ORDER. Court File No Estate No.: ONTARIO SUPERIOR COURT OF OF JUSTICE (IN BANKRUPTCY AND AND INSOLVENCY) [COMMERCIAL LIST]

Transcription

1 THIS COURT ORDERS that the time for service of the Notices of Motion and the Motion Records herein is hereby abridged so that these Motions are properly returnable today and any requirement for further service of the Notices of Motion and the Motion Records is hereby dispensed with. 2. THIS COURT ORDERS AND DECLARES that CFI's motion for an extension of time to file a proposal pursuant to subsection 50.4(9) of the BIA be and is hereby dismissed. 3. THIS COURT ORDERS AND DECLARES that the thirty day period for CFI to file a proposal be and is hereby terminated pursuant to subsection 50.4(11) of the BIA.

2 Court File No Estate No.: IN THE MATTER OF OF THE THE PROPOSAL OF COGENT OF COGENT FIBRE FIBRE INC. INC. ONTARIO SUPERIOR COURT OF OF JUSTICE (IN BANKRUPTCY AND AND INSOLVENCY) [COMMERCIAL LIST] ORDER BORDEN LADNER GERVAIS LLP LLP Banisters and Solicitors Scotia Plaza 40 King Street West Toronto, Ontario M5H 3Y4 ROGER JAIPARGAS Tel.: Fax: LSUC # 43235C DOUG SMITH Tel.: Fax: dilnitli@b10.einn. dilnitli@b10.thin LSUC # 36915R Lawyers for NS United Kaiun Kaisha, Ltd. 296

3 Exhibit "D" to the Affidavit of Arthur Birnbaum, sworn before me this 2e day of October, A Com for taking affidavits, etc.

4 CITATIQN,In the Matter of the Proposal of Cogentlibielne.).2015 ONSC 5139 COURT VILONOt.:31* DATE: SUPERIOR COURT OF JUSTICE -'ONTARIO RE: NS. United KaitMKaislui,Ltd MovingParty (Respondent inthe Proposal), AND: Cogent FilSre errespontling-parly-(applicantin.theiroposal) BEFORE: COUNSEL: Poug'Smitftentel Roger Jaipatgos for NS. United!Cahill Kaisha, Ltd. Kerr Krotiotri:f4,41771, M: Van 411en for Cogent Fibre The., barn Babe for the Proposal Trustee: REARM AttguittZ,241$: ENDORSEMENT [1] in a brie handwritten endoraement of August 12, 2015, I dismissed the motion: of the debtor; Cogent -Fibre' Incn for an extension of the 30- day atay'andat s. 50:49) of the Bankruptcy anti Insolvency and. allowed the motion of the judgment` creditor,` NS United Kaiun Kaisha, Ltd, far an order terminating ribs 30-day stay under s 50,4(11) of the with reasons'to folio*. These are those reasons. [2] Cogent ISM the woodchipi business: It had a five-year shhipthg:conttabt with NS:. United. There was a dispute. which.became the. subject of an tiibitratieheernmeneed itt February Awarbiti*Lawaidwas made against Cbgent 'for, Cdti$15;32thillion in January 205, hr July ZOIS, the District Court' tat:the Southern DiStriet of Now Yorkconfinned die:awn:4: Theday-after the. release etheyeinifirmingjtidgrrient,cogent filed its NQI, [3] In an affidavit SWOrtt:.in tollateral liaartiptey proceedings in New York, Mk. Monti:op,: a director et-cogent, 'deposed 1.h:4:Cogent's management decided to wind "down. COgeitt& business well before the relense of the akin*. award.or confirining,judgment It did so, he said, on the basis,nptiortly of pendhtgniarititt arbittationshaddiet factors including a ahostile.market" [4] Mr. Monti Ai/id-died is, however, that Cogent was prompted, to file its NQI on the basisits 'belief 'that NS:Maori expeditiously sceicite: record the judgment and proceed with collection. 0) The t YideneeTis that Cogent ' currently has assets" of apprakimately V26,1,t10(Yoott has. no operations, revenues: or cash flow The professional fees of these proceedings are being mild by' its.iparent ecirperation.

5 299.Page [6] Cogent,currently has One material, tionrcontingent,, creditor NS United, There are no secured me:liters.: An Maritime. Shipping,company NYK, also manned arbitration proceedings against Cogent, NYK alleges it is, owed about vaq million. There has been,no hearing and there is, Obviously, no decision or "award, Those proceedings are currently stayed: The NYK. claim entirely contingent. There: is t no evidence that NYK it at all interested in Whatever it is that Cogent has diamissed, I was: advised that NYK takes no position on the motions before It is Conceded:by:Cogent that NS United Ms aiyetty over any proposal. The Cogent-Motion to.eittiiii [7] SeotiOn 5044(9) seta otit a three-part;,qonjtnfcttvtiteilfeit, tlifltatirofairextensiorrof-the- 3D-day stay. The 'Court may grant an extension, not to exceed 45 days, if satisfied on the evidence tenderedin Me:application that: (i) the insolvent.person has acted, and is acting, in good faith and with due diligence; (ii) the 'insolvent person would likely be able to make.a viable proposal "if the extension, boingappliedfor were,granteci; and (iil). no creditor Would be Materially prejudicedif the extension being-applied fofwere granted There is no doubt that the intent of the BIA proposal sections is to give the, insolvent persoicattmtipparturiitrtetulircavard -a-plan: -The putose.)of the legislationw.fareliabilltation*,01 _ InatilVent companiesaliould have the chance tq piit forward Mehl proposal. [9] I am net satisfied, however, on the evidenee provided by Cogent that, it has noted and is acting in sood faith and with 41w:diligence, Tam also not satisfied on the evidence provided by Cogent that it would likely beable to make a viable proposal if the extension being applied for were granted..[10] I Say this principally of thebasis di the vague, SOMeWhat Vacuous* affidavit evidence of :Mr: motititp filedirrsupport of the CegentatotiOn and in:response:to the Ng tittatotiow, 11.0 Riarnienc.PRanwpritsAcyitiiithi (a)' Cogent engaged in.settlefilentrifsemssioris with NYK with a view to making a ;proposal to NYK; (b): Cogent haaaffeted tetriemwithm United ; Cogent is working towards avr imp* and..cogent, requires additional time' o continue discussions With NYK and NS [12] There is net a hint of whet Cogent has to. Offer NY.K. and not a hint of what kinct proposalcogenthas Crithisaferaogeritarsties4hatbecatiSethe Settlerneat discussions

