SEC Info℠

Home

Search

My Interests

Help

Sign In

Please Sign In

Bakbone Software Inc – ‘DEFM14A’ on 12/6/10

On:  Monday, 12/6/10, at 5:18pm ET   ·   Effective:  12/6/10   ·   Accession #:  1193125-10-274715   ·   File #:  0-12230

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

 Text Wildcards:  ? (any letter/digit),  * (many).  Search Logic:  for Documents:  & (and),  | (or);  for Text:  | (anywhere),  "(&)" (near).  Details... 

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

12/06/10  Bakbone Software Inc              DEFM14A    12/06/10    1:1.2M                                   RR Donnelley/FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEFM14A     Definitive Proxy Statement                          HTML   1.09M 

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrant  x

Filed by a Party other than the Registrant  ¨

Check the appropriate box:

BAKBONE SOFTWARE INCORPORATED

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

Table of Contents

NOTICE OF SPECIAL MEETING OF SECURITYHOLDERS

to be held January 11, 2011

and

NOTICE OF ORIGINATING APPLICATION

TO THE COURT OF QUEEN’S BENCH OF ALBERTA

and

INFORMATION CIRCULAR and PROXY STATEMENT

with respect to a

PLAN OF ARRANGEMENT

involving

BAKBONE SOFTWARE INCORPORATED, QUEST SOFTWARE, INC.,

BOLTS ACQUISITION CORPORATION AND

THE SECURITYHOLDERS OF BAKBONE SOFTWARE INCORPORATED

December 6, 2010

This information circular and the accompanying materials require your immediate attention. If you are in doubt as to how to deal with these documents or matters to which they refer, please consult a professional advisor. If you have any questions, please contact Kingsdale Shareholder Services Inc. by:

The Exchange Tower 130 King Street West, Suite 2950

P.O. Box 361, Toronto, Ontario M5X 1E2; or

Table of Contents

TABLE OF CONTENTS

Table of Contents

Table of Contents

BAKBONE SOFTWARE INCORPORATED

9540 Towne Centre Drive, Suite 100

San Diego, CA 92121

858-450-9009

Dear Securityholder:

We invite you to attend a special meeting of securityholders of BakBone Software Incorporated (“BakBone”) to be held at the offices of Burnet, Duckworth & Palmer LLP, located at Suite 1400, 350 — 7^th Avenue SW, Calgary, Alberta, at 8:00 a.m., local time, on January 11, 2011. Registered holders of common shares, preferred shares and options and warrants to acquire common shares at the close of business on November 30, 2010 will be entitled to vote at the special meeting or any adjournment or postponement of the special meeting.

At the special meeting, we will ask you to vote in favour of the arrangement resolution approving the plan of arrangement contemplated by that certain Arrangement Agreement dated as of November 8, 2010, among Quest Software, Inc. (“Quest”), Bolts Acquisition Corporation, a Canadian corporation and a wholly owned subsidiary of Quest (“Acquisition Sub”) and BakBone. As a result of the arrangement contemplated by the arrangement agreement, BakBone will become a wholly owned subsidiary of Quest.

If the arrangement is completed, you will be entitled to receive $0.33 in cash, without interest, for each common share of BakBone that you own, and $1.291667 in cash, without interest, for each preferred share of BakBone that you own. If you hold options or warrants to acquire common shares, you will not be entitled to receive any consideration therefor in the arrangement. We cannot complete the arrangement unless all of the conditions to the completion of the arrangement are satisfied or waived by Quest, and the arrangement resolution is approved by the required votes of BakBone’s securityholders.

Our board of directors, none of whom have any interest in Quest, carefully reviewed and considered the terms and conditions of the arrangement. Based on its review, our board of directors has approved the arrangement agreement, determined that the arrangement agreement and the plan of arrangement are advisable, fair to the holders of common shares and preferred shares and in the best interests of BakBone and the shareholders of BakBone, authorized and approved the execution, delivery and performance of the arrangement agreement by BakBone and resolved to recommend that BakBone’s securityholders approve the arrangement resolution. As required by the Canada Business Corporations Act, the two directors elected by the holders of BakBone’s preferred shares did not vote on the foregoing. The directors that voted on the matter were unanimous in their approval.

THE BOARD OF DIRECTORS RECOMMENDS

THAT YOU VOTE “FOR” THE ARRANGEMENT RESOLUTION.

YOUR VOTE IS IMPORTANT.

In the materials accompanying this letter, you will find a notice of special meeting of securityholders, an information circular relating to the actions to be taken by our securityholders at the special meeting, a proxy card and a letter of transmittal. The information circular includes important information about the arrangement. We encourage you to read the entire information circular carefully.

All of our securityholders are cordially invited to attend the special meeting in person. Whether or not you plan to attend the special meeting, however, please complete, sign, date and return your proxy card in the enclosed envelope or appoint a proxy over the internet or by telephone as instructed in these materials. It is important that your securities be represented and voted at the special meeting. If you are a registered securityholder and attend the special meeting, you may vote in person as you wish, even though you have previously returned your proxy card or appointed a proxy over the internet or by telephone.

On behalf of our board of directors, I thank you for your support and urge you to vote “FOR” the arrangement resolution.

San Diego, California

December 6, 2010

i

Table of Contents

BAKBONE SOFTWARE INCORPORATED

9540 Towne Centre Drive, Suite 100

San Diego, CA 92121

858-450-9009

NOTICE OF SPECIAL MEETING OF SECURITYHOLDERS

TO BE HELD ON JANUARY 11, 2011

Pursuant to an interim order of the Court of Queen’s Bench of Alberta dated December 3, 2010, a special meeting of the securityholders of BakBone Software Incorporated, a Canadian corporation (“BakBone”), will be held at the offices of Burnet, Duckworth & Palmer LLP located at Suite 1400, 350 — 7th Avenue SW, Calgary, Alberta, at 8:00 a.m., local time, on January 11, 2011, for the following purposes:

The foregoing items of business are more fully described in the information circular accompanying this notice of meeting.

The board of directors of BakBone has fixed the close of business on November 30, 2010 as the record date for the determination of securityholders entitled to receive notice of and vote at the special meeting and at any adjournment or postponement thereof.

Our board of directors, none of whom have any interest in Quest, carefully reviewed and considered the terms and conditions of the arrangement. Based on its review, our board of directors has approved the arrangement agreement, determined that the arrangement agreement and the plan of arrangement are advisable, fair to the holders of common shares and preferred shares and in the best interests of BakBone and the shareholders of BakBone, authorized and approved the execution, delivery and performance of the arrangement agreement by BakBone and resolved to recommend that BakBone’s securityholders approve the arrangement resolution. As required by the Canada Business Corporations Act, the two directors elected by the holders of BakBone’s preferred shares did not vote on the foregoing. The directors that voted on the matter were unanimous in their approval.

THE BOARD OF DIRECTORS (OTHER THAN THE TWO DIRECTORS ELECTED BY THE

HOLDERS OF THE PREFERRED SHARES, WHO AS REQUIRED BY THE CANADA

BUSINESS CORPORATIONS ACT DID NOT VOTE) UNANIMOUSLY

RECOMMENDS THAT YOU VOTE “FOR” THE ARRANGEMENT

RESOLUTION. YOUR VOTE IS IMPORTANT.

San Diego, California

December 6, 2010.

Neither the United States Securities and Exchange Commission nor any state securities regulator has approved or disapproved the arrangement described in the information circular or determined if the information circular is adequate or accurate. Any representation to the contrary is a criminal offense.

ii

Table of Contents

ORIGINATING APPLICATION

Form 7

[Rule 3.8]

NOTICE

This application will be heard as shown below:

Basis for this claim:

iii

Table of Contents

Remedy sought:

Affidavit or other evidence to be used in support of this application:

Applicable Acts and Regulations:

iv

Table of Contents

INFORMATION CIRCULAR

Introduction

This information circular is furnished in connection with the solicitation of proxies by and on behalf of our management and board of directors for use at the special meeting of securityholders of BakBone to be held at the offices of Burnet, Duckworth & Palmer LLP, located at Suite 1400, 350 — 7th Avenue SW, Calgary, Alberta, at 8:00 a.m., local time, on January 11, 2011 or any adjournment or postponement of the special meeting. No person has been authorized to give any information or to make any representations other than those set forth in this information circular in connection with the solicitation of proxies made hereby, and, if given or made, such information must not be relied upon as having been authorized by BakBone or any other person.

Information contained in this information circular is given as of November 24, 2010 unless otherwise specifically stated.

Exchange rate information

All dollar amounts set forth in this information circular are in United States dollars, except where otherwise indicated. The following table sets forth: (i) the rates of exchange for United States dollars, expressed in Canadian dollars, in effect at the end of each of the periods indicated; (ii) the average of exchange rates in effect during such periods; and (iii) the high and low exchange rates during each such periods, in each case based on the noon rate as reported by the Bank of Canada.

On November 24, 2010, the noon rate for $1.00 United States was $1.0108 Canadian.

Please contact Kingsdale Shareholder Services Inc. at 1 (866) 581-1571,

if you have any questions, or require assistance in completing your form of proxy

Table of Contents

FORWARD-LOOKING STATEMENTS

This information circular contains “forward-looking statements” and “forward-looking information” (“forward looking statements”) within the meaning of applicable securities laws. All statements included in this information circular that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. These statements are based on certain assumptions we have made based on our experience and perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control. Any such projections or statements include our current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that such results will be achieved. Risks and uncertainties that may affect these forward-looking statements include, among other things, risks related to:

Except as required by applicable securities laws, we disclaim any intent or obligation to update any forward-looking statements contained herein, which speak as of the date hereof or, in the case of documents incorporated by reference, as of the date of those documents.

2

Table of Contents

SUMMARY INFORMATION

This summary highlights selected information from this information circular and may not contain all of the information that is important to you. To fully understand the arrangement contemplated by the arrangement agreement dated as of November 8, 2010, among Quest, Acquisition Sub and BakBone, and for a more complete description of the legal terms of the arrangement agreement, you should read carefully this entire information circular and the documents to which we refer. See “Where You Can Find More Information” (page 66). We have included page references in parentheses to direct you to a more complete description of the topics presented in this summary. The arrangement agreement is attached as Appendix A to this information circular. We encourage you to read the arrangement agreement as it is the legal document that governs the arrangement.

The Companies

BakBone Software Incorporated (page 15). BakBone is a global provider of software-based data protection solutions that enable the effective backup, recovery and overall availability of business critical data and information. BakBone develops, markets, sells and supports a portfolio of products sold under the NetVault^® brand name. Its products include award-winning Linux solutions, application-focused solutions to protect the Windows environment, and unique solutions to leverage emerging disk-based and virtual environments.

Quest Software, Inc. (page 15).

Quest delivers innovative products that help IT organizations get enhanced performance from their computing environment. Quest’s product areas are Application Management, Database Management, Windows Management and Virtualization Management. Quest’s innovative solutions make solving the toughest IT management problems easier, enabling more than 100,000 customers worldwide to save time and money across physical, virtual and cloud environments. Quest is a Delaware corporation.

Bolts Acquisition Corporation (page 15).

Acquisition Sub is a newly formed corporation incorporated under the Canada Business Corporations Act (the “CBCA”) and a wholly owned subsidiary of Quest that has been formed specifically for the purpose of participating in the arrangement transaction with BakBone.

Arrangement Consideration (page 42). Upon completion of the arrangement, (i) each outstanding common share of BakBone will be automatically transferred to Acquisition Sub in exchange for $0.33 in cash, without interest and subject to any applicable withholding taxes, assuming the shareholder has not properly exercised rights of dissent under Canadian law, (ii) each outstanding preferred share of BakBone will be automatically transferred to Acquisition Sub in exchange for $1.291667 in cash, without interest and subject to any applicable withholding taxes, and (iii) each stock option and each warrant to purchase common shares of BakBone that is not exercised prior to the completion of the arrangement (whether or not then vested) will automatically be cancelled at the completion of the arrangement and will not be entitled to any consideration under the arrangement.

Market Price of BakBone Common Shares (page 63). Our common shares are listed on the Over-the-Counter Bulletin Board under the ticker symbol “BKBO.OB”. On November 8, 2010, the last full trading day prior to the public announcement of the arrangement, our common shares closed at $0.25 per share. On December 3, 2010, the last full trading day prior to the date of this information circular, our common shares closed at $0.32 per share. Our share price can fluctuate broadly even over short periods of time. It is not possible to predict the actual price of our common shares immediately prior to the completion of the arrangement.

Reasons for the Arrangement (page 20). In the course of reaching its decision to approve the arrangement and the arrangement agreement, our board of directors considered possible change in control transactions involving us, including the arrangement described in this information circular, and considered a number of factors in its deliberations. Those factors are described below in this information circular.

3

Table of Contents

Recommendation of the BakBone Board of Directors in Favour of the Arrangement (page 29). Our board of directors (other than the two directors elected by the holders of preferred shares, who as required by the CBCA) has approved the arrangement agreement, determined that the arrangement agreement and the plan of arrangement are advisable, found the terms to be fair to the holders of common shares and preferred shares and in the best interests of BakBone and the shareholders of BakBone, authorized and approved the execution, delivery and performance of the arrangement agreement by BakBone, and resolved to recommend that BakBone’s securityholders approve the arrangement resolution. Accordingly, our board of directors recommends that you vote “FOR” for the arrangement resolution. As required by the CBCA, the two directors elected by the holders of BakBone’s preferred shares did not vote on the foregoing. The directors that voted on the matter were unanimous in their approval.

Opinion of Financial Advisor (page 23). On November 8, 2010, GCA Savvian Advisors, LLC, or GCA Savvian, financial advisor to BakBone, delivered its opinion to our board of directors. The opinion stated that, as of November 8, 2010, based upon and subject to the assumptions made, procedures followed, factors considered and limitations on the review undertaken set forth in the GCA Savvian opinion, the aggregate purchase price to Quest for the transaction of approximately $55.98 million represents a fair valuation of BakBone, and, based on such aggregate consideration, and in light of the amounts payable upon completion of the arrangement to holders of preferred shares and former shareholders of ColdSpark, Inc., the $0.33 per share consideration payable to holders of common shares is fair, from a financial point of view, to the holders of common shares.

