Xillix Technologies Corp.

Xillix Technologies Corp.

July 09, 2007 19:52 ET

Xillix Announces Agreement With Cavalon Capital Partners and Approval of Plan of Arrangement by Creditors

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 9, 2007) - Xillix Technologies Corp. ("Xillix" or the "Company") (TSX:XLX) today announced that it has entered into an investment agreement (the "Investment Agreement") with Cavalon Capital Partners Ltd. ("Cavalon"), a Calgary based private investment company, pursuant to which Cavalon has agreed to invest the sum of $4,400,000 in Xillix, structured as a non-interest bearing loan (the "Convertible Loan").

The Investment Agreement provides that, upon the settlement and release of all of the Company's secured and unsecured creditors' claims pursuant to the consolidated plan of compromise and arrangement of the Company and its subsidiaries dated June 19, 2007 (the "Plan"), approximately 94.5% of the Convertible Loan will be converted into common shares and a new class of non-voting shares of the Company, such that immediately following such conversion Cavalon will 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.

Xillix also announced that, at the creditors meeting held earlier today, the Plan was approved by secured and unsecured creditors of the Company in the manner required by the interim order granted by the Supreme Court of British Columbia (the "Court) on June 19, 2007.

The completion of the arrangement provided for in the Plan and the Investment Agreement is subject to a number of conditions, including 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. It is anticipated that the Company will apply to Court for a final order approving the Plan on or about July 25, 2007.

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".

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