6 Page 3 - arewithoutprejudiee,. it cannot &Clog MOM, I. dri net find that argument persuasive. Nothing prevents-.cogent. ont-describing its,0140; or what it hopes to achieve in a proposal, Although Cogent has offered, to- meet with Na Unite& NS United has no. interest 'Meeting With Cogentaatthasnot done so. [14) Cogent says it as. wottomg towards, a proposal but, in the face of this,motion,. has not provided ;even alilaof what that proposal might look like. At its highest, it iiivolves talking to the two shipping companies And hoping to make a deal. Coutisel made 'submissions about possibleartiabases:winthlimayhavealtiebut there was licila mote of evidence to this 'effect [15] In this.case; the 30-day Stay expires, at midnight on August 14,.2015 Cogent has taken the position, on theae:ilintions, that if its request for an extension is denied, it will file a proposal of some kind on Monday, August 17, 20[1.5. That, it suggests, would automatically extend the slay for POothcr 21 days. [10] I find it difficult to uncleiatand how Cogent could plea to ille it propostil on Monday, August 17 but Was Unable to"provide At least the-outline of this proposal on Wednesday, August 12. There was no, explanation given.for this appatentcontradiction. [17] In effect,. Cogent says it needs mote, time to 'Contente discussions with its two maim creditors when at least one of those credltors.:(a creditor with veto power) has not engaged in any discussions withcogent and has no intention of doing so.. Cogeht's position is, I fmd, entirely tautological, pal In his faelinn and in oral :submissions, counsel for Cogent emphasized the rehabilitative, nature: of; he proposal sections. He relied heavily on recent Ontario and 13:C. 'authority to the. effect that a veto-empowered creditor's Atatement that it will never agree to a proposal is not dispeeitive Owl:tether to tcrniipetp.or refuse to extend.astay. I quite agree with this position and the supporting law.. Creditors baeii,, for strategic Saytheywill never agree. [19] Nevertheless,. it seems to me there Must be a.certain forthrightness on, the part.or the debtor" abdut What is sought To be achieved. There 'lutist also be an air of reality about the likelihood of any:prep:0s being viable, [20] Ithe10-glay stay (or any extension, thereof). is meant to, give the 'debtor time to -deal with multiple parties, many moving pieces and potentially CoMplex business and financial altangements. Here,., there is no active business. There are no:crimplex financial amagenients. There are no assets. Theft are/oily two Material creditors, at least one of Whi0b, NS United, has a veto" over any proposal "Thereate,in effect, alntiost no moving pieces. the thee of: motion to tertnitlateiheistay, 'One Velndh09e-theught the debtor would be motivated to, come up with the: teat evidence it could of what, its proposal might be and, specifidally, why an extension is necessary to further the development Of that ptoposiii. Yet the debtor has Chosen to put /forward no concrete evidene.ee, but to rely on vaguerettiteltisory asseraphs. It is this failure to:give even a hitg of what; proposal Mightjeolc like, orto Provide any content for the bald and canclusory statement that more time is needed to -further negotiations (particularly, whereit is unclear that there are say negotiations) whieh leads ine,to the couelusien

7 Paso 4- that Cogent has not met its onus of proving, on a balance of probabilities, that it has acted in pod faith and with due diligence and that it is likely to he able to, make a viable proposal if only it is givermoretime. [22J I am, alai) ddyen to, the conclusion that Cogent's emphasis oe so-called "rehabilitation" is empty 'rhetoric. in this case;, The evidence filed by Cogent sin the New York' bankrciptcy court - makes-it clear that there is no ongoing effort to "rehabilitate" thit company. Management had already decided to wind down its Operations before the NS United,arbitrationoward was granted, The statutory balance sheets.filed by the proposal trustee indicate that Cogent' s already well Under wway vtth its awitid-rlowitn-it-wentrem..$427-milliomimassets.in.20.13_ milliori_ in 2414 to, $201, [23] Counsel for the debtor suhmitted in oral sargument that perhaps the company' ould be restarted, There, is no evidence whatsoever to "support such a contention - indeed, all of the evidence is Very Muth to the coatrary. [24],For these reasansthe debtor's motion to extend the stay uader s. 50 4(9) is dismissed. The NS United bowie Ternu late [25] Section 504(19 of 'the 131A provides that where a debtor files a notice of intention to make (proposal, 'a ereditor can apply to the court to terminate the initial 30-day stay on one or Mote of four 'disjunctive grounds (i) the insolvent person has not acted; or is not,acting, in good faith and with due (ii) Ihe insolvent person will.riot likely be able M Make a Viable proposal beforelhe 'ex.piratiorrof the 30-day.period; the insolvent person will not 10 be able to make a proposal, before the 0>iphatiort of the 3Q-dayperied that wilt be accepted by the creditors; or (iv) the creditor( as a whole would 'be materially :prejudiced if the applidatioit to terminate: was rejected by the court. [26] 'NS United took the position that Cogent had not discharged its onus of proving. it.was acting in good "faith aticiwith due diligence on the motion to: ktend but did 'not positively assert this gratind on the motion to terminate, NS United relies on the second and third grounds of s...50,4(11), "[21.] it iselear from rite very existence of's, $0.4(1,1), as. welt aajudicial authority, that while: aminsolvent debtor is entitled to an "atitotnatic stay simply by filing a notice of "intention to Make a proposal, the MA does not guarantee an inselvent perseti a stay without review. There is no abcoltiteimmtinity from creditor( Seethan.50A(11) of the.biapmpowet's the courtto terminate the 30-daystay where the statinerrconditions for doing so are met.

