Trillium Therapeutics Inc.: Exhibit 4.2 - Filed by newsfilecorp.com






 

Annual and Special Meeting of Shareholders 


Management Information Circular 

This Management Information Circular (“Circular”) is
furnished in connection with the solicitation of proxies by and on behalf of the
management of Stem Cell Therapeutics Corp. (the “Corporation”) for use at
the Annual and Special Meeting of the Corporation’s shareholders to be held on
May 27, 2014 at the time and place and for the purposes set out in the
accompanying Notice of Annual and Special Meeting and any adjournment thereof.


No person has been authorized to give any information or make
any representation in connection with any matters to be considered at the Annual
and Special Meeting, other than as contained in this Circular and, if given or
made, any such information or representation must not be relied upon as having
been authorized. 

April 22, 2014 




STEM CELL THERAPEUTICS CORP. 

Notice of Annual and Special Meeting of Shareholders 

NOTICE IS HEREBY GIVEN that the Annual and Special Meeting of
Shareholders (the “Meeting”) of Stem Cell Therapeutics Corp. (the
“Corporation”) will be held at the offices of the Corporation at 96
Skyway Avenue, Toronto, ON M9W 4Y9, on May 27, 2014, at 5:00 pm (Toronto time),
for the following purposes: 

	1. 	
      to receive the audited consolidated financial statements
      of the Corporation for the year ended December 31, 2013, together with the
      auditors’ report thereon;

	 	 
	2. 	
      to elect directors of the Corporation for the ensuing
      year;

	 	 
	3. 	
      to reappoint Ernst & Young, LLP, Chartered
      Accountants, Licensed Public Accountants, as auditors of the Corporation
      for the ensuing year and to authorize the directors to fix the
      remuneration to be paid to the auditors;

	 	 
	4. 	
      to consider, and if deemed advisable, approve the
      Corporation’s amended and restated stock option plan;

	 	 
	5. 	
      to consider, and if deemed advisable, approve the
      Corporation’s amended and restated deferred share unit plan;

	 	 
	6. 	
      to consider, and if deemed advisable, approve the
      Corporation’s amended and restated shareholder rights plan;

	 	 
	7. 	
      to consider, and if deemed advisable, approve the change
      of name of the Corporation to Trillium Therapeutics Inc.;

	 	 
	8. 	
      to consider, and if deemed advisable, approve the
      consolidation of the outstanding common shares of the Corporation on the
      basis of a ratio to be determined by the board of directors of the
      Corporation in its sole discretion, within a range of one
      post-consolidation common share for every 10 to 30 outstanding
      pre-consolidation common shares of the Corporation;

	 	 
	9. 	
      to consider, and if deemed advisable, approve certain
      amendments to the Corporation’s By-Law No.1; and

	 	 
	10. 	
      to transact such other business as may properly come
      before the Meeting or any adjournment or postponement
  thereof.



The Management Information Circular and the form of proxy are
prepared in respect of the Meeting accompanying this notice. 

Shareholders who are unable to attend the Meeting in person are
requested to date, sign and return the enclosed form of proxy in the addressed
envelope provided for that purpose. 

DATED as of the 22nd day of April, 2014. 

	 	BY ORDER OF THE BOARD OF DIRECTORS

	 	 
	 	“Dr. Calvin Stiller” 
	 	 
	 	Dr. Calvin Stiller 
	 	Chairman 






- 3 -


	
      In order to be represented by proxy at the Meeting,
      you must complete, date and sign the enclosed form of proxy or
      other appropriate form of proxy and, in either case, (i) deliver the
      completed proxy to Computershare Investor Services Inc., 100
      University Avenue, 8th Floor, Toronto, ON M5J 2Y1, or (ii) vote
      using the Internet at www.investorvote.com, or (iii) vote using the
      Telephone at 1-866-732-VOTE(8683) from a touch tone telephone, no
      later than 48 hours (excluding Saturdays, Sundays and holidays)
      preceding the date and time of the Meeting, or any adjournment or
      postponement thereof. 








MANAGEMENT INFORMATION CIRCULAR 

TABLE OF CONTENTS 

	MANAGEMENT
      INFORMATION CIRCULAR 	1
    
	  	  
	SOLICITATION OF
      PROXIES 	1
    
	  	  
	APPOINTMENT OF PROXY
      HOLDERS 	2 
	  	  
	REVOCABILITY OF PROXY
    	2 
	  	  
	VOTING OF SHARES
      REPRESENTED BY MANAGEMENT PROXIES 	2 
	  	  
	VOTING SHARES AND THE
      PRINCIPAL HOLDERS THEREOF 	3 
	  	  
	ADVICE TO BENEFICIAL
      HOLDERS OF SECURITIES 	3 
	  	  
	BUSINESS OF THE MEETING
      	4 
	  	  
	           Audited Consolidated Financial Statements and Auditors’
      Report 	5 
	           Election of Directors 	5 
	           Appointment and Remuneration of the Auditors 	7 
	           Approval of the Stock Option Plan 	7 
	           Approval of the Deferred Share Unit Plan 	10
  
	           Approval of the Shareholder Rights Plan 	13 
	           Approval of the Change of the Corporation’s Name to
      Trillium Therapeutics Inc. 	19
  
	           Approval of the Share Consolidation 	20 
	           Approval of By-Law Amendments 	24
  
	  	  
	OTHER MATTERS COMING
      BEFORE THE MEETING 	26
  
	  	  
	STATEMENT OF EXECUTIVE
      COMPENSATION 	26
  
	  	  
	           Compensation Discussion and Analysis 	27
  
	           Risk Oversight 	28 
	           Hedging and Offsetting 	29
  
	           Summary Compensation Table 	30 
	           Option-Based Awards 	31
  
	           Outstanding Option-Based Awards 	32 
	           Value Vested or Earned During the Year 	32
  
	           Securities Authorized for Issuance under Equity
      Compensation Plan 	33 
	           Equity Compensation Plan Information 	33
  
	           Share-based Awards 2014 DSU Plan 	33 
	           Performance Graph 	34
  
	           Termination of Employment, Change of Control and
      Employment Contracts 	35 
	           Director Compensation 	36
  
	           Outstanding Option-Based Awards 	36 
	           Value Vested or Earned During the Year 	37
  
	  	  
	REGULATORY MATTERS AND
      BANKRUPTCIES AND INSOLVENCIES 	38
  






- ii - 

	INDEBTEDNESS
      OF DIRECTORS AND EXECUTIVE OFFICERS 	38
      
	  	  
	INTERESTS
      OF INFORMED PERSONS IN MATERIAL TRANSACTIONS 	38
      
	  	  
	INTERESTS
      OF CERTAIN PERSONS AND COMPANIES IN MATTERS TO BE ACTED UPON 	38
      
	  	  
	AUDIT
      COMMITTEE AND RELATIONSHIP WITH AUDITORS 	38
      
	  	  
	           Audit
      Committee Charter 	38
      
	           Composition
      of the Audit Committee 	38
      
	           Relevant
      Education and Experience 	39
      
	           Audit
      Committee Oversight 	39
      
	           Reliance
      on Certain Exemptions 	40
      
	           Pre-Approval
      Policies and Procedures 	40
      
	           External
      Auditors Service Fees (By Category) 	40
      
	  	  
	CORPORATE
      GOVERNANCE DISCLOSURE 	40
      
	  	  
	           Board
      of Directors 	40
      
	           Board
      and Committee Meetings Held for the Fiscal Year Ended December 31, 2013
      	41
      
	           Attendance
      of Directors for the Fiscal Year Ended December 31, 2013 	42
      
	           Directorships
      	42
      
	           Orientation
      and Continuing Education 	42
      
	           Ethical
      Business Conduct 	43
      
	           Nomination
      of Directors 	43
      
	           Compensation
      Committee 	43
      
	           Relevant
      Education and Experience 	43
      
	           Other
      Committees 	44
      
	           Assessments
      	44
      
	  	  
	ADDITIONAL
      INFORMATION 	44
      
	  	  
	DIRECTORS’
      APPROVAL 	45
      
	  	  
	SCHEDULE
      “A” AUDIT COMMITTEE CHARTER 	A
      
	  	  
	SCHEDULE
      “B” 2014 STOCK OPTION PLAN 	B
      
	  	  
	SCHEDULE
      “C” 2014 DSU PLAN 	C
      
	  	  
	SCHEDULE
      “D” AMENDED AND RESTATED BY-LAW NO. 1 	D
      







 

STEM CELL THERAPEUTICS CORP. 

96 Skyway Avenue 
Toronto, Ontario 
M9W 4Y9 

MANAGEMENT INFORMATION CIRCULAR 

Except where indicated
otherwise, the following information is dated as at April 22, 2014 and all
dollar amounts are in Canadian dollars. 

SOLICITATION OF PROXIES 

The information contained in
this Management Information Circular (the “Circular”) is furnished in connection
with the solicitation of proxies by the management of Stem Cell Therapeutics
Corp. (the “Corporation”) for use at the Annual and Special Meeting (the
“Meeting”) of the holders (the “Shareholders”) of common shares (“Common
Shares”) of the Corporation to be held on May 27, 2014 at 5:00 pm (Toronto time)
at the offices of the Corporation at 96 Skyway Avenue, Toronto, Ontario, Canada,
and at all adjournments or postponements thereof, for the purposes set forth in
the Notice of Annual and Special Meeting of Shareholders (the “Notice”).


The solicitation of proxies is
being made by or on behalf of the management of the Corporation. The
Corporation will bear the entire cost of solicitation of proxies including
preparation, assembly, printing and mailing of this Circular, the Notice, and
the form of proxy (collectively, the “Documents”). Copies of the
Documents are being sent by mail to those Shareholders entitled to receive
notice of the Meeting. The Documents will also be furnished to banks, securities
dealers, and clearing agencies (“Intermediaries”) holding in their names
Common Shares of the Corporation, beneficially owned by others to forward to
such beneficial owners. The Corporation is not sending proxy-related materials
directly to non-registered holders who are non-objecting beneficial owners of
Common Shares, but will make delivery through such Intermediaries. The
Corporation will pay for Intermediaries to deliver proxy-related materials to
non-registered holders who are objecting beneficial owners of Common Shares.
Original solicitation of proxies by mail may be supplemented by telephone,
facsimile or personal solicitation by directors, officers, or other regular
employees of the Corporation. No additional compensation will be paid to
directors, officers, or other regular employees for such services.




- 2 - 

APPOINTMENT OF PROXY HOLDERS 

Shareholders may vote at the
Meeting in person or by proxy. The persons named in the accompanying form of
proxy are directors or executive officers of the Corporation. A Shareholder has
the right to appoint a person other than the persons specified in such form of
proxy (who need not be a shareholder of the Corporation) to attend and act on
behalf of the Shareholder at the Meeting. To exercise this right, a Shareholder
may either insert the name of the desired person in the blank space provided in
the accompanying form of proxy, or complete another appropriate form of proxy.


Those Shareholders who wish to be
represented by proxy at the Meeting, must complete, date and sign the enclosed
form of proxy or other appropriate form of proxy and, in either case, (i)
deliver the completed proxy to Computershare Investor Services Inc., 100
University Avenue, 8th Floor, Toronto, ON M5J 2Y1, or (ii) vote using the
Internet at www.investorvote.com, or (iii) vote using the Telephone at
1-866-732-VOTE(8683) from a touch tone telephone,, no later than 48 hours
(excluding Saturdays, Sundays and holidays) preceding the date and time of the
Meeting, or any adjournment or postponement thereof. 

REVOCABILITY OF PROXY 

A Shareholder who has given a
proxy may revoke it by depositing an instrument in writing executed by the
Shareholder or by his attorney, authorized in writing, or if the Shareholder is
a body corporate, under its corporate seal or by an officer or attorney thereof
duly authorized, to Computershare Investor Services Inc., by delivery to 100
University Avenue, 8th Floor, Toronto, ON M5J 2Y1, any time up to
4:30 pm (Toronto time) on the business day immediately preceding the date of the
Meeting, or any adjournment or postponement thereof, or (ii) with the Chair of
the Meeting on the day of the Meeting, or any adjournment or postponement
thereof, prior to the time of voting and, upon either of such deposits, the
earlier proxy shall be revoked. 

VOTING OF SHARES REPRESENTED BY MANAGEMENT PROXIES 

The executive officers named in
the enclosed form of proxy will vote or withhold from voting the Common Shares
for which they are appointed proxy holders in accordance with the instructions
of the Shareholder indicated on the form of proxy. In the absence of such
instructions, the executive officers named in the enclosed form of proxy intend
to vote the Common Shares represented by the proxy IN FAVOUR of each motion put
forth by management of the Corporation. 

If a Shareholder appoints a
person, other than the executive officers named in the accompanying form of
proxy to represent it, such person will vote the Common Shares for which they
are appointed proxy holder in accordance with the instructions of the
Shareholder indicated on the form of proxy. In the absence of such instructions,
such person may vote the Common Shares for which they are appointed proxy holder
at their discretion. 

The accompanying form of proxy
confers discretionary authority upon the persons named therein with respect to
amendments or variations of matters identified in the Notice, and with respect
to any other matters, if any, which may properly come before the Meeting. At the
time of printing of this Circular, management of the Corporation knows of no
such amendments, variations or other matters to come before the Meeting.
However, if any such amendments, variations or other matters which are not now
known to management should properly come before the Meeting, the persons named
in the form of proxy will vote on such other business in accordance with their
best judgment. 




- 3 - 

VOTING SHARES AND THE PRINCIPAL HOLDERS THEREOF 

As at April 22, 2014, the
Corporation has 124,377,031 Common Shares outstanding, each carrying the right
to one vote. Only the holders of Common Shares of record at the close of
business on April 22, 2014 (the “Record Date”) will be entitled to notice
of, and to attend and vote at, the Meeting. Any transferee or person acquiring
Common Shares after the Record Date may, on proof of ownership of such Common
Shares, make a written demand, not later than 10 days before the Meeting, to be
included in the list of Shareholders entitled to vote at the Meeting, in which
case the transferee will be entitled to vote his or her Common Shares at the
Meeting or any adjournment or postponement thereof. 

As at the date hereof, to the
knowledge of the directors and executive officers of the Corporation, no person
beneficially owns, directly or indirectly or exercises control or direction over
more than 10% of the issued and outstanding Common Shares of the Corporation.


As at April 22, 2014, the
Corporation has 77,895,165 Series I Non-Voting Convertible First Preferred
Shares outstanding. The holders of Series I Non-Voting Convertible First
Preferred Shares shall be entitled to receive notice of and to attend the
Meeting but shall not be entitled to vote with respect to the matters to be
presented for approval at the Meeting as described in this information circular.


ADVICE TO BENEFICIAL HOLDERS OF SECURITIES 

The information set forth in this
section is provided to beneficial holders of Common Shares of the Corporation
who do not hold their Common Shares in their own name (“Beneficial
Shareholders”). Beneficial Shareholders should note that only proxies
deposited by Shareholders whose names appear on the records of the Corporation
as the registered holders of Common Shares can be recognized and acted upon at
the Meeting. If Common Shares are listed in an account statement provided to a
Beneficial Shareholder by a broker, then in almost all cases those Common Shares
will not be registered in the Beneficial Shareholder’s name on the records of
the Corporation. Such Common Shares will more likely be registered under the
name of the Beneficial Shareholder’s broker or an agent of that broker. In
Canada, the vast majority of such Common Shares are registered under the name of
CDS & Co. (the registration name for CDS Clearing and Depository Services
Inc., which acts as nominee for many Canadian brokerage firms). Common Shares
held by brokers or their nominees can only be voted (for or against resolutions)
upon the instructions of the Beneficial Shareholder. Without specific
instructions, the brokers or nominees are prohibited from voting Common Shares
for their clients. The Corporation does not know for whose benefit the Common
Shares registered in the name of CDS & Co. are held. Therefore, Beneficial
Shareholders cannot be recognized at the Meeting for the purposes of voting the
Common Shares in person or by way of proxy except as set forth below. 

Applicable regulatory policy
requires intermediaries or brokers to seek voting instructions from Beneficial
Shareholders in advance of shareholders’ meetings. Every intermediary or broker
has its own mailing procedures and provides its own return instructions, which
should be carefully followed by Beneficial Shareholders in order to ensure that
their Common Shares are voted at the Meeting. Often, the form of proxy supplied
to a Beneficial Shareholder by its broker is identical to the form of proxy
provided to registered Shareholders; however, its purpose is limited to
instructing the registered Shareholder how to vote on behalf of the Beneficial
Shareholder. The majority of brokers now delegate responsibility for obtaining
instructions from clients to Broadridge Investor Communication Solutions
(“Broadridge”) in the United States and Canada. Broadridge typically
applies a special sticker to proxy forms, mails those forms to the Beneficial
Shareholders and requests the Beneficial Shareholders to return the proxy forms
to Broadridge. Broadridge then tabulates the results of all instructions
received and provides appropriate instructions respecting the voting of Common
Shares to be represented at the Meeting. A Beneficial Shareholder receiving a
proxy from Broadridge cannot use that proxy to vote Common Shares directly at
the Meeting as the proxy must be returned as directed by Broadridge well in
advance of the Meeting in order to have the Common Shares voted. 




- 4 - 

Although a Beneficial Shareholder
may not be recognized directly at the Meeting for the purposes of voting Common
Shares registered in the name of his or her broker (or agent of the broker), a
Beneficial Shareholder may attend at the Meeting as proxyholder for the
registered Shareholder and vote Common Shares in that capacity. Beneficial
Shareholders who wish to attend the Meeting and indirectly vote their Common
Shares as proxyholder for the registered Shareholder should enter their own name
in the blank space on the form of proxy provided to them and return the same to
their broker (or the broker’s agent) in accordance with the instructions
provided by such broker (or agent), well in advance of the Meeting. 

In addition, a proxy may be
revoked by the Shareholder executing another form of proxy bearing a later date
and depositing same at the offices of the Registrar and Transfer Agent of the
Corporation within the time period set out under the heading “Revocability of
Proxy”, or by the Shareholder personally attending the Meeting and voting his or
her Common Shares. 

IF YOU ARE A BENEFICIAL SHAREHOLDER AND WISH TO VOTE IN
PERSON AT THE MEETING, PLEASE CONTACT YOUR BROKER OR AGENT WELL IN ADVANCE OF
THE MEETING TO DETERMINE HOW YOU CAN DO SO. 

BUSINESS OF THE MEETING 

At the Meeting, Shareholders will be
asked: 

	1. 	
      to receive the audited consolidated financial statements
      of the Corporation for the year ended December 31, 2013, together with the
      auditors’ report thereon;

	 	 
	2. 	
      to elect directors of the Corporation for the ensuing
      year;

	 	 
	3. 	
      to reappoint Ernst & Young, LLP, Chartered
      Accountants, Licensed Public Accountants, as auditors of the Corporation
      for the ensuing year and to authorize the directors to fix the
      remuneration to be paid to the auditors;

	 	 
	4. 	
      to consider, and if deemed advisable, approve the
      Corporation’s amended and restated stock option plan;

	 	 
	5. 	
      to consider, and if deemed advisable, approve the
      Corporation’s amended and restated deferred share unit plan (“DSU
      Plan”);

	 	 
	6. 	
      to consider, and if deemed advisable, approve the
      Corporation’s amended and restated shareholder rights plan;

	 	 
	7. 	
      to consider, and if deemed advisable, approve the change
      of name of the Corporation to Trillium Therapeutics Inc.;

	 	 
	8. 	
      to consider, and if deemed advisable, approve the
      consolidation of the outstanding common shares of the Corporation on the
      basis of a ratio to be determined by the board of directors of the
      Corporation in its sole discretion, within a range of one
      post-consolidation common share for every 10 to 30 outstanding
      pre-consolidation common shares of the
Corporation;







- 5 - 

	9. 	
      to consider, and if deemed advisable, approve certain
      amendments to the Corporation’s By-Law No.1, to provide for: (i) the
      electronic direct registration of the Corporation’s securities in a
      security holder’s name and allow such securities to be transferred
      electronically; and (ii) the quorum for shareholders meetings to be two
      persons holding at least 33 1/3% of the issued shares as more particularly
      described below; and

	 	 
	10. 	
      to transact such other business as may properly come
      before the Meeting or any adjournment or postponement
  thereof.



Audited Consolidated Financial Statements and Auditors’
Report 

The Corporation’s audited
consolidated financial statements for the year ended December 31, 2013, and the
auditors’ report thereon will be submitted at the Meeting. No vote will be taken
regarding the Corporation’s audited consolidated financial statements. 

Election of Directors 

The articles of the Corporation
provide that the Corporation have not less than three and not more than ten
directors, with the actual number of directors holding office from time to time
to be determined by the board of directors (the “Board of Directors”).
Currently, the Board of Directors is comprised of seven members, all of whom
will be standing for re-election at the Meeting. Accordingly, seven directors
are proposed to be elected at the Meeting. All directors so elected will,
subject to the by-laws of the Corporation and to applicable laws, hold office
until the close of the next annual meeting of Shareholders, or until their
respective successors are elected or appointed. 

All of the nominees are now
members of the Board of Directors and have been since the dates indicated below.
The term of each current director’s appointment will expire at the Meeting. At
the Meeting, the nominees will be voted on individually and in accordance with
applicable Canadian securities legislation, the voting results for each nominee
will be publicly disclosed. 

The persons designated in the
enclosed proxy form, unless instructed otherwise, intend to vote FOR the
election of the following nominees. Management of the Corporation does not
contemplate that any of the nominees will be unable to serve as a director, but
if that should occur for any reason at or prior to the Meeting, the persons
named in the enclosed form of proxy reserve the right to vote for another
nominee in their discretion. 

The following table sets forth
for all persons proposed to be nominated for election as directors, the
positions and offices with the Corporation now held by them, their present
principal occupation and principal occupation for the preceding five years, if
applicable, the periods during which they have served as directors of the
Corporation and the number of Common Shares of the Corporation beneficially
owned, directly or indirectly, by each of them, or over which they exercise
control or direction as of April 22, 2014. 




- 6 - 


	  	 	  	 	  	 	  	 	Number of 
	Name and Municipality 	 	Current Positions and 	 	Principal Occupation in the 	 	  	 	Common 
	of
      Residence 	 	Offices Held 	 	Past Five Years 	 	Director Since 	 	Shares 
	  	 	  	 	  	 	  	 	  
	Mr. Luke Beshar(1) 	 	Director 	 	January 2012 to present: EVP 	 	March 10, 2014 	 	Nil 
	  	 	  	 	and CFO, NPS Pharmaceuticals, 	 	  	 	  
	New Jersey, USA 	 	  	 	Inc. a global biopharmaceutical 	 	  	 	  
	  	 	  	 	company; 2009 to December 	 	  	 	  
	  	 	  	 	2011: SVP and CFO, NPS 	 	  	 	  
	  	 	  	 	Pharmaceuticals, Inc. 	 	  	 	  
	  	 	  	 	  	 	  	 	  
	Dr. Henry Friesen(1)(3)	 	Director 	 	October 2009 to present: 	 	June 28, 2011 	 	Nil 
	Manitoba, Canada 	 	  	 	Distinguished University 	 	  	 	  
	  	 	  	 	Professor Emeritus, University of 	 	  	 	  
	  	 	  	 	Manitoba 	 	  	 	  
	  	 	  	 	  	 	  	 	  
	Dr. Robert Kirkman(1)(2)	 	Director 	 	2009 to present: President and 	 	December 17, 2013 	 	Nil 
	Washington, USA 	 	  	 	CEO, Oncothyreon Inc., an 	 	  	 	  
	 	 	  	 	oncology-focused biotechnology 	 	  	 	  
	  	 	  	 	company. 	 	  	 	  
	  	 	  	 	  	 	  	 	  
	Dr. Michael Moore(2)(3) 	 	Director 	 	2009 to present: Chairman/ 	 	April 9, 2013 	 	Nil 
	Berkshire, United 	 	  	 	Director of a number of private 	 	  	 	  
	Kingdom 	 	  	 	biopharmaceutical companies in 	 	  	 	  
	  	 	  	 	the UK; 2009 to March 2013: 	 	  	 	  
	  	 	  	 	Chairman, Trillium Therapeutics 	 	  	 	  
	  	 	  	 	Inc. 	 	  	 	  
	  	 	  	 	  	 	  	 	  
	Dr. Thomas 	 	Director 	 	Feb 2013 to present: 	 	March 10, 2014 	 	Nil 
	Reynolds(2)(3)	 	  	 	independent biotechnology 	 	  	 	  
	Washington, USA 	 	  	 	consultant; 2009 to January 	 	  	 	  
	 	 	  	 	2013: Chief Medical Officer, 	 	  	 	  
	  	 	  	 	Seattle Genetics, Inc., a 	 	  	 	  
	  	 	  	 	biotechnology company focused 	 	  	 	  
	  	 	  	 	on antibody-based therapies for 	 	  	 	  
	  	 	  	 	the treatment of cancer. 	 	  	 	  
	  	 	  	 	  	 	  	 	  
	Dr. Niclas Stiernholm 	 	President and CEO, 	 	April 2013 to present: President 	 	July 18, 2011 	 	Nil 
	Ontario, Canada 	 	Director 	 	and CEO of the Corporation 	 	  	 	  
	  	 	  	 	2009 - present: CEO of Trillium 	 	  	 	  
	  	 	  	 	  	 	  	 	  
	Dr. Calvin Stiller 	 	Director, Chairman 	 	2009 - present: Chair, BioQuest 	 	July 18, 2011 	 	890,000 
	Ontario, Canada 	 	  	 	Innovations Inc.; Chair/ Director, 	 	  	 	  
	  	 	  	 	Ontario Institute for Cancer 	 	  	 	  
	  	 	  	 	Research; Professor Emeritus, 	 	  	 	  
	 	 	 	 	Western University   	 	 	 	 





	Notes: 	  
	(1) 	          Member
      of the Audit Committee. 
	(2) 	          Member
      of the Compensation Committee. 
	(3) 	          Member
      of the Corporate Governance and Nominating Committee. 


Due to the small number of
employees of the Corporation and with a majority of directors being independent,
for 2012 the Board of Directors considered Corporate Governance and Compensation
matters directly rather than through committees of the Board. On April 8, 2013
the Board of Directors formed a Compensation Committee and a Corporate
Governance and Nominating Committee. 




- 7 - 

Appointment and Remuneration of the Auditors 

Ernst & Young LLP, Chartered
Accountants, Licensed Public Accountants, have been the auditors of the
Corporation since August 25, 2004. The Board of Directors has proposed that
Ernst & Young LLP be reappointed as the Corporation’s independent auditors
for the year ending December 31, 2014 and that the Board of Directors be
authorized to fix the auditors’ remuneration. A majority of the votes voted by
the Shareholders represented at the Meeting is required to approve the
appointment of the Corporation’s auditors. 

Unless otherwise directed, the
persons named in the enclosed form of proxy intend to vote at the Meeting IN
FAVOUR of the reappointment of Ernst & Young LLP as the Corporation’s
auditors and the authorization of the Board of Directors to fix the auditors’
remuneration. 

Approval of the Stock Option Plan 

On the graduation to the Toronto
Stock Exchange (“TSX”) from the TSX Venture Exchange (“TSXV”), the
Corporation’s stock option plan (the “2012 Stock Option Plan”), approved
at the last annual meeting of Shareholders on October 17, 2013, has been amended
and restated (the “2014 Stock Option Plan”) to conform with the TSX’s
rules and to provide that the 2014 Stock Option Plan provides a stock option
pool equal to 10% of the sum of the outstanding Common Shares plus the number of
Common Shares into which the outstanding Series I Non-Voting First Preferred
Shares of the Corporation (“Series I Preferred Shares”) may be converted
in accordance with their terms. 

Shareholders will be asked to
vote on a resolution to approve the 2014 Stock Option Plan at the Meeting (the
“Stock Option Plan Resolution”). A copy of the complete 2014 Stock Option
Plan is attached as Schedule “B” to this Circular, with black-lines highlighting
all the amendments to the plan. The following is a summary of the 2014 Stock
Option Plan, which is qualified in its entirety by reference to the text of the
2014 Stock Option Plan. All capitalized terms used in this section under the
heading, “Approval of Stock Option Plan”, that are not specifically
defined herein shall have the meanings ascribed to them in the 2014 Stock Option
Plan. 

Administration by the Board of Directors 

The 2014 Stock Option Plan is
administered by the Board of Directors which has final authority and discretion,
subject to the express provisions of the 2014 Stock Option Plan, to interpret
the 2014 Stock Option Plan, to prescribe, amend and rescind rules and
regulations relating to it and to make all other determinations deemed necessary
or advisable for the administration of the 2014 Stock Option Plan. This includes
the discretion of the Board of Directors to decide who will participate in the
2014 Stock Option Plan, including directors, officers, employees or consultants
(the “Participants”). The Board of Directors also has authority to
delegate its duties to the Compensation Committee. 

