the
“Original Management Agreement”);

     WHEREAS, the Company and the Manager entered into Amendment No. 1 to the Management Agreement,
dated as of September 30, 2008 (the “First Amendment”);

     WHEREAS; the Company filed with the SEC a Preliminary Proxy Statement on December 11, 2009,
and a Definitive Proxy Statement on December 28, 2009 (the “Proxy Statement”), pursuant to which
the Board of Directors has called a Special Meeting of Stockholders of the Company to take place
Thursday, January 28, 2010, at which the Company will seek approval from the stockholders of the
plan of liquidation that is described in and attached to the Proxy Statement (the “Plan of
Liquidation”); and

     WHEREAS, the Company and the Manager desire to further amend and restate the Management
Agreement as set forth herein, effective upon stockholder approval of the Plan of Liquidation, in
order to facilitate implementation of the Plan of Liquidation.

     NOW THEREFORE, in consideration of the premises and agreements hereinafter set forth, the
parties hereto hereby agree as follows:

     Section 1. Definitions.

          (a) The following terms shall have the meanings set forth in this Section 1(a):

     “Adjusted Amount” has the meaning set forth in Section 6(a)(iii) hereof.

     “Affiliate” means, with respect to any Person (i) any other Person directly or indirectly
controlling, controlled by, or under common control with such Person, (ii) any executive officer or
general partner of such Person, and (iii) any legal entity for which such Person acts as an
executive officer or general partner.

     “Agreement” means this Amended and Restated Management Agreement, dated as of January 15,
2010, as amended, supplemented or otherwise modified from time to time.

     “Aggregate Distributable Cash” has the meaning set forth in Section 6(d) hereof.

     “Base Management Fee” has the meaning set forth in Section 6(a) hereof.

     “Board of Directors” means the board of directors of the Company.

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     “Business Day” means any day except a Saturday, a Sunday or a day on which banking
institutions in New York, New York are not required to be open.

     “Buyout Payment” has the meaning set forth in Section 16(b) hereof.

     “Change in Control of the Manager” shall be deemed to have occurred: (a) if any Person or
group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any
successor provision), including any group for the purpose of acquiring, holding or disposing of
securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than CIT Group
Inc. (“CIT Group”) or an Affiliate of CIT Group, in a single transaction or in a related series of
transactions, becomes the beneficial owner, directly or indirectly, of securities of the Manager
representing more than 50% of the aggregate voting power of all classes of the Manager’s then
outstanding voting securities (provided, however, no change in the ownership of CIT Group shall be
deemed to be a “Change of Control” for purposes of this Agreement) or (b) upon approval by all
requisite parties of (i) a plan of merger, consolidation, share exchange, business combination or
similar transaction between the Manager and an entity (other than an Affiliate of the Manager that
executes this Agreement and agrees to bound by the provisions hereof), or (ii) the execution of a
binding proposal or agreement with respect to the sale, lease, transfer, exchange or other disposal
of all, or substantially all, of the Manager’s assets to an entity (other than an Affiliate of the
Manager in accordance with Section 11(a)).

     “Claim” has the meaning set forth in Section 8(c) hereof.

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Common Stock” means the common stock, par value $0.001, of the Company.

     “Company Indemnified Party” has meaning set forth in Section 8(b) hereof.

     “Company Permitted Disclosure Parties” has the meaning set forth in Section 5(b) hereof.

     “Company Termination Date” has the meaning set forth in Section 10(b) hereof.

     “Company Termination Notice” has the meaning set forth in Section 10(c) hereof.

     “Conduct Policies” has the meaning set forth in Section 2(k) hereof.

     “Confidential Information” has the meaning set forth in Section 5(a) hereof.

     “Conflicts of Interest Policy” means the conflicts of interests policy for the Company with
respect to the Manager, a copy of which is attached hereto as Exhibit A, as the same may be
amended, restated, modified, supplemented or waived by the Manager and the Board of Directors as
specified therein.

     “Early Termination Event” means when either one of the following shall have occurred: (i) the
aggregate book value of the Company’s assets (excluding cash and cash equivalents) is $10,000,000
or less, as reasonably determined by the Manager, or (ii) (x) ninety (90) days have

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elapsed since filing by the Company of a Form 15 with the SEC and (y) the Company has sold or
otherwise disposed of at least five of the six Existing Investments.

     “Effective Date” means the effective date of this Agreement as set forth in Section 16(a)
hereof.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Existing Investments” means the investments listed on Schedule 1 attached hereto.

     “First Adjustment Date” has the meaning set forth in Section 6(a)(ii) hereof.

     “Further Adjusted Amount” has the meaning set forth in Section 6(a)(iv) hereof.

     “GAAP” means generally accepted accounting principles in effect in the United States on the
date such principles are applied.

     “Governing Instruments” means, with regard to any entity, the articles of incorporation or
certificate of incorporation and bylaws in the case of a corporation, the partnership agreement in
the case of a general or limited partnership or the certificate of formation and operating
agreement in the case of a limited liability company, the trust instrument in the case of a trust,
or similar governing documents in each case as amended.

     “Incentive Fee” has the meaning set forth in Section 6(d) hereof.

     “Indemnified Party” has the meaning set forth in Section 8(b) hereof.

     “Independent Director” means a member of the Board of Directors who is “independent” in
accordance with the Company’s Governing Instruments and the rules of the NYSE, if applicable, or
such other securities exchange on which the shares of Common Stock are listed.

     “Investment Company Act” means the Investment Company Act of 1940, as amended.

     “Losses” has the meaning set forth in Section 8(a) hereof.

     “Management Fee Payment” has the meaning set forth in Section 6(c) hereof.

     “Manager Confidential Information” has meaning set forth in Section 5(b) hereof.

     “Manager Indemnified Party” has the meaning set forth in Section 8(a) hereof.

     “Manager Permitted Disclosure Parties” has the meaning set forth in Section 5(a) hereof.

     “Manager Termination Date” has the meaning set forth in Section 10(c) hereof.

     “Manager Termination Notice” has the meaning set forth in Section 10(c) hereof.

     “NYSE” means the New York Stock Exchange, Inc.

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     “Person” means any natural person, corporation, partnership, association, limited liability
company, estate, trust, joint venture, any federal, state, county or municipal government or any
bureau, department or agency thereof or any other legal entity and any fiduciary acting in such
capacity on behalf of the foregoing.

     “Plan of Liquidation” has the meaning set forth in the Recitals hereto.

     “REIT” means a “real estate investment trust” as defined under the Code.

     “Release” has the meaning set forth in Section 16(d) hereof and a copy of which is attached
hereto as Exhibit C.

     “SEC” means the United States Securities and Exchange Commission.

     “Second Adjustment Date” has the meaning set forth in Section 6(a)(iii) hereof.

     “Securities Act” means the Securities Act of 1933, as amended.

     “Subsidiary” means any subsidiary of the Company and any partnership, the general partner of
which is the Company or any subsidiary of the Company, and any limited liability company, the
managing member of which is the Company or any subsidiary of the Company.

     “Termination Agreement” has the meaning set forth in Section 16(c) hereof and a copy of which
is attached hereto as Exhibit B.

          (b) As used herein, accounting terms relating to the Company and its Subsidiaries, if any,
not defined in Section 1(a) and accounting terms partly defined in Section 1(a), to the extent not
defined, shall have the respective meanings given to them under GAAP.

          (c) The words “hereof,” “herein” and “hereunder” and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section references are to this Agreement unless otherwise specified.

          (d) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms. The words include, includes and including shall be deemed
to be followed by the phrase “without limitation.”

     Section 2. Appointment and Duties of the Manager.

          (a) The Company hereby appoints the Manager to manage the investments and day-to-day
operations of the Company and its Subsidiaries, including implementation of the Plan of
Liquidation, subject at all times to the further terms and conditions set forth in this Agreement
and to the supervision and direction of, and such further limitations or parameters as may be
imposed from time to time by, the Board of Directors. The Manager hereby agrees to use its
commercially reasonable efforts to perform each of the duties set forth herein, provided that funds
are made available by the Company for such purposes as set forth in Section 7 hereof. In performing
its duties hereunder, the Manager also herby agrees to use its commercially

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reasonable efforts to comply, and to cause the personnel providing services to the Company to
comply, with the Conflicts of Interest Policy. The appointment of the Manager shall be exclusive to
the Manager, except to the extent that the Manager elects, in its sole and absolute discretion, in
accordance with the terms of this Agreement, to cause the duties of the Manager as set forth herein
to be provided by third parties.

          (b) The Manager, in its capacity as manager of the investments and the day-to-day operations
of the Company, including implementation of the Plan of Liquidation, at all times will be subject
to the supervision and direction of the Board of Directors and will have only such functions and
authority as the Board of Directors may delegate to it, including the functions and authority
identified herein and delegated to the Manager hereby. The Manager will be responsible for the
day-to-day operations of the Company, including in connection with implementing the Plan of
Liquidation, and will perform (or cause to be performed) such services and activities relating
thereto as may be appropriate:

     (i) serving as the Company’s consultant with respect to the periodic review of the
Company’s portfolio and operations (including the Conflicts of Interest Policy, any
modifications to which shall be approved by a majority of the Independent Directors) and
other policies and recommendations with respect thereto for approval by the Board of
Directors;

     (ii) making available to the Company the Manager’s knowledge and experience with
respect to mortgage loans, real estate, real estate securities, other real estate-related
assets and non-real estate related assets and real estate operating companies in the
healthcare industry and otherwise;

     (iii) serving as the Company’s consultant with respect to monitoring and disposition
of the Company’s investments with a view to assisting the Company in its objective of
maintaining the value of such investments while such investments are held by the Company and
maximizing the proceeds of any sales of such investments at the time of their sale;

     (iv) serving as the Company’s consultant with respect to, and making recommendations
to the Company in connection with, all other decisions relating to implementation of the
Plan of Liquidation with a view to assisting the Company in its objective of maximizing the
value to shareholders from implementation of the Plan of Liquidation;

     (v) with respect to any prospective sale, exchange or other disposition of any
investment by the Company, conducting negotiations on behalf of the Company with real estate
brokers, purchasers and their respective agents, representatives and investment bankers and
owners of privately and publicly held real estate companies;

     (vi) providing the Company with portfolio management, asset servicing and loan
servicing, including enforcing rights, exercising remedies, granting consents, and taking
other actions on behalf of the Company in respect of the Company’s investments;

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     (vii) conducting periodic on-site visits to properties to inspect the physical
condition of the properties and to evaluate the performance of a tenant or operator of its
duties;

     (viii) reviewing, analyzing and commenting upon the operating budgets, capital budgets
and leasing plans of properties;

     (ix) engaging and supervising, on behalf of the Company and at the Company’s expense,
independent contractors that provide real estate, investment banking, mortgage brokerage,
securities brokerage, appraisal, engineering, environmental, seismic, insurance, legal,
accounting, transfer agent, registrar, leasing, master servicing, special servicing, due
diligence and such other services as may be required relating to the Company’s operations or
investments;

     (x) coordinating and managing operations of any joint venture or co-investment
interests held by the Company and conducting all matters with the joint venture or
co-investment partners;

     (xi) providing executive and administrative personnel, office space and office
services required in rendering services to the Company;

     (xii) performing and supervising the performance of administrative functions necessary
in the management of the Company as may be agreed upon by the Manager and the Board of
Directors, including the services in respect of any of the Company’s incentive plans, the
collection of revenues and the payment of the Company’s debts and obligations and
maintenance of appropriate information technology services to perform such administrative
functions;

     (xiii) communicating on behalf of the Company with the holders of any equity or debt
securities of the Company as required to satisfy any reporting and other requirements of any
governmental bodies or agencies or trading exchanges or markets and to maintain effective
relations with such holders;

     (xiv) counseling the Company in connection with policy decisions to be made by the
Board of Directors;

     (xv) counseling the Company regarding the maintenance of its qualification as a REIT
and monitoring compliance with the various REIT qualification tests and other rules set out
in the Code and Treasury Regulations promulgated thereunder;

     (xvi) counseling the Company regarding the maintenance of its exemption from status as
an investment company under the Investment Company Act and monitoring compliance with the
requirements for maintaining such exemption;

     (xvii) furnishing reports and statistical and economic research to the Company
regarding the activities and services performed for the Company or its Subsidiaries, if any,
by the Manager;

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     (xviii) monitoring the operating performance of the Company’s investments and
providing periodic reports with respect thereto to the Board of Directors, including
comparative information with respect to such operating performance and budgeted or projected
operating results;

     (xix) investing and re-investing any monies and securities of the Company (including
in short-term investments, payment of fees, costs and expenses, or payments of dividends or
distributions to stockholders and partners of the Company) and advising the Company as to
its capital structure;

     (xx) causing the Company to retain qualified accountants and legal counsel, as
applicable, to (i) assist in developing and maintaining appropriate accounting procedures,
compliance procedures and testing systems with respect to financial reporting obligations
and compliance with the provisions of the Code applicable to REITs and, if applicable,
taxable REIT subsidiaries and (ii) conduct quarterly compliance reviews with respect
thereto;

     (xxi) causing the Company to qualify to do business in all jurisdictions in which such
qualification is required and to obtain and maintain all appropriate licenses;

     (xxii) assisting the Company in complying with all regulatory requirements applicable
to the Company in respect of its business activities, including preparing or causing to be
prepared all financial statements required under applicable regulations and contractual
undertakings and all reports and documents, if any, required under the Exchange Act and the
Securities Act or by the NYSE;

     (xxiii) taking all necessary actions to enable the Company and its Subsidiaries to
make required tax filings and reports, including soliciting stockholders for required
information to the extent necessary under the Code and Treasury Regulations applicable to
REITs;

     (xxiv) handling and resolving all claims, disputes or controversies (including all
litigation, arbitration, settlement or other proceedings or negotiations) in which the
Company may be involved or to which the Company may be subject arising out of the Company’s
day-to-day operations, including implementation of the Plan of Liquidation, other than with
the Manager or its Affiliates;

     (xxv) using commercially reasonable efforts to cause expenses incurred by or on behalf
of the Company to be commercially reasonable or commercially customary and within any
budgeted parameters or expense guidelines set by the Board of Directors from time to time;

     (xxvi) performing such other services as may be required from time to time for the
management and other activities relating to the assets of the Company as the Board of
Directors shall reasonably request or the Manager shall deem appropriate under the
particular circumstances; and

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     (xxvii) using commercially reasonable efforts to cause the Company to comply with all
applicable laws.

          (c) The Manager may retain, for and on behalf, and at the sole cost and expense, of the
Company, such services of accountants, legal counsel, appraisers, insurers (including title
insurers), surveyors, engineering, environmental and seismic consultants, insurance consultants and
brokers, public relations and marketing consultants, information technology consultants, investment
relations advisers, securities brokers, mortgage brokers, transfer agents, registrars, financial
printers, developers, investment banks, financial advisors, internal audit service providers, banks
and other lenders, consultants, agents, contractors, vendors, advisors and others as the Manager
deems necessary or advisable in connection with the management and operations of the Company. In
performing its duties under this Section 2, the Manager shall be entitled to rely reasonably on
qualified experts and professionals (including accountants, legal counsel and other professional
service providers) hired by the Manager at the Company’s sole cost and expense. The Manager shall
use commercially reasonable efforts to cause expenses incurred by or on behalf of the Company to be
commercially reasonable or commercially customary and within any budgeted parameters or expense
guidelines set by the Board of Directors from time to time.

          (d) The Manager shall refrain from any action that, in its sole judgment made in good faith,
(i) would adversely affect the qualification of the Company as a REIT under the Code or the
Company’s status as an entity exempted from investment company status under the Investment Company
Act, or (ii) would violate any law, rule or regulation of any governmental body or agency having
jurisdiction over the Company or of any exchange on which the securities of the Company may be
listed or that would otherwise not be permitted by the Company’s Governing Instruments. If the
Manager is ordered to take any action by the Board of Directors, the Manager shall promptly notify
the Board of Directors if it is the Manager’s judgment that such action would adversely affect such
status or violate any such law, rule or regulation or the Governing Instruments. Notwithstanding
the foregoing, the Manager, its directors, officers, stockholders and employees shall not be liable
to the Company, the Board of Directors, or the Company’s stockholders for any act or omission by
the Manager, its directors, officers, stockholders or employees except as provided in Section 8 of
this Agreement.

          (e) The Company (including the Board of Directors) agrees to take all actions reasonably
required to permit and enable the Manager to carry out its duties and obligations under this
Agreement, including all steps reasonably necessary to allow the Manager to file any filing
required to be made under the Securities Act, Exchange Act, NYSE, Code or other applicable law,
rule or regulation on behalf of the Company in a timely manner. The Company further agrees to use
commercially reasonable efforts to make available to the Manager all resources, information and
materials reasonably requested by the Manager to enable the Manager to satisfy its obligations
hereunder, including its obligations to deliver financial statements and any other information or
reports with respect to the Company. If the Manager is not able to provide a service, or in the
reasonable judgment of the Manager it is not prudent to provide a service, without the approval of
the Board of Directors, as applicable, then the Manager shall be excused from providing such
service (and shall not be in breach of this Agreement) until the applicable approval has been
obtained.

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          (f) Reporting Requirements. (i) As frequently as the Manager may deem reasonably necessary or
advisable, or at the direction of the Board of Directors, the Manager shall prepare, or, at the
sole cost and expense of the Company, cause to be prepared, with respect to any investment, reports
and other information with respect to such investment as may be reasonably requested by the
Company.

     (ii) The Manager shall prepare, or, at the sole cost and expense of the Company, cause
to be prepared, all reports, financial or otherwise, with respect to the Company reasonably
required by the Board of Directors in order for the Company to comply with its Governing
Instruments, or any other materials required to be filed with any governmental body or
agency, and shall prepare, or, at the sole cost and expense of the Company, cause to be
prepared, all materials and data necessary to complete such reports and other materials,
including, if required under the Securities Exchange Act, NYSE rules, the Code or other
applicable law, rule or regulation or if otherwise requested by the Board of Directors, an
annual audit of the Company’s books of account by a nationally recognized independent
accounting firm.

     (iii) The Manager shall prepare, or, at the sole cost and expense of the Company,
cause to be prepared, regular reports for the Board of Directors to enable the Board of
Directors to review the Company’s investments, portfolio composition and characteristics,
credit quality, performance and compliance with the Conflicts of Interest Policy and other
policies approved by the Board of Directors.

          (g) Directors, officers, employees and agents of the Manager or Affiliates of the Manager may
serve as directors, officers, agents, nominees or signatories for the Company, to the extent
permitted by their Governing Instruments, as from time to time amended, or by any resolutions duly
adopted by the Board of Directors pursuant to the Company’s Governing Instruments. When executing
documents or otherwise acting in such capacities for the Company, such Persons shall indicate in
what capacity they are executing on behalf of the Company. Without limiting the foregoing, the
Manager will provide the Company with a management team, including a Chief Executive Officer, Chief
Financial Officer and Chief Investment Officer or similar positions, along with appropriate support
personnel to provide the management services to be provided by the Manager to the Company
hereunder, who shall devote such of their time to the management of the Company as necessary and
appropriate, commensurate with the level of activity of the Company from time to time.

          (h) The Manager shall provide personnel for service on an investment or similar type of
committee.

          (i) The Manager shall maintain reasonable and customary “errors and omissions” insurance
coverage and other customary insurance coverage.

          (j) The Manager shall provide such internal audit, compliance and control services as may be
required for the Company to comply with applicable law (including, if applicable, the Securities
Act and Exchange Act), regulation (including, if applicable, SEC regulations) and, if applicable,
the rules and requirements of the NYSE and as otherwise reasonably requested by the Company or its
Board of Directors from time to time.

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          (k) The Manager acknowledges receipt of the Company’s Code of Business Conduct and Ethics,
Policy on Insider Trading and Communications Policy (collectively, the “Conduct Policies”) and
agrees to require its employees who provide services to the Company to comply with such Conduct
Policies in the performance of such services hereunder or such comparable policies as shall in
substance hold employees of the Manager to at least the standards of conduct set forth in the
Conduct Policies.

     Section 3. Additional Activities of the Manager. Except as provided in the last sentence of
this Section 3 and the Conflicts of Interest Policy, nothing in this Agreement shall (i) prevent
the Manager or any of its Affiliates, officers, directors or employees, from engaging in other
businesses or from rendering services of any kind to any other Person or entity, whether or not the
investment objectives or policies of any such other Person or entity are similar to those of the
Company or (ii) in any way bind or restrict the Manager or any of its Affiliates, officers,
directors or employees from buying, selling or trading any securities or commodities for their own
accounts or for the account of others for whom the Manager or any of its Affiliates, officers,
directors or employees may be acting. While information and recommendations supplied to the Company
shall, in the Manager’s reasonable and good faith judgment, be appropriate under the circumstances
and in light of the objectives and policies of the Company, they may be different from the
information and recommendations supplied by the Manager or any Affiliate of the Manager to others.
The Company shall be entitled to equitable treatment under the circumstances in receiving
information, recommendations and any other services, but the Company recognizes that it is not
entitled to receive preferential treatment as compared with the treatment given by the Manager or
any Affiliate of the Manager to others. The Company shall have the benefit of the Manager’s best
judgment and effort in rendering services hereunder and, in furtherance of the foregoing, the
Manager shall not undertake activities that, in its good faith judgment, will adversely affect the
performance of its obligations under this Agreement.

     Section 4. Bank Accounts. At the direction of the Board of Directors, the Manager may
establish and maintain one or more bank accounts in the name of the Company or any Subsidiary, and
may collect and deposit into any such account or accounts, and disburse funds from any such account
or accounts, under such terms and conditions as the Board of Directors may approve; and the Manager
shall from time to time render appropriate accountings of such collections and payments to the
Board of Directors and, upon request, to the auditors of the Company or any Subsidiary.

     Section 5. Records; Confidentiality.

          (a) The Manager shall maintain appropriate books of accounts and records relating to services
performed hereunder, and such books of account and records shall be accessible for inspection by
representatives of the Company or any Subsidiary at any time during normal business hours. The
Manager shall keep confidential any and all non-public information, written or oral, obtained by it
in connection with the services rendered hereunder (“Confidential Information”) and shall not use
Confidential Information except in furtherance of its duties under this Agreement or disclose
Confidential Information, in whole or in part, to any Person other than (i) to its Affiliates,
officers, directors, employees, agents, representatives or advisors who need to know such
Confidential Information for the purpose of rendering services hereunder, (ii) to appraisers,
financing sources, advisors and others in the ordinary course of the Company’s

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business, (iii) to any potential purchaser of one or more of the Existing Investments that
executes a Confidentiality Agreement acceptable to the Company ((i), (ii) and (iii) collectively,
“Manager Permitted Disclosure Parties”), (iv) in connection with any governmental or regulatory
filings of the Company or disclosure or presentations to Company investors, (v) to governmental
officials having jurisdiction over the Company, (vi) as requested by law or legal process to which
the Manager or any Person to whom disclosure is permitted hereunder is a party, or (vii) with the
consent of the Company. The Manager agrees to inform each of its Manager Permitted Disclosure
Parties of the non-public nature of the Confidential Information and to direct such Persons to
treat such Confidential Information in accordance with the terms hereof. Nothing herein shall
prevent the Manager from disclosing Confidential Information (i) upon the order of any court or
administrative agency, (ii) upon the request or demand of any regulatory agency or authority, or
pursuant to any applicable law or regulation, (iii) to the extent reasonably required in connection
with the exercise of any remedy hereunder, or (iv) to its legal counsel or independent auditors;
provided, however that with respect to clauses (i) and (ii), it is agreed that the Manager will
provide the Company with prompt written notice of such order, request or demand so that the Company
may seek an appropriate protective order and/or waive the Manager’s compliance with the provisions
of this Agreement. If, failing the entry of a protective order or the receipt of a waiver
hereunder, the Manager is, in the opinion of counsel, required to disclose Confidential
Information, the Manager may disclose only that portion of such information that its counsel
advises is legally required without liability hereunder; provided, that the Manager agrees to
exercise its best efforts to obtain reliable assurance that confidential treatment will be accorded
such information. Notwithstanding anything herein to the contrary, each of the following shall be
deemed to be excluded from provisions hereof: any Confidential Information that (A) is available to
the public from a source other than the Manager, (B) is released in writing by the Company to the
public or to persons who are not under similar obligation of confidentiality to the Company, or (C)
is obtained by the Manager from a third-party without breach by such third-party of an obligation
of confidence with respect to the Confidential Information disclosed.

          (b) The Company shall keep confidential any and all non-public information regarding the
Manager, written or oral, obtained by it in connection with its relationship with the Manager (the
“Manager Confidential Information”) and shall not use such Manager Confidential Information except
in furtherance of the terms of this Agreement or disclose such Manager Confidential Information, in
whole or in part, to any Person other than (i) to its Affiliates, officers, directors, agents,
representatives or advisors who need to know such Manager Confidential Information (collectively,
“Company Permitted Disclosure Parties”), (ii) as requested by law or legal process to which the
Company or any Person to whom disclosure is permitted hereunder is a party, or (iii) with the
consent of the Manager. The Company agrees to (i) inform each of its Company Permitted Disclosure
Parties of the non-public nature of the Manager Confidential Information and to direct such Persons
to treat such Manager Confidential Information in accordance with the terms hereof and (ii) not
disclose any Manager Confidential Information to its Company Permitted Disclosure Parties after the
termination or expiration of this Agreement in accordance with Section 10. Nothing herein shall
prevent the Company from disclosing Manager Confidential Information (i) upon the order of any
court or administrative agency, (ii) upon the request or demand of any regulatory agency or
authority, or pursuant to any applicable law or regulation, (iii) to the extent reasonably required
in connection with the exercise of any remedy hereunder, or (iv) to its legal counsel or
independent auditors; provided,

11

 

however that with respect to clauses (i) and (ii), it is agreed that the Company will provide
the Manager with prompt written notice of such order, request or demand so that the Manager may
seek an appropriate protective order and/or waive the Company’s compliance with the provisions of
this Agreement. If, failing the entry of a protective order or the receipt of a waiver hereunder,
the Company is, in the opinion of counsel, required to disclose Manager Confidential Information,
the Company may disclose only that portion of such information that its counsel advises is legally
required without liability hereunder; provided, that the Company agrees to exercise its best
efforts to obtain reliable assurance that confidential treatment will be accorded such information.
Notwithstanding anything herein to the contrary, each of the following shall be deemed to be
excluded from provisions hereof: any Manager Confidential Information that (A) is available to the
public from a source other than the Company, (B) is released in writing by the Manager to the
public or to persons who are not under similar obligation of confidentiality to the Manager, or (C)
is obtained by the Company from a third-party without breach by such third-party of an obligation
of confidence with respect to the Manager Confidential Information disclosed. For the avoidance of
doubt, information about the systems, employees, policies, procedures and investment portfolio
(other than investments in which the Company and Manager have co-invested) of the Manager shall be
deemed to be included within the meaning of “Manager Confidential Information” for purposes of the
Company’s obligations pursuant to this Section 5(b).

     (c) The provisions of this Section 5 shall survive the expiration or earlier termination of
this Agreement for a period of one year.

     Section 6. Compensation.

          (a) Base Management Fee. For the services rendered under this Agreement, from the Effective
Date until the expiration or earlier termination of this Agreement in accordance with terms hereof,
the Company shall pay to the Manager a monthly fee (the “Base Management Fee”) equal to:

     (i) for the month of January 2010, the “Base Management Fee” as defined in and in
effect under the Original Management Agreement as amended by the First Amendment;

     (ii) $125,000 from February 1, 2010 until the earlier of (x) June 30, 2010 and (y)
consummation of the disposition of four of the Existing Investments (such earlier date, the
“First Adjustment Date”);

     (iii) $100,000 (the “Adjusted Amount”) from the First Adjustment Date until the earlier
of (x) December 31, 2010 and (y) consummation of the disposition of five of the Existing
Investments (such earlier date, the “Second Adjustment Date”); and

     (iv) $75,000 (the “Further Adjusted Amount”) from the Second Adjustment Date until the
effective date of expiration or earlier termination of this Agreement by either of the
Company or the Manager in accordance with terms hereof;

provided, however, that notwithstanding the foregoing, the Base Management Fee
shall remain at $125,000 per month until the later of: (A) ninety (90) days after the filing by the
Company of a

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Form 15 with the SEC; and (B) the date that the Company is no longer subject to the reporting
requirements of the Securities Exchange Act of 1934. In addition, notwithstanding anything to the
contrary contained herein, if at anytime during the term of this Agreement, the Company again
becomes subject to the reporting requirements under the Securities Exchange Act of 1934, the Base
Management Fee shall be adjusted back to $125,000 per month effective as of the time that such
reporting requirements become applicable until such time as such reporting requirements are no
longer applicable.

          (b) The parties acknowledge that the Base Management Fee is intended to compensate the
Manager for the costs and expenses of its executive officers and employees (and certain related
overhead not otherwise reimbursable under Section 7 below) incurred in providing to the Company the
advisory and management services rendered under this Agreement.

          (c) The Base Management Fee shall be payable in arrears, in cash, in monthly installments.
To the extent that the amount of the Base Management Fee changes at any time during a calendar
month in accordance with Section 6(a), each applicable amount of the Base Management Fee in effect
during such month shall be pro-rated based on the number of days during such month that such amount
was in effect. The Manager shall calculate each installment of Base Management Fee, and deliver
such calculation to the Board of Directors, within fifteen (15) Business Days following the last
day of each calendar month. The Company shall pay the Manager each installment of the Base
Management Fee (each, a “Management Fee Payment”) within five (5) Business Days after the date of
delivery to the Board of Directors of such computations.

          (d) Incentive Fee. The Company shall pay the Manager an incentive fee of $1,500,000 if (i)
at any time prior to December 31, 2011, the aggregate cash dividends paid to the Company’s
stockholders since the Effective Date equal or exceed $9.25 per share or (ii) as of December 31,
2011, the sum of (x) the aggregate cash dividends paid to the Company’s stockholders since the
Effective Date and (y) the Company’s cash and cash equivalents on hand (after taking into account
reasonably foreseeable cash flows and expenses and other obligations of the Company, including the
incentive fee (collectively, the “Aggregate Distributable Cash”) equals or exceeds $9.25 per share.
In the event that the Aggregate Distributable Cash would equal or exceed $9.25 per share but for
the impact of payment of a $1,500,000 incentive fee, then the Company shall pay the Manager an
incentive fee in such lesser amount as allows the Aggregate Distributable Cash to equal $9.25 per
share. The term “Incentive Fee” shall mean any incentive fee payable pursuant to this Section
6(d). The Manager shall calculate the Incentive Fee, if any, and deliver such calculation to the
Board of Directors, within fifteen (15) Business Days following the earlier of (i) the date on
which the Manager reasonably believes it is entitled to the Incentive Fee and (ii) December 31,
2011. The Company shall pay the Manager the Incentive Fee, if any, within five (5) Business Days
after the date of delivery to the Board of Directors of such computation.

          (e) Effect of Termination on Incentive Fee. The provisions of Section 6(d) shall survive any
expiration or earlier termination of this Agreement; provided however, that, notwithstanding
anything herein to the contrary, (i) if this Agreement is terminated by the Manager pursuant to
Section 10(c) prior to December 31, 2011, the Manager shall not be entitled

13

 

to any Incentive Fee unless the sum of (x) the aggregate cash dividends paid to the Company’s
stockholders between the Effective Date and 90 days following the Manager Termination Date and (y)
the Company’s cash and cash equivalents on hand as of the date that is 90 days following the
Manager Termination Date (after taking into account reasonably foreseeable cash flows and expenses
and other obligations of the Company including the Incentive Fee) equals or exceeds $9.25 per
share, (ii) if this Agreement is terminated by the Company pursuant to Section 12(a) or
automatically terminates pursuant to Section 11(a), no Incentive Fee shall be payable to the
Manager and the provisions of Section 6(d) shall be of no force or effect, (iii) if this Agreement
is terminated by the Company pursuant to Section 10(b) or by the Manager pursuant to Section 12(b)
or if this Agreement expires, the provisions of Section 6(d) shall continue in effect following
such termination or expiration in accordance with their terms.

     Section 7. Expenses of the Company.

          (a) The Manager shall be responsible for employment expenses of the Manager’s employees
(including the officers and directors of the Company who are also employees of the Manager),
including salaries, bonus and other wages, payroll taxes and the cost of employee benefit plans of
such personnel under the Manager’s (or its Affiliates) employee benefit plans.

