Aurora Cannabis Inc.: Exhibit 99.33 - Filed by newsfilecorp.com

EX-99.33 4 exhibit99-33.htm EXHIBIT 99.33 Aurora Cannabis Inc.: Exhibit 99.33 - Filed by newsfilecorp.com

SUBSCRIPTION AGREEMENT

This Subscription Agreement (the "Agreement") is made effective as of the 3pt day of March, 2017.

BETWEEN:

	10094595 Canada Inc., a corporation incorporated under the laws of British Columbia, with its registered office at 1500 - 1199 West Hastings St., Vancouver, British Columbia V6E 3T5;

	(the "Investor")

AND:

	PHOTON PHARMACEUTICALS INC. a corporation incorporated under the laws of Canada, with its registered office at 2500 - 1100 Boulevard Rene Levesque, Montreal, Quebec H3B 5C9;

	(the "Corporation", and together with the Investor, the "Parties", and each a "Party")

RECITALS:

A.	WHEREAS on June 17, 2016, the Corporation initiated proceedings under the Bankruptcy and Insolvency Act (Canada) (the "BIA") by filing a notice of intention to make a proposal pursuant to section 50.4 of the BIA and Raymond Chabot Inc. ("RCI") was appointed as Proposal Trustee (the "Trustee");

B.	AND WHEREAS the Corporation is insolvent and, in consequence thereof, sought application of the relevant provisions of the BIA;

C.	AND WHEREAS on September 14, 2016, RCI was appointed Interim Receiver (in such capacity, the "Interim Receiver") with the power to, among other things, solicit one or several potential buyers of all or any part of the Corporation's property, and solicit one or several potential investors in the share capital of the Corporation;

D.	AND WHEREAS the Corporation submitted a proposal to the Corporation's creditors on November 25, 2016 (the "Initial Proposal");

E.	AND WHEREAS at a general meeting of creditors held on November 25, 2016, the Corporation's creditors instructed RCI to adjourn the general meeting of creditors to December 8, 2016, to allow for further submission of bids in respect of the Corporation;

F.	AND WHEREAS a deadline of 5:00 p.m . on December 6, 2016 was set by RCI for the submission of bids in respect of the Corporation;

G.	AND WHEREAS Aurora Cannabis Inc . ("Aurora") was the only party that submitted a bid by 5:00 p.m. on December 6, 2016;

H.	AND WHEREAS the Investor is a wholly owned subsidiary of Aurora;

I.	AND WHEREAS the general meeting of creditors held on December 8, 2016 was adjourned to allow for an exclusive period of negotiations between the Trustee and Aurora, with the input of the Corporation's creditors;

J.	AND WHEREAS at the general meeting of creditors held on December 16, 2016, RCI was asked by the Required Majority (as defined herein) to seek an order authorizing an expansion of the Interim Receiver's powers to, among other things, enter into the Term Sheet (as defined herein) with the Investor which sets out the principal terms of the transactions contemplated by the Initial Proposal;

K.	AND WHEREAS an order by the Court (as defined herein) was rendered on December 20, 2016 (the "Expanded Powers Order"), authorizing the Interim Receiver to execute the Term Sheet and implement the transactions contemplated therein and authorized the filing of the re - amended proposal and plan of reorganization (the "Amended Proposal");

L.	AND WHEREAS the general meeting of creditors on January 19, 2017 was adjourned;

M .	AND WHEREAS the Amended Proposal and Reorganization (as defined herein) were approved at the general meeting of creditors on January 26, 2017 by the Required Majority;

N.	AND WHEREAS on February 1, 2017, Aurora amended the terms of the Amended Proposal to further benefit the Corporation's creditors (the "Re-Amended Proposal") and the Trustee sent the Re-Amended Proposal to the Corporation's creditors, a copy of which is attached hereto as Schedule "A";

0.	AND WHEREAS the Re -Amended Proposal was approved by the Court by order dated March 29, 2017 (the "Approval Order"), which is attached hereto as Schedule "B";

P.	AND WHEREAS pursuant to the Re -Amended Proposal, the Corporation shall effect a reorganization (the "Reorganization") pursuant to the statutory procedure set out in Section 191 of the Canada Business Corporations Act (the "CBCA") whereby, amongst other things, all Existing Securities (as defined herein) of the Corporation shall be cancelled and extinguished, the details of which are more particularly set out in Schedule "A";

Q.	AND WHEREAS pursuant to the Re -Amended Proposal, the Investor wishes to purchase and the Corporation wishes to sell all of the common shares of the Corporation, being 100 common shares to be issued in connection with the Reorganization (the "New Common Shares"), with the New Common Shares being the only securities of the Corporation outstanding as of the date thereof;

R.	AND WHEREAS pursuant to the Re-Amended Proposal, the Interim Receiver has the necessary power and authority to enter into this Agreement;

S.	AND WHEREAS pursuant to the Re -Amended Proposal, in consideration for the New Common Shares, the Investor shall pay a purchase price for the New Common Shares (the "Issue Price") that is equal to the Investment Pool (as defined herein);

NOW THEREFORE in consideration of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Parties hereto agree as follows:

ARTICLE 1
INTERPRETATION

1.1

Definitions

Whenever used in this Agreement, unless there is something in the subject matter or context inconsistent therewith, the following words and phrases shall have the respective meanings ascribed to them as follows:

"Agreement" means this subscription agreement (including any schedules hereto) and any instrument amending this Agreement; "hereof", "hereto", "hereunder", "herein" and similar expressions mean and refer to this Agreement and not to a particular Article or Section; and the expression "Article" or "Section" followed by a number means and refers to the specified Article or Section of this Agreement;

"Approval Order" has the meaning attributed thereto in the Recitals to this Agreement;

"Articles of Reorganization" means the Articles of Reorganization in respect of the Corporation in accordance with Section 191(4) of the CBCA (as well as Sections 59(4) and 66(1.4) of the BIA, to the extent applicable) giving effect to the proposed reorganization of the Corporation, t~gether with such deletions, additions or modifications as the Interim Receiver may make thereto and therefrom at any time prior to the Approval Order, with the consent of the Investor;

"Aurora Shares" means common shares in the capital of Aurora;

"Aurora Share Component" means Aurora Shares having a value equal to $7,000,000 or such lesser amount as directed by the Trustee pursuant to the Trustee's review of the cash election forms, calculated in each case using the lower of (a) the closing price of the Aurora Shares on January 20, 2017, less a 10% discount and (b) the closing price of the Aurora Shares on February 14, 2017, less a 10% discount, which Aurora Shares are to be contributed to the Investment Pool, which shall, in the aggregate, not exceed $7,000,000;

"BIA" has the meaning attributed thereto in the Recitals to this Agreement;

"Business Day" means a day other than a Saturday, Sunday or any other day on which the principal chartered banks located in Toronto, Ontario and Montreal, Quebec are not open for business.

"Cash Component" means the balance of the Investment Pool Cash Account, which consists of the Cash Contribution, the Deposit and the Professional Fee Surplus;

"Cash Contribution" means such amount in cash as the Trustee may instruct pursuant to the Trustee's review of the cash election forms, provided however that the Cash Contribution shall not, under any circumstances, exceed $7, 000,000 (inclusive of the Deposit) in cash to be contributed by the Investor to the Investment Pool and held by the Trustee in the Investment Pool Cash Account;

"CBCA" has the meaning ascribed thereto in the Recitals to this Agreement;

"Claim" means: (i) a claim provable in bankruptcy against the Corporation or the Directors and includes any indebtedness, liability, action, cause of action, suit, debt, due, account, bond, covenant, contract, counterclaim, demand, claim, right and obligation of any nature whatsoever of the Corporation to any person, whether liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, unsecured, present, future, known or unknown, by guarantee, by surety or otherwise and whether or not such right is executory in nature, including, without limitation, the right or ability of any person to advance a claim for contribution or indemnity or otherwise with respect to any matter, action, cause or chose in action whether existing at present or commenced in the future based in whole or in part on facts which existed prior to or at the Filing Date and, in respect of a claim against the Directors, that relates to obligations of the Corporation where the Directors are by law liable in their capacity as Directors for the payment of such obligations; and (ii) any claim for or resulting from the disclaimer, resiliation, repudiation, termination or restructuring by the Corporation of a contract, lease or other obligation or agreement, including any employment agreement, following the Filing Date and prior to Approval of the Re-Amended Proposal;

"Closing" means the delivery and sale of the New Common Shares and payment of the Issue Price pursuant to this Agreement;

"Closing Date" means March 31, 2017 or such other date or time as the Corporation, Trustee and Investor may mutually agree, acting reasonably;

"Closing Time" means 10:00 am (Eastern Standard Time) on the Closing Date;

"Corporation" means Peloton Pharmaceuticals Inc. and includes any successor corporation to or of the Corporation.

"Court" means the Quebec Superior Court (Commercial Division);

"Deposit" means $150,000, which was provided by, or on behalf of, the Investor to the Trustee as a deposit in respect of the Issue Price;

"Director" has the meaning given to it in the BIA;

"Existing Securities" means all issued and outstanding shares, options, warrants, convertible securities, exchangeable securities and any other rights to acquire any securities, in respect of the Corporation immediately prior to the Reorganization;

"Expanded Powers Order" has the meaning attributed thereto in the Recitals to this Agreement;

"Filing Date" means June 17, 2016;

"Implementation Certificate" has the meaning attributed thereto in Section 3.2(j) of this Agreement;

"Implementation Date" means such date that is two (2) Business Days following the Closing Date;

"Initial Proposal" has the meaning attributed thereto in the Recitals to this Agreement;

"Interim Receiver" has the meaning attributed thereto in the Recitals to this Agreement;

"Investment Pool Cash Account" means a segregated, interest-bearing trust account established by the Trustee;

"Investment Pool" means the total investment amount equal to the aggregate of the Cash Component and the Aurora Share Component to be funded by the Investor pursuant to the terms of the Re-Amended Proposal;

"Issue Price" has the meaning attributed thereto in the Recitals to this Agreement;

"New Common Shares" has the meaning attributed thereto in the Recitals to this Agreement;

"NI 45-106" means National Instrument 45-106 - Prospectus Exemptions of the Canadian Securities Administrators (in Quebec, Regulation 45-106 respecting Prospectus Exemptions);

"person" means any individual (whether acting as an executor, trustee administrator, legal representative or otherwise), corporation, firm, partnership, sole proprietorship, syndicate, joint venture, trustee, trust, unincorporated organization or association, and pronouns have a similar extended meaning.

"Professional Fee Contribution" means $500,000 in cash to be delivered to the Trustee prior to or on the Implementation Date;

"Professional Fee Surplus" means the amount, if any, by which the Professional Fee Contribution exceeds the Administrative Fees and Expenses (as defined in the Re-Amended Proposal), which shall be contributed to the Investment Pool Cash Account by the Trustee;

"Proven Claim" means in respect of a creditor, the amount of a Claim as finally determined in accordance with the provisions of the BIA;

"RCI" has the meaning attributed thereto in the Recitals to this Agreement;

"Re-Amended Proposal" has the meaning attributed thereto in the Recitals to this Agreement;

"Reorganization" has the meaning attributed thereto in the Recitals to this Agreement;

"Required Majority" means an affirmative vote of a majority in number and two-thirds in value of all Proven Claims in the Unsecured Creditor Class entitled to vote, who are present and voting at the Creditors' Meeting (whether in person, by proxy or by voting letter) (as such terms are defined in the Re-Amended Proposal) in accordance with the voting procedures established by the Re-Amended Proposal and the BIA;

"Securities Laws" means, as applicable, the securities laws, regulations, rules, rulings and orders in each of the provinces of Canada, the applicable policy statements issued by the securities regulators in each of the provinces and territories of Canada.