8 Page '5 [28] With taped to the probability On a viable proposal at all,. I agdm refer to the paucity of evidence about what a proposal might look like. The debtor has utterly failed to provide even, a hint of its plan for a proposal. The facts before the court! from Cogent managements own sworn statement, are that Cogent was already being "wound down" before the arhitratawardprompt0 its filing of a NCI, The evidence before the eine, therefore, is that Management's Plartia not:to "rehabilitate" this company. [29] AS inentiotte.d earlier, Cogents Stated intention Mille a,proposal of:some:sokn,, O the last dsy, irtoroet to.huy another 21 days, seemstome not only disingenuous but to highlight the lack --efany-corierele-propesaltiaisimply-iitiffevkitireettranggeartherets,any plan the offing at all, much less one that would, probably appear reasonahlete reasonable.creditor. [3p] Cogent's gambit boils newt to this its proposal depends on negotiating a comprontise Withit,tinty oiotorioi,,momcontiogoot creditor,. That creditor, lawyer, will to; and is under no obligation le, negotiate any compromise with Cogent, pi] On the second ground, likely to be acceptabite creditors, agree with Cogent that the mere fact that.ns United, has a Veto power,over any proposal is not dispositive on a motion to tenninatelmder s. 50i4(.1 I), Itris, newever,.0itetttettn-to betaken into account [32] What adds credibility to INS United'a pesittott that it will, under no circumstances; agree to any proposal is the complete paucity of evidence that any plan is even possible, much less viable_atallikelytellemecepted..by Creditors:, _.. _ [33] Counsel for Cogent sought te,distinguish-betweep the "harsher" line taken by the Ontario. courts in. cases such tii(ittietyrint.7).tdink, Ina and the more liberrir approach taken: and other provinces in eases. like SOWl" Coach Likes and<enii*.i Group Con, Counsel Arguen that tite,more liberal approach is is more :Keeping :with keeping: the with the rehabilitative purpose-of the the proposal soetions.of the BIA and etideritviews ofhow these previsions should be'applien t am not convinced these cases are in conflict ThoeXerase of the discretion under (ss. 50,4(p) and. (,1 l) of the 'WA is thgfily fact dependent. CupOerland; 'for example,, was a base where a proposal had already been filed the issue was Whether to terminate the 21-day stay, The facts.1:taint/wi and-rob:re.can also he'readily nistingniihed tient thetresent ease. In Ccinfit{it, -tho debtor jtheelitbd, evidence:of a pending proposal under which the; obj eeting creditor might be paid multi:tilt, likewiseh, there was evidence that the debtor had significant assets in (other wordsithe debtor had something to:work [315] Here, the debtor has essentially nothing :to work with, which might explain why it has: been so reluctant to= come forward with anything concrete:. 'Cogent has no active business, no revenue, no cash ;flowand,effectively,no assets The jiiteltrite to be drawn from the :complete absence Orally hint of a eonetete;.proposal is, in tl esp eirctintstatteesi that there ia no basis` fot it viable plan and certainly no basis for a el:inclusion, on a balance of probabilities, that there is likelyto aorproposothat WOW he addeptabielo thoveto-empowered :creditor NS:, United, [36] Lax S. said.1019(1.0 IfiveStingiltv Ltd v, penegt.ini (April 12, "the proposal sections of the BIA ate intended40 give a debtor SomChteatliing MOM Theylire:net intended to eteatogn,obstaele course for creditors."

9 E'age 6 - [n] Cogent acl!nits that lb only hope fora proposal is to negotiate cornpromite with, NS IJnite& yet NS 'United has no interest, and no obligation to engage, in that negotiation. [38] EVeri applying What counsel for" ogent deseribes as the more "liberal" or debtor-friendly approach, on the evidence;, NS United has discharged its burden under s. 50,4(11). NS United 'ma> find, proven on.a balance, of probabilities that it is not likely that Cogent will be able to make tviahle proposal and, even:if-that Were likely, the proposal will, Trot likely. be accepted by thetermisite level of.creditor support Forthesereasons,.NS UnitecPs motion to terminatethe 30-day-stay iseartted. [40] NO order as to coots: Penny J. Date" August 17j 2015

10 Exhibit "E" to the Affidavit of Arthur Birnbaum, sworn before me this 26"1 day of October, A Commissi r fo king affidavits, etc.

11 Court File No ONTARIO SUPERIOR COURT OF JUSTICE (IN BANKRUPTCY AND INSOLVENCY) IN THE MATTER OF THE PROPOSAL OF COGENT FIBRE INC. AMENDED PROPOSAL Cogent Fibre Inc. ("CFI"), hereby submits the following Proposal pursuant to the provisions of Bankruptcy and Insolvency Act Act (Canada), R.S.C. 1985, c. B-3. PART I Interpretation Definitions 1.1 In this Proposal unless otherwise stated or the context otherwise requires, capitalized terms shall have the following meanings: (a) (b) (c) (d) (e) "Act" means Bankruptcy and Insolvency Act Act (Canada), R.S.C. 1985, c. B-3, as it may be amended from time to time; "Administrative Fees and Expenses" means the proper fees and expenses of the Trustee, including all legal fees and disbursements incurred by the Trustee, arising from or related to, (i) the preparation, presentation, consideration and implementation of the Proposal and any amendments thereto, and (ii) the proceedings, transactions and agreements contemplated by the Proposal or arising therefrom; "Approval Order" means an Order of the Court approving this Proposal pursuant to the provisions of the Act, "Business Day" means a day, other than a Saturday, Sunday or a day observed as a holiday under the laws of the Province of Ontario or the federal laws of Canada applicable therein on which banks are generally open for business in Toronto, Ontario; "Claim" means any right of any person against CFI in connection with any indebtedness, liability, or obligation of any nature whatsoever of CFI to any person, whether liquidated, unliquidated, fixed, contingent, matured, legal, equitable, secured, unsecured, present, future, known or unknown, and whether

12 by guarantee, surety or otherwise, incurred or arising or relating to the period prior to the Filing Date, and "Claims" has a corresponding meaning; (f) "Claims Bar Date" has the meaning set forth in Section 5.3; (g) (h) (i) "Court" means the Ontario Superior Court of Justice in Bankruptcy and Insolvency; "Creditor" means any person who holds one or more Claims, including Secured Creditors, Preferred Creditors and Unsecured Creditors, and "Creditors" has a corresponding meaning; "Creditors' Meeting" means a meeting of the Creditors called for the purpose of considering and voting on the Proposal; 0) "Effective Date" means the date that all conditions set out in Part VIII have been satisfied; (k) "Employees" means the employees and former employees of CFI, not including independent commissioned sales agents or contractors; (1) (I) "Filing Date" means the date of filing the Notice of Intention, being July 15, 2015; (m) (n) (o) (a) (b) (c) (d) "Fuller Landau" means The Fuller Landau Group Inc.; "Notice of Intention" means the notice of intention to make a proposal pursuant to the BIA filed by CFI with the Official Receiver on July 15, 2015; "Preferred Creditor" means a Creditor with a Proven Claim that is entitled to receive payment thereof without interest in priority to other Creditors as provided for in Section 136 of the Act; "Proposal" means this Proposal and any amendments thereto; "Proof of Claim" means the proof of claim required by the Act to be provided to each known Creditor prior to the Creditors' Meeting; "Proven Claim" means the value of any Claim as accepted by the Trustee and proven in accordance with Section 135 of the Act; "Seented "Secured Creditor" means any person holding a mortgage, hypothec, pledge, charge, lien, encumbrance, security interest or privilege on or against the property of CFI or any part thereof as security for a Claim, and "Secured Creditors" has a corresponding meaning;

