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Press release from Marketwire

Cyberplex Inc. Completes Acquisition of Tsavo Media and Closes C$33.34 Million Bought Deal Private Placement

Tuesday, June 08, 2010

Cyberplex Inc. Completes Acquisition of Tsavo Media and Closes C$33.34 Million Bought Deal Private Placement17:30 EDT Tuesday, June 08, 2010TORONTO, ONTARIO--(Marketwire - June 8, 2010) - NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICESCyberplex Inc. (TSX:CX) a global leader in performance-based online marketing and technology solutions today announced that it successfully completed its previously announced acquisition of leading online media publisher, Tsavo Media, in a transaction valued at US$75 million (the "Tsavo Acquisition"). In connection with the Tsavo Acquisition, Cyberplex also completed a C$33.34 million underwritten bought deal private placement of subscription receipts, inclusive of the underwriters exercising their option to increase the size of the private placement by $3.12 million, as the private placement was oversubscribed. "This acquisition represents a significant milestone for Cyberplex," said Geoffrey Rotstein, President and CEO of Cyberplex. "Tsavo's leadership in targeted distribution combined with Cyberplex's performance advertising solutions create a unique and desired value proposition in the performance marketing industry. We are extremely excited about the opportunity to combine the organizations and realize on the synergies that we believe can be achieved both financially and strategically."Headquartered in Waterloo, Ontario, Tsavo Media is a leading online publisher, featuring a dynamic and diverse family of Web properties. Ted Hastings, President and CEO of Tsavo Media, has been appointed President of the combined Cyberplex organization and all other senior executives of Tsavo Media will remain with the organization. Geoffrey Rotstein will continue to serve as Chief Executive Officer of Cyberplex. In addition, Miles Arnone, a representative of American Capital, Ltd. (as party to the vendor take-back notes described below), has been appointed a director of Cyberplex. "This is a highly synergistic combination and we are excited about the prospects of moving forward as a consolidated entity," said Ted Hastings, President and CEO of Tsavo. "Tsavo's traffic platform and online properties combined with the performance advertising network from Cyberplex will provide a comprehensive offering for our collective advertisers, partners and employees."Under the terms of the Tsavo Acquisition, Cyberplex acquired the business carried on by Tsavo for a total purchase price of US$75,000,000, subject to post-closing adjustments. The purchase price was satisfied by: (i) US$40,000,000, payable with US$37,800,000 in cash, funded partially by the private placement (as described below), and with US$2,200,000 satisfied through the issuance of 4,160,000 common shares of Cyberplex; and (ii) US$35,000,000 by way of vendor take-back notes pursuant to a credit agreement entered into between the Tsavo parent entity being acquired by Cyberplex, as borrower, and certain lenders arranged by the vendors and secured against a first priority security interest on all of the assets of, and equity interests in, the Tsavo parent entity and Tsavo's assets (and not the other assets of Cyberplex or its previously existing subsidiaries). Other than the issuance of 4,160,000 common shares of Cyberplex, the Tsavo Acquisition is being satisfied entirely in cash and through the new senior credit facility.To finance a portion of the Tsavo Acquisition, Cyberplex completed an underwritten bought deal private placement offering of 60,678,428 subscription receipts of Cyberplex (the "Subscription Receipts") at a price of C$0.55 per Subscription Receipt (the "Offering Price") for gross proceeds of C$33,373,135.40 (the "Offering"). The Offering was undertaken with a syndicate of underwriters led by GMP Securities L.P. and including Paradigm Capital Inc., M Partners Inc. and Scotia Capital Inc. The Offering was oversubscribed, and the underwriters exercised their option to increase the size of the private placement by $3.12 million. Each Subscription Receipt is exercisable at any time following the closing of the Tsavo Acquisition (which has now been completed) to acquire one common share in the capital of Cyberplex, subject to adjustment in certain events, and all unexercised Subscription Receipts shall be deemed to be exercised, for no further consideration and with no further action on the part of the holder thereof, into one common share in the capital of Cyberplex, subject to adjustment in certain events, upon the earlier of: (i) the date that is four months and one day following the closing date of the Offering, and (ii) the fifth business day after a receipt is issued for a (final) prospectus by the securities regulatory authorities in each of the provinces of Canada where Subscription Receipts