          (b) The Company shall pay all of its costs and expenses and shall reimburse the Manager or
its Affiliates for expenses of the Manager and its Affiliates incurred on behalf of the Company,
including in connection with implementation of the Plan of Liquidation, excepting only those
expenses that are specifically the responsibility of the Manager pursuant to Section 7(a) of this
Agreement. Without limiting the generality of the foregoing, it is specifically agreed that the
following costs and expenses of the Company or any Subsidiary shall be paid by the Company and
shall not be paid by the Manager or Affiliates of the Manager:

     (i) all costs and expenses associated with being a public company, including filings
with the SEC and the NYSE (and any other exchange or over-the-counter market);

     (ii) all costs and expenses in connection with the disposition, development,
protection, maintenance, financing, administration and ownership of the Company’s or any
Subsidiary’s investment assets, including costs and expenses incurred in contracting with
third parties, including Affiliates of the Manager, to provide such services, such as legal
fees, accounting fees, consulting fees, trustee fees, appraisal fees, insurance premiums,
commitment fees, brokerage fees, guaranty fees, ad valorem taxes, costs of foreclosure,
maintenance, repair and improvement of property and premiums for insurance on property owned
or leased by the Company or any Subsidiary;

     (iii) all legal, audit, accounting, consulting, underwriting, brokerage, listing,
filing, custodian, transfer agent, rating agency, registration and other fees and charges,
printing, engraving and other expenses and taxes incurred in connection with the issuance,
distribution, transfer, registration and stock exchange listing of the Company’s or any
Subsidiary’s equity securities or debt securities;

14

 

     (iv) all costs and expenses in connection with legal, accounting, due diligence, asset
management, securitization, property management, leasing tasks and other services that
outside professionals or outside consultants perform on behalf of the Company;

     (v) all expenses relating to communications to holders of equity securities or debt
securities issued by the Company or any Subsidiary and the other third party services
utilized in maintaining relations with holders of such securities and in complying with the
continuous reporting and other requirements of governmental bodies or agencies (including
the SEC) if applicable, including any costs of computer services in connection with this
function, the cost of printing and mailing certificates for such securities and proxy
solicitation materials and reports to holders of the Company’s or any Subsidiary’s
securities and the cost of any reports to third parties required under any indenture to
which the Company or any Subsidiary is a party;

     (vi) all costs and expenses of money borrowed by the Company or its Subsidiaries, if
any, including principal, interest and the costs associated with the establishment and
maintenance of any credit facilities, warehouse loans, repurchase facilities and other
indebtedness of the Company and its Subsidiaries, if any (including commitment fees, legal
fees, closing and other costs);

     (vii) all taxes and license fees applicable to the Company or any Subsidiary,
including interest and penalties thereon;

     (viii) all fees paid to and expenses of third-party advisors and independent
contractors, consultants, managers and other agents engaged by the Company or any Subsidiary
or by the Manager for the account of the Company or any Subsidiary;

     (ix) all insurance costs incurred by the Company or any Subsidiary, including any
costs to obtain liability or other insurance to indemnify the Manager and underwriters of
any securities of the Company;

     (x) all costs and expenses relating to the acquisition of, and maintenance and
upgrades to, the Company’s portfolio accounting systems;

     (xi) all compensation and fees paid to directors of the Company or any Subsidiary
(excluding those directors who are also officers or employees of the Manager), all expenses
of directors of the Company or any Subsidiary (including those directors who are also
employees of the Manager), the cost of directors and officers liability insurance and
premiums for errors and omissions insurance, and any other insurance deemed necessary or
advisable by the Board of Directors for the benefit of the Company and its directors and
officers (including those directors who are also employees of the Manager);

     (xii) all third-party legal, accounting and auditing fees and expenses and other
similar services relating to the Company’s or any Subsidiary’s operations (including all
quarterly and annual audit or tax fees and expenses);

15

 

     (xiii) all third-party legal, expert and other fees and expenses relating to any
actions, proceedings, lawsuits, demands, causes of action and claims, whether actual or
threatened, made by or against the Company, or which the Company is authorized or obligated
to pay under applicable law or its Governing Instruments or by the Board of Directors;

     (xiv) subject to Section 8 below, any judgment or settlement of pending or threatened
proceedings (whether civil, criminal or otherwise) against the Company or any Subsidiary, or
against any director or officer of the Company or any Subsidiary in his capacity as such for
which the Company or any Subsidiary is required to indemnify such director or officer by any
court or governmental agency, or settlement of pending or threatened proceedings;

     (xv) all travel and related expenses of the Company’s directors and officers and the
Manager’s employees incurred in connection with attending meetings of the Board of Directors
or holders of securities of the Company or any Subsidiary or performing other business
activities that relate to the Company or any Subsidiary, including travel and expenses
incurred in connection with the sale or other disposition of any investment of the Company;
provided, however, that the Company shall only be responsible for a proportionate share of
such expenses, as determined by the Manager in good faith, where such expenses were not
incurred solely for the benefit of the Company;

     (xvi) all expenses of organizing, modifying or dissolving the Company or any
Subsidiary and costs preparatory to entering into a business or activity, or of winding up
or disposing of a business activity of the Company or its Subsidiaries, if any;

     (xvii) all expenses relating to payments of dividends or interest or distributions in
cash or any other form made or caused to be made by the Board of Directors to or on account
of holders of the securities of the Company or any Subsidiary, including in connection with
any dividend reinvestment plan;

     (xviii) all costs and expenses related to the design and maintenance of the Company’s
web site or sites and associated with any computer software, hardware or information
technology services that is used primarily for the Company;

     (xix) costs and expenses incurred with respect to market information systems and
publications, research publications and materials, and settlement, clearing and custodial
fees and expenses; provided, however, that the Company shall only be responsible for a
proportionate share of such expenses, as determined by the Manager in good faith, where such
expenses were not incurred solely for the benefit of the Company;

     (xx) all expenses incurred on behalf of the Company in connection with servicing
problem or delinquent loans, or special servicing;

     (xxi) the costs and expenses incurred with respect to administering the Company’s
incentive plans;

16

 

     (xxii) all other expenses actually incurred by the Manager or its Affiliates or their
respective officers, employees, representatives or agents, or any Affiliates thereof, which
are reasonably necessary for the performance by the Manager of its duties and functions
under this Agreement (including any fees or expenses relating to the Company’s compliance
with all governmental and regulatory matters);

     (xxiii) rent (including disaster recovery facilities costs and expenses), telephone,
utilities, office furniture, equipment, machinery and other office, internal and overhead
expenses of the Manager and its Affiliates required for the Company’s operations; provided,
however, that the Company shall only be responsible for a proportionate share of such
expenses, as determined by the Manager in good faith, where such expenses were not incurred
solely for the benefit of the Company; and

     (xxiv) all other expenses of the Company or any Subsidiary relating to the Company’s
operations, including the costs and expenses of owning, protecting, maintaining, developing
and disposing of investments, that are not the responsibility of the Manager under Section
8(a) of this Agreement.

          (c) Costs and expenses incurred by the Manager on behalf of the Company shall be reimbursed
monthly to the Manager. The Manager shall prepare a written statement in reasonable detail
documenting the costs and expenses of the Company and those incurred by the Manager on behalf of
the Company during each month, and shall deliver such written statement to the Company within
thirty (30) days after the end of each month. The Company shall pay all amounts payable to the
Manager pursuant to this Section 7(c) within ten (10) days after the receipt of the written
statement without demand, deduction, offset or delay. Cost and expense reimbursement to the Manager
shall be subject to adjustment at the end of each calendar year in connection with the annual audit
of the Company, if any. The Independent Directors shall, on an annual basis, review and approve the
allocation of shared expenses between the Company and the Manager. The provisions of this Section 7
shall survive the expiration or earlier termination of this Agreement to the extent such expenses
have previously been incurred or are incurred in connection with such expiration or termination.

     Section 8. Limits of the Manager’s Responsibility.

          (a) The Manager assumes no responsibility under this Agreement other than to render the
services called for hereunder in good faith and shall not be responsible for any action of the
Board of Directors in following or declining to follow any advice or recommendations of the
Manager, including as set forth in the Conflicts of Interest Policy. The Manager and its
Affiliates, and the directors, officers, employees and stockholders of the Manager and its
Affiliates, will not be liable to the Company, any Subsidiary of the Company, the Board of
Directors, or the Company’s stockholders for any acts or omissions by the Manager, its officers,
employees or its Affiliates, performed in accordance with and pursuant to this Agreement or the
Original Management Agreement, except by reason of acts constituting bad faith, willful misconduct,
gross negligence or reckless disregard of their respective duties under this Agreement. The Company
shall, to the full extent lawful, reimburse, indemnify and hold harmless the Manager, its
Affiliates, and the directors, officers, employees and stockholders of the Manager and its
Affiliates (each, a “Manager Indemnified Party”), of and from any and all

17

 

expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever
(including reasonable attorneys’ fees) (collectively “Losses”), in respect of or arising from any
acts or omissions of such Manager Indemnified Party performed in good faith under this Agreement or
the Original Management Agreement and, in respect of any such Manager Indemnified Party, not
constituting bad faith, willful misconduct, gross negligence or reckless disregard of duties of
such Manager Indemnified Party under this Agreement or the Original Management Agreement.

          (b) The Manager shall, to the full extent lawful, reimburse, indemnify and hold harmless the
Company, and the directors, officers and stockholders of the Company and each Person, if any,
controlling the Company (each, a “Company Indemnified Party”; a Manager Indemnified Party and a
Company Indemnified Party are each sometimes hereinafter referred to as an “Indemnified Party”) of
and from any and all Losses in respect of or arising from (i) any acts or omissions of the Manager
constituting bad faith, willful misconduct, gross negligence or reckless disregard of duties of the
Manager under this Agreement or the Original Management Agreement or (ii) any claims by the
Manager’s employees relating to the terms and conditions of their employment by the Manager.

          (c) In case any such claim, suit, action or proceeding (a “Claim”) is brought against any
Indemnified Party in respect of which indemnification may be sought by such Indemnified Party
pursuant hereto, the Indemnified Party shall give prompt written notice thereof to the indemnifying
party, which notice shall include all documents and information in the possession of or under the
control of such Indemnified Party reasonably necessary for the evaluation and/or defense of such
Claim and shall specifically state that indemnification for such Claim is being sought under this
Section; provided, however, that the failure of the Indemnified Party to so notify the indemnifying
party shall not limit or affect such Indemnified Party’s rights to be indemnified pursuant to this
Section except to the extent the indemnifying party’s defense of such Claim is actually prejudiced
thereby. Upon receipt of such notice of Claim (together with such documents and information from
such Indemnified Party), the indemnifying party shall, at its sole cost and expense, in good faith
defend any such Claim with counsel reasonably satisfactory to such Indemnified Party, which counsel
may, without limiting the rights of such Indemnified Party pursuant to the next succeeding sentence
of this Section, also represent the indemnifying party in such investigation, action or proceeding.
In the alternative, such Indemnified Party may elect to conduct the defense of the Claim, if (i)
such Indemnified Party reasonably determines that the conduct of its defense by the indemnifying
party could be materially prejudicial to its interests, (ii) the indemnifying party refuses to
defend (or fails to give written notice to the Indemnified Party within ten (10) days of receipt of
a notice of Claim that the indemnifying party assumes such defense), or (iii) the indemnifying
party shall have failed, in such Indemnified Party’s reasonable judgment, to defend the Claim in
good faith. The indemnifying party may settle any Claim against such Indemnified Party without such
Indemnified Party’s consent, provided (i) such settlement is without any Losses whatsoever to such
Indemnified Party, (ii) the settlement does not include or require any admission of liability or
culpability by such Indemnified Party and (iii) the indemnifying party obtains an effective written
release of liability for such Indemnified Party from the party to the Claim with whom such
settlement is being made, which release must be reasonably acceptable to such Indemnified Party,
and a dismissal with prejudice with respect to all claims made by the party against such
Indemnified Party in connection with such Claim. The applicable Indemnified Party shall

18

 

reasonably cooperate with the indemnifying party, at the indemnifying party’s sole cost and
expense, in connection with the defense or settlement of any Claim in accordance with the terms
hereof. If such Indemnified Party is entitled pursuant to this Section to elect to defend such
Claim by counsel of its own choosing and so elects, then the indemnifying party shall be
responsible for any good faith settlement of such Claim entered into by such Indemnified Party.
Except as provided in the immediately preceding sentence, no Indemnified Party may pay or settle
any Claim and seek reimbursement therefor under this Section.

          (d) The provisions of this Section 8 shall survive the expiration or earlier termination of
this Agreement.

     Section 9. No Joint Venture. The Company and the Manager are not partners or joint venturers
with each other and nothing herein shall be construed to make them such partners or joint venturers
or impose any liability as such on either of them.

     Section 10. Term; Termination.

          (a) Term. This Agreement shall become effective on the Effective Date and shall continue in
operation, unless terminated in accordance with the terms hereof, until December 31, 2011.

          (b) Termination by the Company. Notwithstanding any other provision of this Agreement to the
contrary, the Company may upon the vote of at least a majority of the Independent Directors,
initiate the termination of this Agreement by providing written notice to the Manager as provided
herein at any time (the “Company Termination Notice”). The Company Termination Notice shall set
forth the date (the “Company Termination Date”), which date shall not be less than sixty (60) days
from the date that the Company delivers the Company Termination Notice to the Manager, on which the
Manager shall cease to provide services under this Agreement and this Agreement shall terminate,
and be of no further force or effect, except as otherwise expressly set forth in Sections 5, 6, 7,
8, 10, 13, 14, 16 and 17, on the Company Termination Date.

          (c) Termination by the Manager. Notwithstanding any other provision of this Agreement to the
contrary, the Manager may initiate the termination of this Agreement by providing written notice to
the Company as provided herein at any time (the “Manager Termination Notice”); provided, however,
that the Manager may not deliver a Manager Termination Notice prior to December 31, 2010, unless
there shall have occurred an Early Termination Event prior to such delivery. The Manager
Termination Notice shall set forth the date (the “Manager Termination Date”) on which the Manager
shall cease to provide services under this Agreement and this Agreement shall terminate, which date
shall be not less than one hundred eighty (180) days from the date that the Manager delivers the
Manager Termination Notice to the Company if an Early Termination Event has not occurred prior to
delivery thereof and not less than one hundred twenty (120) days from the date that the Manager
delivers the Manager Termination Notice to the Company if an Early Termination Event has occurred
on or prior to the date of delivery thereof. This Agreement shall terminate, and be of no further
force or effect, except as otherwise expressly set forth in Sections 5, 6, 7, 8, 10, 13, 14, 16 and
17, on the Manager Termination Date.

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          (d) In the event of expiration or termination of this Agreement pursuant to this Section 10,
the parties shall be without any further liability or obligation of each other, except for such
liabilities and obligations that survive the expiration or termination of this Agreement as
expressly set forth herein. This Section 10 shall survive the expiration or termination of this
Agreement.

     Section 11. Assignments.

          (a) This Agreement shall terminate automatically without payment of any unpaid Buyout
Payments or Incentive Fee in the event of its assignment, in whole or in part, by the Manager,
unless such assignment is consented to in writing by the Company with the consent of a majority of
the Independent Directors. Any such permitted assignment shall bind the assignee under this
Agreement in the same manner as the Manager is bound. In addition, the assignee shall execute and
deliver to the Company a counterpart of this Agreement naming such assignee as the Manager.
Notwithstanding the foregoing, the Manager may (i) assign this Agreement to an Affiliate of the
Manager that has the requisite industry experience, knowledge and personnel to perform the
Manager’s obligations under this Agreement consistent with past practice without the consent of the
Company or a majority of the Independent Directors provided that any such proposed Affiliate
assignee executes and delivers to the Company a counterpart to this Agreement that binds the
assignee in the same manner as the Manager is bound under this Agreement and names such Assignee as
the Manager for all purposes hereunder, and (ii) delegate to one or more of its Affiliates the
performance of any of its responsibilities hereunder so long as it remains liable for any such
Affiliate’s performance. Nothing contained in this Agreement shall preclude any pledge,
hypothecation or other transfer of any amounts payable to the Manager under this Agreement.

          (b) The Company shall not assign this Agreement, in whole or in part, unless such assignment
is consented to in writing by the Manager. Any such permitted assignment shall bind the assignee
under this Agreement in the same manner as the Company is bound. In addition, the assignee shall
execute and deliver to the Manager a counterpart of this Agreement.

     Section 12. Termination for Cause.

          (a) Termination of the Manager for Cause. At the option of the Company and at any time
during the term of this Agreement, this Agreement shall be and become immediately terminated upon
written notice of termination from the Board of Directors to the Manager, without payment of any
unpaid Incentive Fee or Buyout Payments, if any of the following events shall occur, which shall be
determined by a majority of the Board of Directors (including a majority of the Independent
Directors):

     (i) the Manager shall commit any act of fraud, misappropriation of funds, or
embezzlement against the Company in its corporate capacity (as distinguished from the acts
of any employees of the Manager which are taken without the complicity of the board of
directors or executive officers of the Manager) or shall be grossly negligent in the
performance of its duties under this Agreement (including such action or inaction by the
Manager which materially impairs the Company’s ability to conduct its business, but

20

 

not including acts of any employees of the Manager which are taken without the
knowledge of the Board of Directors or any of the Manager’s executive officers);

     (ii) the Manager shall commit a material breach of any provision of this Agreement
(including the failure of the Manager to use commercially reasonable efforts to comply with
the Company’s Conflicts of Interest Policy); provided, that such default has continued
uncured for a period of sixty (60) days after written notice thereof, which notice shall
contain a request that the same be remedied;

     (iii) (A) the Manager shall commence any case, proceeding or other action (1) under any
existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (2) seeking appointment of a receiver,
trustee, custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or the Manager shall make a general assignment for the
benefit of its creditors; or (B) there shall be commenced against the Manager any case,
proceeding or other action of a nature referred to in clause (A) above which (1) results in
the entry of an order for relief or any such adjudication or appointment or (2) remains
undismissed, undischarged or unbonded for a period of ninety (90) days; or (C) the Manager
shall take any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (A) or (B) above; or (D) the Manager
shall generally not, or shall be unable to, or shall admit in writing its inability to, pay
its debts as they become due;

     (iv) upon the conviction (including a plea of nolo contendere) of the Manager of a
felony or the entry of any order or consent decree by any state or federal regulatory agency
or authority, or the settlement by the Manager with any such regulatory agency or authority,
whether or not such order, consent decree or settlement involves the admission or denial of
liability, with respect to or arising out of any regulatory proceeding where the subject
matter of the regulatory proceeding involves conduct of the Manager in the course of
conducting its business as contemplated by this Agreement;

     (v) upon a Change in Control of the Manager, provided that the Company exercises its
right to terminate this Agreement within the ninety (90) days following such Change of
Control; or

     (vi) upon the dissolution of the Manager.

If any of the events specified above shall occur, the Manager shall give prompt written notice
thereof to the Board of Directors.

          (b) Termination of the Company for Cause. This Agreement may be terminated by the Manager
upon written notice of such termination to the Board of Directors in the event that the Company
fails to pay any amounts payable to the Manager hereunder within ten (10)

21

 

Business Days after the Manager provides written notice of such failure to the Board of
Directors.

     Section 13. Action Upon Termination. From and after the effective date of expiration or
termination of this Agreement pursuant to Sections 10, 11, or 12 of this Agreement, the Manager
shall not be entitled to compensation for further services hereunder, but shall be paid:

          (a) all compensation under Section 6(a) and fees, costs and expenses that are reimbursable
under Section 7 of this Agreement, that have accrued to the date of termination (as pro-rated if
necessary), which compensation, fees, costs and expenses shall be paid to the Manager no later than
the date on which such compensation, fees, costs and expenses would be due in accordance with
Section 6(a) and Section 7, but for the expiration or termination of this Agreement;

          (b) Upon any such termination, the Manager shall forthwith:

	 	(1)	 	after deducting any accrued compensation,
reimbursement for its expenses, unpaid Buyout Payments to which it is
then entitled and the Incentive Fee to which it is then entitled, pay
over to the Company or a Subsidiary all money collected and held for
the account of the Company or a Subsidiary pursuant to this Agreement;
	 
	 	(2)	 	deliver to the Board of Directors a full
accounting, including a statement showing all payments collected by it
and a statement of all money held by it, covering the period following
the date of the last accounting furnished to the Board of Directors
with respect to the Company and any Subsidiaries; and
	 
	 	(3)	 	deliver to the Board of Directors all property
and documents of the Company and any Subsidiaries then in the custody
of the Manager.

This Section 13 shall survive the expiration or termination of this Agreement.

     Section 14. Release of Money or Other Property Upon Written Request. The Manager agrees that
any money or other property of the Company (which such term, for the purposes of this Section,
shall be deemed to include any and all of its Subsidiaries, if any) held by the Manager shall be
held by the Manager as custodian for the Company, and the Manager’s records shall be appropriately
and clearly marked to reflect the ownership of such money or other property by the Company. Upon
the receipt by the Manager of a written request signed by a duly authorized officer of the Company
requesting the Manager to release to the Company any money or other property then held by the
Manager for the account of the Company under this Agreement, the Manager shall release such money
or other property to the Company within a reasonable period of time, but in no event later than ten
(10) days following such request. Upon delivery of such money or other property to the Company, the
Manager shall not be liable to the Company, the Board of Directors, or the Company’s stockholders
or partners for any acts or omissions by the Company in connection with the money or other property
released to the Company in accordance with this Section. The Company shall indemnify the Manager,
its

22

 

directors, officers, stockholders, employees and agents against any and all expenses, losses,
damages, liabilities, demands, charges and claims of any nature whatsoever, which arise in
connection with the Manager’s release of such money or other property to the Company in accordance
with the terms of this Section 14. Indemnification pursuant to this provision shall be in addition
to any right of the Manager to indemnification under Section 8 of this Agreement and shall survive
the expiration or termination of this Agreement.

     Section 15. Representations and Warranties.

          (a) The Company hereby represents and warrants to the Manager as follows:

     (i) The Company is duly organized, validly existing and in good standing under the
laws of Maryland, has the corporate power and authority and the legal right to own and
operate its assets, to lease any property it may operate as lessee and to conduct the
business in which it is now engaged and is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction where its ownership or lease of property
or the conduct of its business requires such qualification, except for failures to be so
qualified, authorized or licensed that could not in the aggregate have a material adverse
effect on the business operations, assets or financial condition of the Company and its
Subsidiaries, if any, taken as a whole.

     (ii) The Company has the corporate power and authority and the legal right to make,
deliver and perform this Agreement and the other agreements attached hereto as Exhibits
(collectively, the “Transaction Documents”) and all obligations required hereunder and
thereunder and has taken all necessary corporate action to authorize the Transaction
Documents on the terms and conditions hereof and thereof and the execution, delivery and
performance of the Transaction Documents and all obligations required hereunder. No consent
of any other Person, including stockholders and creditors of the Company, and no license,
permit, approval or authorization of, exemption by, notice or report to, or registration,
filing or declaration with, any governmental authority, is required by the Company in
connection with the Transaction Documents or the execution, delivery, performance, validity
or enforceability of the Transaction Documents and all obligations required hereunder and
thereunder except for any filings required under the Exchange Act or the rules of the NYSE.
The Transaction Documents have been, and each instrument or document required hereunder will
be, executed and delivered by a duly authorized officer of the Company, and the Transaction
Documents constitute, and each instrument or document required hereunder and thereunder when
executed and delivered hereunder or thereunder will constitute, the legally valid and
binding obligation of the Company enforceable against the Company in accordance with its
terms. The Company has received the approval of the Independent Directors to enter into the
Transaction Documents and consummate the transactions contemplated herein and therein.

     (iii) The execution, delivery and performance of the Transaction Documents and the
documents or instruments required hereunder and thereunder will not violate any provision of
any existing law or regulation binding on the Company, or any order, judgment, award or
decree of any court, arbitrator or governmental authority binding on

23

 

the Company, or the Governing Instruments of, or any securities issued by the Company
or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking
to which the Company is a party or by which the Company or any of its assets may be bound,
the violation of which would have a material adverse effect on the business operations,
assets or financial condition of the Company and its Subsidiaries, if any, taken as a whole,
and will not result in, or require, the creation or imposition of any lien or any of its
property, assets or revenues pursuant to the provisions of any such mortgage, indenture,
lease, contract or other agreement, instrument or undertaking.

          (b) The Manager hereby represents and warrants to the Company as follows:

     (i) The Manager is duly organized, validly existing and in good standing under the
laws of Delaware, has the limited liability company power and authority and the legal right
to own and operate its assets, to lease the property it operates as lessee and to conduct
the business in which it is now engaged and is duly qualified as a foreign limited liability
company and in good standing under the laws of each jurisdiction where its ownership or
lease of property or the conduct of its business requires such qualification, except for
failures to be so qualified, authorized or licensed that could not in the aggregate have a
material adverse effect on the business operations, assets or financial condition of the
Manager.

     (ii) The Manager has the limited liability company power and authority and the legal
right to make, deliver and perform the Transaction Documents and all obligations required
hereunder and thereunder and has taken all necessary limited liability company action to
authorize the Transaction Documents on the terms and conditions hereof and thereof and the
execution, delivery and performance of the Transaction Documents and all obligations
required hereunder and thereunder. No consent of any other Person, including members and
creditors of the Manager, and no license, permit, approval or authorization of, exemption
by, notice or report to, or registration, filing or declaration with, any governmental
authority, is required by the Manager in connection with the Transaction Documents or the
execution, delivery, performance, validity or enforceability of the Transaction Documents
and all obligations required hereunder and thereunder. The Transaction Documents have been,
and each instrument or document required hereunder will be, executed and delivered by a duly
authorized officer of the Manager, and the Transaction Documents constitute, and each
instrument or document required hereunder and thereunder when executed and delivered
hereunder or thereunder will constitute, the legally valid and binding obligation of the
Manager enforceable against the Manager in accordance with its terms.

     (iii) The execution, delivery and performance of the Transaction Documents and the
documents or instruments required hereunder and thereunder will not violate any provision of
any existing law or regulation binding on the Manager, or any order, judgment, award or
decree of any court, arbitrator or governmental authority binding on the Manager, or the
Governing Instruments of, or any securities issued by the Manager or of any mortgage,
indenture, lease, contract or other agreement, instrument or undertaking to which the
Manager is a party or by which the Manager or any of its assets may be bound, the violation
of which would have a material adverse effect on the business

24

 

operations, assets or financial condition of the Manager, and will not result in, or
require, the creation or imposition of any lien or any of its property, assets or revenues
pursuant to the provisions of any such mortgage, indenture, lease, contract or other
agreement, instrument or undertaking.

Section 16. Effective Date; Buyout; Release

          (a) Effective Date. This Agreement shall become effective upon (i) approval of the Plan of
Liquidation by the Company’s stockholders as required by, and in accordance with, applicable law
and the Company’s Governing Instruments and (ii) the execution by the Company and the Manager of
the Release and the Termination Agreement (the date upon which this Agreement becomes effective,
the “Effective Date”).

          (b)Early Buyout. The Company agrees to pay the Manager the following amounts (each, a “Buyout
Payment”):

     (i) $2,500,000 on the Effective Date;

     (ii) $2,500,000 upon the earlier of: (A) April 1, 2010; and (B) the effective date of
termination of this Agreement by the Company pursuant to Section 10(b) or the Manager
pursuant to Section 12(b); and

     (iii) $2,500,000 upon the earlier of: (A) June 30, 2011; (B) the effective date of
termination of this Agreement by the Company pursuant to Section 10(b) or the Manager
pursuant to Section 12(b), and (C) the effective date of termination of this Agreement by
the Manager pursuant to, and in accordance with, Section 10(c).

          For greater clarity, no unpaid Buyout Payment shall be payable to the Manager in accordance
with this Section 16(b) if prior to the applicable date expressed above this Agreement shall have
been terminated pursuant to Section 11 or Section 12(a).

          (c)Termination of the Mortgage Purchase Agreement. In consideration of the Manager’s
execution and delivery of this Agreement, (i) the Company agrees to rescind all outstanding put
notices under that certain Mortgage Purchase Agreement, dated as of September 30, 2008, between the
Company and the Manager (the “Mortgage Purchase Agreement”), and (ii) the Company and the Manager
agree to terminate the Mortgage Purchase Agreement effective as of the Effective Date, by executing
that certain Termination Agreement attached hereto as Exhibit B (the “Termination
Agreement”).

          (d) Mutual Release. In consideration of the execution and delivery this Agreement, each Party
shall deliver to the other Party, on or prior to the Effective Date, a release substantially in the
form of Exhibit C attached hereto (the “Release”).

          (e) This Section 16 shall survive the expiration or termination of this Agreement.

25

 

     Section 17. Miscellaneous.

          (a) Notices. All notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered against receipt or upon
actual receipt of (i) personal delivery, (ii) delivery by reputable overnight courier, (iii)
delivery by facsimile transmission with telephonic confirmation or (iv) delivery by registered or
certified mail, postage prepaid, return receipt requested, addressed as set forth below (or to such
other address as may be hereafter notified by the respective parties hereto in accordance with this
Section 17):

	 	 	 
	The Company:

	 	Care Investment Trust Inc.
	 

	 	c/o CIT Healthcare LLC
	 

	 	505 Fifth Avenue
	 

	 	New York, New York 10017 
	 

	 	Attention: Chief Executive Officer
	 

	 	Fax: (800) 576-3021 
	 
	 	 
	with a copy to:

	 	McDermott Will & Emery LLP
	 

	 	600 Thirteenth Street, NW
	 

	 	Washington, DC 20005 
	 

	 	Attention: Karen A. Dewis, Esq.
	 

	 	Fax: (202) 756-8087 
	 
	 	 
	The Manager:

	 	CIT Healthcare LLC
	 

	 	505 Fifth Avenue
	 

	 	New York, New York 10017 
	 

	 	Attention: President
	 

	 	Fax: (212) 771-9317 
	 
	 	 
	with a copy to:

	 	CIT Healthcare LLC
	 

	 	505 Fifth Avenue
	 

	 	New York, New York 10017 
	 

	 	Attention: Chief Counsel, Healthcare
	 

	 	Fax: (212) 771-9520 
	 
	 	 
	 

	 	and
	 
	 	 
	 

	 	Vedder Price P.C.
	 

	 	222 N. LaSalle Street, Suite 2400 
	 

	 	Chicago, Illinois 60601 
	 

	 	Attention: Michael A. Nemeroff, Esq.
	 

	 	Fax: (312) 609-5005 

          (b) Binding Nature of Agreement; Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns as provided herein.

26

 

          (c) No Third Party Beneficiaries. This Agreement is not intended to confer upon any person
other than the parties any rights or remedies.

          (d) Integration. This Agreement contains the entire agreement and understanding among the
parties hereto with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or
written, of any nature whatsoever with respect to the subject matter hereof. The express terms
hereof control and supersede any course of performance and/or usage of the trade inconsistent with
any of the terms hereof.

          (e) Amendments. Neither this Agreement nor any terms hereof may be amended, supplemented,
modified or waived except in an instrument in writing executed by the parties hereto, which shall
be approved by a majority of the Independent Directors.

          (f) GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE
UNITED STATES DISTRICT COURT FOR ANY DISTRICT WITHIN SUCH STATE FOR THE PURPOSE OF ANY ACTION OR
JUDGMENT RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY AND TO THE LAYING OF VENUE IN SUCH COURT.

          (g) WAIVER OF JURY TRIAL. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH
MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND,
THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY
ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

          (h) Survival of Representations and Warranties. All representations and warranties made
hereunder, and in any document, certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement.

          (i) No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the
part of a party hereto, any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

27

 

          (j) Section Headings. The section and subsection headings in this Agreement are for
convenience in reference only and shall not be deemed to alter or affect the interpretation of any
provisions hereof.

          (k) Counterparts. This Agreement may be executed by the parties to this Agreement on any
number of separate counterparts (including by telecopy), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.

          (l) Severability. Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.

          (m) This Section 17 shall survive the expiration or termination of this Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

28

 

     IN WITNESS WHEREOF, each of the parties hereto have executed this Amended and Restated
Management Agreement as of the date first written above.

	 	 	 	 	 
	 	 	CARE INVESTMENT TRUST INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Salvatore (Torey) V. Riso Jr.
	 

	 	 	 	 
	 

	 	 	 	Name: Salvatore (Torey) V. Riso Jr.
	 

	 	 	 	Title:   Chief Executive Officer and President
	 
	 	 	 	 
	 	 	CIT HEALTHCARE LLC
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Steven N. Warden
	 

	 	 	 	 
	 

	 	 	 	Name: Steven N. Warden
	 

	 	 	 	Title:   President

(Signature Page to Amended & Restated Management Agreement)

 

 

Exhibit A

CONFLICTS OF INTEREST POLICY

     Capitalized terms used but not defined herein shall have the meanings ascribed thereto in that
certain Amended and Restated Management Agreement, dated as of January 15, 2010, as may be amended
from time to time (the “Management Agreement”), by and between Care Investment Trust Inc. (the
“Company”) and CIT Healthcare LLC (the “Manager”).

     Special Provisions Relating to Co-Investments and Certain Shared Services:

     1. The Company shall not purchase from, or co-invest (i.e., co-originate or co-purchase from
an unaffiliated third party) with, the Manager unless (A) if the co-investment is made on a pari
passu basis, the economic terms (exclusive of any administrative fees payable to the Manager as
agent) shall be at least as favorable to the Company as to the Manager and (B) if the co-investment
results in the Manager and the Company holding Debt Tranches (defined below) of different
priorities, the terms of the Company’s Debt Tranche (defined below) comply with the following: (1)
if purchased in the secondary market from an unaffiliated third party, the Company’s investment
shall be upon such terms as are offered by such third party and (2) if purchased or part of a
co-origination with the Manager, (y) the Company’s investment shall, if there is one or more third
party participants in the Company’s Debt Tranche, be upon terms no less favorable than the most
favored third party participant in the Company’s Debt Tranche and (z) the Company’s investment
shall, if there are no other participants in the Company’s Debt Tranche, be upon then current
market terms for similar investments purchased in arms length transactions as reasonably determined
by the Manager based upon third party bids received or published market data; provided, however, in
the event that third party bids or published market data is not available to the Manager, the
Company’s investment be approved by a majority of the Independent Directors.

     2. In the event that (i) the Company shall invest in a loan (or portion of a loan) that is
secured (directly or indirectly) by the same underlying real estate asset that secures a loan (or
tranche or other portion of a loan) of a different priority held by the Manager or (ii) the Manager
or the Company holds a preferred equity interest in a real estate asset that (directly or
indirectly) secures a loan in which the other party hereto has an interest (each such loan, loan
tranche or other loan portion, or preferred equity interest being a “Debt Tranche”), then, if each
of the Manager and the Company holds a majority of its respective Debt Tranche, a majority of the
Independent Directors may, upon the occurrence of (i) a material default in respect of the Debt
Tranche in which the Company holds an interest (the “Company’s Debt Tranche”) or (ii) any request
to amend, modify or waive any material term of the Company’s Debt Tranche in order to avoid a
pending material default, retain a reputable independent third party special servicer or adviser to
advise the Board of Directors with respect to all material rights, remedies, enforcement actions,
amendments and requests for waivers or consents in respect of the Company’s Debt Tranche, and the
cost of such servicer or adviser shall be deducted from any Base Management Fee payable to the
Manager in respect of the Company’s Debt Tranche, provided, however, that such costs shall not
exceed the lesser of the special servicer fee and the Base Management Fee allocable to the Equity
allocable to such loan.

A-1

 

     3. The Company shall not invest (i) in any loan secured (directly or indirectly) by a real
estate asset in which the Manager has an equity interest (other than preferred equity) or (ii) in
any equity interest (other than preferred equity) in any real estate asset which secures (directly
or indirectly) any loan held by the Manager.

     4. The legal department of the Manager shall provide legal services to the Company such as
advice as to corporate governance matters, regulatory requirements, tax matters, litigation matters
and such other matters as the Company or the Board of Directors may from time to time reasonably
request, and in the provision of such legal services the Company, its officers and directors shall,
to the extent permitted by applicable law, be entitled to all attorney-client privileges available
under applicable law and all fiduciary obligations owed by attorneys to their clients under
applicable law. Notwithstanding the foregoing, in order to mitigate possible conflicts of interest,
the Company shall retain separate external counsel (i) by action of the Independent Directors, with
respect to (1) any disputes between the Manager and Company arising under this Agreement or any
other agreement between the Manager and Company, (2) any transaction of the kind described in
Section 3 of this Conflicts of Interest Policy, (3) any investment for which a majority of the
Independent Directors has retained a special servicer or adviser in accordance with Section 4 of
this Conflicts of Interest Policy, and (4) any matter that a majority of the Independent Directors
identifies as a situation where the dual representation of the Company and the Manager presents an
actual or apparent conflict of interest; and (ii) at the option of the Manager, Company or any
Independent Director, with respect to any other matter.

     This Conflicts of Interest Policy may be
amended, restated, modified, supplemented or
waived by the Manager and the Company (which
approval must include a majority of the
Independent Directors) without the approval
of the Company’s stockholders.

A-2

 

Exhibit B

TERMINATION AGREEMENT

     THIS TERMINATION AGREEMENT (this “Termination Agreement” ) is executed and delivered as of
January 15, 2010 by and between Care Investment Trust, Inc., a Maryland corporation (the
“Company”), and CIT Healthcare LLC, a Delaware limited liability company (the “Manager”; and
together with the Company, collectively, the “Parties” and each a “Party”). Capitalized terms not
otherwise defined herein shall have the meanings assigned to such terms in the Agreement (as
defined below).

