THE HONOURABLE | ) | THURSDAY, THE 5TH |
) | ||
JUSTICE CUMMING | ) |
DAY
OF JULY, 2007
|
IN
THE MATTER OF AN APPLICATION under section 192
of the Canada Business Corporations Act, being R.S.C. 1985, c. C-44; AND
AN APPLICATION under Rule 14.05(2) and Rule
14.05(3)(f) of the Rules of Civil Procedure; |
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AND
IN THE MATTER OF a proposed plan of arrangement
involving Lorus Therapeutics Inc. |
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LORUS THERAPEUTICS INC. and 6650309 CANADA INC. |
PINNACLE
INTERNATIONAL LANDS, INC.
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LORUS
THERAPEUTICS INC.
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Per:
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Per:
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Name:
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Michael
De Cotiis
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Name:
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Aiping
Young
|
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Title:
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President
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Title:
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President
and Chief Executive Officer
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GENESENSE
TECHNOLOGIES INC.
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NUCHEM
PHARMACEUTICALS INC.
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Per:
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Per:
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|||
Name:
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Aiping
Young
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Name:
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Aiping
Young
|
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Title:
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Director
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Title:
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Director
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6650309
CANADA INC.
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6707157
CANADA INC.
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|||
Per:
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Per:
|
|||
Name:
|
Aiping
Young
|
Name:
|
Michael
De Cotiis
|
|
Title:
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President
and Chief Executive Officer
|
Title:
|
President
|
1.01
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Definitions
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(1)
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“Act”
means the Canada Business Corporations Act, R.S.C. 1985, c. C-44,
as from time to time amended or re-enacted, including all regulations
promulgated thereunder;
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(2)
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“Antisense
Patent Assets” means those assets set out in the Antisense Patent
Assets Transfer Agreement;
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(3)
|
“Antisense
Patent Assets Transfer Agreement” means the asset purchase
agreement to be entered into between GeneSense and New Lorus
pursuant to
which GeneSense will transfer the Antisense Patent Assets to
New Lorus and
substantially in the form attached as Schedule C to the Arrangement
Agreement;
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(4)
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“Appropriate
Number” means that number of Old Lorus
Voting Shares which, if combined with the aggregate number of
Old Lorus
Voting Shares purchased pursuant to Section 3.01(24), would result
in
Investor holding a total number of Old Lorus Voting Shares representing
approximately 41% of the issued and outstanding Old Lorus Voting
Shares at
the conclusion of the Arrangement;
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(5)
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“Arrangement”
means the business reorganization pursuant to which, among other
things,
Investor will acquire approximately 41% of the issued and outstanding
voting shares and all of the issued and outstanding non-voting
shares of
Old Lorus as contemplated by this Plan pursuant to section 192
of the
Act;
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(6)
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“Arrangement
Agreement” means the arrangement agreement between Old Lorus,
NuChem, GeneSense, New Lorus, Pinnacle and Investor dated as
of May 1,
2007 which sets out the terms and conditions pursuant to which
the parties
thereto will effect the
Arrangement;
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(7)
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“Articles
of Arrangement” means the articles of arrangement of Old Lorus in
respect of the Arrangement required under subsection 193(6) of
the Act to
be filed with the Director after the Final Order has been made
in order to
give effect to the Arrangement;
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(8)
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“Business
Day” means a day, other than a Saturday, Sunday or other
day,
when banks in Toronto, Ontario or Vancouver, British Columbia
are not
generally open for business;
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(9)
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“Court”
means the Ontario Superior Court of
Justice;
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(10)
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“Debenture
Assumption Agreement” means the agreement to be entered into
between Old Lorus and New Lorus pursuant to which New Lorus will
assume
Old Lorus’ obligation to pay TEMIC the aggregate principal amount of
$15,000,000 plus accrued interest owing under the Old Lorus Debentures,
as
contemplated by Section 3.01(3);
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(11)
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“Depositary”
means Computershare Investor Services Inc., the appointed depositary
in
respect of the Arrangement at its principal transfer office in
Toronto,
Ontario;