The full text of that opinion, which sets forth the assumptions made, procedures followed, matters considered and limitations on the reviews undertaken by GCA Savvian in connection with its opinion, is attached as Appendix B to this information circular. GCA Savvian provided its opinion for the information and assistance of our board of directors in connection with its consideration of the arrangement from a financial point of view. The opinion of GCA Savvian is not a recommendation as to how any securityholder should vote or act with respect to any aspect of the arrangement. We urge you to read the opinion carefully in its entirety.

Interests of BakBone’s Directors and Executive Officers in the Arrangement (page 29). In considering the recommendation of our board of directors in favour of the arrangement, you should be aware that some members of our board of directors and our executive officers have interests in the arrangement that are different from, or are in addition to, the interests of our shareholders generally. The members of our board of directors were aware of these interests and considered them, among other matters, when they approved the arrangement agreement, the arrangement and the other transactions contemplated by the arrangement agreement.

Conditions to the Effectiveness of the Arrangement (page 51). The arrangement agreement provides that the parties are obligated to effect the arrangement only if a number of conditions are satisfied or, to the extent permitted by law, waived by both BakBone, as applicable, on one hand, and Quest and Acquisition Sub, as applicable, on the other hand.

Procedure for the Arrangement to become Effective (page 41).

Procedural Steps

The arrangement is proposed to be carried out pursuant to Section 192 of the CBCA. The following procedural steps must be taken in order for the arrangement to become effective:

4

Table of Contents

Securityholder Approvals

Pursuant to the interim order, the number of votes required to pass the arrangement resolution will be (i) not less than 66 ²/3% of the votes cast on the arrangement resolution by holders of common shares, holders of preferred shares, holders of options and holders of warrants present in person or by proxy at the special meeting and voting together as a single class and (ii) not less than 50.01% of the votes cast on the arrangement resolution by holders of common shares present in person or by proxy at the special meeting and voting together as a single class, other than the votes attached to common shares required under Multilateral Instrument 61-101 — Protection of Minority Securityholders in Special Transactions (“MI 61-101”) to be excluded in connection with the approval of the arrangement resolution. See “The Special Meeting — Votes Required; Abstentions and Broker Non-Votes” and “The Special Meeting — Voting by Our Directors, Executive Officers and Stockholders; Voting and Support Agreements”.

Concurrently with the execution of the arrangement agreement, certain shareholders of BakBone affiliated with JK&B Capital, the preferred shareholders of BakBone and each of BakBone’s directors (other than the two directors elected by the preferred shareholders) who owns common shares (all of the foregoing collectively representing 100% of the outstanding preferred shares and approximately 16% of the outstanding common shares as of the record date), entered into voting and support agreements with Quest and Acquisition Sub providing, among other things, that they will vote in favour of the arrangement resolution. On a combined basis, holders of approximately 30% of our outstanding common shares and preferred shares entitled to vote at the special meeting have entered into voting and support agreements with Quest.

Court Approval

The arrangement requires the Court’s approval. Prior to mailing this information circular, BakBone obtained the interim order of the Court authorizing and directing BakBone to call, hold and conduct the special meeting and to submit the arrangement to the BakBone’s securityholders for approval. A copy of the interim order is attached as Appendix C to this information circular. Subject to the approval of the arrangement resolution by BakBone’s securityholders, the hearing in respect of the final order is expected to take place on January 11, 2011 at the Calgary Courts Centre, 601 — 5^th Street S.W., Calgary, Alberta. See “The Arrangement Agreement — Effectiveness of the Arrangement — Court Approval”.

Conditions Precedent

The implementation of the arrangement is subject to a number of conditions being satisfied or waived by BakBone, or by Quest and Acquisition Sub at or prior to the completion of the arrangement. See “The Arrangement Agreement — Conditions to the Effectiveness of the Arrangement”.

No Solicitation by BakBone (page 48). We have agreed that we will not, except in certain circumstances, take certain actions (directly or indirectly) regarding an alternative acquisition proposal or change in any manner the approval by the BakBone board of directors of the arrangement agreement and the plan of arrangement or the recommendation of BakBone’s board of directors to our securityholders to approve the arrangement resolution.

Change in BakBone Board of Directors Recommendation (page 49). The arrangement agreement provides that at any time prior to the approval of the arrangement resolution by the BakBone securityholders, the BakBone board of directors may, if certain conditions are satisfied, effect a change in recommendation and the BakBone board of directors may approve or recommend, or propose publicly to approve or recommend, any superior acquisition proposal.

5

Table of Contents

Termination of the Arrangement Agreement (page 54). The arrangement agreement provides that it may be terminated at any time prior to the completion of the arrangement by either Quest and Acquisition Sub or BakBone in specified circumstances.

Termination Fee and Expenses (page 54). We must pay to Quest a $600,000 termination fee if the arrangement agreement is terminated by either Quest and Acquisition Sub or BakBone due to the arrangement resolution failing to receive the required vote of BakBone’s securityholders at the special meeting, together with the amount of Quest’s reasonable out-of-pocket expenses related to the arrangement agreement and arrangement up to a maximum of $800,000. We must pay to Quest a termination fee of $2,350,000 if the arrangement agreement is terminated in other specified circumstances together with the amount of Quest’s reasonable out-of-pocket expenses related to the arrangement agreement and arrangement up to a maximum of $800,000.

Rights of Dissent (page 32).

Pursuant to the interim order, registered holders of common shares have the right to dissent with respect to the arrangement resolution if Quest and BakBone, c/o Burnet, Duckworth & Palmer LLP, Suite 1400, 350 — 7^th Avenue SW, Calgary, Alberta, T2P 3N9, Attention: Jeff E. Sharpe, receive by 5:00 p.m. (Calgary time) on the business day prior to the date of the special meeting or any adjournment thereof, a written objection to the arrangement resolution and such holder complies with Section 190 of the CBCA, as modified by the interim order. Provided the arrangement becomes effective, each dissenting shareholder will be entitled to be paid the fair value of the common shares in respect of which the holder dissents in accordance with Section 190 of the CBCA, as modified by the interim order. See Appendices C and D of this information circular for a copy of the interim order and the provisions of Section 190 of the CBCA, respectively.

The statutory provisions covering the right to dissent are technical and complex. Failure to strictly comply with the requirements set forth in Section 190 of the CBCA, as modified by the interim order, may result in the loss of any right to dissent. Persons who are beneficial owners of common shares registered in the name of a broker, custodian, nominee or other intermediary who wish to dissent, should be aware that only the registered holder of such common shares is entitled to dissent. Accordingly, a beneficial owner of common shares desiring to exercise the right to dissent must make arrangements for such common shares beneficially owned to be registered in such holder’s name prior to the time the written objection to the arrangement resolution is required to be received by BakBone, or alternatively, make arrangements for the registered holder to dissent on such holder’s behalf. Pursuant to the interim order, a beneficial owner of common shares desiring to exercise the right to dissent may not exercise the right to dissent in respect of only a portion of such holder’s common shares. See “Rights of Dissent”.

It is a condition to Quest’s obligation to complete the arrangement that BakBone’s shareholders holding no more than 7% of the common shares shall have exercised rights of dissent in relation to the arrangement that have not been withdrawn as at the completion of the arrangement.

Certain Canadian Federal Income Tax Consequences of the Arrangement (page 35).

This information circular contains a summary of the principal Canadian federal income tax considerations applicable to certain holders of common shares in respect of the arrangement. See “Certain Canadian Federal Income Tax Considerations of the Arrangement”. The comments below are qualified in their entirety by reference to such summary.

Generally, a resident holder (as defined under the heading “Certain Canadian Federal Income Tax Considerations of the Arrangement”) who disposes of common shares under the arrangement will realize a capital gain (or capital loss) equal to the amount, if any, by which the amounts received for such common shares under the arrangement, net of any reasonable costs of disposition, exceed (or are exceeded by) the adjusted cost base to the resident holder of the common shares immediately before the disposition.

6

Table of Contents

Generally, a non-resident holder (as defined under the heading entitled “Certain Canadian Federal Income Tax Considerations of the Arrangement”) will not be subject to tax under the Income Tax Act (Canada) (the “Canadian Tax Act”) on any capital gain realized on a disposition of common shares under the arrangement, unless the common shares are “taxable Canadian property” to the non-resident holder for purposes of the Canadian Tax Act and the non-resident holder is not entitled to relief under an applicable income tax convention between Canada and the country in which the non-resident holder is resident.

Material U.S. Federal Income Tax Consequences of the Arrangement (page 38).

The conversion of common shares or preferred shares into the right to receive cash in the arrangement will be a taxable transaction. Generally, this means that our shareholders will recognize a capital gain or loss for U.S. federal income tax purposes equal to the difference between (1) the amount of cash such shareholder receives in the arrangement, and (2) such shareholder’s adjusted tax basis in such shareholder’s common shares or preferred shares (which is usually a shareholder’s original cost for the shares). Tax matters can be complicated and the tax consequences of the arrangement to you will depend on the facts of your own situation. You should consult your own tax advisor to understand fully the tax consequences of the arrangement to you.

Settlement Agreements (page 58).

In connection with entering into the arrangement agreement, BakBone also entered into two separate agreements with groups of its securityholders, both intended to facilitate the arrangement agreement and the arrangement.

Preferred Shareholders’ Agreement. Pursuant to an agreement among BakBone and our preferred shareholders, the preferred shareholders have agreed, concurrently with the consummation of the arrangement, to accept cash consideration equal to $1.291667 per share of preferred stock for the 18,000,000 shares of preferred stock held by them concurrently with the consummation of the arrangement, in lieu of the $1.49475 (CDN$1.50) per share amount to which they would otherwise be entitled as a result of the arrangement, as set forth in our charter documents (assuming an exchange rate of CDN$1.002900 to U.S.$1.00, as quoted by WM/Reuters on November 8, 2010).

ColdSpark Agreement. Pursuant to a Settlement Agreement and General Release of Claims between BakBone and the former shareholders of ColdSpark, Inc. (collectively, the “ColdSpark Shareholders”), the ColdSpark Shareholders have agreed, concurrently with the consummation of the arrangement, to accept $4,106,000 concurrently with the consummation of the arrangement, as payment in full of the remaining cash consideration owed by BakBone to the ColdSpark Shareholders pursuant to an Agreement and Plan of Merger dated as of May 11, 2009, pursuant to which BakBone acquired ColdSpark, Inc., in lieu of the $6,625,000 to which the ColdSpark Shareholders would otherwise be entitled thereunder. The completion of the arrangement will have the effect, under the terms of such Agreement and Plan of Merger, of accelerating the time at which the former ColdSpark Shareholders receive (i) the reduced cash amount described above and (b) certain additional deferred consideration in the form of BakBone common shares (the amount of which was not reduced as a result of this settlement agreement).

The Preferred Shareholders’ Agreement and ColdSpark Agreement also provide, respectively, for mutual general releases between BakBone and our preferred shareholders, and between BakBone and the ColdSpark Shareholders.

The Special Meeting of BakBone Securityholders (page 10).

Time, Date and Place. The special meeting will be held to consider and vote upon the proposal to approve the arrangement resolution, at the offices of Burnet, Duckworth & Palmer LLP, located at Suite 1400, 350 — 7th Avenue SW, Calgary, Alberta at 8:00 a.m., local time, on January 11, 2011.

Record Date and Voting Power. You are entitled to vote at the special meeting if you owned BakBone common shares, preferred shares or options or warrants to acquire common shares at the close of business on November 30, 2010, the record date for the special meeting. You will have one vote at the special meeting for

7

Table of Contents

each common share held by you, each preferred share held by you, each common share subject to options held by you that you would be entitled to acquire if such holder exercised all options held by you, without reference to any vesting provisions or exercise price, and one vote for each common share subject to warrants held by you that you would be entitled to acquire if such holder exercised all warrants held by such holder, without reference to any vesting provisions or exercise price, at the close of business on the record date.

Procedure for Voting. To vote, you can (1) complete, sign, date and return the enclosed proxy card, (2) appoint a proxy over the Internet or by telephone or (3) if you are a registered securityholder, attend the special meeting and vote in person. If your shares are held in “street name” by your broker, bank or other nominee, you should instruct your broker to vote your shares by following the instructions provided by your broker. Your broker will not vote your shares without instruction from you. Failure to instruct your broker to vote your shares will have the same effect as a vote “against” adoption of the arrangement agreement.

Required Vote. The approval of the arrangement resolution requires the affirmative vote of the holders of: (i) not less than 66 2/3% of the votes cast on the arrangement resolution by holders of common shares, holders of preferred shares, holders of options and holders of warrants present in person or by proxy at the special meeting and voting together as a single class and (ii) not less than 50.01% of the votes cast on the arrangement resolution by holders of common shares present in person or by proxy at the special meeting and voting together as a single class, other than the votes attached to common shares required under MI 61-101 to be excluded in connection with the approval of the arrangement resolution.

8

Table of Contents

RISK FACTORS ASSOCIATED WITH THE ARRANGEMENT

You should consider the following factors in conjunction with the other information included in this information circular.

If the arrangement is not completed, our business could be materially and adversely affected and our share price could decline.

The arrangement is subject to customary closing conditions, including the approval of the arrangement resolution by our securityholders and other closing conditions. Therefore, the arrangement may not be completed or may not be completed in the expected time period. If the arrangement agreement is terminated, the market price of our common shares will likely decline, as we believe that our market price reflects an assumption that the arrangement will be completed. In addition, our share price may be adversely affected as a result of the fact that we have incurred and will continue to incur significant expenses related to the arrangement that will not be recovered if the arrangement is not completed. As well, we must pay to Quest a $600,000 termination fee if the arrangement agreement is terminated by either Quest and Acquisition Sub or BakBone due to the arrangement resolution failing to receive the required vote of BakBone’s securityholders at the special meeting plus an expense reimbursement of up to $800,000. Moreover, if the arrangement agreement is terminated under certain other circumstances, we may be obligated to pay Quest a termination fee of up to $2,350,000 plus an expense reimbursement of up to $800,000. As a consequence of the failure of the arrangement to be completed, as well as of some or all of these potential effects of the termination of the arrangement agreement, our business and long-term prospects could be materially and adversely affected.

The fact that there is an arrangement pending could have an adverse effect on our business, revenue and results of operations.

While the arrangement is pending, uncertainty exists about our future. As a result of this uncertainty, customers may decide to delay, defer, or cancel purchases of our products pending completion of the arrangement or termination of the arrangement agreement. If these decisions represent a significant portion of our anticipated revenue, our results of operations and quarterly revenues could be substantially below our expectations.

In addition, while the arrangement in pending, we are subject to a number of risks that may adversely affect our business, revenue and results of operations, including:

9

Table of Contents

THE SPECIAL MEETING

We are furnishing this information circular to you in connection with the solicitation of proxies by our management and board of directors for use at the special meeting.

Date, Time and Place

The special meeting will be held at the offices of Burnet, Duckworth & Palmer LLP located at Suite 1400, 350 — 7^th Avenue SW, Calgary, Alberta at 8:00 a.m., local time, on January 11, 2011.

Purpose of the Special Meeting

The special meeting has been called for the following purposes:

Record Date; Securities Entitled to Vote; Quorum

Only registered securityholders at the close of business on November 30, 2010, the record date, are entitled to notice of and to vote at the special meeting. At the close of business on the record date: (i) 80,884,597 common shares were issued and outstanding and such shares were held by approximately 336 holders of record; (ii) 18,000,000 preferred shares were issued and outstanding and such shares were held by three holders of record; (iii) 6,178,558 options to acquire common shares were issued and outstanding and such options were held by approximately 75 holders of record; and (iv) 885,025 warrants to acquire common shares were issued and outstanding and such warrants were held by 1 holder of record. A quorum will be present at the special meeting if not less than two holders of common shares representing not less than 33 ¹/3% of the outstanding common shares are present in person or proxy. In the event that a quorum is not present at the special meeting, or there are not sufficient votes at the time of the special meeting to pass the arrangement resolution, it is expected that the special meeting will be adjourned or postponed to solicit additional proxies.

Procedure and Votes Required

The interim order provides that the holders of our common shares, preferred shares, and options and warrants to acquire common shares at the close of business on the record date will be entitled to receive notice of, to attend the special meeting and to vote on the arrangement resolution. Each such securityholder will be entitled to vote in accordance with the provisions set out below. In addition, the interim order provides that each of our common shares issued after the record date and prior to the date of the special meeting will be entitled to receive notice of and to vote at the special meeting.

The interim order provides:

10

Table of Contents

Voting by our Directors and Executive Officers; Voting and Support Agreements

Pursuant to the arrangement agreement, certain securityholders of BakBone, concurrent with the signing of the arrangement agreement, delivered to Quest, voting and support agreements pursuant to which such securityholders have agreed to vote all of their BakBone securities in favour of the arrangement resolution, subject to the terms of such agreements. The securityholders that entered into voting and support agreements (including all of our directors that hold common shares) hold or exercise control or direction over 18,000,000 preferred shares and 12,634,487 common shares, representing 100% of the outstanding preferred shares and approximately 16% of the outstanding common shares as of the record date. On a combined basis, holders of approximately 30% of our outstanding common shares and preferred shares entitled to vote at the special meeting have entered into voting and support agreements with Quest.

Solicitation of Proxies

This information circular is furnished in connection with the solicitation of proxies by the management of BakBone to be used at the special meeting. Solicitations of proxies will be primarily by mail, but may also be by newspaper publication, in person or by telephone, fax or oral communication by directors, officers, employees or agents of BakBone who will be specifically remunerated therefore. BakBone has retained Kingsdale Shareholder Services Inc. in connection with the solicitation of proxies. For this service, and other advisory services, Kingsdale will be paid a fee between CDN$45,000 and CDN$145,000 plus out-of-pocket expenses. All costs of the solicitation will be borne by BakBone.

11

Table of Contents

If you have questions about the information contained in this information circular or require assistance in completing your form of proxy, please call Kingsdale Shareholder Services Inc., our proxy solicitation agent, by:

The Exchange Tower 130 King Street West, Suite 2950

P.O. Box 361, Toronto, Ontario M5X 1E2; or

Appointment and Revocation of Proxies

Accompanying this information circular is a form of proxy: (i) in the case of registered holders of common shares, a form of proxy printed on white paper; (ii) in the case of registered holders of preferred shares, a form of proxy printed on yellow paper; (iii) in the case of registered holders of options, a form of proxy printed on blue paper; and (iv) in the case of registered holders of warrants, a form of proxy printed on green paper.

The persons named in the enclosed form of proxy are directors or officers of BakBone. You have the right to appoint someone else as your proxy holder. A securityholder desiring to appoint a person (who need not be a securityholder) to represent such securityholder at the special meeting other than the persons designated in the accompanying form of proxy may do so by inserting such person’s name in the blank space provided in the appropriate form of proxy and sending or delivering the completed proxy to the offices of Computershare Investor Services Inc. located at 9th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1 or by fax at 1-866-249-7775. A form of proxy must be received by Computershare Investor Services Inc. at least 48 hours (excluding Saturdays and holidays) prior to the time set for the special meeting or any adjournment thereof. Failure to so deposit a form of proxy shall result in its invalidation.

A securityholder who has given a form of proxy may revoke it as to any matter on which a vote has not already been cast pursuant to its authority by depositing an instrument in writing executed by such securityholder or by such securityholder’s attorney duly authorized in writing and deposited at

at any time up to and including the last day (other than a Saturday or holiday (a “business day”)) preceding the day of the special meeting, or any adjournment or postponement of such meeting.

Our board of directors has fixed the record date for the special meeting as at the close of business on November 30, 2010. The registered securityholders as of the record date are entitled to receive notice of, to attend and to vote at the special meeting. If you transfer your common shares after the record date but before the special meeting, you will (unless the transferee of such common shares demand, not later than 10 days before the special meeting, that the transferee’s name be included in the list of securityholders entitled to vote at the special meeting), retain your right to vote at the special meeting but will transfer the right to receive the arrangement consideration to the transferee of such common shares.

Beneficial Holders of Common Shares

The persons named in the accompanying forms of proxy will vote the securities in respect of which they are appointed in accordance with the direction of the securityholder appointing them. In the absence of such direction, such securities will be voted FOR the approval of the arrangement resolution.

12

Table of Contents

The information set forth in this section is of significant importance to many holders of common shares, as a substantial number of holders of common shares do not hold common shares in their own name. Holders of common shares who do not hold their common shares in their own name (referred to in this section as “beneficial holders”) should note that only proxies deposited by holders of common shares whose names appear on the records of our transfer agent as registered holders of common shares, can be recognized and acted upon at the special meeting. If common shares are listed in an account statement provided to a shareholder by a broker, then, in almost all cases, those common shares will not be registered in the shareholder’s name on the records of our transfer agent. Such common shares will more likely be registered in the name of the broker or an agent of the broker. In Canada, the vast majority of such common shares are registered under the name of CDS & Co. (the registration name for CDS Clearing and Depository Services Inc., which acts as a nominee for many Canadian brokerage firms). Common shares held by brokers or their nominees can only be voted (for or against resolutions) upon instructions of the beneficial holder. Without specific instructions, brokers/nominees are prohibited from voting securities for their clients. We do not know for whose benefit the securities registered in the names of CDS & Co. are held. Therefore, beneficial holders cannot be recognized at the special meeting for purposes of voting their securities in person or by way of proxy.

Applicable regulatory policies require intermediaries/brokers to seek voting instructions from beneficial holders in advance of the special meeting. Every intermediary/broker has its own mailing procedures and provides its own return instructions that should be carefully followed by beneficial holders in order to ensure that their common shares are voted at the special meeting. Often, the form of proxy supplied to a beneficial holder by its broker is identical to that provided to registered holders of common shares. However, its purpose is limited to instructing the registered shareholder on how to vote on behalf of the beneficial holder. The majority of brokers now delegate responsibility for obtaining instructions from clients to Broadridge Financial Solutions, Inc. (“Broadridge”). Broadridge typically mails a scannable voting instruction form in lieu of the form of proxy. Beneficial holders are asked to complete and return the voting instruction form to Broadridge by mail or facsimile or to follow specified telephone or internet voting procedures. Broadridge then tabulates the results of all instructions received and provides appropriate instructions respecting the voting of common shares to be represented at the special meeting. If a beneficial holder receives a voting instruction form from Broadridge it cannot be used as a proxy to vote common shares directly at the special meeting as the voting instruction forms must be returned to Broadridge or the telephone or internet procedures completed well in advance of the special meeting in order to have the common shares voted.

If you are a beneficial holder of common shares and wish to vote in person at the special meeting, please contact your broker or agent well in advance of the special meeting to determine how you can do so.

Signature of Proxy

The form of proxy must be executed by the shareholder or his attorney authorized in writing, or if the shareholder is a corporation, the form of proxy should be signed in its corporate name under its corporate seal by an authorized officer whose title should be indicated. A proxy signed by a person acting as attorney or in some other representative capacity should reflect such person’s capacity following his signature and should be accompanied by the appropriate instrument evidencing qualification and authority to act (unless such instrument has been previously filed with us).

Voting of Proxies

The persons named in the accompanying forms of proxy will vote the securities in respect of which they are appointed in accordance with the direction of the securityholder appointing them. In the absence of such direction, such securities will be voted FOR the approval of the arrangement resolution.

13

Table of Contents

Exercise of Discretion of Proxy

The enclosed forms of proxy confer discretionary authority upon the persons named therein with respect to amendments or variations to matters identified in the accompanying notice of meeting and this information circular and with respect to other matters that may properly come before the special meeting. At the date of this information circular, we know of no amendments, variations or other matters to come before the special meeting other than the matters referred to in the notice of meeting.

Householding of Proxy Materials

The Securities and Exchange Commission has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more shareholders sharing the same address by delivering a single proxy statement addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for shareholders and cost savings for companies.

This year, a number of brokers with account holders who are shareholders will be “householding” our proxy materials. A single proxy statement will be delivered to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that they will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate proxy statement and annual report, please notify your broker, direct your written request to BakBone Software Incorporated, Attn: Investor Relations, 9540 Towne Centre Drive, Suite 100, San Diego, California 92121 or call Investor Relations at (858) 450-9009. Securityholders who currently receive multiple copies of this information circular at their address and would like to request “householding” of their communications should contact their brokers.

14

Table of Contents

THE COMPANIES

BakBone Software Incorporated

BakBone (Over-the-Counter Bulletin Board: BKBO) is a global provider of software-based data protection solutions that enable the effective backup, recovery and overall availability of business critical data and information. We develop, market, sell and support a portfolio of products sold under the NetVault^® brand name. Our products include award-winning Linux solutions, application-focused solutions to protect the Windows environment, and unique solutions to leverage emerging disk-based and virtual environments. Our common shares are listed on the Over-the-Counter Bulletin Board under the ticker symbol “BKBO.OB”. We are incorporated under the CBCA. Our executive offices are located at 9540 Towne Centre Drive, Suite 100, San Diego, CA 92121. Our telephone number is (858) 450-9009. Our website is www.bakbone.com. Information contained on our website does not constitute a part of this information circular.

Quest Software, Inc.

Quest (Nasdaq: QSFT) delivers innovative products that help IT organizations get enhanced performance from their computing environment. Quest’s product areas are Application Management, Database Management, Windows Management and Virtualization Management. Quest’s innovative solutions make solving the toughest IT management problems easier, enabling more than 100,000 customers worldwide to save time and money across physical, virtual and cloud environments. Quest is a Delaware corporation. Quest’s business telephone number is (949) 754-8000 and its principal executive offices are located at 5 Polaris Way, Aliso Viejo, California 92656.

Bolts Acquisition Corporation

Bolts Acquisition Corporation, or Acquisition Sub, is a newly formed corporation incorporated under the CBCA and a wholly owned subsidiary of Quest. Acquisition Sub has represented to us that it has not engaged in any business activity other than in connection with the arrangement. Acquisition Sub has the same business telephone number as Quest, and its executive offices are located at Quest’s executive offices.

15

Table of Contents

THE ARRANGEMENT

The discussion under the sections of this information circular entitled “The Arrangement” and “The Arrangement Agreement” summarizes the material terms of the arrangement and certain related background information. Although we believe that the description covers the material terms of the arrangement, this summary may not contain all of the information that is important to you. We urge you to read this information circular, the arrangement agreement and the other documents referred to herein carefully for a more complete understanding of the arrangement.

Background of the Arrangement

As a regular part of our business, from time to time our board of directors and senior management have considered opportunities to expand and strengthen our technology, products, research and development capabilities and distribution channels, including opportunities through strategic acquisitions, business combinations, investments, licenses, development agreements and joint ventures. This has included consideration of whether it would be in the best interests of BakBone and our shareholders to continue as a separate company and expand through organic growth, acquisitions or a combination of the two, or to combine with or be acquired by another company.

The following chronology summarizes the key meetings and events that led to BakBone considering the strategic alternatives that ultimately led to the signing of the arrangement agreement. The chronology below covers only certain key events leading up to entry into the arrangement agreement and does not purport to catalogue every conversation between our representatives and other parties or representatives of other parties.

In November 2008, our board of directors invited representatives of GCA Savvian Advisors, LLC, or GCA Savvian, to present an overview of the mergers and acquisition marketplace generally and in relation to BakBone and its prospects. Following such presentation, the board of directors appointed a committee (the “committee”), comprised of directors Ian Bonner, Bruce Nakao and Douglas Lindroth, to oversee, with the assistance of management and such advisors as the committee deemed appropriate, an analysis and review of the valuation and prospects of BakBone’s business and equity value in light of the then-current and expected business and financial market environment.

In February 2009, the committee led a discussion by the board of directors regarding its analysis and review of the valuation and prospects of BakBone’s business and equity value, and the board of directors concluded that additional analysis of these items should be conducted.

On May 7, 2009, BakBone signed an engagement letter with GCA Savvian to act as BakBone’s exclusive financial advisor in connection with (i) an assessment of strategic alternatives for BakBone and (ii) a possible transaction, including a business combination, sale, minority investment in BakBone, or a debt or equity financing.

