Redknee Announces Standby Purchase Agreement in Furtherance of its Strategic Plan

Redknee Solutions Inc. (“Redknee” or the “Company”) (TSX: RKN) has announced that it has entered into a Standby Purchase Agreement with Wave Systems Corp. (“Wave”), an affiliate of ESW Capital, LLC (“ESW”), and ESW in connection with the launching of an approximately US$54 million rights offering, fully backstopped by Wave (the “Rights Offering”). The net proceeds of the Rights Offering will be used to fund a restructuring of the business (the “Restructuring”) in furtherance of the previously announced strategic plan (the “Strategic Plan”) which will, among other things, create a strong platform for long-term growth, simplified operations and sustained profitability for the Company. The Company is also announcing certain leadership changes in connection with the Restructuring.

Subject to the closing of the Rights Offering, the Company will enter into (i) a services agreement with Crossover Markets, Inc. (“Crossover”) pursuant to which Crossover will provide the Company with access to service providers (the “Crossover Services Agreement”), and (ii) a technology services agreement with DevFactory FZ-LLC (“DevFactory”) pursuant to which DevFactory will provide certain technology services to the Company (the “DevFactory Services Agreement” and, together with the Crossover Service Agreement, the “Services Agreements”). The Company has extended the interim Services Agreements with Crossover and DevFactory to the earlier of (i) the Special Meeting referred to below, if the necessary shareholder approvals are not obtained, and (ii) the termination of the Standby Purchase Agreement. Crossover and DevFactory are affiliates of ESW.

Entering into the Standby Purchase Agreement represents the outcome of a review of alternatives undertaken by a special committee of independent directors (the “Special Committee”) of the board of directors of the Company (the “Board”), comprised of Mr. Keith Graham (chair), Ms. Christina Jones and Mr. Farhan Thawar (the “Independent Directors”). The Special Committee was advised by TD Securities Inc., as financial advisor, and Goodmans LLP, as legal advisor. The Special Committee, with the assistance of its advisors, has determined that the Rights Offering, the Standby Purchase Agreement and the Services Agreements collectively represent the best available alternative for the Company.


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