"Term Sheet" means the term sheet entered into by the Interim Receiver (pursuant to the Expanded Powers Order) and Aurora dated January 25, 2017 and attached hereto as part of Schedule "A";

"Trustee" has the meaning attributed thereto in the Recitals to this Subscription Agreement;

"TSX-V" means the TSX Venture Exchange; and

"Unsecured Creditor Class" means the class of creditors comprised of Unsecured Creditors.

1.2

Gender and Number

Words importing the singular number only shall include the plural and vice versa, words importing the masculine gender shall include the feminine gender and words importing persons shall include firms and corporations and vice versa.

1.3

Currency

Unless otherwise specified, all dollar amounts in this Agreement, including the symbol "$", are expressed in Canadian dollars.

1.4

Subdivisions, Headings and Table of Contents

The division of this Agreement into Articles, Sections, Schedules and other subdivisions, the inclusion of headings and the provision of a table of contents are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. The headings in this Agreement are not intended to be full or precise descriptions of the text to which they refer. Unless something in the subject matter or context is inconsistent therewith, references herein to an Article, Section, Subsection, paragraph, clause or Schedule are to the applicable article, section, subsection, paragraph, clause or schedule of this Agreement.

ARTICLE 2
SUBSCRIPTION FOR NEW COMMON SHARES

2.1

Subscription for New Common Shares

The Investor hereby confirms its subscription for and offer to purchase the New Common Shares from the Corporation, on and subject to the terms and conditions set out in this Agreement, for the Issue Price, subject to Article 3 hereto.

2.2

Payment of the Issue Price

The Issue Price, in the aggregate amount of $7,000,000, subject to post-closing adjustments, shall be paid and satisfied by the Investor on or before the Implementation Date as follows:

	(a)	the Cash Contribution shall be delivered by wire transfer or certified cheque to the direction of the Trustee, on behalf and for the benefit of the Corporation's creditors;

	(b)	the Trustee shall transfer, or otherwise contribute, to the Investment Pool Cash Account on behalf of the Investor an amount equal to the Deposit; and

(c)

the Aurora Share Component shall be delivered by Aurora on behalf of the Investor to the Corporation's creditors in accordance with the registration and delivery instructions provided to the Investor pursuant to the Trustee's review of the cash election forms.

If the purchase and sale of the New Common Shares do not proceed for any reason, the Issue Price, without interest or deduction, will be returned to the Investor within five Business Days.

ARTICLE 3
CLOSING

3.1

Conditions of Closing in favour of the Corporation

The Investor acknowledges and agrees that the obligations of the Corporation hereunder are conditional on the accuracy of the representations and warranties of the Investor contained in this Agreement as of the date of this Agreement, and as of the Closing Time as if made at and as of the Closing Time, and the fulfillment of the following additional conditions as soon as possible and in any event not later than the Closing Time:

	(a)	all of the covenants and obligations of this Agreement have been complied with or performed by the Investor at or before the Closing Date;

	(b)	the TSX-V (or such other recognized Canadian exchange that the common shares of Aurora may be trading on at such time) has conditionally approved the issuance of the Aurora Shares comprising the Aurora Share Component that are to be contributed by Aurora on behalf of the Investor to the Investment Pool; and

	(c)	the issuance of the Aurora Shares comprising the Aurora Share Component being exempt from the prospectus requirement of the Securities Laws pursuant to subsection 2.11 of Nl -45 -106.

3.2

Conditions of Closing in favour of the Investor

The Corporation acknowledges and agrees that the obligations of the Corporation hereunder are conditional on the accuracy of the representations and warranties of the Investor contained in this Agreement as of the date of this Agreement, and as of the Closing Time as if made at and as of the Closing Time, and the fulfillment of the following additional conditions as soon as possible and in any event not later than the Closing Time:

	(a)	the Corporation has properly completed, signed and delivered all other documentation as may be required pursuant to the terms of this Subscription Agreement including any other documentation required under the Securities Laws or other securities laws or with any securities commission, securities regulatory authority, stock exchange or other governmental or regulatory authority;

	(b)	the Approval Order, in form and substance satisfactory to the Investor acting reasonably, has been issued, has not been stayed and no appeal therefrom is outstanding;

	(c)	the TSX-V (or such other recognized Canadian exchange that the common shares of the Investor may be trading on at such time) has conditionally approved the issuance of the Aurora Shares comprising the Aurora Share Component that are to be contributed by Aurora on behalf of the Investor to the Investment Pool;

	(d)	there shall not be in effect any preliminary or final decision, order or decree by a governmental authority, no application shall have been made to any governmental authority, and no action or investigation shall have been announced, threatened or commenced by any governmental authority, in consequence of or in connection with the Re -Amended Proposal that restrains, impedes or prohibits (or if granted could reasonably be expected to restrain, impede or inhibit), the Re-Amended Proposal or any part thereof or requires or purports to require a variation of the Re-Amended Proposal;

	(e)	the Articles of Reorganization, in form and substance satisfactory to the Investor, effecting the Reorganization in accordance with the Re-Amended Proposal have been filed in accordance with the Approval Order;

	(f)	at the election of the Investor, all employment agreements of the Corporation's employees have been terminated;

	(g)	no debtor in possession or interim financing has been made available to the Corporation without the consent of the Investor, not to be unreasonably withheld;

	(h)	the Corporation has no subsidiaries (as such term is used in the CBCA);

	(i)	all other actions, documents and agreements necessary to implement the Re -Amended Proposal have been effected and executed, in each case, in form and substance satisfactory to the Investor, acting reasonably;

	(j)	the Investor shall have delivered a certificate to the Trustee that the conditions precedent to the implementation of the Re-Amended Proposal have been satisfied or waived (the "Implementation Certificate"); and

	(k)	all of the covenants and obligations of this Subscription Agreement have been complied with or performed by the Corporation (or waived by the Investor) at or before the Closing Date.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE CORPORATION

4.1

Representations and Warranties of the Corporation

The Interim Receiver, solely in its capacity as Interim Receiver and not in its personal capacity, hereby represents and warrants to the Investor on behalf of the Corporation (and acknowledges that the Investor is relying thereon) that:

(a)

the Corporation is a validly subsisting corporation incorporated under t he laws of Canada, is in good standing under applicable corporate law, has the requisite corporate power and capacity to carry on its business as now carried on and to own its assets, and the Interim Receiver, on behalf of the Corporation, has full corporate power and authority to perform each of its obligations as herein contemplated;

	(b)	the Interim Receiver, on behalf of the Corporation, has the full corporate right, power and authority to execute and deliver this Agreement pursuant to the Expanded Powers Order, and the Corporation may issue the New Common Shares to the Investor pursuant to the Approval Order;

	(c)	this Agreement, when accepted by the Interim Receiver on behalf of the Corporation, will constitute a legal, valid and binding obligation of the Corporation enforceable in accordance with its terms pursuant to the Expanded Powers Order and the Approval Order;

	(d)	the Issue Price will be used by the Trustee, in accordance with the Re-Amended Proposal;

	(e)	to the knowledge of the Interim Receiver, after reasonable enquiry, since the date of the Approval Order, there has not been any change in the assets, liabilities, financial condition or operating results of the Corporation that has, individually or in the aggregate, a material adverse effect on the Corporation;

	(f)	to the knowledge of the Interim Receiver, after reasonable enquiry, since the date of the Approval Order, there has not been any change in the Corporation's application to Health Canada to become a "Licensed Producer" pursuant to the Access to Cannabis for Medical Purposes Regulations;

	(g)	it acknowledges that:

	(i)	no securities commission or similar regulatory authority has reviewed or passed on the merits of the Aurora Shares comprising the Aurora Share Component;

	(ii)	there is no government or other insurance covering the Aurora Share Component;

	(iii)	there are risks associated with the purchase of the Aurora Share Component; and

	(iv)	the Investor has advised the Corporation that the Investor is relying on an exemption from the requirements to prepare and provide the Corporation with a prospectus, and as a consequence of acquiring the Aurora Shares comprising the Aurora Share Component pursuant to this exemption, certain protections, rights and remedies provided by the Securities Act (Ontario) and other applicable Securities Laws, including statutory rights of rescission or damages, will not be available to the Corporation;

(h)

the authorized capital of the Corporation consists of the New Common Shares. As of the date hereof, the Corporation has not agreed to issue any securities of the Corporation to any person, and no person has any pre-emptive rights to acquire securities of the Corporation; and

(i)

the New Common Shares, when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be validly issued, fully paid and non-assessable.

ARTICLE 5
ACKNOWLEDGEMENTS, COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE INVESTOR

5.1

Acknowledgements, Representations, Warranties and Covenants of the Investor

The Investor hereby represents and warrants to, and covenants with, the Corporation as follows as at the date hereof and as at the Closing Time and acknowledges that the Corporation and the Trustee, and their counsels, are relying on such representations and warranties in connection with the transactions contemplated herein:

	(a)	the Investor has the full corporate right, power and authority to execute and deliver this Agreement and shall cause Aurora to issue, sell and deliver the Aurora Shares comprising the Aurora Share Component;

	(b)	this Agreement has been or at the Closing Time will be duly and validly authorized, executed and delivered by, and constitutes a legal, valid, binding and enforceable obligation of the Investor, enforceable against the Investor in accordance with its terms and will not violate or conflict with the terms of any restriction, agreement or undertaking respecting purchases of securities by the Investor;

	(c)	the Investor shall cause Aurora to use its commercially reasonable best efforts to maintain its status as a "reporting issuer" in the jurisdictions in which it is currently a reporting issuer, not in default of any requirement of the Securities Laws thereof, for a period of at least six (6) months after the Closing Date;

	(d)	for a period of a least six (6) months after the Closing Date, the Investor shall cause Aurora to use its commercially reasonable best efforts to remain a corporation validly subsisting under the laws of its jurisdiction of incorporation, licensed, registered or qualified as an extra-provincial or foreign corporation in all jurisdictions where the character of its properties owned or leased or the nature of the activities conducted by it make such licensing, registration or qualification necessary and shall carry on its business in the ordinary course and in compliance in all material respects with all applicable laws, rules and regulations of each such jurisdiction;

	(e)	the Investor shall cause Aurora to use its commercially reasonable best efforts to maintain the listing on the TSX-V of the class of shares of which the Aurora Shares form a part for a period of at least six (6) months after the Closing Date except to the extent that such shares are approved for listing on the Toronto Stock Exchange, which shall not be deemed to be a breach hereof;

	(f)	the Investor represents and warrants that (i) the Investor is purchasing the New Common Shares pursuant to the "private issuer" exemption provided for under NI 45 - 106, and (ii) the Investor is purchasing the New Common Shares as an accredited investor, as defined in subparagraph (m) of the definition of "accredited investor" of NI 45 -106;

	(g)	the issuance of the Aurora Shares comprising the Aurora Share Component will be exempt from the requirements to prepare and deliver a prospectus to the Corporation pursuant to subsection 2.11 of NI 45 -106 and as such, the Aurora Shares comprising the Aurora Share Component will not be subject to any restriction on resale under the Securities Laws, subject to compliance with the conditions set out in subsection 2.6(3) of National Instrument 45 -102 - Resale of Securities (in Quebec, Regulation 45-102 respecting Resale ofSecurities); and

	(h)	the Aurora Shares comprising the Aurora Share Component, when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement (including terms set forth in any schedule hereto), will be validly issued, fully paid and non -assessable.