On May 11, 2009, BakBone acquired ColdSpark, Inc. (“ColdSpark”) for approximately $15.9 million, comprised of a combination of cash in the amount of $8.125 million and the rest in common shares of BakBone. As part of this transaction, both the cash component and the stock component were payable to the former ColdSpark Shareholders in several tranches, with all remaining stock and cash obligations of BakBone accelerated and payable upon any change in control of BakBone. The initial cash payment made by BakBone was $0.75 million, leaving BakBone with approximately $7.4 million of cash on hand at that time.

In August 2009, at a meeting of the board of directors, GCA Savvian presented a strategic review to the board of directors, and the committee made a presentation with respect to the prospects of BakBone’s business. The committee recommended that GCA Savvian be asked to begin a process to determine third-party interest in a business combination with, or an acquisition of BakBone. Following the discussion, the board of directors voted

16

Table of Contents

to instruct GCA Savvian to begin discussions with prospective buyers to determine interest and price for a potential sale, and to report back to the committee so that it and the board of directors could evaluate each expression of interest on a case-by-case basis.

During September and October 2009, GCA Savvian contacted 34 prospective acquirers on behalf of BakBone, including 22 strategic parties, three portfolio companies of financial sponsors, and nine financial parties. BakBone entered into confidentiality agreements with 32 of these prospective acquirers. Prospective purchasers were directed to submit preliminary proposals by October 19, 2009. Three parties initially submitted preliminary non-binding indications of interest, but subsequently, in the course of the process, two of those parties dropped out of the bidding.

On December 7, 2009, the remaining party that had submitted a preliminary non-binding indication of interest (“Company A”) delivered a letter of intent to GCA Savvian setting forth the terms of a proposed acquisition of BakBone. At a special meeting of the board of directors on December 11, 2009, following a presentation by GCA Savvian (which included a summary of the proposal from Company A and the attempts to date to secure alternative proposals), the board of directors determined to pursue the proposed transaction with Company A, as well as any other proposals that might be made by other bidders.

At the direction of the board of directors, counsel to BakBone prepared a form of arrangement agreement which was made available to representatives of Company A, and certain discussions ensued with respect to a possible strategic transaction between BakBone and Company A. In January 2010, Company A informed BakBone that it had determined not to pursue further a strategic transaction with BakBone.

At the same time that discussions with Company A were ongoing, senior management of BakBone, at the board of directors’ direction, had begun to investigate BakBone’s prospects for relisting its common shares on the Toronto Stock Exchange (“TSX”). At a meeting of the board of directors on November 19, 2009, BakBone’s senior management presented their analysis and recommendation regarding listing on the TSX. Senior management was directed to prepare all necessary filings, but to refrain from filing any application until obtaining further authority from the board of directors. For the next several months, management continued to investigate listing on the TSX, ultimately concluding, after consultation with counsel and representatives of the TSX, that BakBone would not qualify for listing on the TSX but that it may qualify for listing on the TSX Venture Exchange (“TSX-V”), an affiliated exchange available to companies with lower market capitalizations compared to the TSX requirements. At a meeting of the board of directors on March 15, 2010, senior management reported these conclusions and was instructed to continue preparations for applying for a listing on the TSX-V.

Effective April 6, 2010, Mr. Johnson ceased to be the Chief Executive Officer of BakBone, and resigned as a member of the board of directors, and the board of directors appointed Mr. Martin as BakBone’s Interim Chief Executive Officer.

At a meeting of the board of directors on April 16, 2010, Mr. Martin discussed the results of management’s assessment of the state of BakBone’s business, covering such matters as near-term financial outlook, the performance of ColdSpark and the prospects for listing the common shares on the TSX-V. It was noted that BakBone would require exemptive relief from the Listings Committee of the TSX-V in order to be listed and there was considerable uncertainty as to whether such relief would be granted. The discussion also included an analysis of cost-cutting measures taken in the base business of BakBone (excluding ColdSpark), the ColdSpark forecast and pipeline, prospective bookings, consolidated cash balances and strategic alternatives for the ColdSpark business. Mr. Martin also presented management’s recommendation to shut down the ColdSpark business as soon as reasonably practicable, and to pursue negotiations with the representative of the former ColdSpark Shareholders for a possible settlement and compromise of certain indemnity rights and related claims that BakBone might have arising out of the original acquisition, including a possible offset of such rights and claims against the outstanding obligations of BakBone to the former ColdSpark Shareholders. Management believed that it was necessary to shut down the ColdSpark business in order to eliminate the risk of ColdSpark’s

17

Table of Contents

comparatively longer sales cycle, stabilize cash utilization for BakBone and to position BakBone to generate enhanced returns for shareholders from its core storage and data protection business.

On April 21, 2010, the board of directors reconvened to discuss management’s analysis of the potential legal strategies associated with the proposed disposition of the ColdSpark business. After a thorough discussion, management was directed to proceed with discussions with the ColdSpark shareholder representative and prepare for the closure of the ColdSpark business. The board of directors also discussed capital strategies and determined to suspend all listing activities. On May 11, 2010, the board of directors directed management to discontinue ColdSpark operations in accordance with management’s plan, and to instruct GCA Savvian to seek other strategic alternatives for BakBone.

Following its receipt of these instructions, GCA Savvian made contact with 21 potential acquirers (many of which had been among the parties contacted in September and October 2009), including 11 strategic parties and 10 financial parties. Those contacts resulted in 11 of these parties initially expressing some degree of interest in continuing to participate in a process with BakBone. Certain of these parties conducted initial due diligence throughout late June, and on June 30, 2010, GCA Savvian contacted the remaining interested parties and asked for written indications of interest to be delivered in advance of a scheduled meeting of the board of directors on July 13, 2010.

At a meeting of the board of directors on July 13, 2010, GCA Savvian reported that it had received one written proposal, three verbal indications of interest, and four reports of on-going due diligence from the parties that had submitted initial expressions of interest. The interested parties continued to conduct due diligence, and GCA Savvian asked the parties to submit further proposals by August 13, 2010, in time for a meeting of the board of directors scheduled for August 17, 2010. On August 13, 2010, Quest submitted a non-binding proposal indicating interest at an enterprise value lower than the consideration ultimately payable by Quest under the arrangement, and on August 16, 2010, another party (“Company B”) submitted a written proposal representing an enterprise value higher than Quest’s August 13, 2010 proposal.

At the meeting of the board of directors on August 17, 2010, GCA Savvian was directed to instruct the interested parties to return with best and final proposals by the close of business on August 20, 2010. In addition, the board of directors reviewed a proposal submitted by a third party (“Company C”) which contemplated an equity investment in BakBone in exchange for the issuance by BakBone of a number of its common shares sufficient to result in Company C obtaining fully diluted ownership of approximately 55% of BakBone, indicating an implied enterprise value lower than the consideration payable by Quest under the arrangement.

On August 18, 2010, a representative of BakBone provided to Quest a form of arrangement agreement that had been prepared by BakBone’s counsel.

On August 20, 2010, Company B confirmed its expression of interest at the same enterprise value as its August 16, 2010 proposal. On August 23, 2010, Quest submitted an expression of interest at an enterprise value of $55 million, depending on findings during due diligence, an amount higher than Company B’s August 16, 2010 proposal. Based on the foregoing, at the board of directors meeting on August 23, 2010, the board of directors voted to move forward in exclusive discussions with Quest.

On August 30, 2010, BakBone and Quest entered into a 28-day exclusivity agreement and between August 30, 2010 and September 27, 2010, Quest conducted additional due diligence on BakBone.

On September 27, 2010, the board of directors agreed to grant Quest’s request for a two-week extension of the period of exclusivity, through October 11, 2010.

On October 2, 2010, counsel to Quest provided counsel to BakBone with preliminary comments on the form of arrangement agreement that had been prepared by BakBone’s counsel. Between October 2, 2010 and

18

Table of Contents

November 1, 2010, the parties and their respective representatives negotiated the terms of the arrangement and ancillary documents, including the terms of the voting and support agreements. During this period, the parties and their counsel exchanged multiple drafts of the arrangement agreement, the voting and support agreements and other deal documentation, and identified and resolved multiple issues, including with respect to covenants, closing conditions and other material terms, including the scope of the “deal protections” afforded to Quest in the arrangement agreement (including the non-solicitation covenant, limitations on the ability of BakBone’s board of directors to change its recommendation in favor of the arrangement, the size of the termination fees and expense reimbursement payable to Quest in the event the arrangement agreement were to be terminated under certain circumstances, and Quest’s match right in the event that a third party were to make an unsolicited superior proposal to acquire BakBone).

In the course of their negotiation of the arrangement agreement, representatives of BakBone and representatives of Quest also continued to negotiate the aggregate purchase price for the transaction. In a meeting on October 25, 2010 between such representatives, it was agreed that, subject to the completion of due diligence and the negotiation of a mutually satisfactory arrangement agreement, and taking into account the payments required upon consummation of the transaction including the ColdSpark settlement and the anticipated amount of excess cash that BakBone would have upon the completion of the arrangement, the aggregate purchase price under the arrangement would be $55.98 million. Contemporaneously with these discussions, representatives of BakBone held discussions with representatives of the holders of its preferred shares and representatives of the former ColdSpark Shareholders, with a view toward negotiating a reduction in the amounts that would otherwise be payable to each of such groups in any transaction with Quest, with the goal of maximizing the cash amount per share that would be available from the Quest transaction to holders of common shares generally. As discussed above, BakBone had previously explored the possibility of an offset of its potential rights and claims against the former shareholders of ColdSpark against the outstanding obligations of BakBone to the former ColdSpark Shareholders. As a result of these discussions (a) the holders of BakBone’s preferred shares ultimately agreed to accept $1.291667 per preferred share in the arrangement, in lieu of the $1.49475 (CDN$1.50) per share amount to which they would otherwise have been entitled, as set forth in our charter documents (assuming an exchange rate of CDN$1.002900 to $1.00, as quoted by WM/Reuters on November 8, 2010), and (b) the former ColdSpark Shareholders ultimately agreed to accept $4,106,000 concurrently with the consummation of the arrangement, as payment in full of the remaining cash consideration owed by BakBone to such former ColdSpark shareholders in lieu of the $6,625,000 to which such former ColdSpark Shareholders would otherwise be entitled thereunder pursuant to the Agreement and Plan of Merger dated as of May 11, 2009, pursuant to which BakBone acquired ColdSpark, Inc. The completion of the arrangement will have the effect, under the terms of such Agreement and Plan of Merger, of accelerating the time at which the former ColdSpark Shareholders receive (i) the reduced cash amount described above and (b) certain additional deferred consideration in the form of BakBone common shares (the amount of which was not reduced as a result of the foregoing discussions). In connection with both of these arrangements, it was agreed that there would be mutual releases between BakBone and each group of shareholders with respect to, among other things, all claims that any of them might have arising out of their respective investments in BakBone.

At a meeting of the board of directors on November 1, 2010, Mr. Martin updated the board of directors on the negotiations with Quest and presented management’s recommendation that the board of directors approve BakBone entering into the arrangement agreement with Quest and the settlement agreements with the holders of its preferred shares and the former ColdSpark Shareholders, and that the board of directors approve a voting and support agreement. At the meeting, representatives of GCA Savvian delivered GCA Savvian’s oral opinion, subsequently confirmed in writing as of November 8, 2010, that, as of the date of such opinion and subject to the assumptions made, procedures followed, factors considered and limitations on the review undertaken described therein, the aggregate purchase price to Quest for the transaction, or the “Aggregate Consideration,” represents a fair valuation of BakBone, and, based on the Aggregate Consideration, and in light of the payments which are due to holders of preferred shares and certain former shareholders of ColdSpark, the $0.33 per share to be received by the holders of common shares, or the “Per Share Consideration”, is fair, from a financial point of view, to the holders of common shares. After receiving GCA Savvian’s oral opinion, members of BakBone

19

Table of Contents

management, representatives of GCA Savvian and Messrs. Harroch and Frasch excused themselves from the meeting in order to allow the other members of the board of directors to discuss the proposed transactions in an in camera session. Following full discussion, the remaining members of the board of directors unanimously voted to authorize management to continue to negotiate the proposed transaction with Quest. Members of management, representatives of GCA Savvian and the two directors elected to the board of directors by the holders of our preferred shares, Mr. Harroch and Mr. Richard Frasch, then, re-joined the meeting.

Between November 1, 2010 and November 7, 2010, the parties and their respective representatives continued to negotiate certain terms of the arrangement and related transactions. In a meeting of the board of directors convened on November 7, 2010 and continued on November 8, 2010, the board of directors considered the proposed final terms of the arrangement and related transactions with Quest. Messrs. Harroch and Frasch did not participate in the meeting in order to allow the other members of the board of directors to discuss the proposed transactions in an in camera session. After full discussion, the board of directors (other than Messrs. Harroch and Frasch):

Following the conclusion of the board of directors meeting, BakBone and Quest finalized the arrangement agreement, the settlement agreements, the voting and support agreements and all related documentation, and the parties entered into such agreements.

Before the opening of trading on the Over-the-Counter Bulletin Board on November 9, 2010, BakBone and Quest issued a joint press release announcing the execution of the arrangement agreement.

Reasons for the Arrangement

Reasons for the Recommendation of the Board of Directors

In considering the arrangement with Quest, the board of directors consulted with GCA Savvian regarding the financial aspects of the arrangement and with representatives of Cooley LLP and Burnet, Duckworth & Palmer LLP, outside counsel to BakBone, regarding the fiduciary duties of the members of the board of directors, legal due diligence matters and the terms of the arrangement agreement and related agreements. Following these consultations, and based on the factors discussed below, the board of directors approved the transaction, authorized BakBone to enter into the arrangement agreement, and resolved to recommend that BakBone’s securityholders approve the arrangement resolution.

In the course of reaching the foregoing determinations and recommendation, the board of directors considered a number of potentially positive factors in its deliberations, including the following:

20

Table of Contents

21

Table of Contents

The board of directors also considered a number of potentially countervailing factors in its deliberations concerning the arrangement, including the following:

Our board of directors also considered the interests of our directors and executive officers in the arrangement which existed as of the time of the board of directors’ determination and recommendation, which are described herein under “The Arrangement — Interests of BakBone’s Directors and Executive Officers in the Arrangement.”

The preceding discussion is not meant to be an exhaustive description of the information and factors considered by our board of directors but is believed to address the material information and factors considered. In view of the wide variety of factors considered in connection with its evaluation of the arrangement and the complexity of these matters, the board of directors did not find it practicable to, and did not, quantify or otherwise attempt to assign relative weights to the various factors considered in reaching its determination. In considering the factors described above, individual members of the board of directors may have given different weight to different factors.