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(12)
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“Director”
means the Director appointed under the
Act;
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(13)
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“Dissent
Rights” has the meaning ascribed thereto in Section
5.01;
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(14)
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“Effective
Date” means the effective date set out in the Articles of
Arrangement which are filed with the
Director;
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(15)
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“Effective
Time” means 12:01 a.m. (Toronto time) on the Effective
Date;
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(16)
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“Escrow
Agreement” has the meaning ascribed thereto in the Arrangement
Agreement;
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(17)
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“Final
Order” means the final order of the Court issued in connection
with the approval of the Arrangement, providing, among other
matters, for
the Arrangement to be sanctioned and to take effect, as such
order may be
affirmed, amended or modified by any court of competent
jurisdiction;
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(18)
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“GeneSense”
means GeneSense Technologies Inc., a corporation existing under
the laws
of Canada;
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(19)
|
“GeneSense
Share Purchase Agreement” means the share purchase agreement to
be entered into between Old Lorus and New Lorus pursuant to which
Old
Lorus will transfer all of the GeneSense Shares to New Lorus
and
substantially in the form attached as Schedule G to the Arrangement
Agreement;
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(20)
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“GeneSense
Shares” means common shares in the capital of
GeneSense;
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(21)
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“Information
Circular” means the management proxy circular relating to the
Old
Lorus Securityholders’ Meeting and forwarded to Old Lorus Securityholders
in connection with, among other things, the transactions contemplated
in
this Plan;
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(22)
|
“Interim
Order” means an interim order of the Court concerning the
Arrangement under subsection 192(4) of the Act, containing declarations
and directions with respect to the Arrangement and the holding
of the Old
Lorus Securityholders’ Meeting, as such order may be affirmed, amended or
modified by any court of competent
jurisdiction;
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(23)
|
“Investor”
means 6707157 Canada Inc., a corporation existing under the laws
of
Canada;
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(24)
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“Letter
of Transmittal” means the letter of transmittal enclosed with the
Information Circular pursuant to which an Old Lorus Securityholder
is
required to surrender certificates representing Old Lorus Securities
in
order to receive, upon completion of the Arrangement, New Lorus
Securities
issued pursuant to the Arrangement and, as applicable, Old Lorus
Voting
Shares or a cash payment in lieu
thereof;
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|
(25)
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“Lock-Up
Holders” has the meaning ascribed thereto in Section
3.01(24);
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(26)
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“New
Lorus” means 6650309 Canada Inc., a corporation existing under
the laws of Canada;
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(27)
|
“New
Lorus Note 1” has the meaning ascribed thereto in Section
3.01(10);
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(28)
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“New
Lorus Note 2” has the meaning ascribed thereto in Section
3.01(14);
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(29)
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“New
Lorus Note 3” has the meaning ascribed thereto in Section
3.01(15);
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(30)
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“New
Lorus Replacement Note” has the meaning ascribed thereto in
Section 3.01(18);
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(31)
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“New
Lorus Options” has the meaning ascribed thereto in Section
3.01(1);
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(32)
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“New
Lorus Securities” has the meaning ascribed thereto in Section
3.01(1);
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(33)
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“New
Lorus Shares” has the meaning ascribed thereto in Section
3.01(1);
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(34)
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“New
Lorus Warrants” has the meaning ascribed thereto in Section
3.01(1);
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(35)
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“NuChem”
means NuChem Pharmaceuticals Inc., a corporation existing under
the laws
of Ontario;
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(36)
|
“NuChem
Share Purchase Agreement” means the share purchase agreement to
be entered into between Old Lorus and New Lorus pursuant to which
Old
Lorus will transfer all of the NuChem Shares held by it to New
Lorus and
substantially in the form attached as Schedule H to the Arrangement
Agreement;
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(37)
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“NuChem
Shares” means common shares in the capital of
NuChem;
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(38)
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“Old
Lorus” means Lorus Therapeutics Inc., a corporation existing
under the laws of Canada;