5.2

Reliance on Representations, Warranties, Covenants and Acknowledgements

The Investor acknowledges and agrees that the representations, warranties, covenants and acknowledgements made by the Investor in this Agreement are made with the intention that they may be relied upon by the Corporation in determining the Investor's eligibility to purchase the New Common Shares under the Securities Laws. The Investor further agrees that by accepting the New Common Shares, the Investor shall be representing and warranting that such representations, warranties, acknowledgements and covenants are true as at the Closing Time with the same force and effect as if they had been made by the Investor at the Closing Time and that they shall survive the purchase by the Investor of the New Common Shares and shall continue in full force and effect for a period of two years from Closing notwithstanding any subsequent disposition by the Investor of any of such New Common Shares.

The Corporation agrees that by accepting the subscription of the Investor hereunder, the Corporation shall be representing and warranting that the representations and warranties made by the Corporation in this Agreement are true as at the Closing Time with the same force and effect as if they had been made by the Corporation at the Closing Time and that they shall survive the Closing and shall continue in full force and effect for a period of twenty-four (24) months from Closing (other than the representations and warranties made by the Corporation at Sections 4.l(a), 4.l(b),4.l(c),4.l(h) and 4.l(i) which shall survive the Closing and shall continue in full force and effect for an indefinite period).

ARTICLE 6
MISCELLANEOUS

6.1

Further Assurances

Each of the Parties hereto upon the request of the other Party hereto, whether before or after the Closing Time, shall do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered all such further acts, deeds, documents, assignments, transfers, conveyances, powers of attorney and assurances as may reasonably be necessary or desirable to complete the transactions contemplated herein.

6.2

Notices

(a)

Any notice, direction or other instrument required or permitted to be given to any party hereto shall be in writing and shall be sufficiently given if delivered personally, or transmitted via email to such party, as follows:

(i)	in the case of the Corporation, to:

	PHOTON PHARMACEUTICALS INC.
	2500 - 1100 Boulevard Rene -Levesque Blvd.
	Montreal, Quebec H3B 5C9
	Attention:	Jean Gagnon
	Email:	gagnon.jean@rcgt.com


(ii)	If to the Trustee:

	RAYMOND CHABOT INC.
	600 de la Guichetiere Street West
	Suite 2000
	Montreal, Quebec H3B 4L8

	Attention:	Jean Gagnon
	Email:	gagnon.jean@rcgt.com

	With a copy to

	DAVIES WARD PHILLIPS & VINEBERG LLP
	1501, av. McGill College avenue
	Suite 2800
	Montreal, Quebec H3A 3N9

	Attention:	Denis Ferland
	Email:	dferland@dwpv.com

(iii)	If to the Investor:

	AURORA CANNABIS INC.
	12613 - 134 Avenue
	Edmonton, Alberta T5L 4S9

	Attention:	Terry Booth
	Email:	terry@auroramj.com

	With a copy to

	BENNETT JONES LLP
	100 King Street West, Suite 3400
	Toronto, Ontario M5X 1A4

	Attention:	Gavin Finlayson and Hugo Alves
	Email:	finlaysong@bennettjones .com; alvesh@bennettjones.com

	(b)	Any such notice, direction or other instrument, if delivered personally, shall be deemed to have been given and received on the day on which it was delivered, provided that if such day is not a Business Day then the notice, direction or other instrument shall be deemed to have been given and received on the first Business Day next following such day and if transmitted by email, shall be deemed to have been given and received on the day of its transmission, provided that if such day is not a Business Day or if it is transmitted or received after the end of normal business hours then the notice, direction or other instrument shall be deemed to have been given and received on the first Business Day next following the day of such transmission .

	(c)	Any party hereto may change its address for service from time to time by notice given to each of the other parties hereto in accordance with the foregoing provisions.

6.3

Time of the Essence

Time shall be of the essence of this Agreement and every part hereof.

6.4

Applicable Law

This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the province of Ontario and the laws of Canada applicable therein. Any and all disputes arising under this Subscription Agreement, whether as to interpretation, performance or otherwise, shall be subject to the non-exclusive jurisdiction of the courts of the province of Ontario and each of the parties hereto hereby irrevocably attorns to the jurisdiction of the courts of such province.

6.5

Entire Agreement

This Agreement, including the Schedules hereto, constitutes the entire agreement between the parties with respect to the transactions contemplated herein and cancels and supersedes any prior understandings, agreements, negotiations and discussions between the parties. There are no representations, warranties, terms, conditions, undertakings or collateral agreements or understandings, express or implied, between the parties hereto other than those expressly set forth in this Agreement or in any such agreement, certificate, affidavit, statutory declaration or other document as aforesaid. This Agreement may not be amended or modified in any respect except by written instrument executed by each of the parties hereto.

6.6

Counterparts

This Subscription Agreement may be executed and delivered (by original, facsimile or other electronic transmission) in two or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same Agreement.

6.7	Assignment

This Subscription Agreement may not be assigned by either Party except with the prior written consent of the other Party hereto.

6.8

Enurement

This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, estate trustees, successors (including any successor by reason of the amalgamation or merger of any party), administrators and permitted assigns.

[Signature Page Follows]

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date first above written.

RAYMOND CHABOT INC., solely in its capacity
as Interim Receiver of

PHOTON PHARMACEUTICALS INC.



	10094595 CANADA INC.



	Per: __________________________________
	Name:
	Title:

CORPORATE GUARANTEE

In consideration of the Corporation entering into this Agreement with the Investor and other good and valuable consideration, the receipt of which is hereby acknowledged by the undersigned, the undersigned guarantees payment and performance by the Investor of all the terms and conditions of this Agreement.

	AURORA CANNABIS INC.



	Per: ____________________________________
	Name:
	Title:

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date first above written.

RAYMOND CHABOT INC., solely in its capacity
as Interim Receiver of

PELOTON PHARMACEUTICALS INC.

	Per: ___________________________________
	Name:
	Title:



	10094595 CANADA INC.

CORPORATE GUARANTEE

	AURORA CANNABIS INC.

SCHEDULE "A"
RE-AMENDED PROPOSAL

Please see attached.

CANADA	SUPERIOR COURT
	(Commercial Division)
PROVINCE OF QUEBEC
DIVISION NO.: 01-MONTREAL	IN THE MATTER OF THE PROPOSAL
COURT NO: 500-11-049170-158	OF:
FILE NO.: 41-2135897
OFFICE NO.: 300085-001	PELOTON PHARMACEUTICALS INC.
SUPERINTENDENT'S NO.: 41-1393380

RE-RE-RE-AMENDED PROPOSAL AND PLAN OF REORGANIZATION

(sponsored by Aurora Cannabis Inc. and Pursuant to Expanded Powers Order)

WHEREAS on June 17, 2016, Peloton Pharmaceuticals Inc. (the "Company") initiated proceedings under the Bankruptcy and Insolvency Act (Canada) (the "BIA") by filing a notice of intention to make a proposal pursuant to section 50.4 of the BIA and Raymond Chabot Inc. ("RCI") was appointed as Proposal Trustee (the "Trustee");

AND WHEREAS the Company is insolvent and, in consequence thereof, has sought application of the relevant provisions of the BIA;

AND WHEREAS on September 14, 2016, RCI was appointed Interim Receiver (in such capacity, the "Interim Receiver") with the power to, among other things, solicit one or several potential buyers of all or any part of the Company's property, and solicit one or several potential investors in the share capital of the Company;

AND WHEREAS the Company submitted a proposal to the Company's creditors on November 25, 2016;

AND WHEREAS at a general meeting of creditors held on November 25, 2016, the Company's creditors instructed RCI to adjourn the general meeting of creditors to December 8, 2016, to allow for further submission of bids in respect of the Company;

AND WHEREAS a deadline of 5:00 p.m. on December 6, 2016 was set by RCI for the submission of bids in respect of the Company (the "Bid Deadline");

AND WHEREAS the Investor (as defined herein) was the only party that submitted a bid by the Bid Deadline;

AND WHEREAS the general meeting of creditors held on December 8, 2016 was adjourned to allow for an exclusive period of negotiations between the Trustee and the Investor, with the input of the Company's creditors;

AND WHEREAS at the general meeting of creditors held on Friday, December 16, 2016, RCI was asked by the Required Majority (as defined herein) of the Company's creditors to seek an order authorizing an expansion ofthe Interim Receiver's powers to, among other things, enter into the Term Sheet (as defined herein) with the Investor which sets out the principal terms of the transactions contemplated by this proposal;

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AND WHEREAS the Expanded Powers Order (as defined herein) was rendered on December 20, 2016, authorizing the Interim Receiver to, among other things, execute the Term Sheet, implement the transaction contemplated therein and authorized the filing of an amended Proposal;

AND WHEREAS pursuant to the Expanded Powers Order the Interim Receiver filed a proposal with the Official Receiver on behalf of the Company and convened a general meeting of creditors to vote on the proposal held on January 19, 2017;

AND WHEREAS as a result of the Expanded Powers Order, the Interim Receiver presented a proposal, on behalf of the Company, during the general meeting of creditors held on January 19, 2017;

AND WHEREAS the meeting of creditors held on January 19, 2017 was adjourned to January 26, 2017;

NOW THEREFORE as a result of the Expanded Powers Order, the Interim Receiver hereby submits, on behalf of the Company, the following proposal under Part III, Division I of the BIA and a plan of reorganization under section 191 of the Canada Business Corporations Act ("CBCA"), and sections 59(4) and 66(1.4) of the BIA, to the Company's creditors (the "Proposal").