After its consideration of the preceding factors and deliberations, our board of directors (excluding the two directors elected by the holders of preferred shares, who did not vote) approved the arrangement agreement, determined that the arrangement agreement and the plan of arrangement are advisable, fair to the holders of common shares and preferred shares and in the best interests of BakBone and the shareholders of BakBone, authorized and approved the execution, delivery and performance of the arrangement agreement by BakBone, and resolved to recommend that BakBone’s securityholders approve the arrangement resolution.

22

Table of Contents

Opinion of Financial Advisor

BakBone has retained GCA Savvian Advisors, LLC, or GCA Savvian, to act as its financial advisor in connection with the arrangement. On November 8, 2010, GCA Savvian delivered to the board of directors its written opinion that, as of that date, the aggregate purchase price to Quest for the transaction of approximately $55.98 million, or the “Aggregate Consideration”, represents a fair valuation of BakBone, and, based on the Aggregate Consideration, and in light of the payments to preferred shareholders and certain former shareholders of ColdSpark, which GCA Savvian understood are due to the recipients thereof, the $0.33 per share to be received by holders of common shares, or the “Per Share Consideration,” is fair from a financial point of view to the holders of common shares.

BakBone determined the consideration its securityholders would receive in the transaction through negotiations with Quest. Except as described below, BakBone did not impose any limitations on GCA Savvian with respect to the investigations made or procedures followed in rendering its opinion. Further, no opinion or view was expressed as to the relative merits of the arrangement in comparison to other strategies or transactions that might be available to BakBone or in which BakBone might engage or as to the underlying business decision of BakBone to proceed with or effect the arrangement.

The full text of the written opinion that GCA Savvian delivered to the board of directors, which describes, among other things, the assumptions made, procedures followed, factors considered, and limitations on the review undertaken by GCA Savvian, is attached as Appendix B to this information circular. You should read this opinion carefully in its entirety. However, the following summary of the GCA Savvian opinion has been included in this information circular, which is qualified in its entirety by reference to the full text of the opinion attached as Appendix B.

GCA Savvian provided its opinion to the board of directors for the benefit and use of the board of directors in connection with and for purposes of its evaluation of the Aggregate Consideration and the Per Share Consideration from a financial point of view. GCA Savvian’s opinion does not constitute a recommendation to any securityholder as to how to vote or act in connection with the arrangement. The GCA Savvian opinion was approved by a fairness committee of GCA Savvian.

The opinion addresses only whether the Aggregate Consideration represents a fair valuation of BakBone, and, based on the Aggregate Consideration, and, in light of the payments to preferred shareholders and certain former shareholders of ColdSpark, which GCA Savvian understood are due to the recipients thereof, whether the Per Share Consideration is fair, from a financial point of view, to the holders of common shares. It does not address the relative merits of the arrangement as compared to any alternatives to the arrangement or any other aspect of the arrangement. Further, it does not address BakBone’s underlying decision to proceed with or effect the arrangement. Moreover, it does not address the fairness of the arrangement to, or any consideration to be received in connection therewith by, the holders of preferred shares or the former ColdSpark Shareholders, nor does it address the relative value or relative fairness of the payments to the holders of preferred shares, the former ColdSpark Shareholders, and the holders of common shares, including, without limitation, whether in relation to the Aggregate Consideration, Per Share Consideration, or each other. Further, the opinion does not address the fairness of the amount or nature of the compensation to any of BakBone’s officers, directors or employees, or class of such persons, including, without limitation, in relation to the Aggregate Consideration or the Per Share Consideration.

In connection with its opinion, GCA Savvian:

23

Table of Contents

In preparing its opinion, GCA Savvian did not assume any obligation to independently verify the information referred to above. Instead, with BakBone’s consent, GCA Savvian relied on the information being accurate and complete in all material respects. GCA Savvian also made the following assumptions, in each case with BakBone’s consent:

In addition, for purposes of GCA Savvian’s opinion:

24

Table of Contents

The following represents a brief summary of the material financial analyses performed by GCA Savvian in connection with providing its opinion to BakBone’s board of directors. Some of the summaries of financial analyses performed by GCA Savvian include information presented in tabular format. In order to fully understand the financial analyses performed by GCA Savvian, BakBone’s shareholders should read the tables together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data set forth in the tables without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by GCA Savvian.

Comparable Company Analysis. Based on public and other available information, GCA Savvian calculated the multiples of enterprise value, which GCA Savvian defined as equity value, plus debt, preferred stock, minority interests and capital lease obligations, less cash and cash equivalents, to estimated calendar year 2010 and 2011 revenue and earnings before interest, taxes, stock-based compensation, depreciation and amortization (EBITDA) for selected companies in the software industry with equity market capitalizations of less than $250 million, based on the closing prices of common shares as of October 29, 2010. GCA Savvian believes that the eleven companies listed below have similar financial profiles to that of BakBone, but noted that none of these companies have the same management, composition, size, operations, or combination of businesses as BakBone:

While the comparable company analysis compared BakBone to eleven companies in the software industry with equity market capitalizations of less than $250 million, based on the closing prices of common shares as of October 29, 2010, GCA Savvian did not include every company that could be deemed to be a participant in this same industry, in the specific sectors of this industry, or with equity market capitalizations of less than $250 million, based on the closing prices of common shares as of October 29, 2010.

25

Table of Contents

Based on these comparable companies, GCA Savvian determined a range of potential trading multiples of revenue and EBITDA for BakBone that it determined, based on comparative analysis and its judgment, were most applicable to BakBone. The following table sets forth the multiples indicated by this analysis, the implied enterprise value of BakBone, and the implied per share values to common shareholders:

Comparable Company Analysis

GCA Savvian noted that the proposed enterprise value of $55 million, based upon the Aggregate Consideration and BakBone’s estimated cash and debt, and Per Share Consideration were within or above the range of implied enterprise value and per share value, respectively, for each of CY2010E Revenue, CY2011E Revenue, CY 2010E EBITDA and CY 2011E EBITDA.

Comparable Transactions Analysis. Based on public and other available information, GCA Savvian calculated the multiples of enterprise value to last-twelve-months (LTM) and next-twelve-months (NTM) revenue and LTM and NTM EBITDA for the following selected fourteen comparable acquisitions of software companies of similar transaction size and with similar financial profile to BakBone that have been consummated or announced since January, 2007:

No company or transaction used in the comparable transactions analyses is identical to BakBone or the arrangement. Accordingly, an analysis of the results of the foregoing is not mathematical; rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading value of the companies and transactions to which BakBone and the arrangement, respectively, are being compared.

26

Table of Contents

Based on these comparable transactions, GCA Savvian determined a range of potential trading multiples of revenue and EBITDA for BakBone that it determined, based on comparative analysis and its judgment, were most applicable to BakBone. The following table sets forth the multiples indicated by this analysis, the implied enterprise value of BakBone, and the implied per share values to holders of common shares:

Comparable Transactions Analysis

GCA Savvian noted that the proposed enterprise value and Per Share Consideration were within the range of implied enterprise value and per share value, respectively, for each of LTM Revenue, NTM Revenue, LTM EBITDA and NTM EBITDA.

Discounted Cash Flow Analysis. GCA Savvian used free cash flow forecasts of BakBone for the last calendar year quarter of 2010 and the calendar years 2011 through 2014, as estimated by BakBone’s management, to perform a discounted cash flow analysis. In conducting this analysis, GCA Savvian assumed that BakBone would perform in accordance with these forecasts provided by BakBone’s management. GCA Savvian estimated the perpetual cash flows by applying annual growth rates of (2.0%) to 2.0% to BakBone’s estimated 2014 free cash flow and then discounted the cash flows projected through 2014 and the perpetual cash flows to present values using rates ranging from 15.0% to 20.0%. This method of analysis indicated a range of enterprise values from $44 million to $66 million, each of which were then decreased by BakBone’s estimated net debt and payments to preferred shareholders and certain former shareholders of ColdSpark, to calculate a range of equity values. These equity values were then divided by BakBone’s common shares outstanding to calculate implied equity values per share ranging from $0.21 to $0.46. GCA Savvian noted the proposed Aggregate Consideration and Per Share Consideration with within the range of implied enterprise and equity values, respectively, of the discounted cash flow analysis.

Premiums Paid Analysis. GCA Savvian reviewed the consideration paid in 918 acquisitions involving an enterprise value greater than $25 million announced between October 28, 2006 and October 28, 2010. GCA Savvian calculated the premiums paid in these transactions over the applicable stock price of the target company one day and thirty days prior to the announcement of the proposed acquisition, and calculated the implied per share value to common shareholders based on third and first quartile metrics.

Premiums Paid Analysis

GCA Savvian noted that the premium implied by the arrangement was 120%, based on the closing price of BakBone’s common shares one day and thirty days prior to October 29, 2010.

27

Table of Contents

Miscellaneous

The foregoing description is only a summary of the analyses and examinations that GCA Savvian deems material to its opinion. It is not a comprehensive description of all analyses and examinations actually conducted by GCA Savvian. The preparation of a fairness opinion necessarily is a complex process involving subjective judgment and is not necessarily susceptible to partial analysis or summary description. GCA Savvian believes that its analyses and the summary set forth above must be considered as a whole and that selecting portions of its analyses and of the factors considered, without considering all analyses and factors, would create an incomplete view of the process underlying the analyses set forth in its presentation to us. In addition, GCA Savvian may have given various analyses more or less weight than other analyses, and may have deemed various assumptions more or less probable than other assumptions. The fact that any specific analysis has been referred to in the summary above is not meant to indicate that this analysis was given greater weight than any other analysis. Accordingly, the ranges of valuations resulting from any particular analysis described above should not be taken to be the view of GCA Savvian with respect to the actual value of BakBone.

In performing its analyses, GCA Savvian made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of BakBone. The analyses performed by GCA Savvian are not necessarily indicative of actual values or actual future results, which may be significantly more or less favourable than those suggested by these analyses. These analyses were prepared solely as part of the analysis performed by GCA Savvian with respect to its opinion and were provided to the board of directors in connection with the delivery of the GCA Savvian opinion that the Aggregate Consideration represents a fair valuation of BakBone, and, based on the Aggregate Consideration, and in light of the payments which are due to preferred shareholders and certain former shareholders of ColdSpark, the Per Share Consideration is fair, from a financial point of view, to the holders common shares. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or the prices at which any securities may trade at any time in the future.

As described above, GCA Savvian’s opinion and presentation were among the many factors the board of directors of BakBone took into consideration in making its determination to approve, and to recommend that its securityholders approve, the arrangement, and should not be viewed as determinative of the views of the board of directors or management with respect to the arrangement, the Aggregate Consideration or the Per Share Consideration. GCA Savvian did not recommend any specific consideration to the board of directors or state that any specific Aggregate Consideration or Per Share Consideration constituted the only appropriate Aggregate Consideration or Per Share Consideration for the arrangement.

BakBone has agreed to pay GCA Savvian an aggregate fee currently estimated to be approximately $1.25 million, a significant portion of which is contingent on the completion of the arrangement (or another transaction). Further, regardless of whether the arrangement is completed, BakBone has agreed to reimburse GCA Savvian for its reasonable out-of-pocket expenses and to indemnify GCA Savvian, its affiliates, and their respective partners, directors, officers, agents, consultants, employees and controlling persons against specific liabilities, including liabilities under securities laws of the United States and Canada. In addition, in December 2008 and July 2009, GCA Savvian advised Quest in connection with repurchases of its shares by means of tender offers for which it received customary compensation.

Except as described above, GCA Savvian has had no other material relationships with BakBone or Quest in the past two years. GCA Savvian and its affiliates may in the future provide financial advisory and/or financing services to BakBone and/or Quest. GCA Savvian was selected by our board of directors based on GCA Savvian’s qualifications, expertise and reputation. GCA Savvian and its affiliates are engaged in investment banking and financial advisory services, principal investment and other financial and non-financial activities and services for various persons and entities. In the ordinary course of these activities and services, GCA Savvian and its affiliates may at any time make or hold long or short positions and investments, as well as trade or effect transactions, in the equity, debt and other securities (or related derivative securities) and financial instruments (including bank loans and other obligations) of BakBone or Quest or any of their respective affiliates or any

28

Table of Contents

currency or commodity that may be involved in the transaction contemplated by the arrangement agreement for their own account.

Recommendation of the Board of Directors

At a special meeting of our board of directors held on November 7 and 8, 2010, our board of directors (excluding the two directors elected by the holders of preferred shares, who did not vote) approved the arrangement agreement, determined that the arrangement agreement and the plan of arrangement are advisable, fair to the holders of common shares and preferred shares and in the best interests of BakBone and the shareholders of BakBone, authorized and approved the execution, delivery and performance of the arrangement agreement by BakBone and resolved to recommend that BakBone’s securityholders approve the arrangement resolution. The two directors elected to the board of directors by the holders of our preferred shares were not present for the vote on, and abstained from voting on, the arrangement agreement and the plan of arrangement, as required pursuant to the CBCA. The directors that voted on the matter were unanimous in their approval.

Accordingly, our board of directors (excluding the two directors elected by the holders of the preferred shares, who did not vote) unanimously recommends that our securityholders vote “FOR” the arrangement resolution.

Interests of BakBone’s Directors and Executive Officers in the Arrangement

In considering the recommendation of our board of directors in favour of the arrangement, you should be aware that certain members of our board of directors and our executive officers have interests in the arrangement different from, or in addition to, the interests of our shareholders generally. The members of our board of directors were aware of these interests and considered them, among other matters, when they approved the arrangement agreement, the arrangement and the other transactions contemplated by the arrangement agreement. These interests include the following:

Change in Control and Retention Agreements with our Executive Officers

The following is a description of our retention and change in control agreements with our executive officers. As discussed below, each agreement entitles the executive officer to certain rights in the event of the executive’s termination without cause, or for good reason by the executive, upon a “change in control” or within a specified period of time following a “change in control.” For purposes of these agreements, a “change in control” will occur if the arrangement is consummated. “Cause” is generally defined in each agreement to mean that the executive has: (i) failed to substantially perform his material duties, (ii) refused to comply with a material direction from the chief executive officer and/or the board of directors, (iii) materially breached any other agreement with us or the terms of our employee policies, (iv) engaged in conduct which brings us into material public disgrace or disrepute, (v) committed a felony or certain other crimes, or any other act involving dishonesty, material disloyalty or fraud with respect to us, or (vi) been convicted or pleaded guilty or nolo contendere to any felony.

