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Sirit Announces Increased Offer from Federal Signal


Toronto, ON - Sirit Inc. (“Sirit”) (TSX: SI), a leading provider of radio frequency identification (“RFID”) technology, announces that it has signed a second amending agreement with Federal Signal Corporation (“Federal Signal”) (NYSE: FSS), for the purpose of amending their previously announced agreement (the “Arrangement Agreement”) under which Federal Signal will acquire all of the issued and outstanding common shares of Sirit (the “Common Shares”) by way of plan of arrangement. Under the terms of the amended agreement, Sirit shareholders would receive, for each Common Share, $0.46 in cash (instead of $0.43 in cash under the prior amended Federal Signal offer dated February 22, 2010).

All other terms and conditions remain substantially similar to those set out in the Arrangement Agreement as described in detail in the information circular mailed to Sirit shareholders on February 2, 2010 and available on, except that under the amended agreement the termination fee payable to Federal Signal in certain circumstances has been increased from $2.5 million to $4.0 million.

The increased consideration represents a premium of 110% over Sirit’s 30-day average closing stock price, and a premium of 145% over Sirit’s 60-day average closing stock price, on the Toronto Stock Exchange prior to the initial announcement by Sirit of the Arrangement Agreement on January 14, 2010. The increased consideration also represents a premium of 53% to the value of the initial Federal Signal offer.

Federal Signal increased the consideration payable to shareholders in connection with Sirit’s receipt of an unsolicited and confidential acquisition proposal which Sirit’s board concluded was not a Superior Proposal (as defined in the Arrangement Agreement). Sirit’s board carefully considered the terms and conditions of the unsolicited acquisition proposal in consultation with its financial and legal advisors and ultimately determined that when taken as a whole, notwithstanding an offer of cash consideration of $0.48, the acquisition proposal did not constitute a Superior Proposal since it included a number of new risks and uncertainties relating to the ability of the acquisition proposal to be completed without undue delay, Sirit’s financial position prior to the delayed closing (including the impact of increased transaction costs) and increased regulatory risks.

The previously announced voting and lock-up agreement with Federal Signal under which certain executive officers, directors and shareholders of Sirit owning approximately 28% of the outstanding Common Shares have agreed to vote their shares in favor of the Federal Signal transaction remains in effect.

A shareholders’ meeting (the “Meeting”) to approve the transaction with Federal Signal, among other things, is currently scheduled to take place at 10:30 a.m. on Friday, February 26, 2010. The Meeting will be held at Suite 1600, 1 First Canadian Place, 100 King Street West, Toronto, Ontario. Sirit does not intend to deliver a supplemental information circular to shareholders in respect of the amended agreement.

Under the terms of Sirit’s pre-existing Key Employee Incentive Plan, if more than 50% of the Common Shares are acquired by a third-party for consideration equal to or greater than $0.45 per share, Sirit will become obligated to pay to certain members of its executive management an amount equal to 5% of the gross aggregate proceeds paid by such third party. Federal Signal’s second amended offer triggers such a payment in an amount equal to approximately $3.9 million. This payment will not reduce the amount per share payable to each shareholder by Federal Signal at closing and will be a liability that accrues only after Sirit is acquired by Federal Signal. As a result of this payment, in addition to the approval of the Arrangement by two-thirds of the votes cast by shareholders present in person or by proxy at the Meeting, Sirit will be seeking approval of a majority of the votes cast by shareholders present in person or by proxy at the Meeting excluding the votes cast by participants in the Key Employee Incentive Plan.

Sirit does not intend to mail new proxy forms, and does not expect intermediaries to mail new voting instruction forms, to shareholders for use in connection with the Meeting. Instead, the form of proxy and voting instruction forms previously mailed to shareholders will continue to be used for the Meeting. The deadline for the deposit of proxies for use at the Meeting remains 4:00 p.m. (Toronto time) on Thursday, February 25, 2010. Voting instruction forms have to be submitted earlier than forms of proxy. Shareholders who have already properly completed and deposited a proxy or submitted a voting instruction form do not have to take any further action to vote their securities, unless they wish to change their voting instructions. Shareholders who have completed and deposited a form of proxy or submitted a voting instruction form but wish to change their voting instructions should contact Innisfree M&A Incorporated toll-free at 1-877-825-8964 for assistance in doing so (banks and brokers may call collect at 212-750-5883).


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