ARTICLE 1
DEFINITIONS AND INTERPRETATION

1.1

Definitions

In this Proposal, unless otherwise stated or the context should otherwise require, the capitalized terms and phrases used but not defined herein have the following meanings:

(a)

"Administrative Fees and Expenses" means the fees, expenses and disbursements incurred by or on behalf of the Trustee, the Interim Receiver, and the solicitors for the Trustee and the Interim Receiver, and the reasonable post-filing fees, expenses and disbursements ofthe solicitors ofthe Company incurred to December 16, 2016, and any reasonable post-filing fees, expenses and disbursements of the solicitors of the Company incurred thereafter in assistance of this Proposal, the Approval Order and consummation of the transactions contemplated herein (in respect of the fees, expenses and disbursements of the solicitors to the Company, to a maximum of $175,000). For greater ce1iainty the fees, expenses and disbursements of counsel or consultants to the existing directors, management and/or Existing Shareholders of the Company incurred after December 16, 2016 in connection with any proposals or steps taken not in assistance of this Proposal, the Approval Order and consummation of the transactions contemplated herein shall not form part of the Administrative Fees and Expenses;

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	(b)	"Affected Claims" means all Claims, including Post-Filing Claims, other than the Unaffected Claims;

	(c)	"Affected Creditors" means all Persons having Affected Claims;

	(d)	"Approval Order" means an order of the Court approving this Proposal, which order shall include provisions permitted by section 191 of the CBCA and sections 59(4) and 66(1.4) of the BIA as may be necessary or appropriate to give effect to this Proposal, including those described in Section 4.1 of this Proposal as it may be amended or restated from time to time;

	(e)	"Articles of Reorganization" means the Articles of Reorganization in respect of the Company in accordance with section 191 (4) of the CBCA (as well as sections 59(4) and 66(1.4) ofthe BIA, to the extent applicable) giving effect to the proposed reorganization of the Company, together with such deletions, additions or modifications as the Interim Receiver may make thereto and therefrom at any time prior to the Approval, with the consent of the Investor. The Articles of Reorganization shall form part of the Reorganization;

	(f)	"BIA" has the meaning given to it in the recitals;

	(g)	"BIA Proceeding" means the proceeding commenced by the Company under the BIA on the Filing Date;

	(h)	"Bid Deadline" has the meaning given to it in the recitals;

	(i)	"Business Day" means any day except Saturday, Sunday or any day on which banks are generally not open for business in the City of Montreal;

	(j)	"CBCA" has the meaning given to it in the recitals;

	(k)	"Cash Component" has the meaning given to it in Section 8.1 of this Proposal;

	(1)	"Cash Contribution" has the meaning given to it in Section 8.1 of this Proposal;

	(m)	"Cash Election Deadline" means February 17, 2017;

	(n)	"Cash Election Form" means the form attached as Schedule "B" to this Proposal;

	(o)	"Certificate" means the certificate ofamendment issued by the Director (as defined in the CBCA) upon receipt of the Articles of Reorganization;

	(p)	"Claim" means:

(i)

a claim provable in bankruptcy against the Company or the Directors and includes any indebtedness, liability, action, cause of action, suit, debt, due, account, bond, covenant, contract, counterclaim, demand, claim, right and obligation of any nature whatsoever ofthe Company to any Person, whether liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, unsecured, present, future, known or unknown, by guarantee, by surety or otherwise and whether or not such right is executory in nature, including, without limitation, the right or ability of any Person to advance a claim for contribution or indemnity or otherwise with respect to any matter, action, cause or chose in action whether existing at present or commenced in the future based in whole or in part on facts which existed prior to or at the Filing Date and, in respect of a claim against the Directors, that relates to obligations ofthe Company where the Directors are by law liable in their capacity as Directors for the payment of such obligations;

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	(ii)	any claim for or resulting from the disclaimer, resiliation, repudiation, termination or restructuring by the Company of a contract, lease or other obligation or agreement, including any employment agreement, entered into by the Company in the normal course of business, following the Filing Date and prior to Approval of this Proposal; and

	(iii)	any Post-Filing Claim;

	(q)	"Closing Date" means no later than March 31, 2017;

	(r)	"Company" means Peloton Pharmaceuticals Inc., incorporated under the CBCA;

	(s)	"Convenience Distribution" has the meaning given to it in Section 5.2 of this Proposal;

	(t)	"Court" means the Quebec Superior Court for the District of Montreal, sitting as both:

	(i)	the "court" as envisaged and defined in section 2(1) ofthe BIA and includes any Justice thereof or, if applicable, the Registrar or any Deputy Registrar thereof; and

	(ii)	the "court" as envisaged in section 191 of the CBCA and includes any Justice thereof;

	(u)	"Court Approval Date" means the date on which the Court issues the Approval Order;

	(v)	"Creditors' Meeting" means the meeting of Unsecured Creditors to be held on or before January 27, 2017, for the purpose of considering and voting upon this Proposal;

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	(w)	"Crown Claims" means all amounts owing to Canada Revenue Agency that could be subject to a demand under subsection 224(1.2) of the Income Tax Act or under any substantially similar provision of provincial legislation as at the Filing Date;

	(x)	"Deposit" has the meaning given to it in Section 8.1 of this Proposal;

	(y)	"Depository" has the meaning given to it in Section 8.2 of this Proposal;

	(z)	"Director" has the meaning given to it in the BIA;

	(aa)	"Effective Time" means the date on which this Proposal 1s approved by the Required Majority;

	(bb)	"Equity Claims" means any claim constituting an equity claim under section 2 of the BIA;

	(cc)	"Excess Administrative Fees and Expenses" has the meaning given to it in Section 9.3;

	(dd)	"Existing Common Shares" means all of the issued and outstanding shares in the capital of the Company;

	(ee)	"Existing Securities" means all issued and outstanding options, warrants, convertible securities, exchangeable securities and any other rights to acquire any securities, in respect of the Company;

	(ff)	"Existing Shareholders" means, collectively, holders of the Existing Common Shares and the Existing Securities immediately prior to the Effective Time;

	(gg)	"Expanded Powers Order" means an order executory notwithstanding appeal that has not been stayed and no appeal therefrom is outstanding, which Expanded Power Order shall, inter alia, expand the powers ofthe Interim Receiver and authorize the Interim Receiver to:

	(i)	enter into the Term Sheet;

	(ii)	file this Proposal with the Official Receiver;

	(iii)	subject to this Proposal being approved pursuant to Section 3.7 hereof, undertake any steps required to obtain approval of the Proposal on behalf of the Company; and

	·(iv)	exercise such power and control over the Company as is necessary to complete the transactions contemplated by the Term Sheet and this· Proposal.

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	(hh)	"Filing Date" means June 17, 2016, the date on which the Company filed a Notice of Intention to Make a Proposal with the Official Receiver in accordance with the BIA;

	(ii)	"Fractional Interests" has the meaning given to such term in Section 9.11 of this Proposal;

	Gj)	"Governmental Authority" means any governmental, regulatory or administrative authority, department, agency, commission, board, panel, tribunal, Crown corporation, Crown ministry or court or other law, rule or regulation-making or enforcing entity having or purporting to have jurisdiction on behalf of any nation, or province, territory or state or other subdivision thereof or any municipality, district or other subdivision thereof;

	(kk)	"Implementation" means the completion and implementation of the transactions contemplated to take place on the Implementation Date under this Proposal;

	(11)	"Implementation Certificate" has the meaning given to it in Subsection 6.2(m) of this Proposal;

	(mm)	"Implementation Date" means such date that is two (2) Business Days following the Closing Date;

	(nn)	"including" means "including, without limitation", and "includes" means "includes without limitation";

	(oo)	"Interim Receiver" has the meaning given to it in the recitals;

	(pp)	"Investment Pool" means the total investment amount equal to the Cash Component and the Investor Shares Component to be funded by the Investor pursuant to the terms of this Proposal;

	(qq)	"Investment Pool Cash Account" has the meaning given to it in Subsection 8.1 of
		this Proposal;

	(rr)	"Investor" means Aurora Cannabis Inc. or its designee;

	(ss)	"Investor Shares" means the common shares of the Investor at, the lower of: (a) the closing price of such shares on January 20, 2017 on the TSX Venture Exchange discounted by ten percent (10%) from such closing price, and (b) the closing price of such shares on February 14, 2017 on the TSX Venture Exchange discounted by ten percent (10%) from such closing price;

	(tt)	"Investor Shares Component" has the meaning given to it in Section 8.2 of this Proposal;

	(uu)	"Investor Share Transmittal Form" means the form attached as Schedule "C" to this Proposal;

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	(vv)	"New Common Shares" means the common shares of the Company to be issued pursuant to Section 4.1 ofthis Proposal having the rights, privileges and restrictions set forth in the Articles of Reorganization;

	(ww)	"Official Receiver" means the officer appointed pursuant to subsection 12(2) of the BIA in the City of Montreal, Quebec, to perform the duties and responsibilities more fully set out in the BIA.

	(xx)	"Person" is to be broadly interpreted and includes an individual, a corporation, a partnership, a trust, an unincorporated organization, any Governmental Authority, and the executors, administrators or other legal representatives of an individual in such capacity;

	(yy)	"Post-Filing Claim" means the claim of any Person against the Company that arose from the provision of authorized goods and services provided or otherwise incurred on or after the Filing Date in the normal course ofbusiness, through to and including the Implementation Date. For greater certainty, any amounts, fees, expenses, or disbursements that arose from the provision of goods or services to the existing directors, management and/or Existing Shareholders ofthe Company in connection with any proposals or steps taken not in assistance of this Proposal, the Approval Order and consummation of the transactions contemplated herein, shall not form a Post-Filing Claim;

	(zz)	"Post-Filing Creditor" means any creditor with a Post-Filing Claim to the extent of its Post-Filing Claim;

	(aaa)	"Preferred Claims" means any claims that are entitled to be paid in priority to other Claims as provided under Section 136 of the BIA;

	(bbb)	"Preferred Creditors" means those creditors of the Company whose claims are entitled to be paid in priority to the Claims ofother Unsecured Creditors as provided under section 136 of the BIA;

	(ccc)	"Professional Fee Contribution" has the meaning given to it in Section 7.1;

	(ddd)	"Professional Fee Pool" means the pool of funds described in Section 7.1 comprising of the Professional Fee Contribution;

	(eee)	"Professional Fee Surplus" has the meaning given to it in Section 7.1;

	(fff)	"Proposal" means this Proposal made pursuant to the BIA and CBCA, as further amended or supplemented from time to time by the Company, in consultation with the Trustee, and with the consent of the Investor;

	(ggg)	"Proven Claim" means in respect of a creditor, the amount of a Claim as finally determined in accordance with the provisions of the BIA;

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	(hhh)	"Proven Creditor" means a creditor holding a Proven Claim to the extent of its Proven Claim;

	(iii)	"RCI" has the meaning given to it in the recitals;

	(jjj)	"Reorganization" has the meaning set out in Article 4 hereof and, in particular, to redeem or otherwise cancel all the Existing Common Shares and issue the New Common Shares to the Investor who will own all New Common Shares of the Company on the Implementation Date;

	(kkk)	"Required Majority" means an affirmative vote of a majority in number and two- thirds in value of all Proven Claims in the Unsecured Creditor Class entitled to vote, who are present and voting at the Creditors' Meeting (whether in person, by proxy or by voting letter) in accordance with the voting procedures established by this Proposal and the BIA;

	(111)	"Subscription Agreement" means an agreement or agreements documenting the
		terms and conditions of the strategic investment by the Investor in the Company;

	(mmm)	"Superintendent's Levy" means the levy payable to the Superintendent of Bankruptcy pursuant to section 60(4) and section 147 of the BIA;

	(nnn)	"Term Sheet" means the term sheet entered into by the Interim Receiver (pursuant to the Expanded Powers Order) and the Investor dated December 20, 2016;

	(ooo)	"Trustee" means Raymond Chabot Inc. or its duly appointed successor;

	(ppp)	"Trustee's Website" means the following website: www.raymondchabot.com;

	(qqq)	"Unaffected Claim" means:

	(i)	any Claim in respect of Administrative Fees and Expenses; and

	(ii)	Crown Claims.