Each of the change in control agreements described below provides for the immediate vesting of all options to purchase our common shares held by the executive in the event of a change in control. However, all of our outstanding stock options, including the stock options held by our executive officers, has an exercise price above the per share consideration to be paid to our holders of common shares in the arrangement. As a result, our executive officers will not receive any consideration in the arrangement as a result of the acceleration of their stock options. In connection with the arrangement agreement, all stock options, including all options held by our executive officers and directors, will be cancelled upon the consummation of the arrangement.

29

Table of Contents

Agreements with Steve Martin, Interim Chief Executive Officer and Chief Financial Officer

Pursuant to the terms of our change in control agreement entered into with Mr. Martin, if within twelve months following the completion of the arrangement, Mr. Martin is terminated without cause or terminates voluntarily for good reason, he will be entitled to receive: (i) payment of severance in the amount equal to nine months of base salary in effect as of the termination date; (ii) continuation of health care benefits for a nine-month period following the termination date; and (iii) acceleration of vesting of all unvested options to purchase common shares. Mr. Martin’s current annual base salary is $250,000.

Pursuant to the terms of our retention agreement with Mr. Martin, upon consummation of the arrangement, Mr. Martin is entitled to receive a lump sum cash retention bonus of $250,000 and an additional lump sum payment of $250,000 if, within twelve months following the consummation of the arrangement, Mr. Martin is either terminated without cause or voluntarily terminates his employment for good reason. Mr. Martin’s retention agreement also provides that he will be entitled to a lump sum cash retention bonus of $125,000 if a change in control transaction does not occur and he remains continuously employed with us through April 30, 2011, and an additional lump sum cash retention bonus of $125,000 if a change in control transaction does not occur and he remains continuously employed with us through April 30, 2012.

Agreements with Dan Woodward, Senior Vice President of Product Delivery

Pursuant to the terms of our change in control agreement with Mr. Woodward, if within twelve months following the completion of the arrangement, Mr. Woodward is terminated without cause or terminates voluntarily for good reason, he will be entitled to receive: (i) payment of severance in the amount equal to nine months of base salary in effect as of the termination date; (ii) continuation of health care benefits for a nine-month period following the termination date; and (iii) acceleration of vesting of all unvested options to purchase common shares. Mr. Woodward’s current annual base salary is $235,000.

Pursuant to the terms of our retention agreement with Mr. Woodward, upon consummation of the arrangement, Mr. Woodward is entitled to receive a lump sum cash retention bonus of $146,875 and an additional lump sum payment of $146,875 if, within twelve months following the consummation of the arrangement, Mr. Woodward is either terminated without cause or voluntarily terminates his employment for good reason. Mr. Woodward’s retention agreement also provides that he will be entitled to a lump sum cash retention bonus of $73,437.50 if a change in control transaction does not occur and he remains continuously employed with us through April 30, 2011, and an additional lump sum cash retention bonus of $73,437.50 if a change in control transaction does not occur and he remains continuously employed with us through April 30, 2012.

Agreements with Robert Wright, Senior Vice President and General Counsel

Pursuant to the terms of our change in control agreement with Mr. Wright, if within twelve months following the completion of the arrangement, Mr. Wright is terminated without cause or terminates voluntarily for good reason, he will be entitled to receive: (i) payment of severance in the amount equal to nine months of base salary in effect as of the termination date; (ii) continuation of health care benefits for a nine-month period following the termination date; and (iii) acceleration of vesting of all unvested options to purchase common shares. Mr. Wright’s current annual base salary is $230,000.

Pursuant to the terms of our retention agreement with Mr. Wright, upon consummation of the arrangement, Mr. Wright is entitled to receive a lump sum cash retention bonus of $115,000 and an additional lump sum payment of $115,000 if, within twelve months following the consummation of the arrangement, Mr. Wright is either terminated without cause or voluntarily terminates his employment for good reason. Mr. Wright’s retention agreement also provides that he will be entitled to a lump sum cash retention bonus of $57,500 if a change in control transaction does not occur and he remains continuously employed with us through April 30, 2011, and an

30

Table of Contents

additional lump sum cash retention bonus of $57,500 if a change in control transaction does not occur and he remains continuously employed with us through April 30, 2012.

Agreements with Roy Hogsed, Senior Vice President of Worldwide Sales

Pursuant to the terms of our change in control agreement with Mr. Hogsed, if within twelve months following the completion of the arrangement, Mr. Hogsed is terminated without cause or terminates voluntarily for good reason, he will be entitled to receive: (i) payment of severance in the amount equal to nine months of base salary in effect as of the termination date; (ii) continuation of health care benefits for a nine-month period following the termination date; and (iii) acceleration of vesting of all unvested options to purchase common shares. Mr. Hogsed’s current annual base salary is $200,000.

Pursuant to the terms of our retention agreement with Mr. Hogsed, upon consummation of the arrangement, Mr. Hogsed is entitled to receive a lump sum cash retention bonus of $100,000 and an additional lump sum payment of $100,000 if, within twelve months following the consummation of the arrangement, Mr. Hogsed is either terminated without cause or voluntarily terminates his employment for good reason. Mr. Hogsed’s retention agreement also provides that he will be entitled to a lump sum cash retention bonus of $50,000 if a change in control transaction does not occur and he remains continuously employed with us through April 30, 2011, and an additional lump sum cash retention bonus of $50,000 if a change in control transaction does not occur and he remains continuously employed with us through April 30, 2012.

Treatment of Options to Purchase our common shares

Certain of our executive officers and directors have been granted options to purchase our common shares. Any unvested options to purchase our common shares held by our executive officers or directors will vest in connection with the arrangement. However, all outstanding unvested options to purchase our common shares held by our directors and executive officers have an exercise price of $0.35 per share, which is in excess of the per share consideration to be received by our holders of common shares in the arrangement. As a result, our directors and executive officers will not receive any consideration in the arrangement as a result of the accelerated vesting of their unvested stock options.

Directors’ and Officers’ Indemnification and Insurance

The arrangement agreement provides that after completion of the arrangement, all obligations pursuant to (i) each indemnification agreement in effect between BakBone or any subsidiary of BakBone and any of our officers or directors at or prior to the completion of the arrangement and (ii) any indemnification provision and any exculpation provision set forth in the charter documents of BakBone or any subsidiary of BakBone will be fulfilled and honoured in all respects. After the completion of the arrangement, such provisions in our charter

31

Table of Contents

documents will not be amended, repealed or otherwise modified in any manner that could materially adversely affect the rights of any indemnified officer or director.

The arrangement agreement further provides that for a period of six years following the completion of the arrangement, Quest will indemnify and hold harmless each indemnified officer or director against and from any costs, fees and expenses (including reasonable attorneys’ fees and investigation expenses), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any claim, legal proceeding, arbitration, investigation or inquiry, whether civil, criminal, administrative or investigative, to the extent such claim, legal proceeding, arbitration, investigation or inquiry arises directly or indirectly out of or pertains directly or indirectly to (i) any action or omission or alleged action or omission in such indemnified officer’s or director’s capacity as a director, officer, employee or agent of BakBone or any subsidiary or other affiliate of BakBone, regardless of whether such action or omission, or alleged action or omission, occurred prior to, at or after the completion of the arrangement or (ii) any of the transactions contemplated by the arrangement agreement.

The arrangement agreement further provides that from and after the completion of the arrangement through the sixth anniversary of the date the arrangement is completed, the current level and scope of directors’ and officers’ liability insurance coverage as set forth in our current directors’ and officers’ liability insurance policies will be maintained, provided that (i) Quest shall not be required to expend in any one year an amount in excess of 200% of the annual premium payable by us as of the date of the arrangement agreement and if the annual premiums payable for such insurance coverage exceed such amount, Quest will be obligated to obtain a policy with the greatest coverage available for a cost equal to such amount and (ii) alternatively, we may obtain a prepaid tail policy prior to the completion of the arrangement which provides the indemnified officer or director with directors’ and officers’ liability insurance for a period of six years following the completion of the arrangement.

Interests of the Directors Elected by the Preferred Shareholders in the Arrangement

Directors Richard Harroch and Richard Frasch have been elected by the preferred shareholders to our board of directors. Mr. Harroch is Managing Director and the Global Head of Mergers and Acquisitions for VantagePoint Venture Partners, an affiliate of the preferred shareholders. Mr. Harroch and Mr. Frasch were not present during the vote on, and abstained from voting on, the arrangement agreement and the plan of arrangement as required pursuant to the CBCA.

Pursuant to the terms of our charter documents, the preferred shareholders have rights to certain payments in preference to our holders of common shares in connection with a change in control. As further described in this information circular, we have entered into an agreement with the preferred shareholders pursuant to which they have agreed to accept cash consideration equal to $1.291667 per share of preferred shares held by them, in lieu of the $1.49475 (CDN$1.50) per share amount to which they would otherwise be entitled (assuming an exchange rate of CDN$1.002900 to $1.00 as quoted by WM/Reuters on November 8, 2010). This agreement also includes a release by the Company of any claims that the Company might have against the directors serving at the request of the holders of the preferred shares.

Deregistration of Common Shares

If the arrangement is completed, our common shares will cease trading on the Over-the-Counter Bulletin Board (“OTCBB”) and will be deregistered under the Securities Exchange Act of 1934, and we will no longer be a reporting issuer in Canada.

Rights of Dissent

The following description of the right to dissent and appraisal to which holders of common shares are entitled is not a comprehensive statement of the procedures to be followed by a registered holder of common

32

Table of Contents

shares who validly exercises the rights of dissent provided to them under the interim order (a “dissenting shareholder”) and is qualified in its entirety by reference to the full text of the interim order, which is attached to this information circular as Appendix C, Section 190 of the CBCA, which is attached to this information circular as Appendix D and the plan of arrangement which is attached as Annex C of Appendix A to this information circular. A common shareholder who intends to exercise the right to dissent and appraisal should carefully consider and comply with the interim order and the provisions of Section 190 of the CBCA. Failure to strictly comply with the interim order and the provisions of Section 190 of the CBCA and to adhere to the procedures established therein may result in the loss of all rights thereunder.

A court hearing the application for the final order approving the arrangement has the discretion to alter the rights of dissent described herein based on the evidence presented at such hearing.

Pursuant to the interim order, registered holders of common shares have the right to dissent with respect to the arrangement resolution if BakBone, c/o Burnet, Duckworth & Palmer LLP, Suite 1400, 350 — 7^th Avenue SW, Calgary, Alberta, T2P 3N9, Attention: Jeff E. Sharpe, receives by 5:00 p.m. (Calgary time) on or before the business day prior to the date of the special meeting or any adjournment thereof, a written objection to the arrangement resolution and such holder complies with Section 190 of the CBCA, as modified by the interim order. Provided the arrangement becomes effective, each dissenting shareholder will be entitled to be paid the fair value of the common shares in respect of which the holder dissents in accordance with Section 190 of the CBCA, as modified by the interim order. See Appendices C and D of this information circular for a copy of the interim order and the provisions of Section 190 of the CBCA, respectively. A dissenting shareholder will be deemed to have transferred the common shares held by such dissenting shareholder to Acquisition Sub, such common shares will be cancelled and such dissenting shareholder will be entitled, in the event the arrangement becomes effective, to be paid the fair value of the common shares held by such dissenting shareholder determined as of the close of business on the business day before the day the arrangement resolution is adopted.

A dissenting shareholder may dissent only with respect to all of the common shares held by such holder or on behalf of any one beneficial owner and registered in the dissenting shareholder’s name. Only registered holders of common shares may dissent. The vast majority of the common shares are registered in the name of CDS & Co. and the Depository Trust Company and are held through the beneficial holders’ brokers and intermediaries. A non-registered common shareholder who wishes to exercise dissent rights should immediately contact the broker or intermediary with whom he or she deals in respect of his or her common shares, as the case may be, and instruct the broker or intermediary to exercise the right of dissent on such common shareholder’s behalf.

A dissenting shareholder who wishes to dissent must send a written objection to the arrangement resolution, which written objection must be received by BakBone c/o their counsel Burnet, Duckworth & Palmer LLP, 1400, 350 — 7th Avenue S.W., Calgary, Alberta, T2P 3N9, Attention: Jeff E. Sharpe by 5:00 p.m. (Calgary time) on or before the business day prior to the date of special meeting or any adjournment thereof. The filing of a written objection does not deprive a dissenting shareholder of the right to vote; however, the CBCA provides, in effect, that a dissenting shareholder who has submitted a written objection to the arrangement resolution and who votes in favour of the arrangement resolution will no longer be considered a dissenting shareholder with respect to the common shares voted in favour of the arrangement resolution. The CBCA does not provide, and BakBone will not assume, that a vote against the arrangement resolution constitutes a written objection to the arrangement resolution. There is no right of partial dissent and, accordingly, a dissenting shareholder may only exercise the right to dissent with respect to all of the common shares held by it on behalf of any one beneficial owner and registered in the name of the dissenting shareholder.

BakBone is required, within 10 days after the adoption of the arrangement resolution, to notify each dissenting shareholder that the arrangement resolution has been adopted, but such notice is not required to be sent to any dissenting shareholder who voted for the arrangement resolution or who has withdrawn its written objection to the arrangement resolution.

33

Table of Contents

A dissenting shareholder must, within 20 days after the dissenting shareholder receives notice that the arrangement resolution has been adopted or, if the dissenting shareholder does not receive such notice, within 20 days after the dissenting shareholder learns that the arrangement resolution has been passed, send to BakBone, a written notice (a “payment demand”) containing the dissenting shareholder’s name and address, the number of common shares in respect of which the dissenting shareholder dissented and a demand for payment of the fair value of such securities. Within 30 days after a payment demand, the dissenting shareholder must send to Computershare Investor Services Inc., at the address given in this information circular, the certificates representing the common shares that are the subject of the payment demand. A dissenting shareholder who fails to send the certificates representing the common shares that are the subject of the payment demand forfeits its right to make a claim under Section 190 of the CBCA. Computershare Investor Services Inc. will endorse on the certificates received from a dissenting shareholder a notice that the holder is a dissenting shareholder and will forthwith return the certificates to the dissenting shareholder.