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(39)
|
“Old
Lorus Debentures” means the prime plus 1% secured convertible
debentures of Old Lorus due on October 6, 2009 in the aggregate
principal
amount of $15,000,000, issued to TEMIC in equal amounts of $5,000,000
each
on each of October 6, 2004, January 15, 2005 and April 15,
2005;
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(40)
|
“Old
Lorus Non-Voting Shares” means the non-voting common shares of
Old Lorus issued and outstanding following the reorganization
of Old
Lorus’ share capital pursuant to the
Arrangement;
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(41)
|
“Old
Lorus Note” has the meaning ascribed thereto in Section
3.01(3);
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(42)
|
“Old
Lorus Options” means the issued and outstanding stock options
issued to directors, senior officers, employees and consultants
of Old
Lorus, governed by the terms of the Old Lorus Stock Option Plans
and
permitting the holders thereof to purchase an aggregate of up
to
25,921,000 Old Lorus Shares, as such number may be amended from
time to
time;
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(43)
|
“Old
Lorus Securities” means, collectively, the Old Lorus Debentures,
the Old Lorus Options, the Old Lorus Shares and the Old Lorus
Warrants;
|
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(44)
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“Old
Lorus Securityholders” means, collectively, the holders of Old
Lorus Shares, Old Lorus Options, Old Lorus Warrants and Old Lorus
Debentures;
|
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(45)
|
“Old
Lorus Securityholders’ Meeting” means the special meeting of Old
Lorus Securityholders, and any adjournments thereof, called to
consider
and authorize, approve and adopt, among other things, the Arrangement
in
accordance with the Interim Order;
|
|
(46)
|
“Old
Lorus Shareholders” means the holders of Old Lorus
Shares;
|
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(47)
|
“Old
Lorus Share Purchase Plan” means the Old Lorus employee share
purchase plan;
|
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(48)
|
“Old
Lorus Shares” means the common shares of Old Lorus issued and
outstanding immediately prior to the reorganization of Old Lorus’ share
capital pursuant to the
Arrangement;
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(49)
|
“Old
Lorus Stock Option Plans” means, collectively, Old Lorus’ 2003
Stock Option Plan and the 1993 Stock Option
Plan;
|
|
(50)
|
“Old
Lorus Voting Shares” means the voting common shares of Old Lorus
issued and outstanding following the reorganization of Old Lorus’ share
capital pursuant to the
Arrangement;
|
|
(51)
|
“Old
Lorus Warrants” means the 3,000,000 issued and outstanding common
share purchase warrants of Old Lorus issued to TEMIC, each of
which
entitles TEMIC to acquire, subject to adjustment, one Old Lorus
Share at a
price per share of $1.00;
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|
(52)
|
“Pinnacle”
means Pinnacle International Lands, Inc., a corporation existing
under the
laws of British Columbia;
|
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(53)
|
“Pinnacle
Share Purchase Agreement” means the share purchase agreement to
be entered into between Investor and New Lorus pursuant to which
Investor
will purchase from New Lorus the Appropriate Number of Old Lorus
Voting
Shares and all of the Old Lorus Non-Voting Shares and substantially
in the
form attached as Schedule I to the Arrangement
Agreement;
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(54)
|
“Plan”
means this plan of arrangement as amended or supplemented from
time to
time, and “hereby”, “hereof’, “herein”, “hereunder”, “herewith” and
similar terms refer to this Plan and not to any particular provision
of
this Plan;
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(55)
|
“Prepaid
Expenses and Receivables” means those assets set out in the
Prepaid Expenses and Receivables Transfer
Agreement;
|
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(56)
|
“Prepaid
Expenses and Receivables Transfer Agreement” means the asset
purchase agreement to be entered into between Old Lorus and GeneSense
pursuant to which Old Lorus will transfer the Prepaid Expenses
and
Receivables to GeneSense and substantially in the form attached
as
Schedule F to the Arrangement
Agreement;
|
|
(57)
|
“resident
in the United States” shall be determined as provided in Rule
12g-4(a)(2) under the United States Securities Exchange Act of
1934, as
amended;
|
|
(58)
|
“Tangible
Business Assets” means Old Lorus’ depreciable property set out in
the Tangible Business Assets Transfer
Agreement;
|
|
(59)
|
“Tangible
Business Assets Transfer Agreement” means the asset purchase
agreement to be entered into between Old Lorus and GeneSense
pursuant to
which Old Lorus will transfer the Tangible Business Assets to
GeneSense
and substantially in the form attached as Schedule E to the
Arrangement Agreement;
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(60)
|
“TEMIC”
means The Erin Mills Investment
Corporation;
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|
(61)
|
“Transfer
Agent and Registrar” means Computershare Investor Services
Inc.;
|
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(62)
|
“United
States” means the United States of America, its territories
and
possessions, any state of the United States and the District
of
Columbia;
|
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(63)
|
“Virulizin
and Small Molecule Patent Assets” means those assets set out in
the Virulizin and Small Molecule Patent Assets Transfer
Agreement;
|
|
(64)
|
“Virulizin
and Small Molecule Patent Assets Transfer Agreement” means the
asset purchase agreement to be entered into by Old Lorus and
GeneSense
pursuant to which Old Lorus will transfer the Virulizin and Small
Molecule
Patent Assets to GeneSense and substantially in the form attached
as
Schedule D to the Arrangement Agreement;
and
|
|
(65)
|
“Warrant
Purchase Agreement” means the warrant purchase agreement between
New Lorus and TEMIC pursuant to which New Lorus has agreed to
purchase the
New Lorus Warrants from TEMIC dated May 1,
2007.
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1.02
|
Headings
|
1.03
|
Interpretation
|
1.04
|
Extended
Meanings
|
1.05
|
Date
for any Action
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1.06
|
Statutory
References
|
1.07
|
Deemed
Currency
|
2.01
|
Purpose
and Effect of the Plan
|
3.01
|
Arrangement
|
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(1)
|
The
Old Lorus Shareholders, holders of Old Lorus Options and holders
of Old
Lorus Warrants will transfer their Old Lorus Shares, Old Lorus
Options and
Old Lorus Warrants,
|
|
|
as
applicable, to New Lorus in exchange for the issuance by New
Lorus of
shares (the “New Lorus Shares”), options (the
“New Lorus Options”) and warrants (the “New Lorus
Warrants” and, together with the New Lorus Shares and the New
Lorus Options, the “New Lorus Securities”), respectively,
having the same value, terms and conditions as the Old Lorus
Shares, Old
Lorus Options and Old Lorus
Warrants;
|
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(2)
|
New
Lorus will repurchase the New Lorus Warrants from TEMIC pursuant
to the
Warrant Purchase Agreement;
|
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(3)
|
Pursuant
to the Debenture Assumption Agreement, New Lorus will assume
Old Lorus’
obligation to pay TEMIC the $15,000,000 aggregate principal amount
of the
Old Lorus Debentures plus accrued and unpaid interest thereon
in
consideration for Old Lorus issuing a non-interest bearing promissory
note
to New Lorus for an amount equal to the amount owing under the
Old Lorus
Debentures (the “Old Lorus
Note”). The right of TEMIC under the Old Lorus
Debentures to convert such debentures into Old Lorus Shares will
be
exchanged for the right to convert such debentures into an equal
number of
New Lorus Shares;
|
|
(4)
|
Old
Lorus will surrender to New Lorus for cancellation the initial
New Lorus
Share that was issued to Old Lorus upon the incorporation of
New
Lorus;
|
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(5)
|
The
articles of Old Lorus will be amended to change its name to “4325231
Canada Inc.” or a name to be used for real estate development
purposes;
|
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(6)
|
The
articles of New Lorus will be amended to change its name to “Lorus
Therapeutics Inc.”;
|
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(7)
|
The
articles of Old Lorus will be amended to conform with the form
of the
amended articles agreed upon in writing by the parties to the
Arrangement
Agreement on or prior to the date of the Interim Order, such
amendments to
effect, among other things, a reorganization of the share capital
of Old
Lorus to create an unlimited number of Old Lorus Voting Shares
and an
unlimited number of Old Lorus Non-Voting Shares. The Old Lorus
Voting Shares and the Old Lorus Non-Voting Shares will rank equally
with
respect to participation in dividends and the liquidation of
Old
Lorus;
|
|
(8)
|
As
part of the reorganization of the share capital of Old Lorus,
the Old
Lorus Shares held by New Lorus will be exchanged for 21,127,828
Old Lorus
Voting Shares and 2,078,872,172 Old Lorus Non-Voting Shares,
the Old Lorus
Options and the Old Lorus Warrants will be cancelled and a right
to
acquire Old Lorus Shares under the Old Lorus Share Purchase Plan
will
become a right to acquire an equivalent number of New Lorus Shares
under
such plan;
|
|
(9)
|
Pursuant
to the Tangible Business Assets Transfer Agreement, Old Lorus
will
transfer the Tangible Business Assets to GeneSense in consideration
for
the issuance by GeneSense of one GeneSense Share to Old
Lorus;
|
|
(10)
|
Pursuant
to the Antisense Patent Assets Transfer Agreement, GeneSense
will transfer
the Antisense Patent Assets to New Lorus in consideration for
the issuance
by New Lorus to GeneSense of a demand non-interest bearing promissory