Expiry 

Options granted under the 2014
Stock Option Plan (the “Options”) are non-transferable, expire not later
than ten years from the date of issuance and are exercisable as determined by
the Board of Directors. In addition, notwithstanding the expiration date
applicable to any Option, if an Option would otherwise expire during or
immediately after a Blackout Period (as defined in the 2014 Stock Option Plan),
then the expiration date of such Option shall be the 10th business day following
the expiration of the Blackout Period, provided that in no event shall the
period during which said Option is exercisable be extended beyond 10 years from
the date such Option is granted to the Participant. 




- 8 - 

Exercise Price 

The exercise price payable in
respect of each Option may not be lower than the volume weighted average trading
price of the Common Shares on the TSX over a period of five days preceding the
date of grant. 

Insider Participation Limit 

The aggregate number of Common
Shares issuable (or reserved for issuance) to Insider Participants under the
2014 Stock Option Plan or any other security-based compensation arrangement of
the Corporation and its affiliates (including, without limitation, the
Corporation’s 2014 DSU Plan), may not at any time exceed 10% of the combined
total number of Common Shares issued and outstanding (on a non-diluted basis)
and the total number of Common Shares into which the outstanding Series I
Preferred Shares may be converted. Common Shares issued to Insider Participants
under the 2014 Stock Option Plan or any other security-based arrangement of the
Corporation within a one-year period may not exceed 10% of the total number of
Common Shares issued and outstanding (on a non-diluted basis) plus 10% of the
total number of Common Shares into which the outstanding Series I Preferred
Shares may be converted.

Amendment Provisions 

The Board of Directors has the
discretion to make amendments to the 2014 Stock Option Plan and any Options
granted thereunder which it may deem necessary, without having to obtain
Shareholder approval. Such changes include, without limitation: 

	 	a) 	
      minor changes of a “housekeeping” nature;

	 	 	 
	 	b) 	
      amending Options under the 2014 Stock Option Plan,
      including with respect to the Option Period (provided that the period
      during which an Option is exercisable does not exceed ten years from the
      date the Option is granted and that such Option is not held by an Insider
      Participant), vesting period, exercise method and frequency, exercise
      price of an Option (provided that such Option is not held by an Insider
      Participant) and method of determining the exercise price, assignability
      and effect of termination of a Participant’s employment or cessation of
      the Participant’s directorship;

	 	 	 
	 	c) 	
      changing the class of Participants eligible to
      participate under the 2014 Stock Option Plan;

	 	 	 
	 	d) 	
      accelerating vesting or extending the expiration date of
      any Option (provided that such Option is not held by an Insider
      Participant), provided that the period during which an Option is
      exercisable does not exceed 10 years from the date the Option is
      granted;

	 	 	 
	 	e) 	
      changing the terms and conditions of any financial
      assistance which may be provided by the Company to Participants to
      facilitate the purchase of Common Shares under the 2014 Stock Option Plan;
      and

	 	 	 
	 	f) 	
      adding a cashless exercise feature, payable in cash or
      securities, whether or not providing for a full deduction of the number of
      underlying Common Shares from the 2014 Stock Option Plan
  reserve.



Shareholder approval will be
required in the case of: (i) any amendment to the amendment provisions of the
2014 Stock Option Plan; (ii) any increase in the maximum number of Common Shares
issuable under the 2014 Stock Option Plan; and (iii) any reduction in the
exercise price or extension of the Option Period benefiting an Insider
Participant, in addition to such other matters that may require Shareholder
approval under the rules and policies of the TSX. 




- 9 - 

Termination, Resignation, Death, etc. 

Options granted under the 2014
Stock Option Plan are, and they will be, evidenced by an option agreement
entered between the Participant and the Corporation. Options granted under the
plan terminate immediately if a Participant is dismissed with cause. If a
Participant ceases to hold any position as a Participant, by reason of
retirement, resignation or disability, the vested options terminate within 120
days from cessation. Under the 2014 Stock Option Plan, the Board of Directors
has been provided with discretion to extend the time to termination for
cessation beyond 120 days but no longer than the normal expiry of the
Option.

Under the 2014 Stock Option Plan,
if a Participant dies, his options may be exercised by his legal representatives
during the period of (and they shall terminate) one year following the date to
the extent they were exercisable on the date of death. If a Participant ceases
to be a director, officer or employee of, or consultant to, the Corporation or
of one of its subsidiaries as a result of disability or illness preventing the
Participant from performing the duties routinely performed by such Participant,
vested options terminate 180 days from the date that the Participant ceases to
serve in such capacities (or until the normal expiry date of the Options if
earlier). 

Change of Control 

The 2014 Stock Option Plan
provides that any Options outstanding immediately prior to the occurrence of a
Change of Control (as defined in the plan), but which are not then exercisable,
shall immediately vest and become fully exercisable upon the occurrence of a
Change of Control. 

Maximum Limit 

The 2014 Stock Option Plan is a
“rolling” and “reloading” stock option plan, meaning that Options may be granted
for no more than 10% of the total number of Common Shares issued and outstanding
(on a non-diluted basis) plus 10% of the total number of Common Shares into
which the outstanding Series I Preferred Shares may be converted in accordance
with their terms less the number of any Common Shares reserved for issuance to
insiders of the Corporation pursuant to the DSU Plan. At April 22, 2014, the
maximum number of Options available for granting is 8,922,655, being 10% of the
124,377,031 issued and outstanding Common Shares and 10% of the 77,895,165
issued and outstanding Series I Preferred Shares less the 11,304,565 outstanding
stock options, in each case as at April 22, 2014. See “Approval of Deferred
Share Unit Plan”. Each exercise of Options will result in a corresponding
increase in the number of Options available for granting under the 2014 Stock
Option Plan, up to the 10% aggregate maximum limit. There are additional
restrictions in the 2014 Stock Option Plan with regard to the number of Options
that may be granted which include the restriction that the aggregate number of
Options granted in any 12 month period to any one person cannot exceed 5% of the
aggregate total number of issued and outstanding Common Shares (on a non-diluted
basis) and Common Shares into which the outstanding Series I Preferred Shares
may be converted in accordance with their terms.

As at the date of this Circular,
options to acquire 11,304,565 Common Shares of the Corporation are
outstanding.




- 10 - 

Shareholder Approval 

The following is the text of the Stock Option Plan Resolution
which will be put forward for approval by the Shareholders at the Meeting:

“BE IT RESOLVED AS AN ORDINARY RESOLUTION THAT: 

	 	(a) 	
      The Amended and Restated 2014 Stock Option Plan is
      approved.

	 	 	 
	 	(b) 	
      Any director or officer of the Corporation is authorized,
      for and on behalf of the Corporation, to execute and deliver such other
      documents and instruments and take such other action as he may determine
      to be necessary or advisable to implement this resolution and the matters
      authorized hereby, such determination to be conclusively evidenced by the
      execution and delivery of any such documents or instruments and the taking
      of any such actions by such director or officer.”



Unless otherwise directed, the
persons named in the enclosed form of proxy intend to vote at the Meeting FOR
approving the 2014 Stock Option Plan. 

Recommendation of the Board 

The Board of Directors
unanimously recommends that Shareholders ratify, confirm and approve the 2014
DSU Plan by voting FOR the Stock Option Plan Resolution. 

Approval of the Deferred Share Unit Plan 

On the graduation to the TSX from
the TSXV, the DSU Plan, approved at the last annual meeting of Shareholders on
October 17, 2013, has been amended and restated (the “2014 DSU Plan”) to
conform with the TSX’s rules, to provide that the definition of “Outstanding
Issue” in the DSU Plan now include the addition of the number of Common Shares
into which the issued and outstanding Series I Preferred Shares may be converted
in accordance with their terms and to include a reference to the TSX when
referring to the exchanges on which the Common Shares trade. Shareholders are
being asked to approve the 2014 DSU Plan, which has been conditionally accepted
by the TSX. 

The 2014 DSU Plan is intended to
promote a greater alignment of long-term interests between non-executive
directors and executive officers of the Corporation and its shareholders through
the issuance of deferred share units (“DSUs”). 

Since the value of a DSU
increases or decreases with the market price of the Common Shares, DSUs reflect
a philosophy of aligning the interests of directors and executive officers with
those of the Shareholders by tying compensation to share price performance. 

The Board of Directors intends to
use DSUs issued under the 2014 DSU Plan, as well as Options issued under the
2014 Stock Option Plan, as part of the Corporation’s overall director and
executive officer compensation program. 

Shareholders will be asked to
vote on a resolution to approve the 2014 DSU Plan at the Meeting (the “DSU
Plan Resolution”). A copy of the complete 2014 DSU Plan is attached as
Schedule “C” to this Circular, with black-lines highlighting all amendments to
the plan. The following is a summary of the 2014 DSU Plan, which is qualified in
its entirety by reference to the text of the 2014 DSU Plan. All capitalized
terms used in this section under the heading, “Approval of Deferred Share
Unit Plan”, that are not specifically defined herein shall have the meanings
ascribed to them in the 2014 DSU Plan. 




- 11 - 

Description of the 2014 DSU Plan 

The 2014 DSU Plan provides that,
subject to the terms of the 2014 DSU Plan and such other conditions as the Board
of Directors (or Compensation Committee of the Board of Directors after
delegation by authority from the Board of Directors) may impose, an executive
officer or director of the Corporation (an “Eligible Person”) shall
receive his or her Total Compensation in the form of DSUs. The term, “Total
Compensation” includes annual and special bonuses payable to directors and
executive officers and, in the case of directors, directors fees (including
annual board retainers, fees for serving as Chair of the Board of Directors
and/or as a Chair or member of any committee of the Board of Directors, for
attending meetings of the Board of Directors or any committee thereof, and any
other fees payable to directors) in the form of DSUs. The Board of Directors may
use DSUs to pay bonuses and directors fees either alone or in conjunction with
cash, or any combination of DSUs and cash. 

The number of DSUs (including
fractional DSUs, computed to three digits) to be credited to an Eligible Person
for services will be determined by dividing the Awarded Amount by the Fair
Market Value as at the last trading day before the date the Awarded Amount is
declared by the Board of Directors. “Fair Market Value” of the Common
Shares is the volume weighted average trading price of the Common Shares on the
TSX for the five days immediately preceding the date in question. 

An Eligible Person who has ceased
to be a director or executive officer (other than as a result of death) may
elect to receive one Common Share in respect of each whole DSU credited to the
Eligible Person’s account by filing with the Corporation a notice of redemption
in the form and by the time stipulated in the 2014 DSU Plan.

If the Eligible Person does not
make the election on a timely basis, the Eligible Person will be deemed to have
elected to redeem all of his or her DSUs.

The issuance of the Common Shares
will be made by the Corporation as soon as reasonably possible following the
election to redeem the DSUs, or being deemed to have been made, by the Eligible
Person. 

Maximum Number of Shares issuable under the Plan 

The “Outstanding Issue”
means the combined total of the number of Common Shares outstanding and the
number of Common shares into which the Series I Preferred Shares outstanding (on
a non-diluted basis) may be converted in accordance with their terms. The
maximum number of Common Shares reserved for issuance under the 2014 DSU Plan is
2,000,000, which is approximately 1.0% of the current Outstanding Issue. 

The 2014 DSU Plan provides that
the maximum number of Common Shares that may be reserved for issuance to
insiders (as that term is defined in the TSX’s rules) pursuant to the
2014 DSU Plan, together with any Common Shares issuable pursuant to any other
securities-based compensation arrangement of the Corporation (including the 2014
Stock Option Plan), will not exceed 10% of the Outstanding Issue.

In addition, the maximum number
of Common Shares that may be issued to insiders under the 2014 DSU Plan,
together with any Common Shares issued to insiders pursuant to any other
securities-based compensation arrangement of the Corporation (including the 2014
Stock Option Plan), within any one year period, will not exceed 10% of the
Outstanding Issue. Also, in no event, may the number of Common Shares reserved
for issuance to any one person pursuant to the 2014 DSU Plan and the 2014 Stock
Option Plan exceed 5% of the Outstanding Issue. 




- 12 - 

Transferability 

DSUs and any other rights,
benefits or interests in the 2014 DSU Plan are non-transferable, except that if
the Eligible Person dies, the legal representatives of the Eligible Person will
be entitled to receive the amount of any payment otherwise payable to the
Eligible Person in accordance with the provisions 2014 DSU Plan. 

Amendments to the 2014 DSU Plan 

The Board of Directors has the
discretion to make amendments to the 2014 DSU Plan and any DSUs granted
thereunder which it may deem necessary, without having to obtain Shareholder
approval. Such changes may include, without limitation: 

	 	a) 	
      minor changes of a “housekeeping” nature;

	 	 	 
	 	b) 	
      amending the terms of DSUs under the 2014 DSU Plan and
      method of determining the Awarded Amount and the number of DSUs that may
      be issued to an Eligible Person, and the assignability and effect of
      Terminated Service of an Eligible Person;

	 	 	 
	 	c) 	
      changing the class of Eligible Persons; and

	 	 	 
	 	d) 	
      changing the method and procedures to be followed with
      regard to the issuance of DSUs under the 2014 DSU
Plan.



Shareholder approval will be
required in the case of: (i) any amendment to the amendment provisions of the
2014 DSU Plan; (ii) any increase in the maximum number of Common Shares issuable
under the 2014 DSU Plan; and (iii) such other matters that may require
shareholder approval under the rules and policies of the TSX. 

Termination of Service 

An Eligible Person who has
Terminated Service may elect to receive one Common Share in respect of each
whole DSU credited to the Eligible Person's account, by filing with the
President of the Corporation a notice of redemption in the form prescribed from
time to time by the Corporation on or before December 15 of the first calendar
year commencing after the date on which the Eligible Person has Terminated
Service. If the Eligible Person fails to file such notice on or before that
December 15, the Eligible Person will be deemed to have filed with the President
of the Corporation a notice of redemption on that December 15 and will be deemed
to have elected to redeem all of his or her DSUs. The date on which a notice is
filed or deemed to be filed with the Secretary of the Corporation is the “Filing
Date”. The Corporation may defer the Filing Date to any other date if such
deferral is, in the sole opinion of the Company, desirable to ensure compliance
the 2014 DSU Plan. There are no causes of cessation of entitlement under the
2014 DSU Plan, including termination for or without cause.

In the event of the death of an Eligible
Person, the Company will, within two months of the Eligible Person's death, pay
cash equal to the Fair Market Value of the Shares which would be deliverable to
the Eligible Person if the Eligible Person had Terminated Service in respect of
the Deferred Share Units credited to the deceased Eligible Person's account (net
of any Applicable Withholding Tax) to or for the benefit of the legal
representative of the Eligible Person. The Fair Market Value will be calculated
on the date of death of the Eligible Person.




- 13 - 

As of the date of the Circular, no DSUs have been issued. 

Shareholder Approval 

The following is the text of the
DSU Plan Resolution which will be put forward for approval by the Shareholders
at the Meeting: 

“BE IT RESOLVED AS AN ORDINARY RESOLUTION THAT: 

	 	(a) 	
      The Amended and Restated Deferred Share Unit Plan of the
      Corporation, as described in the Management Information Circular of the
      Corporation dated April 22, 2014, and in the form filed with the Canadian
      Securities Administrators and appearing on SEDAR at www.sedar.com, is
      hereby approved.

	 	 	 
	 	(b) 	
      Any one officer or director of the Corporation is
      authorized to take such steps or execute such documents, whether or not
      under corporate seal, which are in his or her opinion necessary or
      advisable in order to give effect to this
resolution.”



Unless otherwise directed, the
persons named in the enclosed form of proxy intend to vote at the Meeting FOR
approving the 2014 DSU Plan. 

Recommendation of the Board 

The Board of Directors
unanimously recommends that Shareholders ratify, confirm and approve the 2014
DSU Plan by voting FOR the DSU Plan Resolution. 

Approval of the Shareholder Rights Plan 

The Corporation originally
implemented a shareholder rights plan on September 16, 2013 between the
Corporation and Computershare Trust Company of Canada, which was approved by
Shareholders at the last annual meeting of Shareholders on October 17, 2013 (the
“2013 Rights Plan”). The Board of Directors has now approved, subject to
Shareholder approval, amendments to the 2013 Rights Plan (the “Rights Plan
Amendment” which together with the 2013 Rights Plan may be referred to as
the “Rights Plan”). At the Meeting, the Shareholders will be asked to
pass an ordinary resolution approving the Rights Plan Amendment (the “Rights
Plan Resolution”).

The Board of Directors has
determined that the Rights Plan is in the best interests of the Corporation and
unanimously recommends that the Shareholders vote in favour of the Rights Plan
Resolution. The Rights Plan was not adopted in response to any specific proposal
or intention to acquire control of the Corporation. 

Change of Rights Agent

Pursuant to an Assignment
Agreement dated April 22, 2014, Computershare Trust Company of Canada
(“CTCC”), the Corporation’s duly appointed Rights Agent under the Rights
Plan transferred and assigned its rights, powers, duties and obligations under
the Rights Plan to Computershare Investor Services Inc. (“CISI”). The
Corporation consented to such transfer and assignment from CTCC to CISI.
Effective, April 28, 2014, CISI will become the new Rights Agent under the
Rights Plan. 




- 14 - 

Rights Plan Amendment 

The 2013 Rights Plan provides
that any amendments must be approved by the TSX Venture Exchange
(“TSXV”). With the Corporation’s graduation to the TSX, the reference in
the plan to the requirement of the TSXV’s approval of amendments to the plan has
been amended to reference that any such amendments to the plan would require the
approval of the TSX.

References in the 2013 Rights
Plan to “Computershare Trust Company of Canada” as the Rights Agent have been
amended to refer to “Computershare Investor Services Inc.” as the new Rights
Agent pursuant to the Assignment Agreement dated April 22, 2014.

Purpose of the Rights Plan 

Many public companies in Canada
have shareholder rights plans in effect. While securities legislation in Canada
requires a take-over bid to be open for at least 35 days, the Board of Directors
is concerned that this is too short a time for companies that are subject to
unsolicited take-over bids to be able to respond to ensure that shareholders are
offered full and fair value for their shares. The Rights Plan is designed to
give the Corporation’s Shareholders sufficient time to properly assess a
take-over bid without undue pressure and to give the Board of Directors time to
consider alternatives designed to allow the Corporation’s Shareholders to
receive full and fair value for their Common Shares. 

The Board of Directors is also
concerned that current Canadian take-over bid rules permit a person or company
to obtain control or effective control of the Corporation without treating all
Shareholders equally. 

The Rights Plan is not intended
to prevent a take-over bid or deter offers for Common Shares. It is designed to
encourage any bidder to provide Shareholders with equal treatment and full and
fair value for their Common Shares. A summary of the Rights Plan is found below.


Board Review of the Rights Plan 

In adopting the Rights Plan and
recommending that Shareholders vote in favour of the Rights Plan Resolution, the
Board of Directors considered matters including experience of other issuers with
rights plans in the context of take-over bids, judicial and regulatory
consideration of shareholder rights plans, the terms and conditions of rights
plans adopted by other Canadian companies and the commentary of the investment
community on rights plans, including the published proxy voting guidelines. 

It is not the intention of the
Board of Directors, in adopting the Rights Plan and proposing that it be
approved by Shareholders, to secure the continuance in office of the existing
members of the Board of Directors or management, or to avoid an acquisition of
control of the Corporation in a transaction that is fair and in the best
interests of Shareholders. The Rights Plan will not detract from or lessen the
duty of the Board of Directors to act honestly and in good faith with a view to
the best interests of the Corporation. The Board of Directors will continue to
have the duty and power to take such actions and make such recommendations to
Shareholders of the Corporation as are considered appropriate. 

Summary of the Rights Plan 

The following is a summary of the
principal terms of the Rights Plan, which is qualified in its entirety by
reference to the text of the Rights Plan. A copy of the complete 2013 Rights
Plan has been filed with the Canadian Securities Administrators and is available
on SEDAR at www.sedar.com. All capitalized terms used in this summary without
definition have the meanings attributed to them in the Rights Plan. 




- 15 - 

Effective Date and Term 

The 2013 Rights Plan came into
effect on September 16, 2013 and the Rights Plan Amendment was approved by the
Board of Directors on April 17, 2014. Subject to approval and periodic
confirmation by Shareholders of the Corporation as discussed below, the Rights
Plan will remain in effect until the termination of the annual meeting of the
Corporation in the year 2016. 

Shareholder Approval of the Rights Plan 

The Rights Plan must be approved
by a simple majority of the votes cast at the Meeting by Shareholders present in
person or represented by proxy. 

Issue of Rights 

Immediately upon the Rights Plan
coming into effect, one right (“Right”) was issued and attached to each
Common Share outstanding and will attach to each Common Share subsequently
issued. 

Rights Exercise Privilege 

The Rights will separate from the
Common Shares and will be exercisable on the close of business on the tenth
trading day (the “Separation Time”) after the earlier of the date on
which a person has acquired 20% or more of, or a person commences or announces a
take-over bid for, the Corporation’s outstanding Common Shares, other than by an
acquisition pursuant to a Permitted Bid or a Competing Permitted Bid. The
acquisition by a person (an “Acquiring Person”) of 20% or more of the
Common Shares is referred to as a “Flip-in Event”. When a Flip-in Event
occurs each Right (except for Rights beneficially owned by an Acquiring Person
or certain transferees of an Acquiring Person, which Rights will be void
pursuant to the Rights Plan) becomes a right to purchase from the Corporation,
upon exercise thereof in accordance with the terms of the Rights Plan, that
number of Common Shares having an aggregate market price on the date of
consummation or occurrence of such Flip-in Event equal to twice the Exercise
Price for an amount in cash equal to the Exercise Price. The Exercise Price for
the Rights provided for in the Rights Plan is $100. As an example, if at the
time of the Flip-in Event the Common Shares have a market price of $25.00, the
holder of each Right would be entitled to receive $200 (twice the Exercise
Price) in market value of the Common Shares (8 Common Shares) for $100, i.e. at
a 50% discount. 

The issue of the Rights is not
initially dilutive. However, upon a Flip-in Event occurring and the Rights
separating from the Common Shares, reported earnings per share may be affected.
Holders of Rights not exercising their Rights upon the occurrence of a Flip-in
Event may suffer substantial dilution. 

Any Rights held by an Acquiring
Person will become void upon the occurrence of a Flip-in Event. Any offer other
than a Permitted Bid, a competing Permitted Bid or a bid for which the Board of
Directors has waived the application of the Rights Plan to a particular Flip-in
Event (see “Waiver” below) will become prohibitively expensive for the
Acquiring Person. The Rights Plan is therefore designed to require any person
interested in acquiring more than 20% of the Common Shares to do so by way of a
Permitted Bid or a Competing Permitted Bid or to make an offer which the Board
of Directors considers to represent the full and fair value of the Common
Shares. 




- 16 - 

Exemptions for Portfolio Managers, etc. 

Portfolio managers (for fully
managed accounts), mutual funds and their managers, trust companies (acting in
their capacities as trustees and administrators), statutory bodies whose
business includes the management of funds, administrators of registered pension
plans and crown agents acquiring greater than 20% of the Common Shares are
exempted from triggering a Flip-in Event, provided that they are not making, and
are not part of a group making, a take-over bid. 

Grandfathered Person 

A person (a “Grandfathered
Person”) who was the beneficial owner of more than 20% of the outstanding
Common Shares on September 16, 2013 is deemed not to be an Acquiring Person
until it ceases to own more than 20% of the Common Shares or increases its
beneficial ownership by more than 1% of the outstanding Common Shares on
September 16, 2013 except in specified circumstances. To the knowledge of the
senior officers of the Corporation, the Corporation does not have any
Grandfathered Person. 

Certificates and Transferability 

Prior to the Separation Time, the
Rights will be evidenced by a legend imprinted on the Common Share certificates
of the Corporation and will not be transferable separately from the Common
Shares. Common Share certificates do not need to be exchanged to entitle a
Shareholder to these Rights. The legend will be on all new certificates issued
by the Corporation after the Effective Date. From and after the Separation Time,
the Rights will be evidenced by Rights certificates and will be transferable
separately from the Common Shares. 

Permitted Bid Requirements 

The Permitted Bid requirements include the following: 

	 	(a) 	
      the take-over bid must be made by way of a take-over bid
      circular;

	 	 	 
	 	(b) 	
      the take-over bid must be made to all holders of Common
      Shares (other than the bidder);

	 	 	 
	 	(c) 	
      the take-over bid provides that no Common Shares tendered
      pursuant to the take-over bid may be taken up prior to the expiry of a 60
      day period following the date of the bid and unless at such date more than
      50% of the Common Shares held by the Independent Shareholders (i.e. the
      shareholders, other than the bidder, its affiliates and persons acting
      jointly or in concert and certain other persons), have been tendered to
      the take-over bid and not withdrawn;

	 	 	 
	 	(d) 	
      the take-over bid must be open for acceptance for a
      minimum period of 60 days;

	 	 	 
	 	(e) 	
      the Common Shares deposited pursuant to the bid may be
      withdrawn until taken up or paid for; and

	 	 	 
	 	(f) 	
      if the minimum deposit condition described in (iii) above
      has been satisfied, the bidder must make a public announcement of that
      fact and the take-over bid must remain open for deposits of Common Shares
      for an additional 10 business days from the date of such public
      announcement.







- 17 - 

The Rights Plan allows for a
competing Permitted Bid (a “Competing Permitted Bid”) to be made while a
Permitted Bid is in existence. A Competing Permitted Bid must satisfy all of the
requirements of a Permitted Bid except that no Common Shares will be taken up or
paid for pursuant to the Competing Permitted Bid prior to the close of business
on a date that is no earlier than the later of: 

	 	(a) 	
      35 days after the date of the Competing Permitted Bid;
      and

	 	 	 
	 	(b) 	
      the 60th day after the earliest date on which any other
      Permitted Bid that is then in existence was made.



Waiver 

The Board of Directors, acting in
good faith may, prior to the occurrence of a Flip-in Event, waive the
application of the Rights Plan to a particular Flip-in Event (an “Exempt
Acquisition”) where the take-over bid is made by a take-over bid circular to
all holders of Common Shares. Where the Board of Directors exercises the waiver
power for one take-over bid, the waiver will also apply to any other take-over
bid for the Corporation made by a take-over bid circular to all holders of
Common Shares prior to the expiry of any other bid for which the Rights Plan has
been waived. 

Redemption 

The Board of Directors, with the
approval of the majority of votes cast by Shareholders (or the holders of the
Rights if the Separation Time has occurred) voting in person and by proxy, at a
meeting duly called for that purpose, may redeem all of the then outstanding
Rights at $0.000001 per Right as adjusted by the terms of the Rights Plan.
Rights shall be automatically redeemed following completion of a Permitted Bid,
Competing Permitted Bid or Exempt Acquisition. 

Protection Against Dilution 

The Rights Plan contains detailed
provisions regarding adjustments to the Exercise Price and the number and nature
of the securities that may be purchased upon exercise of Rights outstanding to
prevent dilution in the event of certain declarations of dividends, or
consolidation of outstanding Common Shares, issuances of Common Shares (or other
securities or rights) in respect of or in lieu of an exchange for existing
Common Shares or other changes in the Common Shares. 

Amendment 

The Board of Directors may amend
the Rights Plan with the approval of a majority of votes cast by Shareholders
(or the holders of the Rights if the Separation Time has occurred) voting in
person and by proxy at a meeting duly called for that purpose. The Board of
Directors, without such approval, may correct clerical or typographical errors
and, subject to the subsequent approval as noted above at the next meeting of
the Shareholders (or holders of Rights, as the case may be), may make amendments
to the Rights Plan to maintain its validity due to changes in applicable
legislation. 

Certain Canadian Federal Income Tax Considerations of the
Rights Plan 

The following commentary
summarizes certain Canadian federal income tax consequences of the issuance of
the Rights. It is of a general nature only and is not intended to constitute nor
should it be construed to constitute legal or tax advice to any particular
holder of Common Shares. Such shareholders are advised to consult their own tax
advisors regarding the consequences of acquiring, holding, exercising or
otherwise disposing of their Rights, taking into account their own particular
circumstances and any applicable foreign, provincial or territorial legislation.





- 18 - 

The Corporation did not receive
any income for the purposes of the Income Tax Act (Canada) (the
“ITA”) as a result of the issuance of the Rights. The ITA provides that
the value of a right to acquire additional shares of a corporation is not a
taxable benefit which must be included in computing income of a shareholder, and
is not subject to non-resident withholding tax, if the right is conferred on all
holders of common shares. Although the Rights are to be so conferred, the Rights
could become void in the hands of certain holders of Common Shares upon certain
triggering events occurring (such as a Flip-in Event) and, consequently, whether
or not the issuance of the Rights is a taxable event is not entirely free from
doubt. In any event, only the amount or value of such benefit must be included
in computing income of a shareholder. The Corporation considers that the Rights
have negligible monetary value because there is only a remote possibility that
the Rights will ever be exercised. If the Rights are disposed of (except on
exercise thereof), a holder of Rights may be subject to tax in respect of the
proceeds of disposition of such Rights. 

