The API Services
and Solutions business is one of Australia’s leading security businesses. The business
provides locksmith services including the design and installation of masterkey
services and the servicing and keying of lock systems.

QRS CEO Rick
Stokes said, “The transaction will be significant for QRS. Unaudited management
accounts (which will be reviewed in due diligence) show that the business had
revenue in FY10 of approximately $24 million and EBIT of $3 million.

“This transaction
has the potential to provide synergies with QRS’s existing security business
through the distribution of QRS’s products through API’s 19 branches located
Australia wide.”

The non-binding
Term Sheet sets out some of the terms on which QRS may acquire the Business.
Those terms include a purchase price of $12,700,000 subject to a working
capital adjustment; QRS assuming debts of the Business in the amount of
$1,446,000; API providing certain transitional services to QRS; QRS being
granted exclusivity in relation to the acquisition of the Business until 7
September 2010 (unless the Term Sheet is terminated before that date); and API
agreeing to pay a break fee to cover certain expenses incurred by QRS if API
does not proceed with the sale of the Business to QRS on the terms set out in
the Term Sheet.

The Transaction
may be partially funded from QRS’s existing cash holdings of approximately $7
million and / or may be funded by way of a rights issue. QRS will make an
announcement to the ASX in due course if it determines that it will undertake a
rights issue.