On filing a payment demand, a dissenting shareholder ceases to have any rights as a common shareholder, other than the right to be paid the fair value of the common shares, as the case may be, in respect of which the dissenting shareholder dissented as determined under Section 190 of the CBCA, except where:

Upon the occurrence of any of the events in the three bullet points above, a dissenting shareholder’s rights as a common shareholder will be reinstated.

BakBone is required, not later than seven days after the later of the completion of the arrangement or the date on which it received the payment demand of a dissenting shareholder, to send to each dissenting shareholder who has sent it a payment demand, a written offer to pay (“offer to pay”) for its common shares, as the case may be, in respect of which the dissenting shareholder dissented in an amount considered by the board of directors to be the fair value thereof, accompanied by a statement showing the manner in which the fair value was determined. Every offer to pay with respect to common shares must be on the same terms. BakBone must pay for the common shares of a dissenting shareholder within 10 days after an offer to pay has been accepted by a dissenting shareholder, but any such offer to pay lapses if it does not receive an acceptance thereof within 30 days after the offer to pay has been made. If BakBone fails to make an offer to pay for the common shares that are the subject of the payment demand, or if a dissenting shareholder fails to accept an offer to pay that has been made, BakBone may, within 50 days after the completion of the arrangement or within such further period as a court may allow, apply to a court to fix a fair value for the common shares of dissenting shareholders. If BakBone fails to apply to a court, a dissenting shareholder may apply to a court for the same purpose within a further period of 20 days or within such further period as a court may allow. A dissenting shareholder is not required to give security for costs in such an application.

Upon an application to a court, all dissenting shareholders whose common shares in respect of which they dissent have not received a cash payment from BakBone will be joined as parties and bound by the decision of the court, and BakBone will be required to notify each affected dissenting shareholder of the date, place and consequences of the application and of its right to appear and be heard in person or by counsel. Upon any such application to a court, the court may determine whether any other person is a dissenting shareholder who should be joined as a party, and the court will then fix a fair value for the common shares of all dissenting shareholders. The final order of a court will be rendered against BakBone in favour of each dissenting shareholder and for the amount of the fair value of the common shares in respect of which dissent rights are being exercised as fixed by the court. The court may, in its discretion, allow a reasonable rate of interest on the amount payable to each dissenting shareholder from the completion of the arrangement until the date of payment.

34

Table of Contents

The above is only a summary of the dissent provisions of the CBCA, the interim order and the plan of arrangement, which are technical and complex. It is suggested that any dissenting shareholder wishing to avail itself of its rights under those provisions seek its own legal advice as failure to comply strictly with the provisions of the CBCA, the interim order and the plan of arrangement may prejudice its right of dissent.

Certain Canadian Federal Income Tax Consequences of the Arrangement

The following summary fairly describes the principal Canadian federal income tax considerations generally applicable to a common shareholder who sells common shares under the arrangement and who, at all relevant times, for purposes of the application of the Canadian Tax Act, (1) deals at arm’s length with BakBone, Quest and Acquisition Sub; (2) is not affiliated with BakBone, Quest or Acquisition Sub; and (3) holds the common shares as capital property. Generally, the common shares will be capital property to a holder provided the holder does not hold those common shares in the course of carrying on a business or as part of an adventure or concern in the nature of trade.

This portion of the summary is not applicable to: (i) a common shareholder that is a “specified financial institution”, (ii) a common shareholder an interest in which is a “tax shelter investment”, (iii) a common shareholder that is, for purposes of certain rules (referred to as the mark-to-market rules) applicable to securities held by financial institutions, a “financial institution”, or (iv) a common shareholder to whom the “functional currency” reporting rules apply, each as defined in the Canadian Tax Act. In addition, this summary does not discuss all of the tax considerations in respect of common shares acquired pursuant to employment compensation plans, such as stock option plans, and does not apply in respect of shares of BakBone other than common shares. Persons to whom this paragraph may apply should consult their own tax advisors.

This summary is based upon the current provisions of the Canadian Tax Act and the regulations thereunder (the “Canadian Tax Regulations”) and understanding of the published administrative practices of the Canada Revenue Agency (“CRA”). This summary also takes into account all specific proposals to amend the Canadian Tax Act and the Canadian Tax Regulations publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Tax Proposals”) and assumes that all Tax Proposals will be enacted in the form proposed. However, there can be no assurance that the Tax Proposals will be enacted in their current form, or at all. This summary is not exhaustive of all possible Canadian federal income tax considerations and, except for the Tax Proposals, does not take into account or anticipate any changes in law or administrative practice, whether by legislative, regulatory, administrative or judicial decision or action, nor does it take into account or consider other federal or any provincial, territorial or foreign tax considerations, which may differ significantly from the Canadian federal income tax considerations described herein.

This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular common shareholder. This summary is not exhaustive of all Canadian federal income tax considerations. Consequently, holders of common shares are urged to consult their own tax advisors for advice regarding the income tax consequences to them of disposing of their common shares pursuant to the arrangement, having regard to their own particular circumstances, and any other consequences to them of such transactions under Canadian federal, provincial, local and foreign tax laws.

Holders Resident in Canada

This portion of the summary is generally applicable to a holder who, at all relevant times, for purposes of the application of the Canadian Tax Act and any applicable income tax treaty or convention, is, or is deemed to be, resident in Canada (a “resident holder”).

Certain resident holders may be entitled to make or may have already made the irrevocable election permitted by subsection 39(4) of the Canadian Tax Act, the effect of which is to deem to be capital property any common shares (and all other “Canadian securities”, as defined in the Canadian Tax Act) owned by such resident

35

Table of Contents

holder in the taxation year in which the election is made and in all subsequent taxation years. Resident holders who might not otherwise be considered to hold common shares as capital property should consult their own tax advisors concerning this election.

Disposition of Common Shares

Generally, a resident holder who disposes of common shares under the arrangement will realize a capital gain (or capital loss) in the year of disposition equal to the amount by which the cash payment received is greater (or less) than the aggregate of the holder’s adjusted cost base of the common shares and any reasonable costs of disposition.

Generally, a resident holder is required to include in computing its income for a taxation year one-half of the amount of any capital gain (a “taxable capital gain”) realized in the year. Subject to and in accordance with the provisions of the Canadian Tax Act, a resident holder is required to deduct one-half of the amount of any capital loss (an “allowable capital loss”) realized in a taxation year from taxable capital gains realized by the resident holder in the year. Allowable capital losses in excess of taxable capital gains for the year may be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year against net taxable capital gains realized in such years to the extent and under the circumstances described in the Canadian Tax Act.

The amount of any capital loss realized by a resident holder that is a corporation on the disposition of a common share may be reduced by the amount of any dividends received (or deemed to be received) by the resident holder on such common share to the extent and under the circumstances prescribed by the Canadian Tax Act.

Similar rules may apply where a common share is owned by a partnership or trust of which a corporation, trust or partnership is a member or beneficiary. Such resident holders should consult their own advisors.

A resident holder that is throughout the year a “Canadian-controlled private corporation”, as defined in the Canadian Tax Act, may be liable for a 6 2/3% refundable tax on investment income, including taxable capital gains realized upon a disposition of the common shares. Capital gains realized by an individual or a trust, other than certain specified trusts, may give rise to a liability for alternative minimum tax under the Canadian Tax Act.

Dissenting Holders

A resident holder who validly exercises dissent rights (a “resident dissenting holder”) will be deemed to have transferred such holder’s common shares to Acquisition Sub in exchange for payment by Acquisition Sub of the fair value of such common shares. In general, a resident dissenting holder will realize a capital gain (or capital loss) equal to the amount, if any, by which the cash received by the resident dissenting holder in respect of the fair value of such holder’s common shares (other than in respect of interest awarded by a court) exceeds (or is exceeded by) the adjusted cost base to the resident dissenting holder of such common shares and any reasonable costs of disposition. See “Holders Resident in Canada — Disposition of common shares” above.

Interest awarded by a court to a resident dissenting holder will be included in the holder’s income for the purposes of the Canadian Tax Act.

Holders Not Resident in Canada

This portion of the summary is generally applicable to a holder who, at all relevant times, for purposes of the application of the Canadian Tax Act, is not, and is not deemed to be, resident in Canada and does not use or hold the common shares in a business carried on in Canada (a “non-resident holder”). Special rules, which are

36

Table of Contents

not discussed in this summary, may apply to certain holders that are insurers carrying on an insurance business in Canada and elsewhere.

Disposition of Common Shares

A non-resident holder will not be subject to tax under the Canadian Tax Act on any capital gain realized on a disposition of common shares under the arrangement, unless the common shares are “taxable Canadian property” to the non-resident holder for purposes of the Canadian Tax Act and the non-resident holder is not entitled to relief under an applicable income tax convention between Canada and the country in which the non-resident holder is resident.

The common shares should not constitute taxable Canadian property to a non-resident holder at the completion of the arrangement since the common shares did not, at any time during the 60-month period that ends at the time of disposition, derive, directly or indirectly, more than 50% of their fair market value from one or any combination of: (i) real or immovable property situated in Canada, (ii) “Canadian resource properties” (as defined in the Tax Act), (iii) “timber resource properties” (as defined in the Tax Act), and (iv) options or interests in respect of property described in (i), (ii), (iii). Notwithstanding the foregoing, in certain circumstances set out in the Canadian Tax Act, common shares may be deemed to be taxable Canadian property.

Even if common shares are considered to be taxable Canadian property of a non-resident holder at the completion of the arrangement, any capital gain realized by the non-resident holder on a disposition of the common shares under the arrangement may be exempt from tax under the Canadian Tax Act pursuant to the terms of an applicable income tax convention. Non-resident holders should consult their own tax advisors with respect to the availability of any relief under the terms of any applicable income tax convention in their particular circumstances.

If the common shares constitute taxable Canadian property of a non-resident holder and any capital gain realized by the non-resident holder on the disposition of common shares under the arrangement is not exempt from tax under the Canadian Tax Act by virtue of an applicable income tax convention, then the tax consequences described above under the heading “Holders Resident in Canada — Disposition of Common Shares” will generally apply.

Non-resident holders whose common shares are taxable Canadian property should consult their own tax advisors for advice having regard to their particular circumstances.

Dissenting Holders

A non-resident holder who validly exercises dissent rights (a “non-resident dissenting holder”) will be deemed to have transferred such holder’s common shares to Acquisition Sub in exchange for payment by Acquisition Sub of the fair value of such common shares. In general, the tax treatment of a non-resident dissenting holder will be similar to that of a non-resident holder who participates in the arrangement. See “Holders Not Resident in Canada — Disposition of Common Shares” above.

An amount paid in respect of interest to a dissenting non-resident holder will not be subject to Canadian withholding tax.

Non-resident dissenting holders should consult their own tax advisors with respect to the availability of any relief under the terms of an applicable income tax convention in their particular circumstances.

37

Table of Contents

Material U. S. Federal Income Tax Consequences of the Arrangement

The following summary is a general discussion of the material U.S. federal income tax consequences to our shareholders whose common shares or preferred shares are converted into cash in the arrangement. This summary is based on the current provisions of the Internal Revenue Code of 1986, as amended, or the “Code,” applicable Treasury Regulations, judicial authority, and administrative rulings, all of which are subject to change, possibly with retroactive effect. Any such change could alter the tax consequences to our shareholders as described herein. No ruling from the Internal Revenue Service, or the “IRS,” has been or will be sought with respect to any aspect of the transactions described herein, so there can be no assurance that the IRS will agree with the statements and conclusions set forth in this summary. This summary is for the general information of our shareholders only and does not purport to be a complete analysis of all potential tax effects of the arrangement. For example, it does not consider the effect of any applicable state, local, or non-U.S. income tax laws, or of any non-income-tax laws and, except where noted, does not discuss tax rates or currently scheduled tax rate changes. In addition, this discussion does not address the tax consequences of transactions effectuated prior to or after the completion of the arrangement (whether or not such transactions occur in connection with the arrangement), including, without limitation, the acquisition or disposition of common shares or preferred shares other than pursuant to the arrangement. In addition, it does not address all aspects of U.S. federal income taxation that may affect particular BakBone shareholders in light of their particular circumstances, including holders:

IN VIEW OF THE FOREGOING AND BECAUSE THE FOLLOWING DISCUSSION IS INTENDED AS A GENERAL SUMMARY ONLY, EACH BAKBONE SHAREHOLDER SHOULD

38

Table of Contents

CONSULT SUCH SHAREHOLDER’S OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES, INCLUDING THE APPLICABLE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES, AND ANY TAX REPORTING REQUIREMENTS OF THE ARRANGEMENT AND RELATED TRANSACTIONS IN LIGHT OF SUCH SHAREHOLDER’S OWN TAX SITUATION.

Treatment of Holders of common shares or preferred shares

The conversion of common shares or preferred shares into the right to receive cash in the arrangement will be a taxable transaction for our shareholders. Generally, this means that our shareholders will recognize a capital gain or loss for U.S. federal income tax purposes equal to the difference between (1) the amount of cash such shareholder receives in the arrangement, and (2) such shareholder’s adjusted tax basis in such shareholder’s common shares or preferred shares (which is usually a shareholder’s original cost for the shares). For this purpose, BakBone shareholders who acquired different blocks of shares at different times for different prices, or who hold both common shares and preferred shares, must calculate gain or loss separately for each identifiable block of shares surrendered in the exchange.

Such capital gain or loss generally will be long-term capital gain or loss if the holder has held common shares or preferred shares for more than one year as of the date of the completion of the arrangement. If the shareholder’s holding period for the common shares or preferred shares is one year or less as of the date of the completion of the arrangement, any gain or loss will generally be treated as short-term capital gain. Under current U.S. federal income tax law, long-term capital gain is taxable at a reduced rate for certain non-corporate holders. Capital losses are subject to limitations on deductibility for individuals, corporations, estates and trusts.