note
in an amount equal to the fair market value of the Antisense
Patent Assets
(“New Lorus
Note 1”);
|
|
(11)
|
Pursuant
to the Virulizin and Small Molecule Patent Assets Transfer Agreement,
Old
Lorus will transfer the Virulizin and Small Molecule Patent Assets
to
GeneSense in consideration for the issuance by GeneSense of one
GeneSense
Share to Old Lorus;
|
|
(12)
|
GeneSense
will repay its debt owing to Old Lorus in exchange for the issuance
by
GeneSense of one GeneSense Share to Old
Lorus;
|
|
(13)
|
Pursuant
to the Prepaid Expenses and Receivables Transfer Agreement, Old
Lorus will
transfer the Prepaid Expenses and Receivables to GeneSense in
exchange for
the issuance by GeneSense of one GeneSense Share to Old
Lorus;
|
|
(14)
|
Pursuant
to the GeneSense Share Purchase Agreement, Old Lorus will transfer
all of
the GeneSense Shares to New Lorus at a price equal to their fair
market
value in exchange for the assumption by New Lorus of Old Lorus’ remaining
liabilities and transaction costs (other than the Old Lorus Note)
and the
issuance by New Lorus of a demand non-interest bearing promissory
note to
Old Lorus for an amount equal to the amount by which the purchase
price
for the GeneSense Shares exceeds the amount of Old Lorus’ liabilities
assumed by New Lorus (“New Lorus Note
2”);
|
|
(15)
|
Pursuant
to the NuChem Share Purchase Agreement, Old Lorus will transfer
all of the
NuChem Shares held by it to New Lorus at a price equal to their
fair
market value in consideration for the issuance by New Lorus to
Old Lorus
of a demand, non-interest bearing promissory note in an amount
equal to
the purchase price for the NuChem Shares (“New Lorus Note
3”);
|
|
(16)
|
Old
Lorus will assign all of its contractual obligations to New Lorus
or its
assignee and New Lorus or its assignee will assume such
obligations;
|
|
(17)
|
New
Lorus will offer employment to all of the employees of Old Lorus
and will
assume all employment obligations related
thereto;
|
|
(18)
|
New
Lorus will repay the amount owing by New Lorus to Old Lorus under
the New
Lorus Note 2 and the New Lorus Note 3 by way of set off against
the Old
Lorus Note and the issuance to Old Lorus of a replacement non-interest
bearing demand promissory note (the “New Lorus Replacement
Note”) for an amount equal to the amount by which the aggregate
amount owing by New Lorus under the New Lorus Note 2 and the
New Lorus
Note 3 exceeds the amount of the Old Lorus
Note;
|
|
(19)
|
Old
Lorus will reduce its stated capital by an amount equal to its
remaining
cash, cash equivalents, and short term and long term investments,
less the
amount required to fund the repurchase of Old Lorus Voting Shares
described in Section 3.01(23), plus an amount equal to the amount
of the
New Lorus Replacement Note and will distribute such property
to New Lorus
in satisfaction of the capital reduction
amount;
|
|
(20)
|
[intentionally
deleted]
|
|
(21)
|
Pursuant
to the Pinnacle Share Purchase Agreement, Investor will purchase
the
Appropriate Number of the Old Lorus Voting Shares and all of
the Old Lorus
Non-Voting
|
|
|
Shares
from New Lorus in consideration of a cash payment equal to
$0.0040775156
per Old Lorus Voting Share and $0.0040775156 per Old Lorus
Non-Voting
Share, subject to payment and adjustment in accordance with
the Pinnacle
Share Purchase Agreement and a holdback pursuant to the Escrow
Agreement;
|
|
(22)
|
The
New Lorus Shares will be conditionally approved for listing on
the Toronto
Stock Exchange and the American Stock Exchange subject to the
fulfillment
of the conditions set out in the applicable conditional approval
letter;
|
|
(23)
|
New
Lorus will reduce its stated capital by an amount equal to the
fair market
value of its Old Lorus Voting Shares, determined based on the
price per
Old Lorus Voting Share paid by Investor in Section 3.01(21) above.