13 (e) "Termination Order" means the order of the Court, dated August 12, 2015, terminating the time for CFI to file a proposal pursuant to Section 50.4(11) of the Act; (f) (1) "Trustee" means Fuller. Landau, or its duly appointed successor, in its capacity as trustee acting under the Proposal; (g) (h) "Unsecured Creditor" means a Creditor with a Proven Claim that is not a Secured Creditor or a Preferred Creditor and "Unsecured Creditors" has a corresponding meaning. "Voting Letter" shall mean the voting letter required by subsection 51(1) of the Act to be mailed or sent by electronic transmission to each known Creditor prior to the Creditors' Meeting. Headings 1.2 The division of this Proposal into Parts and Sections and the insertion of headings are for the convenience of reference only and do not affect the construction or interpretation of this Proposal. The terms "this Proposal", "hereof', "hereunder" and similar expressions refer to this entire Proposal and not to any particular Part, Section or other portion hereof and include any agreement supplemental hereto. Unless something in the subject matter or context is inconsistent herewith, references herein to Parts and Sections are to Parts and Sections of this Proposal. Extended Meanings 1.3 In this Proposal words importing the singular number only include the plural and vice versa, words importing any gender include all genders and words importing persons include individuals, partnerships, associations, trusts, unincorporated organizations and corporations. Date for Any Action 1.4 If any date on which any action required to be taken hereunder by any of the parties is not a Business Day, such action must be taken on the next succeeding day which is a Business Day unless precluded by statute. PART II Classification of Creditors Classes of Creditors 2.1 For the purposes of voting on the Proposal, the Creditors of CFI shall be composed of one class consisting of all Preferred Creditors and Unsecured Creditors.

14 PART III Proposal Purpose and Implementation of Proposal 3.1 The purpose of this Proposal is to provide for a distribution to Creditors and the assignment of the balance of their Claims to Cogent Biomass Inc., on the expectation that all Creditors will derive a greater benefit from payment of their Claims pursuant to the terms of the Proposal than would result from a forced liquidation of CFI's assets. 3.2 CFI will pay a total of USD $1,025,000 to the Trustee, pursuant to the schedule set out below, for distribution amongst the Creditors as set forth in the Proposal: (a) on the Business Day next following the issuance of the Approval Order, CFI will pay USD $500,000 to the Trustee; (b) on each anniversary of the Approval Order, CFI will pay an additional $175,000 to the Trustee, up to a maximum of USD $525, The due and timely payment of all amounts payable by CFI pursuant to Section 3.2 are guaranteed by Cogent Biomass Inc. A copy of the Guarantee from Cogent Biomass Inc. is attached hereto as Schedule "A". PART IV Treatment of Creditors Payment of Administrative Fees and Expenses 4.1 All of the Administrative Fees and Expenses shall be paid from the funds paid to the Trustee under Section 3.2 prior to all Claims and shall be a first charge thereon. 4.2 The Trustee may take interim draws of its fees and disbursements, including the Trustee's legal fees and disbursements, from the funds paid under Section 3.2 of this Proposal as follows: (a) (b) interim draws may be taken based on actual time and charges at normal billable rates plus applicable taxes as funds become available; and all draws are subject to final taxation by the Court. Payment of Levy 4.3 All payments contemplated by the Proposal shall be net of any applicable levy payable to the Office of the Superintendent of Bankruptcy as required by the Act.

15 Employees 4.4 Immediately following the granting of the Approval Order, CFI shall pay all Employees the amounts that they are qualified to receive under subsection 136(1)(d) of the Act. Her Majesty in Right of Canada or a Province 4.5 Within six months following the granting of the Approval Order, CFI shall pay in full to Her Majesty in Right of Canada or a Province all amounts that were outstanding as of the Filing Date and are of a kind that could be subject to a demand under: (a) (b) (c) subsection 244(1.2) of the Income Tax Act (Canada); any provision of the Canada Pension Plan or of the Employment Insurance Act that refers to subsection 244(2.2) of the Income Tax Act (Canada) and provides for the collection of a contribution, as defined in the Canada Pension Plan, or an employee's premium, or employer's premium, as defined in the Employment Insurance Act, and of any related interest, penalties or other amounts; or any provision of provincial legislation that has a similar purpose to subsection ) of the Income Tax Act (Canada), or that refers to that subsection, to the extent that it provides for the collection of a sum, and of any related interest, penalties or other amounts, where the sum: (i) (ii) has been withheld or deducted by a person from a payment to another person and is in respect of a tax similar in nature to the income tax imposed on individuals under the Income Tax Act (Canada); or is of the same nature as a contribution under the Canada Pension Plan if the province is a "province providing a comprehensive pension plan" as defined in subsection 3(1) of the Canada Pension Plan and the provincial legislation establishes a "provincial pension plan" as defined in that subsection; Secured Creditors 4.6 Secured Creditors will be paid in accordance with existing or future agreements between CFI and each Secured Creditor. All Claims of Secured Creditors and security held by Secured Creditors in respect of such Claims shall be unaffected by this Proposal. 4.7 All Secured Creditors who are related to CFI (as such term is defined in the Act) are not entitled to any distributions under the Proposal. Distribution To Preferred Creditors 4.8 The Proven Claims of Preferred Creditors are to be paid in full in priority to all claims of Unsecured Creditors in accordance with the scheme of distribution set forth in the Act.

