Xillix Announces Plan of Arrangement



    VANCOUVER, June 21 /CNW/ - Xillix Technologies Corp. (the "Company")
(TSX: XLX) announced today that the Supreme Court of British Columbia (the
"Court") has granted an interim order (the "Interim Order") approving a
consolidated plan of compromise and arrangement (the "Plan") under the
Companies Creditors Arrangement Act (the "CCAA") and the British Columbia
Business Corporations Act (the "BCA"). The arrangement provided for in the
Plan (the "Arrangement") would recapitalize and reorganize the Company,
resulting in funding of $4.4 million.
    The Plan provides for: (i) an investment in the Company by Cavalon
Capital Partners Ltd. ("Cavalon"), a Calgary based private investment company,
in the amount of $4,400,000, structured as a non-interest bearing loan (the
"Convertible Loan"); (ii) the settlement and release of all of the Company's
secured and unsecured creditors' claims in exchange for the payment of a total
of $3,600,000, of which not less than $600,000 will be paid to the unsecured
creditors (on a pro rata basis), leaving the Company with a cash balance of
$800,000; (iii) the conversion of approximately 94.5% of the Convertible Loan
into common shares and a new class of non-voting shares of the Company, such
that immediately following such conversion Cavalon would hold 45% of the
(voting) common shares and 100% of the non-voting shares then outstanding,
providing it with the ownership of 45% of the voting and 80% of the equity
interests in the Company; (iv) the cancellation of all outstanding options,
warrants, exchange rights and conversion rights; and (v) the change of the
Company's name to "Zillion Technologies Corp." or such other name as its
directors may approve. The remaining sum of $240,000 would then be owing by
the Company to Cavalon under the Convertible Loan.
    The completion of the Arrangement will be subject to a number of
conditions, including the entering into of a definitive agreement by the
Company and Cavalon providing for the Convertible Loan, the approval of the
Plan by the Company's secured and unsecured creditors, the granting of a final
Court order approving the Plan, and the receipt of all required regulatory
approvals, including the approval of the Toronto Stock Exchange.
    The Company expects to hold a creditors meeting to consider and approve
the Plan on July 9, 2007. If the Plan is approved by the creditors, it is
anticipated that the Company will apply to Court for a final order approving
the Plan on or about July 25, 2007 and that the Arrangement will be completed
by the end of July.
    On May 3, 2007, the Company sold substantially all of its assets,
including its intellectual property, certain capital assets and inventory to
Novadaq Technologies Inc., of Toronto, Ontario. The completion of the
Arrangement would enable the Company to seek additional capital and pursue
potential acquisitions.

    "Statements contained in this document which are not based on historical
fact, including without limitation, statements containing the words "may",
"will", "plans", "intends", "expects", "anticipates", "believes", "estimate",
"continue" and similar expressions, constitute "forward-looking information"
within the meaning of applicable Canadian securities laws. Forward-looking
statements contained in this document may involve, but are not limited to,
statements relating to the Company's objectives, priorities, strategies,
actions, targets, expectations and outlook. Forward-looking statements are
necessarily based upon assumptions and predictions with respect to the future,
including but not limited to the factors referred to below. As a result,
forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results, events or
developments to be materially different from any future results, events or
developments expressed or implied thereby. These risks, uncertainties and
other factors include, but are not limited to the factors referred to in the
Company's Annual Information Form dated March 28, 2006 and its other filings
with the applicable Canadian securities regulatory authorities. In light of
these uncertainties, assumptions and risks, readers are cautioned not to place
undue reliance on such forward-looking statements, and the Company assumes no
obligation to update or revise such information to reflect later events or
developments, except as required by law."

    The Company is listed on the Toronto Stock Exchange under the trading
symbol "XLX".





For further information:

For further information: e-mail: ir@xillix.com.

Organization Profile

XILLIX TECHNOLOGIES CORP.

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