In satisfaction of the capital reduction, New Lorus will: (i)
in the case
of shareholders of New Lorus who are not resident in the United
States,
distribute Old Lorus Voting Shares on a pro rata basis, disregarding
fractions (provided such distribution effects a distribution
of not less
than 90% of the Old Lorus Voting Shares then owned
by New Lorus); and (ii) in the case of shareholders of New Lorus
who are
resident in the United States, sell to Old Lorus for cash consideration
New Lorus’ remaining Old Lorus Voting Shares (not to exceed
10% of the Old Lorus Voting Shares then owned by
New
Lorus) at the price per Old Lorus Voting Share paid by Investor
at the
Effective Time in Section 3.01(21) and distribute
the proceeds of such sale to such shareholders who are resident
in the
United States on a pro rata basis, disregarding fractions, as
the cash
equivalent to the value of the Old Lorus Voting Shares otherwise
distributable to them;
|
|
(24)
|
Investor
will purchase all of the Old Lorus Voting Shares held by High
Tech
Beteilingungen GmbH & Co. KG, Technifund Inc. and Herbert Abramson
(collectively, the “Lock-Up Holders”) at a fair market
price determined based on the price per Old Lorus Voting Share
paid at the
Effective Time by the Investor in Section
3.01(21);
|
|
(25)
|
Investor
will subscribe for 294,296,851 additional Old Lorus Non-Voting
Shares for
a cash payment of $1,200,000; and
|
|
(26)
|
Pinnacle
or an affiliate thereof will transfer interests in certain real
estate
development projects to Old Lorus in return for a cash payment
and a
promissory note of Old Lorus and Old Lorus will
enter into certain development, management and marketing agreements
with
Pinnacle and/or one or more affiliates
thereof.
|
4.01
|
Outstanding
Certificates
|
4.02
|
Old
Lorus Shares
|
|
(1)
|
As
soon as practicable following the Effective Time, New Lorus shall
cause to
be delivered for the benefit of the Old Lorus Shareholders, certificates
representing, in the aggregate, the New Lorus Shares to which
such holders
are entitled pursuant to Section 3.01(1). New Lorus will,
as soon as practicable following the later of the Effective Date
and the
date of deposit (by a former holder of Old Lorus Shares exchanged
under
the Arrangement) of a duly completed Letter of Transmittal and
the
certificates representing such Old Lorus Shares,
either:
|
|
(a)
|
forward
or cause to be forwarded by first class mail (postage
prepaid) (or, in the case of postal disruption, by such other
means as the
Depositary may deem prudent) to such former holder at the address
specified in the Letter of Transmittal;
or
|
|
(b)
|
if
requested by such holder in the Letter of Transmittal, make available
or
cause to be made available at the Depositary for pickup by such
holder;
|
|
|
certificates
representing the number of New Lorus Shares issued to such
holder under
the Arrangement.
|
|
(2)
|
All
distributions made with respect to any New Lorus Shares allotted
and
issued pursuant to this Arrangement but for which a certificate
has not
been issued will be paid or delivered to the Depositary to be
held by the
Depositary in trust for the registered holder thereof. All
monies received by the Depositary will be invested by it in trust
accounts
upon such terms as the Depositary may reasonably deem
appropriate. The Depositary will pay and deliver to any such
registered holder, as soon as reasonably practicable after application
therefore is made by the registered holder to the Depositary
in such form
as the Depositary may reasonably require, such distributions
to which such
holder is entitled, net of applicable withholding and other
taxes.
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(3)
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Where
a certificate formerly representing Old Lorus Shares is not deposited
with
all other documents as provided for in Section 4.02(1) on or prior to
the sixth anniversary date of the Effective Time, it will cease
to
represent a right or claim of any kind or nature. Thereafter,
the New Lorus Shares to be exchanged with the former holder of
such
certificate will be deemed to be surrendered to New Lorus together
with
all distributions and sale proceeds thereon held for such
holder.