     WHEREAS, on June 27, 2007, the Company retained the Manager to manage the business and
investment affairs of the Company and its subsidiaries and to perform services for the Company in
the manner and on the terms set forth in that certain Management Agreement dated June 27, 2007 (the
“Management Agreement”);

     WHEREAS, on September 30, 2008, the Company and the Manager entered into Amendment No. 1 to
the Management Agreement and concurrently entered into that certain Mortgage Purchase Agreement
between the Company, as seller, and the Manager, as buyer (as amended, supplemented and modified
from time to time, the “Agreement”);

     WHEREAS, pursuant to and subject to the terms of the Agreement, the Company had the right, but
not the obligation, to cause the Manager to purchase Mortgage Assets by delivering put notices to
the Manager;

     WHEREAS, on January 15, 2010, the Company and the Manager further amended and restated the
Management Agreement as set forth in that certain Amended and Restated Management Agreement (as
amended, supplemented and modified from time to time, the “Amended and Restated Management
Agreement”), to be effective upon stockholder approval of the Plan of Liquidation (as such term is
defined in the Amended and Restated Management Agreement) (the date upon which the Amended and
Restated Management Agreement becomes effective, the “Effective Date”);

     WHEREAS, pursuant to the Amended and Restated Management Agreement, in consideration of the
Manager’s execution and delivery of the Amended and Restated Management Agreement, (i) the Company
agreed to rescind all outstanding put notices under the Agreement, and (ii) the Company and the
Manager agreed to terminate the Agreement effective as of the Effective Date by executing this
Termination Agreement; and

     WHEREAS, the Company and the Manager wish to terminate the Agreement upon the terms and
conditions set forth in this Termination Agreement and mutually release each other from all claims
each such Party may have against the other pursuant thereto or in connection therewith.

     NOW THEREFORE, in consideration of the following covenants and agreements and for other good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties agree as follows:

B-1

 

     1. Termination. The Company and the Manager hereby agree to terminate the Agreement
effective as of the Effective Date; provided, however that nothing in this Termination Agreement
shall be deemed to terminate, or otherwise modify, supplement or affect, any assignment or other
agreements or documents executed or delivered between the Parties in connection with any sale or
assignment of Mortgage Assets pursuant to the Agreement (any such agreements or documents,
“Underlying Sale Documents”). Each of the Parties agrees that the Agreement shall be deemed null
and void as of the Effective Date and that any and all rights and obligations of either Party
arising out of or related to the Agreement (other than rights and obligations arising out of or
related to any Underlying Sale Documents) , whether arising before or after the date hereof, are
hereby extinguished and terminated effective as of the Effective Date, such that, subject to
Section 2 below, from and after the Effective Date, neither Party shall remain obligated or liable
for any payment, claims, costs, expenses, services or any other obligations that may or may have
accrued or are due and owing under the Agreement (other than any such payments, claims, costs,
expenses, services or other obligations arising out of or related to any Underlying Sale
Documents).

     2. Mutual Release. Effective as of the Effective Date, each Party hereto hereby
releases the other Party hereto and such Party’s stockholders, members, directors, officers,
employees, representatives, lenders, agents, successors and assigns from any and all losses,
liabilities, damages, lawsuits, actions, causes of actions, debts, demands, obligations, suits in
law or equity and claims of any kind, whether known or unknown, actual or contingent, or which now
exist or might exist in the future, based on or attributable to any fact or matter arising out of
or relating to the Agreement other than claims arising out of a Party’s failure to honor its
obligations under this Termination Agreement and other than any claims arising out of or related to
any Underlying Sale Documents. This general release extends to all claims under common law,
statute, regulation or ordinance.

     3. Further Assurances. The Company and the Manager agree to execute any and all
documents and writings and take such other actions that may be reasonably necessary to effectuate
the terms contained in this Termination Agreement.

     4. Entire Agreement. This Termination Agreement constitutes the entire agreement
between the Parties hereto with regard to the matters related to the Agreement (other than any
matters arising out of or related to any Underlying Sale Documents), superseding all prior
understandings and agreements whether written or oral related thereto. This Termination Agreement
may not be amended or revised except by a writing signed by both of the Parties, which shall be
approved by a majority of the Independent Directors (as such term is defined in the Amended and
Restated Management Agreement).

     5. Representation of Counsel. Both Parties acknowledge that they have had the advice
and guidance of legal counsel and have jointly assisted in the drafting of this Termination
Agreement.

     6. No Admission of Liability. It is understood and agreed that nothing contained
herein shall be construed as an admission of liability on the part of any of the Parties hereto.

B-2

 

     7. Counterparts. This Termination Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which shall constitute one and the same instrument.
One or more counterparts of this Termination Agreement may be delivered by facsimile, with the
intention that delivery by such means shall have the same effect as delivery of an original
counterpart thereof.

     8. Severability. If any provision of this Termination Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of this Termination
Agreement will remain in full force and effect. Any provision of this Termination Agreement held
invalid or unenforceable only in part or degree will remain in full force and effect to the extent
not held invalid or unenforceable.

     9. GOVERNING LAW. THIS TERMINATION AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS TERMINATION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW. EACH OF THE PARTIES HERETO IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR ANY DISTRICT WITHIN SUCH STATE FOR
THE PURPOSE OF ANY ACTION OR JUDGMENT RELATING TO OR ARISING OUT OF THIS TERMINATION AGREEMENT OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND TO THE LAYING OF VENUE IN SUCH COURT.

     10. WAIVER OF JURY TRIAL. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS TERMINATION AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND, THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR
RELATING TO THIS TERMINATION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS TERMINATION
AGREEMENT.

[SIGNATURE PAGE FOLLOWS]

B-3

 

     IN WITNESS WHEREOF, each of the Parties hereto have executed and delivered this Termination
Agreement as of the date first written above.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	CARE INVESTMENT TRUST INC.

	 	 	 	CIT HEALTHCARE LLC
	By:
	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	

	 	Name: Salvatore (Torey) V. Riso Jr.
	 	 	 	 	 	Name: Steven N. Warden	 	 	 	 
	

	 	Its:      Chief Executive Officer and President
	 	 	 	 	 	Its:      President	 	 	 	 

(Signature Page to Termination Agreement)

 

 

Exhibit C

GENERAL MUTUAL RELEASE

     This General Mutual Release (this “Release”) is being executed and delivered as of
January 15, 2010, in accordance with Section 16(d) of that certain Amended and Restated Management
Agreement (as amended, supplemented and modified from time to time, the “Amended and Restated
Management Agreement”), amending and restating that certain Management Agreement dated June 27,
2007, as amended by Amendment No.1, dated as of September 30, 2008 (the “Original Management
Agreement”), in each case, by and between Care Investment Trust Inc., a Maryland corporation
(the “Company”), and CIT Healthcare LLC, a Delaware limited liability company (the “Manager”; and
together with the Company, collectively, the “Parties” and each a “Party”). Capitalized terms used
in this Release without definition have the respective meanings given to them in the Amended and
Restated Management Agreement.

     WHEREAS, in consideration of each Party’s agreement to execute and deliver the Amended and
Restated Management Agreement, each Party has agreed to deliver to the other Party, on or prior to
the Effective Date, this Release.

     NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged and intending to be legally bound, the Parties hereby agrees as follows:

     1. General Release.

          (a) Effective as of the Effective Date, each Party hereto hereby releases and forever
discharges the other Party hereto and such Party’s stockholders, members, directors, officers,
employees, representatives, lenders, agents, successors and assigns from any and all losses,
liabilities, damages, lawsuits, actions, causes of actions, debts, demands, obligations, suits in
law or equity and claims of any kind, whether known or unknown, actual or contingent, or which now
exist or might exist in the future, which such Party now has, has ever had or may hereafter have
against the other Party arising prior to the Effective Date pursuant to or in connection with the
Original Management Agreement; provided, however, that nothing contained herein
shall operate to release (i) any rights, obligations, covenants, representations and warranties of
the Parties arising under, (A) the Amended and Restated Management Agreement, including without
limitation Section 8 of the Amended and Restated Management Agreement, or (ii) any claims, causes
of action or proceedings against such Party related to fraudulent actions of such Party.

          (b) Each Party hereby irrevocably covenants to refrain from, directly or indirectly, asserting
any claim or demand, or commencing, instituting or causing to be commenced, any proceeding of any
kind against the other Party based upon any matter purported to be released hereby.

          (c) Without in any way limiting any of the rights and remedies otherwise available to the
other Party, each Party, severally and not jointly, agrees to indemnify, defend and hold harmless
the other Party from and against any and all loss, liability, claim, damage

C-1

 

(including incidental and consequential damages) or expense (including costs of investigation
and defense and reasonable attorney’s fees), whether or not involving third party claims, arising
directly or indirectly from or in connection with (i) the assertion by or on behalf of such Party
of any claim or other matter purported to be released pursuant to this Release and (ii) the
assertion by any third party of any claim or demand against the other Party which claim or demand
arises directly or indirectly from, or in connection with, any assertion by or on behalf of such
Party against such third party of any claims or other matters purported to be released pursuant to
this Release.

     2. Miscellaneous.

          (a) Further Assurances. The Company and the Manager agree to execute any and all
documents and writings and take such other actions that may be reasonably necessary to effectuate
the terms contained in this Release.

          (b) Severability. If any provision of this Release is held invalid or unenforceable
by any court of competent jurisdiction, the other provisions of this Release will remain in full
force and effect. Any provision of this Release held invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not held invalid or unenforceable.

          (c) GOVERNING LAW. THIS RELEASE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS RELEASE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE
UNITED STATES DISTRICT COURT FOR ANY DISTRICT WITHIN SUCH STATE FOR THE PURPOSE OF ANY ACTION OR
JUDGMENT RELATING TO OR ARISING OUT OF THIS RELEASE OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY
AND TO THE LAYING OF VENUE IN SUCH COURT.

          (d) WAIVER OF JURY TRIAL. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS RELEASE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND, THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR
RELATING TO THIS RELEASE OR THE TRANSACTIONS CONTEMPLATED BY THIS RELEASE.

          (e) Entire Agreement. This Release constitutes the entire agreement between the
Parties hereto with regard to the matters contained herein, superseding all prior understandings
and agreements whether written or oral related thereto. This Release may not be amended or revised
except by a writing signed by both of the Parties, which shall be approved by a majority of the
Independent Directors.

C-2

 

          (f) Representation of Counsel. Both Parties acknowledge that they have had the advice
and guidance of legal counsel and have jointly assisted in the drafting of this Release.

          (g) No Admission of Liability. It is understood and agreed that nothing contained
herein shall be construed as an admission of liability on the part of any of the Parties hereto.

          (h) Counterparts. This Release may be executed in counterparts, each of which shall
be deemed an original but all of which shall constitute one and the same instrument. One or more
counterparts of this Release may be delivered by facsimile, with the intention that delivery by
such means shall have the same effect as delivery of an original counterpart thereof.

[SIGNATURE PAGE FOLLOWS]

C-3

 

     IN WITNESS WHEREOF, each of the undersigned
have execute and delivered this Release as the date first above written.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CARE INVESTMENT TRUST INC.

	 	 	 	CIT HEALTHCARE LLC
	By:

	 	
	 	
	 	By:
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name: Salvatore (Torey) V. Riso Jr.
	 	 	 	 	 	Name: Steven N. Warden	 	 	 	 	 	 
	

	 	Its:      Chief Executive Officer and President
	 	 	 	 	 	Its:      President	 	 	 	 	 	 

(Signature Page to General Mutual Release)

 

 

Schedule 1

EXISTING INVESTMENTS

Bickford Senior Living Portfolio

Cambridge Medical Office Building Portfolio

Senior Management Concepts Senior Living Portfolio

Mortgage investment secured by Michigan Skilled Nursing Portfolio

Mortgage investment secured by Texas Skilled Nursing / Assisted Living Portfolio

Mortgage investment secured by Texas / Louisiana Skilled Nursing / Assisted Living / Sr. Apartment
Portfolio

D-1exv10w1

Exhibit 10.1

ARRANGEMENT AGREEMENT

BETWEEN

FEDERAL SIGNAL CORPORATION

-AND-

1815315 ONTARIO LIMITED

-AND-

SIRIT INC.

January 13, 2010

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE 1
	 	 	 	 
	INTERPRETATION
	 	 	2	 
	1.1 Definitions
	 	 	2	 
	1.2 Interpretation Not Affected by Headings
	 	 	14	 
	1.3 Number and Gender
	 	 	14	 
	1.4 Date for Any Action
	 	 	14	 
	1.5 Currency
	 	 	14	 
	1.6 Accounting Matters
	 	 	14	 
	1.7 Knowledge
	 	 	14	 
	1.8 Schedules
	 	 	14	 
	1.9 Other Definitional and Interpretive Provisions
	 	 	15	 
	 
	 	 	 	 
	ARTICLE 2
	 	 	 	 
	THE ARRANGEMENT
	 	 	15	 
	2.1 Arrangement
	 	 	15	 
	2.2 Interim Order
	 	 	15	 
	2.3 The Company Meeting
	 	 	16	 
	2.4 The Company Circular
	 	 	17	 
	2.5 Continuance
	 	 	18	 
	2.6 Final Order
	 	 	18	 
	2.7 Court Proceedings
	 	 	18	 
	2.8 Articles of Arrangement and Effective Date
	 	 	19	 
	2.9 Payment of Consideration
	 	 	19	 
	2.10 Public Communications
	 	 	20	 
	 
	 	 	 	 
	ARTICLE 3
	 	 	 	 
	REPRESENTATIONS AND WARRANTIES OF THE COMPANY
	 	 	20	 
	3.1 Representations and Warranties
	 	 	20	 
	3.2 Disclaimer of Additional Representations and Warranties

	 	 	20	 
	3.3 Survival of Representations and Warranties
	 	 	20	 
	 
	 	 	 	 
	ARTICLE 4
	 	 	 	 
	REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUIRECO
	 	 	20	 
	4.1 Representations and Warranties
	 	 	20	 
	4.2 Disclaimer of Additional Representations and Warranties

	 	 	21	 

- i -

 

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	4.3 Survival of Representations and Warranties
	 	 	21	 
	 
	 	 	 	 
	ARTICLE 5
	 	 	 	 
	COVENANTS OF COMPANY AND ACQUIRECO
	 	 	21	 
	5.1 Covenants of the Company Regarding the Conduct of Business

	 	 	21	 
	5.2 Covenants of the Company Regarding the Arrangement
	 	 	24	 
	5.3 Covenants of Acquireco Regarding the Performance of Obligations

	 	 	25	 
	5.4 Mutual Covenants
	 	 	26	 
	5.5 Performance of Acquireco
	 	 	26	 
	 
	 	 	 	 
	ARTICLE 6
	 	 	 	 
	CONDITIONS
	 	 	27	 
	6.1 Mutual Conditions Precedent
	 	 	27	 
	6.2 Additional Conditions Precedent to the Obligations of Acquireco

	 	 	27	 
	6.3 Additional Conditions Precedent to the Obligations of the
Company
	 	 	29	 
	6.4 Satisfaction of Conditions
	 	 	29	 
	 
	 	 	 	 
	ARTICLE 7
	 	 	 	 
	ADDITIONAL AGREEMENTS
	 	 	30	 
	7.1 Notice and Cure Provisions
	 	 	30	 
	7.2 Non-Solicitation
	 	 	30	 
	7.3 Notice of Superior Proposal Determination and Right to Match

	 	 	32	 
	7.4 Agreement as to Damages
	 	 	33	 
	7.5 Fees and Expenses; Other Payments
	 	 	34	 
	7.6 Injunctive Relief and Specific Performance
	 	 	34	 
	7.7 Access to Information; Confidentiality Agreement
	 	 	35	 
	7.8 Insurance
	 	 	35	 
	7.9 Restructuring
	 	 	36	 
	7.10 Withholding Rights
	 	 	37	 
	 
	 	 	 	 
	ARTICLE 8
	 	 	 	 
	TERM, TERMINATION, AMENDMENT AND WAIVER
	 	 	37	 
	8.1 Term
	 	 	37	 
	8.2 Termination
	 	 	37	 
	8.3 Waiver
	 	 	39	 

- ii -

 

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	ARTICLE 9
	 	 	 	 
	GENERAL PROVISIONS
	 	 	39	 
	9.1 Notices
	 	 	39	 
	9.2 Governing Law
	 	 	41	 
	9.3 Third Parties
	 	 	41	 
	9.4 Time of Essence
	 	 	41	 
	9.5 Entire Agreement, Binding Effect and Assignment
	 	 	41	 
	9.6 Severability
	 	 	41	 
	9.7 Counterparts, Execution
	 	 	42	 
	9.8 Amendments
	 	 	42	 

Schedule A  —  Continuance Resolution

Schedule B  —  Arrangement Resolution

Schedule C  —  Plan of Arrangement

Schedule D  —  Representations and Warranties of the Company

Schedule E  —  Representations and Warranties of Parent and Acquireco

- iii -

 

 

ARRANGEMENT AGREEMENT

     THIS ARRANGEMENT AGREEMENT dated January 13, 2010

B E T W E E N:

FEDERAL SIGNAL CORPORATION, a corporation incorporated under the laws of Delaware
(“Parent”)

- and -

1815315 ONTARIO LIMITED, a corporation incorporated under the laws of Ontario
(“Acquireco”)

- and -

SIRIT INC., a corporation existing under the laws of the Territory
of Yukon (the “Company”)

     WHEREAS, Parent desires to acquire all of the Company Shares (as hereinafter defined);

     AND WHEREAS, Acquireco is a wholly-owned subsidiary of Parent formed for the purpose of, among
other things, acquiring all of the Company Shares;

     AND WHEREAS the board of directors of the Company (the “Board of Directors”) has unanimously
determined, after consultation with its Financial Advisor (as hereinafter defined), that the
consideration per Company Share to be received by the Company Shareholders (as hereinafter defined)
pursuant to the Arrangement (as hereinafter defined) is fair and that the Continuance (as
hereinafter defined) and the transactions contemplated in the Arrangement are in the best interests
of the Company; and the Board of Directors unanimously has resolved to support the Continuance and
the Arrangement and to unanimously recommend acceptance of the Continuance and the Arrangement to
the Company Shareholders, all on the terms and subject to the conditions contained herein;

     AND WHEREAS all of the members of the Board of Directors and Wolf Bielas and certain
significant shareholders have concurrently with the execution and delivery of this Agreement
entered into the Voting Agreement (as hereinafter defined);

     THIS AGREEMENT WITNESSES THAT in consideration of the covenants and agreements herein
contained and other good and valuable consideration (the receipt and sufficiency of which are
hereby acknowledged), the Parties (as hereinafter defined) hereto covenant and agree as follows:

 

 

- 2 -

ARTICLE 1

INTERPRETATION

1.1 Definitions

     In this Agreement, unless the context otherwise requires:

	 	 	“Acquisition Proposal” means (a) any offer, proposal or inquiry relating to any (i) merger,
amalgamation, business combination, take-over bid, tender offer, arrangement, consolidation,
recapitalization, reorganization, liquidation, dissolution, winding up, distribution or
share exchange involving the Company and/or one or more of its subsidiaries, (ii) sale of
assets (including shares of subsidiaries) of the Company and/or one or more of its
subsidiaries representing 20% or more of the consolidated assets or contributing 20% or more
of the consolidated revenue of the Company or its subsidiaries (or any lease, license,
long-term supply agreement or other arrangement having the same economic effect), (iii) sale
or acquisition in any manner, directly or indirectly of beneficial or registered ownership
of 20% or more the equity securities of the Company (or rights or interests therein or
thereto), or similar transactions involving the Company and/or one or more of its
subsidiaries; or (b) a proposal or offer or public announcement or other public disclosure
of an intention to do any of the foregoing, directly or indirectly, excluding, in each case
the Arrangement or any transaction to which Parent or any of its affiliates are a party, any
transaction involving only the Company and/or one or more of its subsidiaries but including
for greater certainty any modification or proposed modification to an Acquisition Proposal;

	 	 	“affiliate” has the meaning ascribed thereto in National Instrument 45-106 of the Canadian
Securities Administrators;
	 
	 	 	“Agreement” means this Agreement, including all schedules, and all amendments or
restatements hereof (if any);
	 
	 	 	“Arrangement” means the proposed arrangement under section 182 of the OBCA on the terms and
subject to the conditions set out in the Plan of Arrangement, subject to any amendments or
variations thereto made in accordance with this Agreement or the Plan of Arrangement or made
at the direction of the Court in the Final Order with the consent of the Company and
Acquireco, each acting reasonably;
	 
	 	 	“Arrangement Resolution” means the special resolution approving the Plan of Arrangement to
be considered at the Company Meeting, substantially in the form and content of Schedule B
hereto;
	 
	 	 	“Articles of Arrangement” means the articles of arrangement of the Company in respect of the
Arrangement, to be sent to the Director pursuant to the OBCA after the Final Order is made;
	 
	 	 	“Articles of Continuance” means the articles of continuance of the Company in respect of the
Continuance, to be sent to the Director pursuant to the OBCA in accordance with Section 2.6;

 

- 3 -

	 	 	“associate” has the meaning ascribed thereto in the Securities Act;
	 
	 	 	“Board of Directors” has the meaning ascribed thereto in the recitals;
	 
	 	 	“business day” means any day, other than a Saturday, a Sunday or a day on which commercial
banks are closed in Toronto, Canada or Chicago, USA;
	 
	 	 	“Business Intellectual Property” means the Licensed Intellectual Property and the Owned
Intellectual Property;
	 
	 	 	“Certificate of Arrangement” means the certificate or other confirmation of filing giving
effect to the Arrangement to be issued by the Director pursuant to section 183(2) of the
OBCA after the Articles of Arrangement have been filed;
	 
	 	 	“Code” means the United States Internal Revenue Code of 1986;
	 
	 	 	“Company Circular” means the notice of the Company Meeting and accompanying management proxy
circular, including all schedules, appendices and exhibits thereto, to be sent to, among
others, the Company Shareholders in connection with the Company Meeting, as amended,
supplemented or otherwise modified from time to time;
	 
	 	 	“Company Disclosure Letter” means the letter of disclosure dated as of the date hereof and
delivered by the Company to Parent and Acquireco with respect to certain matters in this
Agreement;
	 
	 	 	“Company Financial Statements” has the meaning ascribed thereto in Section (i) of Schedule D
hereto;
	 
	 	 	“Company Meeting” means the special meeting of Company Shareholders, including any
adjournment or postponement thereof, to be called and held in accordance with the Interim
Order to consider the Continuance Resolution and the Arrangement Resolution;
	 
	 	 	“Company Plans” means all plans, arrangements, agreements, programs, policies, practices or
undertakings, whether oral or written, formal or informal, funded or unfunded, insured or
uninsured, registered or unregistered which the Company or any of its subsidiaries is a
party to or bound by or in which the Employees or their dependents participate, in
connection with their employment by the Company, or which the Company or any of its
subsidiaries has, or will have, any liability or contingent liability under or, pursuant to
which payments are made, or benefits are provided or an entitlement to payments or benefits
may arise with respect to any Employees or former employees, directors or officers of the
Company or any of its subsidiaries or Consultants (or any spouses, dependants, survivors or
beneficiaries of any such persons), relating to retirement savings, pensions, bonuses,
profit sharing, retention, severance, deferred compensation, incentive compensation, life or
accident insurance, hospitalization, health, medical or dental treatment or expenses,
disability, employee loans, vacation pay, severance or termination pay or other employee
benefits, but excluding Statutory Plans;

 

- 4 -

	 	 	“Company Shareholders” means the registered or beneficial holders of Company Shares, as the
context requires;
	 
	 	 	“Company Shares” means the common shares in the capital of the Company;
	 
	 	 	“Company’s Public Disclosure Record” means all reports, schedules, forms, statements and
other documents (including exhibits and other information incorporated therein) filed by the
Company with the OSC since January 1, 2008 and on or before January 12, 2010 that are
available to the public on SEDAR;
	 
	 	 	“Confidentiality Agreement” means the letter agreement dated September 28, 2009 between
Parent and the Company;
	 
	 	 	“Consideration” means $0.30 in cash per Company Share, subject to adjustment in accordance
with Section 2.6 of the Plan of Arrangement;
	 
	 	 	“Consultant” means any individual whose relationship to the Company or any of its
subsidiaries is that of independent contractor;
	 
	 	 	“Continuance” means the continuance of the Company as a corporation under the OBCA to be
effected prior to the Effective Time;
	 
	 	 	“Continuance Resolution” means the special resolution approving the Continuance to be
considered at the Company Meeting, substantially in the form and content of Schedule A
hereto;
	 
	 	 	“Contract” means any contract, license, lease, franchise, agreement, commitment,
understanding or other legally binding right or obligation to which the Company or any of
its subsidiaries is a party or by which any of them, or any of their respective properties
or assets, may be bound or by which the Company or any of its subsidiaries has any liability
and, for greater certainty, shall exclude Company Plans;
	 
	 	 	“Court” means the Superior Court of Justice (Ontario);
	 
	 	 	“Credit Agreement” means, collectively, (i) the loan and security agreement, dated June 12,
2009 between Sirit Inc., Sirit Technologies Inc., Sirit Corp., RSI ID Technologies, Inc.,
Sirit Corp. and Silicon Valley Bank, (ii) the export-import bank loan and security
agreement, dated June 12, 2009, between Sirit Inc., Sirit Technologies Inc., Sirit Corp.,
RSI ID Technologies, Inc., Sirit Corp. and Silicon Valley Bank, and (iii) the borrower
agreement, dated June 12, 2009, between Sirit Inc., the Export-Import Bank of the United
States and Silicon Valley Bank;
	 
	 	 	“Credit Agreement Indebtedness Amount” has the meaning ascribed thereto in Section 6.2(e);
	 
	 	 	“D&O Insurance” has the meaning ascribed thereto in Section 7.8(1);

 

- 5 -

	 	 	“Depository” means Equity Transfer & Trust Company or such other trust company as may be
agreed by the Parties;
	 
	 	 	“Director” means the Director appointed pursuant to section 278 of the OBCA;
	 
	 	 	“Dissent Rights” means the rights of dissent in respect of the Continuance described in the
Plan of Arrangement;
	 
	 	 	“Effective Date” means the date shown on the Certificate of Arrangement giving effect to the
Arrangement;
	 
	 	 	“Effective Time” has the meaning ascribed thereto in the Plan of Arrangement;
	 
	 	 	“Employees” means those individuals employed by the Company or any of its subsidiaries on a
full-time, part-time or temporary basis, including those employees on disability leave,
parental leave or other absence;
	 
	 	 	“Employment Contracts” means all written Contracts, other than Company Plans, relating to
the employment of an Employee or Consultant, or providing for retention, termination,
severance or change of control benefits;
	 
	 	 	“Encumbrance” (and any grammatical variation thereof) includes any mortgage, pledge,
assignment, charge, lien, claim, hypothec, security interest, adverse claim, option, right,
privilege or other third party interest or encumbrance of any kind, whether contingent or
absolute;
	 
	 	 	“Environment” means the ambient air, all layers of the atmosphere, surface water, ground
water, all land, all living organisms and the interacting natural systems that include
components of air, land, water, organic and inorganic matter (including natural resources)
and living organisms;
	 
	 	 	“Environmental Laws” means all applicable Laws relating to the Environment, the protection
of the Environment, the regulation of Hazardous Materials (including the transportation of
dangerous goods), or occupational, employee and public health and safety;
	 
	 	 	“ERISA” means the Employee Retirement Income Security Act of 1974;
	 
	 	 	“Fairness Opinion” means the opinion of the Financial Advisor, to the effect that, as of the
date of such opinion, the Consideration under the Arrangement is fair, from a financial
point of view, to Company Shareholders;
	 
	 	 	“Final Order” means the final order of the Court in a form acceptable to the Parties acting
reasonably, approving the Arrangement as such order may be amended by the Court (with the
consent of the Parties, each acting reasonably) at any time prior to the Effective Time or,
if appealed, then, unless such appeal is withdrawn or dismissed, as affirmed or as amended
(provided that any such amendment is acceptable to the Parties, each acting reasonably) on
appeal;

 

- 6 -

	 	 	“Financial Advisor” means GMP Securities L.P., financial advisor to the Company;

	 	 	“Financial Indebtedness” means in relation to a person (the “debtor”), an obligation or
liability (contingent or otherwise) of the debtor (a) for borrowed money (including
overdrafts and including amounts in respect of principal, premium, interest or any other sum
payable in respect of borrowed money) or for the deferred purchase price of property or
services, (b) under any loan, stock, bond, note, debenture or other similar instrument or
debt security, (c) under any acceptance credit, bankers’ acceptance, Guarantee, letter of
credit or other similar facilities, (d) under any conditional sale, hire purchase or title
retention agreement with respect to property, under any capitalized lease arrangement, under
any sale and lease back arrangement or under any lease or any other agreement having the
commercial effect of a borrowing of money or treated as a finance lease or capital lease in
accordance with applicable accounting principles, (e) under any foreign exchange
transaction, any interest or currency swap transaction, any fuel or commodity hedging
transaction or any other kind of derivative transaction, (f) in respect of any
counter-indemnity obligation in respect of a Guarantee, indemnity, bond, standby or
documentary letter of credit or any other instrument issued by a bank or financial
institution, (g) in respect of preferred stock (namely capital stock of any class or series
that is preferred as to the payment of dividends or distributions, or as to the distribution
of assets upon any voluntary or involuntary liquidation or dissolution, over the capital
stock of any other class or series) or redeemable capital stock (namely any class or series
of capital stock that, either by its terms, by the terms of any security into which it is
convertible or exchangeable or by contract or otherwise, is, or upon the happening of an
event or passage of time would be, required to be redeemed on a specified date or is
redeemable at the option of the holder thereof at any time, or is convertible into or
exchangeable for debt securities at any time), (h) for any amount raised under any
transaction similar in nature to those described in clauses (a) to (g) of this definition,
or otherwise having the commercial effect of borrowing money and classified as indebtedness
under GAAP, (i) under a Guarantee, indemnity or similar obligation entered into by the
debtor in respect of an obligation or liability of another person which would fall within
clauses (a) to (h) of this definition if the references to the debtor referred to the other
person; for greater certainty, Financial Indebtedness includes obligations and liabilities
of another person which would fall within clauses (a) to (h) of this definition where such
obligations or liabilities are secured by (or where such other person has a right to require
that such obligations or liabilities be secured by) a security interest over any property of
the debtor even though the debtor has not assumed or become liable for the payment of such
obligations or liabilities or receivables sold, assigned, or discounted, but excludes (i) in
respect of the Company or a subsidiary obligations and liabilities owing to the Company or a
subsidiary, (ii) trade payables and accrued expenses arising in the ordinary course of
business, (iii) prepaid or deferred revenue arising in the ordinary course of business,
(iv) purchase price holdbacks arising in the ordinary course of business in respect of a
portion of the purchase prices of an asset to satisfy unperformed obligations of the seller
of such asset, and (v) earn-out obligations until such obligations become a liability on the
balance sheet of such person in accordance with GAAP;

	 	 	“GAAP” means Canadian generally accepted accounting principles, as in effect at the relevant
time;

 

- 7 -

	 	 	“Governmental Entity” means (a) any supranational, international, multinational, national,
federal, provincial, state, regional, municipal, local or other government, governmental or
public department, ministry, central bank, court, tribunal, arbitral body, office, Crown
corporation, commission, commissioner, board, bureau or agency, whether domestic or foreign,
(b) any subdivision, agent or authority of any of the foregoing, or (c) any
quasi-governmental or private body, including any tribunal, commission, stock exchange,
regulatory agency or self-regulatory organization, exercising any regulatory, expropriation
or taxing authority (including the TSX);

	 	 	“Guarantee” of or by any person means any obligation, contingent or otherwise, of such
person guaranteeing any Financial Indebtedness of any other person (the “primary obligor”)
in any manner, whether directly or indirectly, and including any obligation of such person,
direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Financial Indebtedness or to purchase (or to advance or supply funds for
the purchase of) any security for the payment of such Financial Indebtedness, (b) to
purchase property, securities or services for the purpose of assuring the owner of such
Financial Indebtedness of the payment of such Financial Indebtedness, or (c) to maintain
working capital, equity capital or other financial statement condition or liquidity of the
primary obligor so as to enable the primary obligor to pay such Financial Indebtedness;
provided, however, that the term Guarantee shall not include endorsements for collection or
deposit, in each case in the ordinary course of business;

	 	 	“Hazardous Materials” means any chemical or other material or substance, form of energy or
other contaminant (as such term is defined in the Environmental Protection Act (Ontario));

	 	 	“Indemnified Person” has the meaning ascribed thereto in Section 7.8;

	 	 	“Intellectual Property Rights” means (a) any and all proprietary rights provided under:
(i) patent law; (ii) copyright law (including moral rights); (iii) trade-mark law;
(iv) design patent or industrial design law; (v) semi-conductor chip law; or (vi) any other
statutory provision or common law principle, including trade secret law, which may provide a
right in either hardware, software, documentation, ideas, formulae, algorithms, concepts,
inventions, processes or know-how generally, or the expression or use of such hardware,
software, documentation, ideas, formulae, algorithms, concepts, inventions, processes or
know-how; (b) any and all applications, registrations, licenses, sub-licenses, franchises,
agreements or any other evidence of a right in any of the foregoing; and (c) all licenses
and waivers and benefits of waivers of the rights set out above and all rights to damages
and profits by reason of the infringement of any of the rights set out above;

	 	 	“Interim Order” means the interim order of the Court in a form acceptable to the Parties,
acting reasonably, providing for, among other things, the calling and holding of the Company
Meeting, as the same may be amended by the Court with the consent of the Parties, each
acting reasonably;

 

- 8 -

	 	 	“IP Agreements” means Contracts under which the Company or any of its subsidiaries has
received or granted a license to Business Intellectual Property which is material to the
business of the Company or any of its subsidiaries as currently conducted;

	 	 	“Law” or “Laws” means all supranational, international, multinational, federal, provincial,
state, municipal, regional and local laws (including common law), by-laws, statutes, rules,
regulations, principles of law and equity, orders, rulings, certificates, ordinances,
judgments, injunctions, determinations, awards, decrees, codes, policies or other
requirements, whether domestic or foreign, and the terms and conditions of any grant of
approval, permission, authority or license of any Governmental Entity, and the term
“applicable” with respect to such Laws and in a context that refers to one or more Parties,
means such Laws as are binding upon or applicable to such Party or its assets;

	 	 	“Licensed Intellectual Property” means all Intellectual Property Rights used by the Company
or its subsidiaries except for the Owned Intellectual Property;

	 	 	“Material Adverse Effect” means any fact, change, effect, circumstance, event, occurrence,
action, omission or development that, individually or in the aggregate, (a) is or would
reasonably be expected to be material and adverse to the financial condition, business or
annual results of operations of the Company and its subsidiaries on a consolidated basis, or
(b) prevents or could reasonably be expected to prevent the ability of the Company to
consummate the transactions contemplated by this Agreement; provided any fact, change,
effect, circumstance, event, occurrence, action, omission or development resulting from or
arising in connection with any of the following shall not constitute a Material Adverse
Effect:

