ZipLocal Agrees to Sale of Assets



    
    /NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE
    DISTRIBUTION SERVICES/
    

    TORONTO, June 19 /CNW/ - ZIPLOCAL INC. (ZIP-TSX Venture Exchange)
("ZipLocal" or the "Company") announces that it has entered into a definitive
agreement with JLA CP Holdings Inc. ("JLACP"), a private Ontario corporation,
to sell substantially all of its assets, and those of its subsidiary Zip411
Enterprises Inc., for approximately $2.383 million (subject to adjustment)
(the Transaction). The purchase price will be paid by the application of
approximately $1.933 million (including interest) of secured debt currently in
default and owed to affiliates of JLACP with the balance of $450,000 payable
in cash. ZipLocal intends to use the cash proceeds of the Transaction to pay
off its unsecured debts and other liabilities and to explore new business
opportunities. Following completion of the Transaction, ZipLocal will not have
an operating business.
    A committee of independent directors of the Company has received an
opinion from Cormark Securities Inc. that, as of June 19, 2009, the
consideration to be received by ZipLocal pursuant to the Transaction is fair,
from a financial point of view, to ZipLocal and its shareholders. The
directors of the Company, upon recommendation of the independent committee,
unanimously recommend that shareholders vote in favour of the Transaction.
    Immediately following closing of the Transaction, JLACP will sell all of
the assets acquired from ZipLocal and Zip411 to Canpages Inc. (Canpages) (the
Canpages Transaction). The purchase price will be satisfied by the issuance of
shares of Canadian Phone Directories Holdings Inc. (Holdings), the parent of
Canpages. JLACP and the JLA IV Funds (defined below) have agreed to provide an
additional $1 million cash indemnity to Canpages and Holdings to facilitate
the Canpages Transaction.
    JLACP has been incorporated for the sole purpose of facilitating the
Transaction and the Canpages Transaction. The Transaction is being undertaken
to accommodate material conditions of an acquisition proposal made by Canpages
in early 2009, including that, upon completion of any transaction, the shares
issued as payment for the assets of ZipLocal be held by one person and that
business and financial information relating to Canpages be kept confidential
and not be subject to disclosure under applicable securities laws. As
privately-held companies, Canpages and Holdings are not subject to public
company disclosure obligations.
    Closing of the Transaction (and the Canpages Transaction) is subject to
various closing conditions including receipt of all necessary consents and
regulatory approvals, including the approval of the TSX Venture Exchange.
    ZipLocal will be seeking approval of the Transaction from its
shareholders at the annual and special meeting to be held on Monday, July 20,
2009. Shareholders holding approximately 34% of the outstanding shares of
ZipLocal have entered into a shareholder voting agreement with Canpages and
have agreed to vote in favour of the Transaction. ZipLocal has agreed to pay
to JLACP a termination fee of $150,000 if the Transaction is not completed if
certain conditions in favour of JLACP are not satisfied or certain events
occur, including a sale pursuant to a competing transaction proposal. JLACP is
required to pay a similar termination fee to Canpages if the Canpages
Transaction is not completed.
    The shareholders of JLACP are members of the J.L. Albright Ventures group
of funds (collectively, JLA IV Funds). John L. Albright, Chairman of the Board
of ZipLocal, is the sole director and officer of JLACP and the Managing
Partner of JLA IV Funds. In addition, JLA IV Funds hold approximately 21.1
million common shares of the Company (representing approximately 26.5% of the
outstanding shares of ZipLocal) and are secured creditors of ZipLocal and
Zip411. As a result, the Transaction is a related party transaction under
applicable securities laws. The votes attaching to the shares held by JLA IV
Funds are eligible to vote in respect of the Transaction for corporate law
purposes, however, such shares will be disregarded with respect to determining
approval of the Transaction by disinterested shareholders as required by the
TSX Venture Exchange.
    Additional information regarding the Transaction will be more fully
described in the information circular to be mailed to ZipLocal's shareholders
in connection with the meeting referred to above. The definitive agreement
between ZipLocal and JLACP will be filed on SEDAR and will be available at
www.sedar.com.
    The Company also announces that Aris Zakinthinos, the Company's Chief
Technology Officer, has left to join another technology company.

    About ZipLocal Inc.

    ZipLocal operates a Canadian online directory that provides a rich,
user-defined local search experience. ZipLocal provides relevant search
results from Canadian and US businesses with maps and functionality for users
to review, rate and tag business listings. ZipLocal is focused on creating the
most comprehensive and engaging search experience at the neighbourhood and
city-wide level.

    FORWARD-LOOKING STATEMENTS

    This news release may contain forward-looking statements based on
management's current projections, beliefs and opinions at the date of this
news release. Actual results could differ materially from those anticipated in
the statements due to risks and uncertainties, which affect the Company's
business and operations. Reference should be made to the Company's continuous
disclosure documents filed from time to time with Canadian securities
regulatory authorities for a detailed description of such risks and
uncertainties. The Company takes no responsibility to update forward-looking
statements if circumstances or management's projections, beliefs or opinions
change.

    
    "Neither TSX Venture Exchange nor its Regulation Services Provider (as
    that term is defined in the policies of the TSX Venture Exchange) accepts
    responsibility for the adequacy or accuracy of this release."
    

    %SEDAR: 00022621E




For further information:

For further information: Stephen McDonald, ZipLocal Inc., (416)
987-2135, Investor_relations@ziplocal.com

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ZIPLOCAL INC.

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