Otello Corporation ASA

Legal Proceedings Report • Sep 14, 2018

Judgment handed down in Otello's case regarding the potential sale of Vewd minority stake

Judgment handed down in Otello's case regarding the potential sale of Vewd minority stake

As reported to the market on December 20, 2016, Otello had completed the sale of the majority stake in the Vewd Software business (the "Company") to Moore Frères & Co LLC ("MFC"), which today is the majority shareholder and controls the board of directors of the Company (the "Board").

On February 20, 2018, Otello Corporation ASA ("Otello") entered into a share purchase agreement (the "SPA") for the sale of its remaining ownership stake (approximately 27-28.5% in the Vewd Software business). The SPA contained certain conditions for completion, such as approval of the sale by the Board and a right of first refusal not being exercised.

MFC's appointed directors on the Board, Martez Moore (chairman), Martino Moore (Martez's brother), and Robert Azeke (Martez's friend), formally refused to approve the sale during a Board meeting held on April 27, 2018. Lars Boilesen, Otello's representative on the Board, was the only Board member to vote to approve the sale.

On April 12, 2018, Otello filed a claim with the High Court of Justice in England and Wales against MFC and the Company and successfully obtained an order of the Court for the trial to be heard on an expedited basis. The case was heard from July 9th through the 12th.

Today, the judgment from the High Court of Justice was handed down. Otello was successful in its claim, with the Court accepting its arguments and awarding all of the relief Otello sought. The Court concluded that Martez Moore did attempt to disrupt and prevent the sale of Otello's shares for his and MFC's own commercial reasons, as alleged by Otello. The Court found that Martez Moore acted for an improper purpose in order to achieve its commercial objective of blocking the sale of Otello's shares and that Martino Moore shared the improper purpose and that Robert Azeke failed to exercise any independent judgment and therefore also shared the improper purpose. The Court held that the MFC-appointed directors' behavior constituted unfair conduct by MFC of the Company's affairs so as to prejudice Otello.

Due to the delay caused by the MFC-appointed Board members and the subsequent refusal to approve the sale, Otello was not able to complete the transaction prior to the long-stop date in the SPA. The judge granted Otello the injunction it sought in the proceedings requiring the Board to approve the buyer, although it ordered that the injunction should not take effect before early October when MFC is entitled to seek permission from the judge to appeal the decision to the Court of Appeal. Since the long-stop date has now passed, the judge recognized that the buyer might no longer be interested in completing the sale. In those circumstances, Otello will seek an order from the Court that MFC be required to buy Otello's shares for the price that the buyer was prepared to pay, or alternatively that MFC pays Otello damages.

Otello expects that MFC will be ordered by the Court to pay a substantial portion of its legal costs to date.

The full judgment is attached to this announcement.

Petter Lade, CFO

Phone: +47 91143878

E-mail: petterl@otellocorp.com

About Otello: Otello holds shares in several different businesses, including (i) AdColony which helps publishers monetize their content through advertising and advertisers reach the audiences that build value for their businesses, capitalizing on a global consumer audience reach that exceeds 2 billion; (ii)

Bemobi, a Mobile Media and Entertainment company which integrate people and mobile content through technology and offers a leading subscription-based discovery service for mobile apps in Latin America and beyond; (iii) Skyfire which offers cloud-based network solutions for mobile operators and (iv) Vewd which offers OTT services in the Connected TV Space.