	(rrr)	"Unaffected Creditor" means a creditor having an Unaffected Claim to the extent of its Unaffected Claim;

	(sss)	"Undeliverable Distributions" mean distributions to Proven Creditors that are returned as undeliverable;

	(m)	"Unsecured Claims" means all Affected Claims that are Proven Claims other than a Preferred Claim and a Post-Filing Claim;

	(uuu)	"Unsecured Creditor" means any creditor having an Unsecured Claim to the extent of its Unsecured Claim; and

	(vvv)	"Unsecured Creditor Class" means the class of creditors comprised of Unsecured Creditors.

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1.2

Date of Any Action

In the event that any date on which any action is required to be taken under this Proposal by any ofthe paiiies is not a Business Day, the action shall be required to be taken on the next proceeding day which is a Business Day.

1.3

Time

All times expressed in this Proposal are local time Montreal, Quebec, Canada, unless stipulated otherwise. Time is of the essence in this Proposal.

1.4

Statutory References

Any reference in this Proposal to a statute includes all regulations made thereunder and all amendments to such statutes or regulations in force from time to time.

1.5

Successors and Assigns

The Proposal shall be binding upon and shall enure to the benefit of the heirs, administrators, executors, legal personal representatives, successors and assigns of any Person or party named or referred to in the Proposal.

1.6

Monetary References

All references to currency and to ¹¹$¹¹are to Canadian dollars, unless otherwise indicated.

1.	7 Schedules

The following are the Schedules to this Proposal:

	•	Schedule "A" - Articles of Reorganization;
	•	Schedule "B" - Cash Election Form; and
	•	Schedule "C" - Investor Share Transmittal Form.

The terms and conditions of the Schedules form an integral part of this Proposal and should be read in conjunction with this Proposal.

ARTICLE2
PURPOSE AND EFFECT OF THE PROPOSAL

2.1

Purpose

The purpose of this Proposal is to effect a proposal concerning the obligations of the Company and the reorganization of the capital structure of the Company in order to be enable the business of the Company to continue, in the expectation that all creditors will derive a greater benefit from such proposal and reorganization than would result from the discontinuance of the Company's operations and forced liquidation of the Company's assets, and specifically to provide for:

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	(a)	distributions from the Professional Fee Pool to provide for the satisfaction of Administrative Fees and Expenses;

	(b)	distributions from the Investment Pool to the Preferred Creditors, Post-Filing Creditors, and Unsecured Creditors in satisfaction of their Proven Claims;

	(c)	the cancellation of the Existing Common Shares and the subscription by the Investor for the New Common Shares for the subscription price equal to the Investment Pool;

	(d)	the cancellation and extinguishment of all Existing Securities;

	(e)	the deemed resignation of all current Directors of the Company and the appointment of new Directors; and

	(f)	such other amendments and/or resolutions of the Articles as set fo1ih in the Articles of Reorganization.

2.2

Corporate Reorganization

This Proposal contemplates a corporate reorganization of the capital structure of the Company. The Articles of Reorganization attached as Schedule "A" to the Proposal shall, upon Court approval of the Proposal, amend the constating documents of the Company, inter alia, to effect the redemption of all Existing Common Shares and the cancellation of all Existing Securities, and authorizing the issuance of the New Common Shares to the Investor.

2.3

Strategic Investment

On the Implementation Date,. the Investor shall, subject to and upon the terms and conditions of this Proposal, make a strategic investment in the Company by subscribing for New Common Shares for a subscription price equal to the aggregate of the Investment Pool and the Professional Fee Pool as set forth in this Proposal, to be used to fund this Proposal.

2.4

Persons Affected

On the Implementation Date, this Proposal will become effective and, subject to the fulfillment by the Interim Receiver, the Trustee, and the Investor of their respective obligations hereunder, shall be binding on the Company, the Existing Shareholders and the Affected Creditors.

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ARTICLE3
CLASSIFICATION OF AFFECTED CREDITORS, VALUATION OF CLAIMS AND RELATED MATTERS

3.1

Classes of Creditors

There shall be one class of Affected Creditors for the purposes of considering and voting on this Proposal comprised of all Unsecured Creditors to the extent of their Unsecured Claims.

3.2

Proxies and Voting Letters

Proxies as provided for in the BIA indicating a Person authorized to act for the Unsecured Creditor, may be submitted to the Trustee at, or any time prior to, the commencement of the Creditors' Meeting. The Trustee shall chair the Creditors' Meeting. Voting letters as provided for in the BIA submitted to the Trustee prior to the Creditors' Meeting must indicate whether the Unsecured Creditor wishes to cast its vote in favour of or against the Proposal. Voting letters that do not indicate either preference will be deemed to indicate a vote in favour of the Proposal. Persons in attendance at the Creditors' Meeting shall cast their vote in the manner prescribed by the Trustee and the BIA. For greater certainty, Unaffected Creditors shall not be entitled to vote the value of their Unaffected Claim.

3.3

Quorum and Conduct of Creditors' Meeting

A quorum shall be constituted for the Creditors' Meeting or any adjournment thereof ifthere is one Unsecured Creditor, entitled to vote, present in person or by proxy, or if one Unsecured Creditor, entitled to vote, has submitted a voting letter in accordance with the provisions ofthe BIA and this Proposal. If the requisite quorum is not present at the Creditors' Meeting or if the Creditors' Meeting has to be postponed for any reason, then the Creditors' Meeting shall be adjourned by the Trustee to such date, time and place as determined by the Trustee. For greater certainty, the Creditors' Meeting may be adjourned one or more times.

3.4

Location of Creditors' Meeting

The Creditors' Meeting shall take place at the office of the Trustee, 600 de la Gauchetiere West, Suite 2000, Montreal, H3B 4L8.

3.5

Proofs of Claim and Treatment of Disputed Claims

The total amount of all Claims will be determined based on the proofs of claim submitted to the Trustee. The provisions of section 13 5 of the BIA will apply to all proofs of claim submitted to the Trustee, including in respect of disputed Claims.

3.6

Voting on the Proposal

Only the Unsecured Creditors with Proven Claims shall vote on the te1ms of this Proposal. Each Unsecured Creditor shall be entitled to a single vote valued in the full amount of its Proven Claim with respect to the vote ofthe Unsecured Creditor Class. In order to vote at the Creditors' Meeting, the proof of claim must be submitted prior to the commencement of the Creditors' Meeting.

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3.7	Approval by Affected Creditors

In order to be approved, this Proposal must receive the affirmative votes ofthe Required Majority.

3.8

Modification to Proposal

Subject to the prior consent and approval by the Investor, the Interim Receiver reserves the right at any time prior to the Creditors' Meeting to file any modification of, amendment or supplement to, the Proposal by way of a supplementary proposal and plan of reorganization. Any such amended or supplementary proposal shall forthwith be posted on the Trustee's Website, sent to the service list in the BIA Proceeding and filed with the Official Receiver as soon as practicable, in which case any such amended or supplementary proposal or proposals shall, for all purposes, be and be deemed to be a part of and incorporated into the Proposal. At the Creditors' Meeting, the Trustee shall provide all Unsecured Creditors in attendance with details of any modifications or amendments prior to the votes being taken to approve the Proposal. Subject to the provisions of the BIA and the Rules promulgated thereunder, after the Creditors' Meeting (and both prior to and subsequent to the Approval Order) and subject to the consent and approval by the Investor, the Interim Receiver may at any time and from time to time vary, amend, modify or supplement the Proposal.

ARTICLE 4
REORGANIZATION

4.1

The Reorganization

After the acceptance of this Proposal in accordance with Section 3. 7 and the relevant provisions of the BIA, the Interim Receiver will present a motion to the Court seeking the Approval Order, which Approval Order shall include the ordering, inter alia, that the following shall occur (collectively the "Reorganization"), namely:

(a)	with respect to all Existing Common Shares:

	(i)	reorganizing of all Existing Common Shares into shares redeemable for cancellation by the Company for the aggregate price (for all Existing Common Shares in their totality) of $1.00; and

	(ii)	thereafter, the deemed redemption for cancellation of all Existing Common Shares by the Company for the aggregate redemption price (for all Existing Common Shares in their totality) of $1.00 and the cancellation of all Existing Common Shares;

(b)	the creation of the New Common Shares having the rights, privileges and restrictions set forth in the Articles of Reorganization;

(c)	with respect to all Existing Securities, the deemed cancellation of all Existing Securities;

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(d)	with respect to the current Directors ofthe Company, the Directors shall be deemed to have resigned and new Directors shall be appointed to the board of directors of the Company; and

(e)	such other amendments and/or restating of the Articles as set forth in the Articles of Reorganization.

Subject to consent and approval of the Investor, the Interim Receiver shall retain the right, at any time prior to Approval, to make such further deletions, additions or modifications, as the Interim Receiver may deem appropriate, to the Reorganization such that the term "Reorganization" shall include such deletions, additions or further modifications so made by the Interim Receiver.

Immediately following the Approval Order, the Interim Receiver will send the Articles of Reorganization to the director appointed under section 260 of the CBCA (as envisaged by section 191(4) of the CBCA) in order to obtain from such director the Certificate.

4.2

Reorganization is a Condition Precedent

The Reorganization provided in Section 4.1 of this Proposal is and shall remain a condition precedent to the Investor funding the Professional Fee Pool and the Investment Pool and to the performance ofthis Proposal. As a consequence, any acceptance by the Creditors of this Proposal shall include approval of the Reorganization. In the event that the Approval Order does not approve the Reorganization, this Proposal shall be deemed, for all purposes, to have not been accepted or approved as required pursuant to the relevant provisions of the BIA.

ARTICLES
TREATMENT OF CREDITORS' CLAIMS

5.1

Voting by Unsecured Creditors

Each Unsecured Creditor shall be entitled to vote on this Proposal at the Creditors' Meeting, to the extent of its Proven Claim for voting purposes. Notwithstanding the foregoing, Unsecured Creditors having Equity Claims shall not be entitled to vote in respect of such Equity Claims at the Creditors' Meeting.

5.2

Treatment of Unsecured Creditors

On the Implementation Date, or as soon thereafter as is practicably possible, each Unsecured Creditor with a Proven Claim that is equal to or less than $2000 shall be paid the full amount of such Unsecured Creditor's Proven Claim to a maximum of $2000, in accordance with Section 9.5(b) hereof (the "Convenience Distribution").

Each Unsecured Creditor with a Proven Claim that is greater than $2000 may, by submitting a Cash Election Form to the Trustee on or before February 17, 2017 (the "Cash Election Deadline") elect to receive a cash payment in respect of all or any percentage of such Unsecured Creditor's Proven Claim from the Cash Component of the Investment Pool. An Unsecured Creditor that submits a Cash Election Form to the Trustee by the Cash Election Deadline shall receive a distribution comprised of cash, or if applicable a combination of cash and Investor Shares, in accordance with Sections 9.5(c)(i) and 9.5(c)(ii) of this Proposal.

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Each Unsecured Creditor that has a Proven Claim that is greater than $2000 and does not file a Cash Election Form with the Trustee by the Cash Election Deadline shall receive Investor Shares equal to the full amount of such Unsecured Creditor's Proven Claim, in accordance with Section 9.5( c)(iii) hereof.

5.3

Treatment of Existing Shareholders

In connection with or as a result of the Implementation of this Proposal, Existing Shareholders shall not be entitled to any payment or other compensation on account oftheir Equity Claims under this Proposal and shall not be entitled to vote on this Proposal at the Creditors' Meeting or in connection with the Reorganization and will have no dissent rights.