are issued and sold qualifying the distribution of the common shares of Cyberplex to be issued upon the exercise of the Subscription Receipts. Cyberplex has agreed to use commercially reasonable efforts to qualify the distribution of the common shares issuable on exercise of the Subscription Receipts within 30 days following the date hereof.After giving effect to the Tsavo Acquisition and the Offering, upon exercise of the Subscription Receipts, Cyberplex will have an aggregate of 133,324,896 common shares issued and outstanding. GMP Securities L.P. acted as financial advisor to Cyberplex. In addition, Paradigm Capital Inc. issued a fairness opinion to Cyberplex with respect to the Tsavo Acquisition. RBC Capital Markets acted as financial advisor to Tsavo and its shareholders. About Tsavo Media Based in Waterloo, Ontario, Tsavo Media develops highly relevant content experiences for today's digital consumers, as well as niche content monetization services to publishers. Fundamental demand for Tsavo's offering continues to grow with the inevitable transition of online pricing models from clicks to actions. The ability to intelligently identify consumer intent and accurately match it with relevant and timely offers, will be critical for delivering value for advertisers as they consistently move online in the future. Tsavo has more than 300 websites offering consumer information in five strategic categories - health & wellness, technology, lifestyle, education and finance. Its network of sites attracts more than 30 million visitors each month. About CyberplexCyberplex Inc. (www.cyberplex.com) is a leader in providing advertising solutions, online customer acquisition strategies and technology development. The Company, through its subsidiaries, leverages its proprietary affiliate network, robust advertising relationships and experience, along with technology design, development and solutions specialists to develop and implement web-based programs and solutions that have a proven record in delivering results.With over 16 years of experience serving Fortune 1000 clients including FTD, Vista Print, Sony Canada, IAC, Vista Print, Aecon, Ontario Power Generation, Scotia Bank and the Royal Bank of Canada, Cyberplex is frequently the firm of choice for business leaders looking for effective and reliable online solutions. Cyberplex serves clients across Canada and the US and is headquartered in Toronto, Canada.CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTSThis press release may contain forward-looking statements. The statements concerning Cyberplex's objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates, and the business, operations, financial performance and condition of Tsavo Media, its subsidiaries and Cyberplex are forward-looking statements. The words "believe", "expect", "anticipate", "estimate", "intend", "may", "will", "would" and similar expressions and the negative of such expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to important assumptions, including the following specific assumptions: the ability of Cyberplex and Tsavo Media to meet their respective revenue targets; the ability to achieve cost synergies; the completion of the Tsavo Acquisition in accordance with its terms; general industry and economic conditions; changes in Cyberplex's and Tsavo Media's relationships with their customers and suppliers; pricing pressures and other competitive factors; and changes in regulatory requirements affecting the businesses of Cyberplex and Tsavo Media. Cyberplex has also made certain macroeconomic and general industry assumptions in the preparation of such forward-looking statements. While Cyberplex considers these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to: failure to obtain written shareholder approval of the Offering; general economic and business conditions; financing risk; risks inherent in the business of operating Cyberplex and Tsavo Media, including the inability to attract and retain qualified employees; competition; disruptions in business operations; interest rate and foreign currency fluctuations; existing governmental regulations and changes in, or the failure to comply with, governmental regulations; and liability and other claims asserted against Cyberplex. Furthermore, the amounts set out in this press release are based on foreign currency exchange rates in effect on the date hereof and there is no assurance that such foreign currency exchange rates will not fluctuate in a manner that is adverse to Cyberplex. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. All of the forward-looking statements made in this press release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Cyberplex. Forward-looking statements are given only as at the date hereof and Cyberplex disclaims any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.FOR FURTHER INFORMATION PLEASE CONTACT: Cyberplex Inc. David Katz VP Corporate Development 416.597.8889 416.597.2345 (FAX)