Notwithstanding the foregoing, if BakBone currently is, or at any time during which a BakBone shareholder held the common shares or preferred shares was, a passive foreign investment company (a “PFIC”), then some or all the gain, if any, recognized by such BakBone shareholder in the conversion of common shares or preferred shares into the right to receive cash in the arrangement may be recharacterized as ordinary income and such BakBone shareholder may be subject to an interest charge based, in part, on the amount of such gain and the amount of time which such BakBone shareholder owned the common shares or preferred shares which generated such gain. We believe that we are not currently, nor have we recently been, a PFIC. BakBone shareholder should consult their tax advisors with respect to the determination of whether the Company is or has been a PFIC and application of the rules governing PFICs.

Dissenters’ Rights

Under specified circumstances, a BakBone shareholder may be entitled to dissenters’ rights in connection with the arrangement. If dissenters’ rights are available and a BakBone shareholder receives cash pursuant to the exercise of dissenters’ rights, such shareholder generally will recognize gain or loss equal to the difference between (1) the amount of cash received by such shareholder pursuant to the exercise of such rights, and (2) such shareholder’s adjusted tax basis in such shareholder’s (which is usually a shareholder’s original cost for the shares). BakBone shareholder who exercise dissenters’ rights are urged to consult their own tax advisors. Interest, if any, awarded in connection with the exercise of dissenters’ rights by a court would be included in such shareholder’s income as ordinary income for U.S. federal income tax purposes.

Backup Withholding

Unless certain requirements are satisfied, BakBone shareholder may be subject to “backup withholding” for U.S. federal income tax purposes with respect to certain “reportable payments” including taxable proceeds received in exchange for such shareholder’s common shares or preferred shares in the arrangement. Backup withholding will generally not apply to a BakBone shareholder who completes Form W-9 (if the BakBone shareholder is a U.S. Holder) or the appropriate series of Form W-8 (if the BakBone shareholder is not a U.S. Holder). Each BakBone shareholder and, if applicable, each other payee, should complete the appropriate form in

39

Table of Contents

accordance with instructions that are included with the letter of transmittal in order to provide the information and certification necessary to avoid the imposition of backup withholding, unless an exemption applies and is established in a manner satisfactory to the depositary.

Backup withholding is not an additional tax. Rather, the U.S. federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If backup withholding results in an overpayment of taxes by such shareholder, such shareholder should timely seek advice from such shareholder’s tax advisors regarding the possibility of obtaining a refund of such overpayment.

The foregoing discussion of the U.S. federal income tax consequences of the arrangement is for our shareholder’s general information only. Accordingly, our shareholders should consult their own tax advisors with respect to the particular tax consequences to them of the arrangement, including the applicable U.S. federal, state, local, and non-U.S. tax consequences.

Regulatory Matters

Although the parties have determined that there are no antitrust, competition or foreign investment filings required in connection with the arrangement, at any time before or after the completion of the arrangement, (1) any governmental authority of any state, province or country may seek to review the arrangement and/or take action to enjoin, or having the effect of enjoining, the arrangement or, after completion of the arrangement, to unwind the arrangement under the antitrust or foreign investment laws of any jurisdiction as they consider necessary or desirable, or (2) any private party may seek to enjoin the arrangement on anti-competitive or other grounds. We cannot be sure that such actions would not be taken, or that, if taken, that we will prevail.

40

Table of Contents

THE ARRANGEMENT AGREEMENT

The following description summarizes the material provisions of the arrangement agreement and is qualified in its entirety by reference to the complete text of the arrangement agreement. The arrangement agreement is included as Appendix A to this information circular. We encourage you to read it carefully and in its entirety. The arrangement agreement has been included to provide you with information regarding its terms. It is not intended to provide any other factual information about BakBone. Such information can be found elsewhere in this information circular and in the other public filings BakBone makes with the applicable securities regulators, which are available without charge at www.sec.gov and at www.sedar.com.

Structure of the Arrangement

Subject to the terms and conditions of the arrangement agreement and the final order approving the arrangement, each preferred share shall be transferred to Acquisition Sub in exchange for $1.291667 per preferred share and each common share shall be transferred to Acquisition Sub in exchange for $0.33 per common share, following which BakBone will be a wholly owned subsidiary of Acquisition Sub.

Please read the plan of arrangement, which is attached as Annex C to Appendix A of this information circular, for a description of the specific transactions that are expected to take place in connection with the completion of the arrangement.

Effectiveness of the Arrangement

The arrangement is proposed to be carried out pursuant to Section 192 of the CBCA. The following procedural steps must be taken for the arrangement to become effective:

Securityholder Approvals

Pursuant to the interim order, the number of votes required to pass the arrangement resolution shall be: (i) not less than 66 ²/3% of the votes cast on the arrangement resolution by holders of common shares, holders of preferred shares, holders of options and holders of warrants present in person or by proxy at the special meeting and voting together as a single class and (ii) not less than 50.01% of the votes cast on the arrangement resolution by holders of common shares present in person or by proxy at the special meeting and voting together as a single class, other than the votes attached to common shares required under MI 61-101 to be excluded in connection with the approval of the arrangement resolution.

Court Approval

Interim Order

On December 3, 2010, the Alberta Court of Queen’s Bench granted the interim order directing the calling of the special meeting and prescribing the conduct of the special meeting and other matters. A copy of the interim order is attached as Appendix C to this information circular.

Final Order

The CBCA provides that a plan of arrangement requires court approval. Subject to the terms of the arrangement agreement, and if the arrangement resolution is approved by securityholders at the special meeting in the manner required by the interim order, BakBone will make application to the Court for the final order.

41

Table of Contents

The application for the final order approving the arrangement is scheduled for January 11, 2011 at 1:30 p.m., (Calgary time), or as soon thereafter as counsel may be heard, at the Calgary Courts Centre, 601 — 5^th Street SW, Calgary, Alberta. At the hearing, any securityholder and any other interested party who wishes to participate or to be represented or to present evidence or argument may do so, subject to filing with the Court and serving upon BakBone a notice of intention to appear together with any evidence or materials which such party intends to present to the Court on or before 5:00 p.m. (Calgary time) on January 7, 2011. Service of such notice shall be effected by service upon the solicitors for BakBone: Burnet, Duckworth & Palmer LLP, Suite 1400, 350 — 7^th Avenue S.W., Calgary, Alberta, T2P 3N9, Attention: Jeff E. Sharpe. See the Notice of Originating Application accompanying this information circular.

We are advised that the Court has broad discretion under the CBCA when making orders with respect to plans of arrangement. The Court will consider, among other things, the fairness and reasonableness of the arrangement, both from a substantive and a procedural point of view. The Court may approve the arrangement either as proposed or as amended in any manner the Court may direct, subject to compliance with such terms and conditions, if any, as the Court thinks fit. Depending upon the nature of any required amendments, BakBone and/or Quest may determine not to proceed with the arrangement.

Arrangement Consideration

If the arrangement is completed: (i) you will receive $0.33 in cash, without interest, subject to any applicable withholding tax, in exchange for each share of BakBone common share that you own and for which you have not properly exercised any rights of dissent; and (ii) the holders of our preferred shares will receive $1.291667 in cash, without interest, subject to any applicable withholding tax, in exchange for each preferred share that they own.

After the arrangement is completed, you will have the right to receive the arrangement consideration, but as a result of the arrangement you will no longer have any rights as a BakBone securityholder. BakBone securityholders will receive the arrangement consideration after exchanging their BakBone share certificates in accordance with the instructions contained in the letter of transmittal accompanying this information circular.

The per-share consideration described above was determined through arm’s-length negotiations between BakBone and Quest.

Treatment of Stock Options and Warrants

At the completion of the arrangement, each stock option and each warrant to purchase common shares of BakBone that is not exercised prior to the completion of the arrangement (whether or not then vested) will automatically be cancelled at the completion of the arrangement and will not be entitled to any consideration under the arrangement.

Payment Procedures

The arrangement agreement provides that at or before the effective time of the arrangement, Quest will deposit with the depositary in escrow for the benefit of the securityholders, cash in the aggregate amount equal to the payments contemplated by the plan of arrangement (calculated without reference to whether any common shareholders have exercised or may exercise dissent rights).

As soon as practicable following the later of the effective date of the arrangement and the surrender to the depositary for cancellation of a certificate which immediately prior to the effective time of the arrangement represented outstanding shares that were exchanged under the arrangement, together with a duly completed and executed letter of transmittal and such additional documents and instruments as the depositary may reasonably require, the shareholder of such surrendered certificate will be entitled to receive in exchange therefore, the cash

42

Table of Contents

which such shareholder has the right to receive under the arrangement for such shares, and any certificate so surrendered will forthwith be cancelled. The cash deposited with the depositary will be held in an interest-bearing account and any interest earned on such funds will be for the account of Acquisition Sub.

Until surrendered as contemplated by the plan of arrangement, each certificate which, immediately prior to the effective time of the arrangement represented shares, will be deemed at the effective time of the arrangement to represent only the right to receive, upon such surrender, a cash payment in lieu of such certificate as contemplated in the arrangement.

BakBone, Acquisition Sub and Quest will cause the depositary, in the case of a former holder of shares, as soon as practicable following the time the former holder becomes entitled to a cash payment in accordance with the plan of arrangement, to: (i) forward or cause to be forwarded by first class mail (postage paid) to such former holder at the address specified in the letter of transmittal; (ii) if requested by such former holder in the letter of transmittal, make available at the offices of the depositary specified in the letter of transmittal for pick-up by such former holder; or (iii) if the letter of transmittal neither specifies an address nor contains a request as described above, forward or cause to be forwarded by first class mail (postage paid) to such former holder at the address of such former holder as shown on the central securities register maintained by or on our behalf in respect of shares immediately prior to the effective time of the arrangement, a cheque representing the net cash payment, if any, payable to such former holder in accordance with the plan of arrangement.

Any certificate formerly representing the shares shall, on the sixth anniversary of the effective date of the arrangement, cease to represent a claim of any nature whatsoever and shall be deemed to have been surrendered to BakBone or Acquisition Sub, as applicable and shall be cancelled. Any payment made by way of cheque by the depositary pursuant to the plan of arrangement that has not been deposited or has been returned to the depositary or that otherwise remains unclaimed, in each case, on or before the sixth anniversary of the effective date of the arrangement, and any right or claim to payment thereunder that remains outstanding on the sixth anniversary of the effective date of the arrangement shall cease to represent a right or claim of any kind or nature and the right of the holder to receive the cash consideration for shares pursuant to the plan of arrangement shall terminate and be deemed to be surrendered and forfeited to BakBone or Acquisition Sub, as applicable, for no consideration.

In the event any certificate which immediately prior to the effective time of the arrangement represented any outstanding shares that were acquired by Acquisition Sub pursuant to the arrangement has 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 depositary will pay in relation to such lost, stolen or destroyed certificate, the net cash payment which the former holder of such shares is entitled to receive pursuant to the plan of arrangement. When authorizing such payment in relation to any lost, stolen or destroyed certificate, the person to whom the payment is made will, as a condition precedent to the delivery thereof, give a bond satisfactory to Acquisition Sub, BakBone and the depositary in such sum as Acquisition Sub may direct or otherwise indemnify Acquisition Sub and BakBone in a manner reasonably satisfactory to Acquisition Sub and BakBone against any claim that may be made against Acquisition Sub and BakBone with respect to the certificate alleged to have been lost, stolen or destroyed.

Representations and Warranties

The arrangement agreement contains representations and warranties made by BakBone to Quest and Acquisition Sub and representations and warranties made by Quest and Acquisition Sub to BakBone. The representations and warranties contained in the arrangement agreement were made only for purposes of the arrangement agreement and as of specified dates, were solely for the benefit of the parties to the arrangement agreement, and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the arrangement agreement. The representations and warranties have been made for the purposes of allocating contractual risk

43

Table of Contents

between the parties to the arrangement agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. For the foregoing reasons, you should not rely on the representations and warranties or any descriptions thereof as characterizations of the actual state of facts or condition of BakBone, Quest, Acquisition Sub or any of their respective subsidiaries or affiliates. The representations and warranties in the arrangement agreement and the description of them in this information circular should be read in conjunction with the other information contained in the reports, statements and filings BakBone publicly files with the Securities and Exchange Commission and with the Canadian securities regulatory authorities in British Columbia, Alberta and Ontario.

We made a number of representations and warranties to Quest and Acquisition Sub regarding, among other things:

44

Table of Contents

Quest and Acquisition Sub made a number of representations and warranties to us in the arrangement agreement regarding, among other things:

The arrangement agreement provides that the representations and warranties of BakBone, Quest and Acquisition Sub will not survive the completion of the arrangement.

Material Adverse Effect

Several of the representations, warranties, covenants, closing conditions and termination provisions in the arrangement agreement use the phrase “material adverse effect.” The arrangement agreement provides that “material adverse effect” means, with respect to BakBone, any change, event, development, circumstance, condition, state of facts or effect that individually or considered together with all other changes, events, developments, circumstances, conditions, states of facts or effects, (i) is or is reasonably likely to have a material adverse effect on the business, assets and liabilities (taken together), results of operations or financial condition of BakBone and its subsidiaries, taken as a whole, or (ii) prevents the completion of the arrangement or materially delays the completion of the arrangement beyond the latest possible “termination date” provided in the arrangement agreement (or a longer date if certain circumstances set forth in the arrangement agreement exist and either party extend such date in accordance with the terms of the arrangement agreement).

The arrangement agreement provides, however, that none of the following will be taken into account in determining whether there has occurred, a material adverse effect with respect to BakBone:

45

Table of Contents

Conduct of Business Prior to the Arrangement

We have agreed in the arrangement agreement that, until the completion of the arrangement or the termination of the arrangement agreement, and subject to certain exceptions, we will use commercially reasonable efforts to conduct our business in the ordinary course consistent with past practice and in compliance in all material respects with all applicable legal requirements and use commercially reasonable efforts to preserve substantially intact our business organizations and goodwill, keep available the services of our officers and employees and preserve the relationships with those persons having business dealings with us or any of our subsidiaries.

We have also agreed in the arrangement agreement that, until the completion of the arrangement or the termination of the arrangement agreement, subject to certain exceptions or except as otherwise agreed to in writing by Quest, we will not, and will not permit any of our subsidiaries to do the following: