Securities Law & Instruments

Headnote

Mutual Reliance Review System for Exemptive Relief Applications -- issuer conducting "business combination" required to make available and to file copies of a prior valuation in respect of the issuer's securities -- prior valuation containing information of the issuer that is highly commercially sensitive, the disclosure of which would be seriously prejudicial to the issuer -- information redacted from prior valuation does not contain information in relation to the issuer or the securities of the issuer that would be material to a security holder -- issuer permitted to file and make available redacted version of prior valuation.

Applicable Legislative Provisions

OSC Rule 61-501 Insider Bids, Issuer Bids, Business Combinations and Related Party Transactions, s. 9.1.

June 22, 2007

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO AND QUÉBEC

(the Jurisdictions)

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

LORUS THERAPEUTICS INC.

(the Company)

 

MRRS DECISION DOCUMENT

Background

The local securities regulatory authority or regulator (the Decision Maker) in each of the Jurisdictions has received an application from the Company for a decision under the securities legislation of the Jurisdictions (the Legislation) that the Company is exempt from the requirement contained in the Legislation

(i) to disclose in its Circular (as defined below) an address where a copy of the Prior Valuation (as defined below) is available for inspection,

(ii) to state in its Circular that a copy of the Prior Valuation will be sent to any security holder upon request and without charge, and

(iii) to file a copy of the Prior Valuation with the Decision Makers

(collectively, the Requested Relief).

Under the Mutual Reliance Review System for Exemptive Relief Applications

(a) the Ontario Securities Commission is the principal regulator for this application, and

(b) this MRRS decision document evidences that decision of each Decision Maker.

Interpretation

Defined terms contained in National Instrument 14-101 Definitions have the same meaning in this decision unless they are defined in this section.

Representations

This decision is based on the following facts represented by the Company:

1. The Company was incorporated under the laws of the Province of Ontario on September 5, 1986 under the name RML Medical Laboratories Inc. On October 28, 1991, RML Medical Laboratories Inc. amalgamated with Mint Gold Resources Ltd., resulting in the Company becoming a reporting issuer in Ontario on such date. On August 25, 1992, the Company changed its name to IMUTEC Corporation. On November 27, 1996, the Company changed its name to Imutec Pharma Inc., and on November 19, 1998, the Company changed its name to Lorus Therapeutics Inc. On October 1, 2005 the Company was continued under the laws of Canada.

2. The Company is authorized to issue an unlimited number of common shares (Shares). As of April 30, 2007, 211,610,130 Shares were issued and outstanding.

3. The Company is a reporting issuer in each of the Jurisdictions and is not in default of any of its obligations as a reporting issuer.

4. On May 1, 2007, the Company announced the entering into of agreements in connection with an arrangement (the Arrangement) among the Company, NuChem Pharmaceuticals Inc., GeneSense Technologies Inc., 6650309 Canada Inc. (New Lorus), Pinnacle International Lands, Inc. and 6707157 Canada Inc. (Investor) under Section 192 of the Canada Business Corporations Act.

5. Pursuant to the Arrangement (which includes a reorganization of the Company's share capital as contemplated by the Arrangement):

(a) the Company will transfer, directly or indirectly, all of its assets at their fair market value and all of its liabilities to New Lorus;

(b) the Company's security holders will transfer their Shares, options and warrants in the Company in exchange for the issuance by New Lorus on a one-for-one basis of common shares, options and warrants having the same value, terms and conditions as the Shares, options and warrants of the Company, and

(c) Investor will acquire from the Company and certain of its principal shareholders an aggregate of approximately 41% of voting shares and 100% of the non-voting shares of the reorganized share capital of the Company.

6. The Arrangement constitutes a "business combination" or "going private transaction" within the meaning of the Legislation, and is therefore subject to the minority approval requirements contained in the Legislation.

7. The Company is in possession of a report issued by Frank De Lisio, CA, CBV dated December 11, 2006 entitled "Intangible Asset Valuation Report" (the Prior Valuation).

8. The Prior Valuation contains certain information of the Company that is highly commercially sensitive, the disclosure of which would be seriously prejudicial to the Company. Consequently, it has prepared a redacted version of the Prior Valuation (the Reacted Prior Valuation) which is identical to the Prior Valuation, except that the commercially sensitive information has been removed.

9. The information redacted from the Prior Valuation does not contain information in relation to the Company or the securities of the Company that would be material to a securityholder.

10. The Company has provided disclosure of the Prior Valuation in the circular it prepared in connection with the Arrangement (the Circular) in sufficient detail to allow the readers to understand the Prior Valuation and its relevance to the Arrangement.

11. The Circular also

(a) indicates an address where a copy of the Redacted Prior Valuation is available for inspection, and

(b) states that a copy of the Redacted Prior Valuation will be sent to any security holder of the Company upon request and without charge.

Decision

Each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the decision has been met.

The decision of the Decision Maker in Ontario is that the Requested Relief is granted, provided that a copy of the Redacted Prior Valuation is filed with the Decision Makers forthwith.

"Naizam Kanji"
Manager, Mergers & Acquisitions
Ontario Securities Commission