Press Release

Creates a market leading TV software company

Ottawa, Ontario – June 30, 2008 - Espial® Group Inc. ("Espial" or the "Company"), (TSX: ESP), a leader in the delivery of IPTV middleware and applications, today announced that it has entered into a definitive agreement pursuant to which Espial will acquire all of the outstanding shares of Kasenna, Inc. (“Kasenna”) in exchange for an aggregate of 4,722,224 Espial common shares, which before giving effect to the transaction represents 51.2% of the issued and outstanding shares of Espial and will represent approximately 33.6% of the issued and outstanding shares of Espial on an after-issue basis.

“Video services are critical for service providers' success worldwide. The combination of Espial and Kasenna strengthens the leadership position of Espial in the IPTV, hybrid IP-DVB and hospitality segments”, noted Jaison Dolvane, CEO of Espial. “The IPTV market remains early and fragmented, and service providers are looking for clear leaders that they can bet on. Acquiring Kasenna provides us with increased scale, expertise, product breadth and channel access to position ourselves as the leading choice for service providers worldwide”.

Mr. Dolvane noted, “The Kasenna team has a tremendous amount of depth and expertise in video. They've done an excellent job creating world class middleware and VOD products that have received industry recognition. For example, Kasenna Mediabase was ranked #1 video-on-demand product by MRG in 2007”.

The combined operations will provide strong synergies including,

•  Increased number of Tier 1 video service provider customers, a footprint in over 100 customers worldwide with no overlap and a combined 2.4M+ IPTV licenses in deployment for one or more of our products.

•  Broader channel relationships with equipment vendors and system integrators.

•  Larger sales force, support and fulfillment capacity across EMEA, Asia & Americas.

•  Broader product portfolio includes browsers, video servers, client & server middleware, and applications.

•  Differentiated best-of-breed technology with a strong patent portfolio.

•  Strong balance sheet, financial and cost synergies that will be accretive to Espial shareholders in 2009.

“This creates a company with 20+ years of video software experience. The combined depth and strength of our product portfolios, customers, partners and channel relationships, provides the right attributes to create an industry leader” said Vivek Pendharkar , CEO of Kasenna. “Kasenna investors believe this merger creates a winning combination and agreed to a majority share transaction in order to participate in the growth of Espial. This increased scale and a continued strong balance sheet positions Espial to capitalize on this market as it matures”.

The selection of a TV software platform involves a long-term commitment from customers. Many global service providers have delayed or deferred decisions due to difficulty in selecting the right partner in this early market. This combination distinguishes Espial from the crowd, as a leading choice for service providers in this important decision.

“Espial will work to support and enhance its relationships with all Kasenna and Espial customers, partners and channels.” Mr. Dolvane stated. “We will deliver integrated solutions with a predictable roadmap, along with continuing to sell component products for open and homegrown IPTV & hybrid IP-DVB video systems. Partnering with ecosystem partners, including 3 rd party middleware and VOD companies will continue to be an important part of our strategy”.

Espial and Kasenna are arm's length parties and, to the knowledge of Espial, no insider of Espial has any interest, directly or indirectly, in the transaction, no shareholder of Kasenna holds any common shares of Espial prior to the closing of the acquisition and no shareholder of Kasenna, together with their associates and joint actors, will hold more than 10% of the common shares of Espial following closing of the acquisition. As such, the transaction will not materially affect control of Espial.

200,954 of the common shares to be issued in connection with the merger will be issued to certain key officers and directors of Kasenna. 753,545 of the Espial common shares to be issued in connection with the merger, representing approximately 16.6% of the Espial common shares to be issued in exchange for Kasenna shares, will be placed into escrow for a period of one year following closing of the merger as security for any misrepresentations or breach of covenants by Kasenna and/or its stockholders under the Merger Agreement.

Closing is subject to certain customary conditions, including regulatory approvals. The policies of the TSX require that Espial seek and obtain shareholder approval due to the fact that the number of securities issued or issuable in payment of the purchase price exceeds 25% of the number of common shares of Espial which are outstanding prior to the acquisition, on a non-diluted basis. The policies of the TSX allow Espial to meet that requirement by providing the TSX with written evidence that holders of more than 50% of the voting securities of Espial are familiar with the terms of the proposed transaction and are in favour of it. The Board of Directors of Espial has received a fairness opinion in respect of the merger, has unanimously approved the merger and has recommended that shareholders vote in favour of the transaction. Espial has received written consent to the transaction from certain major shareholders, representing 53% of the outstanding common shares of Espial. Subject to regulatory approvals and satisfaction of other conditions of closing, the proposed transaction is expected to close on or about July 9, 2008. Upon completion of the acquisition, Espial will have seven directors, six of whom will be the current directors of Espial, and one of whom will be a nominee of the shareholders of Kasenna.

Genuity Capital Markets & GMP Securities L.P. acted as financial advisors to Espial on this transaction. ThinkPanmure LLC. acted as financial advisor to Kasenna.

About Espial

Espial provides IPTV middleware and applications that enable superior quality of experience, fast application performance, carrier-grade scalability, and open extensibility, all at a lower total cost of ownership. Espial's Evo® IPTV Service Platform includes Evo Client, Evo Server, Evo Browser, Evo BML Browser, Evo Future-Proof Framework™ (FPF), Evo SkinTones™ and applications such as Electronic Program Guide, Video on Demand, Digital Video Recorder, Content Portal, Games, and Triple Play..

About Kasenna

As a market leader in IP video delivery, the company has focused on open standards and an intelligent management infrastructure which allow service providers, enterprises, and other organizations to build commercial-grade IP video networks that support new and emerging video services. Kasenna offers network operators a turnkey source of IP video infrastructure and applications for video services. Kasenna's patented software technology has been proven with thousands of successful telco, cable, and enterprise deployments worldwide. Kasenna is headquartered in Sunnyvale , California . For more information please visit the Kasenna website, www.kasenna.com. 

Forward Looking Statements

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 theses terms or other similar expressions concerning matters that are not historical facts. In particular, statements about the proposed acquisition of Kasenna by Espial, including the expected timetable for completing the transaction, the receipt of shareholder and regulatory approvals, benefits and synergies of the transaction, future opportunities for the combined company and products and any other statements regarding Espial's and Kasenna'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 the parties' ability to consummate the transaction, the conditions to the completion of the transaction, including the receipt of shareholder approval or the regulatory approvals required for the transaction may not be obtained on the terms expected or on the anticipated schedule. Additional risks and uncertainties affecting Espial can be found in Espial's Annual Report for the fiscal year ended December 31, 2007 and in its most recent quarterly report filed on SEDAR at www.sedar.com , and as may be set out in Espial's management proxy circular in respect of the proposed transaction to be made available, once 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.

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