Haivision Systems Inc. — Capital/Financing Update 2020

Nov 16, 2020

HAIVISION SYSTEMS INC. Initial Public Offering of Common Shares Term Sheet Approximately $45 Million November 16, 2020

A preliminary prospectus dated November 13, 2020 containing important information relating to the securities described in this document has been filed with the securities regulatory authority in each of the provinces of Canada. No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise.

The preliminary prospectus is still subject to completion. A copy of the preliminary prospectus, and any amendment, is required to be delivered with this document. Copies of the prospectus may be obtained from Canaccord Genuity Corp. (416‐869‐3052 or by email at ecm@cgf.com) and Desjardins Capital Markets (416‐607‐3047 or by email at ecm@desjardins.com). There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final prospectus has been issued.

This document does not provide full disclosure of all material facts relating to the securities offered. Investors should read the preliminary prospectus, the final prospectus and any amendment for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.

The preliminary prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities. These securities of the Company (as defined below) have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “ U.S. Securities Act ”), or the securities laws of any state of the United States (as such term is defined in Regulation S under the U.S. Securities Act) and may not be offered, sold or delivered, directly or indirectly, in the United States, except pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. The preliminary prospectus and this document does not constitute an offer to sell or solicitation of an offer to buy any of these securities in the United States.

Capitalized terms used but not otherwise defined herein shall have the respective meaning ascribed thereto in the preliminary prospectus. All references to “$” or “dollars” in this document are to Canadian dollars.

Issuer:	Haivision Systems Inc. (“Haivision” or the “Company”).
Description of the	Haivision is a leading provider of infrastructure solutions for the video streaming market,
Company:	servicing enterprises and governments globally.
Offering Size:	$45 million ($51.75 million if the Over‐Allotment Option is exercised in full).
Offering Price Range:	Between $6.50 and $7.00 per common share (the “Offering Price”).
Over‐Allotment Option:	The Company has granted to the Underwriters an option (the “Over‐Allotment Option”),
	exercisable, in whole or in part, at any time for a period of 30 days after the Closing Date,
	to purchase up to an additional 15% of the aggregate number of common shares offered
	under the prospectus at the Offering Price solely to cover over‐allotments, if any, and for
	market stabilization purposes.
Shares Outstanding:	Based on the midpoint of the Offering Price range, and assuming that all existing stock
	options of the Company will be exercised on a cashless basis under the Pre‐Closing Capital
	Changes, upon completion of the offering, an aggregate of 27,065,127 common shares
	and no preferred shares will be issued and outstanding (28,065,127 common shares if
	the Over‐Allotment Option is exercised in full).
Use of Proceeds:	The aggregate net proceeds to the Company from the offering are estimated to be
	approximately $42.3 million ($48.6 million if the Over‐Allotment Option is exercised in

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full) after deducting the Underwriters' fee but before the expenses relating to the offering.

The Company intends to use (i) approximately $28.0 million of the net proceeds of the offering to fund selective acquisitions, (ii) approximately $6.0 million of the net proceeds of the offering to accelerate the introduction of new products, features and services, (iii) approximately $6.0 million of the net proceeds of the offering to fund the expansion and to increase the scope of sales, marketing and global support activities; and (iv) the balance for general working capital and other general corporate purposes.

Description of Equity Upon completion of the offering, the Company’s authorized share capital will consist of Capital: (i) an unlimited number of common shares, and (ii) an unlimited number of preferred shares, issuable in series. Lock‐Up Arrangements: In connection with the offering, each of the Company’s executive officers and directors, each such shareholder’s associates and affiliates, and certain other shareholders have agreed that he, she or it will not, directly or indirectly, without the prior written consent of the Bookrunners, on behalf of the Underwriters, offer, issue, sell, grant, secure, pledge, or otherwise transfer, dispose of or monetize, or engage in any hedging transaction, or enter into any form of agreement or arrangement the consequence of which is to alter economic exposure to, or announce any intention to do so, in any manner whatsoever, any common shares or securities convertible into, exchangeable for, or otherwise exercisable to acquire common shares or other equity securities of the Company (the “Locked‐up Securities” ) for a period commencing on the Closing Date and ending (i) in the case of the Company’s executive officers, 18 months after the Closing Date, and (ii) in the case of the Company’s directors and other shareholders, 6 months after the Closing Date, in both cases subject to certain limited exceptions (the “Lock‐up Agreements” ). Pursuant to the terms and conditions of their Lock‐up Agreements, each of the Company’s executive officers will be released of the restrictions applicable to him under his Lock‐up Agreement in respect of (i) one third of his Locked‐up Securities as of 6 months after the Closing Date, (ii) an additional one third of his Locked‐up Securities as of 12 months after the Closing Date, and (iii) the remaining one third of his Locked‐up Securities as of 18 months after the Closing Date. Listing: The Company has applied to list the common shares on the Toronto Stock Exchange (“ TSX ”) under the symbol “HAI”. Listing is subject to the approval of the TSX in accordance with its original listing requirements. Eligibility for Investment: Eligible under the usual statutes and for RRSPs, RRIFs, RDSPs, RESPs and TFSAs. Underwriting Fee: 6.0% of the gross proceeds raised in respect of the offering (including the Over‐Allotment Option). Bookrunners: Canaccord Genuity Corp. and Desjardins Capital Markets. Pricing: Expected the week of November 30, 2020. Closing: Expected the week of December 7, 2020.

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