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(4)
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New
Lorus will be entitled to deduct and withhold from any consideration
otherwise payable to any holder of Old Lorus Securities such
amounts as
New Lorus is required to deduct and withhold with respect to
such payment
under the Income Tax Act (Canada), the United States Internal
Revenue Code of 1986 or any provision of federal, provincial,
state, local
or foreign tax law, in each case, as amended. To the extent
that amounts are so withheld, such withheld amounts will be treated
for
all purposes hereof as having been paid to the holder of the
Old Lorus
Securities in respect of which such deduction and withholding
was made,
provided that such withheld amounts are actually remitted to
the
appropriate taxing authority.
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(5)
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If
any certificate which immediately prior to the Effective Time
represented
an interest in outstanding Old Lorus Shares that were exchanged
pursuant
to Section 3.01(1) has been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming
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such
certificate to have been lost, stolen or destroyed, the Transfer
Agent and
Registrar will issue and the Depositary will deliver in exchange
for such
lost, stolen or destroyed certificate the consideration to
which the
holder is entitled pursuant to the Arrangement (and any distributions
with
respect thereto) as determined in accordance with the
Arrangement. The person who is entitled to receive such
consideration will, as a condition precedent to the receipt
thereof, give
a bond to each of New Lorus and its Depositary, which bond
is in form and
substance satisfactory to each of New Lorus and the Depositary,
or will
otherwise indemnify New Lorus and its Depositary against any
claim that
may be made against any of them with respect to the certificate
alleged to
have been lost, stolen or
destroyed.
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4.03
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Old
Lorus Options and Old Lorus
Warrants
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4.04
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Old
Lorus Share Purchase
Plan
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4.05
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Old
Lorus Voting Shares
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(1)
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As
soon as practicable following the Effective Time, New Lorus shall
cause to
be delivered for the benefit of the shareholders of New Lorus
who are not
resident in the United States, certificates representing, in
the
aggregate, the Old Lorus Voting Shares to which such holders
are entitled
pursuant to Section 3.01(23). New Lorus will, as soon as
practicable following the Effective Date,
either:
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(a)
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forward
or cause to be forwarded by first class mail (postage
prepaid) (or, in the case of postal disruption, by such other
means as the
Depositary may deem prudent) to such holder at the address specified
in
the Letter of Transmittal; or
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(b)
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if
requested by such holder in the Letter of Transmittal, make available
or
cause to be made available at the Depositary for pickup by such
holder,
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certificates
representing the number of Old Lorus Voting Shares issued
to such holder
under the Arrangement.
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(2)
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New
Lorus will be entitled to deduct and withhold from any consideration
otherwise payable to any holder of New Lorus Shares such amounts
as New
Lorus is required to deduct and withhold with respect to such payment
under the Income Tax Act (Canada), the United States Internal
Revenue Code of 1986 or any provision of federal, provincial,
state, local
or foreign tax law, in each case, as amended. To the extent
that amounts are so withheld, such withheld amounts will be treated
for
all purposes hereof as having been paid to the holder of the
New Lorus
Shares in respect of which such deduction and withholding was
made,
provided that such withheld amounts are actually remitted to
the
appropriate taxing authority.
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4.06
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Cash
Payments Pursuant to Section
3.01(23)(ii)
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(1)
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As
soon as practicable following the Effective Time, New Lorus shall
cause to
be delivered to the Transfer Agent and Registrar, for the benefit
of each
shareholder of New Lorus who is resident in the United States,
an amount
equal to the aggregate of the payments representing each holder’s pro rata
portion of the cash equivalent of the value of the Old Lorus
Voting Shares
otherwise distributable to New Lorus shareholders who are resident
in the
United States pursuant to Section
3.01(23).
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(2)
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Such
payment shall be made by cheque payable at par at any branch
of New Lorus’
bankers for the time being in Canada (or, with the consent of
the holder,
by any other means of immediately available
funds).
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(3)
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New
Lorus will be entitled to deduct and withhold from any consideration
otherwise payable to any holder of New Lorus Shares such amounts
as New
Lorus is required to deduct and withhold with respect to such
payment
under the Income Tax Act (Canada), the United States Internal
Revenue Code of 1986 or any provision of federal, provincial,
state, local
or foreign tax law, in each case, as amended. To the extent
that amounts are so withheld, such withheld amounts will be treated
for
all purposes hereof as having been paid to the holder of the
New Lorus
Shares in respect of which such deduction and withholding was
made,
provided that such withheld amounts are actually remitted to
the
appropriate taxing authority.
