SF funds gets 3.9 mill XDM shares for its RMG shares then buys another 5.1 mill shares from 'two related sellers' at a price of .30 + cost to a max of .322, so I guess SF funds is willing to pay .322 for a lot of shares
XDM is building up a lot of cash and paying off its debt, nice to see something starting to happen on the corp side
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Xentel shareholder SF funds to acquire 27.37% holding
2010-02-25 09:50 ET - News Release
Mr. Michael Platz reports
ACQUISITION OF SHARES OF XENTEL DM INCORPORATED
SF Fund Management Inc., SF Fund Management II Inc. and SF Fund Management III Inc., each in its capacity as the general partner of the respective Ontario limited partnership noted below, have entered into agreements to acquire a total of 9,053,855 Class A common shares of Xentel DM Inc.
The shares to be acquired will comprise in the aggregate approximately 27.37 per cent of the outstanding Class A common shares of Xentel which will be outstanding after giving effect to Xentel's issuance of shares in exchange for the outstanding shares of the Responsive Marketing Group Inc. (RMG), as noted below.
Of the shares, 3,928,053 are to be issued to the undernoted acquirers by Xentel in exchange for their sale to Xentel of 47.5 per cent of the outstanding shares in the capital of RMG. RMG is a private company, all of the outstanding shares in the capital of which are to be acquired by Xentel in exchange for the issuance by it of 8,269,585 Class A common shares (such acquisition is herein referred to as the RMG purchase). The remaining 5,125,802 shares will be purchased by one of the acquirers in a private transaction from two related sellers at the price 30 cents per share plus reimbursement of certain of their legal expenses, the total of the amount of such reimbursement and the purchase price of the shares not to exceed 32.2 cents per share.
The shares will be acquired as displayed in the "Share acquisition" table.
SHARE ACQUISITIONBuyer Issuer/seller No. of sharesSF Xentel 1,964,027SF II Xentel 1,964,026SF III Two related Xentel Shareholders 5,125,802
SF, SF II and SF III, and the limited partnerships of which they respectively are the general partners, act jointly or in concert. Such limited partnerships, and the number of shares to be acquired by each, are in the "Limited partnership" table.
LIMITED PARTNERSHIPGeneral No. of shares to bepartner Limited partnership acquiredSF The SF Fund Limited Partnership 1,910,016SF The Shotgun Fund Limited Partnership II 54,011SF II SF Fund Limited Partnership II 1,898,992SF II SF Fund Limited Partnership II-B 65,034SF III Shotgun Fund Limited Partnership III 5,125,802
The shares will be acquired for investment purposes. None of the reporting persons intends to acquire any additional securities of Xentel.
In connection with the acquisitions, a shareholders agreement is to be entered into among the acquirers, the following three individuals and their respective family holding companies as named below, and Xentel. Such three individuals and their family holding companies are:
- Michael Davis and 2062766 Ontario Inc.;
- Michael Platz and All West Productions Ltd.;
- David A. Winograd and D & W Management Fund LLC.
Mr. Platz is the chief executive officer and a director, and Mr. Winograd is the president and a director, of Xentel. Mr. Davis is the chief executive officer of RMG and will become a director and senior officer of Xentel on completion of the RMG purchase. Mr. Davis's family holding company will be issued 3,928,053 Class A common shares of Xentel in exchange for its 47.5 per cent of the outstanding shares of RMG. The acquirers understand that such three individuals and their family holding companies will, upon completion of the RMG purchase, own an aggregate of 14,221,596 Class A common shares of Xentel, comprising approximately 43 per cent of the number of Class A common shares of Xentel which will be outstanding.
By the shareholders agreement, the contracting Xentel shareholders who are parties thereto will therein agree to vote their shares of Xentel to elect as the directors of Xentel three nominees of the acquirers, one nominee of each of the other respective contracting shareholders and a joint nominee of those other three contracting shareholders, for a total of seven directors. The shareholders agreement will provide for the continuing management of the operations of Xentel under the direction of its board of directors; for Mr. Platz and Mr. Davis are to be the co-chief executive officers of Xentel, for Mr. Winograd to be its president; and for the employment by Xentel of Mr. Davis, Mr. Platz and Mr. Winograd, and their remuneration; and will contain non-competition and confidentiality covenants in favour of Xentel from each of the other parties to the shareholders agreement.
Pursuant to the shareholders agreement, the shareholders will deposit their shares of Xentel with a third party depository under an agreement which will prohibit the release of their shares except as agreed by the depositing shareholders.