5.4

Treatment of Preferred Creditors

On the Implementation Date, the Proven Claims of all Preferred Creditors, if any, shall be paid, in priority to the Claims of other Unsecured Creditors in accordance with section 136 of the BIA, including the Proven Claims of all employees or former employees for all amounts provable as described in subsection 60(1.3) ofthe BIA which, ifany, shall be paid immediately after the Court Approval Date.

5.5

Treatment of Post-Filing Creditors

On the Implementation Date, the Post-Filing Creditors, if any, shall be paid in accordance with Section 9.4 of this Proposal, in priority to the Claims of other Unsecured Creditors, up to the Implementation Date and thereafter by the Company in the ordinary course of business.

5.6

Treatment of Crown Claims

All Crown Claims that were outstanding at the Filing Date, if any, shall be paid in full to Her Majesty in right of Canada or a province, within six months after the Court Approval Date.

5.7

Treatment of Administrative Fees and Expenses

On the Implementation Date, Administrative Fees and Expenses incurred and invoiced prior to the Implementation Date shall be paid in priority to all Claims of Unsecured Creditors from the Professional Fee Pool, and to the extent that the funds in the Professional Fee Pool are insufficient to satisfy all of the Administrative Fees and Expenses, the balance (if any) of the Administrative Fees and Expenses after payment from the Professional Fee Pool, shall be paid from the Investment Pool in priority to all Claims of Unsecured Creditors.

5.8

Extinguishment of Claims

On the Implementation Date in accordance with its terms and in the sequence set forth in this Proposal and in accordance with the provisions of the Approval Order, the treatment of Affected Claims shall be final and binding on the Company, all Affected Creditors (and their respective heirs, executors, administrators, legal personal representatives, successors and assigns), and all Affected Claims shall be fully, finally, irrevocably and forever released, discharged, cancelled and barred, and the Company and the Directors shall thereupon have no further obligation whatsoever in respect ofthe Affected Claims; provided that nothing herein releases the Company or any other Person from their obligations to make distributions in the manner and to the extent provided for in the Proposal.

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5.9

Guarantees and Similar Covenants

No Person who has a Claim under any guarantee, surety, indemnity or similar covenant in respect of any Claim which is compromised and released under this Proposal or who has any right to claim over in respect of or to be subrogated to the rights of any Person in respect of a Claim which is compromised under this Proposal shall not be entitled to any greater rights as against the Company than the Person whose Claim is compromised under the Proposal.

ARTICLE6
CONDITIONS TO IMPLEMENTATION

6.1

Confirmation of Proposal

Provided that the Proposal is approved by the Required Majority, the Trustee shall apply for the Approval Order as soon as reasonably practicable.

6.2

Conditions Precedent to Implementation of the Proposal

Implementation of this Proposal on the Implementation Date is subject to the satisfaction of the following conditions precedent being satisfied on or before the Closing Date:

	(a)	the Proposal is approved by the Required Majority;

	(b)	the Approval Order, in form and substance satisfactory to the Investor acting reasonably, has been issued, has not been stayed and no appeal therefrom is outstanding;

	(c)	the TSX Venture Exchange (or such other recognized Canadian exchange that the common shares of the Investor may be trading on at such time) has conditionally approved the issuance of the Investor Shares that are to be contributed by the Investor to the Investment Pool;

	(d)	to the extent possible, and using commercially reasonable best eff01is, to structure the issuance of the Investor Shares Component so as to exempt the Investor Shares Component from any hold-period under applicable securities laws, it being understood that (i) it is the Investor's present intention to issue the Investor Shares in reliance upon the business combination and reorganization exemption in National Instrument 45-106, and (ii) in no circumstances will the Investor be obliged to file a prospectus in order to qualify the distribution of the Investor Shares;

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	(e)	the Interim Receiver on behalf of the Company and the Investor have entered into the Subscription Agreement, in form and substance satisfactory to the Investor, and all conditions precedent under the Subscription Agreement have been satisfied or waived in accordance with the terms thereof, other than the condition relating to the Implementation of this Proposal;

	(f)	the Interim Receiver and the Investor shall have amended the Term Sheet as necessary or appropriate;

	(g)	there shall not be in effect any preliminary or final decision, order or decree by a Governmental Authority, no application shall have been made to any Governmental Authority, and no action or investigation shall have been announced, threatened or commenced by any Governmental Authority, in consequence of or in connection with the Proposal that restrains, impedes or prohibits (or ifgranted could reasonably be expected to restrain, impede or inhibit), the Proposal or any part thereof or requires or purports to require a variation of the Proposal;

	(h)	the Articles of Reorganization, in form and substance satisfactory to the Investor, effecting the reorganization of the Company's share capital in accordance with the Proposal have been filed in accordance with the Approval Order;

	(i)	at the election of the Investor, all employment agreements of the Company's employees have been terminated;

	U)	no debtor in possession or interim financing has been made available to the Company without consent of the Investor, not to be unreasonably withheld;

	(k)	the Company has no subsidiaries (as such term is used in the CBCA);

	(1)	all other actions, documents and agreements necessary to implement the Proposal as required herein have been effected and executed, in each case, in form and substance satisfactory to the Investor, acting reasonably; and

	(m)	the Investor acting reasonably shall have delivered a certificate to the Trustee that the conditions precedent to the Implementation of the Proposal have been satisfied or waived (the "Implementation Certificate").

Upon written confirmation of receipt by the Trustee of the Implementation Certificate, the Implementation of the Proposal shall occur on the Implementation Date and all actions deemed to occur on the Implementation Date shall occur without the delivery or execution of any further documentation, agreement or instrument.

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ARTICLE 7
CREATION OF THE PROFESSIONAL FEE POOL

7.1

Funding of the Professional Fee Pool

Subject to the satisfaction ofall conditions precedent in Article 6 ofthis Proposal, the Trustee shall distribute the Professional Fee Contribution in accordance with Article 9 of this Proposal.

7.2

Professional Fee Surplus

Ifthe Professional Fee Contribution is greater than the total amount of the Administrative Fees and Expenses, any surplus amount that would remain in the Professional Fee Pool after payment of all Administrative Fees and Expenses (the "Professional Fee Surplus") will be transferred, or otherwise contributed, by the Trustee to the Investment Pool Cash Account (as defined below).

ARTICLE 8
CREATION OF THE INVESTMENT POOL

8.1

Cash Component of the Investment Pool

Subject to the satisfaction of all conditions precedent in Article 6 of this Proposal, on the Implementation Date the Investor shall deliver to the Trustee, in accordance with wire transfer instructions provided by the Trustee at least three (3) Business Days prior to the Implementation Date, and in partial consideration by the Investor for the subscription ofthe New Common Shares, such amount in cash (the "Cash Contribution") as the Trustee may instruct pursuant to the Trustee's review of the Cash Election Forms, provided however that the Cash Contribution shall not, under any circumstances, exceed $7, 000,000 (inclusive of the Deposit, as defined below). The Cash Contribution is to be contributed by the Investor to the Investment Pool and held by the Trustee in a segregated, interest-bearing trust account established by the Trustee ("Investment Pool Cash Account").

On the Implementation Date, the Trustee shall transfer, or otherwise contribute, to the Investment Pool Cash Account on behalf of the Investor and as partial consideration by the Investor for subscription of the New Common Shares, an amount equal to $150,000, which was provided by the Investor to the Trustee as a deposit (the "Deposit").

On the Implementation Date, the Trustee shall transfer, or otherwise contribute, to the Investment Pool Cash Account, the Professional Fee Surplus in accordance with Section 7.2 hereof, such that, on the Implementation Date, the Investment Pool Cash Account shall be comprised of the Cash Contribution, the Deposit and the Professional Fee Surplus (the "Cash Component").

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Subject to the satisfaction of all conditions precedent in Article 6 ofthis Proposal, the Trustee shall distribute the Cash Component ofthe Investment Pool in accordance with Article 9 ofthis Proposal as soon as practicable thereafter.

8.2

Investor Shares Component of the Investment Pool

Subject to the satisfaction of all conditions precedent in Article 6 of this Proposal, on the Implementation Date, and in paiiial consideration by the Investor for the subscription of the New Common Shares, the Investor shall issue, register and deliver to Computershare Trust Company of Canada or such other third-party depository acceptable to the both the Investor and the Trustee (the "Depository"), in trust on behalf and for the benefit ofthe Affected Creditors ofthe Company, in accordance with the Trustee's written instructions delivered to the Investor at least two (2) Business Days before the Implementation Date, Investor Shares equal to $7,000,000 or such lesser amount as directed by the Trustee pursuant to the Trustee's review of the Cash Election Forms, calculated at, the lower of:

	(a)	the closing price of such shares on January 20, 2017 on the TSX Venture Exchange discounted by ten percent (10%) from such closing price; and

	(b)	the closing price of such shares on February 14, 2017 on the TSX Venture Exchange discounted by ten percent (10%) from such closing price,

which Investor Shares are to be contributed to the Investment Pool (the "Investor Shares Component").

The Investor Shares Component shall be adjusted to reflect fully the effect of any share split, reverse split, share dividend (including any return of capital, dividend, or distribution of securities convertible into Investor Shares, other than share dividends paid in lieu of ordinary course dividends), consolidation, reorganization, recapitalization or other like change with respect to the Investor Shares occurring after the date hereof and prior to the Implementation Date.

Subject to the satisfaction of all conditions precedent in Article 6 of this Proposal, the Company with the consent of the Trustee, as applicable, shall distribute, or cause to be distributed, the Investor Shares Component of the Investment Pool in accordance with Article 9 of this Proposal as soon as practicable thereafter.

ARTICLE 9
DISTRIBUTIONS UNDER THE PROPOSAL

All distributions to be effected pursuant to the Proposal shall be made pursuant to this Article 9 and shall occur in the manner set out below under the supervision ofthe Trustee. Notwithstanding any other provisions of this Proposal, no distributions or transfers from the Professional Fee Pool or the Investment Pool shall be made with respect to all or any portion of a disputed Claim unless and only to the extent that such disputed Claim has become a Proven Claim, in whole or in part.

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9.1

Superintendent's Levy

Any distributions made pursuant to the terms hereof shall be made net of the Superintendent's Levy required to be made, pursuant to sections 147 and 60(4) of the BIA.

9.2

Withholding

The Investor, Company, Trustee or Depository shall be entitled to deduct and withhold from any consideration payable to or otherwise contemplated in this Proposal such amounts as the Investor, Company, Trustee or Depository is required to deduct and withhold with respect to the making of such payment under the Income Tax Act (Canada) or any provision of state, local or foreign Tax Law and to take any action necessary to ensure that such deductions and withholdings are timely made. To the extent that amounts are so withheld by the Investor, Company, Trustee or Depository and paid to the appropriate Governmental Authority, such withheld amounts shall be treated for all purposes ofthis Proposal as having been paid to the Person who otherwise would have received the payment in respect of which such deduction and withholding was made by the Investor, Company, Trustee or Depository.

9.3

Distributions from the Professional Fee Pool

On the Implementation Date, in order to provide for the payment of the Administrative Fees and Expenses, the Trustee shall make distributions using the Professional Fee Contribution of the Professional Fee Pool, in priority to all claims of Unsecured Creditors. To the extent that the Professional Fee Pool is insufficient to satisfy all Administrative Fees and Expenses, any remaining Administrative Fees and Expenses after payment ofthe Professional Fee Pool ("Excess Administrative Fees and Expenses") shall be satisfied in accordance with Section 9.4.

9.4

Distributions to Preferred Creditors, Post-Filing Creditors and to satisfy Excess Administrative Fees and Expenses

On the Implementation Date, the Trustee shall make a distribution from the Cash Component of the Investment Pool equal to:

	(a)	the amount payable to satisfy the Excess Administrative Fees and Expenses,

	(b)	the amount payable to each Preferred Creditor less such reserves as the Trustee shall deem necessary or appropriate; and

	(c)	the amount payable to each Post-Filing Creditor.

in priority to all Claims of Unsecured Creditors. For greater certainty, no payments shall be made to the Unsecured Creditors prior to the Trustee making any and all payments required under this Section 9.4, or alternatively, the Trustee reserving and holding in trust sufficient funds to pay the amounts required under this Section 9.4.

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9.5

Distribution to Unsecured Creditors

On or as soon as practicable after the Implementation Date, in order to provide for the payment of the Excess Administrative Fees and Expenses, the Prefened Creditors, the Post-Filing Creditors, and the Unsecured Creditors, the Company, the Trustee, or the Depository as instructed by the Company with the prior consent of the Trustee, as applicable, shall make distributions from the Investment Pool in the following order of priority:

	(a)	the Trustee shall first pay the Prefened Creditors, the Post-Filing Creditors and any Persons entitled to payment in respect of the Excess Administrative Fees and Expenses, in accordance with Section 9.4 of this Proposal by using the Cash Component of the Investment Pool;

	(b)	the Trustee shall make the Convenience Distribution from the Cash Component of the Investment Pool; and

	(c)	the Trustee, or the Company with the prior consent of the Trustee, as the case may be, shall direct, authorize or cause the following distributions to be made:

	(i)	to each Unsecured Creditor that has filed a Cash Election Form with the Trustee by the Cash Election Deadline, a cash payment from the Cash Component equal to such percentage of the Unsecured Creditor's Proven Claim as indicated on such Unsecured Creditor's Cash Election Form;

	(ii)	to each Unsecured Creditor that filed a Cash Election Form with the Trustee by the Cash Election Deadline, Investor Shares, equal to the balance (if any) of such Unsecured Creditor's Proven Claim after taking into account the distribution in 9.5(c)(i), from the Investor Shares Component of the Investment Pool; and

	(iii)	to each Unsecured Creditor that did not file a Cash Election Form by the Cash Election Deadline, Investor Shares equal to the full amount of such Unsecured Creditor's Proven Claim, from the Investor Shares Component of the Investment Pool.

9.6

Undeliverable Distributions

Ifthere are any Undeliverable Distributions, then, at the discretion of and with the consent of the Trustee, the Corporation shall direct, authorize or cause the Depository to distribute the Undeliverable Distributions to the Unsecured Creditors on a pro-rata basis to the maximum amount ofthe Proven Claims ofUnsecured Creditors should any such Proven Claims ofUnsecured Creditors remain.

9.7

Return of Balance of Investment Pool

To the extent that there is any amount of cash remaining in the Cash Component ofthe Investment Pool and/or are any Investor Shares remaining in the Investor Shares Component ofthe Investment Pool after all Proven Claims of Unsecured Creditors have been paid in full, the Trustee, or the Depository as instructed by the Trustee, shall return or cancel, as applicable, such cash and Investor Shares from the Investment Pool to the Company. Any Investor Shares returned to the Company shall be cancelled by the Investor for no consideration.

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9.8

Final Distributions

As soon as reasonably possible after the acceptance ofthis Proposal by the Required Majority, the Trustee shall give notice pursuant to section 149(1) of the BIA to every Person with an Affected Claim ofwhich the Trustee has notice or knowledge but whose Affected Claim has not been proved that if such Person does not prove its Claim within a period of 30 days after the sending of the notice, the Trustee will proceed to declare a final creditor distribution without regard to such Person's Claim; the distribution refe1Ted to in said notice shall be deemed a final creditor distribution and any Person so notified who does not prove its Claim within the period specified in the notice shall be barred from making a Claim in this Proposal or sharing in any creditor distribution hereunder, subject to any exceptions set out in subsections 149(2), (3) and (4) of the BIA.

9.9

Cancellation of Certificates and Notes

Upon Implementation of the Proposal on the Implementation Date, all debentures, notes, certificates, agreements, invoices and other instruments evidencing Affected Claims will not entitle any holder thereof to any compensation or participation other than as expressly provided for in the Proposal and will be cancelled and will be null and void.

9.10

Interest

Interest shall not accrue or be paid on Affected Claims on or after the Filing Date, and no holder of an Affected Claim shall be entitled to interest accruing on or after the Filing Date.

9.11

Fractional Interests

No fractional interests of Investor Shares ("Fractional Interests") will be issued under this Proposal. Recipients of Investor Shares will have their entitlements adjusted downwards to the nearest whole number of Investor Shares, as applicable, to eliminate any such Fractional Interests and no compensation will be given for the Fractional Interest.

9.12

Allocation of Distributions

All distributions made pursuant to the Proposal shall be allocated first towards the repayment of the principal amount in respect of such Affected Creditor's Affected Claim and second, if any, towards the repayment of all accrued but unpaid interest in respect of such Affected Creditor's Affected Claim.

9.13

Investor Shares Registration and Delivery

An Unsecured Creditor may, by completing the Investor Share Transmittal Form attached hereto as Schedule "C" and submitting it to the Trustee by the Cash Election Deadline, provide instructions to the Trustee regarding the registration and delivery of Investor Shares that are to be distributed to the Unsecured Creditor under this Proposal. In the absence of an Unsecured Creditor providing express registration and/or instructions prior to the Cash Election Deadline, the Investor Shares will be registered and delivered to the Unsecured Creditor at its last known address as reflected in the Company's records, and upon registration and delivery, the Investor shall be deemed to have complied with any obligations with respect to registration and delivering of the Investor Shares.

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ARTICLE 10
PROCEDURE FOR DISTRIBUTIONS REGARDING DISPUTED CLAIMS

10.1

No Distribution Pending Allowance

An Affected Creditor holding a disputed Claim will not be entitled to receive a distribution under the Proposal in respect of such disputed Claim or any p011ion thereof unless and until, and then only to the extent that, such disputed Claim is allowed pursuant to the BIA.

10.2

Distributions after Disputed Distribution Claims Resolved

Once a disputed Claim is resolved, a distribution will be made to that Affected Creditor as to its Proven Claim in accordance with Article 9 of this Proposal.

ARTICLE 11
IMPLEMENTATION OF THE PROPOSAL AND EFFECT OF THE PROPOSAL

11.1

Proposal Implementation

On the Implementation Date, this Proposal will become effective and be binding on and enure to the benefit of the Company and all Affected Creditors in accordance with the terms of this Proposal, irrespective of whether the Affected Creditor submits a proof of claim under this Proposal.

11.2

Effect of the Proposal Generally

The payment, compromise or satisfaction of any Affected Claims under this Proposal, if approved by the Court, shall be binding upon each Affected Creditor and his, her or its heirs, executors, administrators and other legal representatives, successors and assigns, as the case may be, for all purposes and this Proposal will constitute (a) a full, final and absolute settlement of all rights of the Affected Creditors against the Company, and the Directors of the Company (in their capacity as Directors of the Company) in respect of the Affected Claims; and (b) an absolute release and discharge of all indebtedness, liabilities and obligations of or in respect of the Affected Claims against the Company and the Directors of the Company (in their capacity as Directors of the Company), and all Liens granted by the Company in respect thereof, including any interest or costs accruing thereon (whether before or after the Filing Date), other than distributions pursuant to the Proposal.

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11.3

Consents and Releases

Upon Implementation of the Proposal, all Affected Creditors will be deemed to have consented and agreed to all of the provisions of this Proposal in its entirety. In particular, each Affected Creditor shall be deemed to have executed and delivered to the Company and Directors of the Company all consents, releases, assignments and waivers, statutory or otherwise, required to implement and carry out this Proposal in its entirety.

11.4

Waivers of Defaults

Upon Implementation of the Proposal, all Persons shall be deemed to have waived any and all defaults of the Company then existing or previously committed by the Company, or caused by the Company, by any of the provisions in the Proposal or steps contemplated in the Proposal, or non-compliance with any covenant, warranty, representation, term, provision, condition or obligation, expressed or implied, in any contract, instrument, credit document, indenture, note, lease, guarantee, agreement for sale or other agreement, written or oral, and any and all amendments or supplements thereto, existing between such Person and the Company and any and all notices of default and demands for payment or any step or proceeding taken or commenced in connection therewith under any such agreement shall be deemed to have been rescinded and of no further force or effect, provided that nothing shall be deemed to excuse the Company from performing its obligations under the Proposal or be a waiver of defaults by the Company under the Proposal and the related documents. For great certainty, nothing in this Section shall waive any obligations of the Company in respect of any of the Unaffected Claims.

11.5

Deeming Provision

In this Proposal, the deeming provisions are not rebuttable and are conclusive and irrevocable.

11.6

Preferences and Transfers at Undervalue

Section 95 through and including section 101 of the BIA do not apply to this Proposal.

11.7

Proposal Releases

Upon Implementation, all Claims ofthe Affected Creditors and all claims ofthe Affected Creditors existing or hereafter arising, based in whole or in part on any act or omission, transaction, dealing or other occurrence existing or taking place on or prior to the Implementation Date relating to, arising out of or in connection with the Company or its assets, business or affairs, whenever and however conducted, this Proposal or the BIA Proceeding, other than Unaffected Claims, and the right to enforce the Company's obligations under this Proposal shall be deemed to be fully and finally satisfied, settled and discharged and (a) no Affected Creditor shall have any further right, remedy or claim against the Company in respect of all or any portion of the Affected Creditor's Claim, and (b) no Affected Creditor shall have any fuiiher right, remedy or claim against the officers, Directors, partners, shareholders, agents, contractors, employees or professional or legal advisors ofthe Company in respect ofall or any portion ofany Claim. Nothing herein shall release any Unaffected Claim.

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11.8

Release of Directors

Upon Implementation, the Affected Creditors shall be deemed to fully release and discharge and shall not pursue any claims or assessments against the Company's current and former Directors for claims against such current or former Directors of the Company that arose prior to the Filing Date and that relate to the liabilities of the Company where such current or former Directors are by law liable in their capacity as Directors for the payment of such obligations. Nothing herein shall be interpreted as an acknowledgement of any liability or obligations of any of the current or former Directors. For greater certainty, Unaffected Claims, including Unaffected Claims that relate to contractual rights of one or more creditors arising from contracts with one or more Directors or based on allegations of misrepresentation made by Directors or ofwrongful or oppressive conduct by the Directors are not released.

