Espial Group Inc. Secures $3.5 Million Loan Facility from JLA Ventures

OTTAWA, Nov. 8 /CNW/ - Espial^® Group Inc. ("Espial" or the "Company"), (TSX:ESP)
, a leader in the delivery of on-demand TV software and solutions, today announced that it has ent
ered into a $3.5 million secured term loan facility agreement with J.L. Albright Ventures group of funds. The participating funds are J.L. Albright IV Venture Fund L.P., J.L. Albright IV Venture Parallel Fund L.P. and J.L. Albright IV Venture Parallel II Fund L.P. (collectively, "JLA Ventures").

"This investment from our largest shareholder demonstrates their commitment to our business plan and the market" said Jaison Dolvane, President and CEO.  "With our broad base of industry leading customers, products and channel partners, we believe we are well positioned to continue growing our service provider business with Pay TV operators.  We're also in the early stages of OTT (Over-The-Top) video market adoption, a disruptive force that will change the way consumers watch and access TV.  We have already demonstrated success in this market and this investment will enable us to continue to innovate and invest strategically to secure customers and market share"

"Espial has great market momentum and continues to demonstrate strong execution against its business plan," said Pierre Donaldson, Partner, JLA Ventures and a member of the Blackberry Partners Fund. "Our investment will allow Espial to build additional strength into their balance sheet and to allow them to accelerate their strategic investment in attractive market opportunities as they arise."

The proposed loan has a term of 42 months and will bear interest at the annual rate of 10%.  Interest-only monthly payments are required during the term of the loan and the principal is pre-payable without bonus or penalty. In conjunction with the loan, Espial has agreed to grant JLA Ventures five-year warrants to purchase up to 823,529 common shares of the Company. These warrants are to be granted on closing of the facility, which is anticipated to occur on December 30, 2010, and will have an exercise price equal to the lesser of $0.85 or the five day volume weighted average trading price of the Company's shares on the Toronto Stock Exchange at the time of closing. The common shares issuable upon the exercise of the warrants will be subject to a four-month hold period that expires on the date that is four months after the date of issue of the warrants.

The proposed transaction is a related party transaction under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") and completion of the transaction is subject to minority shareholder and regulatory approval and other conditions of closing.  The Company intends to call a shareholder meeting for this purpose to be held on December 29, 2010.

Pierre Donaldson, a director of Espial, is a Partner of the general partner of JLA Ventures. JLA Ventures holds 2.8 million common shares of the Company (representing approximately 19.9% of the outstanding shares of Espial, 17.2% fully diluted).  The warrants contemplated by the proposed transaction, if exercised in full, would increase JLA Ventures' interest in Espial to a total of 3,623,529 common shares, which would represent 24.3% of Espial's outstanding voting shares, assuming no intervening share issuances through the exercise of outstanding options or otherwise (21.2% fully diluted).  As the warrants may result in JLA Ventures' ownership interest exceeding 20% of the issued and outstanding shares of Espial, the TSX requires shareholder approval of the warrants, including the formula used to determine the exercise price.  Under MI-61-101, the proposed transaction is exempt from formal valuation requirements to which related party transactions are subject because the proposed warrants represent less than 25% of the Company's capitalization.

Forward Looking Statement

This press release contains information that is forward looking information with respect to Espial within the meaning of Section 138.4(9) of the Ontario Securities Act (forward looking statements) and other applicable securities laws. In some cases, forward-looking information can be identified by the use of terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or the negative of these terms or other similar expressions concerning matters that are not historical facts. In particular, statements about anticipated benefits of the proposed loan facility, future opportunities for the company and products and any other statements regarding Espial's future expectations, beliefs, goals or prospects are or involve forward-looking information.

Forward-looking information is based on certain factors and assumptions.  While the company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward-looking information, by its nature necessarily involves risks and uncertainties, including Espial's ability to satisfy all conditions of closing of the proposed transaction (such as securing necessary shareholder and regulatory approvals), some of which are outside Espial's control.  Additional risks and uncertainties affecting Espial can be found in Espial's Annual Report for the fiscal year ended December 31, 2009 and in its most recent quarterly report filed on SEDAR at www.sedar.com. If any of these risks or uncertainties were to materialize, or if the factors and assumptions underlying the forward-looking information were to prove incorrect, actual results could vary materially from those that are expressed or implied by the forward-looking information contained herein.  Espial assumes no obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.

About Espial (www.espial.com)

Espial is a leading supplier of high performance and open digital and IP TV software and solutions to service providers in the cable, telecommunications, hospitality and consumer electronics industries. Its middleware, video-on-demand and browser solutions provide superior service delivery, advanced service innovation tools and the flexibility to implement diverse pay-TV business models. Over 7 million licenses of its patented software are in use across the world. Espial is headquartered in Ottawa, Canada and has offices in the United States, Europe and Asia. For more information please call +1.613.230.4770 or visit www.espial.com.

About JLA Ventures

JLA Ventures, a venture capital firm with offices in Toronto and Montreal, is a leading investor in technology companies at all stages of growth. In addition, JLA Ventures is also the co-manager of the BlackBerry Partners Fund. JLA Ventures' past and current portfolio companies include: Q9 Networks (acquired by Abry Partners), Nstein (acquired by Open Text), Triple G Systems (acquired by General Electric), Pixstream (acquired by Cisco), Basis100 (acquired by First American Corporation), Fun Technologies (acquired by Liberty Media Corporation), Servicesoft Technologies (acquired by Broadbase), Isolation Systems (acquired by Shiva), Descartes Systems Group (NASDAQ:DSGX), Bioscrypt (acquired by L-1 Identity Solutions), VFM Leonardo, Quickplay Media, HealthUnity,  b5media, Paymentus, ecobee, I Love Rewards, and Netshelter. For more information please visit www.jlaventures.com.

%SEDAR: 00025301E

For further information:

Inquiries from financial press or analysts: