Versatile Mobile Systems (Canada) Inc.

Versatile Mobile Systems (Canada) Inc.

March 28, 2005 04:00 ET

Versatile Finalizes Share Purchase Agreement to Acquire Perfect Order


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: VERSATILE MOBILE SYSTEMS (CANADA) INC.

TSX VENTURE SYMBOL: VMS

MARCH 28, 2005 - 04:00 ET

Versatile Finalizes Share Purchase Agreement to
Acquire Perfect Order

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 28, 2005) - Versatile
Mobile Systems (Canada) Inc. (TSX VENTURE:VMS)

VERATILE SIGNS COMMITMENT LETTER WITH US BANK TO PROVIDE $5.8 MILLION OF
CREDIT FACILITIES

Versatile Mobile Systems (Canada) Inc. (TSX VENTURE:VMS) ("Versatile"),
a leading developer and provider of mobile business solutions, is
pleased to announce that it has executed a Share Purchase Agreement (the
"Agreement") to purchase all of the outstanding shares of Perfect Order,
Inc. and Perfect Order Manufacturing, Inc. (collectively "Perfect
Order"). All figures are in U.S. dollars unless otherwise stated.

Pursuant to the terms of the Agreement, Versatile will pay $7,475,000
consisting of a cash payment of $3,000,000 on closing, secured
Promissory Notes for $4,200,000 bearing interest at the rate of 3.1% per
annum, payable 12 months after the closing date and a cash payment
totaling $275,000 paid in quarterly amounts commencing June 10, 2005 and
ending March 10, 2006. The $275,000 payment compensates the shareholders
of Perfect Order (the "Vendors") for the additional tax costs that they
will incur to make a 338 election under the U.S. Internal Revenue code.
This election is expected to increase the cash flow from operations for
Perfect Order by up to $3,500,000 in future years.

The Vendors may convert up to one-half of their Promissory Notes, within
10 months of the Closing Date, into shares of Versatile at the rate of
one common share for each $0.52 (CDN $0.65 per share) of the Promissory
Note. In addition, Versatile will issue 750,000 Common Share purchase
warrants (a "Warrant") to the Vendors on the Closing Date. One Warrant
will entitle the holder thereof to purchase one Common Share at the
market price the day before the Closing Date, for a period expiring 24
months after the Closing Date.

Versatile, along with its wholly owned subsidiary Perfect Order
Acquisition Corporation has also signed a commitment letter with a U.S.
based financial institution for a secured term loan of $2,800,000 as
well as a secured demand loan of up to $3,000,000 based on a percentage
of eligible accounts receivable. The term loan will be used to replace
an existing facility Perfect Order has with another financial
institution, while the demand loan will provide additional access to
capital for the combined organization.

Closing of the transaction is conditional upon customary closing
conditions including completion of due diligence, receipt of audited
financial statements for Perfect Order and requisite regulatory
approvals. The transaction is expected to close on or about April 19,
2005.

"We are delighted to have reached agreement with the Vendors on all the
commercial terms for this transaction and to have done so within a month
of signing the Letter of Intent," said John Hardy, Chairman and CEO of
Versatile. "This acquisition will be a transforming event for Versatile
as it significantly increases our revenue, adds a strong deployed
salesforce, establishes our presence in multiple vertical markets, and
expands our product offerings with complimentary services and
applications."

"We look forward to completing this transaction quickly in order to
begin pursuing a number of business opportunities where the combined
organizations can work together," said John M. Gomery, President and
founder of Perfect Order.

With offices located in Atlanta, Boston, Buffalo, Mechanicsburg,
Philadelphia, and Pittsburgh, Perfect Order has more than 110 employees
and provides a broad suite of information technology solutions for the
implementation, maintenance and security of mission-critical computing
environments. Since its inception in 1992, the Company has built a
strong industry reputation, enjoyed significant revenue growth and
funded the development of a suite of software products all the while
maintaining profitable operations. Customers include companies such as,
Motorola, Tyco (AMP), Comcast, Adelphia Communications, Time Warner
(AOL), Mellon Financial, HSBC, Astra Zeneca, and Bristol Meyers Squibb.

In addition, Perfect Order is GSA certified (General Services
Administration: the United States Federal Contracting Agency), and has
provided solutions to US Army, US Navy and Department of Defence. The
Company has also provided solutions to the Commonwealth of Pennsylvania,
including PA State Police, Department of Health, and Department of
Welfare. Other customers include the University of Pennsylvania, School
District of Philadelphia, Princeton University, Harvard University,
University of Oklahoma and Pennsylvania State University.

Perfect Order (www.perfectorder.com) business solutions are powered by
their core product, CommNav, (www.commnav.com; www.sysnav.com), which
provides web-based solutions that allow businesses to aggregate critical
data in a secure framework. This technology leverages key industry
standards including Web services, roles based management, and patented
virtualization technology. Packaged solutions are being used
successfully in diverse industries including, Financial Services,
Communications, Retail, Pharmaceutical, Consumer Packaged Goods,
Government and Higher Education.

Martin Wolf Securities LLC, San Ramon, CA advised Versatile in
connection with this transaction.

About Versatile Mobile Systems

Versatile Mobile Systems provides mobile business solutions that enable
companies to improve sales, marketing and distribution of their
products. By using Versatile Mobile's technology, over 300 companies in
the consumer packaged goods and transportation industries have gained
the benefits of supply chain visibility, shortened fulfillment cycles
and improved customer satisfaction. Versatile's international customer
list includes Cadbury Schweppes, Ocado, Albertsons, Michaels, Nordstrom,
Publix Supermarkets, K&L Distributors, Rug Doctor and Kellogg.
Additional information is available at www.versatilemobile.com

Forward-Looking Statements

This document may contain forward-looking statements relating to
Versatile's proposed purchase of Perfect Order, and the businesses of
Versatile and Perfect Order and the environment in which they operate.
These statements are not guarantees of future performance and involve
risks and uncertainties that are difficult to predict or are beyond
Versatile's control. A number of important factors including the
satisfaction of conditions precedent to the acquisition and those set
forth in other public filings could cause actual outcomes and results to
differ materially from those expressed in these forward looking
statements. Consequently readers should not place any undue reliance on
such forward-looking statements. In addition, these forward looking
statements relate to the date on which they are made. Versatile
disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise.

(C)2005 Versatile Mobile Systems (Canada) Inc. All rights reserved.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Versatile Mobile Systems (Canada) Inc.
    John Hardy
    Chairman and CEO
    1-800-262-1633 or from Europe 001 425 778-8577
    or
    Versatile Mobile Systems (Canada) Inc.
    Fraser Atkinson
    CFO
    604 683-2915, ext. 214
    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.