	 	(i)	 	any change in global, North American, national or regional
political conditions (including acts of terrorism);
	 
	 	(ii)	 	any natural disaster;
	 
	 	(iii)	 	any change in general economic, business, regulatory, national
or global financial, currency exchange or securities market conditions;
	 
	 	(iv)	 	any change in Law;
	 
	 	(v)	 	the announcement of the execution of this Agreement or the
transactions contemplated hereby or the performance of any obligation
hereunder;
	 
	 	(vi)	 	any action required by the terms of this Agreement or
undertaken by the Company at the request of or with the consent of Acquireco;
	 
	 	(vii)	 	any action that is not taken by the Company because it is
prohibited by the terms of this Agreement;
	 
	 	(viii)	 	the failure of the Company to meet its internal or published forecasts,
budgets, projections or revenue or earnings predictions;

 

- 9 -

	 	(ix)	 	any change in GAAP or regulatory accounting principles (or
interpretations thereof) generally;
	 
	 	(x)	 	any change in the trading price or volume of the Company Shares
(it being understood that the causes underlying such change in market price or
trading volume may be taken in account in determining whether a Material
Adverse Effect has occurred), or any suspension of trading in securities
generally or on any securities exchange on which any securities of the Company
trade; or
	 
	 	(xi)	 	any matter that has been generally disclosed on SEDAR prior to
the date of the Agreement or specifically disclosed in the Company Disclosure
Letter;

	 	 	provided, however, that with respect to the immediately preceding clauses (i)
through (iv) such matters do not have a disproportionate effect on the Company and
its subsidiaries taken as a whole, relative to other companies and entities
providing products and services in the field of radio frequency identification;

	 	 	“Material Contract” means any Contract that: (a) in the case of Contracts which are outside
of the ordinary course of business, provides for obligations or entitlements of the Company
and/or its subsidiaries exceeding $100,000 per annum, and in the case of Contracts in the
ordinary course of business, provides for obligations or entitlements of the Company and/or
its subsidiaries exceeding $250,000 per annum; (b) has a term in excess of 12 months and
which is not terminable by the Company or its subsidiaries upon notice of 3 months or less;
(c) is a joint venture or similar agreement in respect of any the design, development,
manufacture or implementation of radio frequency identification products or solutions;
(d) is a contract with a third party that contains most favoured nations or similar clause
in favour of the third party; (e) is a contract that contains any non-competition or similar
obligations or that restricts the business of the Company or any subsidiary; (f) relates to
any Financial Indebtedness of the Company and/or its subsidiaries; (g) relates to the
disposition or acquisition by the Company or any of its subsidiaries after the date of this
Agreement of material assets or an ownership interest in a business or pursuant to which the
Company or any of its subsidiaries has any material ownership or participation interest in
any other person or other business enterprise other than the Company’s subsidiaries; (h)
relates to the acquisition or sale by the Company of any operating business or the capital
stock or other ownership or participation interest of any other person and under which the
Company has any material continuing liability or obligation; or (i) is a contract under
which the Company or any of its subsidiaries has received a licence to use any third party
Intellectual Property Rights that are material to the business of the Company or its
subsidiaries;

	 	 	“material fact” has the meaning ascribed thereto in the Securities Act;
	 
	 	 	“MD&A” has the meaning ascribed thereto in Section (i) of Schedule D hereto;
	 
	 	 	“MI 61-101” has the meaning ascribed thereto in Section (dd) of Schedule D hereto;

 

- 10 -

	 	 	“OBCA” means the Business Corporations Act (Ontario);
	 
	 	 	“Option” means an option to purchase a Company Share granted under the Stock Option Plan;
	 
	 	 	“Option Amount” means, for each Option outstanding, the amount, if any, equal to the
Consideration less the applicable exercise price for such Option and net of all applicable
withholdings;
	 
	 	 	“Outside Date” means June 30, 2010 or such later date as may be agreed to in writing by the
Parties;
	 
	 	 	“Owned Intellectual Property” means all Intellectual Property Rights owned in whole or in
part by the Company or its subsidiaries;
	 
	 	 	“Parties” means the Company, Parent and Acquireco, and “Party” means any of them;
	 
	 	 	“Pension Plan” means all registered Company Plans relating to retirement or retirement
savings including registered retirement savings plans or registered pension plans (whether
defined contribution plans or defined benefit plans);
	 
	 	 	“Permit” means any license, permit, certificate, consent, order, grant, approval,
classification, registration, flagging or other authorization of and from any Governmental
Entity;
	 
	 	 	“Permitted Encumbrances” means, with respect to the Company and its subsidiaries:

	 	(a)	 	statutory liens for Taxes not yet due or payable or which the Company or its
subsidiaries owing such Taxes is contesting in good faith but only for so long as such
contestation effectively postpones enforcement of any such liens or Taxes, or if
adequate reserves with respect thereto are maintained in the appropriate financial
statements;
	 
	 	(b)	 	statutory liens incurred or deposits made in the ordinary course of the
business of the Company and its subsidiaries in connection with workers’ compensation,
unemployment insurance and similar legislation, but only to the extent that each such
statutory lien or deposit relates to amounts not yet due;
	 
	 	(c)	 	security given by the Company or any of its subsidiaries pursuant to the Credit
Agreement;
	 
	 	(d)	 	security given by the Company or any of its subsidiaries to a public utility or
any Governmental Entity when required in the ordinary course of business of the Company
and its subsidiaries;
	 
	 	(e)	 	undetermined or inchoate construction, mechanics or repair or storage liens
arising in the ordinary course of the business of the Company and its subsidiaries,
with respect to amounts which are not yet due and a claim for which has not been

 

- 11 -

	 	 	 	filed or registered pursuant to applicable Law or of which notice in writing has not
been given to the Company or its subsidiaries;

	 	(f)	 	any reservations or exceptions contained in the original grants from the Crown
or Governmental Entity, as applicable;
	 
	 	(g)	 	easements, including rights of way for, or reservations or rights of others
relating to, sewers, water lines, gas lines, pipelines, electric lines, telegraph and
telephone lines and other similar services and any registered restrictions or covenants
that run with the land, provided that there has been compliance with the provisions
thereof and that they do not in the aggregate materially detract from the ability to
use the real property subject to Real Property Leases and will not materially and
adversely affect the ability of the Company and its subsidiaries to carry on their
business as it has been carried on in the past;
	 
	 	(h)	 	zoning by-laws, ordinances or other restrictions as to the use of real
property, and agreements with other persons registered against title to the real
property subject to Real Property Leases, provided that they do not in the aggregate
materially detract from the ability to use the real property subject to Real Property
Leases and will not materially and adversely affect the ability of the Company and its
subsidiaries to carry on their business as it has been carried on in the past;
	 
	 	(i)	 	any Encumbrance to the extent it would constitute a Permitted Lien under the
Credit Agreement; and
	 
	 	(j)	 	such other defects or irregularities of title as do not materially and
adversely detract from the value or interfere with the use of the properties or assets
subject thereto or affected thereby.

	 	 	“person” includes an individual, limited or general partnership, limited liability company,
limited liability partnership, trust, joint venture, association, corporation, body
corporate, unincorporated organization, trustee, executor, administrator, legal
representative, Governmental Entity or any other entity, whether or not having legal status;
	 
	 	 	“Plan of Arrangement” means the plan of arrangement, substantially in the form of Schedule C
hereto, and any amendments or variations thereto made in accordance with Section 9.8 hereof
or Section 5.2 of the Plan of Arrangement or made at the direction of the Court in the Final
Order with the consent of the Company and Acquireco, each acting reasonably;
	 
	 	 	“Real Property Leases” means the leases, subleases and other similar agreements (and all
amendments or modifications thereto) under which the Company or any of its subsidiaries uses
or occupies or has the right to use or occupy, now or in the future, any real property;
	 
	 	 	“Releases” includes releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, migrating, escaping, leaching, disposing, dumping, depositing,

 

- 12 -

	 	 	spraying, burying, abandoning, incinerating, seeping or placing, or any similar action
referred to in any Environmental Law;
	 
	 	 	“Requisite Approval” means the approval of Company Shareholders in accordance with
Section 2.2(b), as may be modified by the Interim Order;
	 
	 	 	“Response Period” has the meaning ascribed thereto in Section 7.3(1)(c);
	 
	 	 	“Returns” means all reports, forms, schedules, elections, estimates, declarations of
estimated Tax, information statements and returns relating to, or required to be filed in
connection with, any Taxes;
	 
	 	 	“Securities Act” means the Securities Act (Ontario);
	 
	 	 	“Securities Authorities” means the Ontario Securities Commission and the applicable
securities commissions and other securities regulatory authorities in each of the other
provinces and territories of Canada;
	 
	 	 	“Securities Laws” means the Securities Act and all other applicable Canadian provincial and
territorial securities Laws and the rules and regulations and published policies under or
relating to the foregoing securities Laws and applicable stock exchange rules and listing
standards of the TSX;
	 
	 	 	“Shrink Wrap Software” means software that is generally commercially available: (a) through
or in consumer retail stores; (b) from the software licensors or their distributors, sales
agents, representatives or other persons, including value-added and other resellers or
original equipment manufacturers; or (c) from the Internet pursuant to “shrink wrap” or
“click through” licenses;
	 
	 	 	“Statutory Plans” means statutory plans or social security which the Company or any of its
subsidiaries is required to participate in or comply with, including the Canada Pension Plan
and plans administered pursuant to applicable health tax, workplace safety insurance and
employment insurance legislation;
	 
	 	 	“Stock Option Plan” means the stock option plan for key persons of the Company as amended on
April 26, 2007;
	 
	 	 	“subsidiary” means, with respect to a specified person, any entity, whether incorporated or
unincorporated, in which such person owns, directly or indirectly, a majority of the
securities or other ownership interests having by their terms ordinary voting power to elect
a majority of the directors or other persons performing similar functions, or the management
and policies of which such person otherwise has the power to direct;
	 
	 	 	“Superior Proposal” shall mean any unsolicited bona fide written Acquisition Proposal, which
the Board of Directors receives after the date hereof but before the time at which the
Arrangement Resolution is passed, to acquire not less than all of the outstanding Company
Shares or all or substantially all of the assets of the Company and its subsidiaries on a
consolidated basis and that: (a) is reasonably capable of being

 

- 13 -

	 	 	completed without undue delay, taking into account all financial, legal, regulatory and
other aspects of such Acquisition Proposal and the person making such Acquisition Proposal;
(b) that the Board of Directors determines, in its good faith judgment, after receiving the
advice of its outside legal and financial advisors, is on terms and conditions more
favourable to Company Shareholders from a financial point of view than the Arrangement;
(c) that did not result from a breach of Section 7.2; (d) that is not subject to any due
diligence condition; and (e) is not subject to any financing condition and any financing
required to complete such Acquisition Proposal has been committed or written confirmation is
provided from the sources of financing to be used to complete such Acquisition Proposal to
the satisfaction of the Board;
	 
	 	 	“Tax Act” means the Income Tax Act (Canada) and the regulations made thereunder, as now in
effect and as they may be promulgated or amended from time to time;
	 
	 	 	“Taxes” means all supranational, national, federal, state, provincial, territorial, county,
municipal, local or foreign taxes, dues, duties, rates, fees, imposts, levies, assessments,
tariffs and other charges imposed, assessed or collected by a Governmental Entity including,
but not limited to, (a) any gross income, net income, gross receipts, business, royalty,
capital, capital gains, goods and services, value added, franchise, license, occupation,
premium, capital stock, sales, use, real property, personal property, ad valorem, transfer,
license, profits, windfall profits, environmental, payroll, employment, employer health,
anti-dumping, countervail, excise, customs, duties, stamp, occupation, or premium taxes,
(b) all withholdings on amounts paid to or by a person, (c) all employment insurance or
other Statutory Plan premiums payable to a Governmental Entity, (d) any fine, penalty,
interest, or addition to tax, (e) any tax imposed, assessed, or collected or payable
pursuant to any tax sharing agreement or any other arrangement relating to the sharing or
payment of any such tax, levy, assessment, tariff, duty, deficiency or fee, and (f) any
liability for any of the foregoing as a transferee, successor, guarantor, or by contract or
by operation of law;
	 
	 	 	“Technology” has the meaning ascribed thereto in Section (bb)(x) of Schedule D hereto;
	 
	 	 	“Termination Fee” has the meaning ascribed thereto in Section 7.4;
	 
	 	 	“TSX” means the Toronto Stock Exchange;
	 
	 	 	“Voting Agreement” means the voting agreement dated the date hereof between Parent and
Acquireco, on the one hand, and each of the directors of the Company and Wolf Bielas and
certain significant shareholders, on the other hand, pursuant to which such persons have
agreed, among other things, to support the Continuance and the Arrangement and to vote the
Company Shares beneficially owned by them in favour of the Continuance Resolution and the
Arrangement Resolution; and
	 
	 	 	“YBCA” means the Business Corporations Act (Yukon).

 

- 14 -

1.2 Interpretation Not Affected by Headings

     The division of this Agreement into Articles, Sections, subsections and paragraphs and the
insertion of headings are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement. Unless the contrary intention appears, references in
this Agreement to an Article, Section, subsection, paragraph or Schedule by number or letter or
both refer to the Article, Section, subsection, paragraph or Schedule, respectively, bearing that
designation in this Agreement.

1.3 Number and Gender

     In this Agreement, unless the contrary intention appears, words importing the singular include
the plural and vice versa, and words importing gender include all genders.

1.4 Date for Any Action

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

1.5 Currency

     Unless otherwise stated, all references in this Agreement to sums of money are expressed in,
and all payments provided for herein shall be made in Canadian dollars, “$” refers to Canadian
dollars and “US$” refers to United States dollars.

1.6 Accounting Matters

     Unless otherwise stated, all financial accounting terms used in this Agreement in respect of
the Company and its subsidiaries shall have the meanings attributable thereto under GAAP and all
determinations of a financial accounting nature in respect of the Company and its subsidiaries
required to be made shall be made in a manner consistent with GAAP consistently applied.

1.7 Knowledge

     In this Agreement, unless otherwise stated, references to “the knowledge of the Company” means
the knowledge, after reasonable inquiry, of Norbert Dawalibi, Anastasia Chodarcewicz, Bruce
Roesner, John Freund, Paul Chappelle and Wolf Bielas in their capacity as officers of the Company
and its subsidiaries and not in their personal capacity.

1.8 Schedules

     The following Schedules are annexed to this Agreement and are incorporated by reference into
this Agreement and form a part hereof:

	 	 	 	 	 
	Schedule A
	 	—	 	Continuance Resolution
	Schedule B
	 	—	 	Arrangement Resolution

 

- 15 -

	 	 	 	 	 
	Schedule C

	 	—	 	Plan of Arrangement
	Schedule D

	 	—	 	Representations and Warranties of the Company
	Schedule E

	 	—	 	Representations and Warranties of Parent and Acquireco

1.9 Other Definitional and Interpretive Provisions

	 	(a)	 	References in this Agreement to the words “include”, “includes” or “including”
shall be deemed to be followed by the words “without limitation” whether or not they
are in fact followed by those words or words of like import.
	 
	 	(b)	 	The words “hereof”, “herein” and “hereunder” and words of like import used in
this Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.
	 
	 	(c)	 	Any capitalized terms used in any exhibit or Schedule but not otherwise defined
therein, shall have the meaning ascribed to them in this Agreement.
	 
	 	(d)	 	References to any agreement or contract are to that agreement or contract as
amended, modified or supplemented from time to time in accordance with the terms hereof
and thereof. References to any person include the successors and permitted assigns of
that person.
	 
	 	(e)	 	References to a particular statute or law shall be to such statute or law and
the rules, regulations and published policies made thereunder, as now in effect and as
they may be promulgated thereunder or amended from time to time.

ARTICLE 2

THE ARRANGEMENT

2.1 Arrangement

     The Company, Parent and Acquireco agree that the Arrangement will be implemented in accordance
with and subject to the terms and conditions contained in this Agreement and the Plan of
Arrangement.

2.2 Interim Order

     The Company agrees that as soon as reasonably practicable after the date hereof, but in any
event in sufficient time to permit the Company Meeting to be convened in accordance with Section
2.3(1), the Company shall move in a manner reasonably acceptable to Acquireco pursuant to
section 182 of the OBCA and, in cooperation with Acquireco, prepare, file and diligently pursue a
motion for the Interim Order, which shall provide, among other things:

	 	(a)	 	for the class of persons to whom notice is to be provided in respect of the
Arrangement and the Company Meeting and for the manner in which such notice is to be
provided;

 

- 16 -

	 	(b)	 	the requisite approval for the Arrangement Resolution shall be two-thirds of
the votes cast on the Arrangement Resolution by Company Shareholders present in person
or represented by proxy at the Company Meeting, each Company Share entitling the holder
thereof to one vote on the Arrangement Resolution;
	 
	 	(c)	 	that, in all other respects, the terms, restrictions and conditions of the
Company’s articles and by-laws as in effect as of the date hereof, including quorum
requirements and all other matters, shall apply in respect of the Company Meeting;
	 
	 	(d)	 	for the notice requirements with respect to the presentation of the application
to the Court for the Final Order;
	 
	 	(e)	 	that the Company Meeting may be adjourned or postponed from time to time by the
Company (subject to the terms of this Agreement) without the need for additional
approval of the Court; and
	 
	 	(f)	 	confirmation of the record date for the purposes of determining the Company
Shareholders entitled to receive material and vote at the Company Meeting in accordance
with the Interim Order.

2.3 The Company Meeting

     (1) Subject to the terms of this Agreement and the Interim Order, the Company agrees to
convene and conduct the Company Meeting as soon as reasonably practicable, with a target date for
the Company Meeting of February 26, 2010, and in any event will hold the Company Meeting no later
than March 12, 2010, in each case, in accordance with the Interim Order, the Company’s articles and
by-laws as in effect on the date hereof and applicable Laws, and not postpone or adjourn (other
than a postponement or adjournment not exceeding three business days for the purpose of attempting
to obtain the requisite approvals as set out in Section 2.2(b)) or cancel the Company Meeting
without Acquireco’s prior written consent (which consent shall not be unreasonably withheld,
conditioned or delayed) except as required for quorum purposes, or to comply with requirements of
applicable Law (provided that the Company uses commercially reasonable efforts to comply with such
Laws in a timely manner and excluding applicable Laws governing fiduciary duties, which the Parties
hereby agree are otherwise addressed in this Agreement).

     (2) Subject to the terms of this Agreement, the Company will use commercially reasonable
efforts to solicit proxies in favour of the Continuance Resolution and the Arrangement Resolution,
including, if so requested by Acquireco (i) using dealer and proxy solicitation services requested
by Acquireco and at Acquireco’s expense; and (ii) cooperating with any persons engaged by Acquireco
to solicit proxies in favour of the Continuance Resolution and the Arrangement Resolution.

     (3) The Company will give notice to Acquireco of the Company Meeting and allow Acquireco’s
representatives and legal counsel to attend the Company Meeting.

 

- 17 -

     (4) The Company will advise Acquireco, as Acquireco may reasonably request, and at least on a
daily basis on each of the last seven business days prior to the date of the Company Meeting, as to
the aggregate tally of the proxies received by the Company in respect of the Continuance Resolution
and the Arrangement Resolution.

     (5) The Company will promptly advise Acquireco of any written notice of dissent or purported
exercise by any registered holder of Company Shares of Dissent Rights received by the Company in
relation to the Continuance Resolution and any withdrawal of Dissent Rights received by the Company
and, subject to applicable Laws, will provide Acquireco with an opportunity to review and comment
upon any written communications sent by or on behalf of the Company to any registered holder of
Company Shares exercising or purporting to exercise Dissent Rights in relation to the Continuance
Resolution. The Company shall not settle any claims with respect to Dissent Rights without the
prior consent of Aquireco.

2.4 The Company Circular

     (1) As promptly as reasonably practicable after the execution of this Agreement, the Company
shall prepare and complete, in consultation with Acquireco, the Company Circular together with any
other documents required by the YBCA, OBCA, Securities Laws and other applicable Laws in connection
with the Company Meeting, the Continuance and the Arrangement, and the Company shall, as promptly
as reasonably practicable after obtaining the Interim Order, cause the Company Circular and other
documentation required in connection with the Company Meeting to be filed and to be sent to each
Company Shareholder and other persons as required by the Interim Order and applicable Laws (for the
purposes of this Section 2.4, “Company Circular” shall include such other documentation), in each
case so as to permit the Company Meeting to be held within the time required by Section 2.3(1).

     (2) The Company shall ensure that the Company Circular complies in all material respects with
all applicable Laws, and, without limiting the generality of the foregoing, that the Company
Circular will not, at the time of mailing, contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the statements
contained therein not misleading in light of the circumstances in which they are made (other than
with respect to any information furnished by Acquireco or its affiliates) and shall provide Company
Shareholders with information in sufficient detail to permit them to form a reasoned judgment
concerning the matters to be placed before them at the Company Meeting. The Company Circular will
include (i) subject to Article 7 and Section 8.2(1)(e), the unanimous recommendation of the Board
that Company Shareholders vote in favour of the Continuance Resolution and the Arrangement
Resolution and (ii) the Fairness Opinion.

     (3) Acquireco and its legal counsel shall be given a reasonable opportunity to review and
comment on drafts of the Company Circular and other documents related thereto, and reasonable
consideration shall be given to any comments made by Acquireco and its counsel, provided that all
information relating solely to Acquireco included in the Company Circular shall be in form and
content satisfactory to the Acquireco, acting reasonably.

     (4) Acquireco will furnish to the Company all such information concerning itself as may be
reasonably required by the Company in the preparation of the Company Circular and

 

- 18 -

other documents related thereto, and Acquireco shall ensure that no such information will
contain any untrue statement of a material fact or omit to state a material fact required to be
stated in the Company Circular in order to make any information so furnished or any information
concerning itself not misleading in light of the circumstances in which it is disclosed.

     (5) Each of Acquireco and the Company shall promptly notify the other if at any time before
the Effective Date it becomes aware (in the case of the Company only with respect to the Company
and in the case of Acquireco only with respect to Acquireco) that the Company Circular or any
amendment or supplement thereto 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 contained therein
not misleading in light of the circumstances in which they are made, or that otherwise requires an
amendment or supplement to the Company Circular, and the Parties shall co-operate in the
preparation of any amendment or supplement to the Company Circular, as required or appropriate, and
the Company shall promptly mail or otherwise publicly disseminate any amendment or supplement to
the Company Circular to Company Shareholders and, if required by the Court or applicable Laws, file
the same with the Securities Authorities and as otherwise required.

2.5 Continuance

     As soon as practicable following the approval of the Continuance Resolution at the Company
Meeting, the Company shall take all steps necessary to give effect to the Continuance.

2.6 Final Order

     Subject to the terms of this Agreement, the Company shall as soon as reasonably practicable,
and in any event no later than 3 business days after the Company Meeting, take all steps necessary
or desirable to submit the Arrangement to the Court and diligently pursue an application for the
Final Order pursuant to section 182 of the OBCA.

2.7 Court Proceedings

     Acquireco and the Company will cooperate in seeking the Interim Order and the Final Order,
including by Acquireco providing to the Company on a timely basis any information required to be
supplied by Acquireco in connection therewith. The Company will provide legal counsel to Acquireco
with reasonable opportunity to review and comment upon drafts of all material to be filed with the
Court in connection with the Arrangement, and will give reasonable consideration to all such
comments. The Company will also provide legal counsel to Acquireco on a timely basis with copies
of any notice of appearance and evidence served on the Company or its legal counsel in respect of
the application for the Final Order or any appeal therefrom. Subject to applicable Laws, the
Company will not file any material with the Court in connection with the Arrangement or serve any
such material, and will not agree to modify or amend materials so filed or served, except as
contemplated hereby or with Acquireco’s prior written consent, such consent not to be unreasonably
withheld, conditioned or delayed; provided that nothing herein shall (i) require Acquireco to agree
or consent to any increase in Consideration or other modification or amendment to such filed or
served materials that expands or increases Parent or Acquireco’s obligations set forth in any such
filed or served materials or under this

 

- 19 -

Agreement or (ii) limit the Company’s ability to take any and all steps, including the filing
of all manner of documents with any Governmental Entity, to enforce its rights hereunder.

2.8 Articles of Arrangement and Effective Date

     The Articles of Arrangement shall implement the Plan of Arrangement. The Articles of
Arrangement shall include the form of the Plan of Arrangement attached to this Agreement as
Schedule C, as it may be amended as provided for in this Agreement or the Plan of Arrangement.
Subject to the Interim Order, the Final Order and any applicable Law, and without otherwise
limiting Section 9.8 or the amendment provisions of the Plan of Arrangement, Acquireco will obtain
the Company’s consent, such consent not to be unreasonably withheld, conditioned or delayed, in
respect of any amendment to the Plan of Arrangement at any time prior to the Effective Time in
order to add, remove or amend any steps or terms determined to be necessary or desirable by
Acquireco, acting reasonably, including providing for the purchase of Company Shares by an
affiliate of Parent, provided that the Plan of Arrangement shall not be amended in any manner which
is (a) prejudicial to the Company Shareholders or other persons to be bound by the Plan of
Arrangement or is inconsistent with the provisions of this Agreement or (b) creates a reasonable
risk of delaying, impairing or impeding in any material respect the satisfaction of any condition
set forth in Article 6 hereof.

     The Articles of Arrangement shall be filed by the Company with the Director on the later of
(a) the first business day following the date on which the Final Order is received; and (b) the
first business day after the satisfaction or, where not prohibited, the waiver by the applicable
Party or Parties in whose favour the condition is, of the conditions (excluding conditions that, by
their terms, cannot be satisfied until the Effective Date, but subject to the satisfaction or,
where not prohibited, the waiver by the applicable Party or Parties in whose favour the condition
is, of those conditions as of the Effective Date) set forth in Article 6, unless another time or
date is agreed to in writing by the Parties, provided that the Company shall not be required to
file Articles of Arrangement with the Director unless it has received written confirmation of
funding referred to in Section 2.9. From and after the Effective Time, the Plan of Arrangement
will have all of the effects provided by applicable Law, including the OBCA. The closing of the
transactions contemplated hereby will take place at the offices of Torys LLP, 79 Wellington Street
West, Suite 3300, Toronto, Ontario or at such other location as may be agreed upon by the Parties.

2.9 Payment of Consideration

     Acquireco will, following receipt of the Final Order and prior to the filing by the Company of
the Articles of Arrangement with the Director, (i) provide the Depository with sufficient funds in
escrow (the terms and conditions of such escrow to be satisfactory to Acquireco and the Company,
acting reasonably) to pay the Consideration for all of the Company Shares to be acquired pursuant
to the Arrangement, (ii) at the Company’s request provide the Depository, on behalf of the Company,
with sufficient funds in escrow (the terms and conditions of such escrow to be satisfactory to
Acquireco and the Company, acting reasonably) to pay the Option Amount for all of the Options to be
cancelled pursuant to the Arrangement; and (iii) pay the Credit Agreement Indebtedness Amount as
specified in the payout letters or other written confirmation set out in Section 6.2(e).

 

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2.10 Public Communications

     The Parties agree that, from the date hereof until the earlier of the completion of the
Arrangement and the termination of this Agreement, except as required by Laws, none of the Company,
Parent or Acquireco shall make any public announcement or public statement with respect to the
Arrangement, the Continuance or this Agreement without the consent of the other Parties, such
consent not to be unreasonably withheld, conditioned or delayed. Each Party agrees to give prior
notice to the other Parties of any public announcement as permitted herein relating to the
Arrangement, Continuance or the Agreement and agrees to consult with the other Parties, and acting
reasonably and in good faith, to consider comments provided by the other Parties prior to issuing
each such public announcement. The Company and Parent agree to use reasonable best efforts to
jointly develop and implement a communications strategy to discuss the Arrangement and its impact
with the Company’s customers and suppliers.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

3.1 Representations and Warranties

     Except as disclosed in the Company’s Public Disclosure Record, the Company hereby represents
and warrants to and in favour of Parent and Acquireco as set forth in Schedule D hereto. Any
investigation by Acquireco shall not mitigate or diminish the representations and warranties of the
Company, as same may be qualified.

3.2 Disclaimer of Additional Representations and Warranties

     Parent and Acquireco agree and acknowledge that the neither the Company nor any other persons
on behalf of the Company makes any representation or warranty, express or implied, other than as
set forth in this Agreement.

3.3 Survival of Representations and Warranties

     The representations and warranties of the Company contained in this Agreement shall not
survive the completion of the Arrangement and shall expire and be terminated on the earlier of the
Effective Time and the date on which this Agreement is terminated in accordance with its terms.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUIRECO

4.1 Representations and Warranties

     Parent and Acquireco hereby represent and warrant to and in favour of the Company as set forth
in Schedule E hereto. Any investigation by the Company shall not mitigate or diminish the
representations and warranties of Parent and Acquireco, as same may be qualified.

 

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4.2 Disclaimer of Additional Representations and Warranties

     The Company agrees and acknowledges that neither Parent, nor Acquireco, nor any other persons
on behalf of Parent or Acquireco makes any representation or warranty, express or implied, other
than as set forth in this Agreement.

4.3 Survival of Representations and Warranties

     The representations and warranties of Parent and Acquireco contained in this Agreement shall
not survive the completion of the Arrangement and shall expire and be terminated on the earlier of
the Effective Time and the date on which this Agreement is terminated in accordance with its terms.

ARTICLE 5

COVENANTS OF COMPANY AND ACQUIRECO

5.1 Covenants of the Company Regarding the Conduct of Business

     The Company covenants and agrees that during the period from the date of this Agreement until
the earlier of the Effective Time and the time that this Agreement is terminated in accordance with
its terms, or unless Acquireco shall consent in writing (such consent not to be unduly withheld,
conditioned or delayed) or except as is otherwise expressly permitted or specifically contemplated
by this Agreement or the Arrangement or except as is otherwise required by applicable Law:

	 	(a)	 	except as set forth in Schedule 5.1(a) of the Company Disclosure Letter, the
business of the Company and its subsidiaries shall be conducted only in the ordinary
course of business, and the Company and its subsidiaries shall not take any action
except in the ordinary course of business and consistent with past practice, and the
Company shall use all commercially reasonable efforts to maintain and preserve its and
its subsidiaries’ business organization, assets, employees, goodwill and business
relationships;

	 	(b)	 	the Company shall promptly notify Acquireco in writing of: (i) any circumstance
or development that is or could, individually or in the aggregate, reasonably be
expected to constitute a Material Adverse Effect, or (ii) any change in any material
fact set forth in the Company Disclosure Letter;

	 	(c)	 	the Company shall not, and shall not permit any of its subsidiaries to,
directly or indirectly: (i) amend its articles, charter or by-laws or other comparable
organizational documents; (ii) declare, set aside or pay any dividend or other
distribution or payment (whether in cash, shares or property) in respect of the Company
Shares owned by any person or the securities of any subsidiary owned by a person other
than the Company or its subsidiaries, other than dividends or other distributions or
payments between two or more wholly-owned subsidiaries of the Company or between any of
its wholly-owned subsidiaries and the Company; (iii) issue, grant, sell or pledge or
agree to issue, grant, sell or pledge any shares of the Company or its subsidiaries, or
securities convertible into or

 

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	 	 	 	exchangeable or exercisable for, or otherwise evidencing a right to acquire, shares
of the Company or its subsidiaries, other than (A) the issuance of Company Shares
pursuant to the outstanding rights to acquire Company Shares pursuant to the Stock
Option Plan, as set forth in Schedule 5.1(c) of the Company Disclosure Letter and
(B) transactions not involving Company Shares between two or more wholly-owned
subsidiaries of the Company or between the Company and any of its wholly-owned
subsidiaries; (iv) redeem, purchase or otherwise acquire any of its outstanding
securities other than as may be required by the terms of such securities or in
transactions not involving Company Shares between two or more Company wholly-owned
subsidiaries or between the Company and a Company wholly-owned subsidiary; (v) amend
the terms of any of its securities; (vi) adopt a plan of liquidation or resolution
providing for the liquidation or dissolution of the Company or any of its
subsidiaries; (vii) split, combine or reclassify any of the Company Shares or shares
of a subsidiary; (viii) reorganize, amalgamate or merge with any other person; or
(ix) enter into, modify or terminate any Contract with respect to any of the
foregoing;

	 	(d)	 	the Company shall not, and shall not permit any of its subsidiaries to,
directly or indirectly: (i) sell, pledge, lease, license, dispose of, encumber or
otherwise transfer any interest in, any assets of the Company or of any subsidiary
other than inventory in the ordinary course of business; (ii) acquire (by merger,
amalgamation, consolidation or acquisition of shares or assets) any corporation,
partnership or other business organization or division thereof, or make any investment
either by the purchase of securities, contributions of capital (other than to
wholly-owned subsidiaries) or property transfer, or purchase of any property or assets
of any other person (other than a wholly-owned subsidiary); (iii) incur, extend, renew
or replace any Financial Indebtedness of the Company and/or its subsidiaries, or
assume, guarantee, endorse or otherwise become responsible for the obligations of any
other person, or make any loans or advances (other than to or for wholly-owned
subsidiaries); (iv) pay, discharge or satisfy any material liabilities or obligations
before the same become due in accordance with their terms, other than the payment,
discharge or satisfaction of liabilities (other than Financial Indebtedness) reflected
or reserved against in the Company Financial Statements; (v) settle any material
litigation or claims (except in relation to Taxes); (vi) waive, release, grant or
transfer any rights of material value; (vii) expend or commit to expend any amounts
with respect to capital expenditures (that are, in the aggregate, in excess of
$100,000); (viii) make any changes in financial accounting methods, principles,
policies or practices, except as required, in each case, by GAAP or by applicable Law;
(ix) enter into any contracts or other transactions with any officer or director of the
Company or any of its subsidiaries; or (x) authorize or propose any of the foregoing,
or enter into or modify any Contract to do any of the foregoing;

	 	(e)	 	other than as necessary to comply with Company Plans, Employment Contracts or
Contracts existing as of the date hereof and set forth in Schedule 5.1(e) of the
Company Disclosure Letter, neither the Company nor any of its subsidiaries shall grant
to any officer or director of the Company or any of its subsidiaries an

 

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	 	 	 	increase in compensation in any form, grant any general salary increase, take any
action with respect to the grant of any severance or termination pay to or enter
into, or vary, any employment agreement with any officer or director of the Company
or any of its subsidiaries, increase any benefits payable to any officer or director
of the Company or its subsidiaries under its current severance or termination pay
policies, or adopt or materially amend any Company Plan;

	 	(f)	 	at the request of the Parent or Acquireco, Sirit Corp. (Texas), the Company or
the applicable subsidiary, as the case may be, shall adopt a resolution terminating the
Sirit Corp. 401(k) Plan, the RSI ID Technologies Inc. 401K Profit Sharing Plan and
Trust, and any profit sharing plan maintained by SAMys (US) Inc. or its existing or
former affiliates, each to be effective as of the Effective Time;
	 
	 	(g)	 	the Company shall use commercially reasonable efforts to cause the current
insurance (or re-insurance) policies maintained by the Company and any of its
subsidiaries, including directors’ and officers’ insurance, not to be cancelled or
terminated or any of the coverage thereunder to lapse, unless simultaneously with such
termination, cancellation or lapse, replacement policies underwritten by insurance or
re-insurance companies of internationally recognized standing having comparable
deductibles and providing coverage equal to or greater than the coverage under the
cancelled, terminated or lapsed policies for substantially similar premiums are in full
force and effect; provided that none of the Company or any of its subsidiaries shall
obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months;
	 
	 	(h)	 	except as set forth in Schedule 5.1(h) of the Company Disclosure Letter, the
Company shall not, and shall not permit any of its subsidiaries to enter into, extend,
amend, renew or terminate, or agree to any waiver or consent in respect of, any
Material Contract or any Real Property Lease, or any amendment of any of the foregoing;
	 
	 	(i)	 	the Company shall not, and shall not permit any of its subsidiaries to,
commence any litigation (other than litigation in connection with the collection of
accounts receivable, to enforce the terms of this Agreement or the Confidentiality
Agreement or as a result of litigation commenced against the Company or any of its
subsidiaries);
	 
	 	(j)	 	subject to applicable Laws, the Company shall consult in good faith on a
reasonably regular basis with Acquireco to report material, individually or in the
aggregate, operational, business and financial developments, the general status of
relationships with customers and resellers, the general status of ongoing operations
and other matters reasonably requested by Acquireco pursuant to procedures reasonably
requested by Acquireco; provided, however, that no such consultation shall alter or
amend the representations, warranties, covenants, agreements or obligations of the
Parties (or remedies with respect thereto) or the conditions to the obligations of the
Parties under this Agreement;

 

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	 	(k)	 	the Company shall not, and shall not permit any of its subsidiaries to (i)
make, rescind or change any election with respect to Taxes, or (ii) file any amended
Returns, or waive or extend the statute of limitations relating to any Taxes of the
Company or any of its subsidiaries, or (iii) other than in the ordinary course of
business and consistent with past practice, enter into any closing agreement regarding
Taxes, surrender any right to claim a material refund of Taxes or amend any of its
transfer pricing policies; and

	 	(l)	 	at the request of the Parent or Acquireco, the Company shall obtain as soon as
practicable a license pursuant to the UHF RFID licensing program administered by Sisvel
UHF RFID, LLC on behalf of RFID Consortium, LLC.

5.2 Covenants of the Company Regarding the Arrangement

     The Company shall perform, and shall cause its subsidiaries to perform, all obligations
required to be performed by the Company or any of its subsidiaries under this Agreement, co-operate
with Acquireco in connection therewith, and do all such other reasonable acts and things as may be
necessary or desirable in order to consummate and make effective, as soon as reasonably
practicable, the transactions contemplated in this Agreement and, without limiting the generality
of the foregoing, the Company shall and, where appropriate, shall cause its subsidiaries to:

	 	(a)	 	use commercially reasonable efforts to satisfy (or cause the satisfaction of)
the conditions precedent to the Company’s obligations hereunder as set forth in
Article 6 to the extent the same are within its control and to take, or cause to be
taken, all other reasonable action and to do, or cause to be done, all other things
necessary, proper or advisable under all applicable Laws to complete the Arrangement,
including using commercially reasonable efforts to: (i) effect all necessary
registrations, filings and submissions of information requested by Governmental
Entities or otherwise required to be effected by the Company or its subsidiaries in
connection with the Arrangement (including for greater certainty any required filings
with the Federal Communications Commission); and (ii) co-operate with each of Parent
and Acquireco in connection with its performance of its obligations hereunder. Subject
to the terms and conditions herein provided, the Company shall not knowingly take or
cause to be taken any action which would reasonably be expected to prevent or
materially delay the consummation of the transactions contemplated hereby;

	 	(b)	 	use commercially reasonable efforts to obtain from each member of the Board of
Directors customary mutual releases from all claims and potential claims in respect of
the period prior to the Effective Time, in form satisfactory to Acquireco and the
Company, acting reasonably;

	 	(c)	 	use commercially reasonable efforts to obtain, all consents, waivers or
approvals under all Contracts set forth in Schedule 5.2(c) of the Company Disclosure
Letter, including waivers required in connection with any change of control provisions

 

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	 	 	 	contained in any agreements or other arrangements with respect to Financial
Indebtedness of the Company or any of its subsidiaries;

	 	(d)	 	use commercially reasonable efforts to defend all lawsuits or other legal,
regulatory or other proceedings against the Company or its subsidiaries challenging or
affecting this Agreement or the consummation of the transactions contemplated hereby
and give Acquireco the opportunity to participate in the defence or settlement of any
such proceedings and not agree to any settlement in connection with any such proceeding
without Acquireco’s prior consent (such consent not to be unreasonably withheld or
delayed); and

	 	(e)	 	except as prohibited by applicable Laws, promptly notify Acquireco of the
occurrence of any of the following or any matter or event that has resulted, or is
reasonably likely to result, in (i) any condition to the transactions contemplated
hereby and set forth in Section 6.2 not being satisfied; (ii) the failure of the
Company to perform any obligation to be performed by it under this Agreement such that
any condition set forth in Article 6 would not be satisfied; (iii) any notice or other
communication from any person in connection with the Arrangement or any of the other
transactions contemplated in this Agreement (excluding any notices or communications
relating to an Acquisition Proposal or Superior Proposal, which the Parties agree are
dealt with in Article 7), and a copy of any such notice or communication (if in written
form) shall be promptly furnished to Acquireco; (iv) any actions, suits, claims,
investigations or proceedings commenced or, to the knowledge of the Company, threatened
against, relating to or involving or otherwise affecting the Company or any of its
subsidiaries that, if pending on the date of this Agreement, would have been required
to be disclosed in the Company Disclosure Letter, or that relate to the consummation of
the Arrangement or any of the other transactions contemplated by this Agreement; and
(v) any notice with respect to any agreements or other arrangements with respect to
Financial Indebtedness of the Company or any of its subsidiaries; provided, however,
that, in each case, no such notification shall affect the representations, warranties,
covenants, agreements or obligations of the Parties (or remedies with respect thereto)
or the conditions to the obligations of the parties under this Agreement.

5.3 Covenants of Acquireco Regarding the Performance of Obligations

     Each of the Parent and Acquireco shall perform all obligations required to be performed by it
under this Agreement, co-operate with the Company in connection therewith, and do all such other
reasonable acts and things as may be necessary or desirable in order to consummate and make
effective, as soon as reasonably practicable, the transactions contemplated in this Agreement and,
without limiting the generality of the foregoing, Parent and Acquireco shall:

	 	(a)	 	use commercially reasonable efforts to satisfy (or cause the satisfaction of)
the conditions precedent to its obligations hereunder as set forth in Article 6 and to
take, or cause to be taken, all other reasonable action and to do, or cause to be done,
all other things necessary, proper or advisable under all applicable Laws to

 

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	 	 	 	complete the Arrangement, including using commercially reasonable efforts to:
(i) effect all necessary registrations, filings and submissions of information
requested by Governmental Entities required to be effected by it in connection with
the Arrangement; (ii) co-operate with the Company in connection with the performance
by it and its subsidiaries of their obligations hereunder. Subject to the terms and
conditions herein provided, Acquireco shall not knowingly take or cause to be taken
any action which would reasonably be expected to prevent or materially delay the
consummation of the transactions contemplated hereby; and

	 	(b)	 	take all necessary action to ensure that Acquireco has sufficient funds to
carry out its obligations under this Agreement, the Plan of Arrangement and the other
elements of the transaction and to pay related fees and expenses and Acquireco shall,
on or before the Effective Date, provide the Depository with sufficient funds to (i)
pay in full the aggregate Consideration for all Company Shares and (ii) pay the Option
Amount for the Options to be cancelled pursuant to the Arrangement.

5.4 Mutual Covenants

     (1) Subject to the terms and conditions of this Agreement, the Parties shall use their
commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable under applicable Law to consummate the
transactions contemplated by this Agreement as soon as practicable, including:

	 	(a)	 	obtaining and maintaining all approvals, clearances, consents, registrations,
permits, authorizations and other confirmations required to be obtained from any third
party that are necessary, proper or advisable to consummate the transactions
contemplated by this Agreement;

	 	(b)	 	taking appropriate action to oppose, lift or rescind any injunction or
restraining or other order seeking to stop, or otherwise adversely affecting its
ability to consummate, the Arrangement and to defend, or cause to be defended, any
proceeding to which it is a party or brought against it or its directors or officers
challenging this Agreement or the consummation of the transactions contemplated hereby;
and

	 	(c)	 	carrying out the terms of the Interim Order and Final Order applicable to it
and using commercially reasonable efforts to comply promptly with all requirements
which applicable Laws may impose on it or its subsidiaries with respect to the
transactions contemplated hereby.

5.5 Performance of Acquireco

     Subject to the terms and conditions of this Agreement, Parent will cause Acquireco to comply
with all of its obligations arising under this Agreement and the Arrangement contemplated herein,
including any payments made in respect of the acquisition by Acquireco of any Common Shares, or the
cancellation of any Options, under the Arrangement.

 

- 27 -

ARTICLE 6

CONDITIONS

6.1 Mutual Conditions Precedent

     The obligations of the Parties to complete the transactions contemplated by this Agreement are
subject to the fulfillment or waiver, on or before the Effective Time, of each of the following
conditions precedent, each of which may only be waived with the mutual consent of the Parties:

	 	(a)	 	the Arrangement Resolution shall have received the Requisite Approval at the
Company Meeting in accordance with the Interim Order;
	 
	 	(b)	 	the Interim Order and the Final Order shall each have been obtained on terms
consistent with the Agreement, and shall not have been set aside or modified in a
manner unacceptable to the Company and Acquireco, acting reasonably, on appeal or
otherwise;
	 
	 	(c)	 	the Continuance Resolution shall have been approved by two-thirds of the votes
cast in respect of the Continuance Resolution by Company Shareholders present in person
or represented by proxy at the Company Meeting, and the Company shall have obtained the
Articles of Continuance;
	 
	 	(d)	 	no statute, rule, regulation or order shall have been enacted or temporary or
permanent restraining order or preliminary or permanent injunction or other order shall
have been entered or issued, by any Government Authority in each case that has the
effect of making the Arrangement illegal or otherwise preventing or prohibiting
consummation of the Arrangement; and
	 
	 	(e)	 	this Agreement shall not have been terminated in accordance with its terms.

6.2 Additional Conditions Precedent to the Obligations of Acquireco

     The obligations of Parent and Acquireco to complete the transactions contemplated by this
Agreement shall also be subject to the fulfillment or waiver of each of the following conditions
precedent (each of which is for the benefit of Parent and Acquireco and may be waived by Parent and
Acquireco):

	 	(a)	 	all covenants of the Company under this Agreement to be performed on or before
the Effective Time shall have been duly performed by the Company in all material
respects (except for the covenants to be performed under Section 7.7(1)(b) which shall
have been duly performed by the Company in all respects) and Parent and Acquireco shall
have received a certificate of the Company addressed to Parent and Acquireco and dated
the Effective Date, signed on behalf of the Company by a senior executive officer of
the Company (on the Company’s

 

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	 	 	 	behalf and without personal liability), confirming the same as at the Effective
Date;

	 	(b)	 	the representations and warranties of the Company set forth in this Agreement
shall be true and correct in all respects without regard to any materiality or Material
Adverse Effect qualifications contained in them, as of the Effective Time, as though
made on and as of the Effective Time (except (i) for representations and warranties
made as of a specified date, the accuracy of which shall be determined as of that
specified date, (ii) other than in the case of representations and warranties referred
to in clause (iii) below of this Section 6.2(b), where the failure or failures of such
representations and warranties to be so true and correct in all respects, individually
or in the aggregate, would not have had or would not reasonably be expected to have a
Material Adverse Effect and (iii) in the case of the representations and warranties set
forth in Section (f) of Schedule D hereto, such representations and warranties shall be
true and correct in all respects); and Parent and Acquireco shall have received a
certificate of the Company addressed to Parent and Acquireco and dated the Effective
Date, signed on behalf of the Company by a senior executive officer of the Company (on
the Company’s behalf and without personal liability), confirming the same as at the
Effective Date;

	 	(c)	 	the Key Employee Incentive Plan of the Company dated January 14, 2005 and as
amended by the Board of Directors on April 21, 2005 and February 12, 2007 (the “Key
Employee Incentive Plan”) shall have been terminated in accordance with the Plan of
Arrangement, without payment of any additional consideration or amounts in respect of
such termination; provided that the Consideration at the Effective Time has not been
amended to be increased to an amount equal to or greater than $0.45, in which case the
Key Employee Incentive Plan shall be terminated following payment of the amounts
required to be paid thereunder;

	 	(d)	 	all outstanding Options will be cancelled and the Stock Option Plan shall have
been terminated, each in accordance with and following payment of the amounts required
by, the Plan of Arrangement;

	 	(e)	 	Acquireco shall have received payout letters or other written confirmation in
form satisfactory to Acquireco, acting reasonably, of the repayment at the Effective
Time of any indebtedness outstanding under the Credit Agreement (the “Credit Agreement
Indebtedness Amount”), and termination of the Credit Agreement upon such repayment;

	 	(f)	 	the Company shall have received, in form satisfactory to Acquireco, acting
reasonably, all authorizations, consents, approvals, licenses, permits, orders and
waivers from any Person and provided all notices required with respect to the
Continuance or the Arrangement, including for greater certainty the amalgamations
contemplated in the Plan of Arrangement, and as set forth in Schedule (d) of the
Company Disclosure Letter;

 

- 29 -

	 	(g)	 	since the date hereof, there shall not have been or occurred a Material Adverse
Effect; and

	 	(h)	 	holders of Company Shares representing in excess of 5% of the outstanding
Company Shares shall not have exercised Dissent Rights or have instituted proceedings
to exercise Dissent Rights.

6.3 Additional Conditions Precedent to the Obligations of the Company

     The obligations of the Company to complete the transactions contemplated by this Agreement
shall also be subject to the fulfillment or waiver of the following conditions precedent (each of
which is for the exclusive benefit of the Company and may be waived by the Company):

	 	(a)	 	all covenants of Parent and Acquireco under this Agreement to be performed on
or before the Effective Time shall have been duly performed by Parent and Acquireco in
all material respects and the Company shall have received a certificate of Parent and
Acquireco addressed to the Company and dated the Effective Date, signed on behalf of
Parent and Acquireco by a senior executive officer of Parent and Acquireco (on behalf
of Parent and Acquireco and without personal liability), confirming the same as at the
Effective Date;

	 	(b)	 	the representations and warranties of Parent and Acquireco set forth in this
Agreement shall be true and correct in all respects without regard to any materiality
qualifications contained in them as of the Effective Time as though made on and as of
the Effective Time, except (i) to the extent that such failure to be true and correct
would not have a material adverse effect on the ability of Acquireco to consummate the
Arrangement and perform its obligations hereunder, and (ii) for representations and
warranties made as of a specified date, the accuracy of which shall be determined as of
that specified date and the Company shall have received a certificate of Parent and
Acquireco addressed to the Company and dated the Effective Date, signed on behalf of
Parent and Acquireco by a senior executive officer of Parent and Acquireco (on behalf
of Parent and Acquireco and without personal liability), confirming the same as at the
Effective Date; and

	 	(c)	 	Acquireco shall have deposited or caused to be deposited with the Depository in
escrow, and the Depositary shall have delivered to the Company a signed receipt
acknowledging the receipt of, the funds required (i) to effect payment in full of the
Consideration to be paid for the Company Shares and (ii) to pay the Option Amount for
the Options to be cancelled pursuant to the Arrangement.

6.4 Satisfaction of Conditions

     The conditions precedent set out in Sections 6.1, 6.2 and 6.3 shall be conclusively deemed to
have been satisfied, waived or released when the Certificate of Arrangement is issued by the
Director. For greater certainty, and notwithstanding the terms of any escrow arrangement entered
into between Acquireco and the Depository, all funds held in escrow by the Depository

 

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pursuant to Section 2.9 hereof shall be deemed to be released from escrow when the Certificate
of Arrangement is issued by the Director.

ARTICLE 7

ADDITIONAL AGREEMENTS

7.1 Notice and Cure Provisions

     No Party may elect not to complete the transactions contemplated pursuant to the conditions
set forth herein or any termination right arising therefrom and no payments are payable as a result
of such election pursuant to Section 7.4 unless forthwith and in any event prior to the Effective
Time, the Party intending to rely thereon has delivered a written notice to the other Parties
specifying in reasonable detail all breaches of covenants, representations and warranties or other
matters which the Party delivering such notice is asserting as the basis for the non-fulfillment of
the applicable condition or termination right, as the case may be. If any such notice is delivered
with respect to a breach of covenant, representation or warranty in this Agreement that is capable
of being cured, provided that a Party is proceeding diligently to cure such matter, no Party may
terminate this Agreement other than pursuant to Section 8.2(1)(h) until the expiration of a period
ending the earlier of the following: (i) 10 days from such notice and (ii) the Outside Date if such
matter has not been cured by such date.

7.2 Non-Solicitation

     (1) The Company shall not, directly or indirectly, through any person, and shall cause its
subsidiaries not to: (i) solicit, assist, initiate, knowingly encourage or otherwise facilitate any
inquiries or proposals, whether publicly or otherwise, regarding an Acquisition Proposal,
(ii) enter into, continue or participate in any discussions or negotiations with, furnish any
information relating to the Company or any of its subsidiaries or offer or provide access to the
business, properties, assets, books or records of the Company or any of its subsidiaries or
otherwise cooperate in any way with, any proposals or offers or any other efforts or attempts that
constitute, or may lead to, an Acquisition Proposal, (iii) withdraw, qualify or modify (or propose
to do so), the approval of the Board of Directors of the Arrangement, (iv) approve or recommend, or
propose publicly to approve or recommend, any Acquisition Proposal (it being understood that
publicly taking no position or a neutral position with respect to an Acquisition Proposal for a
period of more than five business days shall be considered to be a violation of this Section 7.2),
or (v) accept or enter into any agreement, understanding or arrangement in respect of an
Acquisition Proposal; provided that nothing contained in this Agreement shall
prevent the Board of Directors, during the period commencing on the date hereof and ending prior to
obtaining the Requisite Approval of the Arrangement Resolution by the Company Shareholders, from
entering into an agreement and changing or withdrawing its recommendation of this Agreement or the
Arrangement (subject to compliance with Section 8.2(1)(e) and Section 7.3) in respect of an
Acquisition Proposal that the Board of Directors has concluded in good faith constitutes a Superior
Proposal, or engaging in discussions or negotiations with or furnishing information to (subject to
compliance with Section 7.2(4)) any person who has made a written Acquisition Proposal that the
Board of Directors determines in good faith after consultation with its financial advisors and its
outside counsel would reasonably be expected to lead to a Superior Proposal.

 

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     (2) The Company shall, and shall cause its subsidiaries and the officers, directors,
employees, representatives and agents of the Company and its subsidiaries to, immediately terminate
any existing discussions or negotiations with any parties (other than Parent and its affiliates)
with respect to any proposal or matter that constitutes, or may reasonably be expected to lead to,
an Acquisition Proposal. The Company agrees not to release (or waive or otherwise forbear in the
enforcement of) any third party (other than Parent and its affiliates) from any existing or
subsequent confidentiality agreement (including, for greater certainty, any standstill provisions.
The Company represents and warrants that as of the date of this Agreement (i) other than as
disclosed in Schedule 7.2(2) of the Company Disclosure Letter, it has not entered into any
confidentiality agreements since January 1, 2008 (other than the Confidentiality Agreement) and
(ii) it has not waived any standstill provisions in effect as of the date of this Agreement,
whether contained in a confidentiality agreement or otherwise, for any person, other than
Acquireco. The Company shall promptly request the destruction of all information provided to any
third party which, at any time since January 1, 2009, has entered into a confidentiality agreement
with the Company relating to a potential Acquisition Proposal to the extent that such information
has not previously been returned or destroyed, and shall use all commercially reasonable efforts to
ensure that such requests are honoured in accordance with the terms of such agreement.

     (3) The Company shall promptly (and in any event within 24 hours) notify Acquireco of (i) any
Acquisition Proposal or inquiry that could lead to an Acquisition Proposal, in each case received
after the date hereof, (ii) any amendments to an Acquisition Proposal, (iii) any request for
non-public information relating to the Company or any of its subsidiaries in connection with an
Acquisition Proposal or which request could reasonably be expected to lead to an Acquisition
Proposal, and (iv) any request for access to the properties, books or records of the Company or any
of its subsidiaries by any person that informs the Company or such subsidiary that it is
considering making, or has made, an Acquisition Proposal. Any such notice shall include the
identity of the person making the Acquisition Proposal or inquiry and a description of the material
terms and conditions of any such Acquisition Proposal or amendment or inquiry (and a copy thereof,
if in writing). The Company shall keep Acquireco informed of any change to the material terms of
any such Acquisition Proposal (as amended, if applicable) and any material changes to the nature of
any such inquiry.

     (4) If at any time following the date of this Agreement and prior to obtaining the Requisite
Approval of the Arrangement Resolution by the Company Shareholders, the Company receives a request
for material non-public information from a person who proposes an Acquisition Proposal and the
Board of Directors determines in good faith after consultation with its financial advisors and its
outside counsel that such proposal would be reasonably likely to lead to a Superior Proposal, then,
and only in such case, the Board of Directors may provide such person with access to information
regarding the Company, subject to the execution by such person of a confidentiality agreement
having a standstill provision with a term of not less than six months and other terms not more
favourable to such person than the equivalent terms of the Confidentiality Agreement and the
standstill provision set out in section (i) of the letter of intent dated December 3, 2009 between
the Company and Parent (provided that the Board of Directors may permit such person to make an
Acquisition Proposal if the Board of Directors, after consultation with its financial advisors and
outside legal counsel, has determined in good faith that doing so could reasonably be expected to
lead to a Superior Proposal), and provided that

 

- 32 -

Acquireco is promptly provided with a list and copies of all information provided to such
person not previously provided to Acquireco and is promptly provided with access to information
similar to that which was provided to such person and is promptly and regularly provided with a
reasonably detailed update on the content and status of the discussions with such person.

     (5) The Company shall ensure that its officers and directors and those of its subsidiaries and
any financial or other advisors or representatives retained by it are aware of the provisions of
this Section 7.2, and it shall be responsible for any breach of this Section 7.2 by any such person
or its advisors or representatives.

7.3 Notice of Superior Proposal Determination and Right to Match

     (1) Subject to Section 7.3(2), (3) and (4), if the Board of Directors has concluded in good
faith that any Acquisition Proposal constitutes a Superior Proposal, the Company may terminate this
Agreement pursuant to Section 8.2(1)(e) and the Board of Directors may recommend such Superior
Proposal to the Company Shareholders or change or withdraw its recommendation relating to the
Agreement or the Arrangement after such termination and may enter into any agreement,
understanding, letter of intent or arrangement with respect to such Superior Proposal; provided the
Company shall have first:

	 	(a)	 	delivered written notice to Parent of the Company’s determination, subject only
to compliance with this Section 7.3, to accept, approve, recommend or enter into a
binding agreement to proceed with a Superior Proposal and to terminate this Agreement
pursuant to Section 8.2(1)(e);
	 
	 	(b)	 	complied with its obligations under Section 7.2 and the other provisions of
this Article 7 and has provided Acquireco with a copy of the Superior Proposal
(together with a written notice regarding the value and financial terms that the Board
of Directors has in consultation with its financial advisors ascribed to any non-cash
consideration offered under the said Superior Proposal);
	 
	 	(c)	 	allowed a period (the “Response Period”) of five business days to have lapsed
from the date on which notice is delivered to Parent pursuant to Section 7.3(1)(a);
	 
	 	(d)	 	if Acquireco has proposed to amend the terms of this Agreement in accordance
with Section 7.3(2), determined that the Acquisition Proposal continues to constitute a
Superior Proposal after taking into account the amendments;
	 
	 	(e)	 	terminated, or shall concurrently terminate, this Agreement pursuant to
Section 8.2(1)(e); and
	 
	 	(f)	 	previously paid, or concurrently with termination will have paid, a portion of
the Termination Fee in accordance with Section 7.4.

     (2) During the Response Period, Acquireco will have the right, but not the obligation, to
offer to amend the terms of this Agreement. The Board of Directors will review any such proposal
by Acquireco to amend the terms of the Agreement, including an increase in, or modification of, the
consideration to be received by the Company Shareholders, to determine

 

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whether the Acquisition Proposal to which Acquireco is responding would be a Superior Proposal
when assessed against the Agreement as it is proposed by Acquireco to be amended. If the Board of
Directors does not so determine, the Board of Directors will promptly, and, if requested by
Acquireco to do so, publicly, reaffirm its recommendation of the transactions contemplated under
this Agreement in the same manner as described in Section (a) of Schedule D hereto. If the Board of
Directors does so determine, the Company may after the end of the Response Period approve,
recommend, accept or enter into an agreement, understanding or arrangement to proceed with the
Superior Proposal.

     (3) Each successive amendment to any Acquisition Proposal that results in an increase in, or
modification of, the consideration (or value of such consideration) to be received by the Company
Shareholders shall constitute a new Acquisition Proposal for the purposes of this Section 7.3 and
the Company shall be required to comply with Section 7.3(1) and (2) in respect of each such
Acquisition Proposal.

     (4) If the Response Period would not terminate before the date fixed for the Company Meeting,
the Company shall adjourn the Company Meeting to a date that is at least one business day after the
expiration of the Response Period.

7.4 Agreement as to Damages

     (1) Notwithstanding any other provision hereof relating to the payment of fees, including the
payment of brokerage fees, if:

	 	(a)	 	the Agreement is terminated either by the Company or Acquireco pursuant to
Section 8.2(1)(a) in circumstances where the Arrangement Resolution did not receive the
Requisite Approval at the Company Meeting in accordance with the Interim Order (as
contemplated in Section 6.1(a)), but only if prior to the Company Meeting an
Acquisition Proposal shall have been made to the Company Shareholders or any person
shall have publicly announced an intention to make an Acquisition Proposal, and within
twelve months of termination of this Agreement, any person or company either
(a) acquires, directly or indirectly, more than 50% of the issued and outstanding
Company Shares or consolidated assets of the Company or (b) enters into a definitive
agreement to acquire, directly or indirectly, more than 50% of the issued and
outstanding Company Shares or consolidated assets of the Company; or

	 	(b)	 	Acquireco shall have terminated this Agreement pursuant to Section 8.2(1)(c) on
the basis of (i) any breach by the Company of Section 7.3; (ii) any breach by the
Company of Section 7.2, other than an inadvertent breach of Section 7.2 which breach
has not (A) resulted in a Material Adverse Effect, (B) resulted in, or otherwise lead
to, the receipt of an Acquisition Proposal by the Company, or (C) resulted in the
delivery of any confidential information of the Company to a third party, and (iii) any
breach by the Company of any other covenant, which breach would, or could reasonably be
expected to, prevent the ability of the Company to consummate the transactions
contemplated by this Agreement; or

 

- 34 -

	 	(c)	 	Acquireco shall have terminated this Agreement pursuant to Section 8.2(1)(d);

	 	(d)	 	the Company shall have terminated this Agreement pursuant to Section 8.2(1)(e);
or

	 	(e)	 	Acquireco shall have terminated this Agreement pursuant to Section 8.2(1)(g);

then the Company shall pay, or cause to be paid, to Parent (or as Parent may direct by notice in
writing), the amount of $1,500,000 (the “Termination Fee”). The Termination Fee shall be paid in
immediately available funds to an account designated by Parent as follows: (i) in the case of
paragraph (a) above, on the date which is the earlier of (A) the date on which an Acquisition
Proposal is completed, and (B) twelve months from the date on which this Agreement is terminated;
(ii) in the case of paragraph (b) and (c) or (e) above, within two business days of such
termination; and (iii) in the case of paragraph (d) above, a portion of the Termination Fee equal
to $750,000 will be payable prior to the effective termination of this Agreement in accordance with
Section 7.3, and the balance shall be payable on the date which is the earlier of (A) the date on
which an Acquisition Proposal is completed, and (B) 120 days from the date on which this Agreement
is terminated.

     (2) Notwithstanding any other provision hereof relating to the payment of fees, if the Company
shall have terminated this Agreement pursuant to Section 8.2(1)(b) on the basis of any breach by
the Parent or Acquireco of any of its covenants, which breach would, or could reasonably be
expected to, prevent the ability of Acquireco to consummate the transactions contemplated by this
Agreement, then the Parent shall pay, or cause to be paid, to the Company (or as the Company may
direct by notice in writing), within two business days of the date this Agreement is terminated,
the amount of $1,500,000 in immediately available funds.

     (3) Each Party acknowledges that the payment amounts set out in this Section 7.4 represent a
payment of liquidated damages that is a genuine pre-estimate of the damages that the Party entitled
to such damages will suffer or incur as a result of the event giving rise to such damages and the
resultant termination of this Agreement and is not a penalty. The Parties irrevocably waive any
right they may have to raise as a defence that any such liquidated damages are excessive or
punitive. No Party shall be obligated to make more than one payment pursuant to this Section 7.4.

7.5 Fees and Expenses; Other Payments

     Each Party shall pay all fees, costs and expenses incurred by such Party in connection with
this Agreement and the Arrangement.

7.6 Injunctive Relief and Specific Performance

     The Parties acknowledge and agree that an award of money damages would be inadequate remedy
for any breach of this Agreement by any Party and that such breach would cause the non-breaching
party irreparable harm. The Parties agree that, in the event of any breach or threatened breach of
this Agreement by one of the Parties, the non-breaching party will be entitled to obtain equitable
relief, including injunctive relief and specific performance of any such covenants or agreements,
without the necessity of posting bond or security in connection

 

- 35 -

therewith, and the Parties shall not object to the granting of injunctive or other equitable
relief on the basis that there exists an adequate remedy at law. Such remedies will not be the
exclusive remedies for any breach of this Agreement, but will be in addition to all other remedies
available at law or in equity to each of the Parties. In the event that either Parent, Acquireco
or the Company becomes liable to make a payment under Section 7.4, there will be no liability
attributable to any shareholder, director, officer, employee, advisor or representative of Parent,
Acquireco, the Company, or any affiliate thereof.

7.7 Access to Information; Confidentiality Agreement

     (1) Subject to the restrictions imposed by any applicable Laws, from the date hereof until the
earlier of the Effective Time and the termination of this Arrangement Agreement, (a) the Company
shall, and shall cause its subsidiaries and their respective officers, directors, employees,
independent auditors, accounting advisers and agents to, afford to Parent and Acquireco and the
officers, employees, agents and representatives of Parent and Acquireco such access as they may
reasonably require at all reasonable times for the purpose of facilitating integration business
planning, to their officers, employees, agents, properties, books, records, and Contracts, provide
all data and information which Parent or Acquireco may reasonably request for this purpose which is
reasonably available to the Company and otherwise co-operate with Parent’s review in this regard;
and (b) without limiting the foregoing, during the period ending 7 business days from the date
hereof, the Company shall, and shall cause its subsidiaries to, afford to Parent and Acquireco, and
the officers, employees, agents and representatives of Parent and Acquireco, access, as they or
their legal advisors may reasonably require at all reasonable times in connection with Parent’s
review and investigation of regulatory matters and the foreign operations of the Company or its
subsidiaries, to three members of management of the Company or its subsidiaries specified by Parent
and to the books and records of the Company and its subsidiaries, and to provide all data and
information of the Company or its subsidiaries which Parent and Acquireco may reasonably request
for this purpose and which is reasonably available to the Company, and to otherwise co-operate with
Parent’s review and investigation in this regard. The Parties acknowledge and agree that
information furnished pursuant to this Section 7.7 shall be subject to the terms and conditions of
the Confidentiality Agreement;

     (2) Parent and Acquireco acknowledge that the provisions of the Confidentiality Agreement
shall continue to apply notwithstanding the execution of this Agreement by the Parties or the
announcement of the Agreement. The Company and its Board of Directors consents to, and waives, the
provisions of section (i) of the letter of intent dated December 3, 2009 between the Company and
Parent with respect to the consummation of the transactions contemplated herein.

7.8 Insurance

     (1) Parent agrees that it will directly honour all rights to indemnification or exculpation
now existing in favour of present and former officers and directors of the Company and its
subsidiaries (each an “Indemnified Person”) which will survive the completion of the Arrangement.

 

- 36 -

     (2) Prior to the Effective Time, the Company shall and, if the Company is unable to Acquireco
shall cause the Company as of the Effective Time to, obtain and fully pay the premium for the
extension of the directors’ and officers’ insurance policies for a claims reporting or run-off and
extended reporting period of at least six years from and after the Effective Time with respect to
any claim related to any period or time at or prior to the Effective Time from an insurance carrier
with the same or better credit rating as the Company’s current insurance carriers with respect to
directors’ and officers’ liability insurance (“D&O Insurance”), and with terms, conditions,
retentions and limits of liability that are no less advantageous to the Indemnified Persons than
the coverage provided under the Company’s and its subsidiaries’ existing policies; provided that
there shall be no obligation to purchase or maintain D&O Insurance to the extent that the premium
therefor exceeds 300% of the premiums currently in effect.

     (3) If the Company or Acquireco or any of their successors or assigns shall: (a) amalgamate,
consolidate with or merge or wind-up into any other Person and, if applicable, shall not be the
continuing or surviving corporation or entity; or (b) transfer all or substantially all of its
properties and assets to any Person or Persons, then, and in each such case, proper provisions
shall be made so that the successors, assigns and transferees of the Company or Acquireco, as the
case may be, shall assume all of the obligations set forth in this Section 7.8.

     (4) The provisions of this Section 7.8 are intended for the benefit of, and will be
enforceable by, each insured or Indemnified Person described in Section 7.8(1), his or her heirs
and his or her legal representatives and, for such purpose, the Parties hereby confirm that, in
negotiating and agreeing with the provision of this Section 7.8, the Company is acting as agent and
trustee on their behalf.

7.9 Restructuring

     (1) Each of the Company and its subsidiaries, as the case may be, shall, prior to the
Effective Date, use reasonable efforts to co-operate with Parent and Acquireco in structuring,
planning and implementing any reorganization of their respective capital, assets and structure as
Parent and Acquireco may reasonably request, provided that (i) Parent and Acquireco shall provide
written notice to the Company of any proposed reorganization at least ten days prior to the
Effective Time; (ii) any such requested co-operation does not unreasonably interfere with the
ongoing operations of the Company and its subsidiaries or delay, impair or prevent the completion
of the Arrangement; (iii) the Company and its subsidiaries shall not be obligated to take any
action that could result in any Taxes being imposed on, or any adverse Tax or other consequences
to, any securityholder of the Company incrementally greater than the Taxes or other consequences to
such party in connection with the consummation of the Arrangement in the absence of any such
action; (iv) Parent and Acquireco shall pay and be responsible for the implementation costs and any
direct or indirect costs and liabilities thereof, including employment costs, Taxes and
liabilities, that may be incurred to unwind any such reorganization if the Arrangement is not
completed, including out-of-pocket costs and expenses for filing fees and external counsel and
auditors, which may be incurred; (v) such co-operation does not require the directors, officers,
employees or agents of the Company and its subsidiaries to take any action in any capacity other
than as a director, officer or employee, as the case may be; (vi) in no circumstances shall the
Company or its subsidiaries be required to take any action if the Board of

 

- 37 -

Directors, in its opinion determines that taking such action would be in breach of applicable
Laws; and (vii) the effectiveness of any such reorganization shall occur (a) not more than two days
prior to the Effective Time, and (b) after Acquireco shall have confirmed in writing that all
conditions in Sections 6.1 and 6.2 have been satisfied or waived by Acquireco and the Company shall
have confirmed in writing that all conditions in Sections 6.1 and 6.3 have been satisfied or waived
by the Company; and provided further that it is agreed and understood that no such actions shall be
considered to constitute a breach of the representations or warranties or covenants of the Company
under this Agreement. In no event shall completion of any reorganization requested by Parent and
Acquireco pursuant to this Section 7.9 be a condition to completion of the Arrangement.

     (2) The Company shall co-operate with Parent and Acquireco and provide support for any net
operating loss, non-capital loss, net capital loss, adjusted cost base and other tax attributes of
the Company and its subsidiaries that may be necessary in connection with the pre-closing
reorganization, the Arrangement or otherwise, and the Company shall co-operate with Parent and
Acquireco to determine the nature of any pre-closing reorganizations that might be undertaken and
the manner in which they may most effectively be undertaken.

7.10 Withholding Rights

     Notwithstanding anything in this Agreement or the Plan of Arrangement to the contrary, the
Company, the Depository, Acquireco or one or more affiliates or subsidiaries of Acquireco, as the
case may be, shall be entitled to deduct and withhold from any amount otherwise payable pursuant to
this Agreement or the Plan of Arrangement to any Company Shareholder or holder of Options, such
amounts as are required to be deducted and withheld with respect to the making of such payment
under the Tax Act, the Code, or any provision of applicable local, state, provincial or foreign Tax
Law, in each case, as amended, or the administrative practice of the relevant Governmental Entity
administering such Law. To the extent that amounts are so withheld, such withheld amounts shall be
treated for all purposes of this Agreement and the Plan of Arrangement as having been paid to the
former holder of the Company Shares or Options, as the case may be, in respect of which such
deduction and withholding was made, provided that such withheld amounts are actually remitted to
the appropriate taxing authority within the time required and in accordance with applicable Laws.

ARTICLE 8

TERM, TERMINATION, AMENDMENT AND WAIVER

8.1 Term

     This Agreement shall be effective from the date hereof until the earlier of the Effective Time
and the termination of this Agreement in accordance with its terms, provided that if the Effective
Time occurs, the agreements in Section 7.8 shall survive the Effective Time in accordance with
their terms.

8.2 Termination

     (1) This Agreement may:

 

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	 	(a)	 	subject to Section 7.1, be terminated either by the Company or Acquireco if any
condition in Section 6.1 becomes incapable of being satisfied in circumstances where
the failure to satisfy any such condition is not the result, directly or indirectly, of
a breach of this Agreement by such terminating Party;
	 
	 	(b)	 	subject to Section 7.1, be terminated by the Company if any condition in
Section 6.3 becomes incapable of being satisfied in circumstances where the failure to
satisfy any such condition is not the result, directly or indirectly, of a breach of
this Agreement by the Company;
	 
	 	(c)	 	subject to Section 7.1, be terminated by Acquireco if any condition in
Section 6.2 becomes incapable of being satisfied in circumstances where the failure to
satisfy any such condition is not the result, directly or indirectly, of a breach of
this Agreement by Acquireco;
	 
	 	(d)	 	be terminated by Acquireco if the Board of Directors shall have: (i) withdrawn
or modified in a manner adverse to Acquireco its approval or recommendation of the
Arrangement (it being understood that publicly taking no position or a neutral position
with respect to an Acquisition Proposal for a period of more than five business days
shall be considered an adverse modification), (ii) approved or recommended an
Acquisition Proposal or entered into a binding written agreement in respect of an
Acquisition Proposal (other than a confidentiality and standstill agreement permitted
by Section 7.2(4)) or (iii) failed to publicly recommend or reaffirm its approval of
the Arrangement, after an Acquisition Proposal shall have been made to the Company
Shareholders or any person shall have publicly announced an intention to make an
Acquisition Proposal, within five business days of any written request by Acquireco,
acting reasonably (or in the event that the Company Meeting is scheduled to occur
within such five business day period, prior to the date of such meeting);
	 
	 	(e)	 	be terminated by Company in order to enter into a binding written agreement
with respect to a Superior Proposal (other than a confidentiality and standstill
agreement permitted by Section 7.2(4)), subject to compliance with Sections 7.2 and
7.3;
	 
	 	(f)	 	be terminated either by Acquireco or the Company if the Effective Time does not
occur on or prior to the Outside Date, provided that the failure of the Effective Time
to so occur is not the result of the breach of a representation, warranty or covenant
by the Party terminating this Agreement;
	 
	 	(g)	 	be terminated by Acquireco if the Company Meeting is not convened and held on
or before March 12, 2010;
	 
	 	(h)	 	be terminated either by Acquireco or the Company if the Arrangement Resolution
shall have failed to receive the Requisite Approval at the Company Meeting in
accordance with the Interim Order or the Continuance Resolution shall have failed to be
approved at the Company Meeting;

 

- 39 -

	 	(i)	 	be terminated by either Acquireco or the Company if any Law makes the
consummation of the Arrangement or the transactions contemplated by this Agreement
illegal or otherwise prohibited, and such Law has become final and non-appealable; or

	 	(j)	 	be terminated by the written agreement of the Parties;

in each case, prior to the Effective Time.

     (2) If this Agreement is terminated in accordance with the foregoing provisions of this
Section 8.2, this Agreement shall forthwith become void and of no further force or effect and no
Party shall have any further obligations hereunder except as provided in Sections 7.4, 7.5, 7.6,
and 7.7 and 7.8 and Article 9, and provided that neither the termination of this Agreement nor
anything contained in this Section 8.2 shall relieve any Party from any liability for any willful
breach by it of this Agreement.

8.3 Waiver

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

ARTICLE 9

GENERAL PROVISIONS

9.1 Notices

     All notices and other communications given or made pursuant hereto shall be in writing and
shall be deemed to have been duly given or made as of the date delivered or sent if delivered
personally or sent by electronic transmission (with hard copy delivery of such notice to follow as
soon as practicable thereafter), or as of the following business day if sent by prepaid overnight
courier, to the Parties at the following addresses (or at such other addresses as shall be
specified by any Party by notice to the other Parties given in accordance with these provisions):

 

- 40 -

	 	(a)	 	if to Parent or Acquireco:

Federal Signal Corporation

1415 W. 22nd Street

Oak Brook, Illinois

60523

Attention: Jennifer L. Sherman, Senior Vice President and General Counsel

Facsimile: 866.229.4459

e-mail: jsherman@federalsignal.com

with a copy to:

Torys LLP

79 Wellington Street W.

Suite 3000

Toronto, Ontario

M5K 1N2

Attention: Michael Pickersgill

Facsimile: 416.865.7380

e-mail: mpickersgill@torys.com

	 	(b)	 	if to the Company:

Sirit Inc.

372 Bay Street

Suite 1100

Toronto, Ontario

M5H 2W9

Attention: Norbert Dawalibi, Chief Executive Officer

Facsimile: 416.367.1435

e-mail: ndawalibi@sirit.com

with a copy to:

Gowling Lafleur Henderson LLP

1 First Canadian Place

Suite 1600, 100 King Street West

Toronto, Ontario

M5X 1G5

Attention: Alan James

Facsimile: 416.862.7661

e-mail: alan.james@gowlings.com

 

- 41 -

9.2 Governing Law

     This Agreement shall be governed, including as to validity, interpretation and effect, by the
laws of the Province of Ontario and the laws of Canada applicable therein, and shall be construed
and treated in all respects as an Ontario contract. Each Party hereby irrevocably attorns to the
non-exclusive jurisdiction of the Courts of the Province of Ontario in respect of all matters
arising under and in relation to this Agreement and the Arrangement.

9.3 Third Parties

     Nothing contained in this Agreement, express or implied is intended to or shall confer on any
other person, any right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement other than as specifically provided in Section 7.8.

9.4 Time of Essence

     Time shall be of the essence in this Agreement.

9.5 Entire Agreement, Binding Effect and Assignment

     This Agreement shall be binding on and shall enure to the benefit of the Parties and their
respective successors and permitted assigns.

     This Agreement (including the exhibits and schedules hereto), the Company Disclosure Letter,
the Voting Agreement, the Confidentiality Agreement and section (i) of the letter of intent dated
December 3, 2009 between the Company and Parent constitute the entire agreement, and supersede all
other prior agreements and understandings, both written and oral, between the Parties, or any of
them, with respect to the subject matter hereof and thereof and this Agreement is not intended to
and shall not confer upon any person other than the Parties any rights or remedies hereunder.
Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by
either of the Parties without the prior written consent of the other Party; provided, however, that
Parent in its sole discretion may assign any or all of Acquireco’s rights, interests and/or
obligations under this Agreement to any direct or indirect subsidiary or any affiliate of Parent.

9.6 Severability

     If any term or other provision of this Agreement is invalid, illegal or incapable of being
enforced by any applicable rule or Law or public policy, all other conditions and provisions of
this Agreement shall nevertheless remain in full force and effect. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall
negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties
as closely as possible in an acceptable manner to the end that the transactions contemplated hereby
are fulfilled to the fullest extent possible.

 

- 42 -

9.7 Counterparts, Execution

     This Agreement may be executed in two or more counterparts, each of which shall be deemed to
be an original but all of which together shall constitute one and the same instrument. The Parties
shall be entitled to rely upon delivery of an executed facsimile or similar executed electronic
copy of this Agreement, and such facsimile or similar executed electronic copy shall be legally
effective to create a valid and binding agreement between the Parties.

9.8 Amendments

     This Agreement and, without limiting the terms of the Plan of Arrangement, the Plan of
Arrangement may, at any time and from time to time before or after the holding of the Company
Meeting but not later than the Effective Time, be amended by mutual written agreement of the
Parties, and any such amendment may, subject to the Interim Order and Final Order and applicable
Laws, without limitation:

	 	(a)	 	change the time for performance of any of the obligations or acts of the
Parties;

	 	(b)	 	modify any representation or warranty contained herein or in any document
delivered pursuant hereto;

	 	(c)	 	modify any of the covenants herein contained and waive or modify performance of
any of the obligations of the Parties; and/or

	 	(d)	 	modify any mutual conditions precedent herein contained.

[Remainder of page intentionally left blank.]

 

- 43 -

     IN WITNESS WHEREOF, Parent, Acquireco and the Company have caused this Agreement to be
executed as of the date first written above by their respective officers thereunto duly authorized.

	 	 	 	 	 
	 	FEDERAL SIGNAL CORPORATION

 	 
	 	By:  	/s/ Jennifer Sherman
 	 
	 	 	Name:  	Jennifer Sherman 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	1815315 ONTARIO LIMITED

 	 
	 	By:  	/s/ Jennifer Sherman
 	 
	 	 	Name:  	Jennifer Sherman 	 
	 	 	Title:  	President and Secretary 	 
	 
	 	SIRIT INC.

 	 
	 	By:  	/s/ Norbert Dawalibi
 	 
	 	 	Name:  	Norbert Dawalibi 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 

 

 

Schedule A

To the Arrangement Agreement

Continuance Resolution

BE IT RESOLVED AS A SPECIAL RESOLUTION THAT:

	1.	 	Sirit Inc. (the “Corporation”) continue as a corporation under and in accordance with
the Business Corporations Act (Ontario) (the “OBCA”) and any officer or director of the
Corporation is hereby authorized and directed for and on behalf of the Corporation to make an
application to the Yukon Registrar of Corporations for a certificate of discontinuance in
accordance with section 191 of the Business Corporations Act (Yukon) (the “YBCA”) and to
execute and deliver such other documents as are necessary or desirable to the Yukon Registrar
of Corporations under the YBCA to carry out the foregoing.

	2.	 	Any officer or director of the Corporation is hereby authorized and directed for and
on behalf of the Corporation to apply to the director under the OBCA for the continuance of
the Corporation, and to execute and deliver articles of continuance and such other documents
as are necessary or desirable to the director under the OBCA or the Yukon Registrar of
Corporations under the YBCA to carry out the foregoing.

	3.	 	The directors of the Corporation are authorized, in their discretion, to abandon the
application for continuation of the Corporation under the OBCA without further approval,
ratification or confirmation by the shareholders of the Corporation.

	4.	 	Any officer or director of the Corporation is hereby authorized and directed for and
on behalf of the Corporation to execute or cause to be executed and to deliver or cause to be
delivered, all such other documents and instruments and to perform or cause to be performed
all such other acts and things as in such person’s opinion may be necessary or desirable to
give full effect to the foregoing resolutions and the matters authorized thereby, such
determination to be conclusively evidenced by the execution and delivery of such document or
instrument or the doing of any such act or thing.

A-1

 

Schedule B

To the Arrangement Agreement

Arrangement Resolution

BE IT RESOLVED AS A SPECIAL RESOLUTION THAT:

	1.	 	The arrangement (the “Arrangement”) under section 182 of the Business Corporations Act
(Ontario) (the “OBCA”) involving Sirit Inc. (the “Corporation”), all as more particularly
described and set forth in the management information circular (the “Circular”) of the
Corporation dated •, 2010 (as the Arrangement may be modified or amended), is hereby
authorized, approved and adopted.

	2.	 	The plan of arrangement, as it may be or has been amended (the “Plan of Arrangement”),
involving the Corporation and implementing the Arrangement, the full text of which is set out
in Appendix • to the Circular (as the Plan of Arrangement may be, or may have been, modified
or amended), is hereby authorized, approved and adopted.

	3.	 	The arrangement agreement (the “Arrangement Agreement”) between the Corporation,
Federal Signal Corporation and 1815315 Ontario Limited, made as of January 13, 2010, the
actions of the directors of the Corporation in approving the Arrangement Agreement and the
actions of the officers of the Corporation in executing and delivering the Arrangement
Agreement and any amendments thereto are hereby ratified and approved.

	4.	 	Notwithstanding that this resolution has been passed (and the Arrangement adopted) by
the shareholders of the Corporation or that the Arrangement has been approved by the Superior
Court of Justice (Ontario), the directors of the Corporation are hereby authorized and
empowered without further notice to, or approval of, the shareholders of the Corporation (a)
to amend the Arrangement Agreement or the Plan of Arrangement to the extent permitted by the
Arrangement Agreement or the Plan of Arrangement, or (b) subject to the terms of the
Arrangement Agreement, not to proceed with the Arrangement.

	5.	 	Any officer or director of the Corporation is hereby authorized and directed for and
on behalf of the Corporation to execute and deliver articles of arrangement and such other
documents as are necessary or desirable to the director under the OBCA in accordance with the
Arrangement Agreement, such determination to be conclusively evidenced by the execution and
delivery of such articles of arrangement and any other such documents.

	6.	 	Any officer or director of the Corporation is hereby authorized and directed for and
on behalf of the Corporation to execute or cause to be executed and to deliver or cause to be
delivered, all such other documents, agreements and instruments and to perform or cause to be
performed all such other acts and things as in such person’s opinion may be necessary or
desirable to give full effect to the foregoing resolutions and the matters authorized thereby,
such determination to be conclusively evidenced by the execution and delivery of such
document, agreement or instrument or the doing of any such act or thing.

B-1

 

Schedule C

To the Arrangement Agreement

Plan of Arrangement

PLAN OF ARRANGEMENT

UNDER SECTION 182 OF THE

BUSINESS CORPORATIONS ACT (ONTARIO)

ARTICLE 1

DEFINITIONS AND INTERPRETATION

	1.1	 	Definitions 

     In this Plan of Arrangement, unless there is something in the subject matter or context
inconsistent therewith, and unless indicated otherwise, where used in this Plan of Arrangement,
capitalized terms used but not defined shall have the meanings ascribed thereto in the Arrangement
Agreement and the following terms shall have the following meanings (and grammatical variations of
such terms shall have corresponding meanings):

“Acquireco” means 1815315 Ontario Limited, a corporation incorporated under the OBCA;

“affiliate” has the meaning ascribed thereto in National Instrument 45-106 of the Canadian
Securities Administrators;

“Amalco I” means a corporation formed by the amalgamation, under the laws of Ontario, of the
Company and Sirit Technologies, in accordance with Section 2.2(3);

“Amalco I Shares” means the common shares in the capital of Amalco I;

“Amalco II” means a corporation formed by the amalgamation, under the laws of Ontario, of Amalco I
and Acquireco as contemplated pursuant to Section 2.2(6);

“Arrangement” means the proposed arrangement under section 182 of the OBCA on the terms and subject
to the conditions set out in this Plan of Arrangement, subject to any amendments or variations
thereto made in accordance with the Arrangement Agreement and this Plan of Arrangement or made at
the direction of the Court in the Final Order with the consent of the Company and Acquireco, each
acting reasonably;

“Arrangement Agreement” means the arrangement agreement made as of January 13, 2010 among the
Company, Parent and Acquireco, including all schedules, as same may be amended, supplemented or
restated in accordance with its terms providing for, among other things, the Arrangement;

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“Arrangement Resolution” means the special resolution approving the Plan of Arrangement to be
considered at the Company Meeting, substantially in the form and content of Schedule B attached to
the Arrangement Agreement;

“Articles of Arrangement” means the articles of arrangement of the Company in respect of the
Arrangement, to be sent to the Director after the Final Order is made;

“business day” means any day, other than a Saturday, a Sunday or a day on which commercial banks
are closed in Toronto, Canada or Chicago, USA;

“Certificate of Arrangement” means the certificate or other confirmation of filing giving effect to
the Arrangement to be issued by the Director pursuant to subsection 183(2) of the OBCA after the
Articles of Arrangement have been filed;

“Charter Documents” means articles and by-laws and similar constating documents of the Company;

“Company” means Sirit Inc., a corporation existing under the laws of the Territory of Yukon;

“Company Circular” means the notice of the Company Meeting and accompanying management proxy
circular, including all schedules, appendices and exhibits thereto, to be sent to, among others,
the Company Shareholders in connection with the Company Meeting, as amended, supplemented or
otherwise modified from time to time;

“Company Meeting” means the special meeting of Company Shareholders, including any adjournment or
postponement thereof, to be called and held in accordance with the Interim Order to consider the
Continuance Resolution and the Arrangement Resolution;

“Company Shareholders” means the registered or beneficial holders of Company Shares, as the context
requires;

“Company Shares” means the common shares in the capital of the Company;

“Consideration” means $0.30 in cash per Company Share, subject to adjustment in accordance with
Section 2.6;

“Continuance” means the continuance of the Company as a corporation under the OBCA to be effected
prior to the Effective Time;

“Continuance Resolution” means the special resolution approving the Continuance to be considered at
the Company Meeting, substantially in the form and content of Schedule A attached to the
Arrangement Agreement;

“Court” means the Superior Court of Justice (Ontario);

“Depository” means Equity Transfer & Trust Company or such other trust company as may be agreed by
the Parties;

C-3

 

“Director” means the Director appointed pursuant to section 278 of the OBCA;

“Dissent Rights” has the meaning ascribed thereto in Section 3.1(1);

“Dissenting Shareholder” means a registered holder of Company Shares who has properly and validly
dissented in respect of the Continuance Resolution in strict compliance with the Dissent Rights,
who has not withdrawn or been deemed to have withdrawn such dissent and who is ultimately
determined to be entitled to be paid the fair value of its Company Shares, but only in respect of
the Company Shares in respect of which Dissent Rights are validly exercised by such registered
holder;

“Effective Date” means the date upon which the Arrangement becomes effective as established by the
date of issue shown on the Certificate of Arrangement;

“Effective Time” means the first moment in time in Toronto, Canada on the Effective Date, or such
other time as may be agreed to in writing by the Company and Acquireco prior to the Effective Date;

“Encumbrance” (and any grammatical variation thereof) includes any mortgage, pledge, assignment,
charge, lien, claim, hypothec, security interest, adverse claim, option, right, privilege or other
third party interest or encumbrance of any kind, whether contingent or absolute;

“Final Order” means the final order of the Court in a form acceptable to the Company and Acquireco,
acting reasonably, approving the Arrangement as such order may be amended by the Court (with the
consent of both the Company and Acquireco, each acting reasonably) at any time prior to the
Effective Time or, if appealed, then, unless such appeal is withdrawn or dismissed, as affirmed or
as amended (provided that any such amendment is acceptable to both the Company and Acquireco, each
acting reasonably) on appeal;

“Governmental Entity” means (a) any supranational, international, multinational, national, federal,
provincial, state, regional, municipal, local or other government, governmental or public
department, ministry, central bank, court, tribunal, arbitral body, office, Crown corporation,
commission, commissioner, board, bureau or agency, whether domestic or foreign, (b) any
subdivision, agent or authority of any of the foregoing, or (c) any quasi-governmental or private
body, including any tribunal, commission, stock exchange, regulatory agency or self-regulatory
organization, exercising any regulatory, expropriation or taxing authority (including the TSX);

“Incentive Plan” means the key employee incentive plan of the Company dated January 14, 2005 as
amended by the Board of Directors on April 21, 2005 and February 12, 2007;

“Interim Order” means the interim order of the Court in a form acceptable to the Company and
Acquireco, acting reasonably, providing for, among other things, the calling and holding of the
Company Meeting, as the same may be amended by the Court with the consent of the Company and
Acquireco, each acting reasonably;

“Law” or “Laws” means all supranational, international, multinational, federal, provincial, state,
municipal, regional and local laws (including common law), by-laws, statutes, rules, regulations,
principles of law and equity, orders, rulings, certificates, ordinances, judgments, injunctions,

C-4

 

determinations, awards, decrees, codes, policies or other requirements, whether domestic or
foreign, and the terms and conditions of any grant of approval, permission, authority or license of
any Governmental Entity, and the term “applicable” with respect to such Laws and in a context that
refers to one or more Parties, means such Laws as are binding upon or applicable to such Party or
its assets;

“Letter of Transmittal” means a letter of transmittal to be forwarded or made available by the
Company to Company Shareholders, in a form acceptable to Acquireco, acting reasonably, for use by
such Company Shareholders in connection with the Arrangement as contemplated herein;

“OBCA” means the Business Corporations Act (Ontario);

“Option” means an option to purchase Company Shares granted under the Stock Option Plan;

“Option Amount” has the meaning ascribed thereto in Section 2.2;

“Parent” means Federal Signal Corporation, a corporation existing under the laws of Delaware;

“Parties” means the Company and Acquireco, and “Party” means either of them;

“person” includes an individual, limited or general partnership, limited liability company, limited
liability partnership, trust, joint venture, association, corporation, body corporate,
unincorporated organization, trustee, executor, administrator, legal representative, Governmental
Entity or any other entity, whether or not having legal status;

“Plan of Arrangement” means the plan of arrangement, substantially in the form of Schedule D of the
Arrangement Agreement, and any amendments or variations thereto made in accordance with section 9.8
of the Arrangement Agreement or Section 5.2 of this Plan of Arrangement or made at the direction of
the Court in the Final Order with the consent of the Company and Acquireco, each acting reasonably;
and references to “Article” or “Section” mean the specified Article or Section of this Plan of
Arrangement;

“Sirit Technologies” means Sirit Technologies Inc., a corporation amalgamated under the laws of
Ontario;

“Stock Option Plan” means the stock option plan for key persons of the Company as amended on April
26, 2007;

“subsidiary” means, with respect to a specified person, any entity, whether incorporated or
unincorporated, in which such person owns, directly or indirectly, a majority of the securities or
other ownership interests having by their terms ordinary voting power to elect a majority of the
directors or other persons performing similar functions, or the management and policies of which
such person otherwise has the power to direct;

“Tax Act” means the Income Tax Act (Canada);

“TSX” means the Toronto Stock Exchange; and

C-5

 

“YBCA” means the Business Corporations Act (Yukon).

	1.2	 	Interpretation Not Affected by Headings

     The division of this Plan of Arrangement into Articles, Sections and other parts and the
insertion of headings are for convenience only and shall not affect the construction or
interpretation of this Plan of Arrangement. Unless the contrary intention appears, references in
this Plan of Agreement to an Article, Section, subsection, paragraph or Schedule by number or
letter or both refer to the Article, Section, subsection, paragraph or Schedule, respectively,
bearing that designation in this Plan of Arrangement.

	1.3	 	Number and Gender 

     In this Plan of Arrangement, unless the contrary intention appears, words importing the
singular include the plural and vice versa, and words importing any gender include all genders.

	1.4	 	Time 

     Time is of the essence in this Plan of Arrangement. All times expressed herein or in any
Letter of Transmittal are local time (Toronto, Ontario) unless otherwise stipulated herein or
therein.

	1.5	 	Currency 

     Unless otherwise stated, all references in this Plan of Arrangement to sums of money are
expressed in, and all payments provided for herein shall be made in Canadian dollars and “$” refers
to Canadian dollars.

	1.6	 	Statutory References 

     Unless otherwise expressly provided herein, any reference in this Plan of Arrangement to a
statute includes all regulations made thereunder, all amendments to such statute or regulations in
force from time to time, and any statute or regulation that supplements or supersedes such statute
or regulations.

	1.7	 	Governing Law

     This Plan of Arrangement shall be governed by and construed in accordance with the laws of the
Province of Ontario and the federal laws of Canada applicable therein.

ARTICLE 2

THE ARRANGEMENT

	2.1	 	Effectiveness 

     This Plan of Arrangement is made pursuant to, and is subject to the provisions of and forms
part of, the Arrangement Agreement. Subject to the terms of the Arrangement Agreement, this Plan
of Arrangement will become effective at the Effective Time and will be binding from

C-6

 

and after the Effective Time on: (i) the Company; (ii) Acquireco; (iii) Sirit Technologies;
(iv) all registered holders and all beneficial owners of Company Shares; (v) all registered holders
and all beneficial owners of Options; (vi) all persons with rights under the Incentive Plan;
(vii) the registrar and transfer agent in respect of the Company Shares; and (viii) the Depository.
The Articles of Arrangement shall be filed, and the Certificate of Arrangement shall be issued,
with respect to the Arrangement in its entirety. The Certificate of Arrangement shall be
conclusive evidence that the Arrangement has become effective in accordance with its terms in the
sequence provided herein.

	2.2	 	The Arrangement 

     Commencing at the Effective Time, the following shall occur and be deemed to occur in the
following order without further act or formality:

	 	(1)	 	each Key Employee (as defined in the Incentive Plan) shall receive any Sale
Transaction Payment (as defined in the Incentive Plan), to which they may be entitled
in accordance with the terms of the Incentive Plan net of applicable withholdings and
the Incentive Plan shall be terminated (regardless of whether a payment is made) and
the Company and Acquireco shall have no further liabilities or obligations with respect
to the Incentive Plan;
	 
	 	(2)	 	each Company Share in respect of which Dissent Rights have been validly
exercised shall be transferred and deemed to be transferred by the holder thereof,
without any further act or formality on its part, free and clear of all Encumbrances,
to Acquireco in consideration for a debt claim against Acquireco in an amount
determined and payable in accordance with Article 3, and the name of such holder will
be removed from the register of holders of Company Shares (in respect of the Company
Shares for which Dissent Rights have been validly exercised), and Acquireco shall be
recorded as the registered holder of Company Shares so transferred and shall be deemed
to be the legal and beneficial owner of such Company Shares free and clear of any
Encumbrances;
	 
	 	(3)	 	the Company and its wholly-owned subsidiary Sirit Technologies shall be
amalgamated and will continue as one corporation, Amalco I, and the following
provisions shall apply:

	 	(a)	 	each Company Share held by the holder thereof shall continue as one common
share in the capital of Amalco I;
	 
	 	(b)	 	all of the issued and outstanding shares of Sirit Technologies held by the
Company shall be cancelled without any repayment of capital in respect thereof;
	 
	 	(c)	 	the stated capital of Amalco I shall be the same as the stated capital of
the Company immediately prior to the amalgamation;
	 
	 	(d)	 	the articles of Amalco I shall be the articles of continuance of the
Company;

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	 	(e)	 	the by laws of Amalco I shall be the by laws of the Company in effect
immediately prior to the amalgamation;
	 
	 	(f)	 	the first directors of Amalco I shall be the directors of the Company
immediately prior to the amalgamation;
	 
	 	(g)	 	the first officers of Amalco I shall be the officers of the Company
immediately prior to the amalgamation;
	 
	 	(h)	 	the registered office of Amalco I shall be the registered office of the
Company;
	 
	 	(i)	 	the property of each of the amalgamating corporations shall continue to be
the property of Amalco I; and
	 
	 	(j)	 	Amalco I shall be liable for the obligations of each of the amalgamating
corporations, whether existing or arising before, at or from the Effective Time.

	 	(4)	 	each Option that is granted and that remains outstanding immediately prior to
the Effective Time, without any further action on behalf of the holder thereof and
without any payment except as provided in this Plan of Arrangement, shall be disposed
of and surrendered by the holders thereof to the Company without any act or formality
on its or their part in exchange for a cash payment equal to the amount (if any) by
which (A) the product of the number of Company Shares underlying such Options held by
such holder and the Consideration exceeds (B) the aggregate exercise price payable
under such Options by the holder to acquire the Company Shares underlying such Options,
net of applicable withholdings (the “Option Amount”) and all Options and the Stock
Option Plan shall be terminated and the Company and Acquireco shall have no liabilities
or obligations with respect to the Options or the Stock Option Plan except pursuant to
this Section 2.2(4);
	 
	 	(5)	 	each issued and outstanding Amalco I Share shall be transferred and deemed to
be transferred by the holder thereof, without any further act or formality on its part,
free and clear of all Encumbrances, to Acquireco in exchange for a payment in cash
equal to the Consideration, and the name of such holder will be removed from the
register of holders of Amalco I Shares and Acquireco shall be recorded as the
registered holder of Amalco I Shares so transferred and shall be deemed to be the legal
and beneficial owner thereof, free and clear of any Encumbrances, and such payment
shall be made upon the presentation and surrender by or on behalf of the holder to the
Depository (acting on behalf of Acquireco) of the certificate that immediately prior to
the Effective Time represented Company Shares which were converted to Amalco I Shares
in accordance with Section 2.2(3) and a Letter of Transmittal as more fully described
in Section 2.3 and Section 2.4; and
	 
	 	(6)	 	Acquireco and Amalco I shall be amalgamated and will continue as one
corporation, Amalco II, and the following provisions shall apply:

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	 	(a)	 	the stated capital of Amalco II shall be the same as the stated capital of
Acquireco;
	 
	 	(b)	 	each common share of Acquireco held by the holder thereof will continue as
one common share in the capital of Amalco II;
	 
	 	(c)	 	all of the outstanding shares of Amalco I held by Acquireco will be
cancelled without any repayment of capital of Amalco I;
	 
	 	(d)	 	the name of Amalco II shall be “[Sirit Inc.]”;
	 
	 	(e)	 	the articles of Amalco II shall be the articles of amalgamation of
Acquireco;
	 
	 	(f)	 	the by laws of Amalco II shall be the by laws of Acquireco in effect
immediately prior to the amalgamation;
	 
	 	(g)	 	the first directors of Amalco II shall be the directors of Acquireco
immediately prior to the amalgamation;
	 
	 	(h)	 	the first officers of Amalco II shall be the officers of Acquireco
immediately prior to the amalgamation;
	 
	 	(i)	 	the registered office of Amalco II shall be the registered office of
Acquireco;
	 
	 	(j)	 	the property of each of the amalgamating corporations shall continue to be
the property of Amalco II; and
	 
	 	(k)	 	Amalco II shall be liable for the obligations of each of the amalgamating
corporations, whether existing or arising before, at or from the Effective Time.

	2.3	 	Letter of Transmittal

     At the time of mailing the Company Circular, the Company shall forward the Letter of
Transmittal to each Company Shareholder to the address of such holder as it appears on the register
maintained by or on behalf of the Company in respect of such holders.

	2.4	 	Delivery of Consideration and Other Payments

     Prior to the Effective Date, (i) Acquireco shall deposit, or arrange to be deposited, the
money required to be deposited with the Depository for the payment of the aggregate Consideration
pursuant to Section 2.2(5) (with the amount per Company Share in respect of which Dissent Rights
have been exercised being deemed to be the Consideration per applicable Company Share for this
purpose) for the benefit of and in trust for former Company Shareholders entitled to receive the
Consideration for each Amalco I Share held by them in a special account with the Depository to be
paid to or to the order of the respective former Company Shareholders without interest; and (ii)
the Company shall deposit the money, if any, required for payment of the Option Amount pursuant to
Section 2.2(4) for the benefit of and in trust for former holders of Options entitled to receive
the Option Amount (if any) for Options

C-9

 

held by them in a special account with the Depository to be paid to or to the order of the
applicable former holders of Options without interest. All such money shall be cash, denominated
in Canadian dollars in same day funds. Such money shall not be used for any purpose except as
provided in this Plan of Arrangement. Upon surrender to the Depository for transfer to Acquireco
of, in the case of a former Company Shareholder, the certificate(s) that immediately prior to the
Effective Time represented Company Shares which were continued as Amalco I Shares in accordance
with Section 2.2(4) and subsequently acquired by Acquireco pursuant to Section 2.2(5), and a duly
completed Letter of Transmittal, and such other documents and instruments as would have been
required to effect the transfer of the Company Shares formerly represented by such certificate
under the OBCA and the by-laws of the Company and such additional documents and instruments as
Acquireco and/or the Depository may reasonably require, such former holder shall be entitled to
receive in exchange therefor, and as soon as practicable after the Effective Time the Depository
shall deliver to such holder, by cheque (or, if required by applicable laws, by wire transfer) the
amount of money such holder is entitled to receive under the Arrangement. In the event of a
transfer of ownership of Company Shares that was not registered in the securities register of the
Company, the amount of money payable for such Amalco I Shares under the Arrangement may be
delivered to the transferee if the certificate representing such Company Shares is presented to the
Depository as provided above, accompanied by all documents required to evidence and effect such
transfer and to evidence that any applicable transfer Taxes have been paid. As soon as practicable
after the Effective Time, the Depository shall deliver on behalf of the Company to each holder of
Options as reflected on the books and records of the Company, a cheque (or, if required by
applicable laws, a wire transfer) for the amount of money such holder is entitled to receive under
the Arrangement, if any, in accordance with Section 2.2(4). Thereafter, Acquireco and the Company
shall be fully and completely discharged from its payment obligations to the former Company
Shareholders under Section 2.2(5) and former holders of Options under Section 2.2(4), and the
rights of such former holders shall be limited to receiving, without interest, from the Depository
their proportionate part of the money so deposited. Any interest on such deposit shall belong to
Amalco II, as successor in interest to Acquireco.

	2.5	 	Expiration of Rights 

     Any amounts deposited with the Depository for the payment of the Consideration pursuant to
Section 2.2(5) which remain unclaimed on the date which is six years from the Effective Date shall
be forfeited to Amalco II, as successor in interest to Acquireco, and paid over to or as directed
by Amalco immediately following the date that is six years from the Effective Date, and the former
holders of Company Shares shall thereafter have no right to receive their respective entitlement to
the payments pursuant to Section 2.2(5).

	2.6	 	Dividends and Distributions 

     If the Company declares, sets aside or pays any dividend on, or makes any other actual,
constructive or deemed distribution in respect of any of the Company Shares, or otherwise makes any
payments to the holders of the Company Shares in their capacity as such, during the period
commencing on the date of the Arrangement Agreement and ending on the Effective Date, Acquireco may
reduce the amount of the Consideration by any amount it determines in its sole

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discretion, provided that such discount shall not exceed the amount of such dividend,
distribution or payment received per Company Share.

	2.7	 	Transfers Free and Clear 

     Any transfer of securities pursuant to this Plan of Arrangement shall be free and clear of any
Encumbrances.

ARTICLE 3

RIGHTS OF DISSENT

	3.1	 	Dissent Rights

	 	(1)	 	Company Shareholders who duly and validly exercise rights of dissent with
respect to their Company Shares in connection with the Continuance Resolution (in the
event that the Continuance becomes effective) pursuant to and in the manner set forth
in section 193 of the YBCA (the “Dissent Rights”) (i) will be deemed not to have
participated in the Continuance or the Arrangement and (ii) will cease to have any
rights as Company Shareholders other than the right to be paid fair value for such
Shares by the Company in accordance with section 193 of the YBCA.
	 
	 	(2)	 	Company Shareholders who duly and validly exercise Dissent Rights, and who
withdraw their dissent to the Continuance or who are ultimately determined not to be
entitled, for any reason, to be paid fair value for their Company Shares, shall have
participated and shall be deemed to have participated in the Continuance and the
Arrangement, as at the Effective Time, on the same basis as any non-dissenting Company
Shareholder and shall receive cash consideration in respect of their Company Shares
equal to the aggregate Consideration a holder of Amalco I Shares holding such number of
Amalco I Shares would be entitled to under Section 2.2(5).
	 
	 	(3)	 	In no case shall the Company, Acquireco, Amalco I, Amalco II, the Depository,
the registrar and transfer agent in respect of the Company Shares and the Amalco I
Shares or any other person be required to recognize a Dissenting Shareholder as a
holder of Company Shares after the Effective Time and the name of each Dissenting
Shareholder shall be deleted from the registers of Company Shareholders as at the
Effective Time as provided in Article 2.

ARTICLE 4

CERTIFICATES

	4.1	 	Certificates 

     From and after the Effective Time, until surrendered as contemplated by Section 2.4, each
certificate which immediately prior to the Effective Time represented Company Shares that, under
the Arrangement, were deemed to be converted into Amalco I Shares pursuant to Section 2.2(3) and
were subsequently transferred or deemed to be transferred to Acquireco for cash

C-11

 

pursuant to Section 2.2(5), shall represent, and be deemed at all times after the Effective
Time to represent, only the right to receive upon such surrender the Consideration specified in
Section 2.2(2) or 2.2(5) of this Plan of Arrangement, as applicable. From and after the Effective
Time, each Option referred to in Section 2.2(4) and any evidence thereof shall be deemed, at all
times after the Effective Time, to represent only the right to receive the applicable consideration
specified in Section 2.2(4) of this Plan of Arrangement.

	4.2	 	Lost Certificates

     In the event that any certificate which immediately prior to the Effective Time represented
one or more outstanding Company Shares that was sold and transferred to Acquireco pursuant to
Section 2.2 shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact
by the person claiming such certificate to be lost, stolen or destroyed, the Depository will pay
such person the cash that such person would have been entitled to had such share certificate not
been lost, stolen or destroyed. When authorizing such payment in exchange for any lost, stolen or
destroyed certificate, the person to whom cash is to be paid shall, at the sole discretion of
Amalco II, as successor in interest to Acquireco, give a bond satisfactory to Amalco II in such sum
as Amalco II may direct or otherwise indemnify the Depository and Amalco I in a manner satisfactory
to each of them against any claim that may be made against the Depository or Amalco II with respect
to the certificate alleged to have been lost, stolen or destroyed.

ARTICLE 5

GENERAL

	5.1	 	Paramountcy

     From and after the Effective Time (i) this Plan of Arrangement shall take precedence and
priority over any and all Company Shares and Options issued prior to the Effective Time, (ii) the
rights and obligations of the registered holders of Company Shares and Options and the Company,
Acquireco, Amalco I, Amalco II, the Depository and any trustee or transfer agent therefor in
relation thereto, shall be solely as provided for in this Plan of Arrangement, and (iii) all
actions, causes of action, claims or proceedings (actual or contingent and whether or not
previously asserted) based on or in any way relating to any Company Shares, Amalco I Shares or
Options shall be deemed to have been settled, compromised, released and determined without
liability except as set forth herein.

	5.2	 	Amendment 

	 	(1)	 	Subject to the provisions of this Section 5.2 and subject to the Interim Order,
the Company and Acquireco reserve the right to amend, modify and/or supplement this
Plan of Arrangement at any time and from time to time prior to the Effective Date,
provided that any such amendment, modification and/or supplement must be contained in a
written document which is (i) agreed to in writing by the Company and Acquireco,
(ii) filed with the Court and, if made following the making of the Final Order,
approved by the Court subject to such conditions as the Court may impose, and (iii) if
so required by the Court, communicated to

C-12

 

	 	 	 	Company Shareholders and/or holders of Options in the manner required by the Court.

	 	(2)	 	Any amendment, modification or supplement to this Plan of Arrangement may be
proposed by the Company at any time prior to or at the Company Meeting (provided that
Acquireco shall have consented thereto in writing), with or without any prior notice or
communication or approval by the Court, and if so proposed and accepted by the persons
voting at the Company Meeting (other than as may be required under the Interim Order),
shall become part of this Plan of Arrangement for all purposes.
	 
	 	(3)	 	Any amendment, modification and/or supplement to this Plan of Arrangement that
is approved by the Court shall be effective only if: (i) it is agreed to by each of the
Company and Acquireco (in each case acting reasonably), and (ii) if required by the
Court, it is approved by holders of the Company Shares voting in the manner directed by
the Court.
	 
	 	(4)	 	Notwithstanding anything in this Plan of Arrangement or the Arrangement
Agreement, any amendment, modification and/or supplement to this Plan of Arrangement
may be made by Amalco II unilaterally after the Effective Date without the approval of
the Company Shareholders or the Company provided that it concerns a matter which, in
the reasonable opinion of Amalco II, is of an administrative or ministerial nature
required to better give effect to the implementation of this Plan of Arrangement and is
not adverse to the financial or economic interests of the former Company Shareholders
and former holders of Options.
	 
	 	(5)	 	Notwithstanding anything in this Plan of Arrangement or the Arrangement
Agreement, Acquireco shall be entitled, at any time prior to or following the Company
Meeting, to modify this Plan of Arrangement to increase the consideration Acquireco is
prepared to make available to Company Shareholders or holders of Options pursuant to
the Arrangement, whether or not the board of directors of the Company has changed its
recommendation, provided that Acquireco shall use all of its commercially reasonable
efforts to provide not less than one business day’s prior written notice of such
proposal to the Company.
	 
	 	(6)	 	Notwithstanding anything in this Plan of Arrangement or the Arrangement
Agreement, no amendment, revision, update or supplement shall be made to the Plan of
Arrangement that (i) would require the Company to obtain any sanctions, rulings,
consents, orders, clearances, exemptions, permits and other approvals (including the
lapse, without objection, of a prescribed time under a statute or regulation that
states that a transaction may be implemented if a prescribed time lapses following the
giving of notice without an objection being made) of any Governmental Entity, (ii)
would prejudice the Company’s securityholders or would result in the withdrawal or
material modification of the Fairness Opinion, (iii) would impede or materially delay
the consummation of the transactions contemplated by the Plan of Arrangement, or (iv)
would require the Company to

C-13

 

	 	 	 	take any action in contravention of applicable Law, its constating documents or any
material provision of any material agreement to which it is a party.
	 
	 	(7)	 	Notwithstanding anything in this Plan of Arrangement, Acquireco shall be
entitled, at any time prior to or following the Company Meeting, to modify this Plan of
Arrangement in accordance with the terms of the Arrangement Agreement to assign any or
all of its rights, interests and obligations under this Plan of Arrangement to any
direct or indirect subsidiary of Parent or any other affiliate.

	5.3	 	Further Assurances

     Notwithstanding that the transactions and events set out in this Plan of Arrangement shall
occur and be deemed to have occurred in the order set out herein, without any further act or
formality, each of the parties to the Arrangement Agreement shall make, do and execute, or cause to
be made, done and executed, all such further acts, deeds, agreements, transfers, assurances,
instruments or documents as may reasonably be required by any of them in order to implement this
Plan of Arrangement and to further document or evidence any of the transactions or events set out
herein.

	5.4	 	Withholding Rights

     Notwithstanding anything in the Arrangement Agreement or this Plan of Arrangement to the
contrary, the Company, the Depository, Acquireco or one or more affiliates or subsidiaries of
Acquireco, as the case may be, shall be entitled to deduct and withhold from any amount otherwise
payable pursuant to the Arrangement Agreement or this Plan of Arrangement to any former Company
Shareholder or former holder of Options, such amounts as are required to be deducted and withheld
with respect to the making of such payment under the Tax Act or any provision of applicable local,
state, provincial or foreign Tax Law, in each case, as amended, or the administrative practice of
the relevant Governmental Entity as administering such Law. To the extent that amounts are so
withheld, such withheld amounts shall be treated for all purposes of the Arrangement Agreement and
this Plan of Arrangement as having been paid to the former holder of the Company Shares or Options,
as the case may be, in respect of which such deduction and withholding was made, provided that such
withheld amounts are actually remitted to the appropriate taxing authority within the time required
and in accordance with applicable Laws.

C-14

 

Schedule D

To the Arrangement Agreement

Representations and Warranties of the Company

     The Company hereby represents and warrants to and in favour of Parent and Acquireco as follows
and acknowledges that Parent and Acquireco are relying upon such representations and warranties in
connection with entering into this Agreement and consummating the transactions contemplated hereby:

	 	(a)	 	Board Approval. As of the date hereof, the Board of Directors, after
consultation with its outside legal and financial advisors, has unanimously determined
that the Consideration is fair to the Company Shareholders and the Continuance and the
Arrangement are in the best interests of the Company and has unanimously resolved to
approve the transactions contemplated herein and the execution and performance of this
Agreement and to unanimously recommend to the Company Shareholders that they vote their
Company Shares in favour of the Continuance Resolution and the Arrangement Resolution
at the Company Meeting and that such determinations and resolutions are effective and
unamended as of the date hereof. The Board of Directors has received the Fairness
Opinion and such opinion has not been withdrawn, amended, modified or rescinded.
	 
	 	(b)	 	Organization and Qualification. Except as set forth in Schedule (b) of
the Company Disclosure Letter, the Company and each of its subsidiaries is a
corporation formed and validly existing under the laws of its jurisdiction of
incorporation, amalgamation, continuance or creation and has the requisite corporate or
other power and authority to own its assets as now owned and to carry on its business
as it is now being conducted. The Company and each of its subsidiaries is duly
registered or otherwise authorized to do business and each is in good standing in each
jurisdiction in which the character of its properties, owned, leased, licensed or
otherwise held, or the nature of its activities makes such registration or
authorization necessary, except where the failure to be so registered or authorized or
in good standing would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Neither the Company nor any of its subsidiaries is
subject to any liquidation, administrative, bankruptcy or similar proceedings and
neither the Company nor any of its subsidiaries has entered into any composition or
arrangement, within the meaning of applicable Laws, with creditors.
	 
	 	(c)	 	Authority Relative to this Agreement. The Company has the requisite
corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution and delivery of this Agreement has been duly
authorized by the Board of Directors, and no other corporate proceedings on the part of
the Company are necessary to authorize the consummation of the transactions
contemplated hereby other than the approval by the Board of Directors of the Company
Circular and the approval by the Company

D-1

 

	 	 	 	Shareholders in the manner required by the Interim Order and applicable Laws and
approval by the Court of the Interim Order and the Final Order. This Agreement has
been duly executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company enforceable against the Company in accordance with
its terms, subject to the qualification that such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other
laws of general application relating to or affecting rights of creditors and that
equitable remedies, including specific performance, are discretionary and may not be
ordered.
	 
	 	(d)	 	No Violations. Except as set forth in Schedule (d) of the Company
Disclosure Letter, neither the execution and delivery of this Agreement by the Company
nor the completion of the transactions contemplated hereby, nor compliance by the
Company with any of the provisions hereof will: (i) violate, conflict with, or result
in a breach of any provision of, require any consent, approval or notice under, or
constitute a default (or an event which, with notice or lapse of time or both, would
constitute a default) or result in a right of termination, cancellation or acceleration
of any obligation or loss of a benefit under, give rise to any rights of first refusal
or trigger any change in control provisions or any restriction or limitation under, or
result in the creation of any Encumbrance upon any of the properties or assets of the
Company or any of its subsidiaries under, give rise to any increased, additional,
accelerated or guaranteed rights or entitlements under (including any right of a holder
of a security of the Company or any of its subsidiaries to require the Company or any
of its subsidiaries to acquire such security), or cause any indebtedness to come due
before its stated maturity or cause any credit commitment to cease to be available or
cause any payment or other obligation to be imposed on the Company or any of its
subsidiaries under any of the terms, conditions or provisions of (A) their respective
charters or by-laws or other comparable organizational documents or (B) any note, bond,
mortgage, indenture, loan agreement, deed of trust, Encumbrance, contract, agreement,
arrangement, lease, undertaking or commitment, other than material Financial
Indebtedness, to which the Company or any of its subsidiaries is a party or to which
any of them, or any of their respective properties or assets, may be subject or by
which the Company or any of its subsidiaries is bound except in the case of this clause
(B), which, individually or in the aggregate, would not have or reasonably be expected
to have a Material Adverse Effect or (C) any material Financial Indebtedness of the
Company or any of its subsidiaries; or (ii) subject to obtaining the consent of the
registrar of corporations under the YBCA with respect to the Continuance and compliance
with the Interim Order and any approvals required thereunder, the Final Order, and
filings with the Director under the OBCA (A) violate any Law applicable to the Company
or any of its subsidiaries or any of their respective properties or assets; or
(B) cause the suspension or revocation of any material Permit currently in effect. The
conduct of the businesses of the Company and its subsidiaries as currently conducted
and as currently proposed by the Company to be conducted does not materially violate or
conflict with any obligation of confidentiality to any other person. Assuming
compliance with the Interim Order and any approvals required thereunder, the

D-2

 

	 	 	 	Final Order, and filings with the Director under the OBCA, and except as set forth
in the Company Disclosure Letter, no material authorization, consent, approval,
license, permit, order, authorization of, or registration, declaration or filing
with, any third party or Governmental Entity is required to be obtained or made by
the Company or its subsidiaries in connection with the performance of the Company’s
obligations and the consummation of the transactions contemplated hereunder,
including the amalgamations contemplated in the Plan of Arrangement.
	 
	 	(e)	 	Capitalization. The authorized share capital of the Company consists
of an unlimited number of Company Shares and preferred shares. As of the close of
business on January 13, 2010, there were issued and outstanding 161,137,311 Company
Shares, and no other shares of any class or series in the capital of the Company are
outstanding. A maximum of 21,750,000 Company Shares are reserved for issuance under the
Stock Option Plan. As of the date hereof, the number of Options granted under the
Stock Option Plan and the exercise price, grant date, vesting schedule and expiry date
with respect to such Options are disclosed in Schedule (e) of the Company Disclosure
Letter. Except as set forth in Schedule (e) of the Company Disclosure Letter, there
are no options, warrants, convertible securities or other rights, shareholder rights
plans, agreements or commitments of any character whatsoever requiring or which may
require the issuance, sale or transfer by the Company of any shares of the Company or
any of its subsidiaries (including Company Shares) or any securities convertible into,
or exchangeable or exercisable for, or otherwise evidencing a right to acquire, any
shares of or other equity or voting interests in the Company or any of its subsidiaries
(including Company Shares). There are no securities or any other compensation or
consideration of any kind payable, or capable of becoming payable, by the Company under
the terms of the Stock Acquisition Agreement dated March 4, 2008 between, among others,
Sirit Acquisition Inc., the Bielas Family Trust and Wolf Bielas.
	 
	 	 	 	All outstanding Company Shares have been duly authorized and validly issued, are
fully paid and non-assessable. With respect to the Options, (i) each grant of an
Option was duly authorized no later than the date on which the grant of such Option
was by its terms to be effective (the “Grant Date”) by all necessary corporate
action, including, as applicable, approval by the Board (or a duly constituted and
authorized committee thereof) and any required shareholder approval by the necessary
number of votes or written consents, and the award agreement governing such grant
(if any) was duly executed and delivered by each party thereto, (ii) each such grant
was made in accordance with the Stock Option Plan, and all applicable Laws and
regulatory rules or requirements, including the applicable rules of the TSX, (iii)
the per share exercise price of each Option was not less than the fair market value
of a Company Share on the applicable Grant Date, and (iv) each such grant was
properly accounted for in all material respects in accordance with GAAP in the
Company Financial Statements (including the related notes) and disclosed in
compliance with applicable Securities Laws. Except as set forth in Schedule (e) of
the Company Disclosure Letter, since

D-3

 

	 	 	 	January 1, 2008, there has not been any (A) except in respect of any wholly-owned
subsidiary, split, combination or reclassification of any shares in the capital of,
or equity or other voting interests in, the Company or any of its subsidiaries or
any issuance or the authorization of any issuance of any other securities in respect
of, in lieu of or in substitution for shares in the capital of, or other equity or
voting interests in, the Company or any of its subsidiaries, or (B) grant or
amendment of any incentive award (including Options) or the removal or modification
of any restrictions in any such award (including the acceleration thereof). Except
as set forth in Schedule (e) of the Company Disclosure Letter, there are no
outstanding contractual or other obligations of the Company or any subsidiary to
repurchase, redeem or otherwise acquire any of its securities. Other than the
Company Shares, there are no securities or other instruments or obligations of the
Company or any of its subsidiaries that carry (or which is convertible into, or
exchangeable for, securities having) the right to vote generally with the Company
Shareholders on any matter. Neither the Company nor any of its subsidiaries is a
party to any voting agreements with respect to any shares in the capital of or other
equity or voting interests in the Company or any of its subsidiaries and, to the
knowledge of the Company, as of the date of this Agreement, other than the Voting
Agreement executed and delivered contemporaneously with this Agreement, there are no
irrevocable proxies and no voting agreements with respect to any shares in the
capital of, or other equity or voting interests in, the Company or any of its
subsidiaries.
	 
	 	(f)	 	No Material Adverse Effect. (i) Since December 31, 2008 through the
date of this Agreement, there has not been any Material Adverse Effect and (ii) since
the date of this Agreement, there has not been any Material Adverse Effect.
	 
	 	(g)	 	Ownership of Subsidiaries. A complete and accurate list of all
subsidiaries owned, directly or indirectly, by the Company, each of which is
wholly-owned except as otherwise noted in such list, is set forth in Schedule (g) of
the Company Disclosure Letter. All of the outstanding shares and other ownership
interests in the Company’s subsidiaries are duly authorized, validly issued, fully paid
and non-assessable, and all such shares and other ownership interests held directly or
indirectly by the Company are, except pursuant to restrictions on transfer contained in
constating documents of such subsidiaries, owned free and clear of all Encumbrances,
other than Permitted Encumbrances, and there are no outstanding options, rights,
entitlements, understandings or commitments (contingent or otherwise) regarding the
right of any person to acquire any such shares or other ownership interests in or
material assets or properties of any of the Company’s subsidiaries. Except for the
shares in, or other equity or voting interests in, its subsidiaries, the Company does
not own, directly or indirectly, any shares in the capital of, or other equity or
voting interests in, any person.
	 
	 	(h)	 	Reporting Status and Securities Laws Matters.

	 	(i)	 	The Company is a “reporting issuer”, or the equivalent thereof,
and not on the list of reporting issuers in default under the applicable
Canadian

D-4

 

	 	 	 	provincial and territorial Securities Laws and the Company has complied in
all material respects with applicable Law, including any requirements of any
Securities Laws. The Company Shares are listed for trading on the TSX and
the Company is in compliance in all material respects with all of the
listing and other requirements of the TSX. None of the subsidiaries of the
Company are subject to continuous or periodic, or other disclosure
requirements under any Securities Laws. No delisting, suspension of trading
in or cease trading order with respect to any securities of the Company and,
to the knowledge of the Company, no inquiry or investigation (formal or
informal) of any Securities Authority or the TSX, is in effect or ongoing
or, to the knowledge of the Company, expected to be implemented or
undertaken other than routine continuous disclosure reviews and inquiries.
As of their respective dates, the Company’s Public Disclosure Record did not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Company has not filed any confidential material change
report or other document with any applicable Securities Authorities or any
other applicable Governmental Entities which remains confidential as of the
date of this Agreement.
	 
	 	(ii)	 	The management of the Company has implemented disclosure
controls and procedures to ensure that material information relating to the
Company, including its subsidiaries, is made known to the management of the
Company by others within those entities, which disclosure controls and
procedures are, given the size of the Company and the nature of its business,
effective at the reasonable assurance level in timely alerting the Company’s
principal executive officer and its principal financial officer, or other
persons performing similar functions, to information required to be included in
the Company’s Public Disclosure Record.

	 	(i)	 	Foreign Corrupt Practices. To the knowledge of the Company, none of
the Company nor any of its subsidiaries nor any director, officer, agent, employee,
consultant, or other person acting on behalf of the Company or, any of its
subsidiaries, has violated or is in violation of the Corruption of Foreign Public
Officials Act (Canada), the U.S. Foreign Corrupt Practices Act of 1977 or similar Laws
in any applicable jurisdiction or any anti-money laundering Laws in any applicable
jurisdiction, or made any bribe, rebate, payoff, influence payment, kickback or
unlawful payment to any foreign or domestic Governmental Entity or political party,
official, employee, appointee or candidate.
	 
	 	(j)	 	Company Financial Statements. The Company’s audited financial
statements as at and for the fiscal years ended December 31, 2008, 2007 and 2006
(including the notes thereto and related management’s discussion and analysis (“MD&A”))
and the Company’s unaudited financial statements as at and for the nine months ended
September 30, 2009 (including the notes thereto and related MD&A) (collectively, the
“Company Financial Statements”) and all financial statements

D-5

 

	 	 	 	of the Company and its subsidiaries included or incorporated by reference in
information circulars, forms, reports, statements, prospectuses and other documents
filed under Securities Laws since January 1, 2008 were prepared in accordance with
GAAP consistently applied (except (i) as otherwise indicated in such financial
statements and the notes thereto or, in the case of audited statements, in the
related report of the Company’s independent auditors, or (ii) in the case of
unaudited interim statements, are subject to normal period-end adjustments and may
omit notes which are not required by applicable Laws in the unaudited statements)
and fairly present in all material respects the consolidated financial position,
results of operations and cashflows and surplus or deficit and changes in financial
position of the Company and its subsidiaries, as applicable, as of the dates thereof
and for the periods indicated therein (subject, in the case of any unaudited interim
financial statements, to normal period-end adjustments) and reflect reserves
required by GAAP in respect of all material contingent liabilities, if any, of the
Company and its subsidiaries on a consolidated basis. Since January 1, 2008, there
has been no material change in the Company’s or its subsidiaries’ financial
accounting policies, methods or practices except as described in the notes to the
Company Financial Statements. Except as set forth in Schedule (j) of the Company
Disclosure Letter, since January 1, 2008, there has not been any write-down by the
Company or any of its subsidiaries of any of the assets of the Company or any of its
subsidiaries.
	 
	 	(k)	 	No Undisclosed Liabilities. There are no liabilities or obligations of
the Company or any of its subsidiaries, whether accrued, absolute, contingent or
otherwise, that would be required by GAAP to be reflected on a consolidated balance
sheet of the Company as of the date of this Agreement other than (i) liabilities and
obligations disclosed or reflected in its most recent publicly disclosed consolidated
financial statements or any public disclosure documents of the Company made available
to the public on SEDAR since the date of such financial statements; (ii) liabilities or
obligations incurred in the ordinary course of business consistent with past practice;
and (iii) liabilities or obligations incurred in connection with the transactions
contemplated hereby. Neither the Company nor any of its subsidiaries is a party to, or
has any commitment to become a party to, any joint venture, off balance sheet
partnership or any similar agreement (including any agreement or arrangement relating
to any transaction or relationship between or among the Company or any of its
subsidiaries, on the one hand, and any unconsolidated entity, including any structured
finance, special purpose, or limited purpose entity or person, on the other hand) or
any “off balance sheet arrangements” (as defined in section 1.8 and the instructions
thereto of Form 51-102F1 of National Instrument 51-102 – Continuous Disclosure
Obligations) where the result, purpose or effect of such agreement or arrangement is to
avoid disclosure, of any material transaction involving, or material liabilities of,
the Company or any of its subsidiaries in the Company’s or such subsidiary’s financial
statements or any other documents filed by the Company under applicable Securities
Laws.

D-6

 

	 	(l)	 	Books and Records. The financial books, records and accounts of the
Company and its subsidiaries accurately and fairly disclose the financial position of
the Company and its subsidiaries, are kept in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the Company, and all
material transactions relating to the businesses carried on by the Company and its
subsidiaries. The corporate records and minute books of the Company and its
subsidiaries have been maintained in compliance with applicable Laws and are true and
complete in all material respects. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i) transactions
are executed in accordance with management’s general or specific authorization and (ii)
transactions are recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain accountability for assets, and that access to
assets is permitted only in accordance with management’s general or specific
authorization. The management of the Company has disclosed, based on its most recent
evaluation, to the Company’s outside auditors and the audit committee of the Board of
Directors (i) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably likely to
adversely affect the Company’s ability to record, process, summarize and report
financial data and (ii) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Company’s internal control over
financial reporting.
	 
	 	(m)	 	Litigation. There are no claims, actions, suits, arbitrations,
inquiries, investigations or proceedings pending or, to the knowledge of the Company,
threatened against or relating to the Company or any of its subsidiaries before any
court or Governmental Authority or body that, if adversely determined, would reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect,
prevent or materially delay consummation of the transactions contemplated by this
Agreement, nor, to the knowledge of the Company, are there any facts or circumstances
that could form the basis for any such claim, action, suit, arbitration, inquiry,
proceeding or investigation. None of the Company or any of its subsidiaries is subject
to any outstanding judgment, order, writ, injunction or decree that would reasonably be
expected to have a Material Adverse Effect or prevent or materially delay consummation
of the transactions contemplated by this Agreement. Neither the Company nor any of its
subsidiaries has commenced or is subject to any proceedings or litigation (other than
any proceedings or litigation, on an individual basis, that is comprised solely of
monetary claims of less than $50,000, immaterial internal investigations, and actions
for non-payment in the ordinary course of business consistent with past practice that
have been settled).
	 
	 	(n)	 	Taxes.

	 	(i)	 	Except as set forth in Schedule (n)(i) of the Company
Disclosure Letter, the Company and each of its subsidiaries has duly and timely
filed all Returns required to be filed by it prior to the date hereof, and all
such

D-7

 

	 	 	 	Returns are true and complete. Except as set forth in Schedule (n)(i) of
the Company Disclosure Letter, each of the Company and its subsidiaries has
paid, or has duly collected, withheld and remitted, on a timely basis all
Taxes which are due and payable, all assessments and reassessments, and all
other Taxes due and payable by it, whether or not shown on any Return, on or
before the date hereof (including all installments on account of Taxes for
the current year), other than those which are being contested in good faith
or in respect of which appropriate reserves have been provided in the most
recently publicly-disclosed Company Financial Statements;
	 
	 	(ii)	 	each of the Company and its subsidiaries has duly and timely
withheld all Taxes required by Law to be withheld by it (including Taxes
required to be withheld by it in respect of any amount paid or credited or
deemed to be paid or credited by it to or for the account of any person,
including any Employees, officers or directors and any non-resident person) and
has duly and timely remitted to the appropriate Tax authority such Taxes
required by Law to be remitted by it, including all Taxes in the UK, Germany,
Brazil, Uruguay and Hong Kong;
	 
	 	(iii)	 	the Company Financial Statements reflect an appropriate
reserve, in accordance with GAAP for amounts at least equal to the amount of
all material Taxes payable by the Company and its subsidiaries that are not yet
due and payable whether or not assessed and whether or not shown as being due
on any Return and that relate to periods ending on or prior to the date of such
financial statements, and the Company and its subsidiaries have made adequate
provisions in accordance with GAAP in their books and records for any Taxes
accruing in respect of any period which has ended subsequent to the period
covered by such financial statements;
	 
	 	(iv)	 	none of the Company or any of its subsidiaries have obtained
any tax rulings or tax concessions from any relevant taxing authority;
	 
	 	(v)	 	no material deficiencies, litigation, proposed adjustments or
matters in controversy have been asserted in writing with respect to Taxes of
the Company or any of its subsidiaries, and there is no material claim, audit,
proceeding or investigation now pending with respect to Taxes against the
Company or its subsidiaries or to the knowledge of the Company, threatened
against the Company or any of its subsidiaries or any of their respective
assets in respect of which a Governmental Entity has indicated it will result
in a proposed adjustment of Taxes;
	 
	 	(vi)	 	there are no Encumbrances for Taxes against the assets of the
Company, or any of its subsidiaries other than Permitted Encumbrances;
	 
	 	(vii)	 	there are no currently effective material elections,
agreements or waivers extending the statutory period or providing for an
extension of time with

D-8

 

	 	 	 	respect to the assessment, reassessment or collection of any Taxes, or of
the filing of any Return or any payment of Taxes, by the Company or any of
its subsidiaries;
	 
	 	(viii)	 	there has not been (A) any settlement or compromise of any Canadian federal
or United States federal income tax liability of the Company or its
subsidiaries. or (B) any affirmative Canadian federal or United States federal
tax election or change in any Canadian federal or United States federal tax
election, by the Company or any of its subsidiaries (other than Samsys
Technologies Inc. or Hamel David Corporation) since January 1, 2004 and by
Samsys Technologies Inc. and Hamel David Corporation since April 13, 2006;
	 
	 	(ix)	 	neither the Company nor any of its subsidiaries has acquired
property from a non-arm’s length person, within the meaning of the Tax Act, for
consideration, the value of which is less than the fair market value of the
property acquired in circumstances which could subject it to a liability under
section 160 of the Tax Act;
	 
	 	(x)	 	each of the Company and its Canadian subsidiaries is a “taxable
Canadian corporation” as defined in the Tax Act;
	 
	 	(xi)	 	neither the Company nor any of its subsidiaries is a party to,
bound by or currently has any liability under any tax sharing, allocation,
indemnity or similar agreement or arrangement with a person other than the
Company or any of its subsidiaries;
	 
	 	(xii)	 	neither the Company nor any of its subsidiaries (A) is or has
been a member of an affiliated group (as defined in section 1504 of the Code)
filing a consolidated federal income tax return (other than any such group the
common parent of which is a subsidiary of the Company), or (B) has any
liability for the Taxes of any person (other than the Company or any of its
subsidiaries) under Treasury Regulation §1.1502-6 (or any similar provision of
state, local or foreign Law), as a transferee or successor, by contract or
otherwise as a transferee or successor, by contract or otherwise, or (C) except
as set forth in Schedule (n)(xii) of the Company Disclosure Letter, has entered
into any transaction that would result in a liability for Taxes or an
adjustment resulting in a liability for Taxes to the Company or such
subsidiaries pursuant to a transfer pricing or similar provision of any
applicable Law of any jurisdiction that requires the value of the consideration
paid or received for the acquisition, sale, transfer or other disposition of
property (including intangibles) or services (including financial transactions)
to be the fair value of such property or services in the case of transactions
with (1) in the case of Tax Act, persons not resident in Canada dealing at
non-arm’s length; (2) in the case of the Code, related persons; or (3) in any
case, persons who have a relationship similar to (1) or (2) based on the
criteria imposed by applicable Law;

D-9

 

	 	(xiii)	 	neither the Company nor any of its subsidiaries organized in the United
States or a political subdivision thereof is a “distributing corporation” or a
“controlled corporation” within the meaning of section 355(a)(1)(A) of the Code
in a distribution (other than a distribution by a subsidiary of the Company to
one or more of the Company or a subsidiary thereof) qualifying for tax free
treatment under section 355 in the two years prior to the date of this
Agreement;
	 
	 	(xiv)	 	neither the Company nor any of its subsidiaries has made any
payments, is obligated to make any payments or is a party to any agreement
that, individually or collectively, would obligate it to make any payments in
connection with the transactions contemplated hereby that would not be
deductible under section 280G of the Code;
	 
	 	(xv)	 	none of the Company, any of its subsidiaries, or any other
person on behalf of the Company or its subsidiaries (A) has agreed to or is
required to make any adjustments pursuant to section 481(a) of the Code (or any
predecessor provision) or any similar provision of state, provincial,
territorial, local or foreign law by reason of a change in accounting methods
initiated by the Company or any of its subsidiaries, or has any knowledge that
the Internal Revenue Service or any other taxing authority has proposed any
such adjustment or change in accounting methods in writing, or has any
application pending with any taxing authority requesting permission for any
changes in accounting methods that relate to the business or operations of the
Company or any of its subsidiaries, (B) has executed or entered into a closing
agreement pursuant to section 7121 of the Code or any predecessor provision
thereof or any similar provision of state, provincial, territorial, local or
foreign law with respect to the Company or any of its subsidiaries, or (C) has
taxable income that will be reportable in a taxable period beginning after the
Effective Date that is attributable as an installment sale that occurred prior
to such date;
	 
	 	(xvi)	 	none of the tax attributes available to the Company, Sirit
Technologies Inc. (including Sirit Corp. (Ontario)), and Sirit Corp. (Texas),
including but not limited to non-capital losses, net capital losses,
undepreciated capital cost, and cumulative eligible capital, are restricted in
use as of the 2009 taxation year except as set forth in Schedule (n)(xvi) of
the Company Disclosure Letter;
	 
	 	(xvii)	 	since January 1, 2004, there have been no prior acquisitions of control, or
other dissolutions, amalgamations or reorganizations (in each case as defined
in the Tax Act or the Code) of the Company or any of its subsidiaries except as
set forth in Schedule (n)(xvii) of the Company Disclosure Letter;

D-10

 

	 	(xviii)	 	neither the Company nor any of its subsidiaries has waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency;
	 
	 	(xix)	 	neither the Company nor any of its subsidiaries has been a US
Real Property Holding Corporation within the meaning of section
897(c)(1)(A)(ii) of the Code during the applicable period specified in section
897(c)(1)(A)(ii);
	 
	 	(xx)	 	each of the Company and its subsidiaries has disclosed on its
United States federal income Tax Return all positions taken therein that could
give rise to a substantial understatement of United States federal income Tax
within the meaning of section 6662 of the Code;
	 
	 	(xxi)	 	neither the Company nor any of its subsidiaries carry on any
activities that give rise to a permanent establishment in any national
jurisdiction within the meaning of the Code other than in the United States and
Canada;
	 
	 	(xxii)	 	neither the Company nor any of its subsidiaries has engaged in any reportable
or listed transaction as described in section 6707A(c) of the Code and Treasury
Regulations 1.6011-4(b)(2) or identified as such in applicable Internal Revenue
Service published guidance; and
	 
	 	(xxiii)	 	the Company has made available to Acquireco true and complete copies of (A)
all material Canadian federal and provincial, United States federal and state
income Returns of the Company and its subsidiaries for the preceding three
taxable years, (B) all currently-effective tax rulings (including private
letter rulings), pending ruling requests, and transfer pricing studies received
from or submitted to a taxation authority by, or agreed to, by or on behalf of
the Company and/or its subsidiaries, (C) any audit report issued within the
last three years (or otherwise with respect to any audit or proceeding in
progress) relating to income and franchise and any other material Taxes of the
Company or any of its subsidiaries, and (D) any notice of assessment and
reassessment issued by any relevant Tax authorities.

	 	(o)	 	Real Property.

	 	(i)	 	Neither the Company nor any of its subsidiaries has any right,
title or interest of any kind in any real property, except as provided in the
Real Property Leases. The Company and each of its subsidiaries has good and
sufficient leases, licenses, easements, rights of way, and permits permitting
the use by the Company and its subsidiaries of lands or premises owned by third
parties that are material and necessary to permit the operation by the Company
and its subsidiaries of their businesses, as they are currently being
conducted, each of which is in full force and effect and, to the knowledge of
the Company, neither the Company nor its

D-11

 

	 	 	 	subsidiaries is in breach or default in any material respect thereunder.
Neither the Company nor its subsidiaries is a party to any Contract other
than the Real Property Leases, to acquire or lease any material real
property or interest therein.
	 
	 	(ii)	 	A complete and accurate list of all Real Property Leases is set
forth in Schedule (o)(ii) of the Company Disclosure Letter. True and complete
copies of all Real Property Leases have been provided to Acquireco. Each of
the Real Property Leases is in full force and effect in accordance with its
terms and constitutes a valid and binding obligation of the Company and its
subsidiaries that are a party thereto, and to the knowledge of the Company,
each other party thereto, subject to the qualification that such enforceability
may be limited by bankruptcy, insolvency, reorganization or other Laws of
general application relating to or affecting rights of creditors and that
equitable remedies, including specific performance, are discretionary and may
not be ordered. All rents and other sums and charges payable by the Company or
its subsidiaries under the Real Property Leases are current, and neither the
Company nor any of its subsidiaries is in breach or default (in each case, with
or without notice or lapse of time or both) under any Real Property Lease. To
the knowledge of the Company, no counterparty to a Real Property Lease is in
breach or default under any Real Property Lease. The leasehold interest of the
Company or its subsidiaries in each parcel of real property subject to the Real
Property Leases is free and clear of all Encumbrances, other than Permitted
Encumbrances and Encumbrances affecting the freehold interest in any such real
property having priority to the applicable Real Property Lease.
	 
	 	(iii)	 	All real property and tangible personal property of the
Company and each of its subsidiaries necessary for the conduct of the business
currently carried on by the Company and its subsidiaries is in good repair and
is operational and usable in the manner in which it is currently being
utilized, subject to normal wear and tear and technical obsolescence, repair or
replacement, except for such property whose failure to be in such condition
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
	 
	 	(iv)	 	The buildings and other structures located on the real property
subject to the Real Property Leases and the operation and maintenance thereof,
as now operated and maintained, comply in all material respects with all
applicable Laws. Except as set forth in Schedule (o)(iv) of the Company
Disclosure Letter, neither the Company nor any of its subsidiaries has received
notice of any breach or violation of any Laws relating to their use,
occupation, operation or maintenance of any of the real property subject to
Real Property Leases and, to the knowledge of the Company, there are no
expropriation, condemnation, eminent domain or similar

D-12

 

	 	 	 	proceedings pending or threatened affecting any portion of the real property
subject to the Real Property Leases.

	 	(p)	 	Permits. The Company and each of its subsidiaries has obtained all
Permits required by applicable Laws necessary to conduct their businesses, as currently
conducted, other than where the absence of such Permits would not, reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect. All
such Permits are valid and subsisting and in good standing, and the Company and its
subsidiaries are in compliance with the terms of such Permits. Neither the Company nor
its subsidiaries have received any notice of proceedings relating to the revocation or
modification of any such Permit which, if the subject of an unfavourable decision,
ruling or finding would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, and there has not occurred any event which would
reasonably be expected to result in the revocation, cancellation, non-renewal or
adverse modification of any such Permit.
	 
	 	(q)	 	Material Contracts. A complete and accurate list of Material Contracts
has been disclosed in Schedule (q) of the Company Disclosure Letter. True and complete
copies of all Material Contracts have been provided to Acquireco (including all
amendments thereto) and except as set forth in Schedule (q) of the Company Disclosure
Letter, no such Contract has been modified, rescinded or terminated since the date such
Contract was made available to Acquireco. Except as would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect, neither the
Company nor any of its subsidiaries is in breach or violation of or default (in each
case, with or without notice or lapse of time or both) under the terms of any Material
Contract except as set forth in Schedule (q) of the Company Disclosure Letter and, to
the knowledge of the Company, there exists no state of facts which after notice or
lapse of time or both would constitute a default or breach of any Material Contract.
As of the date hereof, to the knowledge of the Company, no other party to any Material
Contract is in material breach of, or default under the terms of, or has threatened to
terminate, any such Material Contract. Each Material Contract is a valid and binding
obligation of the Company or its subsidiaries that are a party thereto (subject to the
qualification that such enforceability may be limited by bankruptcy, insolvency,
reorganization or other Laws of general application relating to or affecting rights of
creditors and that equitable remedies, including specific performance, are
discretionary and may not be ordered) and to the knowledge of the Company is in full
force and effect in accordance with its terms.
	 
	 	(r)	 	Restrictions on Conduct of Business. Except as set forth in
Schedule (q) of the Company Disclosure Letter, none of the Company, its subsidiaries or
their respective employees are party to or bound by any non-competition agreement, any
non-solicitation agreement, or any other agreement, obligation, judgment, injunction,
order or decree which purports to (i) limit the manner or the localities in which all
or any material portion of the business of the Company or its subsidiaries is
conducted, (ii) limit any business practice of the Company or any of its subsidiaries
in any material respect, or (iii) restrict any acquisition or

D-13

 

	 	 	 	disposition of any property by the Company or its subsidiaries in any material
respect. None of the Company or any of its subsidiaries or any of their respective
properties or assets is subject to any outstanding judgment, order, writ, injunction
or decree that involves or may involve, or restricts or may restrict, the right or
ability of the Company or any of its subsidiaries to conduct its business in all
material respects as it has been carried on prior to the date hereof, or that would
materially impede the consummation of the transactions contemplated by this
Agreement.
	 
	 	(s)	 	Compliance with Laws. The Company and its subsidiaries have complied
with and are not in violation of any applicable Laws, other than non-compliance or
violations which would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
	 
	 	(t)	 	Customer and Supplier Relations. Since January 1, 2008, neither the
Company nor its subsidiaries has received any written notice that any customer,
supplier, distributor or sales representative intends to cancel, terminate or otherwise
modify or not renew its relationship with the Company or its subsidiaries. As of the
date of hereof, no customer of the Company that represented 5% or more of the Company’s
consolidated revenues in the fiscal year ended December 31, 2009, has provided notice
to the Company that it will stop, or materially decrease the rate of, buying products
or services from the Company.
	 
	 	(u)	 	Environmental Matters.

	 	(i)	 	Except as set forth in Schedule (u)(i) of the Company
Disclosure Letter:

	 	(A)	 	the Company and its subsidiaries are and have
been in compliance for the last five years with all applicable
Environmental Laws, and have not received written notice and are not
aware of any requirement or practice that is proposed for adoption or
implementation under any Environmental Law that would be applicable to
the operations of the Company, any of its subsidiaries and which may
require an expenditure that would reasonably be expected to have a
Material Adverse Effect on the Company, and have obtained, and are in
compliance with, any environmental Permits required under all
applicable Environmental Laws for their operations; and
	 
	 	(B)	 	there are no material judicial, administrative
or other actions, suits, claims, investigations or proceedings
(including prosecutions) pending or, to the knowledge of the Company,
threatened which allege a violation by or liability of the Company or
any of its subsidiaries pursuant to any Environmental Laws (including
due to a Release of, and exposure to, Hazardous Materials).

D-14

 

	 	(ii)	 	To the knowledge of the Company, no material Release of
Hazardous Materials has occurred, nor are any Hazardous Materials present in
material quantities, at, from, in, to, on, or under (A) any property currently
owned, operated, controlled, managed or leased by the Company or any of its
subsidiaries or (B) any property formerly owned, operated, controlled, managed
or leased by the Company or any of its subsidiaries to the extent any such
Release or presence of Hazardous Materials arose out of their operations or
during the ownership, operation control, management or lease of any property by
the Company or any of its subsidiaries at such properties at levels that
require investigation, remediation, monitoring or other response or remedial
actions under Environmental Laws (including obtaining any Permit) or at levels
that pose a material liability to the Company. Neither the Company nor any of
its subsidiaries has transported or arranged for the treatment, storage,
handling, disposal of any Hazardous Materials to any off-site location that has
or could reasonably be expected to result in a claim under or relating to any
Environmental Laws against the Company or any of its subsidiaries, except for
claims which, if adversely decided, would not be material to the Company.

	 	(v)	 	Pension and Employee Benefits.

	 	(i)	 	The Company and each of its subsidiaries has complied with the
terms of all Company Plans and with all applicable Laws relating thereto.
	 
	 	(ii)	 	A true and complete list of all Company Plans is set forth in
Schedule (v)(ii) of the Company Disclosure Letter. Current and complete copies
of all such written Company Plans or, where oral, written summaries of the
material terms thereof, have been provided to Acquireco together with current
and complete copies of all material documents relating to the Company Plans,
including, without limitation, service provider agreements, insurance
contracts, investment management agreements and record-keeping agreements.
There has been no amendment or other change to the Key Employee Incentive Plan
other than the amendment on February 12, 2007.
	 
	 	(iii)	 	All of the Company Plans are registered, qualified, invested,
funded, operated and administered, in all material respects, in accordance with
all applicable Laws, and in accordance with their terms. Neither the Company
nor its subsidiaries has received, in the last three years, any notice from any
person questioning or challenging such compliance, and the Company has no
knowledge of any such notice beyond the last three years. All material
reports, returns and similar documents with respect to all Company Plans
required to be filed with any Governmental Entity or distributed to any Company
Plan participant have been duly and timely filed or distributed.

D-15

 

	 	(iv)	 	All obligations of the Company or any of its subsidiaries
regarding the Company Plans have been satisfied and no Taxes are owing or
exigible under any of the Company Plans. All contributions or premiums
required to be made to any Statutory Plans or under the terms of each Company
Plan or by applicable Laws have been made in a timely fashion in accordance
with applicable Laws and the terms of the Company Plans.
	 
	 	(v)	 	No unfunded liability, solvency deficiency, going concern
deficiency or wind up deficiency exists with respect to any Pension Plan.
	 
	 	(vi)	 	There is no investigation (including governmental audits or
investigations), examination or other proceeding, action or claim that has been
asserted or initiated, or to the knowledge of the Company, threatened with
respect to any of the Company Plans, the assets of the trusts under such plans
or the plan sponsor or the plan administrator, or against any fiduciary of any
of the Company Plans with respect to the terms or operation of such plans
(other than routine claims for benefits), and there exists no state of facts
which after notice or lapse of time or both could reasonably be expected to
give rise to any such investigation, examination or other proceeding, action or
claim or to affect the registration or qualification of any Company Plan
required to be registered or qualified.
	 
	 	(vii)	 	There has been no partial wind-up of any registered Company
Plan and, to the knowledge of the Company, no event has occurred respecting any
registered Company Plan which would result in the revocation of the
registration of such Company Plan (where applicable) or entitle the person or
entity (without the consent of the Company or any of its subsidiaries) to
wind-up or terminate any Company Plan in whole or in part or which could
otherwise reasonably be expected to adversely affect the tax status of any such
Company Plan.
	 
	 	(viii)	 	Neither the Company nor its subsidiaries has any formal plan or has made any
promise or commitment, whether legally binding or not, to create any additional
Company Plan or to improve the benefits provided under any Company Plan.
	 
	 	(ix)	 	There are no agreements, or undertakings, written or oral, by
the Company or any of its subsidiaries other than those set forth in the
written Company Plans that would result in any material liability to the
Company or its subsidiaries on or at any time after the Effective Time on
amendment or termination of any Company Plan (including any Company Plan
covering retirees or other former employees).
	 
	 	(x)	 	Other than as required under applicable Law, no Company Plan
promises or provides retiree health benefits or retiree life insurance benefits
or any other non-pension post-retirement benefits to any person, other than in
accordance with section 4980B of the Code.

D-16

 

	 	(xi)	 	Each Company Plan which covers current or former employees of
the Company or any of its subsidiaries in respect of employment in the United
States of America (the “US Company Plans”), is an “employee pension benefit
plan” within the meaning of section 3(2) of ERISA, and which is intended to
meet the qualification requirements of section 401(a) of the Code has received
a determination letter from the Internal Revenue Service to the effect that
such plan is qualified and exempt from federal income Taxes under
sections 401(a) and 501(a), respectively, of the Code, and to the knowledge of
the Company, nothing has occurred since the date of such determination letter
that could adversely affect the qualification of such plan or the tax-exempt
status of such trust. In addition, the Company has provided true and accurate
copies of each US Company Plan maintained by the Company or any of its
subsidiaries on or after December 31, 2007, that has been terminated or merged
into a US Company Plan that is currently maintained by the Company or any of
its subsidiaries. The U.S. Company Plans formerly maintained by RSI ID
Technologies, Inc. and SAMSys Technologies, Inc. were either merged into the
Sirit Corp. 401(k) Plan, or were properly terminated in accordance with ERISA
and the Code, without adversely affecting the qualification of such plan(s) or
any U.S. Company Plan currently maintained by the Company or any of its
subsidiaries.
	 
	 	(xii)	 	To the knowledge of the Company, none of the U.S. Company
Plans or any trusts created thereunder, or the Company or any of its
subsidiaries, or any employee of the foregoing, or, to the knowledge of the
Company, any trustee, administrator or other fiduciary in respect of such U.S.
Company Plans, has engaged in a “prohibited transaction” (as such term is
defined in section 4975 of the Code or section 406 of ERISA).
	 
	 	(xiii)	 	There are no Company Plans to which the Company or its subsidiaries are
required to contribute which are not maintained or administered by the Company
or its subsidiaries.
	 
	 	(xiv)	 	Except as would not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect, none of the Company
Plans require or permit a retroactive increase in premiums or payments, or
require additional premiums or payments on termination of the Company Plan
relating thereto.
	 
	 	(xv)	 	Neither the execution of this Agreement nor the consummation of
the transactions contemplated hereby will (either alone or in connection with
the termination of employment or service of any officer, employee, director,
independent contractor or consultant following, or in connection with the
transactions contemplated hereby) (i) except as set forth in Schedule (v)(xv)
of the Company Disclosure Letter, entitle any current or former employee,
independent contractor or consultant of the Company to severance pay or any
increase in severance pay upon any termination of

D-17

 

	 	 	 	employment after the date of this Agreement, (ii) accelerate the time of
payment or vesting or trigger any payment or funding (through a grantor
trust or otherwise) of compensation or benefits under, or increase the
amount payable or trigger any other obligation pursuant to, any of the
Company Plans, or (iii) limit or restrict the right of the Company or, after
the consummation of the transactions contemplated hereby, Parent or
Acquireco, to merge, amend or terminate any such plan. None of the Company
Plans in effect immediately prior to the consummation of the transactions
contemplated by this Agreement would result separately or in the aggregate
(including, without limitation, as a result of this Agreement or the
transactions contemplated hereby) in the payment of any “excess parachute
payment” within the meaning of section 280G of the Code.
	 
	 	(xvi)	 	Each Company Plan or any other arrangement of the Company that
is, or was, subject to section 409A of the Code, was administered in
reasonable, good faith compliance with the requirements of section 409A of the
Code through December 31, 2008, and all Company Plans subject to section 409A
of the Code that provide payment after December 31, 2008 and were in existence
on such date have been amended (if applicable) to comply with the requirements
of the final regulations under section 409A of the Code. The Company (i) has
no obligation to gross-up, indemnify or otherwise reimburse any person for any
Tax incurred by such person pursuant to section 409A of the Code, (ii) has not
elected to or is not required to defer payment of amounts from a foreign entity
which will be subject to the provisions of section 457A of the Code, and (iii)
has no obligation to gross-up, indemnify or otherwise reimburse any person for
any Tax incurred by such person pursuant to section 280G of the Code.

	 	(w)	 	Employees.

	 	(i)	 	An accurate and complete list of all Employment Contracts is
set forth in Schedule (w)(i) of the Company Disclosure Letter, and full and
complete copies of such Employment Contracts have been provided to Acquireco.
Subject to the terms of the Employment Contracts set forth on Schedule (w)(i)
of the Company Disclosure Letter, the employment of each Employee in Canada is
terminable on reasonable notice. Except as set forth in Schedule (v)(xv) of
the Company Disclosure Letter, there are no agreements, promises or commitments
providing for cash or other compensation or benefits upon the consummation of
the transactions contemplated by this Agreement. The Company and its
subsidiaries are in compliance with all Employment Contracts and have not
received any notice from any Employee or Consultant that any term of a Contract
has been breached. To the knowledge of the Company, each individual in a
Consultant or independent contractor relationship with the Company or any of
its subsidiaries is in fact a Consultant or independent contractor and is not
an Employee.

D-18

 

	 	(ii)	 	Neither the Company nor any of its subsidiaries is: (A) a party
to any collective agreement or collective bargaining agreement, or (B) subject
to any current, pending or threatened labour slow down, work stoppage, strike
or lockout, or any other dispute or controversy with or involving a labour
organization or with respect to unionization or collective bargaining.
	 
	 	(iii)	 	There are no outstanding or, to the knowledge of the Company,
threatened unfair labour practices, complaints or applications of any kind, nor
has any trade union, council of trade unions, employee bargaining agency,
affiliated bargaining agent or employee association applied or threatened to
apply for certification as bargaining agent for Employees or requested or
demanded negotiations, elections, recognition or representation, nor is there a
threatened or apparent union organizing campaign for Employees not covered
under a collective bargaining agreement.
	 
	 	(iv)	 	The Company and its subsidiaries have been and are being
operated in compliance in all material respects with all applicable Laws
relating to Employees and Consultants. There are not now in existence nor has
there been within the last 12 months prior to the date of this Agreement any
pending or, to the knowledge of the Company, threatened, material complaints,
charges, orders, investigations, prosecutions, litigation, proceedings or
claims against the Company or any of its subsidiaries with any Governmental
Entity or arbitrator, or claim or investigation of wrongful discharge, claim or
investigation of employment discrimination or retaliation, claim or
investigation of sexual harassment, or other employment dispute of any nature
against the Company and its subsidiaries.
	 
	 	(v)	 	There are no material notices of assessment, provisional
assessment, reassessment, supplementary assessment, penalty assessment or
increased assessment or any other communications related thereto which the
Company or any of its subsidiaries has received from any workers’ compensation
or workplace safety and insurance board or similar authorities in any
jurisdictions where the business is carried on which are unpaid on the date
hereof or which will be unpaid at the Effective Time and, to the knowledge of
the Company, there are no facts or circumstances which may result in a material
increase in liability from any applicable workers’ compensation or workplace
safety and insurance legislation, regulations or rules after the Effective
Time. The accident cost experience of the Company and any of its subsidiaries
is such that there are no such material pending or possible assessments and
there are no claims or potential claims which may materially affect the
accident cost experience of the Company or any of its subsidiaries.
	 
	 	(vi)	 	All vacation pay, bonuses and commissions relating to the
business of the Company and any of its subsidiaries and the Employees are
accurately

D-19

 

	 	 	 	reflected in all material respects and have been properly accrued in the
books and records of the Company or any of its subsidiaries.
	 
	 	(vii)	 	All Employee data necessary to administer each Company Plan is
in the possession of the Company, its subsidiaries or their agents and is in a
form which is sufficient for the proper administration of each such Company
Plan in accordance with its terms and all Laws and, to the knowledge of the
Company, such data is true and complete.
	 
	 	 	 	There have been no layoffs and other losses of employment experienced at any
site of employment of the Company and any of its subsidiaries during the 90
day period preceding the date of this Agreement.
	 
	 	(viii)	 	To the knowledge of the Company, none of the Employees, Consultants or agents
of the Company or any of its subsidiaries is or during the last two years has
been under administrative, civil or criminal investigation or indictment by any
Governmental Entity in connection with their employment at the Company or any
of its subsidiaries, nor has the Company or its subsidiaries been (individually
or collectively) liable in arrears of wages, or other compensation or benefits,
or any Taxes or penalties for failure to comply in any material respect with
any applicable Laws related to the Employees or Consultants.

	 	(x)	 	Non-Arm’s Length Transactions. Except as set forth in Schedule (x) of
the Company Disclosure Letter, there are no Contracts (other than the Employment
Contracts) existing between, among or involving the Company or any of its subsidiaries,
on the one hand, and any of their respective directors, officers or shareholders or any
of their Employees, Consultants, or directors, officers or shareholders thereof, or any
of their respective affiliates or their associates, on the other hand (including in
respect of purchasing or obtaining any product or service or in respect of any
Financial Indebtedness or guarantee thereof). No director, officer or shareholder of
the Company or any of its subsidiaries, or Employee or Consultant or director, officer
or shareholder thereof, or any of their respective affiliates or associates has any
direct or indirect ownership interest in any person in which the Company or any of its
subsidiaries has any direct or indirect ownership interest. Except as set forth in
Schedule (x) of the Company Disclosure Letter, there are no current contracts,
commitments, agreements, arrangements or other transactions between the Company or any
of its subsidiaries on the one hand, and any director, officer, Employee or Consultant
of the Company or any of its subsidiaries or any associate of any director, officer,
Employee or Consultant, on the other hand, other than Company Plans and Employment
Contracts.
	 
	 	(y)	 	Insurance. The Company and its subsidiaries are in compliance in all
material respects with all requirements with respect to their insurance policies, and
no notice of cancellation or termination has been received with respect to any such
policy which has not been replaced on substantially similar terms prior to the date

D-20

 

	 	 	 	of such cancellation. There is no claim pending under any insurance policies of the
Company or its subsidiaries as to which coverage has been questioned, denied or
disputed. Copies of all insurance policies have been made available to Acquireco.
	 
	 	(z)	 	Auditors. The auditors of the Company are independent public
accountants as required by applicable Laws and there is not now, and there has never
been, any reportable event (as defined in National Instrument 51-102 — Continuous
Disclosure Obligations) with the present or any former auditors of the Company.
	 
	 	(aa)	 	Indebtedness. Other than indebtedness under the Credit Agreement or as
disclosed in the Company’s most recent publicly-disclosed consolidated financial
statements or as set forth in Schedule (aa) of the Company Disclosure Letter, there are
no outstanding bonds, debentures or other evidences of Financial Indebtedness of the
Company or any of its subsidiaries excluding any inter-company indebtedness solely
among the Company and its subsidiaries. As of the date hereof, the Credit Agreement is
in full force and effect, the Company is in compliance with the terms and conditions of
the Credit Agreement, and any other evidence of material Financial Indebtedness of the
Company or any of its subsidiaries, has not received any notice of default or breach
of, or termination under, and, to the knowledge of the Company, there exists no state
of facts which after notice or lapse of time or both would constitute a default or
breach of the Credit Agreement or any other instruments governing material Financial
Indebtedness of the Company or any of its subsidiaries, except for such defaults or
breaches which, individually or in the aggregate, would not have or reasonably be
expected to have a Material Adverse Effect.
	 
	 	 	 	Except as set forth in Schedule (aa) of the Company Disclosure Letter, and except as
disclosed in its most recently publicly-disclosed consolidated financial statements:

	 	(i)	 	neither the Company nor its subsidiaries is indebted to any of
its directors or officers or any of their associates or to any securityholder
of the Company;
	 
	 	(ii)	 	none of the directors or officers of the Company or any of
their associates or Company Shareholders is indebted or under material
obligation to the Company or any of its subsidiaries on any account whatsoever
(other than pursuant to an employment contract entered into in the ordinary
course of business);
	 
	 	(iii)	 	neither the Company nor its subsidiaries has guaranteed or
agreed to guarantee any debt, liability or other obligation of any kind
whatsoever of any person other than of a subsidiary; and
	 
	 	(iv)	 	there is no inter-company indebtedness outstanding between any
of the Company and its subsidiaries.

D-21

 

	 	(bb)	 	Intellectual Property.

	 	(i)	 	The Company and its subsidiaries own or have valid licenses to
use (and are not in breach of such licenses) all Business Intellectual Property
that is material to the conduct of the business, as presently conducted, of the
Company or its subsidiaries.
	 
	 	(ii)	 	A complete and accurate list of all registrations of, and
applications for registration of, Owned Intellectual Property is set forth in
Schedule (bb)(ii) of the Company Disclosure Letter. The Owned Intellectual
Property has been duly registered or applications to register the same have
been filed such applications or registrations are in good standing, and the
Company or its subsidiaries holds the entire right, title and interest in and
to all of the Owned Intellectual Property, and has the exclusive and unfettered
right to use the Owned Intellectual Property, except to the extent the Company
or its subsidiaries has licensed others to use the Owned Intellectual Property.
	 
	 	(iii)	 	A complete and accurate list of all of the Licensed
Intellectual Property, other than Shrink Wrap Software, is set forth in
Schedule (bb)(iii) of the Company Disclosure Letter. Neither the Company nor
its subsidiaries is a party to any contract or commitment to pay any royalty or
other fee to use Licensed Intellectual Property except pursuant to the
agreements set forth in Schedule (bb)(iii) of the Company Disclosure Letter.
	 
	 	(iv)	 	The Owned Intellectual Property is valid and enforceable. The
Owned Intellectual Property is free and clear of all Encumbrances other than
(A) those arising under any of the IP Agreements, (B) non-exclusive licenses
granted in the ordinary course of business, and (C) Permitted Encumbrances.
	 
	 	(v)	 	None of the Company or any of its subsidiaries or, to the
knowledge of the Company, any third party to any IP Agreement, is in breach
thereof and the IP Agreements are binding and are in full force and effect.
	 
	 	(vi)	 	To the knowledge of the Company, except as set forth in
Schedule (bb)(vi) of the Company Disclosure Letter, the use of the Owned
Intellectual Property and conduct of the business, as conducted in the past and
as presently conducted, by the Company and its subsidiaries does not infringe
upon any third party Intellectual Property Rights.
	 
	 	(vii)	 	There is no proceeding initiated by any third party for which
notice has been provided to the Company or its subsidiaries or which to the
knowledge of the Company has been threatened, with respect to any alleged
infringement, misappropriation or other violation by the Company or any of its
subsidiaries of any third party Intellectual Property Rights.

D-22

 

	 	(viii)	 	Except as set forth in Schedule (bb)(viii) of the Company Disclosure Letter,
to the knowledge of the Company, no third party is infringing upon any of the
Owned Intellectual Property and, except for patent rights scheduled for
abandonment in the ordinary course of business in accordance with the Company’s
annual maintenance review, no Owned Intellectual Property has been lost,
abandoned or cancelled or is in jeopardy of being lost, abandoned or cancelled
through failure to act by the Company or its subsidiaries.
	 
	 	(ix)	 	Since January 1, 2008, there has been no pending or threatened
claim, and there are currently no pending or threatened claims, for which
notice has been provided to the Company or its subsidiaries challenging the
validity or enforceability of, or contesting the Company’s or any of its
subsidiaries’ rights in, the Business Intellectual Property or their rights
under the IP Agreements.
	 
	 	(x)	 	All hardware, software and firmware, technology infrastructure
and other computer systems used in connection with the conduct of the business,
as presently conducted, of the Company and its subsidiaries, taken as a whole
(collectively, the “Technology”), are sufficient for conducting the business,
as presently conducted, of the Company and its subsidiaries, taken as a whole.
The Company and its subsidiaries own or have valid licenses to use (and are not
in breach of such licenses) such Technology and have security measures in place
in relation to such Technology that meet or exceed the industry standard.
	 
	 	(xi)	 	To the extent that any Business Intellectual Property is
confidential, the Company and its subsidiaries have taken commercially
reasonable efforts to ensure that their employees, consultants and contractors
are subject to enforceable legal obligations to maintain the confidentiality of
such Business Intellectual Property.
	 
	 	(xii)	 	The Company and its subsidiaries have taken commercially
reasonable steps (in accordance with industry standards) to protect the Owned
Intellectual Property, including commercially reasonable steps to prevent
unauthorized use or disclosure of any trade secrets, confidential information
and know how possessed by the Company and its subsidiaries.

	 	(cc)	 	Vote Required. Except as may otherwise be provided for in the Interim
Order, the only vote of holders of securities necessary to approve the Continuance
Resolution and the Arrangement Resolution is (i) in the case of the Continuance, the
affirmative vote of two-thirds of the votes cast on the Continuance Resolution by
Company Shareholders present in person or represented by proxy at the Company Meeting,
and (ii) in the case of the Arrangement, the approval set forth in Section 2.2(b).

D-23

 

	 	(dd)	 	No “Collateral Benefit”. To the knowledge of the Company, no “related
party” of the Company (within the meaning of CSA Multilateral Instrument 61-101 –
Protection of Minority Security Holders in Special Transactions (“MI 61-101”)) will
receive a “collateral benefit” (within the meaning of MI 61-101) as a consequence of
the transactions contemplated by this Agreement.
	 
	 	(ee)	 	Insolvency. Neither the Company nor any of its subsidiaries: (i) is
insolvent or bankrupt under or pursuant to any corporate, insolvency, winding-up,
restructuring, reorganization, administration or other laws applicable to it; (ii)
except as set forth in Schedule (ee) of the Company Disclosure Letter, has commenced,
approved, authorized or taken any action in furtherance of proceedings in respect of
such Company or subsidiary under any applicable bankruptcy, insolvency, restructuring,
reorganization, administration, winding up, liquidation, dissolution, or similar Law;
or (iii) is or has been subject to any actions taken or proceedings commenced by
creditors or other persons for or in respect of the bankruptcy, receivership,
insolvency, restructuring, reorganization, administration, winding-up, liquidation or
dissolution of such Company or subsidiary, or any material property or assets of such
Company or subsidiary.
	 
	 	(ff)	 	Fees. The Company represents and warrants that, except for the
Financial Advisors, no broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission from, or to the reimbursement of any of
its expenses by, the Company in connection with this Agreement or the Arrangement (and
the transactions contemplated herein and therein). The Company has made full
disclosure in writing to Acquireco of all fees to be paid to the Financial Advisor
under the terms of the agreements with the Financial Advisor relating to any
arrangements between the Company or any of its subsidiaries and the Financial Advisor
that are in effect at the date hereof and the Company shall not amend or otherwise
modify such agreements without the prior written consent of Acquireco.

D-24

 

Schedule E

To the Arrangement Agreement

Representations and Warranties of Parent and Acquireco

     Parent and Acquireco hereby represent and warrant to and in favour of the Company as follows
and acknowledge that the Company is relying upon such representations and warranties in connection
with entering into this Agreement and consummating the transactions contemplated hereby:

	 	(a)	 	Organization and Qualification. Each of Parent and Acquireco is a
corporation formed and validly existing under the laws of its jurisdiction of
incorporation and has the requisite corporate power and authority to own its assets as
now owned and to carry on its business as it is now being conducted. Each of Parent
and Acquireco is duly registered or otherwise authorized to do business and is in good
standing in each jurisdiction in which the character of its properties, owned, leased,
licensed or otherwise held, or the nature of its activities makes such registration
necessary, except where the failure to be so registered or in good standing would not,
materially impair or delay the ability of Parent or Acquireco to consummate the
transactions contemplated by this Agreement.
	 
	 	(b)	 	Authority Relative to this Agreement. Each of Parent and Acquireco has
the requisite corporate power and capacity to enter into this Agreement and to carry
out its obligations hereunder. The execution and delivery of this Agreement by Parent
and Acquireco and performance of this Agreement by it of its obligations hereunder have
been duly authorized by its board of directors, and no other corporate proceedings on
its part are necessary to authorize the consummation of the transactions contemplated
hereunder or completion of the Arrangement. This Agreement has been duly executed and
delivered by Parent and Acquireco and constitutes a legal, valid and binding obligation
of each of Parent and Acquireco, as the case may be, enforceable against it in
accordance with the terms of this Agreement, subject to the qualification that such
enforceability may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws of general application relating to or
affecting rights of creditors and that equitable remedies, including specific
performance, are discretionary and may not be ordered.
	 
	 	(c)	 	No Violations.

	 	(i)	 	Neither the execution and delivery of this Agreement by Parent
or Acquireco nor the completion of the transactions contemplated hereby, nor
compliance by Parent and Acquireco with any of the provisions hereof will
violate, conflict with, or result in a breach of any material provision of,
require any consent, approval or notice under, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a default)
under (A) the organizational or charter documents governing

E-1

 

	 	 	 	Parent or Acquireco, as the case may be; (B) any material contract or other
instrument or obligation to which Parent or Acquireco is a party, or to
which any of their respective properties or assets may be subject, or by
which Parent or Acquireco is bound; or (C) violate any Law applicable to
Parent or Acquireco or any of its subsidiaries or any of its properties or
assets (except, in the case of clauses (B) and (C) above, as would not
reasonably be expected to materially impair or delay the ability of Parent
or Acquireco to consummate the transactions contemplated in this Agreement).
	 
	 	(ii)	 	Assuming compliance with the Interim Order and any approvals
required thereunder, the Final Order, filings with the Director under the OBCA
and compliance with applicable Securities Laws, no material authorization,
approval, license, permit, order, consent, authorization of, or registration,
declaration or filing with, any third party or Governmental Entity is required
to be obtained or made by Parent or Acquireco in connection with the
performance of its obligations and the consummation of the transactions
contemplated hereunder.

	 	(d)	 	Sufficient Funds Available. Acquireco has, and will have at the
Effective Time, sufficient cash on hand to consummate the transactions and assume the
obligations contemplated by this Agreement, including for the payment of (A) its and
the Company’s fees and expenses, including the fees and expenses of its and the
Company’s advisors, (B) the aggregate Consideration for all of the Company Shares to be
acquired pursuant to the Arrangement, (C) the aggregate Option Amount payable in
respect of the Options to be cancelled pursuant to the Arrangement.

E-2

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