ARTICLE 12
NOTICES

12.1

Notices

Any notice, certificate, consent, determination or other communication required or permitted to be given or made under this Proposal shall be in writing and shall be effectively given and made if (i) delivered personally, (ii) sent by prepaid courier service, or (iii) sent by email transmission, in each case to the applicable address set out below:

(a)	If to the Company:

	PELOTON PHARMACEUTICALS INC.
	2500- 1100 Boulevard Rene Levesque
	Montreal, QC H3B 5C9
	Attention:	Edward Agopian
	Email:	edward@pelotonphanna.com

	With a copy to:

	BCFLLP
	1100 Rene-Levesque Blvd. West
	Montreal, QC H3B 5C9
	Attention:	Bertrand Giroux and Antonio N adaira
	Email:	bertrand.giroux@bcf.ca; antonio.nadaira@bcf.ca

(b)	If to the Trustee:

	RAYMOND CHABOT INC.
	Suite 2000, 600 de la Gauchetiere Street West
	Montreal, QC H3B 4L8

	Attention:	Jean Gagnon

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	Email:	gagnon. jean@,rc gt. com

	With a copy to

	DAVIES WARD PHILLIPS & VINEBERG LLP
	1501, av. McGill College
	Suite 2800
	Montreal, QC H3A 3N9

	Attention:	Denis Ferland and Gabriel Lavery Lepage
	Email:	dferland@dwpv.com; glaverylepage(@,dwpv.com

(c)	If to the Investor:

	AURORA CANNABIS INC.
	12613 - 134 Avenue
	Edmonton, AB T5L 4S9

	Attention:	Terry Booth
	Email:	terry@aurorami.com

	With a copy to

	BENNETT JONES LLP
	100 King Street West
	Toronto, ON MSX 1A4

	Attention:	Gavin Finlayson and Hugo Alves
	Email:	finlaysong@bennettiones.com; alvesh@bennettiones.com

any such communication so given or made shall be deemed to have been given or made and to have been received on the day of delivery if delivered, or on the day of faxing or sending by other means of recorded electronic communic.ation, provided that such day in either event is a Business Day and the communication is so delivered, faxed or sent before 5:00 p.m. (Montreal time) on such day. Otherwise, such communication shall be deemed to have been given and made and to have been received on the next following Business Day.

ARTICLE 13
MISCELLANEOUS

13.1

Capacity of Trustee and Certificate of Completion

Raymond Chabot Inc. shall be the Trustee under this Proposal. Upon resolution of all disputed Claims, if any, and the making of the distributions by the Trustee to Proven Creditors as contemplated by this Proposal, the terms of the Proposal shall be deemed to be fully performed and the Trustee shall provide to the Company and to the Official Receiver a certificate pursuant to section 65.3 of the BIA and the Trustee shall be entitled to be discharged.

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13.2

Non-Consummation

Ifthe conditions precedent to this Proposal are not met, (a) the Proposal shall be null and void in all respects, (b) any settlement or compromise embodied in the Proposal, including the fixing or limiting to an amount certain any Claim, any document or agreement executed pursuant to the Proposal shall be deemed null and void, and (c) nothing contained in the Proposal, and no acts taken in preparation for consummation of the Proposal, shall (i) constitute or be deemed to constitute a waiver or release of any Claims by or against the Company or any other Person; (ii) prejudice in any manner the rights of the Company or any other Person in any further proceedings involving the Company; or (iii) constitute an admission of any sort by the Company or any other Person.

13.3

Paramountcy

From and after the Effective Time, any conflict between:

	(a)	the Proposal or the Approval Order; and

	(b)	the covenants, warranties, representations, terms, conditions, prov1s1ons or obligations, expressed or implied, of any contract, mortgage, security agreement, indenture, trust indenture, note, loan agreement, commitment letter, agreement for sale, lease or other agreement, written or oral and any and all amendments or supplements thereto existing between one or more of the Affected Creditors and the Company as at the Implementation Date and the notice of articles, articles or bylaws of the Company at the Implementation Date;

will be deemed to be governed by the terms, conditions and provisions ofthe Proposal and the Approval Order, which shall take precedence and priority.

13.4

Severability of Proposal Provisions

Ifprior to the Court Approval Date, any term or provision of the Proposal is held by the Court to be invalid, void or unenforceable, the Court, at the request of the Investor and with the consent of the Interim Receiver, shall have the power to either: (a) sever such term or provision from the balance of the Proposal and provide the Investor and Interim Receiver with the option to proceed with the implementation of the balance of the Proposal as of and with effect from Court Approval Date; or (b) alter and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void or unenforceable, and such term or provision shall then be applicable as altered or interpreted. Notwithstanding any such holding, alteration or interpretation, and provided that this Proposal proceeds to Implementation, the remainder of the terms and provision of the Proposal shall remain in full force and effect and shall in no way be affected, impaired or invalidated by such holding, alteration or interpretation.

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13.5

Further Assurances

The Company, the Interim Receiver, the Investor and the Affected Creditors will execute and deliver all such documents and instruments and do all such acts and things as may be necessary or desirable to carry out the full intent and meaning of this Proposal and to give effect to the transactions contemplated herein.

13.6

Governing Law

This Proposal will be governed by and construed in accordance with the laws of the Province of Quebec and the laws of Canada applicable therein.

13.7

Proposal Language

The parties have expressly required that this Proposal be drafted in the English language. Les parties ant expressement exige que la presente Proposition so it redigee en anglais.

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

SCHEDULE "A"
ARTICLES OF REORGANIZATION

The Articles of Peloton Pharmaceuticals Inc. (the "Corporation") are amended by:

a)	creating a new class of common shares in the capital of the Corporation, the number of which shall be unlimited, having attached thereto the rights, privileges, restrictions and conditions hereto (the "New Common Shares"):

(i) each New Common Share shall entitle the holder thereof to one vote at all meetings of the shareholders of the Corporation;

(ii) the holders ofthe New Common Share shall be entitled to receive, as and when declared by the board of directors, dividends payable in money, property or by the issue of fully paid shares of the capital of the Corporation; and

(iii) in the event of the liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, or other distribution of assets of the Corporation among shareholders for the purpose of winding up its affairs, the holders of the New Common Share shall be entitled to receive the remaining property of the Corporation.

b)	creating a new class of redeemable shares in the capital of the Corporation, the number of which shall be unlimited, having attached thereto the rights, privileges, restrictions and conditions hereto (the "Redeemable Shares"):

(i) no holder of a fractional interest in a Redeemable Share shall be entitled to be registered on the books of the Corporation in respect of such fraction of a Redeemable Share;

(ii) the holders of the Redeemable Shares or fractional interests therein shall not be entitled to receive notice of or to attend any meeting ofthe shareholders ofthe Corporation and shall not be entitled to vote at any such meeting;

(iii) the holders of Redeemable Shares shall not be entitled to receive any dividend; and

(iv) all of the outstanding Redeemable Shares and fractional interests therein shall be automatically redeemed by the Corporation immediately following their issuance, without notice to the holders of such Redeemable Shares, for an aggregate amount of $1.00 for each whole Redeemable Share (the "Redemption Price").

c)	changing each Class A share, Class B share, Class C share, Class D share, Class E share, Class F share, Class G share, whether issued or unissued (including any right, option, warrant or other security convertible or exchangeable into any Class A share, Class B share, Class C share, Class D share, Class E share, Class F share, Class G share, into 0.00000001 of a Redeemable Share;

d)	the Corporation shall pay or cause to be paid to each holder of Redeemable Shares to be redeemed the Redemption Price by cheque, provided that if any holder owns less than one whole Redeemable Share, then the aggregate Redemption Price payable to such holder shall be deemed to be $0.00, and the fractional interests therein held by such holder shall be automatically redeemed by the Corporation immediately following their issuance without any payment or further act or formality;

e)	immediately following the redemption of all of the Redeemable Shares, to cancel, remove and delete the authorized share capital of the Corporation, consisting of the Class A shares, Class B shares, Class C shares, Class D shares, Class E shares, Class F shares, Class G shares and the outstanding Redeemable Shares (collectively, the "Cancelled Classes of Shares"), along with the rights, privileges, restrictions and conditions attached to the Cancelled Classes of Shares; and

f)	Providing that, after giving effect to the foregoing, the authorized capital of the Corporation consists only of an unlimited number of New Common Shares.

SCHEDULE "B"
CASH ELECTION FORM

1.	Any Unsecured Creditor ofthe Company with a Claim that is equal to or greater than $2000 may, by submitting this Cash Election Form to the Trustee on or before February 17, 2017 (the Cash Election Deadline), elect to receive a cash payment in respect of all or any percentage of its Proven Claim from the Cash Component of the Investment Pool.

2.	An Unsecured Creditor that submits a Cash Election Form to the Trustee by the Cash Election Deadline shall receive a distribution in accordance with Sections 9.5(c)(i) and 9.5(c)(ii) of the Proposal.

3.	This Cash Election Form may only be completed by an Unsecured Creditor of the Company that has a Claim equal to or greater than $2000. Any Cash Election Form submitted by an Unsecured Creditor with a Proven Claim that is less than $2000 shall be deemed to have been automatically rejected upon receipt by the Trustee.

4.	Any Cash Election Form received by the Trustee after the Cash Election Deadline will be deemed to have been automatically rejected upon receipt by the Trustee.

5.	Unsecured Creditors may make an election provided by this Cash Election Form by completing the balance of this form, signing the same and transmitting it to the Trustee care of: Suite 2000, 600 de la Gauchetiere Street West, Montreal, QC, or care of the following email: Tetreault-Robert.Maxine@rcgt.com or Gagnon.Jean@rcgt.com

I, __________, being an Unsecured Creditor, or officer of a creditor corporation, ___________ [insert name of corporate Unsecured Creditor], acknowledge that my Proven Claim is equal to __________, and hereby elect to receive a cash payment in respect of _________ percent (%) of my Proven Claim. I hereby acknowledge and agree that the balance of my Proven Claim (if any) shall be paid in Investor Shares in accordance with Section 9.5 of the Proposal.

_____________________________

Signature of Unsecured Creditor, officer or authorized signatory of same.

I hereby acknowledge and agree that the balance of my Proven Claim (if any) shall be paid in Investor Shares in accordance with Section 9.5 of the Proposal.

____________________________

Signature of Unsecured Creditor, officer or authorized signatory of same.

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SCHEDULE "C"

INVESTOR SHARE TRANSMITTAL FORM

TO: PELOTON PHARMACEUTICALS INC.

I, _________ , being an Unsecured Creditor, or officer of a creditor corporation, ___________ [insert name of corporate Unsecured Creditor], hereby direct that my Investor Shares be registered as follows:

Registration Information:		Delivery Instructions as set forth below:

		(Name)
(Name of Registered Holder, including Account Informatio
applicable)		(Address)



		(Telephone Number)
(Address)

Dated: __________________ , 2017

________________________

Signature of Unsecured Creditor, officer or authorized signatory of same.

Instructions;

This form must be duly signed and completed by or on behalf of the Unsecured Creditor and returned to the Trustee prior to 5:00 pm Eastern time on February 6, 2017, being the Cash Election Deadline.

In the absence of an Unsecured Creditor providing express registration and/or instructions to the Trustee prior to the Cash Election Deadline, the Investor Shares will be registered and delivered to the Unsecured Creditor at its last known address as reflected in the Company's records.

The Unsecured Creditor, upon request by the Investor, agrees to provide such additional documentation (including signature or medallion guarantees) as may be required by the Investor's share registrar and transfer agent or by the Depositary in fu1iherance of these instructions.

SCHEDULE "B"
APPROVAL ORDER

Please see attached.

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