Court upholds ESW rights to Optiva board seats and OceanLink financing

CPE News (12/14/2020) – Ontario Superior Court of Justice has rendered a decision with respect to the Notice of Application filed by ESW Capital, LLC in connection with Optiva Inc. (TSX: OPT)’s July 2020 US $90 million debenture financing and redemption of its Series A Preferred Shares held by ESW.

Court declined to set aside the financing and redemption. The Court held that ESW is entitled under the Subscription Agreement between Optiva and ESW dated December 18, 2016, to nominate two individuals for election to Optiva’s board of directors.

In a separate Notice of Application filed by ESW, the Court enjoined Optiva from proceeding for 45 days with its previously announced private placement of 750,000 subordinate voting shares to certain funds managed by OceanLink Management Ltd. at a purchase price of CDN $40.00 per share for gross proceeds to Optiva of CDN $30 million to allow Optiva to conduct a review process and provide ESW an opportunity to participate in that process. Optiva said it intends to discuss the Court’s decision with OceanLink, including the changes needed to the previously entered subscription agreement in order to comply with the Court’s decision.

Optiva said it is reviewing the Court’s decisions and is considering their implications and alternatives available to the company.

As of June 29, 2020, ESW was Optiva’s largest shareholder, controlling 1,476,851 Subordinate Voting Shares representing 27.78% of then outstanding subordinate voting shares, ahead of Maple Rock Capital Partners Inc. (1,188,091 subordinate voting shares or 22.35%) and EdgePoint Investment Group Inc. (963,654 subordinate voting shares or 18.13%).

Prior to the redemption of the Preferred Shares, ESW had the right to nominate four board members of then Optiva 7-member board of directors.

photo credit: Optiva

News Release

Optiva Announces Court Decisions in ESW Applications

TORONTO, Dec. 14, 2020 /CNW/ – Optiva Inc. (“Optiva” or the “Company”) (TSX: OPT) announced today that the Ontario Superior Court of Justice (the “Court”) has rendered a decision with respect to the Notice of Application filed by ESW Capital, LLC, and certain of its affiliates (“ESW”) and heard by the Court on October 1 and 2, 2020. In its decision released on December 11, 2020, the Court declined to set aside the Company’s July 2020 US$90 million debenture financing and redemption of its Series A Preferred Shares. The Court also held that ESW is entitled under the Subscription Agreement between the Company and ESW dated December 18, 2016, to nominate two individuals for election to Optiva’s board of directors.

In a separate Notice of Application filed by ESW and heard by the Court on December 13, 2020, the Court enjoined Optiva from proceeding for 45 days with its previously announced private placement of 750,000 subordinate voting shares to certain funds managed by OceanLink Management Ltd. (“OceanLink”) at a purchase price of CDN$40.00 per share for gross proceeds to Optiva of CDN$30 million (the “Private Placement”) to allow Optiva to conduct a review process and provide ESW an opportunity to participate in that process. The Company intends to discuss the Court’s decision with OceanLink, including the changes needed to the subscription agreement previously entered into between OceanLink and the Company in order to comply with the Court’s decision. There can be no assurance that any such revised agreement will be entered into between the Company and OceanLink.

Optiva is reviewing the Court’s decisions and is considering their implications and alternatives available to the Company.

About Optiva Inc.

Optiva Inc. is a global leader in providing communication service providers (CSPs) with cloud-native revenue management software on the public cloud. CSP operators and mobile virtual network operators can integrate our best-of-breed charging engine into a BSS stack or deploy our fully managed, end-to-end, SaaS-based suite. Optiva solutions offer unmatched speed, scale, security and savings. Our market knowledge, analytical insights and unique Customer Success Program ensure telecoms are equipped to achieve their strategic business goals. Established in 1999, Optiva Inc. is on the Toronto Stock Exchange (TSX: OPT). For more information, visit www.optiva.com.

SOURCE Optiva Inc.

For further information: Media Inquiries: Misann Ellmaker, media@optiva.com; Investor Relations: Ali Mahdavi, investors-relations@optiva.com