16 Distribution To Unsecured Creditors 4.9 The balance of the funds paid by CFI pursuant to Section 3.2, after payment of Administrative Fees and Expenses, any payments made pursuant to Sections 4.3 and 4.4, and payment of the Proven Claims of Preferred Creditors, shall be distributed by the Trustee pro rata among all of the Unsecured Creditors to the extent of their Proven Claims. Claims Against Directors 4.10 Any Claims against CFI by any Creditor that are also Claims against the directors and officers of CFI that relate to obligations of CFI where directors are under any law liable in their capacity as directors for the payment of such obligations shall be, and upon Court approval of this Proposal, are hereby, to the extent permitted by the Act, compromised and released and forever discharged as against the directors of CFI upon acceptance of this Proposal by the Creditors and approval by the Court. Interest on Claims 4.11 No Creditors shall be entitled to claim interest accruing on their Claim after the Filing Date. Post Filing Claims 4.12 All Claims arising after the Filing Date are unaffected by this Proposal. Timing of Distributions 4.13 The first distribution to Creditors pursuant to the Proposal shall be paid by the Trustee within sixty (60) Business Days of receipt of funds or as determined by the Trustee. All subsequent distributions to Creditors shall be paid by the Trustee within sixty (60) Business Days of receipt of funds or as determined by the Trustee. PART V Procedure For Validation and Valuation of Claims Allowance or Disallowance of Claims by the Trustee and CFI 5.1 Upon receipt of a completed Proof of Claim, the Trustee and CFI shall examine the Proof of Claim and shall deal with each Claim in accordance with the provisions of the Act. Valuation of Claims 5.2 The procedure for valuing Claims of Creditors and resolving disputes with respect to such Claims will be as provided for in the Act. The Trustee and CFI reserve the right to seek the assistance of the Court in valuing any Claim of a Creditor and in respect of any other matter as may be required.

17 Claims Bar Date 5.3 In order to receive a distribution under the Proposal, all Proofs of Claim must be delivered by the Creditors and received by the Trustee within fifteen (15) days of the issuance of the Approval Order (the "Claims Bar Date"). Any and all Creditors who do not file a Proof of Claim by the Claims Bar Date shall not be entitled to any distributions under the Proposal. PART VI Meetings of Creditors Creditors' Meetings 6.1 The Trustee will call the Creditors' Meeting in order for the Creditors' Meeting to be held 21 days after the filing of the Proposal with the Official Receiver on such date, time and at such place as may be agreed upon by the Trustee and CFI. Notice of Creditors' Meetings 6.2 The Trustee shall provide the Creditors with notice of the time and place of the Creditors' Meeting by mail pursuant to the Act. All Proofs of Claim shall be delivered in accordance with the provisions of the Proposal, the Act and any order which may be issued by the Court in respect of the procedure governing the Creditors' Meeting. Conduct of Creditors' Meetings 6.3 The Official Receiver, or any nominee thereof, shall preside as the chair of the Creditors' Meeting and will decide all matters relating to the conduct of the Creditors' Meeting. The only persons entitled to attend the Creditors' Meeting are those persons (including the holders of proxies) entitled to vote at the Creditors' Meeting and the officers, directors and legal counsel of CFI together with such representatives of the Trustee as the Trustee may appoint in its discretion. Any other persons may be admitted on invitation of the chair of the Creditors' Meeting or with the consent of the Creditors. Adjournment of Meeting 6.4 The Creditors' Meeting may be adjourned in accordance with Section 52 of the Act. Voting by Creditors 6.5 To the extent provided for herein, each Creditor will be entitled to vote at the Creditors' Meeting to the extent of the amount which is equal to the Proven Claim of such Creditor as allowed by the Act. Approval by Creditors 6.6 In order for the Proposal to be binding on all of the Creditors, it must first be accepted by the Creditors by a majority in number of the Creditors with Proven Claims who actually

18 vote upon the Proposal (whether in person or by proxy) at the relevant Creditors' Meeting or by a Voting Letter, representing two-thirds in value of the Proven Claims of the Creditors who actually vote upon the Proposal (whether in person or by proxy) at the relevant Creditors' Meeting or by a Voting Letter. PART VII Inspectors 7.1 At the Creditors' Meeting, the Creditors will be entitled to appoint one or more, but not exceeding five, Inspectors whose powers shall be as follows: (a) (b) (c) (d) advising the Trustee in respect of such matters as may be referred to the Inspectors by the Trustee; advising the Trustee concerning any dispute that may arise as to the validity of the Claims of Creditors under this Proposal; exercising all powers given to the Inspectors of a bankrupt estate appointed pursuant to the provisions of the Act; and altering or extending the time for payments to be made pursuant to this Proposal, as recommended by the Trustee, but not the total amount paid. PART VIII Conditions Precedent to Implementation of the Proposal 8.1 As provided for in the Act, the arrangements set out in this Proposal will not take effect unless the conditions set forth below are satisfied: (a) (b) (e) all approvals and consents to the Proposal that may be required have been obtained; the Approval Order has been issued and the appeal period in respect of such order has expired; and no order or decree restraining or enjoining the consummation of the transactions contemplated by this Proposal has been issued. PART IX Miscellaneous Effect of Payment 9.1 Upon the delivery of the certificate of performance contemplated by Section 9.3 of the Proposal, the balance of all Claims shall, automatically, be irrevocably and unconditionally assigned to Cogent Biomass Inc., without any further action required on the part of CFI, Cogent Biomass Inc., the Trustee or any Creditor.

19 Amendment to Proposal 9.2 This Proposal may be amended by CFI with the consent of the Trustee at any time prior to the conclusion of the Creditors' Meeting called to consider the Proposal, provided that any amendment made pursuant to this section shall not reduce the rights and benefits given to the Creditors under the Proposal before any such amendment, and provided further that any and all amendments shall be deemed to be effective as of the filing date of the Proposal. Performance Certificate 9.3 The Trustee will give CFI and the Official Receiver a certificate of performance, contemplated by Section 65.3 of the Act, following the Trustee being satisfied that all distributions to Creditors contemplated herein are complete. Court Approval 9.4 After the Creditors' acceptance of the Proposal, the Trustee will proceed to seek the Approval Order from the Court pursuant to Section 58 of the Act. Binding Effect 9.5 The provisions of this Proposal will be binding on the Creditors, CFI, and their respective heirs, executors, administrators, successors and assigns, upon the Effective Date. Reviewable Transactions 9.6 Sections 95 to 101 of the Act do not apply to this Proposal. Outstanding Appeals 9.7 On August 12, 2015, the Court granted the Termination Order. On that same date, CFI served a Notice of Appeal of the Termination Order as well as a Notice of Appeal of the Order of the United States District Court for the Southern District of New York, dated July 14, 2015, which confirmed an arbitration award granted in favour of NS United Kaiun Kaisha Ltd. 9.8 The appeals described in Section 9.7 may affect the timing of the Creditors' Meeting, the granting of the Approval Order and/or the distributions to Creditors contemplated by the Proposal. Notices 9.9 Any notices or communication to be made or given hereunder shall be in writing and shall refer to this Proposal and may be given by personal delivery, fax or by addressed to the respective parties as follows:

20 (a) If to CFI: do Arthur Birnbaum Eglinton Ave East Toronto Ontario M4P 2Y3 Fax: arthur.birnbaum@rogers.blackberrv.net Copy to: Dentons Canada LLP 77 King Street West, Suite 400 Toronto, ON M5K OA1 Attention: Ken Kraft Fax: kenneth.kraft@dentons.com (b) If to the Trustee: The Fuller Landau Group Inc. 151 Bloor Street West, 12th Floor Toronto, ON M5S 1S4 Attention: Ken Pearl Fax: KPearl@FullerLLP.com (c) If to an Unsecured Creditor, to the address, fax number or for such Unsecured Creditor specified in their Proof of Claim filed by such Unsecured Creditor or, if no Proof of Claim has been filed, to such other address, or fax number at which the notifying party may reasonably believe that the Unsecured Creditor may be contacted; or such other address as any party may from time to time notify the others in accordance with this Section. All such notices and communications will be deemed to have been received, in the case of notice by fax, or delivery prior to 5:00 p.m. on a Business Day, when received or if received after 5:00 p.m. on a Business Day or at any time on a non-business Day, on the next following Business Day. Any unintentional failure to give a notice contemplated hereunder to any particular Creditor will not invalidate this Proposal or any action taken by any person pursuant to this Proposal, including CFI.

21 PART X Trustee 10.1 Fuller Landau, shall be the Trustee under this Proposal and all monies payable under this Proposal shall be paid over to the Trustee who shall make the payment of all dividends in accordance with the terms of this Proposal Fuller Landau is acting in its capacity as Trustee and not in its personal capacity and no officer, director, employee or agent of Fuller Landau shall incur any obligations or liabilities in connection with this Proposal or in respect of the business or liabilities of CFI Upon payment by the Trustee of the amounts contemplated in Part IV of this Proposal, the Trustee shall have discharged its duties as Trustee, and the Trustee shall be entitled to apply for its discharge as Trustee hereunder For greater certainty, the Trustee will not be responsible or liable for any obligations of CFI and will be exempt from any personal liability in fulfilling any duties or exercising any powers conferred upon it by the Proposal unless such acts have been carried out in bad faith and constitute a willful or wrongful act or default. Dated at Collins., dr. A Ontario this 1) day of August, COGENT FIBRE INC. Title: A ebarit ; p c eamer er I have authority to bind the corporation ti Agreed to this-) day of August, 2015 COGENT BIOMASS INC. N egeitel S. 3St Title:;ras,_,- I have authority to bind the corporation

22 3( SCHEDULE A GUARANTEE TO: FROM: The Creditors of Cogent Fibre Inc. (the "Creditors') Cogent Biomass Inc. ("Guarantor") WHEREAS Cogent Fibre Inc. ("CFI') has made a Proposal to its Creditors pursuant to the provisions of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, dated as of today's date (the "Proposal"); AND WHEREAS all capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Proposal; AND WHEREAS the Guarantor has agreed to guarantee the financial obligations of CFI pursuant to the Proposal; NOW THEREFORE THIS GUARANTEE WITNESSETH that in consideration for the benefits to the Guarantor of CFI making a Proposal to its Creditors: 1. Guarantee. The Guarantor hereby unconditionally, absolutely and irrevocably guarantees, as a primary obligor and not merely as surety, the due and timely payment of all amounts payable by CFI pursuant to Section 32 of the Proposal (the "Obligations"). In the event that CFI fails to make the payments contemplated by Section 3.2 of the Proposal, the Guarantor will make such payments to the Trustee within five (5) 13usiness Days of a request in writing delivered to the Guarantor by the Trustee or any Creditor. 2. Governing. Law. This Guarantee shall be construed and enforced in accordance with, and shall be governed by, the laws of the Province of Ontario and the laws of Canada applicable therein (without application of any conflict of laws rules). DATED the iv- day of August, 2015 COGENT BIOMASS INC. By: Name: 4er-4 An A.r \7 *pr. Title: -1-3; occiper,

23 Exhibit "F" to the Affidavit of Arthur Birnbaum, sworn before me this 26th day of October, A Commissio or taking affidavits, etc.

24 District of ONTARIO Division No Tdronto COURT NO: 31-3 I ESTATE NO: 31-3 I» ONTARIO SUPERIOR COURT OF JUSTICE (IN BANKRUPTCY AND INSOLVENCY) IN THE MATTER OF THE PROPOSAL OF COGENT FIBRE INC. Of the City of Toronto, in the Province of Ontario TO THE CREDITORS OF COGENT FIBRE INC. (the "Debtor", the "Company" or "CFI") The Debtor filed a Notice of Intention to Make a Proposal ("NOI") under the Bankruptcy and Insolvency Act ("BIA") on July 15, 2015 and The Fuller Landau Group Inc. Inc. consented to act as trustee under the the proposal (the (the "Proposal Trustee") in the administration of of the proposal proceedings (the "Proposal Proceedings"). A proposal to to creditors was was filed filed with with the the Official Official Receiver Receiver on August on August 13, , 2015 (the "August It 131" Proposal"), and and an an amended proposal was filed with the Official Receiver on August 17, 2015 (the "August Proposal" or the "Proposal"). We enclose herewith the following documents: a formal notice of meeting of creditors; a copy of the Proposal; the Statement of Affairs, including a list of creditors; a proof of claim form and general proxy; and a voting letter in the event you wish to vote in advance of the meeting of creditors. A creditors' meeting will be held to consider the Proposal on September 2, 2015, at 2:00 p.m. at the offices of The Fuller Landau Group Inc. 151 Bloor Street West, 12th Floor, Toronto, Ontario, M5S M In order to be eligible to vote, either at or before the meeting, the Proposal Trustee must receive prior to the meeting a properly executed proof of claim, together with your Statement of Account, attached thereto as Schedule "A". If you intend to have an individual represent you at at the the upcoming meeting, you you must must properly properly complete complete the proxy the proxy form attached to to the proof of of claim, and and therein name name the the individual representing you. you. All All companies must name a proxy. a For For your your -convenience, you may you vote may in vote advance in advance of the of the meeting by returning to to us us the the attached voting voting letter letter with with your your completed completed proof proof of claim. of claim.

25 Please send any documents you are forwarding to the Proposal Trustee to the attention of Ken Pearl by facsimile at or by to: If the Proposal is accepted by the statutory majority of creditors, and approved by the Ontario Superior Court of Justice (In (in Bankruptcy and Insolvency) (the "Court"), the Proposal will become legally binding on the Debtor and all of its creditors. The purpose of this report of the Proposal Trustee (the "Proposal Trustee's Report to Creditors") is to provide creditors with the necessary information they need to make a well-informed decision on the acceptance, or refusal of the Proposal. For reference purposes, any capitalized terms not otherwise defined in this report shall have the meanings ascribed to them in the Proposal. BACKGROUND AND CAUSES OF FINANCIAL DIFFICULTIES CFI is a privately, held company and the wholly owned subsidiary of Cogent Biomass, Inc. ("Biomass"). CFI was originally incorporated in 2006 as Cogent Fibre, LLC, pursuant to the laws of the State of Delaware. In 2011 CFI changed its name to "Cogent Fibre Inc.", continued pursuant to the federal laws of Canada and extra-provincially registered in Ontario. Its head office is located in Toronto, Ontario. Although based in Canada, CFI carried on business exporting woodchips from the eastern seaboard of the United States (North Carolina and Georgia) primarily to customers in Europe, mainly in Turkey, where the woodchips were used in manufacturing of particleboard and medium-density fiberboard as well as to generate clean, renewable energy at biomass-fired power plants. Biomass was CFI's sole source of financing, and has been periodically funding CFI's l's operations on a secured basis. CFI primarily shipped its products under contracts with NS United Kaiun Kaisha, Ltd. ("NSU") and Nippon Yusen Kaisha ("NYK"), two Japanese shipping companies. As a result of the economic slowdown of 2008, there was depressed demand for CFI's products and CFI was unable to generate sufficient sales to meet the quotas under its agreements with NSU and NYK. Disputes arose with NSU, which resulted in complex and expensive maritime arbitrations in New York, commencing in early Recently, CF1 CFI lost an arbitration decision in favour of NSU. On January 23, 2015, the arbitration panel issued its findings and awarded damages in favour of NSU in the total amount of US$11,606,421 (the "Arbitration Award"). In March, 2015, NSU commenced a proceeding for confirmation and enforcement of the Arbitration Award against Cogent by filing a petition in the United States District Court for the Southern District of New York (the "District Court"). On July 14, 2015 the District Court confirmed the Arbitration Award (the "Confirmation Order"). In addition, NYK claims to be owed a total of approximately US$10.9 million, which amount has not been agreed to by CFI who claims that approximately US$8 million of this 2

26 amount is contingent. At the time of filing of the NO1, NOI, NYK and CFI were in the early stages of an arbitration proceeding. Proceeding. The only other known creditor of CFI is Canada Revenue Agency for income tax debt of approximately $50,000. Given that most of CFI's creditors are located outside Canada, and due to the Confirmation Order, CFI commenced proceedings in order to seek recognition of the NO1 NOI Proceedings pursuant to chapter 15 of title 11 of the United States Code (the "Chapter 15 Proceedings"). By an order of this Court dated July 17, 2015, CFI was appointed as the foreign representative in respect of the NOl NOI Proceedings (the "Foreign Representative"). On July 17, 2015, the Foreign Representative filed a petition for recognition of the NOl Proceedings (the "Petitioner's Verified Petition") with the United States Bankruptcy Court for the Southern District of New York (the "US Bankruptcy Court"). The US Bankruptcy Court issued an order dated July 20, 2015, which stays all proceedings against CFI, pending further order of the Canadian Court, until the US Bankruptcy Court enters a final ruling on the Petitioner's Verified Petition. On August 4, 2015, NSU filed a a motion record which asks the Ontario Court to terminate the NOI NOl Proceedings and states that NSU will oppose any request by Cogent for an extension to file a proposal (the "NSU Motion"). On August 5, 2015, each of NSU and NYK filed objections to the Chapter 15 Proceedings with the US Bankruptcy Court. On August 6, 2015, Cogent filed a motion record to request that the Court issue an order approving a 45 day extension from August 14, 2015 to September 28, 2015 (the "Request for Extension Motion") to file a proposal. On August 10, 2015, the US Bankruptcy Court stayed the Chapter 15 Proceedings pending the outcome of the NSU Motion and the Request for Extension Motion. On August 12, 2015 the Court heard the NSU Motion and the Request for Extension Motion. By an order of Mr. Justice Penny dated August 12, 2015 (the "August 12th 12a Order"), the Request for Extension Motion was dismissed and the Proposal Proceedings were terminated, which would mean that CFI would be deemed bankrupt. However, during the afternoon of August 12, 2015 CFI filed a Notice of Appeal of the August 12th Order, which stayed the August 12th Order and the deemed bankruptcy. In order to comply with the thirty day deadline of August 14, 2015, CF1 CFI filed the August 13th Proposal with the Proposal Trustee. On August 20, 2015, NSU asked Mr. Justice Penny to issue an order that the Proposal Proceedings be stayed and that the Proposal Trustee be relieved of its obligations under the BIA arising from CFI filing the. August 13th 13th Proposal, pending a disposition by the Court of appeal commenced by CFI of the August 12th 12th Order. A meeting with Mr. Justice Penny has been scheduled for the morning of August 25, Subject to any further orders of the Court, the Proposal Trustee has an obligation to continue to carry out its duties pursuant to the BIA, which include sending the Proposal Trustee's Report to Creditors th and scheduling a meeting of creditors for the purpose of voting on the August 17th Proposal.