Eligibility for Investment in Canada 

Provided that at all material
times the Corporation remains a “public corporation” for purposes of the ITA and
deals at arm’s length with each person who is an annuitant, a beneficiary, an
employer or a subscriber, as the case may be, under a registered retirement
savings plan, a registered retirement income fund, a deferred profit sharing
plan or a registered education savings plan (collectively, the “Plans”),
the Rights will be qualified investments under the ITA for the Plans. 

Shareholder Approval 

To be effective, the resolution must be passed by: 

	 	(a) 	
      a simple majority of the votes cast thereon by the
      Shareholders present in person or by proxy at the Meeting; and

	 	 	 
	 	(b) 	
      a simple majority of the votes cast thereon by the
      Shareholders present in person or by proxy at the Meeting without giving
      effect to any votes cast by any Grandfathered Person and any associate,
      affiliate and insider of a Grandfathered Person.



The following is the text of the
Rights Plan Resolution which will be put forward for approval by the
Shareholders at the Meeting: 

“BE IT RESOLVED AS AN ORDINARY RESOLUTION THAT: 

	 	(a) 	
      the amended and restated shareholder rights plan, the
      terms and conditions of which are set out in the amended Shareholders
      Rights Plan Agreement to be dated on or after May 27, 2014 between Stem
      Cell Therapeutics Corp. (the “Corporation”) and Computershare Investor
      Services Inc. (the “Rights Agreement”), and the distribution and continued
      existence of the rights distributed pursuant to the Rights Agreement, as
      more particularly described in the Management Proxy and Information
      Circular dated April 22, 2014 be and the same is hereby ratified,
      confirmed and approved;

	 	 	 
	 	(b) 	
      any officer or director of the Corporation be and is
      hereby authorized and directed, for and on behalf of the Corporation to
      execute and deliver, under the corporate seal of the Corporation or
      otherwise, all such certificates, directions, notices, acknowledgements,
      receipts, documents, agreements and instruments and including, without
      limitation, execution of the Rights Agreement and to do or cause to be
      done all such other acts and things as such director or officer of the
      Corporation shall determine to be necessary or desirable in order to carry
      out the intent of this resolution and the matters authorized hereby, such
      determination to be conclusively evidenced by the execution and delivery
      of such documents or instruments or the doing of any such act or thing;
      and







- 19 - 

	 	(c) 	
      notwithstanding that these resolutions have been duly
      passed by the holders of the outstanding common shares of the Corporation,
      the directors of the Corporation are hereby authorized and empowered, if
      they decide not to proceed with any of the actions contemplated in the
      foregoing resolutions, to revoke these resolutions at any time prior to
      the proposed effective date for such action without further notice to, or
      approval of the holders of the common shares.”



The TSX has accepted notice from
the Corporation of the issue of the Rights and the Common Shares made subject to
issuance on the exercise of the Rights, subject to Shareholder ratification of
the Rights Plan at the Meeting. 

Unless otherwise directed, the
persons named in the enclosed form of proxy intend to vote at the Meeting IN
FAVOUR of the amendment to the Rights Plan. 

Recommendation of the Board 

The Board of Directors
unanimously recommends that Shareholders ratify, confirm and approve the Rights
Plan by voting IN FAVOUR of the Rights Plan Resolution. 

Approval of the Change of the Corporation’s Name to Trillium
Therapeutics Inc. 

At the Meeting, the Shareholders
will be asked to consider and, if deemed advisable, pass a special resolution
(the “Name Change Resolution”) authorizing the Corporation to file
articles of amendment under Business Corporations Act (Ontario) (the
“OBCA”) to change the name of the Corporation from “Stem Cell
Therapeutics Corp.” to “Trillium Therapeutics Inc.”, or to such other name as
the Board of Directors deems appropriate and as may be approved by applicable
regulatory authorities, including the TSX. The Corporation believes that the
Stem Cell Therapeutics name reflects its history as a regenerative medicine
company but does not reflect its current focus of immuno-oncology. “Trillium” is
associated with a history of drug development in immunology and oncology and is
recognized for this by the life sciences industry. The Board of Directors may
determine not to implement the Name Change Resolution at any time after the
Meeting and after receipt of necessary regulatory approvals, but prior to the
issuance of a certificate of amendment, without further action on the part of
the Shareholders.

No Dissent Rights

Under the OBCA, the Shareholders
do not have any dissent and appraisal rights with respect to the proposed Name
Change Resolution.

Shareholder Approval 

The OBCA requires that the Name
Change Resolution be approved by a special resolution of Shareholders, either in
person or by proxy at the Meeting. Shareholders will be asked to consider and,
if thought advisable, to authorize and approve the Name Change Resolution.
Pursuant to the provisions of the OBCA, in order to be effective, the Name
Change Resolution must be approved by 66 2/3% of the votes cast in respect
thereof by Shareholders present in person or by proxy at the Meeting.




- 20 - 

The following is the text of the
Name Change Resolution which will be put forward for approval by the
Shareholders at the Meeting: 

“BE IT RESOLVED AS A SPECIAL
RESOLUTION THAT:

	 	(a) 	
      the Articles of the Corporation be amended to provide
      that the Corporation change its name from “Stem Cell Therapeutics Corp.”
      to “Trillium Therapeutics Inc.”, or such other name that the Board of
      Directors deems appropriate and as may be approved by applicable
      regulatory authorities, including the TSX, if the Board of Directors
      considers it to be in the best interests of the Corporation to implement
      such a name change;

	 	 	 
	 	(b) 	
      notwithstanding that this resolution has been duly passed
      by the Shareholders, the Board of Directors is hereby authorized and
      empowered, if it decides not to proceed with this resolution, to revoke
      this resolution in whole or in part at any time prior to it being given
      effect without further notice to, or approval of, the Shareholders;
    and

	 	 	 
	 	(c) 	
      any one director or officer of the Corporation be, and
      such director or officer of the Corporation is hereby, authorized,
      instructed and empowered, acting for, in the name of and behalf of the
      Corporation, to do or to cause all such other acts and things in the
      opinion of such director or officer of the Corporation as may be necessary
      or desirable in order to fulfill the intent of these foregoing
      resolutions.”



Unless otherwise directed, the
persons named in the enclosed forms of proxy intend to vote at the Meeting IN
FAVOUR of the Named Change Resolution. 

Recommendation of the Board 

The Board of Directors
unanimously recommends that Shareholders vote IN FAVOUR of the Name Change
Resolution. 

Approval of the Share Consolidation 

At the Meeting, Shareholders will
be asked to consider, and if deemed advisable, approve, the resolution
authorizing an amendment to the Corporation’s articles to consolidate the issued
and outstanding Common Shares (the “Share Consolidation Resolution”). The
Board of Directors believes it is in the best interests of the Corporation to
consolidate the issued and outstanding Common Shares of the Corporation on a
ratio of one post-consolidation Common Share for each 10 to 30 outstanding
pre-consolidation Common Shares (the “Share Consolidation”), with the
final ratio to be determined by the Board of Directors in its sole discretion.
If the Share Consolidation Resolution is approved, the Share Consolidation would
only be implemented, if at all, upon a determination by the Board of Directors
that it is in the best interests of the Corporation and its Shareholders, at
that time. The Board of Directors’ selection of the specific ratio will be based
primarily on the price of the Common Shares at the given time and expected
stability of that price.

If the proposed Share
Consolidation is implemented, the number of Common Shares issued and outstanding
will be reduced from approximately 124,377,031 Common Shares (as of April 22,
2014) to between approximately 4,145,901 (in the event of a 30 to 1
consolidation) to 12,437,703 (in the event of a 10 to 1 consolidation) Common
Shares, depending on the ratio selected by the Corporation’s Board of Directors.
The number of Series I Preferred Shares which are convertible on a one-for-one
basis to Common Shares will not change but the conversion ratio of Series I
Preferred Shares will change to reflect the consolidation ratio. The issued and
outstanding warrants which are each exercisable into one Common Share will be
reduced from approximately 138,724,781 (as of April 22, 2014) to between
approximately 4,624,159 (in the event of a 30 to 1 consolidation) and 13,872,478
(in the event of a 10 to 1 consolidation) warrants.




- 21 - 

No fractional Common Shares will
be issued in connection with the Share Consolidation and, in the event that a
Shareholder would otherwise be entitled to receive a fractional Common Share,
upon such Share Consolidation, the number of Common Shares to be received by
such Shareholder will be rounded up or down to the nearest whole number. 

Upon the Share Consolidation
becoming effective, the number of Common Shares issuable upon conversion of the
Series I Preferred Shares shall be adjusted in accordance with their terms and
the number of Common Shares issuable upon the due exercise of outstanding
warrants of the Corporation shall be adjusted in accordance with the terms of
such warrants set forth in the certificate and any warrant indenture governing
the warrants. No further action by the holders of Series I Preferred Shares and
warrants shall be required in order to give effect to these adjustments. 

The Share Consolidation is
subject to regulatory approval, including approval of the TSX. As a condition to
the approval of a consolidation of shares listed for trading on the TSX, the TSX
requires, among other things, that the Corporation must meet,
post-consolidation, the continued listing requirements contained in Part VII of
the TSX Company Manual. Specifically, the Corporation’s securities may be
delisted if: (a) the market value of listed issued securities is less than
$3,000,000 over any period of 30 consecutive trading days; or (b) the market
value of the Corporation’s freely-tradable, publicly held securities is less
than $2,000,000 over any period of 30 consecutive trading days; or (c) the
number of freely-tradable, publicly held securities is less than 500,000; or (d)
the number of public security holders, each holding a board lot or more, is less
than 150. 

If the Share Consolidation
Resolution is approved, the Board of Directors will determine when and if the
articles of amendment giving effect to the Share Consolidation would be filed,
and shall determine the share consolidation ratio. No further action on the part
of Shareholders would be required in order for the Board of Directors to
implement the Share Consolidation. 

Notwithstanding approval of the
proposed Share Consolidation by Shareholders, the Board of Directors, in its
sole discretion, may delay implementation of the Share Consolidation or revoke
the Share Consolidation Resolution and abandon the Share Consolidation without
further approval or action by or prior notice to Shareholders. 

If the Board Directors does
not implement the Share Consolidation prior to the next annual meeting of
Shareholders, the authority granted by the special resolution to implement the
Share Consolidation on these terms would lapse and be of no further force or
effect. 

Reasons for the Share Consolidation 

The Board of Directors believes
that it is in the best interests of the Corporation and the Corporation's
Shareholders to reduce the number of outstanding Common Shares by way of the
Share Consolidation, because it may be required as a condition to listing the
Corporation’s securities on a recognized US stock exchange (a “US
Exchange”) and also position the Common Shares in the best possible manner
to attract investor interest from the United States, Canada and other
jurisdictions. 




- 22 - 

Listing on US Exchange 

The Corporation plans to explore
its eligibility for a listing of the Common Shares on a foreign stock exchange,
and must effect a consolidation of the Common Shares to achieve the minimum
share trading price required to satisfy the listing requirements of the foreign
exchange. The trading price of the Common Shares on the TSX is currently below
the minimum price for such foreign stock exchange and the proposed Share
Consolidation should allow the Corporation to achieve such minimum listing
price. 

The Board of Directors of the
Corporation believes that Shareholder approval of a range of potential
consolidation ratios (rather than a single consolidation ratio) provides the
Board of Directors with flexibility to achieve the desired results of the Share
Consolidation, being an increase in the trading price of the Common Shares so as
to meet the minimum listing price of the previously mentioned foreign stock
exchange. 

There can be no assurances
whatsoever that any increase in the market price per Common Share will result
from the proposed Share Consolidation and there is no assurance whatsoever that
the Corporation will submit an application for listing on any foreign stock
exchange, or if an application is made, that the Corporation will be successful
at achieving such a listing if the proposed Share Consolidation is implemented.


Share Certificates 

If the proposed Share
Consolidation is approved by the Shareholders and all regulatory requirements
are complied with, including the Corporation obtaining approval of the TSX, and
implemented by the Board of Directors no later than one year from the date of
approval of the Share Consolidation by the Shareholders, following the
announcement by the Corporation of the effective date of the Share
Consolidation, registered Shareholders will be sent a transmittal letter by the
Corporation’s transfer agent, Computershare Investor Services Inc., containing
instructions on how to exchange their share certificates representing
pre-consolidation Common Shares for new share certificates representing
post-consolidation Common Shares. Non-registered Shareholders holding their
Common Shares through a bank, broker or other nominee should note that such
banks, brokers or other nominees may have different procedures for processing
the Share Consolidation than those that will be put in place by the Corporation
for the registered Shareholders. If you hold your Common Shares with such a
bank, broker or other nominee and if you have any questions in this regard, you
are encouraged to contact your nominee. 

Risk Factors Associated with the Share Consolidation


Decline in Market Capitalization 

There are numerous factors and
contingencies that could affect the prices of pre-consolidation Common Shares
and the post-consolidation Common Shares, including the Corporation’s reported
financial results in future periods, and general economic, geopolitical, stock
market and industry conditions. Accordingly, the market price of the
post-consolidation Common Shares may not be sustainable at the direct arithmetic
result of the Share Consolidation, and may be lower. If the market price of the
post-consolidation Common Shares is lower than it was before the Share
Consolidation on an arithmetic equivalent basis, the Corporation’s total market
capitalization (the aggregate value of all Common Shares at the then market
price) after the Share Consolidation may be lower than before the Share
Consolidation. 

Potential for Adverse Effect on the Liquidity of the Common
Shares 

If the Share Consolidation is
implemented and the market price of the post-consolidation Common Shares
declines, the percentage decline may be greater than would occur in the absence
of the Share Consolidation. The market price of the post-consolidation Common
Shares will, however, also be based on the Corporation’s performance and other
factors, which are unrelated to the number of Common Shares outstanding.
Furthermore, the liquidity of the post-consolidation Common Shares could be
adversely affected by the reduced number of consolidated Common Shares that
would be outstanding after the Share Consolidation. 




- 23 - 

No Fractional Shares to be Issued 

No fractional consolidated Common
Shares will be issued in connection with the Share Consolidation and, in the
event that a Shareholder would otherwise be entitled to receive a fractional
consolidated share upon the Share Consolidation, such fraction will be rounded
up or down to the nearest whole number. 

Effects of the Share Consolidation on the Common
Shares 

The Consolidation Ratio will be
the same for all Common Shares. Except for any variances attributable to the
rounding up and down of fractional shares, the change in the number of issued
and outstanding Common Shares that will result from the Share Consolidation will
cause no change in the capital attributable to the Common Shares and will not
materially affect any Shareholder’s percentage ownership in the Corporation,
even though such ownership will be represented by a smaller number of
consolidated Common Shares. 

The Share Consolidation will not
materially affect any Shareholder’s proportionate voting rights. Each
consolidated Common Share outstanding after the Share Consolidation will have
the same rights and privileges as the existing Common Shares.

The implementation of the Share
Consolidation would not affect the total Shareholders’ equity of the Corporation
or any components of Shareholders’ equity as reflected on the Corporation’s
financial statements except to change the number of issued and outstanding
Common Shares to reflect the Share Consolidation. 

Procedure for Implementing the Share Consolidation 

If the Share Consolidation
Resolution is approved by the Shareholders and the Board of Directors decides to
implement the Share Consolidation, the Corporation will file articles of
amendment with the Director under the OBCA in the form prescribed by the OBCA to
amend the Corporation’s articles. The Share Consolidation will become effective
as specified in the articles of amendment and the certificate of amendment
issued by the Director under the OBCA. 

No Dissent Rights 

Under the OBCA, Shareholders do
not have dissent and appraisal rights with respect to the proposed Share
Consolidation. 

U.S. Federal Income Tax Considerations

A Shareholder taxable in the U.S.
generally will not recognize gain or loss on the Share Consolidation. In
general, the aggregate tax basis of the consolidated Common Shares received will
be equal to the aggregate tax basis of the existing Common Shares exchanged
therefor, and the holding period of the consolidated Common Shares received will
include the holding period of the existing Common Shares exchanged. 

SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE
TAX CONSEQUENCES OF THE SHARE CONSOLIDATION TO THEM, INCLUDING THE EFFECTS OF
U.S. FEDERAL, STATE AND LOCAL, FOREIGN AND OTHER TAX LAWS. 

CIRCULAR 230 WARNING: NOTHING HEREIN MAY BE USED BY ANY
TAXPAYER FOR THE PURPOSE OF AVOIDING ANY PENALTIES THAT MAY BE IMPOSED UNDER THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED. EACH TAXPAYER SHOULD SEEK ADVICE
BASED ON THE TAXPAYER’S PARTICULAR CIRCUMSTANCE FROM AN INDEPENDENT TAX ADVISOR.





- 24 - 

Share Consolidation Resolution 

Shareholders will be asked to
consider and, if thought advisable, to authorize and approve the Share
Consolidation Resolution. Pursuant to the provisions of the OBCA, in order to be
effective, the Share Consolidation Resolution must be approved by 66 2/3% of the
votes cast in respect thereof by Shareholders present in person or by proxy at
the Meeting.

The following is the text of the
Share Consolidation Resolution which will be put forward for approval by the
Shareholders at the Meeting:

“BE IT RESOLVED AS A SPECIAL
RESOLUTION THAT: 

	 	(a) 	
      Pursuant to section 168(1)(h) of the Business
      Corporations Act (Ontario) (the “OBCA”), the Articles of Stem Cell
      Therapeutics Corp. (the “Corporation”) be amended to consolidate all of
      the issued and outstanding common shares of the Corporation (the “Common
      Shares”) on the basis of a ratio of one (1) post- consolidation Common
      Share for each 10 to 30 outstanding pre-consolidation Common Shares, with
      such ratio to be determined by the Board of Directors in its sole
      discretion. Any resulting fractional Common Shares shall be either rounded
      up or down to the nearest whole Common Share;

	 	 	 
	 	(b) 	
      The Board of Directors of the Corporation be and it is
      hereby authorized to revoke, without further approval of the Shareholders,
      this special resolution at any time prior to the completion thereof,
      notwithstanding the approval by the Shareholders of same, if determined,
      in the Board of Directors’ sole discretion to be in the best interest of
      the Corporation; and

	 	 	 
	 	(c) 	
      Any director or officer of the Corporation be and is
      hereby authorized to do all such further acts and things and execute all
      such documents and instruments as may be necessary or desirable to give
      effect to the matters contemplated by this special resolution, including
      but not limited to, the filing of articles of amendment under the
      OBCA.”



Unless otherwise
directed, the persons named in the enclosed form of proxy intend to
vote at the Meeting IN FAVOUR of the Share Consolidation Resolution. 

Recommendation of the Board 

The Board of Directors
believes that the proposed Share Consolidation of the Common Shares is in the
best interests of the Corporation and its Shareholders and unanimously
recommends that Shareholders vote IN FAVOUR of the Share Consolidation
Resolution. 

Approval of By-Law Amendments 

At the Meeting, Shareholders will
be asked to consider, and if deemed appropriate, pass two ordinary resolutions
authorizing two separate sets of amendments to the Corporation’s by-laws (the
“ByLaw Amendment Resolutions”). The Corporation wishes to amend its
by-laws to provide for: (i) the electronic direct registration of the
Corporation’s securities in a security holder’s name and allow such securities
to be transferred electronically; and (ii) the quorum for shareholders meetings
to be two persons holding at least 33 1/3% of the issued shares as more
particularly described below. 




- 25 - 

The Direct Registration System
(“DRS”) provides for electronic direct registration of securities in a
security holder’s name on the books of a corporation and allows such securities
to be transferred electronically under DRS. At the Corporation’s option,
shareholders will receive either a share certificate or a statement from the
Corporation’s transfer agent of the Common Shares, evidencing ownership of such
Common Shares, rather than a physical share certificate. The Corporation
believes the use of the DRS will improve access to the Corporation’s Common
Shares by United States investors. Amendments to By-Law No. 1 of the Corporation
(the “By-Law”) are required to allow the Corporation to utilize DRS. 

The Corporation also seeks
approval from shareholders in respect of the amendment to the ByLaw to provide
that the quorum for shareholders meetings shall be two or more persons present
in person, each being a shareholder entitled to vote thereat, or a duly
appointed proxy or proxy holder for an absent shareholder so entitled, holding
or representing in the aggregate not less than 33 1/3% of the issued shares of
the Corporation. 

Shareholder Approval 

The following is the text of the By-Law Amendment Resolutions
which will be put forward for approval by the Shareholders at the Meeting:

“BE IT RESOLVED AS AN ORDINARY
RESOLUTION THAT: 

Section 8.3 of the By-Law is hereby
amended by adding the words underlined below: 


  
    8.3                  Registration of
      Transfer – Subject to the Act, no transfer of shares shall be registered in
      a securities register except on presentation of the certificate or
      acknowledgment of the right to receive a certificate representing such
      shares with an endorsement which complies with the Act, together with such
      reasonable assurance or evidence of signature, identification and authority to
      transfer as the Board may from time to time prescribe, on payment of all
      applicable taxes and any fees prescribed by the Board, on compliance with such
      restrictions on transfer as are authorized by the articles and on satisfaction
      of any lien referred to in Section 8.5

  



Section 8.7 of the By-Law is
  hereby amended by deleting the words struck out below and adding the word
  underlined below: 


  
    8.7                  Security Certificates – Every holder of one or more
      securities of the Corporation shall be entitled, at the  security
        holder’s  Corporation’s option, to a security certificate, or to
      a non-transferable written acknowledgement of such security holder's right to
      obtain a security certificate, stating the number and class or series of
      securities held by such security holder as shown on the securities register.
      Security certificates and acknowledgements of a security holder's right to a
      security certificate, respectively, shall be in such form as the Board shall
      from time to time approve. Any security certificate shall be signed in
      accordance with Section 2.2 and need not be under the corporate seal; provided
      that, unless the Board otherwise determines, certificates representing
      securities in respect of which a transfer agent and/or registrar has been
      appointed shall not be valid unless countersigned by or on behalf of such
      transfer agent and/or registrar. The signature of one of the signing officers
      or, in the case of security certificates which are not valid unless
      countersigned by or on behalf of a transfer agent and/or registrar, the
      signatures of both signing officers, may be printed or mechanically reproduced
      in facsimile on security certificates and every such facsimile signature shall
      for all purposes be deemed to be the signature of the officer whose signature it
      reproduces and shall be binding on the Corporation. A security certificate
      executed as aforesaid shall be valid notwithstanding that one or both of the
      officers whose facsimile signature appears thereon no longer holds office at the
      date of issue of the certificate.” 

  






- 26 - 

“BE IT RESOLVED AS AN ORDINARY
RESOLUTION THAT: 

Section 10.11 of the By-Law is deleted
and replaced with the following: 


  
    “10.11 Quorum - Subject to the Act, a quorum for
      the transaction of business at any meeting of shareholders shall be two or more
      persons present in person, each being a shareholder entitled to vote thereat, or
      a duly appointed proxy or proxy holder for an absent shareholder so entitled,
      holding or representing in the aggregate not less than 33 1/3% of the issued and
      outstanding shares of the Corporation. If a quorum is present at the opening of
      any meeting of shareholders, the shareholders present in person or represented
      by proxy may proceed with the business of the meeting notwithstanding that a
      quorum is not present throughout the meeting. If a quorum is not present at the
      opening of any meeting of shareholders, the shareholders present in person or
      represented by proxy may adjourn the meeting to a fixed time and place, but may
      not transact any other business.” 

  



A copy of the amended and
restated By-Law is attached to this Circular (reflecting both sets of amendments
referenced above) as Schedule “D”, with black-lines highlighting all amendments
to the By-Law. Unless otherwise directed, the persons named in the enclosed form
of proxy intend to vote at the Meeting IN FAVOUR of the By-Law Amendment
Resolutions. 

Recommendation of the Board 

The Board of Directors
believes that the By-Law amendments are in the best interests of the Corporation
and its Shareholders and unanimously recommends that Shareholders vote in favour
of the By-Law Amendment Resolutions. 

OTHER MATTERS COMING BEFORE THE MEETING 

Management knows of no other
matters to come before the Meeting other than as referred to in the Notice of
Annual and Special General Meeting. Should any other matters properly come
before the Meeting, the Common Shares represented by proxy solicited hereby will
be voted on such matters in accordance with the best judgement of the person
voting such proxy. 

STATEMENT OF EXECUTIVE COMPENSATION 

All dollar amounts in this
Circular are expressed in Canadian dollars unless otherwise indicated. The
Corporation does not have any subsidiaries. 




- 27 - 

Compensation Discussion and Analysis 

The executive compensation policy
of the Corporation is determined by the Compensation Committee of the Board of
Directors. The Compensation Committee exercises general responsibility regarding
overall compensation of employees and executive officers of the Corporation.


In carrying out its duties and
responsibilities in relation to compensation, the Compensation Committee: 

	 	(a) 	
      annually assess the competitiveness and appropriateness
      of the compensation package of the CEO, all other officers of the
      Corporation and such other key employees of the Corporation or any
      subsidiary of the Corporation as may be identified by the CEO and approved
      by the Committee (collectively, the “Designated
  Employees”);

	 	 	 
	 	(b) 	
      annually review the performance goals and criteria for
      the CEO and evaluate the performance of the CEO against such goals and
      criteria establishes the amount of regular and incentive compensation, if
      any, to be paid to the CEO;

	 	 	 
	 	(c) 	
      annually review the CEO’s performance evaluation of
      Designated Employees and his recommendations with respect to the amount of
      regular and incentive compensation, if any, to be paid to such Designated
      Employees;

	 	 	 
	 	(d) 	
      review any employment contracts or arrangements with each
      of the Designated Employees, including any retiring allowance arrangements
      or any similar arrangements to take effect in the event of a termination
      of employment;

	 	 	 
	 	(e) 	
      when requested by the CEO, review short term incentive or
      reward plans, incentive stock option plans and any other long term
      incentive plans; and

	 	 	 
	 	(f) 	
      periodically, but at least every third year, review the
      compensation of the Board of Directors.



The objectives of the
Corporation’s executive compensation program are to: (a) to attract, retain and
motivate quality executives; (b) align the interests of executives with those of
the Corporation’s Shareholders; and (c) to provide total compensation to
executives that is competitive with that paid by other companies of comparable
size engaged in similar business in appropriate regions. The executive
compensation program has been designed to reward executives for the
reinforcement of the Corporation’s business objectives and values, the
achievement of the Corporation’s performance objectives and milestones, and
their individual performance. 

The Corporation’s executive
“total direct compensation” is comprised of three primary elements: (i) base
salary, (ii) a short term incentive plan, which, if paid, generally consists of
a cash bonus, and (iii) a stock option plan which serves as a long term
incentive. 

As soon as practical following
any year, the Board of Directors determines the performance of the Corporation
against pre-determined targets and milestones for that year. The resultant
corporate performance in that year is considered in connection with determining
an executive’s total direct compensation for the year. 

With respect to the individual
components of an executive’s total direct compensation, the salary of each
executive is determined by the Compensation Committee each year. This will
depend on the recent performance of the executive, his or her potential as a
succession candidate for key roles and the Board of Director’s perception of the
executive’s development in the position. The base salary review of each Named
Executive Officer (“NEO”) takes into consideration the current
competitive market conditions, experience, proven or expected performance, and
the particular skills of the NEO. Benchmarking is performed across
representative biotechnology companies.




- 28 - 

A short-term incentive award, if
any, shall be a cash payment made by Corporation to the executive each year. The
Board of Directors will determine the amount of such payment based on normal
ranges for the executive’s compensation level as determined by applicable
corporate performance. The amount of the short term incentive award is subject
to increase or decrease based on the Compensation Committee’s assessment of the
individual performance of the executive and departments for which the executive
is responsible. 

With respect to long-term
incentives, each year the executive may be awarded stock options. The amount of
the long term incentive award for each year shall be determined by the
Compensation Committee based on normal ranges for the executive’s target
compensation level as determined by reference to the applicable corporate
performance, and shall generally be determined to bring the executive’s total
direct compensation to the appropriate level after taking into account salary
and short term incentive payments. The Board of Directors takes into account
previous stock option grants to a particular individual when considering new
grants. The purpose and principal features of the Corporation’s stock option
plan is set out under the heading “Approval of Stock Option Plan” and
“Incentive Plan Awards – Stock Option Plan”. 

Risk Oversight 

In carrying out its mandate, the
Compensation Committee reviews from time to time the risk implications of the
Corporation’s compensation policies and practices, including those applicable to
the Corporation’s executives. This review of the risk implications ensures that
compensation plans, in their design, structures and application have a clear
link between pay and performance and do not encourage excessive risk taking. Key
considerations regarding risk management include the following: 

	• 	design of the compensation program to ensure
      all executives are compensated equally based on the same or, depending on
      the mandate and term of appointment of that particular executive,
      substantially equivalent performance goals; 
	  	  
	• 	balance of short-term performance incentives
      with equity-based awards that vest over time; 
	  	  
	• 	utilizing compensation policies that do not
      rely solely on the accomplishment of specific tasks without consideration
      to longer term risks and objectives. 


For the reasons set forth below,
the Board of Directors believes that the Corporation’s current executive
compensation policies and practices achieve an appropriate balance in relation
to the Corporation’s overall business strategy and do not encourage executives
to expose the Corporation to inappropriate or excessive risks. 

While a significant feature of
the Corporation’s current executive compensation practice is the awarding of
stock options under the 2014 Stock Option Plan, and while such compensation is
“at risk” (i.e. not guaranteed), the Corporation’s long-term incentive plans are
designed such that stock options vest over a two to four year period and
therefore encourage sustainable Common Share price appreciation and reduce the
risk of actions which may have short-term advantages.




- 29 - 

Additionally, the granting of
options is in accordance with the terms and provisions of the Corporation’s 2014
Stock Option Plan. 

The base salaries set for the
Corporation’s executives are intended to provide a steady income regardless of
share price performance, allowing executives to focus on both near-term and
long-term goals and objectives without undue reliance on short term share price
performance or market fluctuations. 

Compensation payable under the
Corporation’s bonus plan is overseen by the Compensation Committee. The
Compensation Committee does not consider the applicable periods set for bonus
purposes to be heavily weighed to the short-term and believes it has struck an
appropriate balance between short-term performance incentives and long-term
awards that vest over time.

Hedging and Offsetting 

The Corporation does not have a
formal policy prohibiting its directors and officers from engaging in short
sales of securities of the Corporation or buying or selling puts, calls or other
derivatives that are designed to hedge or offset a decrease in the market value
of securities of the Corporation. 

Currently, in the absence of such
a policy, the directors and officers of the Corporation are expected to act at
all times transparently, with integrity and with a view to the best interests of
the Corporation and its Shareholders in their securities trading activities.


It should be noted that any
transactions of this nature are subject to insider reporting requirements and
are reported on the System for Electronic Disclosure by Insiders (SEDI). 




- 30 - 

Summary Compensation Table 

Outlined below is a summary of
the compensation paid, payable, awarded or granted by the Corporation for 2013
to the Executive Chairman, President and Chief Executive Officer, the Chief
Financial Officer and the Chief Scientific Officer (collectively, the “Named
Executive Officers”). 


	  	 	  	 	  	 	  	 	Non-equity incentive    	 	  	 	  
	  	 	  	 	  	 	  	 	 plan
      compensation 	 	  	 	  
	  	 	  	 	  	 	  	 	($) 	 	  	 	  
	  	 	  	 	  	 	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	Option- 	 	  	 	  	 	  	 	  
	Name and 	 	  	 	  	 	based 	 	Annual 	 	Long-term 	 	All other 	 	Total 
	principal 	 	  	 	Salary 	 	awards 	 	 incentive 	 	Incentive 	 	compensation 	 	compensation 
	position(8) 	 	Year 	 	($) 	 	($)(6) 	 	Plans(7) 	 	plans 	 	($) 	 	($) 
	  	 	  	 	  	 	  	 	  	 	  	 	  	 	  
	Niclas 	 	2013 	 	217,500(6) 	 	262,679 	 	120,000 	 	Nil 	 	Nil 	 	600,179 
	Stiernholm(1) 	 	  	 	  	 	  	 	  	 	  	 	  	 	  
	President and 	 	  	 	  	 	  	 	  	 	  	 	  	 	  
	CEO 	 	  	 	  	 	  	 	  	 	  	 	  	 	  
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	David Allan(2) 	 	2013 	 	138,750 	 	Nil 	 	Nil 	 	Nil 	 	Nil 	 	138,750 
	Executive 	 	2012 	 	200,000 	 	Nil 	 	Nil 	 	Nil 	 	Nil 	 	200,000 
	Chairman 	 	2011 	 	100,000(1) 	 	177,100 	 	Nil 	 	Nil 	 	Nil 	 	277,100 
	  	 	  	 	  	 	  	 	  	 	  	 	  	 	  
	Robert Uger(1) 	 	2013 	 	137,750(6) 	 	52,536 	 	47,500 	 	Nil 	 	Nil 	 	237,786 
	Chief Scientific 	 	  	 	  	 	  	 	  	 	  	 	  	 	  
	Officer 	 	  	 	  	 	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  	 	  	 	  	 	  
	Allen Davidoff 	 	2011 	 	166,154(3) 	 	15,000 	 	Nil 	 	Nil 	 	80,000(3) 	 	261,154 
	Chief Scientific 	 	  	 	  	 	  	 	  	 	  	 	  	 	  
	Officer 	 	  	 	  	 	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  	 	  	 	  	 	  
	James Parsons 	 	2013 	 	106,042 	 	26,268 	 	25,000 	 	Nil 	 	Nil 	 	157,310 
	CFO 	 	2012 	 	93,525 	 	Nil 	 	Nil 	 	Nil 	 	Nil 	 	93,525 
	  	 	2011 	 	47,175(4) 	 	7,625 	 	Nil 	 	Nil 	 	Nil 	 	54,800 
	  	 	  	 	  	 	  	 	  	 	  	 	  	 	  
	Michael Cook 	 	2011 	 	68,477(5) 	 	7,500 	 	15,000 	 	Nil 	 	56,000(5) 	 	146,977 
	CFO 	 	  	 	  	 	  	 	  	 	  	 	  	 	  





	
      Notes: 
	  
	(1) 	
      Dr. Stiernholm and Dr. Uger joined the Corporation on the
      acquisition of Trillium from April 9, 2013 and the salaries shown here are
      for the period from this date to the end of 2013. Dr. Stiernholm’s annual
      salary was $300,000 and Dr. Uger’s salary was $190,000. 

	(2) 	
      David Allan was appointed Executive Chairman on June 28,
      2011. The information is this table reflects the compensation of Mr. Allan
      in his role as an officer of the Corporation and subsequent to May 31,
      2013, in his role as a consultant. Mr. Allan received compensation as a
      Board member beginning Q2-2013 and this data is disclosed under Director
      Compensation below. 

	(3) 	
      Allen Davidoff ceased employment on December 31, 2011 and
      he received a severance of $80,000. 

	(4) 	
      James Parsons joined as CFO from August 25, 2011 and
      worked on a part-time basis from 2011 to 2013. 

	(5) 	
      Michael Cook ceased employment on August 25, 2011 and he
      received a severance of $56,000. 

	(6) 	
      Amount represents the grant date fair value of the award
      using the Black-Scholes option pricing model. 

	(7) 	
      These payments reflect cash bonuses on the achievement of
      the 2013 corporate objectives. 

	(8) 	
      The Corporation has not issued any share-based awards.
      







- 31 - 

Option-Based Awards 

Stock Option Plan 

The 2014 Stock Option Plan
provides for the granting of stock options to officers, directors, employees and
consultants of the Corporation and its affiliates. The purpose of the 2014 Stock
Option Plan is to assist in attracting, retaining, and motivating directors,
officers, employees and consultants of the Corporation and its subsidiaries and
to closely align the personal interests of such directors, officers, employees
and consultants with those of Shareholders by providing an opportunity, through
options, to acquire an ownership interest in the Corporation. As at April 22,
2014, pursuant to the 2014 Stock Option Plan, the Corporation is entitled to
issue an additional 8,922,655 stock options. Below are some of the key features
of the 2014 Stock Option Plan: 

	1. 	
      directors, officers, employees and consultants of the
      Corporation, or those of its subsidiaries, are eligible to receive options
      under the 2014 Stock Option Plan;

	 	 
	2. 	
      the maximum number of Common Shares issuable pursuant to
      the 2014 Stock Option Plan is a “rolling” maximum equal to the aggregate
      of 10% of the total number of outstanding Common Shares and the number of
      Common Shares issuable upon conversion of the outstanding Series I
      Preferred Shares in accordance with their terms. Any increase in the
      issued and outstanding Common Shares or the number of Common Shares
      issuable upon conversion of the outstanding Series I Preferred Shares will
      result in an increase in the available number of Common Shares issuable
      under the 2014 Stock Option Plan, and any exercises of options will result
      in a corresponding increase to the number of options available for
      granting under the 2014 Stock Option Plan;

	 	 
	3. 	
      the exercise price for Common Shares under each option is
      determined by the Board of Directors, as set forth under the 2014 Stock
      Option Plan and in accordance with the rules of the TSX, at the time any
      option is granted;

	 	 
	4. 	
      the 2014 Stock Option Plan will provide that the
      aggregate number of Common Shares reserved for issuance to any one person
      under the 2014 Stock Option Plan in any one year period must not exceed 5%
      of the aggregate of the then outstanding Common Shares plus the number of
      Common Shares issuable upon conversion of the outstanding Series I
      Preferred Shares unless the Corporation has obtained disinterested
      Shareholder approval in respect of such grant and meets applicable TSX
      requirements;

	 	 
	5. 	
      all options granted under the 2014 Stock Option Plan
      shall expire not later than the 10th anniversary of the date such options
      were granted and may be exercised by the Participant as to such varying
      percentages, on a cumulative basis, during the terms thereof as the Board
      of Directors shall determine;

	 	 
	6. 	
      options terminate within a prescribed period of time
      following an optionholder ceasing to be an employee, director, officer or
      consultant of the Corporation or a subsidiary of the Corporation. In the
      event of death, the legal representatives of the deceased Participant
      shall have the right for a period of 1 year (or until the normal expiry
      date of the option rights of such Participant if earlier) from the date of
      death of the Participant to exercise the deceased Participant’s option
      with respect to all of the Optioned Shares of the deceased Participant to
      the extent they were exercisable on the date of death;

	 	 
	7. 	
      options granted under the 2014 Stock Option Plan are
      non-transferrable and non-assignable.







- 32 - 

Outstanding Option-Based Awards 

The following table sets forth
all awards outstanding as at December 31, 2013 held by Named Executive Officers
under the 2014 Stock Option Plan, as awards under the 2014 Stock Option Plan are
considered “option-based awards” under applicable securities laws. The value of
the unexercised “in-the-money” options as at December 31, 2013 has been
determined based on the excess of the closing price of the Common Shares on the
TSXV of $0.41 per Common Share over the exercise price of such options.


Outstanding Option-Based Awards 


	  	 	  	 	                 
       Option-based Awards 	 	  
	  	 	Number of securities 	 	  	 	  	 	Value of unexercised 
	  	 	underlying unexercised 	 	Option exercise 	 	  	 	in- the money options 
	Name
      	 	options (#) 	 	price ($) 	 	Option expiration date 	 	($) 
	Niclas Stiernholm 	 	50,000 	 	1.00 	 	Jul 18, 2016 	 	Nil 
	President and CEO 	 	1,275,141 	 	0.25 	 	Apr 8, 2023 	 	204,023 
	  	 	  	 	  	 	  	 	  
	David Allan(1) 	 	N/A 	 	N/A 	 	N/A 	 	N/A 
	Executive Chairman 	 	  	 	  	 	  	 	  
	 	 	 	 	 	 	 	 	 
	Robert Uger Chief 	 	255,028 	 	0.25 	 	Apr 8, 2023 	 	40,804 
	Scientific Officer 	 	  	 	  	 	  	 	  
	 	 	 	 	 	 	 	 	 
	James Parsons 	 	12,500 	 	1.00 	 	Aug 25, 2016 	 	Nil 
	CFO 	 	127,514 	 	0.25 	 	Apr 8, 2023 	 	20,402





	
      Notes: 
	  
	(1) 	David Allan received stock options in his
      capacity of Director in 2013 – see Director Compensation.



Value Vested or Earned During the Year 

The following table sets forth
the value of the awards that vested for each Named Executive Officer under the
2014 Stock Option Plan in 2013 as well as non-equity incentive plan compensation
earned during the financial year ended December 31, 2013. 

	  	 	Option-based awards - 	 	Share-based awards - 	 	Non-equity incentive plan

	  	 	Value vested during 	 	Value vested during the 	 	compensation – Value earned
  
	  	 	the year 	 	year 	 	during the year 
	Name
      	 	($)(1) 	 	($) 	 	($) 
	  	 	  	 	  	 	  
	Niclas Stiernholm 
President and CEO 		Nil 		N/A 		120,000 
	  	 	  	 	  	 	  
	David Allan 
Executive Chairman 		Nil 		N/A 		Nil 
	  	 	  	 	  	 	  
	Robert Uger Chief Scientific 
Officer
		Nil 		N/A 		47,500 
	  	 	  	 	  	 	  
	James Parsons 
CFO 		Nil 		N/A 		25,000 


Notes: 

	1) 	
      Aggregate dollar value that would have been realized by
      determining the difference between the closing market price of the
      Corporation’s Common Shares on the TSXV and the exercise price of the
      underlying option on each date during the fiscal year when an option award
      vested.







- 33 - 

Securities Authorized for Issuance under Equity Compensation
Plan 

The following table sets out
information concerning the number and price of securities to be issued under the
Corporations’ equity compensation plans as at December 31, 2013. 

Equity Compensation Plan Information 

	  	  	 	  	 	Number of
      securities 
	  	  	 	  	 	remaining available
      for 
	  	Number of
      securities to be 	 	Weighted-average
      exercise 	 	future issuance
      under 
	  	issued upon
      exercise of 	 	price of
      outstanding 	 	equity compensation
      plans 
	  	outstanding
      options, 	 	options, warrants
      and 	 	(excluding
      securities 
	  	warrants and rights 	 	rights 	 	reflected in column (a)) 
	  	  	 	  	 	  
	Plan Category 	(a) 	 	(b) 	 	(c) 
	  	  	 	  	 	  
	Equity compensation plans 
approved by
      securityholders 	14,175,238 		$0.33 		11,254,141 
	  	  	 	  	 	  
	Equity compensation plans 
not approved
      by 
securityholders 	Nil 		N/A 		Nil 
	  	  	 	  	 	  
	Total 	14,175,238 	 	$0.33 	 	11,254,141
  


Share-based Awards 2014 DSU Plan 

The 2014 DSU Plan was approved at the annual general meeting of
Shareholders held on October 17, 2013. The purpose of the 2014 DSU Plan is to
provide an alternative form of compensation to satisfy annual and special
bonuses payable to directors and executive officers and to satisfy fees that may
be payable to directors for acting as directors of the Corporation. This form of
compensation promotes a greater alignment of interests amongst directors and
executive officers and the Corporation’s Shareholders.

The 2014 DSU Plan provides that the Board of Directors may,
from time to time, issue deferred share units to any eligible person (as defined
by the 2014 DSU Plan) at the time of declaring or awarding any bonuses or at the
time of payment of fees to directors. The number of DSUs granted is determined
by dividing the applicable awarded amount by the fair market value of the common
shares based on the five-day volume weighted average trading price as calculated
in accordance with the policies of the TSX. The maximum aggregate number of
common shares that may be reserved for issuance pursuant to the 2014 DSU Plan is
2,000,000 common shares. No DSUs have been issued to the date of this Circular.





- 34 - 

Performance Graph

The following graph compares the total shareholder return of
$100 invested in our Common Shares with the total return of the S&P/TSX
Venture Composite Index.

Year Return on Investment
    

  December 31, 2008 to December 31, 2013 

  2008 = $100 


 

The performance trend shown by the above graph does not reflect
the trend in the Corporation’s compensation to Named Executive Officers reported
over the same period. The market price of the Common Shares, similar to the
share prices of many publicly-traded biotechnology companies, has historically
been highly volatile. The Corporation’s approach to compensation is designed to
attract and retain quality executives while promoting long-term profitability
and maximizing shareholder value. The Corporation’s Named Executive Officers are
compensated on the basis of individual and corporate performance and
compensation is benchmarked to other life sciences companies, rather than on
factors strictly tied to the performance of the Corporation’s shares in the
market.




- 35 - 

Termination of Employment, Change of Control and Employment
Contracts 

Effective April 9, 2013, the
Corporation entered into an employment agreement with Niclas Stiernholm which
has an indefinite term and provides for his employment as President and Chief
Executive Officer of the Corporation. The agreement provides for compensation
with respect to Dr. Stiernholm’s annual base salary of $300,000 and
participation in the Corporation’s bonus plan and stock option plan. Dr.
Stiernholm’s agreement provides for severance pay of fifteen months’ salary plus
bonus if terminated without cause and 18 months’ salary plus bonus if terminated
on a change in control. If the severance is as a result of a change in control,
all unvested stock options will also immediately vest. In the event that Dr.
Stiernholm was entitled to severance as of December 31, 2013, Dr. Stiernholm
would have been entitled to $472,500.

Effective April 9, 2013, the
Corporation entered into an employment agreement with Robert Uger which has an
indefinite term and provides for his employment as Chief Scientific Officer of
the Corporation. The agreement provides for compensation with respect to Dr.
Uger’s annual base salary of $190,000 and participation in the Corporation’s
bonus plan and stock option plan. Dr. Uger’s agreement provides for severance
pay of nine months base salary remuneration. If the severance is as a result of
a change in control, all unvested stock options will also immediately vest. In
the event that Dr. Uger was entitled to severance as of December 31, 2013, Dr.
Uger would have been entitled to $142,500.

Effective May 1, 2013, the
Corporation entered into an employment agreement with James Parsons which has an
indefinite term and provides for his employment as Chief Financial Officer of
the Corporation. The agreement provides for compensation with respect to Mr.
Parsons annual base salary of $200,000, prorated for part-time employment, and
participation in the Corporation’s bonus plan and stock option plan. Mr.
Parsons’ agreement provides for severance pay of nine months base salary
remuneration. If the severance is as a result of a change in control, all
unvested stock options will also immediately vest. In the event that Mr. Parsons
was entitled to severance as of December 31, 2013, Mr. Parsons would have been
entitled to $75,000. Prior to May 1, 2013, Mr. Parsons’ compensation was subject
to a consulting arrangement with an indefinite term. 

Effective June 28, 2011, the
Corporation entered into an employment agreement with David Allan which had an
indefinite term and provided for his employment as Executive Chairman of the
Corporation. The agreement provided for compensation with respect to Mr. Allan’s
annual base salary of $200,000 and participation in the Corporation’s bonus plan
and stock option plan. Mr. Allan resigned his post of Executive Chairman on May
31, 2013 and retained the Chairmanship of the Board of Directors. Mr. Allan
received compensation as a member of the Board of Directors from April 1, 2013
and also received compensation under a consulting agreement with the Corporation
which may be terminated on 30 days’ notice.

Stock Option Plan 

If an optionholder shall cease to
be a director, officer, consultant or employee of the Corporation or a service
provider to the Corporation due to retirement, resignation or termination, such
optionholder may exercise his or her options to the extent that the optionholder
was entitled to exercise his or her options at the date of such cessation,
provided that such exercise must occur within 120 days after the optionholder
ceases to be a director, officer, consultant, employee or service provider, or
until the normal expiry date of the subject options, whichever is earlier.


In the event of the death of any
optionholder, the legal representatives of the deceased optionholder shall have
the right for a period of 1 year (or until the normal expiry date of the option
rights of such Participant if earlier) from the date of death of the
optionholder to exercise the deceased optionholder’s option with respect to all
of the Optioned Shares of the deceased optionholder to the extent they were
exercisable on the date of death. Upon the expiration of such period, all
unexercised option rights of the deceased optionholder shall immediately become
terminated and shall lapse notwithstanding the original term of the option
granted to the deceased optionholder under the 2014 Stock Option Plan. 




- 36 - 

Director Compensation 

During 2013, each independent
director of the Corporation was compensated with an annual fee of $20,000 paid
quarterly. Beginning in the second quarter of 2013, the chair of the Board of
Directors also received an additional fee of $10,000 paid quarterly. The Board
of Directors was also eligible to receive stock options. In addition, each
independent director of the Corporation was entitled to reimbursement for
reasonable expenses incurred in such capacity as a director, including travel
and other out-of-pocket expenses relating to meetings of the Board of Directors
and any committee meetings. Compensation paid to the independent directors for
the year ended December 31, 2013 and stock options issued to them for their
services as a director and committee member were as follows: 


	  	 	  	 	  	 	Non-equity 	 	  	 	  
	  	 	  	 	Option-based 	 	incentive plan 	 	All other 	 	  
	  	 	Fees earned 	 	awards 	 	compensation 	 	compensation 	 	Total 
	Name 	 	($) 	 	($)(4) 	 	($) 	 	($) 	 	($) 
	 	 	 	 	 	 	 	 	 	 	 
	Mr. David Allan 	 	22,500 	 	30,900 	 	Nil 	 	Nil 	 	53,400 
	 	 	 	 	 	 	 	 	 	 	 
	Dr. James DeMesa(1) 	 	20,000 	 	20,600 	 	Nil 	 	Nil 	 	40,600 
	 	 	 	 	 	 	 	 	 	 	 
	Dr. Henry Friesen 	 	20,000 	 	27,810 	 	Nil 	 	Nil 	 	47,810 
	 	 	 	 	 	 	 	 	 	 	 
	Dr. Robert Kirkman(3) 	 	Nil 	 	Nil 	 	Nil 	 	Nil 	 	Nil 
	 	 	 	 	 	 	 	 	 	 	 
	Dr. Michael Moore 	 	15,000 	 	24,720 	 	Nil 	 	Nil 	 	39,720 
	 	 	 	 	 	 	 	 	 	 	 
	Mr. R. Dean Peterson 	 	20,000 	 	20,600 	 	Nil 	 	Nil 	 	40,600 
	 	 	 	 	 	 	 	 	 	 	 
	Dr. Niclas Stiernholm(2) 	 	5,000 	 	Nil 	 	Nil 	 	Nil 	 	5,000 
	 	 	 	 	 	 	 	 	 	 	 
	Dr. Calvin Stiller 	 	20,000 	 	24,720 	 	Nil 	 	Nil 	 	44,720





	
      Notes: 
	  
	(1) 	Dr. DeMesa’s director fees were paid in U.S.
      dollars. 
	(2) 	Dr. Stiernholm ceased receiving fees as a
      director when he became President and CEO on April 9, 2013 
	(3) 	Dr. Kirkman was appointed to the Board of
      Directors on December 17, 2013. 
	(4) 	Amount represents the grant date fair value of
      the award using the Black-Scholes option pricing model.



Outstanding Option-Based Awards 

The following table sets forth
all outstanding awards held by the independent directors of the Corporation as
at December 31, 2013 under the 2014 Stock Option Plan, as awards under the 2014
Stock Option Plan are considered “option based awards” under applicable
securities laws. The value of the unexercised in-the-money options as at
December 31, 2013 has been determined based on the excess of the closing price
of the Common Shares on the TSXV on December 31, 2013 of $0.41 per Common Share
over the exercise price of such options.




- 37 - 


	  	 	  	 	                 
             Option-based Awards 	 	  
	  	 	  	 	  	 	  	 	  
	  	 	Number of securities 	 	  	 	  	 	  
	  	 	underlying 	 	  	 	  	 	Value of unexercised 
	  	 	unexercised options 	 	Option exercise price 	 	Option 	 	in-the-money options 
	 
                   Name 	 	(#) 	 	($) 	 	expiration date 	 	($) 
	  	 	  	 	  	 	  	 	  
	Mr. David Allan(1) 	 	50,000 	 	0.25 	 	Apr 25, 2014 	 	8,000 
	 	 	 	 	 	 	 	 	 
	Dr. James DeMesa(2) 	 	12,000 	 	1.00 	 	Feb 24, 2014 	 	Nil 
	  	 	3,000 	 	1.20 	 	Aug 28, 2014 	 	Nil 
	  	 	20,000 	 	1.70 	 	Nov 24, 2014 	 	Nil 
	  	 	40,000 	 	1.00 	 	Mar 7, 2015 	 	Nil 
	  	 	100,000 	 	0.25 	 	Mar 7, 2015 	 	16,000 
	 	 	 	 	 	 	 	 	 
	Dr. Henry Friesen 	 	50,000 	 	1.00 	 	Jun 28, 2016 	 	Nil 
	  	 	135,000 	 	0.25 	 	Apr 8, 2023 	 	21,600 
	 	 	 	 	 	 	 	 	 
	Dr. Robert Kirkman 	 	Nil 	 	N/A 	 	N/A 	 	N/A 
	  	 	  	 	  	 	  	 	  
	Dr. Michael Moore 	 	120,000 	 	0.25 	 	Apr 8, 2023 	 	19,200 
	  	 	  	 	  	 	  	 	  
	Mr. R. Dean 	 	50,000 	 	1.00 	 	Mar 6, 2015 	 	Nil 
	Peterson(3) 	 	100,000 	 	0.25 	 	Mar 6, 2015 	 	16,000 
	 	 	 	 	 	 	 	 	 
	Dr. Calvin Stiller 	 	50,000 	 	1.00 	 	Jul 18, 2016 	 	Nil 
	  	 	120,000 	 	0.25 	 	Apr 8, 2023 	 	19,200 





	
      Notes: 
	  
	(1) 	Mr. Allan resigned from the Board of Directors
      on January 25, 2014. 
	(2) 	Dr. DeMesa resigned from the Board of Directors
      on March 7, 2014, 
	(3) 	Mr. Peterson resigned from the Board of
      Directors on March 6, 2014. 


Value Vested or Earned During the Year 

The following table sets forth
the value of the awards that vested for each independent director of the
Corporation under the 2014 Stock Option Plan in 2013. None of the independent
directors earned any non-equity incentive plan compensation during 2013. Only
the options which vested during the 2013 fiscal year that were “in-the-money”
are reported in the table below. 

	  	 	Option-based awards - 	 	  	 	  
	  	 	Value vested during the 	 	Share-based awards - Value 	 	Non-equity incentive plan

	  	 	year 	 	vested during the year 	 	compensation -Value 
	 
                         
       Name 	 	($)(1) 	 	($) 	 	earned during the year 
	 	 	 	 	 	 	 
	Mr. David Allan 	 	Nil 	 	N/A 	 	N/A 
	 	 	 	 	 	 	 
	Dr. James DeMesa 	 	Nil 	 	N/A 	 	N/A 
	 	 	 	 	 	 	 
	Dr. Henry Friesen 	 	Nil 	 	N/A 	 	N/A 
	 	 	 	 	 	 	 
	Dr. Robert Kirkman 	 	Nil 	 	N/A 	 	N/A 
	 	 	 	 	 	 	 
	Dr. Michael Moore 	 	Nil 	 	N/A 	 	N/A 
	 	 	 	 	 	 	 
	Mr. R. Dean Peterson 	 	Nil 	 	N/A 	 	N/A 
	 	 	 	 	 	 	 
	Dr. Calvin Stiller 	 	Nil 	 	N/A 	 	N/A 



	
      Notes: 
	  
	(1) 	
      Aggregate dollar value that would have been realized by
      determining the difference between the closing market price of the
      Corporation’s Common Shares on the TSXV and the exercise price of the
      underlying option on each date during the fiscal year when an option award
      vested. 







- 38 - 

REGULATORY MATTERS AND BANKRUPTCIES AND INSOLVENCIES 

No nominee for director of the
Corporation is, as at the date of this Circular, or has been, within 10 years
before the date of this Circular, a director or executive officer of any company
that, while that person was acting in that capacity, (i) was the subject of a
cease trade or similar order or an order that denied the relevant company access
to any exemption under securities legislation for a period of more than 30
consecutive days, (ii) was subject to an event that resulted, after the director
or executive officer ceased to be a director or executive officer, in the
company being the subject of a cease trade or similar order or an order that
denied the relevant company access to any exemption under securities
legislation, for a period of more than 30 consecutive days, or (iii) within a
year of that person ceasing to act in that capacity, became bankrupt, made a
proposal under any legislation relating to bankruptcy or insolvency or was
subject to or instituted any proceedings, arrangement or compromise with
creditors or had a receiver, receiver manager or trustee appointed to hold its
assets. 

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS 

As at the date of this Circular,
other than routine indebtedness as defined under applicable securities laws,
there exists no indebtedness of any of the directors or executive officers to
the Corporation.

INTERESTS OF INFORMED PERSONS IN MATERIAL TRANSACTIONS


No informed person, proposed
director or any associate or affiliate of an informed person or proposed
director of the Corporation had a material interest, direct or indirect, in any
transaction or proposed transaction during the period ended December 31, 2013
that materially affected or would materially affect the Corporation. 

INTERESTS OF CERTAIN PERSONS AND COMPANIES IN MATTERS TO BE
ACTED UPON 

Management of the Corporation is
not aware of any material interest, direct or indirect, of any director or
nominee for director, executive officer or any associate or affiliate of any of
the foregoing in any matter to be acted on at the Meeting. 

AUDIT COMMITTEE AND RELATIONSHIP WITH AUDITORS 

National Instrument 52-110 Audit
Committees (“NI 52-110”) requires the Corporation to disclose annually
certain information relating to the Corporation’s audit committee (the “Audit
Committee”) and its relationship with the Corporation’s independent
auditors. This information may be found in the in the Corporation’s Audit
Committee Charter attached as Schedule “A”. 

Audit Committee Charter 

The Corporation’s Audit Committee
Charter is attached to this information circular as Schedule “A”. 

Composition of the Audit Committee 

During 2013, the Corporation’s
Audit Committee consisted of the following directors: Dr. Niclas Stiernholm
(Chair), Mr. Dean Peterson, and Dr. James DeMesa. On April 8, 2013, the Audit
Committee composition was changed to: Dr. Henry Friesen (Chair), Dr. James
DeMesa, and Dr. Calvin Stiller. Effective March 10, 2014, the Audit Committee
composition was changed to: Dr. Henry Friesen (Chair), Mr. Luke Beshar, and Dr.
Robert Kirkman, and Mr. Beshar became Chair of the Audit Committee on April 1,
2014. 




- 39 - 

As such terms are defined in NI 52-110, all members are
“independent” and “financially literate”. 

Relevant Education and Experience 

The following describes the
education and experience of each Audit Committee member that is relevant in the
performance of his responsibilities as an Audit Committee member: 

Luke Beshar is
Executive Vice President and Chief Financial Officer of NPS Pharmaceuticals. He
joined the company in 2007 and has been responsible for financial management,
investor relations, information technology, technical operations, supply-chain
management, facilities, project management, contracts & outsourcing, and
alliance management. Under his financial leadership, NPS secured approximately
$400M of capital and its market capitalization increased from $180 million to
more than $3 billion. Prior to joining NPS, Mr. Beshar served as Executive Vice
President and Chief Financial Officer of Cambrex Corporation, a global life
sciences company. At Cambrex, his accomplishments included raising approximately
$600 million of new capital, building a global finance team, and leading a
process of evaluating strategic alternatives, which resulted in the sale of
non-strategic operations for $460 million and an $11 per share special dividend
to Shareholders. Mr. Beshar began his career with Arthur Andersen & Co. and
is a certified public accountant. He obtained his bachelor’s degree in
Accounting and Finance from Michigan State University and is a graduate of The
Executive Program at the Darden Graduate School of Business at the University of
Virginia. 

Dr. Henry Friesen was the
President of the Canadian Government’s Medical Research Council, President of
the National Cancer Institute of Canada and President of the Canadian Society
for Clinical Investigation. He is the Past Founding Chair of Genome Canada. Dr.
Friesen was Chair of the Gairdner Foundation whose international awards are
Canada’s most prestigious prizes in the biomedical sciences and Chair, Genome
Canada, a $600 million budget non-profit organization that supports
genomics/proteomics programs to position Canada as a world leader in selected
areas in this important sector. From 1991 to 2000, Dr. Friesen was President of
the Medical Research Council of Canada and was instrumental in transforming it
into the Canadian Institutes of Health Research, an organization with an annual
budget in 2008 of over $900 million dedicated to supporting Canadian researchers
as well as industry participants. Dr. Friesen has served on the boards of
several life science companies including Sanofi Pasteur Canada, YM BioSciences
Inc. and Spectral Diagnostics Inc.

Dr. Kirkman has broad executive experience from several public
biotechnology companies. He currently serves as the President and Chief
Executive Officer of Oncothyreon Inc., an oncology company with a
long-established interest in the immunotherapy field. He previously held various
executive positions at Xcyte Therapies, another immunotherapy company, and
Protein Design Labs. Dr. Kirkman began his career as a clinician-scientist,
holding various positions at Brigham and Women’s Hospital, Boston, including
Chief, Division of Transplantation. Dr. Kirkman holds an M.D. degree from
Harvard Medical School and a B.A. in economics from Yale University. 

Audit Committee Oversight 

Since the commencement of the
Corporation’s most recently completed fiscal period and adoption of the Audit
Committee charter, the Board of Directors has not failed to adopt a
recommendation of the Audit Committee to nominate or compensate an external
auditor.




- 40 - 

Reliance on Certain Exemptions 

The Corporation has not relied on
the exemptions contained in section 2.4 or Part 8 of NI 52-110 in the most
recently completed fiscal period. 

Pre-Approval Policies and Procedures 

The Audit Committee has not
adopted specific policies and procedures for the engagement of non-audit
services. The Audit Committee will review the engagement of non-audit services
as required.

External Auditors Service Fees (By Category) 

The aggregate fees billed and
accrued by the Corporation’s external auditor in the last two fiscal periods for
auditor service fees is as follows: 


	FINANCIAL 
PERIOD
      ENDING 	
AUDIT
      FEES(1) 	AUDIT 
RELATED
      FEES(2) 	
TAX FEES 	ALL 
OTHER
      FEES(3) 

	December 31, 2013
    	           $50,000 	$45,000 	$ -
    	$ -
    
	December 31, 2012
    	           $40,000 	$15,000 	$ -
    	$
      43,000 




	
    Notes: 
	  
	(1) 	
      Includes fees related to the fiscal year audit,
      notwithstanding when the fees and expenses were billed or when the
      services were rendered. 

	(2) 	
      For 2013, includes incremental audit procedures related
      to the purchase price allocation of Trillium and an interim review fee for
      Q3 2013. For 2012, included interim review fees for Q3 2012. 

	(3) 	
      For 2012, includes fees related to the filing of a
      prospectus supplement. 



CORPORATE GOVERNANCE DISCLOSURE 

Corporate governance relates to
the activities of the Board of Directors, the members of which are elected by
and accountable to the Shareholders, and accounts for the role of management who
are appointed by the Board of Directors and charged with the day to day
management of the Corporation. The Board of Directors and senior management
consider good corporate governance to be central to the effective and efficient
operation of the Corporation. National Instrument 58-101 Disclosure of
Corporate Governance Practices (“NI 58-101”) requires the Corporation
to disclose annually in its Circular certain information concerning its
corporate governance practices, as set forth below. 

Board of Directors 

The Board of Directors is
responsible for overseeing the management of the Corporation and for the conduct
of the Corporation’s affairs generally. Each director is elected annually by the
Shareholders and serves for a term that will end at the Corporation’s next
annual meeting. The Board of Directors elected in fiscal 2013 consisted of
seven members, six of whom were independent. Dr. James DeMesa, Mr. R.
Dean Peterson, Dr. Henry Friesen, Dr. Michael Moore, Mr. David Allan and Dr.
Calvin Stiller (Chair) were independent meaning that they are not in a
relationship which could reasonably interfere with the exercise of their
independent judgment. Dr. Niclas Stiernholm became the Corporation’s President
and CEO on April 9, 2013 and therefore became a non-independent director.
Subsequent to year-end, Mr. David Allan, Mr. Dean Peterson and Dr. James DeMesa
retired from the Board of Directors, and Dr. Robert Kirkman, Mr. Luke Beshar and
Dr. Thomas Reynolds were appointed to the Board of Directors. The three new
appointees are independent directors. 




- 41 - 

The Board of Directors
facilitates its exercise of independent supervision over the Corporation’s
management through a combination of formal meetings of the Board of Directors
and informal discussions amongst board members. The Corporate Governance and
Nominating Committee oversees all governance matters and looks to management of
the Corporation to keep it apprised of all significant developments affecting
the Corporation and its operations. All major acquisitions, dispositions,
investments and contracts and other significant matters outside the ordinary
course of the Corporation’s business are subject to approval by the Board of
Directors.

During the most recently
completed financial year ended December 31, 2013, the Board of Directors held
seven formal board meetings. The remaining decisions during the year were passed
by written resolution following informal discussions amongst the directors and
management.

The Board of Directors functions
independently as a majority of the members of the Board of Directors are not
involved in management. Also, when appropriate, the Board of Directors excuses
management from meetings and conducts business and makes decisions exclusive of
management. During 2013, five such in-camera sessions were held. In addition,
each Board of Directors committee is comprised of independent directors.

The responsibilities of the Chair
of the Board of Directors includes (i) providing leadership to enhance the
effectiveness and focus of the Board, (ii) calling and chairing meetings of the
Board of Directors ensuring that the Board of Directors meets on a regular
basis, at least quarterly, (iii) setting with the Chief Executive Officer the
agenda for each meeting, and (iv) ensuring that the Board of Directors receives
adequate and regular updates from Management on all matters necessary for the
Board of Directors to discharge its responsibilities. 

The Board of Directors does not
have a written mandate, however, the Board of Directors delineates its role and
responsibilities by overseeing the conduct of the business of the Corporation
and the activities of management who are responsible for the day-to-day conduct
of the business of the Corporation. The Board of Directors further operates by
delegating certain of its authorities to management and by reserving certain
powers to itself. The Board of Directors retains the responsibility of managing
its own affairs including selecting its Chairman, nominating candidates for
election to the Board, constituting committees of the full Board of Directors
and determining compensation for the directors. Subject to the Corporation’s
constating documents, the Board of Directors may constitute, seek the advice of
and delegate powers, duties and responsibilities to committees of the Board.
Each of the committees of the Board of Directors has a charter which sets out
the responsibilities of the committee and the role of the chair of each
committee.

Board and Committee Meetings Held for the Fiscal Year Ended
December 31, 2013 

	  	Number of Meetings 	 	Dates of Meetings 
	  	  	 	  
	Board of Directors 	7 	 	Mar 7, Apr 8, Apr 29, May 23, 
	  	  	 	Aug 27, Oct 7, Nov 15 
	 	 	 	 
	Audit Committee 	6 	 	Jan 16, Apr 29, May 23, Aug 27, 
	  	  	 	Oct 21, Nov 18 
	  	  	 	  
	Corporate Governance and 	1 	 	May 15 
	Nominating Committee 	  	 	  
	 	 	 	 
	Compensation Committee 	1 	 	May 15 
	  	  	 	  
	Total Number of Meetings Held 	15    	 	  







- 42 - 

Attendance of Directors for the Fiscal Year Ended December
31, 2013 


	Director 	Board 	Audit 	Corporate 	Compensation 
	  	Meetings 	Committee 	Governance 	Committee 
	  	Attended 	Meetings 	Committee 	Meetings 
	  	  	Attended(1,2) 	Meetings 	Attended(2) 
	  	  	  	Attended(2) 	  
	David Allan 	7 	- 	- 	1 
	James DeMesa 	7 	6 	- 	1 
	Henry Friesen 	7 	5 	1 	- 
	Robert Kirkman(4) 	- 	- 	- 	- 
	Michael Moore(3) 	4 	- 	1 	1 
	R. Dean Peterson 	6 	- 	- 	- 
	Niclas Stiernholm 	7 	1 	- 	- 
	Calvin Stiller 	7 	5 	1 	- 




	
      Notes: 
	  
	(1) 	Audit Committee attendance is determined based
      on membership of the Audit Committee during the year ended December 31,
      2013. 
	(2) 	Committee attendance results above are recorded
      only for committee members. If non-committee members attend a committee
      meeting, their attendance is not recorded above. 
	(3) 	Dr. Moore joined the Board of Directors on
      April 9, 2013. 
	(4) 	Dr. Kirkman joined the Board of Directors on
      December 17, 2013 and therefore did not attend any meetings in 2013.
  


Directorships 

Each of the directors of the
Corporation is also a director of other Reporting Issuers, as described below:



	               
               DIRECTOR 	                 
                         
                         
                 COMPANY 
	Dr. Robert Kirkman 	Oncothyreon Inc. 
	Dr.
      Thomas Reynolds 	MEI
      Pharma, Inc. 
	Dr.
      Calvin R. Stiller 	Magor
      Corporation 



Orientation and Continuing Education 

The Corporation does not
currently have a formal orientation or continuing education program for new
directors. New directors are provided with access to recent, publicly filed
documents of the Corporation, technical reports and internal financial
information and given copies of Board of Directors minutes and corporate
governance materials. Directors are encouraged to ask questions and communicate
with management, auditors and technical consultants to keep themselves current
with industry trends and developments and changes in legislation. 




- 43 - 

Ethical Business Conduct 

Ethical business behaviour is of
great importance to the Board of Directors and the management of the
Corporation. The Corporation has instituted policies on disclosure, insider
trading as well as a whistleblower policy for all staff and personnel to report
any fraudulent or illegal acts on an anonymous basis directly to the Audit
Committee chair. 

In addition, as some of the
directors of the Corporation also serve as directors and officers of other
companies engaged in similar activities, the Board of Directors must comply with
the conflict of interest provisions of the Business Corporations Act
(Ontario), as well as the relevant securities regulatory instruments, in order
to ensure that directors exercise independent judgment in considering
transactions and agreements in respect of which a director or officer has a
material interest. Any director would be required to declare the nature and
extent of his interest and would not be entitled to vote at meetings which
involve such conflict. 

The Board of Directors has also
adopted a Code of Business Conduct and Ethics (“Code”) intended to document the
principles of conduct and ethics to be followed by the Corporation’ employees,
officers and directors. A copy of the Corporation’s Code can be obtained under
the Corporation’s profile on www.sedar.com or by written request to the
Corporation’s Chief Financial Officer, at 96 Skyway Avenue, Toronto, Ontario,
M9W 4Y9. 

Nomination of Directors 

On April 8, 2013, the Board of
Directors formed a Corporate Governance and Nominating Committee of the Board of
Directors to perform the function of determining the need for and selecting
candidates for the Board of Directors. The primary duties and responsibilities
of the Corporate Governance and Nominating Committee are to review and make
recommendations to the Board of Directors in respect of the governance of the
Corporation, identify and recommend new candidates to the Board, and assess
directors on an on-going basis.

Compensation Committee 

On April 8, 2013, the Board of
Directors of the Corporation formed the Compensation Committee consisting of the
following independent directors: Dr. Michael Moore (Chair), Mr. Dean Peterson,
and Mr. David Allan. In March 2014, Dr. Kirkman and Dr. Thomas Reynolds joined
the Compensation Committee on the retirement of Mr. Allan and Mr. Peterson. 

The Compensation Committee is
charged with the responsibility for reviewing executive compensation policies
and guidelines for the Corporation, recommending to the Board of Directors
matters with respect to compensation structure, incentive compensation plans and
equity-based plans, and monitoring the administration of the Corporation’s
executive officer incentive and other compensation related plans. The
Corporation’s Board of Directors has adopted a written mandate for the Committee
that is available on the Corporation’s website. 

Relevant Education and Experience 

The following describes the
education and experience of each Compensation Committee member that is relevant
in the performance of his responsibilities as a Compensation Committee member:
Dr. Moore was most recently Chief Executive Officer and Director of PIramed Ltd,
a UK-based biotechnology company recently acquired by Roche. He is also
Associate Professor at the Brunel Institute Mr. Luke Beshar, and Dr. Robert
Kirkman, and Mr. Beshar became Chair of the Audit Committee on April 1, 2014.


Dr. Moore was most recently Chief Executive Officer and Director of PIramed Ltd, a UK-based
biotechnology company recently acquired by Roche. He is also Associate Professor at the Brunel Institute of Cancer Genetics and Pharmacogenomics, a post he has held since 1997. Prior to joining PIramed, he
held several progressive positions at Xenova Group plc (1988-2003), including Chief Scientific Officer
and Research Director. He also acted as Chairman for Phogen (2001-2003), a joint venture between
Xenova and Marie Curie Cancer Care.





- 44 - 

Dr. Thomas Reynolds served as
Chief Medical Officer of Seattle Genetics from March 2007 until his retirement
in February 2013. While at Seattle Genetics, he was responsible for building and
leading an integrated clinical development, regulatory and medical affairs
organization, highlighted by the development and approval of ADCETRIS®. From
2002 to 2007, Dr. Reynolds served at ZymoGenetics (acquired by Bristol-Myers
Squibb in 2010), most recently as Vice President, Medical Affairs, where he
oversaw the clinical development and regulatory filing of RECOTHROM®.
Previously, he was Vice President, Clinical Affairs at Targeted Genetics, and
before that he was at Somatix Therapy (acquired by Cell Genesys in 1997). Dr.
Reynolds received his M.D. and Ph.D. in Biophysics from Stanford University and
a B.A. in Chemistry from Dartmouth College. 

Dr. Kirkman’s qualifications are
discussed above under Audit Committee – Relevant Education and Experience. 

Other Committees 

The Corporation may establish
Special Committees from time to time to deal with specific matters.

For a description of the Audit
Committee see above under “Audit Committee and Relationship with Auditors” and
Schedule “A” hereto which contains a copy of the Audit Committee charter. 

Assessments 

The Board of Directors has
developed a formal questionnaire to be completed by each director on an annual
basis for the purpose of formally assessing the effectiveness of the Board of
Directors as a whole, committees of the Board, and the contribution of
individual directors. These questionnaires, and the issues arising therefrom,
are intended to be reviewed and assessed by the Chair on an annual basis or more
frequently from time to time as the need arises. The Chair takes appropriate
action as required based on the results obtained. 

ADDITIONAL INFORMATION 

Additional information relating
to the Corporation can be found on SEDAR at www.sedar.com. Financial information
is provided in the Corporation’s audited consolidated financial statements for
the year ended December 31, 2013 and the related Management’s Discussion and
Analysis (MD&A). Each of these documents is available on SEDAR at
www.sedar.com and are incorporated herein by reference. 

Copies of these consolidated
financial statements and MD&A may be obtained (in some cases upon payment of
a reasonable charge if the request is made by a person or company that is not a
securityholder of the Corporation) upon written request to James Parsons, CFO,
at: Stem Cell Therapeutics Corp., 96 Skyway Avenue, Toronto, Ontario, M9W 4Y9.





- 45 - 

DIRECTORS’ APPROVAL 

The contents and the sending of
this Circular have been approved by the directors. 

DATED the 22nd day of April, 2014. 




SCHEDULE “A” 
AUDIT COMMITTEE CHARTER

Policy Statement

It is the policy of Stem Cell Therapeutics Corp. (the
“Corporation”) to establish and maintain an Audit Committee, composed
entirely of independent directors, to assist the Board of Directors (the
“Board”) in carrying out its oversight responsibility for the
Corporation’s internal controls, financial reporting and risk management
processes. The Audit Committee will be provided with resources commensurate with
the duties and responsibilities assigned to it by the Board including
administrative support. If determined necessary by the Audit Committee, it will
have the discretion to institute investigations of improprieties, or suspected
improprieties within the scope of its responsibilities, including the standing
authority to retain special counsel or experts.

Composition of the Committee

	1. 	
      The Audit Committee shall consist of at least three
      directors. The Board shall appoint the members of the Audit Committee. The
      members of the Committee shall appoint one member of the Audit Committee
      to be the Chair of the Audit Committee.

	 	 
	2. 	
      Each director appointed to the Audit Committee by the
      Board shall be an independent director who is unrelated. An outside,
      unrelated director is a director who is independent of management and is
      free from any interest, any business or other relationship which could, or
      could reasonably be perceived, to materially interfere with the director’s
      ability to act with a view to the best interests of the Corporation, other
      than interests and relationships arising solely from shareholding. In
      determining whether a director is independent of management, the Board
      shall make reference to the then current legislation, rules, policies and
      instruments of applicable regulatory authorities.

	 	 
	3. 	
      Each member of the Audit Committee shall be “financially
      literate”. In order to be financially literate, a director must be, at a
      minimum, able to read and understand basic financial statements.

	 	 
	4. 	
      A director appointed by the Board to the Audit Committee
      shall be a member of the Audit Committee until replaced by the Board or
      until his or her resignation.

	 	 
	5. 	
      The Chief Executive Officer (the “CEO”) and
      Chairman of the Board shall be ex officio members of the Audit
      Committee.



Meetings of the Committee

	6. 	
      The Audit Committee shall convene a minimum of four times
      each year at such times and places as may be designated by the Chair of
      the Audit Committee and whenever a meeting is requested by the Board, a
      member of the Audit Committee, the auditors, or a senior officer of the
      Corporation. Meetings of the Audit Committee shall correspond with the
      review of the quarterly financial statements and management discussion and
      analysis.

	 	 
	7. 	
      The rules for calling, holding, conducting and adjourning
      meetings of the Audit Committee shall be the same as those governing
      meetings of the Directors as are set out in the Corporation’s
    By-laws.







- 2 -

	8. 	
      Notice of each meeting of the Audit Committee shall be
      given to each member of the Audit Committee, the Chairman of the Board and
      the CEO.

	 	 
	9. 	
      Notice of a meeting of the Audit Committee
  shall:




	 	(a) 	
      be in writing;

	 	 	 
	 	(b) 	
      state the nature of the business to be transacted at the
      meeting in reasonable detail;

	 	 	 
	 	(c) 	
      to the extent practicable, be accompanied by copies of
      documentation to be considered at the meeting; and

	 	 	 
	 	(d) 	
      be given at least two business days prior to the time
      stipulated for the meeting or such shorter period as the members of the
      Audit Committee may permit.




	10. 	
      A quorum for the transaction of business at a meeting of
      the Audit Committee shall consist of a majority of the members of the
      Audit Committee (excluding the Chairman of the Board and CEO). However, it
      shall be the practice of the Audit Committee to require review, and, if
      necessary, approval of certain important matters by all members of the
      Audit Committee.

	 	 
	11. 	
      A member or members of the Audit Committee may
      participate in a meeting of the Audit Committee by means of telephonic,
      electronic or other communication facilities, as such permits all persons
      participating in the meeting to communicate adequately with each other. A
      member participating in such a meeting by any such means is deemed to be
      present at the meeting.

	 	 
	12. 	
      In the absence of the Chair of the Audit Committee, the
      members of the Audit Committee shall choose one of the members present to
      be Chair of the meeting. In addition, the members of the Audit Committee
      shall choose one of the persons present to be the Secretary of the
      meeting.

	 	 
	13. 	
      The Chairman of the Board, senior management of the
      Corporation and other parties may attend meetings of the Audit Committee;
      however the Audit Committee (i) shall meet with the external auditors
      independent of management and (ii) may meet separately with or without
      management.

	 	 
	14. 	
      Minutes shall be kept of all meetings of the Audit
      Committee and shall be signed by the Chair and the Secretary of the
      meeting.



Duties and Responsibilities of the Committee

	15. 	
      The Audit Committee’s primary duties and responsibilities
      are to:




	 	(a) 	
      identify and monitor the management of the principal
      risks that could impact the financial reporting of the
  Corporation;

	 	 	 
	 	(b) 	
      monitor the integrity of the Corporation’s financial
      reporting process and system of internal controls regarding financial
      reporting and accounting compliance;

	 	 	 
	 	(c) 	
      monitor the independence and performance of the
      Corporation’s external auditors;

	 	 	 
	 	(d) 	
      deal directly with the external auditors to approve
      external audit plans, other services (if any) and fees;

	 	 	 
	 	(e) 	
      directly oversee the external audit process and
      results;







- 3 -

	 	(f) 	
      provide an avenue of communication among the external
      auditors, management and the Board;

	 	 	 
	 	(g) 	
      ensure that an effective “whistle blowing” procedure
      exists to permit stakeholders to express any concerns regarding accounting
      or financial matters to an appropriately independent individual;
  and

	 	 	 
	 	(h) 	
      ensure that an appropriate Code of Conduct is in place
      and understood by employees and directors of the
  Corporation.




	16. 	
      The Audit Committee shall have the authority
  to:




	 	(a) 	
      inspect any and all of the books and records of the
      Corporation, its subsidiaries and affiliates;

	 	 	 
	 	(b) 	
      discuss with the management of the Corporation, its
      subsidiaries and affiliates and senior staff of the Corporation, any
      affected party and the external auditors, such accounts, records and other
      matters as any member of the Audit Committee considers necessary and
      appropriate;

	 	 	 
	 	(c) 	
      engage independent counsel and other advisors as it
      determines necessary to carry out its duties; and

	 	 	 
	 	(d) 	
      set and pay the compensation for any advisors employed by
      the Audit Committee.




	17. 	
      The Audit Committee shall, at the earliest opportunity
      after each meeting, report to the Board the results of its activities and
      any reviews undertaken and make recommendations to the Board as deemed
      appropriate.

	 	 
	18. 	
      The Audit Committee shall:




	 	(a) 	
      review the audit plan with the Corporation’s external
      auditors and with management;

	 	 	 
	 	(b) 	
      discuss with management and the external auditors any
      proposed changes in major accounting policies or principles, the
      presentation and impact of significant risks and uncertainties and key
      estimates and judgments of management that may be material to financial
      reporting;

	 	 	 
	 	(c) 	
      review with management and with the external auditors
      significant financial reporting issues arising during the most recent
      fiscal period and the resolution or proposed resolution of such
    issues;

	 	 	 
	 	(d) 	
      review any problems experienced or concerns expressed by
      the external auditors in performing an audit, including any restrictions
      imposed by management or significant accounting issues on which there was
      a disagreement with management;

	 	 	 
	 	(e) 	
      review with senior management the process of identifying,
      monitoring and reporting the principal risks affecting financial
      reporting;







- 4 -

	 	(f) 	
      review audited annual financial statements and related
      documents in conjunction with the report of the external auditors and
      obtain an explanation from management of all significant variances between
      comparative reporting periods;

	 	 	 
	 	(g) 	
      consider and review with management, the internal control
      memorandum or management letter containing the recommendations of the
      external auditors and management’s response, if any, including an
      evaluation of the adequacy and effectiveness of the internal financial
      controls of the Corporation and subsequent follow up to any identified
      weaknesses;

	 	 	 
	 	(h) 	
      review with financial management and the external
      auditors the quarterly unaudited financial statements and management
      discussion and analysis before release to the public;

	 	 	 
	 	(i) 	
      before release, review and if appropriate, recommend for
      approval by the Board, all public disclosure documents containing audited
      or unaudited financial information, including any prospectuses, annual
      reports, annual information forms, management discussion and analysis and
      press releases; and

	 	 	 
	 	(j) 	
      oversee any of the financial affairs of the Corporation,
      its subsidiaries or affiliates, and, if deemed appropriate, make
      recommendations to the Board, external auditors or
  management.




	19. 	
      The Audit Committee shall:




	 	(a) 	
      evaluate the independence and performance of the external
      auditors and annually recommend to the Board the appointment of the
      external auditor or the discharge of the external auditor when
      circumstances are warranted;

	 	 	 
	 	(b) 	
      consider the recommendations of management in respect of
      the appointment of the external auditors;

	 	 	 
	 	(c) 	
      pre-approve all non-audit services to be provided to the
      Corporation or its subsidiary entities by its external auditors’, or the
      external auditors of the Corporation’s subsidiary entities;

	 	 	 
	 	(d) 	
      approve the engagement letter for non-audit services to
      be provided by the external auditors or affiliates, together with
      estimated fees, and considering the potential impact of such services on
      the independence of the external auditors;

	 	 	 
	 	(e) 	
      when there is to be a change of external auditors, review
      all issues and provide documentation related to the change, including the
      information to be included in the Notice of Change of Auditors and
      documentation required pursuant to National Policy 31 (or any successor
      legislation) of the Canadian Securities Administrators and the planned
      steps for an orderly transition period; and

	 	 	 
	 	(f) 	
      review all reportable events, including disagreements,
      unresolved issues and consultations, as defined by applicable securities
      policies, on a routine basis, whether or not there is to be a change of
      external auditors.




	20. 	
      The Audit Committee shall:







- 5 - 

	 	(a) 	
      review with management at least annually, the financing
      strategy and plans of the Corporation; and

	 	 	 
	 	(b) 	
      review all securities offering documents (including
      documents incorporated therein by reference) of the
  Corporation.




	21. 	
      The Audit Committee shall review the amount and terms of
      any insurance to be obtained or maintained by the Corporation with respect
      to risks inherent in its operations and potential liabilities incurred by
      the directors or officers in the discharge of their duties and
      responsibilities.

	 	 
	22. 	
      The Audit Committee shall review the appointments of the
      Chief Financial Officer and any key financial managers who are involved in
      the financial reporting process.

	 	 
	23. 	
      The Audit Committee shall enquire into and determine the
      appropriate resolution of any conflict of interest in respect of audit or
      financial matters, which are directed to the Audit Committee by any member
      of the Board, a Shareholder of the Corporation, the external auditors, or
      senior management.

	 	 
	24. 	
      The Audit Committee shall periodically review with
      management the need for an internal audit function.

	 	 
	25. 	
      The Audit Committee shall establish and maintain
      procedures for:




	 	(a) 	
      the receipt, retention and treatment of complaints
      received by the Corporation regarding accounting controls, or auditing
      matters; and

	 	 	 
	 	(b) 	
      the confidential, anonymous submission by employees of
      the Corporation on concerns regarding questionable accounting or auditing
      matters.




	26. 	
      The Audit Committee shall review and approve the
      Corporation’s hiring policies regarding employees and former employees of
      the present and former external auditors or auditing matters.

	 	 
	27. 	
      The Audit Committee shall review with the Corporation’s
      legal counsel as required but at least annually, any legal matter that
      could have a significant impact on the Corporation’s financial statements,
      and any enquiries received from regulators, or government
  agencies.

	 	 
	28. 	
      The Audit Committee shall assess, on an annual basis, the
      adequacy of this mandate and the performance of the Audit
  Committee.

	 	 
	29. 	
      In contributing to the Audit Committee’s discharging of
      its duties under this mandate, each member of the Audit Committee shall be
      entitled to rely in good faith upon:



	 	 	
       
	 	(a)	
      accounting information of the Corporation represented to him or her by an
      officer of the Corporation or in a written report of the auditors, and
	 	 	 
	 	(b)	
      any report of a lawyer, accountant, engineer, appraiser or other person
      whose profession lends credibility to a statement made by any such
      persons.






- 6 -

	30.	
      In contributing to the Audit Committee’s discharging of
      its duties under this mandate, each member of the Audit Committee shall be
      obliged only to exercise the care, diligence and skill that a reasonably
      prudent person would exercise in comparable circumstances. Nothing in this
      mandate is intended, or may be construed, to impose on any member of the
      Audit Committee a standard of care or diligence that is in any way more
      onerous or extensive than the standard to which all Board members are
      subject. The essence of the Audit Committee’s duties is the monitoring and
      reviewing to gain reasonable assurance (but not to ensure) that the
      Corporation’s business activities are being conducted effectively, that
      the financial reporting objectives are being met and to enable the Audit
      Committee to report thereon to the Board. 







SCHEDULE “B” 
2014 STOCK OPTION PLAN

 

 

 




STEM CELL THERAPEUTICS CORP. 

STOCK OPTION PLAN

July 18, 2012 

Amended and Restated on
  

[•], 2014

	1. 	
      Definitions



Unless otherwise defined herein
or the context otherwise requires, capitalized terms used have the meaning
ascribed to them in the TSX VentureToronto Stock
Exchange (“TSXV”) Policy
4.4.TSX”) Company Manual.

	2. 	
      Purpose of Plan



The purpose of the Stem Cell
Therapeutics Corp. (the “Corporation”) Stock Option Plan (the
“Plan”) is to assist the Corporation in attracting, retaining and
motivating directors, officers, consultantsservice providers (the term
“service provider” having the definition ascribed thereto in the TSX Company
Manual) and employees of the Corporation and its subsidiaries and to closely
align the personal interests of such directors, officers, employees and
consultantsservice providers with those of the
shareholders of the Corporation by providing them with the opportunity, through
options (“Options”), to acquire common shares (“Common Shares”) in
the capital of the Corporation.

	3. 	
      Administration



The Plan shall be administered by
the Board of Directors of the Corporation which shall have full and final
authority and discretion, subject to the express provisions of the Plan, to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it and to make all other determinations deemed necessary or
advisable for the administration of the Plan, subject to the rules and policies
of any exchange or quotation system upon which the Corporation’s Common Shares
are listed or quoted including the TSX-V. The Board of
Directors may delegate any or all of its authority and discretion with respect
to the administration of the Plan to a compensation committee of directors. When
used hereafter in the Plan, “Board of Directors” shall be deemed to
include the compensation committee acting on behalf of the Board of
Directors.

	4. 	
      Number of Shares Under
Plan



The number of authorized but
unissued Common Shares that may be issued upon the exercise of
optionsOptions granted under the Plan at any time, plus
the number of Common Shares reserved for issuance under outstanding
optionsOptions otherwise granted by the Corporation
(collectively, the “Optioned Shares”) shall not exceed ten percent of the
combined total of the issued and outstanding Common Shares on a
non-diluted basis at any timeand the number of Common Shares
issuable upon due exercise of the issued and outstanding Preferred Shares,
and the number of Optioned Shares reserved for issuance under the Plan shall
increase or decrease as the number of issued and outstanding Common Shares and
Preferred Shares changes. Any exercise of optionsOptions
will make new grants available under the Plan. However, the following
additional restrictions apply:




- 2 -

	 	(a) 	
      in no event shall optionsOptions 
      be granted to an individual to purchase in excess of five percent of
      the total of the number of then issued and outstanding Common Shares
      and the number of Common Shares issuable upon due conversion of the issued
      and outstanding Preferred Shares of the Corporation in any 12 month
      period;

	 	 	 
	 	(b) 	
      no more than two percent of the issued Common
      Shares of the Corporation may be granted to any one Consultant in any 12
      month period;the aggregate number of Common Shares issuable
      (or reserved for issuance) to Insider Participants under the Plan (such
      that “Insider Participant” shall mean any Participant
      (as defined in Section 5 below) that is an Insider as defined in Section
      613 of the TSX Company Manual) or any other security-based compensation
      arrangement of the Corporation and its affiliates (including, without
      limitation, the Corporation’s Deferred Share Unit Plan, which together
      with this Plan shall be referred to as “Security-Based
      Compensation Arrangements”), may not at any time exceed 10% of
      the total combined issued and outstanding Common Shares and the number of
      Common Shares issuable upon due conversion of the issued and outstanding
      Preferred Shares;

	 	 	 
	 	(c) 	
      in no event shall (i) the number of Common Shares
      reserved for issuance under stock options granted to Insiders; or
      (ii) options be granted to Insiders, in either case, that permit the
      purchase of in excess of ten percent of the then outstanding shares in any
      12 month period;

	 	 	 
	 	(c) 	
      (d) no more than an aggregate of two percent of
      the issued Common Shares of the Corporation may be granted to persons
      employed to conduct Investor Relations Activities, in any 12 month period;
      andthe aggregate number of Common Shares issued to Insider
      Participants under the Plan or any other Security-Based Compensation
      Arrangement of the Company within a one-year period, may not exceed 10% of
      the total combined number of issued and outstanding Common Shares and the
      number of Common Shares issuable upon due conversion of the issued and
      outstanding Preferred Shares; and

	 	 	 
	 	(d) 	
      (e) if optionsOptions granted to
      an individual under the Plan in respect of certain Optioned Shares expire
      or terminate for any reason with or without having been exercised, such
      Optioned Shares may be made available for other
      optionsOptions to be granted under the
  Plan.




	5. 	
      Eligibility



Options may be granted under the
Plan to such directors, officers, employees of, or
consultantsservice providers to, the Corporation or its
subsidiaries as the Board of Directors may from time to time designate as
participants (the “Participants”) under the Plan. Subject to the
provisions of the Plan, the total number of Optioned Shares to be made available
under the Plan and to each Participant, the time or times and price or prices at
which optionsOptions shall be granted, the time or times
at which such optionsOptions are exercisable and any
conditions or restrictions on the exercise of optionsOptions
shall be in the full and final discretion of the Board of Directors.




- 3 -

Notwithstanding the expiration
date applicable to any Option, if an Option would otherwise expire during or
immediately after a Black-out Period, then the expiration date of such Option
shall be the tenth business day following the expiration of the Black-out
Period, provided that in no event shall the period during which said Option is
exercisable be extended beyond 10 years from the date such Option is granted to
the Participant. Where used herein, “Black-out Period” means the period
during which the Corporation has imposed trading restrictions on its Insiders
and certain other persons pursuant to its insider trading and disclosure
policies.

	6. 	
      Terms and Conditions



All
optionsOptions under the Plan shall be granted upon and
subject to the terms and conditions hereinafter set forth.

	 	(a) 	
      Exercise Price



      The exercise price to each Participant
        forpayable in respect of each Optioned Share
        shallmay not be lower than the Discounted Marked
          Price at the time of the grant as determined by the Board of Directors
          calculated using the closing marketvolume weighted average trading          price of the Common Shares of the Corporation on the TSX-V on the
              trading day immediately prior to the grant of the option (or, if no trades
              occurred on such day, then on the next previous day on which trading took place)
              less the maximum discount, if any permitted by the TSX-V or other applicable
              exchange, and further provided that disinterested shareholder approval will be
              obtained for any reduction in the exercise price if the
                participant is an Insider of the Corporation at the time of the proposed
                amendmenton the TSX over a period of five days preceding the date of
                  grant.

	 	(b) 	
      Option Agreement



     All optionsOptions granted under the
        Plan shall be evidenced by means of an agreement (the “Option Agreement”)
        between the Corporation and each Participant in a form as may be approved by the
        Board of Directors, such approval to be conclusively evidenced by the execution
        of the Option Agreement by any senior officer or director of the
        Corporation other than the Participant. The Corporation shall represent in each
        Option Agreement that the Participant is a bona fide director, officer, or
        employee of, or consultantservice provider to, the
        Corporation.

	 	(c) 	
      Length of Grant and Vesting



      All optionsEach Option granted under
        the Plan shall expire not later than the 10th anniversary of the date such
        options wereOption was granted and may be exercised by
        the Participant assubject to such varying
        percentages, on a cumulative basisvesting (if any),
        during the termsterm thereof as the Board of Directors
        shall determine (“Option Period”).




- 4 -

	 	(d) 	
      Non-Assignability of Options

	 	 	 
	 		
      An optionOption granted under the
      Plan shall not be transferable or assignable (whether absolutely or by way
      of mortgage, pledge or other charge) by a Participant other than to a
      Participant’s Registered Retirement Savings Plan or wholly-owned
      corporation or by will or other testamentary instrument or the laws of
      succession and may be exercisable during the lifetime of the Participant
      only by such Participant.

	 	 	 
	 	(e) 	
      Right to Postpone Exercise

	 	 	 
	 		
      Each Participant, upon becoming entitled to exercise an
      optionOption in respect of any Optioned Shares in
      accordance with an Option Agreement, shall thereafter be entitled to
      exercise the optionOption to purchase such
      Optioned Shares at any time prior to the expiration or other termination
      of the Option Agreement or the optionOption rights
      granted thereunder in accordance with such agreement.

	 	 	 
	 	(f) 	
      Exercise and Payment

	 	 	 
	 		
      Any optionOption granted under
      the Plan may be exercised by a Participant or the legal representative of
      a Participant by giving notice to the Corporation specifying the number of
      Common Shares in respect of which such optionOption
      is being exercised, accompanied by payment (by cash or certified
      cheque payable to the Corporation) of the entire exercise price
      (determined in accordance with the Option Agreement) for the number of
      Common Shares specified in the notice. Upon any such exercise of an
      optionOption by a Participant, the Corporation
      shall promptly deliver to such Participant or the legal representative of
      such Participant, as the case may be, a share certificate in the name of
      such Participant or the legal representative of such Participant, as the
      case may be, representing the number of Common Shares specified in the
      notice.

	 	 	 
	 		
      If the Corporation is required under the Income Tax
      Act (Canada) or any other applicable law to remit to any governmental
      authority an amount on account of tax on the value of any taxable benefit
      associated with the exercise or disposition of Options by a Participant,
      then the Participant shall, concurrently with the exercise or
      disposition:




	 	(i) 	
      pay to the Corporation, in addition to the exercise price
      for the Options, if applicable, sufficient cash as is determined by the
      Corporation to be the amount necessary to fund the required tax
      remittance;

	 	 	 
	 	(ii) 	
      where the Corporation so agrees, authorize the
      Corporation, on behalf of the Participant, to sell in the market on such
      terms and at such time or times as the Corporation determines such portion
      of the Common Shares being issued upon exercise of the Options as is required to realize
cash proceeds in the amount necessary to fund the required tax remittance;
or







- 5 -

	 	(iii) 	
      make other arrangements acceptable to the Corporation to
      fund the required tax remittance.




	 	(g) 	
      Rights of Participants

	 	 	 
	 		
      The Participants shall have no rights whatsoever as
      shareholders in respect of any of the Optioned Shares (including, without
      limitation, any right to receive dividends or other distributions
      therefrom, voting rights, warrants or rights under any rights offering)
      other than in respect of Optioned Shares for which Participants have
      exercised their optionOption to purchase and which
      have been issued by the Corporation.

	 	 	 
	 	(h) 	
      Change of Control

	 	 	 
	 		
      In the event of an amalgamation, arrangement or
      other form of business combination of the Corporation with another
      corporation or other entity which results in the holders of voting
      securities of that other corporation or entity holding, in the aggregate,
      voting securities having attached thereto a number of votes which
      constitutes, in the aggregate, more than 50% of the aggregate votes
      attaching to all outstanding voting securities of the Corporation or
      entity resulting from the business combination (a
      “Change of Control”) all issued
      options become exercisable immediately. In the event of a Change of
      Control transaction which results in the Corporation being acquired
      outright by another entity, the Corporation may, at its option, require
      the acceleration of the time for the exercise of the option rights granted
      under the Plan and the time for fulfilment of any conditions or
      restrictions on such exercise.

	 	 	 
	 		
      Any Options outstanding immediately prior to the
      occurrence of a Change in Control, but which are not then exercisable,
      shall immediately vest and become fully exercisable upon the occurrence of
      a Change in Control. The term “Change of Control”
      shall mean any one or a combination of:




	 	(i) 	
      Third Party Offerany transaction at
      any time and by whatever means pursuant to which (A) the Corporation goes
      out of existence by any means, except for any corporate transaction or
      reorganization in which the proportionate voting power among holders of
      securities of the entity resulting from such corporate transaction or
      reorganization is substantially the same as the proportionate voting power
      of such holders of Corporation voting securities immediately prior to such
      corporate transaction or reorganization or (B) any Person or any group of
      two or more Persons acting jointly or in concert (other than the
      Corporation, a wholly-owned Subsidiary (as defined in the
      Securities Act (Ontario)) of the Corporation, an
      employee benefit plan of the Corporation or of any of its wholly-owned
      Subsidiaries, including the trustee of any such plan acting as
      trustee) hereafter acquires the direct or indirect “beneficial
ownership” (as defined by the Business Corporations Act (Ontario)) of, or acquires the right to exercise control or direction
over, securities of the Corporation representing 50% or more of the
Corporation’s then issued and outstanding securities in any manner whatsoever,
including, without limitation, as a result of a take-over bid, an exchange of
securities, an amalgamation of the Corporation with any other entity, an
arrangement, a capital reorganization or any other business combination or
reorganization;







- 6 -

If at any time when an option
granted under the Plan remains unexercised with respect to any Optioned Shares,
an offer to purchase all of the Common Shares of the Corporation is made by a
third party, the Corporation shall use its best efforts to bring such offer to
the attention of the Participants as soon as practicable and the Corporation
may, at its option, require the acceleration of the time for the exercise of the
option rights granted under the Plan and of the time for the fulfilment of any
conditions or restrictions on such exercise.

	 	(ii) 	
      the sale, assignment or other transfer of all or
      substantially all of the assets of the Corporation to a Person other than
      a wholly-owned Subsidiary of the Corporation;

	 	 	 
	 	(iii) 	
      the dissolution or liquidation of the Corporation
      except in connection with the distribution of assets of the Corporation to
      one or more Persons which were wholly-owned Subsidiaries of the
      Corporation immediately prior to such event;

	 	 	 
	 	(iv) 	
      the occurrence of a transaction requiring approval of
      the Corporation’s shareholders whereby the Corporation is acquired through
      consolidation, merger, exchange of securities, purchase of assets,
      amalgamation, arrangement or otherwise by any other Person (other than a
      short form amalgamation or exchange of securities with a wholly-owned
      Subsidiary of the Corporation); or

	 	 	 
	 	(v) 	
      the Board passes a resolution to the effect that, for
      the purposes of some or all of the Option Agreements, an event set forth
      in (i), (ii), (iii) or (iv) above has
occurred.




	 	(i) 	
      (j) Alterations in Shares

	 	 	 
	 		
      In the event of a share dividend, share split, issuance
      of Common Shares or instruments convertible into Common Shares (other than
      pursuant to the Plan) for less than market value, share consolidation,
      share reclassification, exchange of Common Shares, recapitalization,
      amalgamation, merger, consolidation, corporate continuance,
      reorganization, liquidation or the like of or by the Corporation, the
      Board of Directors may make such adjustment, if any, of the number of
      Optioned Shares, or of the exercise price, or both, as it shall deem
      appropriate to give proper effect to such event, including to prevent, to
      the extent possible, substantial dilution or enlargement of rights granted to Participants under the
Plan. In any such event, the maximum number of Common Shares available under the
Plan may be appropriately adjusted by the Board of Directors. If because of a
proposed merger, amalgamation or other corporate continuance or reorganization,
the exchange or replacement of Common Shares in the Corporation for those in
another corporation is imminent, the Board of Directors may, in a fair and
equitable manner, determine the manner in which all unexercised
        optionOption rights granted under the Plan shall be
treated including, for example, requiring the acceleration of the time for the
exercise of such rights by the Participants and of the time for the fulfilment
of any conditions or restrictions on such exercise. All determinations of the
Board of Directors under this paragraph (j) shall be full and final,







- 7 -

	 	(j) 	
      (k) Termination for Cause

	 	 	 
	 		
      If a Participant is dismissed as a director, officer or
      employee of, or consultantservice provider to, the
      Corporation or one of its subsidiaries for cause, all unexercised
      optionOption rights of that Participant under the
      Plan shall immediately become terminated and shall lapse notwithstanding
      the original term of the optionOption granted to
      such Participant under the Plan.

	 	 	 
	 	(k) 	
      (l) Retirement, Resignation or Termination

	 	 	 
	 		
      Subject to earlier termination pursuant to Section 6(k)
      above, if a Participant ceases to be a director, officer or employee of,
      or consultantservice provider to, the Corporation
      or of one of its subsidiaries as a result of:




	 	(i) 	
      retirement at the normal retirement age prescribed by the
      Corporation pension plan, if any;

	 	 	 
	 	(ii) 	
      resignation; or

	 	 	 
	 	(iii) 	
      termination;



such Participant shall have the right
for a period of 90 days (or such other longer period as may be
determined by the Board of Directors in its sole discretion)120 days
from the date of ceasing to be a director, officer, employee or
consultantservice provider to exercise the
optionOption under the Plan with respect to all Optioned
Shares of such Participant to the extent they were exercisable on the date of
ceasing to hold any such position with the Corporation, or until the normal
expiry date of the optionOption rights of such
Participant, whichever is earlier. Upon the expiration of such period, all
unexercised optionOption rights of that Participant
shall immediately become terminated and shall lapse notwithstanding the original
term of the optionOption granted to such Participant
under the Plan.

	 	(l) 	
      (m) Disabled Participant

	 	 	 
	 		
      If a Participant ceases to be a director, officer or
      employee of, or consultantservice provider to, the
      Corporation or of one of its subsidiaries as a result of disability
    or illness preventing the Participant from performing the duties
routinely performed by such Participant, such Participant shall have the right
for a period of 180 days (or until the normal expiry date of the
      optionOption rights of such Participant if earlier) from
the date of ceasing to be a director, officer, employee or ConsultantService provider to exercise the optionOption under the Plan with respect to all Optioned
Shares of such Participant to the extent they were exercisable on the date of
ceasing to hold any such position. Upon the expiration of such 180 day period
all unexercised optionOption rights of that Participant
shall immediately become terminated and shall lapse notwithstanding the original
term of the option granted to such Participant under the
Plan.







- 8 -

	 	(n) 	
      Participant engaged in Investor Relations ActivitiesIf a
      Participant who engaged in Investor Relations Activities for the
      Corporation is terminated without cause or ceases to be employed by reason
      of retirement, resignation or disability or illness, such Participant
      shall have the right for a period of 30 days (or until the normal expiry
      date of the option rights of such Participant if earlier) from the date of
      ceasing to be engaged in Investor Relations Activities with the
      Corporation to exercise the option under the Plan with respect to all
      Optioned Shares of such Participant to the extent they were exercisable on
      the date of ceasing to hold any such position with the Corporation. Upon
      the expiration of such 30 day period, all unexercised option rights of
      that Participant shall immediately become terminated and shall lapse
      notwithstanding the original term of the optionOption
      granted to such Participant under the Plan.

	 	 	 
	 	(m) 	
      (o) Deceased Participant

	 	 	 
	 		
      In the event of the death of any Participant, the legal
      representatives of the deceased Participant shall have the right for a
      period of one year (or until the normal expiry date of the
      optionOption rights of such Participant if
      earlier) from the date of death of the Participant to exercise the
      deceased Participant’s optionOption with respect
      to all of the Optioned Shares of the deceased Participant to the extent
      they were exercisable on the date of death. Upon the expiration of such
      period all unexercised optionOption rights of the
      deceased Participant shall immediately become terminated and shall lapse
      notwithstanding the original term of the optionOption
      granted to the deceased Participant under the
Plan.




	7. 	
      Amendment and Discontinuance of
  Plan



The Board of Directors may from time to time amend or
revise the terms of the Plan or may discontinue the Plan at any time, provided
that no such action may in any manner adversely affect the rights under any
options earlier granted to a Participant under the Plan without the consent of
that Participant.has the discretion to make amendments to this Plan
and any Options granted hereunder which it may deem necessary, without having to
obtain shareholder approval. Such changes include, without limitation:

	 	(i) 	
      minor changes of a “housekeeping”
  nature;







- 9 -

	 	(ii) 	
      amending Options under the Plan, including with
      respect to the Option Period (provided that the period during which an
      Option is exercisable does not exceed ten years from the date the Option
      is granted and that such Option is not held by an Insider Participant),
      vesting period, exercise method and frequency, exercise price of an Option
      (provided that such Option is not held by an Insider Participant) and
      method of determining the exercise price, assignability and effect of
      termination of a Participant’s employment or cessation of the
      Participant’s directorship;

	 	 	 
	 	(iii) 	
      changing the class of Participants eligible to
      participate under the Plan;

	 	 	 
	 	(iv) 	
      changing the terms and conditions of any financial
      assistance which may be provided by the Company to Participants to
      facilitate the purchase of Common Shares under the Plan; and

	 	 	 
	 	(v) 	
      adding a cashless exercise feature, payable in cash or
      securities, whether or not providing for a full deduction of the number of
      underlying Common Shares from the Plan
reserve.



Shareholder approval will be required in the case of: (i)
any amendment to the amendment provisions of the Plan; (ii) any increase in the
maximum number of Common Shares issuable under the Plan; and (iii) any
reduction in the exercise price or extension of the Option Period benefiting
an Insider Participant, in addition to such other matters that may require
shareholder approval under the rules and policies of the TSX.

	8. 	
      No Further Right



Nothing contained in the Plan nor in any
optionOption granted hereunder shall give any
Participant or any other person any interest or title in or to any Common Shares
of the Corporation or any rights as a shareholder of the Corporation or any
other legal or equitable right against the Corporation whatsoever other than as
set forth in the Plan and pursuant to the exercise of any
optionOption, nor shall it confer upon the Participants
any right to continue as an officer or employee of the Corporation or of its
subsidiaries.

	9. 	
      Compliance with Laws



The obligations of the Corporation to sell Common Shares and
deliver share certificates under the Plan are subject to such compliance by the
Corporation and the Participants with all applicable corporate and securities
laws as the Corporation deems necessary or advisable.




SCHEDULE “C” 
2014 DSU PLAN

 

 

 





	STEM CELL THERAPEUTICS CORP. 
	(the "Company") 
	  
	DEFERRED SHARE UNIT PLAN 
	FOR DIRECTORS AND EXECUTIVE OFFICERS 
	Amended and Restated on [•],
      2014 
	  
	  
	PART l - GENERAL PROVISIONS 


Purpose

1.1      1.1           The purpose of this Plan is to provide an
alternative form of compensation to satisfy annual and special bonuses payable
to Directors and Executive Officers and to satisfy fees that may be payable to
Directors for acting as directors of the Company. This form of compensation
promotes a greater alignment of interests amongst Directors and Executive
Officers and the Company's shareholders.

Definitions

1.2      1.2           In this Plan,

Annual Board Retainer means the annual retainer paid by
the Company to a Director, but does not include Chair Fees, Committee Fees and
Meeting Fees.

Applicable Withholding Tax has the meaning set forth in
Section 3.4; 

Awarded Amount has the meaning set forth in Section 2.1;


Board means the Board of Directors of the Company; 

Chair means the chair of the Board;

Chair Fees means the fees or retainers, other than
Meeting Fees, the Annual Board Retainer and Committee Fees, paid by the Company
to a Director for service as the Chair and as chairperson of a committee of the
Board; 

Committee means the Compensation Committee of the Board,
or any other persons designated by the Board to perform the duties contemplated
herein; 

Committee Fees means the fees or retainers, other than
Meeting Fees, the Annual Board Retainer and Chair Fees, paid by the Company to a
Director for service on a committee of the Board; 

Company means Stem Cell Therapeutics Corp.; 

Deferred Share Unit means a right granted by the Company
to an Eligible Person to receive, on a deferred payment basis, a Share or the
Fair Market Value thereof, or a combination thereof on the terms contained in
this Plan; 

Director means any Director of the Company, or a
subsidiary of the Company, appointed and approved by the Board or the
shareholders;




2

Eligible Person means any person who is a Director or
Executive Officer;

Executive Officer means the Chief Executive Officer,
President, Chief Financial Officer and any senior officer of the Company, or any
subsidiary of the Company or any persons acting in any such capacity on behalf
of the Company or subsidiary of the Company; 

Fair Market Value means the five-day volume weighted
average trading price as calculated, being the VWAP (as the term VWAP is
defined in accordance with the TSXV Policiesthe TSX
Company Manual), as at, and including, the relevant determination date or
such other applicable date referenced herein provided that such date is a
business day and if it is not then calculated as at and including the last
business day which proceededpreceded such applicable
date referenced herein, except that if the Shares are not listed on the
TSXVTSX, the Fair Market Value will be the value
established by the Board based on the five-day average closing price per Share
on any other public exchange on which the Shares are listed calculated as at,
and including, the relevant determination date or such other applicable date
referenced herein provided that such date is a business day and if it is not
then calculated as at and including the last business day which proceeded such
applicable date referenced herein, or if the Shares are not listed on any public
exchange, by the Board based on its determination of the fair value of a Share;


Director Fees means the aggregate total of the Annual
Board Retainer, Chair Fees, Committee Fees, Meeting Fees and any other fees
payable to a Director; 

Insider means an “insider” as defined in
the TSXV PoliciesSection 613 of the TSX Company Manual;


Meeting Fees means the fees or retainers, other than the
Annual Board Retainer, Chair Fees, and Committee Fees, paid by the Company to a
Director for attending meetings of the Board or any committee of the Board; 

Option means the right to purchase Shares granted
pursuant to the Company's stock option plan approved by the Board, as may be
amended from time to time in accordance with its terms, or any successor plan
accepted for filing by the TSXVTSX; 

Outstanding Issue means the combined total number of
Shares outstanding on a non-diluted basisand the number of
Shares issuable upon conversion of the issued and outstanding First Preferred
Shares of the Company in accordance with their terms; 

Plan means this Deferred Share Unit Plan, as amended
from time to time; 

Reserved for Issuance refers to Shares that may be
issued in the future upon the exercise of Options granted under the Company’s
stock option plan, Deferred Share Units which have been or are granted pursuant
to this Plan or pursuant to any other Share Compensation Arrangements; 

Section 409A means Section 409A of the United States
Internal Revenue Code of 1986, as amended, and any applicable United States
Treasury Regulations and other binding regulatory guidance thereunder; 

Separation from Service of a US Taxpayer means the date
the US Taxpayer incurs a separation from service with the Company within the
meaning of U.S. Treas. Regs. § 1.409A -1(h);




3

Service Provider means a person who is a bona fide
director, officer, employee or consultant of the Company or its affiliates, and
also includes a company, of which 100% of the share capital is beneficially
owned by one or more such persons; 

Share means a common share in the capital of the
Company; 

Share Compensation Arrangement means the Plan described
herein and any other stock option, stock option plan, employee stock purchase
plan or any other compensation or incentive mechanism involving the issuance or
potential issuance of shares to one or more Eligible Persons, including a share
purchase from treasury which is financially assisted by the Company by way of a
loan, guaranty or otherwise; 

Specified Employee means a US Taxpayer who meets the
definition of “specified employee,” as defined in Section 409A(a)(2)(B)(i) of
the Code; 

Terminated Service means that the Eligible Person has
ceased to be a Director or Executive Officer, other than as a result of death;


Total Compensation for a particular Eligible Person
means the aggregate of:

	 	(a) 	
      the discretionary annual bonus determined by the Board
      for which Directors or Executive Officers are eligible, and

	 	 	 
	 	(b) 	
      a bonus, that is not an annual bonus, that may be awarded
      to a Director or Executive Officer at the discretion of the Board;
    and

	 	 	 
	 	(c) 	
      Director Fees.



TSXVTSX means the
TSX VentureToronto Stock Exchange;

US Taxpayer means an Eligible Person whose compensation
from the Company is subject to Section 409A.

Effective Date

1.3      1.3           Subject to the acceptance by the
TSXVTSX, this Plan will be effective immediately upon

the approval of the shareholders of the Company at the Company’s Annual and
Special Meeting to be held October 17, 2013.[•],
2014.

Administration

1.4      1.4           The Board will, in its sole and absolute
discretion, but taking into account relevant corporate, securities and tax
laws,

	 	(a) 	
      (a)      interpret and administer this Plan,

	 	 	 
	 	(b) 	
      (b)      establish, amend and rescind any rules and
      regulations relating to this Plan, and

	 	 	 
	 	(c) 	
      (c)      make any other determinations that the Board deems
      necessary or desirable for the administration of this
  Plan.







4

The Board may correct any defect or any omission or reconcile
any inconsistency in this Plan in the manner and to the extent the Board deems,
in its sole and absolute discretion, necessary or desirable. Any decision of the
Board in the interpretation and administration of this Plan will be final,
conclusive and binding on all parties concerned. All expenses of administration
of this Plan will be borne by the Company.

Delegation

1.5      1.5           The Board may, to the extent permitted by law,
delegate any of its responsibilities under this Plan and powers related thereto
(including, without limiting the generality of the foregoing, those referred to
under Section 1.4) to the Committee or to one or more officers of the Company
and all actions taken and decisions made by the Committee or by such officers in
this regard will be final, conclusive and binding on all parties concerned,
including, but not limited to, the Company, the Eligible Person, and their legal
representatives.

PART 2 - AWARDS UNDER THIS PLAN

Determination of Deferred Share Units

2.1      2.1           The Board will, in its sole and absolute
discretion, decide at the time of declaring or awarding any Total Compensation
to any Eligible Person the amount (the "Awarded Amount") of the Total
Compensation that will be satisfied in the form of Deferred Share Units.

Issue of Deferred Share Units

2.2      2.2           The number of Deferred Share Units (including
fractional Deferred Share Units, computed to three digits) to be credited to an
Eligible Person for services will be determined by dividing the Awarded Amount
by the Fair Market Value as at the last trading day before the date the Awarded
Amount is declared by the Board.

Maximum Shares Reserved

2.3      2.3           Subject to adjustment as provided for herein,
the maximum aggregate number of Shares that may be Reserved for Issuance
pursuant to this Plan is 2,000,000 Shares (subject to adjustment as provided
for herein).

2.4      2.4           In no event may the number of Shares that are
Reserved for Issuance to any one person pursuant to Deferred Share Units and
Options exceed 5% of the Outstanding Issue.

2.5      2.5           The maximum aggregate number of Shares that,
under all Share Compensation Arrangements,

	 	(a) 	
      (a)      may be Reserved for Issuance to Insiders of the
      Company, may not exceed 10% of the Outstanding Issue at any time,
    and

	 	 	 
	 	(b) 	
      (b)      may be issued to Insiders within a one-year period,
      may not exceed 10% of the Outstanding Issue.







5

2.6      2.6           For the purposes of Section 2.5, Shares issuable
to an Insider pursuant to a Deferred Share Unit or other entitlement that was
granted before the person became an Insider will be excluded in determining the
number of Shares issuable to Insiders.

Shares Not Acquired

2.7      2.7           Any Shares not acquired under a Deferred Share
Unit granted under the Plan which has expired or been cancelled or terminated
may be made the subject of a further Deferred Share Unit pursuant to the
provisions of the Plan.

Dividend Equivalents

2.8      2.8           On any date on which a cash dividend is paid on
Shares, an Eligible Person's account will be credited with the number of
Deferred Share Units (including fractional Deferred Share Units, computed to
three digits) calculated by,

	 	(a) 	
      (a)      multiplying the amount of the dividend per Share by
      the aggregate number of Deferred Share Units that were credited to the
      Eligible Person's account as of the record date for payment of the
      dividend, and

	 	 	 
	 	(b) 	
      (b)      dividing the amount obtained in Section 2.8(a) by the
      Fair Market Value on the date on which the dividend is
  paid.



Eligible Person's Account

2.9      2.9           A written confirmation of the balance in each
Eligible Person's account will be sent by the Company to the Eligible Person
upon request of the Eligible Person.

Adjustments and Reorganizations

2.10      2.10           In the event of any dividend paid in shares,
share subdivision, combination or exchange of shares, merger, consolidation,
spin-off or other distribution of Company assets to shareholders, or any other
change in the capital of the Company affecting Shares, the Board, in its sole
and absolute discretion, will make, with respect to the number of Deferred Share
Units outstanding under this Plan, any proportionate adjustments as it considers
appropriate to reflect that change.

PART 3 - TERMINATION OF SERVICE

Termination of Service

3.1      3.1           An Eligible Person who has Terminated Service
may elect to receive one Share in respect of each whole Deferred Share Unit
credited to the Eligible Person's account (determined in accordance with Section
3.2), by filing with the President of the Company a notice of redemption in the
form prescribed from time to time by the Company on or before December 15 of the
first calendar year commencing after the date on which the Eligible Person has
Terminated Service. If the Eligible Person fails to file such notice on or
before that December 15, the Eligible Person will be deemed to have filed with
the President of the Company a notice of redemption on that December 15 and will
be deemed to have elected to redeem all of his or her Deferred Share Units. The
date on which a notice is filed or deemed to be filed with the Secretary of the
Company is the "Filing Date". The Company may defer the Filing Date to
any other date if such deferral is, in the sole opinion of the Company,
desirable to ensure compliance with Section 4.3.




6

Issuance of Shares

3.2      3.2           The issuance of the Shares will be made by the
  Company as soon as reasonably possible following the Filing Date. In no event
  will the issuance be made later than December 31 of the first calendar year
  commencing after the Eligible Person has Terminated Service. Fractional Shares
  may not be issued, and where an Eligible Person would be entitled to receive a
  fractional Share in respect of any fractional Deferred Share Unit, the Company
  will pay to such Eligible Person, in lieu of such fractional Share, cash equal
to its Fair Market Value, calculated as at the Filing Date.

3.3      3.3.           Notwithstanding the foregoing provisions of
Section 3.1 and Section 3.2, if an Eligible Person is a US Taxpayer, then the
following rules shall apply relating to the redemption of Deferred Share Units
and issuance of Shares:

	 	(a) 	
      (a)      Deferred Share Units which become redeemable under
      Section 3.1 shall be redeemed only if the event giving rise to Terminated
      Service is a Separation from Service; and

	 	 	 
	 	(b) 	
      (b)      the redemption date shall be any date determined by
      the Company (and not the US Taxpayer) to occur as soon as
      reasonably possible (but not later than two months) after the Separation
      from Service, without a notice of filing required by the Eligible Person,
      except that if the US Taxpayer is determined to be a Specified Employee,
      the redemption date shall be the first day of the seventh month after the
      Separation from Service of the US Taxpayer.



Death

3.4      3.4           In the event of the death of an Eligible Person,
the Company will, within two months of the Eligible Person's death, pay cash
equal to the Fair Market Value of the Shares which would be deliverable to the
Eligible Person if the Eligible Person had Terminated Service in respect of the
Deferred Share Units credited to the deceased Eligible Person's account (net of
any Applicable Withholding Tax) to or for the benefit of the legal
representative of the Eligible Person. The Fair Market Value will be calculated
on the date of death of the Eligible Person.

Applicable Withholding Tax

3.5      3.5           The Company is authorized to deduct such taxes
and other amounts as it may be required by law to withhold ("Applicable
Withholding Tax"), in such manner as it determines, including, without
limiting the generality of the foregoing, by delivering fewer Shares than an
Eligible Person otherwise would have received. In addition to, or as an
alternative to the foregoing, the Company may require Eligible Persons, as a
condition precedent to the issuance and delivery of Shares otherwise to be
delivered to them under this Plan, to deliver payment in full of the Applicable
Withholding Tax to the Company or undertakings to, or indemnities in favour of,
the Company respecting the payment by such Eligible Persons of applicable income
or other taxes.




7

PART 4 - GENERAL

Non-Transferability

4.1      4.1           Deferred Share Units and all other rights,
benefits or interests in this Plan are non-transferable and may not be pledged
or assigned or encumbered in any way and are not subject to attachment or
garnishment, except that if the Eligible Person dies, the legal representatives
of the Eligible Person will be entitled to receive the amount of any payment
otherwise payable to the Eligible Person hereunder in accordance with the
provisions hereof.

No Right to Service

4.2      4.2           Neither participation in this Plan nor any
action under this Plan will be construed to give any Eligible Person a right to
be retained in the service of the Company.

Applicable Trading Policies

4.3      4.3           The Board and each Eligible Person will ensure
that all actions taken and decisions made by the Board or the Eligible Person,
as the case may be, pursuant to this Plan comply with any applicable securities
laws and policies of the Company relating to insider trading or "blackout"
periods.

Successors and Assigns

4.4      4.4           This Plan will enure to the benefit of and be
binding upon the respective legal representatives of the Eligible Person.

Plan Amendment

4.5           The Board reserves the right, in its absolute discretion,
to at any time amend, modify or terminate the Plan without obtaining
shareholder approval as it deems necessary or appropriate, but no amendment
will, without the consent of the Eligible Person or unless required by law,
adversely affect the rights of an Eligible Person with respect to Deferred Share
Units to which the Eligible Person is then entitled under this
Plan.

4.6           Notwithstanding Section 4.5, the Board may not, without
approval of the holders of a majority of the issued and outstanding
equity securities of the Company present and voting in person or by proxy at a
meeting of holders of such securities, amend the Plan or a Deferred Share Unit
to: 

(a)      increase the number of Shares
reserved for issuance under the Plan; 

(b)      permit assignments, or exercises
other than by the Eligible Person, of Deferred Share Units beyond that
contemplated by Section 4.1, except for an amendment that would permit the
assignment of a Deferred Share Unit for estate planning or estate settlement
purposes; and




8

(c)      amend the Plan to provide for other
types of compensation through equity issuance, unless the change to the
Plan or a Deferred Share Unit results from the application of Section
2.10.

4.7           Without limiting the generality of Section 4.5, the Board
may make the following amendments to the Plan without obtaining
shareholder approval: 

(a)      amendments to the terms and
conditions of the Plan necessary to ensure that the Plan complies with
the applicable regulatory requirements, including without limitation the TSXV
Policies or the rules of any national securities exchange or system on which the
Shares are then listed or reported, or by any regulatory body having
jurisdiction with respect thereto; 

(b)      making adjustments to outstanding
Deferred Share Units in the event of certain corporate transactions;


(c)      a change to the termination
provisions of a security or the Plan which does not entail an extension
beyond the original termination date; 

4.5      The Board has the
discretion to make amendments to this Plan and any Deferred Share Units granted
hereunder which it may deem necessary, without having to obtain shareholder
approval. Such changes may include, without limitation:

	 	(a) 	
      minor changes of a “housekeeping”
nature;

	 	 	 
	 	(b) 	
      amending the terms of Deferred Share Units under the
      Plan and method of determining the Awarded Amount and the number of
      Deferred Share Units that may be issued to an Eligible Person, and the
      assignability and effect of Terminated Service of an Eligible
      Person;

	 	 	 
	 	(c) 	
      (d)      amendments to the provisions of the Plan respecting
      administration of the Plan and eligibility for participation under
      the Plan, including, without limitation, to expandchanging
      the class of Eligible Persons to include any or all Service
      Providers; and

	 	 	 
	 	(d) 	
      changing the method and procedures to be followed with
      regard to the issuance of Deferred Share Units under the
  Plan.



4.6      (e)      amendments to the Plan that are of a
"housekeeping nature".Shareholder approval will be required in the case of:
(i) any amendment to the amendment provisions of the Plan; (ii) any increase in
the maximum number of Common Shares issuable under the Plan; and (iii) such
other matters that may require shareholder approval under the rules and policies
of the TSX.

Plan Termination

4.7      4.8           The Board may terminate this Plan at any time,
but no termination will, without the consent of the Eligible Person or unless
required by law, adversely affect the rights of an Eligible Person with respect to Deferred Share Units to
which the Eligible Person is then entitled under this Plan. In no event will a
termination of this Plan accelerate the time at which the Eligible Person would
otherwise be entitled to receive any Shares or cash in respect of Deferred Share
Units hereunder.




9

Governing Law

4.8      4.9           This Plan and all matters to which reference is
  made in this Plan will be governed by and construed in accordance with the laws
of Ontario and the laws of Canada applicable therein.

Reorganization of the Company

4.9      4.10           The existence of this Plan or Deferred Share
Units will not affect in any way the right or power of the Company or its
shareholders to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company's capital structure or its
business, or to create or issue any bonds, debentures, shares or other
securities of the Company or to amend or modify the rights and conditions
attaching thereto or to effect the dissolution or liquidation of the Company, or
any amalgamation, combination, merger or consolidation involving the Company or
any sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar nature or otherwise.

No Shareholder Rights

4.10      4.11           Deferred Share Units are not considered to be
Shares or securities of the Company, and an Eligible Person whose account is
credited with Deferred Share Units will not, as such, be entitled to exercise
voting rights or any other rights attaching to the ownership of Shares of other
securities of the Company, or be considered the owner of Shares by virtue of
such crediting of Deferred Share Units.

No Other Benefit

4.11      4.12           No amount will be paid to, or in respect of,
an Eligible Person under this Plan to compensate for a downward fluctuation in
the price of a Share, nor will any other form of benefit be conferred upon, or
in respect of, an Eligible Person for such purpose.

Unfunded Plan

4.12      4.13           For greater certainty, this Plan will be an
unfunded plan, including for tax purposes. Any Eligible Person holding Deferred
Share Units or related accruals under this Plan will have the status of a
general unsecured creditor of the Company with respect to any relevant rights
hereunder.




SCHEDULE “D”
AMENDED AND RESTATED BY-LAW NO.
1

 

 

 




BY-LAW NO. 1

A by-law relating generally to the transaction of the business
and affairs
of

Stem Cell Therapeutics Corp.

amended and restated on April [•],
2014

CONTENTS

	 	Section 1	- 	Interpretation 
	 	Section 2	- 	Business of the Corporation 
	 	Section 3	- 	Borrowing and Securities 
	 	Section 4	- 	Directors 
	 	Section 5	- 	Delegation 
	 	Section 6	- 	Officers 
	 	Section 7	- 	Protection of Directors, Officers and Others
  
	 	Section 8	- 	Shares 
	 	Section 9	- 	Dividends and Rights 
	 	Section 10	- 	Meetings of Shareholders 
	 	Section 11	- 	Notices 
	 	Section 12	- 	Repeal 
	 	Section 13	  	Effective Date 


BE IT ENACTED as a by-law of the Corporation as
follows:

SECTION 1
INTERPRETATION

1.1 Definitions - In the by-laws of the Corporation,
unless the context otherwise requires, capitalized terms used but not defined in
this By-Law shall have the meanings attributed to them in the Act, except that:


"Act" means the Business
Corporations Act (Ontario), and any statute that may be substituted
therefor, as amended, restated or in effect from time to time; 

"appoint" includes
"elect" and vice-versa; 

"articles" means the original or
restated articles of incorporation, articles of amendment, articles of
amalgamation, articles of continuance, articles of reorganization, articles of
arrangement, articles of dissolution or articles of revival and includes any
amendments thereto; 

"Board" means the board of
directors of the Corporation; 

"by-laws" means this by-law and
all other by-laws of the Corporation from time to time in force and effect;




"Corporation" means Stem Cell
Therapeutics Corp.;

"meeting of shareholders"
includes an annual meeting of shareholders or a special meeting of shareholders;
"special meeting of shareholders" includes a meeting of any class or
classes of shareholders and a special meeting of all shareholders entitled to
vote at an annual meeting of shareholders; 

"non-business day" means
Saturday, Sunday and any other day that is a holiday as defined in the
Interpretation Act (Canada) and any statute that may be substituted
therefor, as amended, restated or in effect from time to time; 

"recorded address" means:

	 	(a) 	
      in the case of a shareholder, that person's address as
      recorded in the securities register;

	 	 	 
	 	(b) 	
      in the case of joint shareholders, the address appearing
      in the securities register in respect of such joint holding or the first
      address so appearing if there are more than one; and

	 	 	 
	 	(c) 	
      in the case of a director, officer, auditor or member of
      a committee of the Board, that individual's latest address as recorded in
      the records of the Corporation;



"Regulations" means the
regulations made under the Act, as amended, restated or in effect from time to
time; 

"signing officer" means, in
relation to any instrument, any person authorized to sign the instrument on
behalf of the Corporation by Section 2.2 or by a resolution passed pursuant
thereto; and 

"unanimous shareholder
agreement" means:

	 	(a) 	
      an otherwise lawful written agreement among all the
      shareholders of the Corporation, or among all the shareholders and one or
      more persons who are not shareholders, that restricts, in whole or in
      part, the powers of the directors to manage, or supervise the management
      of, the business and affairs of the Corporation, as amended, supplemented,
      restated and replaced from time to time in accordance with its provisions;
      or

	 	 	 
	 	(b) 	
      a written declaration made by a person who is the
      beneficial owner of all of the issued shares of the Corporation that
      restricts in whole or in part, the powers of the directors to manage, or
      supervise the management of, the business and affairs of the Corporation,
      as amended, supplemented, restated and replaced from time to time in
      accordance with its provisions.



1.2 Interpretation – Words in the singular include the
plural and vice-versa, words in one gender include all genders, and words
importing persons include individuals, bodies corporate, partnerships, trusts
and unincorporated organizations.

- 2 -




SECTION 2
BUSINESS OF THE CORPORATION

2.1 Corporate Seal - The Corporation may have one or
more different corporate seals which may be adopted or changed from time to time
by the Board, on which the name of the Corporation appears in the language or
one or more of the languages set out in the articles.

2.2 Execution of Instruments - Deeds, transfers,
assignments, contracts, obligations, certificates and other instruments may be
signed on behalf of the Corporation by any one of the directors or officers. In
addition, the Board may from time to time direct the manner in which and the
person or persons by whom any particular instrument or class of instruments may
or shall be signed. Any signing officer may affix the corporate seal (if any) to
any instrument. Any signing officer may certify a copy of any instrument,
resolution, by-law or other document of the Corporation to be a true copy
thereof.

2.3 Execution in Counterpart - Any articles, notice,
resolution, requisition, statement or other document required or permitted to be
executed in several documents of like form each of which is executed by all
persons required or permitted, as the case may be, to do so, shall be deemed to
constitute one document and to bear date as of the date of execution thereof by
the last person.

2.4 Banking Arrangements - The banking business of the
Corporation including, without limitation, the borrowing of money and the giving
of security therefor, shall be transacted with such banks, trust companies or
other bodies corporate or organizations as may from time to time be designated
by or under the authority of the Board. Such banking business or any part
thereof shall be transacted under such agreements, instructions and delegations
of powers as the Board may from time to time prescribe or authorize.

2.5 Voting Rights in Other Bodies Corporate - The
signing officers of the Corporation may execute and deliver proxies and arrange
for the issuance of voting certificates or other evidence of the right to
exercise the voting rights attaching to any securities held by the Corporation.
Such instruments, certificates or other evidence shall be in favour of such
person or persons as may be determined by the officers executing such proxies or
arranging for the issuance of voting certificates or such other evidence of the
right to exercise such voting rights. In addition, the Board may from time to
time direct the manner in which and the person or persons by whom any particular
voting rights or class of voting rights may or shall be exercised.

2.6 Withholding Information from Shareholders - Subject
to the Act, no shareholder shall be entitled to discovery of any information
respecting any details or conduct of the Corporation's business which, in the
opinion of the Board, it would be inexpedient in the interests of the
shareholders or the Corporation to communicate to the public. The Board may from
time to time determine whether and to what extent and at what time and place and
under what conditions or regulations the accounts, records and documents of the
Corporation or any of them shall be open to the inspection of shareholders and
no shareholder shall have any right of inspecting any account, record or
document of the Corporation except as conferred by the Act or authorized by the
Board or by resolution passed at a meeting of shareholders.

SECTION 3
BORROWING AND SECURITIES

3.1 Borrowing Power - Without limiting the borrowing
powers of the Corporation as provided by the Act, but subject to the articles
and any unanimous shareholder agreement, the Board may from time to time on
behalf of the Corporation, without authorization of the shareholders: 

- 3 -





	(a) 	
      borrow money on the credit of the Corporation;

	 	 
	(b) 	
      issue, reissue, sell, pledge or hypothecate bonds,
      debentures, notes or other evidences of indebtedness of the Corporation,
      whether secured or unsecured;

	 	 
	(c) 	
      give a guarantee on behalf of the Corporation to secure
      performance of any present or future indebtedness, liability or obligation
      of any person; and

	 	 
	(d) 	
      mortgage, hypothecate, pledge or otherwise create a
      security interest in all or any currently owned or subsequently acquired
      real or personal, movable or immovable, property of the Corporation
      including book debts, rights, powers, franchises and undertakings, to
      secure any such bonds, debentures, notes or other evidences of
      indebtedness or guarantee or any other present or future indebtedness,
      liability or obligation of the Corporation.



The Board may from time to time delegate to one or more of the
directors and officers of the Corporation as may be designated by the Board all
or any of the powers conferred on the Board in this Section 3.1 to the extent
and in the manner as the Board shall determine at the time of such delegation.


Nothing in this Section limits or restricts the borrowing of
money by the Corporation on bills of exchange or promissory notes made, drawn,
accepted or endorsed by or on behalf of the Corporation. 

3.2 Delegation - Subject to any unanimous shareholder
agreement, the Board may from time to time delegate to a committee of the Board,
a director or an officer of the Corporation or any other person as may be
designated by the Board all or any of the powers conferred on the Board by
Section 3.1 or by the Act to such extent and in such manner as the Board shall
determine at the time of each such delegation.

SECTION 4
DIRECTORS

4.1 Number of Directors and Quorum – Subject to the
articles, the Board shall consist of the number of directors specified in the
articles, except that if the articles provide for a minimum and maximum number
of directors, the board shall consist of the number of directors determined from
time to time by a special resolution of the shareholders (or, if the directors
are empowered by a special resolution to determine the number, by a resolution
of the Board) within such minimum and maximum. Subject to Section 4.18, a
majority of the number of directors so specified or determined shall constitute
a quorum at any meeting of the Board.

4.2 Qualification - No person shall be qualified for
election as a director:

	(a) 	
      if the person is less than 18 years of age;

	 	 
	(b) 	
      if the person has been found under the Substitute
      Decisions Act, 1992 (Ontario) or under the Mental Health Act
      (Ontario) to be incapable of managing property or who has been found
      to be incapable by a court in Canada or elsewhere;

	 	 
	(c) 	
      if the person is not an individual; or

	 	 
	(d) 	
      if the person has the status of a
  bankrupt.



- 4 -




Subject to the articles, a director need not be a shareholder.
Subject to the Act, at least 25% of the directors must be resident Canadians. If
the Corporation has less than four directors, at least one director must be a
resident Canadian.

4.3 Election and Term - The election of directors shall
take place at the first meeting of shareholders and at each annual meeting of
shareholders and all the directors then in office shall retire but, if
qualified, shall be eligible for re-election. The election shall be by
resolution. If an election of directors is not held at the proper time, the
incumbent directors shall continue in office until their successors are
elected.

4.4 Removal of Directors - Subject to the Act, the
shareholders may by ordinary resolution passed at an annual or special meeting
remove any director from office and the vacancy created by such removal may be
filled at the same meeting failing which it may be filled by the Board.

4.5 Vacation of Office - A director ceases to hold
office when such director: (a) dies or, subject to the Act, resigns; (b) is
removed from office by the shareholders in accordance with the Act; or (c)
ceases to be qualified for election as a director in accordance with the Act. A
resignation of a director becomes effective at the time a written resignation is
sent or delivered to the Corporation or the time specified in such resignation,
whichever is later.

4.6 Vacancies - Subject to the Act and the articles, a
quorum of the Board may fill a vacancy in the Board, except a vacancy resulting
from:

	(a) 	
      an increase in the number of directors, unless the
      directors are authorized to determine the number of directors and the
      appointment of an additional director would not result in a total number
      of directors greater than one and one-third times the number of directors
      required to have been elected at the last annual meeting of
      shareholders;

	 	 
	(b) 	
      an increase in the maximum number of directors;
  or

	 	 
	(c) 	
      a failure of the shareholders to elect the number of
      directors required to be elected at any meeting of
  shareholders.



In the absence of a quorum of the Board, or if the vacancy has
arisen from a failure of the shareholders to elect the number of directors
required to be elected at any meeting of shareholders, the Board shall forthwith
call a special meeting of shareholders to fill the vacancy. If the Board fails
to call such meeting or if there are no directors then in office, any
shareholder may call the meeting.

4.7 Action by the Board - Subject to any unanimous
shareholder agreement, the Board shall manage, or supervise the management of,
the business and affairs of the Corporation. Subject to Section 4.8, the powers
of the Board may be exercised by resolution passed at a meeting at which a
quorum is present or by resolution in writing signed by all the directors
entitled to vote on that resolution at a meeting of the Board. Where there is a
vacancy in the Board, the remaining directors may exercise all the powers of the
Board so long as a quorum remains in office. Where the Corporation has only one
director, that director may constitute a meeting.

4.8 Meeting by Communications Facilities - If all the
directors of the Corporation consent, a meeting of the Board or of a committee
of the Board may be held by means of such telephone, electronic or other
communications facilities as permit all persons participating in the meeting to
communicate with each other simultaneously and instantaneously, and a director
participating in such a meeting by such means is deemed to be present at the
meeting. Any such consent shall be effective whether given before or after the meeting to which it relates
and may be given with respect to all meetings of the Board and committees of the
Board. If a majority of directors participating in a meeting held under this
Section are then in Canada, the meeting shall be deemed to be held in
Canada.

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4.9 Place of Meetings - Meetings of the Board may be
held at any place within or outside Ontario. In any financial year of the
Corporation, a majority of the meetings of the Board need not be held in
Canada.

4.10 Calling of Meetings - Meetings of the Board shall
  be held from time to time at such time and at such place as the Board, the chair
  of the Board, the chief executive officer, the president, a vice-president or
any two directors may determine.

4.11 Notice of Meeting - Notice of the time and place of
each meeting of the Board shall be given in the manner provided in Section 11.1
to each director not less than 48 hours before the time when the meeting is to
be held. A notice of a meeting of directors need not specify the purpose of or
the business to be transacted at the meeting except where the Act requires such
purpose or business to be specified. A director may in any manner waive notice
of a meeting of the Board, and attendance of a director at a meeting constitutes
a waiver of notice, except where the director attends a meeting for the express
purpose of objecting to the transaction of any business on the grounds that the
meeting is not lawfully called.

4.12 First Meeting of New Board - Provided a quorum of
directors is present, each newly elected Board may without notice hold its first
meeting immediately following the meeting of shareholders at which such Board is
elected.

4.13 Adjourned Meeting - Notice of an adjourned meeting
of the Board is not required if the time and place of the adjourned meeting is
announced at the original meeting.

4.14 Regular Meetings - The Board may appoint a day or
days in any month or months for regular meetings of the Board at a place and
hour to be named. A copy of any resolution of the Board fixing the place and
time of such regular meetings shall be sent to each director forthwith after
being passed, but no other notice shall be required for any such regular meeting
except where the Act requires the purpose thereof or the business to be
transacted thereat to be specified.

4.15 Meetings Without Notice. A meeting of the Board may
be held at any time and place permitted by the Act or the articles or the
by-laws without notice or on shorter notice than that provided for in this
by-law, and proceedings at such meeting shall not be invalidated if all or if
all the directors are present in person (except where a director attends the
meeting for the express purpose of objecting to the transaction of any business
on the grounds that the meeting is not lawfully called) or if not so present
have received notice, or before or after the meeting or the time prescribed for
the notice of such meeting, in writing waive notice of or accept short notice of
such meeting.

4.16 Chair - The chair of any meeting of the Board shall
be the first mentioned of such of the following officers as have been appointed
and who is a director and is present at the meeting: chair of the Board, chief
executive officer, president, or a vice-president. If no such officer is
present, the directors present shall choose one of their number to be chair.

4.17 Votes to Govern - At all meetings of the Board
every question shall be decided by a majority of the votes cast on the question
of those directors entitled to vote. In case of an equality of votes the chair
of the meeting shall not be entitled to a second or casting vote.

- 6 -




4.18 Conflict of Interest - A director or officer
who:

	(a) 	
      is a party to; or

	 	 
	(b) 	
      is a director or an officer of, or has a material
      interest in, any person who is a party to;



a material contract or transaction or proposed material
contract or transaction with the Corporation shall disclose the nature and
extent of such director's or officer's interest at the time and in the manner
provided by the Act. Any such contract or transaction or proposed material
contract or transaction shall be referred to the Board or shareholders for
approval in accordance with the Act even if such contract or proposed material
contract or transaction is one that in the ordinary course of the Corporation's
business would not require approval by the Board or shareholders, and a director
interested in a contract or transaction so referred to the Board shall not
attend any part of a meeting of the Board during which the contract or
transaction is discussed and shall not vote on any resolution to approve such
contract or transaction except as provided by the Act.

4.19 Remuneration and Expenses - Subject to the articles
and any unanimous shareholder agreement, the directors shall be paid such
remuneration for their services as the Board may from time to time determine.
The directors shall also be entitled to be reimbursed for travelling and other
expenses properly incurred by them in attending meetings of the Board or any
committee thereof. Nothing herein contained shall preclude any director from
serving the Corporation in any other capacity and receiving remuneration
therefor in that capacity.

SECTION 5
DELEGATION

5.1 Committee of Directors - The Board may appoint a
committee of directors and delegate to such committee any of the powers of the
Board except those which, under the Act, a committee of directors has no
authority to exercise.

5.2 Transaction of Business - The powers of a committee
of directors may be exercised by a meeting at which a quorum is present or by
resolution in writing signed by all the members of such committee who would have
been entitled to vote on that resolution at a meeting of the committee. Meetings
of such committee may be held at any place within or outside Ontario.

5.3 Procedure - Unless otherwise determined by the
Board, each committee shall have the power to fix its quorum at not less than a
majority of its members, to elect its chair and to regulate its procedure.

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SECTION 6
OFFICERS

6.1 Appointment - Subject to the articles and any
unanimous shareholder agreement, the Board may from time to time appoint a chief
executive officer, president, chief financial officer, one or more
vice-presidents (to which title may be added words indicating seniority or
function), a secretary, a treasurer and such other officers as the Board may
determine, including one or more assistants to any of the officers so appointed.
The Board may specify the duties of and, in accordance with this by-law and
subject to the Act, the articles and any unanimous shareholder agreement,
delegate to such officers powers to manage the business and affairs of the
Corporation. Subject to Section 6.2, an officer may but need not be a director
and one person may hold more than one office.

6.2 Chair of the Board - The Board may from time to time
also appoint a chair of the Board who shall be a director. If appointed, the
Board may assign to the chair any of the powers and duties that are by any
provision of this by-law assigned to the chief executive officer; and the chair
shall, subject to the Act, have such other powers and duties as the Board may
specify. During the absence or disability of the chair of the Board, the chair's
duties shall be performed and the chair's powers exercised by the chief
executive officer if the chief executive officer is a director, failing which,
such other director as the majority of the directors shall determine.

6.3 Chief Executive Officer – If appointed, the chief
executive officer, subject to the authority of the Board, shall be responsible
for implementing the strategic plans and policies of the Corporation as
established by the Board; and the chief executive officer shall have such other
powers and duties as the Board may specify. During the absence or disability of
the chair, or if no chair has been appointed, the chief executive officer shall
have the powers and duties of that office as contemplated in Section 6.2.  

6.4
President - If appointed, the president shall have general supervision of
the business of the Corporation and shall have such other powers and duties as
the Board may specify. During the absence or disability of the chief executive
officer, or if no chief executive officer has been appointed, the president
shall also have the powers and duties of that office.

6.5 Chief Financial Officer – If appointed, the chief
financial officer shall keep proper accounting records in compliance with the
Act and shall be responsible for the deposit of money, the safekeeping of
securities and the disbursement of the funds of the Corporation; the chief
financial officer shall render to the Board whenever required an account of all
transactions as chief financial officer and of the financial position of the
Corporation; and shall have such other powers and duties as the Board or the
chief executive officer may specify.

6.6 Vice-President - If appointed, a vice-president
shall have such powers and duties as the Board or the chief executive officer
may specify.

6.7 Secretary - If appointed, the secretary shall attend
and be the secretary of all meetings of the Board, shareholders and committees
of the Board and shall enter or cause to be entered in records kept for that
purpose minutes of all proceedings thereat; the secretary shall give or cause to
be given, as and when instructed, all notices to shareholders, directors,
officers, auditors and members of committees of the Board; the secretary shall
be the custodian of the stamp or mechanical device generally used for affixing
the corporate seal of the Corporation and of all books, papers, records,
documents and instruments belonging to the Corporation, except when some other
officer or agent has been appointed for that purpose; and the secretary shall
have such other powers and duties as the Board or the chief executive officer
may specify.

- 8 -




6.8 Treasurer - If appointed, the treasurer shall have
such powers and duties as the Board or the chief financial officer may specify.
During the absence or disability of the chief financial officer, or if no chief
financial officer has been appointed, the treasurer shall have the powers and
duties of that office.

6.9 Powers and Duties of Other Officers - The powers and
duties of all other officers shall be such as the terms of their engagement call
for or as the Board or the chief executive officer may specify. Any of the
powers and duties of an officer to whom an assistant has been appointed may be
exercised and performed by such assistant, unless the Board or the chief
executive officer otherwise directs. 

6.10 Variation of Powers and Duties - The Board may from
time to time and subject to the Act, vary, add to or limit the powers and duties
of any officer.

6.11 Term of Office - The Board, in its discretion, may
remove any officer of the Corporation, without prejudice to such officer's
rights under any employment contract. Otherwise each officer appointed by the
Board shall hold office until such officer's successor is appointed, or until
such officer's earlier resignation.

6.12 Terms of Employment and Remuneration - The terms of
employment and the remuneration of officers appointed by the Board shall be
settled by it from time to time.

6.13 Conflict of Interest - An officer who:

	(a) 	
      is a party to; or

	 	 
	(b) 	
      is a director or an officer of, or has a material
      interest in, any person who is a party to;



a material contract or transaction or proposed material
contract or transaction with the Corporation shall disclose the nature and
extent of such officer's interest at the time and in the manner provided by the
Act.

6.14 Agents and Attorneys - The Board shall have power
from time to time to appoint agents or attorneys for the Corporation in or
outside Canada with such powers of management or otherwise (including the power
to sub-delegate) as may be thought fit.

6.15 Fidelity Bonds - The Board may require such
officers, employees and agents of the Corporation as the Board deems advisable
to furnish bonds for the faithful discharge of their powers and duties, in such
form and with such surety as the Board may from time to time determine.

SECTION 7
PROTECTION OF DIRECTORS, OFFICERS AND
OTHERS

7.1 Limitation of Liability - No director or officer
shall be liable for the acts, receipts, neglects or defaults of any other
director or officer or employee, or for joining in any receipt or other act for
conformity, or for any loss, damage or expense happening to the Corporation
through the insufficiency or deficiency of title to any property acquired for or
on behalf of the Corporation, or for the insufficiency or deficiency of any
security in or on which any of the moneys of the Corporation shall be invested,
or for any loss or damage arising from the bankruptcy, insolvency or tortious
acts of any person with whom any of the moneys, securities or effects of the
Corporation shall be deposited, or for any loss occasioned by any error of
judgment or oversight on such individual's part, or for any other loss, damage
or misfortune whatever which shall happen in the execution of the duties of such
individual's office or in relation thereto; provided that
nothing herein shall relieve any director or officer from the duty to act in
accordance with the Act and the Regulations or from liability for any breach
thereof.

- 9 -




7.2 Indemnity - Subject to the Act, the Corporation
shall indemnify a director or officer of the Corporation, a former director or
officer of the Corporation or another individual who acts or acted at the
Corporation's request as a director or officer, or an individual acting in a
similar capacity, of another entity, and such person's heirs and legal
representatives, against all costs, charges and expenses, including an amount
paid to settle an action or satisfy a judgment, reasonably incurred by the
individual in respect of any civil, criminal, administrative, investigative or
other proceeding in which the individual is involved because of that association
with the Corporation or other entity, if:

	(a) 	
      the individual acted honestly and in good faith with a
      view to the best interests of the Corporation or, as the case may be, to
      the best interest of the other entity for which the individual acted as a
      director or officer or in a similar capacity at the Corporation's request;
      and

	 	 
	(b) 	
      in the case of a criminal or administrative action or
      proceeding that is enforced by a monetary penalty, the person had
      reasonable grounds for believing that the individual's conduct was
      lawful.



7.3 Insurance - Subject to the Act, the Corporation may
purchase and maintain such insurance for the benefit of its directors and officers as such, as the Board
may from time to time determine.

SECTION 8
SHARES

8.1 Allotment - Subject to the Act, the articles and any
unanimous shareholder agreement, the Board may from time to time allot or grant
options to purchase the whole or any part of the authorized and unissued shares
of the Corporation at such times and to such persons and for such consideration
as the Board shall determine, provided that no share shall be issued until it is
fully paid as provided by the Act.

8.2 Commissions - The Board may from time to time
authorize the Corporation to pay a reasonable commission to any person in
consideration of such person purchasing or agreeing to purchase shares of the
Corporation, whether from the Corporation or from any other person, or procuring
or agreeing to procure purchasers for any such shares.

8.3 Registration of Transfer - Subject to the Act, no
transfer of shares shall be registered in a securities register except on
presentation of the certificate or acknowledgment of the right to
receive a certificate representing such shares with an endorsement
which complies with the Act, together with such reasonable assurance or evidence
of signature, identification and authority to transfer as the Board may from
time to time prescribe, on payment of all applicable taxes and any fees
prescribed by the Board, on compliance with such restrictions on transfer as are
authorized by the articles and on satisfaction of any lien referred to in
Section 8.5.

8.4 Transfer Agents and Registrars - The Board may from
time to time appoint a registrar to maintain the securities register and a
transfer agent to maintain the register of transfers and may also appoint one or
more branch registrars to maintain branch securities registers and one or more
branch transfer agents to maintain branch registers of transfers, but one person
may be appointed both registrar and transfer agent. The Board may at any time
terminate any such appointment.

- 10 -




8.5 Lien for Indebtedness - If the articles provide that
the Corporation shall have a lien on shares registered in the name of a
shareholder indebted to the Corporation, such lien may be enforced, subject to
any other provision of the articles and to any unanimous shareholder agreement,
by the sale of the shares thereby affected or by any other action, suit, remedy
or proceeding authorized or permitted by law or by equity and, pending such
enforcement, the Corporation may refuse to register a transfer of the whole or
any part of such shares.

8.6 Non-recognition of Trusts - Subject to the Act, the
Corporation may treat the person in whose name a share is registered in the
securities register as the person exclusively entitled to vote, to receive
notices, to receive any dividend or other payments in respect of the share and
otherwise to exercise all the rights and powers of an owner.

8.7 Security Certificates - Every holder of one or more
securities of the Corporation shall be entitled, at the security
holder'Corporation’s option, to a security certificate, or to a
non-transferable written acknowledgement of such security holder's right to
obtain a security certificate, stating the number and class or series of
securities held by such security holder as shown on the securities register.
Security certificates and acknowledgements of a security holder's right to a
security certificate, respectively, shall be in such form as the Board shall
from time to time approve. Any security certificate shall be signed in
accordance with Section 2.2 and need not be under the corporate seal; provided
that, unless the Board otherwise determines, certificates representing
securities in respect of which a transfer agent and/or registrar has been
appointed shall not be valid unless countersigned by or on behalf of such
transfer agent and/or registrar. The signature of one of the signing officers
or, in the case of security certificates which are not valid unless
countersigned by or on behalf of a transfer agent and/or registrar, the
signatures of both signing officers, may be printed or mechanically reproduced
in facsimile on security certificates and every such facsimile signature shall
for all purposes be deemed to be the signature of the officer whose signature it
reproduces and shall be binding on the Corporation. A security certificate
executed as aforesaid shall be valid notwithstanding that one or both of the
officers whose facsimile signature appears thereon no longer holds office at the
date of issue of the certificate. 

8.8 Replacement of Security Certificates - The Board or
any officer or agent designated by the Board may in its or such person's
discretion direct the issue of a new security certificate in lieu of and on
cancellation of a security certificate that has been mutilated or in
substitution for a security certificate claimed to have been lost, destroyed or
wrongfully taken on payment of such fee, not exceeding the amount prescribed by
the Regulations, and on such terms as to indemnity, reimbursement of expenses
and evidence of loss and of title as the Board may from time to time prescribe,
whether generally or in any particular case.

8.9 Joint Security Holders - If two or more persons are
registered as joint holders of any security, the Corporation shall not be bound
to issue more than one certificate in respect thereof, and delivery of such
certificate to one of such persons shall be sufficient delivery to all of them.
Any one of such persons may give effectual receipts for the certificate issued
in respect thereof or for any dividend, bonus, return of capital or other money
payable or warrant issuable in respect of such security.

8.10 Deceased Security Holders - In the event of the
death of a holder, or of one of the joint holders, of any security, the
Corporation shall not be required to make any entry in the securities register
in respect thereof or to make payment of any dividends thereon except on
production of all such documents as may be required by law and on compliance
with the reasonable requirements of the Corporation and its transfer agents.

- 11 -




SECTION 9
DIVIDENDS AND RIGHTS

9.1 Dividends - Subject to the Act, the Board may from
time to time declare dividends payable to the shareholders according to their
respective rights and interests in the Corporation. Dividends may be paid in
money or property or by issuing fully paid shares of the Corporation.

9.2 Dividend Cheques - A dividend payable in money shall
be paid by cheque drawn on the Corporation's bankers or one of them to the order
of each registered holder of shares of the class or series in respect of which
it has been declared and mailed by prepaid ordinary mail to such registered
holder at such registered holder's recorded address, unless such holder
otherwise directs. In the case of joint holders the cheque shall, unless such
joint holders otherwise direct, be made payable to the order of all of such
joint holders and mailed to them at their recorded address. The mailing of such
cheque as aforesaid, unless the same is not paid on due presentation, shall
satisfy and discharge the liability for the dividend to the extent of the sum
represented thereby plus the amount of any tax which the Corporation is required
to and does withhold.

9.3 Non-receipt of Cheques - In the event of non-receipt
of any dividend cheque by the person to whom it is sent as aforesaid, the
Corporation shall issue to such person a replacement cheque for a like amount on
such terms as to indemnity, reimbursement of expenses and evidence of
non-receipt and of title as the Board may from time to time prescribe, whether
generally or in any particular case.

9.4 Record Date for Dividends and Rights - The Board may
fix in advance a date, preceding by not more than 50 days, the date for the
payment of any dividend or the date for the issue of any warrant or other
evidence of the right to subscribe for securities of the Corporation, as a
record date for the determination of the persons entitled to receive payment of
such dividend or to exercise the right to subscribe for such securities,
provided that notice of any such record date shall be given, not less than 7
days before such record date. Where no record date is fixed so, the record date
for the determination of the persons entitled to receive payment of any dividend
or to exercise the right to subscribe for securities of the Corporation shall be
at the close of business on the day on which the resolution relating to such
dividend or right to subscribe is passed by the Board.

9.5 Unclaimed Dividends - Any dividend unclaimed after
the expiry of the applicable limitation period shall be forfeited and shall
revert to the Corporation.

SECTION 10
MEETINGS OF SHAREHOLDERS

10.1 Annual Meetings - The annual meeting of
shareholders shall be held at such time in each year and, subject to Section
10.3, at such place as the Board, may from time to time determine, for the
purpose of considering the financial statements and reports required by the Act
to be placed before the annual meeting, electing directors, appointing auditors
and for the transaction of such other business as may properly be brought before
the meeting.

10.2 Special Meetings - The Board, the chair of the
Board, the chief executive officer, or the

president shall have power to call a special meeting of
shareholders at any time.

10.3 Place of Meetings – Subject to the articles and any
unanimous shareholder agreement, meetings of shareholders shall be held at the
registered office of the Corporation or, if the Board shall so determine, at
some other place in Ontario or, at some place outside Ontario if all the
shareholders entitled to vote at the meeting so agree. A meeting of
shareholders held under Section 10.4 is deemed to be held at the place where the
registered office is located.

- 12 -




10.4 Participation by Electronic Means - If the
Corporation chooses to make available a telephonic or electronic facility that
permits all participants to communicate adequately with each other during a
meeting of shareholders, any shareholder entitled to attend such meeting may
participate in the meeting by means of such telephonic or electronic
communication facility. A shareholder, who through such means votes at the
meeting or establishes a communications link to the meeting is deemed to be
present at the meeting. Notwithstanding any other provision of this by-law, any
person participating in a meeting of shareholders pursuant to this Section who
is entitled to vote at that meeting may vote, in accordance with the Act and the
Regulations, by means of any telephonic, electronic or other communication
facility that the Corporation has made available for that purpose.

10.5 Notice of Meetings - Notice of the time and place
  of each meeting of shareholders shall be given in the manner provided in Section
  11.1 not less than 10 nor more than 50 days before the date of the meeting, or
  within such other period as may be provided by the Act or prescribed by the
  Regulations to each director, to the auditor and to each shareholder who at the
  close of business on the record date for notice, is entered in the securities
  register as the holder of one or more shares carrying the right to vote at the
  meeting. Notice of a meeting of shareholders called for any purpose other than
  consideration of the financial statements and auditors report, election of
  directors and reappointment of the incumbent auditors shall state the nature of
  such business in sufficient detail to permit the shareholder to form a reasoned
  judgment thereon and shall state the text of any special resolution to be
submitted to the meeting.

10.6 List of Shareholders Entitled to Notice - For every
meeting of shareholders, the Corporation shall prepare within the time specified
by the Act a list of shareholders entitled to receive notice of the meeting,
arranged in alphabetical order and showing the number of shares held by each
shareholder. If a record date for notice is fixed pursuant to Section 10.7, the
shareholders listed shall be those registered at the close of business on such
record date. If no record date for notice is so fixed, the shareholders listed
shall be those registered (a) at the close of business on the day immediately
preceding the day on which notice of the meeting is given, or (b) on the day on
which the meeting is held where no such notice is given. The list shall be
available for examination by any shareholder during usual business hours at the
registered office of the Corporation or at the place where the central
securities register is maintained and at the meeting for which the list was
prepared.

10.7 Record Date for Notice The Board may fix in advance
a date, preceding the date of any meeting of shareholders by not less than 21
days and not more than 50 days, as a record date for the determination of the
shareholders entitled to notice of the meeting, and notice of any such record
date shall be given not less than 7 days before such record date by newspaper
advertisement and written notice in the manner provided by the Act. If no record
date for notice is so fixed, the record date for the determination of the
shareholders entitled to notice of the meeting shall be (a) at the close of
business on the day immediately preceding the day on which notice of the meeting
is given, or (b) on the day on which the meeting is held where no such notice is
given.

10.8 Meetings without Notice - A meeting of shareholders
may be held at any time and place permitted by the Act without notice or on
shorter notice than that provided for herein, and proceedings thereat shall not
be invalidated (a) if all the shareholders entitled to vote thereat are present
in person or represented by proxy (other than as expressly to object that the
meeting is not lawfully called) or if those not present in person or represented
by proxy waive notice before or after the meeting or the time prescribed for the
notice thereof, in writing of such meeting being held, and (b) if the auditors
and the directors are present or if those not present, waive notice of or
otherwise consent to such meeting being held. At such a meeting any business may be transacted which
the Corporation at a meeting of shareholders may transact. If the meeting is
held at a place outside Ontario, shareholders not present in person or
represented by proxy, but who have waived notice of such meeting, shall also be
deemed to have consented to the meeting being held at such place.

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10.9 Chair, Secretary and Scrutineers - The chair of any
meeting of shareholders shall be the first mentioned of such of the following
officers as have been appointed and who is present at the meeting: chief
executive officer, president, chair of the Board, or a vice-president who is a
director. If no such officer is present within 15 minutes from the time fixed
for holding the meeting, the persons present and entitled to vote shall choose
one of their number to be chair. If the secretary of the Corporation is absent,
the chair shall appoint some person, who need not be a shareholder, to act as
secretary of the meeting. If desired, one or more scrutineers, who need not be
shareholders, may be appointed by a resolution or by the chair with the consent
of the meeting.

10.10 Persons Entitled to be Present - The only persons
  entitled to attend a meeting of shareholders shall be those entitled to vote
  thereat, the directors and auditor of the Corporation and others who, although
  not entitled to vote, are entitled or required under the Act or the articles or
  by-laws to be present at the meeting. Any other person may be admitted only on
  the invitation of the chair of the meeting or with the consent of the
meeting.

10.11 Quorum - Subject to the Act, a quorum for the
transaction of business at any meeting of shareholders shall be one
persontwo or more persons present in person,
each being a shareholder entitled to vote thereat,
or a duly appointed representative or proxyholderproxy or proxy
holder for an absent shareholder so entitled, and holding or
representing in the aggregate not less than
a majority331/3% of the issued
and outstanding shares of the Corporation entitled to vote at the
meeting..
 If a quorum is present at the opening of any meeting of
shareholders, the shareholders present in person or represented by proxy may
proceed with the business of the meeting notwithstanding that a quorum is not
present throughout the meeting. If a quorum is not present at the opening of any
meeting of shareholders, the shareholders present in person or represented by
proxy may adjourn the meeting to a fixed time and place, but may not transact
any other business.

10.12 Right to Vote - Subject to the Act as to
authorized representatives of any other body corporate or association, at any
meeting of shareholders for which the Corporation must prepare a list referred
to in Section 10.6, every person who is named in such list shall be entitled to
vote the shares shown opposite such person's name.

10.13 Proxies - Every shareholder entitled to vote at a
meeting of shareholders may appoint a proxyholder, or one or more alternate
proxyholders, who need not be shareholders, to attend and act at the meeting in
the manner and to the extent authorized and with the authority conferred by the
proxy. A proxy shall be in writing executed by the shareholder or such
shareholder's attorney and shall conform with the Act. Every such shareholder
which is a body corporate or association may by resolution of its directors or
governing body authorize an individual who need not be a shareholder to
represent it at a meeting of shareholders and such individual may exercise on
the shareholder's behalf all the powers it could exercise if it were an
individual shareholder. The authority of such an individual shall be established
by depositing with the Corporation a certified copy of such resolution, or in
such other manner as may be satisfactory to the secretary of the Corporation or
the chair of the meeting.

10.14 Time for Deposit of Proxies - The Board may
specify in a notice calling a meeting of shareholders a time, preceding the time
of such meeting by not more than 48 hours exclusive of non-business days, before
which time proxies to be used at such meeting must be deposited. A proxy shall
be acted on only if, prior to the time so specified, it shall have been
deposited with the Corporation or an agent thereof specified in such notice or, if no such
time is specified in such notice, unless it has been received by the secretary
of the Corporation or by the chair of the meeting or any adjournment thereof
prior to the time of voting.

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10.15 Joint Shareholders - If two or more persons hold
shares jointly, one of them present in person or represented by proxy at a
meeting of shareholders may, in the absence of the other or others, vote the
shares; but if two or more of those persons are present in person or represented
by proxy and vote, they shall vote as one on the shares jointly held by
them.

10.16 Votes to Govern - At any meeting of shareholders
  every question shall, unless otherwise required by the articles or by-laws or by
  law, be determined by a majority of the votes cast on the question. In case of
  an equality of votes either on a show of hands or on a ballot or on results of
  electronic voting, the chair of the meeting shall not be entitled to a second or
casting vote.

10.17 Show of Hands - Subject to the Act, any question
at a meeting of shareholders shall be decided by a show of hands unless a ballot
thereon is required or demanded as hereinafter provided. On a show of hands
every person who is present and entitled to vote shall have one vote. Whenever a
vote by show of hands shall have been taken on a question, unless a ballot
thereon is so required or demanded, a declaration by the chair of the meeting
that the vote on the question has been carried or carried by a particular
majority or not carried and an entry to that effect in the minutes of the
meeting shall be prima facie evidence of the fact without proof of the
number or proportion of the votes recorded in favour of or against any
resolution or other proceeding in respect of the question, and the result of the
vote so taken shall be the decision of the shareholders on the question.

10.18 Ballots - On any question proposed for
consideration at a meeting of shareholders, and whether or not a show of hands
has been taken thereon, the chair may require a ballot of any person present or
any shareholder or proxyholder entitled to vote on such question at the meeting
may demand a ballot. A ballot so demanded shall be taken in such manner as the
chair shall direct. A demand for a ballot may be withdrawn at any time prior to
the taking of the ballot. If a ballot is taken each person present shall be
entitled, in respect of the shares which such person is entitled to vote at the
meeting on the question, to that number of votes provided by the Act or the
articles, and the result of the ballot so taken shall be the decision of the
shareholders on the question.

10.19 Adjournment - If a meeting of shareholders is
adjourned by one or more adjournments for an aggregate of less than 30 days it
is not necessary to give notice of the adjourned meeting other than by
announcement at the time of an adjournment. If a meeting of shareholders is
adjourned by one or more adjournments for an aggregate of 30 days or more but
not more than 90 days, notice of the adjourned meeting shall be given as for an
original meeting but the management of the Corporation shall not be required to
send a form of proxy in the form provided by the Act to each shareholder who is
entitled to receive notice of the meeting.

10.20 Resolution in Writing - A resolution in writing
signed by all the shareholders entitled to vote on that resolution at a meeting
of shareholders is as valid as if it had been passed at a meeting of the
shareholders unless a written statement with respect to the subject matter of
the resolution is submitted by a director or the auditors in accordance with the
Act.

10.21 Only One Shareholder - Where the Corporation has
only one shareholder or only one holder of any class or series of shares, the
shareholder present in person or by proxy constitutes a meeting.

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SECTION 11
NOTICES

11.1 Method of Giving Notices - Any notice (which term
includes any communication or document) to be given (which term includes sent,
delivered or served) pursuant to the Act, the Regulations, the articles, the
by-laws or otherwise to a shareholder, director, officer or member of a
committee of the Board or to the auditors shall be sufficiently given if
delivered personally to the person to whom it is to be given or if delivered to
such person's recorded address or if mailed to such person at such person's
recorded address by prepaid ordinary or air mail or if sent to such person at
such person's recorded address by facsimile or if provided to such person by
electronic means in accordance with the Electronic Commerce Act, 2000
(Ontario). A notice so delivered shall be deemed to have been given when it
is delivered personally or to the recorded address as aforesaid; a notice so
mailed shall be deemed to have been received by the addressee on the fifth day
after mailing; and a notice so provided by electronic means (including by
facsimile) shall be deemed to have been sent and received in the manner and at
the time specified in the Electronic Commerce Act, 2000 (Ontario). The
secretary may change or cause to be changed the recorded address of any
shareholder, director, officer, auditor or member of a committee of the Board in
accordance with any information believed by the secretary to be reliable.

11.2 Notice to Joint Shareholders - If two or more
persons are registered as joint holders of any share, any notice shall be
addressed to all of such joint holders but notice to one of such persons shall
be sufficient notice to all of them.

11.3 Computation of Time - In computing the date when
notice must be given under any provision requiring a specified number of days
notice of any meeting or other event, the date of giving the notice shall be
excluded and the date of the meeting or other event shall be included.

11.4 Undelivered Notices - If any notice given to a
shareholder pursuant to Section 11.1 is returned on two consecutive occasions
because such shareholder cannot be found, the Corporation shall not be required
to give any further notices to such shareholder until such shareholder informs
the Corporation in writing of such shareholder's new address.

11.5 Omissions and Errors - The accidental omission to
give any notice to any shareholder, director, officer, auditor or member of a
committee of the Board or the non-receipt of any notice by any such person or
any error in any notice not affecting the substance thereof shall not invalidate
any action taken at any meeting held pursuant to such notice or otherwise
founded thereon.

11.6 Persons Entitled by Death or Operation of Law -
Every person who, by operation of law, transfer, death of a shareholder or any
other means whatsoever, shall become entitled to any share, shall be bound by
every notice in respect of such share which shall have been duly given to the
shareholder from whom such person derives title to such share prior to such
person's name and address being entered on the securities register (whether such
notice was given before or after the happening of the event on which such person
became so entitled) and prior to such person furnishing to the Corporation the
proof of authority or evidence of entitlement provided by the Act.

11.7 Waiver of Notice - Any shareholder, (or such
shareholder's duly appointed proxyholder), director, officer, auditors or member
of a committee of the Board may at any time waive any notice, or waive or
abridge the time for any notice, required to be given to such person under the
Act, the Regulations, the articles, the by-laws or otherwise and such waiver or
abridgement, whether given before or after the meeting or other event of which
notice is required to be given, shall cure any default in the giving or in the
time of such notice, as the case may be. Any such waiver or abridgement shall be
in writing or by electronic means in accordance with the
  Electronic Commerce Act, 2002 (Ontario) except a waiver of notice of a
meeting of shareholders or of the Board or of a committee of the Board which may
be given in any manner.

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SECTION 12
REPEAL

12.1 Repeal - By-law No. 2, entitled “A by-law relating
generally to the transaction of the business and affairs of Stem Cell
Therapeutics Corp.” and made as of August 23, 2005, is repealed as of the coming
into force of this by-law provided that such repeal shall not affect the
previous operation of any by-law so repealed or affect the validity of any act
done or right, privilege, obligation or liability acquired or incurred under or
the validity of any contract or agreement made pursuant to any such by-law prior
to its repeal. All officers and persons acting under any by-law so repealed
shall continue to act as if appointed by the directors under the provisions of
this by-law or the Act until their successors are appointed.

SECTION 13
EFFECTIVE DATE

13.1 Effective Date - This by-law shall be effective
when made by the Board.

Dated as of the 16th [day] day of
September, 2013.[Month], [Year].


	David
      AllanCalvin Stiller 
	Chairman 



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