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5.01
|
Rights
of Dissent
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(a)
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are
ultimately entitled to be paid fair value for their Old Lorus
Shares shall
be deemed to have transferred such Old Lorus Shares to New Lorus
on the
Effective Date simultaneously with the transactions described
in Section
3.01(1) without
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any
further act or formality and free and clear of all liens, claims
and
encumbrances, with New Lorus being obligated to pay such Old
Lorus
Shareholders in consideration therefor the fair value of such
Old Lorus
Shares, which fair value, notwithstanding anything to the contrary
in the
Act, if permitted by the Court, shall be determined as of the
close of
business on the day before the special resolution of Securityholders
approving this Plan is adopted, and the name of each such Old
Lorus
Shareholder will be removed from the register of holders of
Old Lorus
Shares and New Lorus will be recorded as the registered holder
of the Old
Lorus Shares so transferred and will be deemed to be the legal
and
beneficial owner of such Old Lorus Shares free and clear of
any liens,
claims or encumbrances; or
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(b)
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for
any reason are ultimately not entitled to be paid fair value
for their Old
Lorus Shares shall be deemed to have participated in the Arrangement
on
the same basis as any non-dissenting Old Lorus Shareholder who
is not a
Lock-Up Holder as at and from the Effective Time, and shall be
deemed to
have transferred their Old Lorus Shares to New Lorus in exchange
for New
Lorus Shares under Section 3.01(1), but in no case shall Old
Lorus, New
Lorus or any other person be required to recognize such Old Lorus
Shareholders as holders of Old Lorus Shares after the time set
out in
Section 3.01(1), and the names of such Old Lorus Shareholders
shall be
deleted from the register of Old Lorus Shareholders at the time
set out in
Section 3.01(1).
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6.01
|
Amendments
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(1)
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Old
Lorus, GeneSense, NuChem, New Lorus, Investor and Pinnacle reserve
the
right to amend, modify and/or supplement this Plan from time
to time at
any time prior to the Effective Time provided that any such amendment,
modification or supplement must be contained in a written document
that
is:
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(a)
|
agreed
to by all such parties;
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(b)
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filed
with the Court and approved by the Court;
and
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(c)
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communicated
to Old Lorus Securityholders in the manner required by the Court
(if so
required).
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(2)
|
Any
amendment, modification or supplement to this Plan which is approved
by
the Court will be effective only:
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(a)
|
if
it is consented to by Old Lorus and Pinnacle;
and
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(b)
|
if
required by the Court or Applicable Law, it is consented to by
the Old
Lorus Securityholders.
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(3)
|
Notwithstanding
that the transactions and events set out herein will occur and
be deemed
to occur in the order set out in this Plan without any further
act or
formality, each of the parties to the Arrangement Agreement shall
make, do
and execute, or cause to be made, done and executed, all such
further
acts, deeds, agreements, transfers, assurances, instruments or
documents
as may reasonably be required by any of them in order further
to document
or evidence any of the transactions or events set out
herein.
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7.01
|
General
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(1)
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Any
director or officer of Old Lorus is hereby authorized to execute
and file
the Articles of Arrangement and to execute and deliver all other
documents
and do all such other acts and things necessary or desirable
to give
effect to this Arrangement.
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(2)
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The
directors of Old Lorus are hereby authorized, if they deem appropriate
in
their sole discretion, to revoke this Plan of Arrangement and
to not
proceed with the Arrangement without further approval of the
Old Lorus
Securityholders.
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IN
THE MATTER OF a proposed plan of arrangement involving Lorus Therapeutics
Inc.
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LORUS
THERAPEUTICS INC. et al.
Applicants
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Court
File No. 07-CL-7015
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ONTARIO
SUPERIOR
COURT OF JUSTICE
COMMERCIAL
LIST
Proceeding
Commenced at Toronto
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ORDER
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McCarthy
Tetrault LLP
Box
48, Suite 4700
Toronto
Dominion Bank Tower
Toronto,
Ontario M5K 1E6
Geoff
R. Hall LSUC# 34701O
Tel. 416 601-7856 Fax: 416 868-0673 Solicitors
for the Applicants
#4180947
v. 2
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