27 FINANCIAL POSITION AND EVALUATION OF ASSETS A summary of of the the book value of of CFI's CFI's assets assets and and liabilities as reported as reported on the on Company's the Company's statement of of affairs dated August 13, 13, is as is follows: as follows: Cash In in bank $ 18,743 Unsecured liabilities $ 19,309,933 $ 18,743 $ 19,360;033 19,309,933 CFI has treated the claims of of NSU l'sisu and and NYK NYK as contingent as in its in financial its financial records. records. A A summary of of CFI's internal balance sheets sheets as at as December at December 31, 2011, 31, 2011, 2012, 2013, 2012, 2014, 2013, and 2014, and July 15, 2015 is is as as follows: Balance Sheets As At,Assets July 15/15 Dec 31/14 Dec 31/13 Dec 31/12 Dec 31/11 Cash 20, ,086 4, , ,969 Accounts receivable 0 108,783 7,242 4,433, ,260 Inventory 0 3,059,523 1,747,141 4,607,010 4,382,570 Prepaid expenses and deposits 0 9,108 71,935 98,963 29,067 Miscellaneous 0 1, ,884 20,665 3,300,533 1, ,830,560 9,385,539 5,540,750 Shareholder - Cogent Biomass- see Note 240,811 1,723,526 1,439, ,060 1,864, , ,723,526 1,439, , ,060 1,864, ,476;; 5,024,059 3, ,270,529 10,272,599 7,405,207 Liabilities Accounts payable 1,120,000 3,267,401 2,788,985 8,638,233 5,286,741 Accrued liabilities - 95, ,948 1,131, ,772 Corporate tax payable 50,000 50,000 50,000 50, ,118 Loan Payable - CFP Intl - 1,500,000 1,170,000 4,912,709 3,207,933 9,819,527 6,009,631 Share capital I 1 I Retained earnings (908,525) 111,349 62, ,071 1,395,575 (908,524) 111,350 62, ,072 1,395, ,476 5,024,059 3,270,529 10,272,599 7,405,207 Note - since July 15, 2015, Biomass has repaid the shareholder loan by funding CFI's professional fees for the Proposal Proceedings and the Chapter 15 Proceedings. A search of the Personal Property Properly Security Act Act (Ontario) dated dated July July 21, 21, shows shows that that Biomass and CFP International Inc. (both related parties to CFI) to CFI) had had financing charges charges registered on on December 12, 12, against CFI, CFI, however however at the at date the of date filing of filing of the of NO1, the no NOI, no amounts were owing to to either party. A legal A legal opinion opinion has has not not been been obtained obtained on the on validity the validity of any registered charges.

28 CFI has wound down its operations and currently has no operating business. CFI has not prepared external financial statements or filed income tax returns for the fiscal years ended December 31, 2012, 2013 and SUMMARY OF PROPOSAL.. th The purpose of the August 11 I7th Proposal is is to to provide a a distribution to to creditors, which will be of greater benefit than what creditors would receive from a liquidation th of CFI's remaining assets. The following summarizes key points of the August 17th Proposal. All amounts referred to are in Canadian dollars unless otherwise noted. For reference purposes, any capitalized terms not otherwise defined shall have the meanings ascribed to them in the August 17th I7th Proposal. Funding The funding of the August 17th Proposal, which has been guaranteed by Biomass, consists of a total of US$1,025,000 (the "Proposal Funds"), which will be paid to the Proposal Trustee over a three year term as follows: (a) on the Business Day next following the issuance of the Approval Order (as defined in the August 17th Proposal), CFI will pay US$500,000 to the Proposal Trustee; and (b) on each anniversary of of the Approval Order, CFI will pay an additional US$175,000 to the Trustee, up to a maximum of US$525,000. Distributions to Creditors The Proposal Funds, net of Administrative Fees and Expenses (fees and disbursements and legal fees and disbursements of the Proposal Trustee related to the preparation and implementation of the Proposal) will be distributed to creditors who have filed Proof of Claims by the Claims Bar Date (which are accepted as Proven Claims) according to the following scheme of distribution as set forth in the BIA: (a) Source deduction liabilities (including interest and penalties), if any CFI advises that there are no outstanding source deduction liabilities, however Canada Revenue Agency has contacted the Proposal Trustee to arrange for an audit. (b) Wages and Vacation pay owing to Employees pursuant to section 136(1) of the BIA, B1A, if if any= CFI advises that there are no wages or vacation pay amounts owing. (c) Secured Creditors' claims will be paid in accordance with existing agreements and secured claims of related parties will not be entitled to any distributions CFI advises that there are no amounts owing to secured creditors who are not related to CFI. (d) Preferred Creditors are are to to be be paid in in full full CFI advises that there are no amounts owing to Preferred Creditors. (e) Unsecured Creditors. 5

29 Distributions paid to Secured Creditors, Preferred Creditors and Unsecured Creditors will be subject to the levy, payable to the Office of the Superintendent Supeiintendent of Bankruptcy as required by the B1A, BIA, which is 5% of the first million dollars and 1.25% I of the next million dollars of distributions. Distributions are to be paid without interest and within 60 days of receipt of funds by the Proposal Trustee. Balance of Claims Upon completion of the distributions, the unpaid balances of any Claims are to be assigned to Biomass. The August 17th Proposal also compromises Claims against the directors of CFI, where the directors are under any law liable in their capacity as directors for the payment of such obligations, and acceptance by the Unsecured Creditors and approval by the Court of the August 17th Proposal will release and forever discharge the directors for such Claims. CONDUCT OF THE DEBTOR The Proposal Trustee has completed a cursory review of CFI's accounting records, including bank statements for the past twelve months. The August 17th Proposal states that sections 95 to 101 of the BIA do not apply to the August 17th Proposal. Sections 95 to 101 of the BIA deal with Preferences, Transfers at Undervalue, and Dividends and Redemptions of Shares. At this time, the Proposal Trustee is not aware of any preferential payments, transfers at under value that CFI may have been party to, or any dividends or redemptions of shares of CFI. Any further investigations or actions regarding sections 95 to 101 of the BIA by the Proposal Trustee will be subject to approval of the creditors/inspectors and subject to the Proposal Trustee receiving appropriate and sufficient funding. CREDITORS' CLAIMS As reported above, management of CFI advises that they are not aware of any Secured Claims owing to non-related parties, priority claims relating to to arrears of source deductions or wages and vacation pay, or Preferred Claims, which would be paid in priority to the claims of the Unsecured Creditors. The Proposal Trustee is not aware of any encumbrances or trust claims against the assets of the Company, save and except as mentioned' in this report. All Claims are subject to review by the Proposal Trustee and will only be eligible for voting purposes or to share in any distribution if accepted by the Proposal Trustee in accordance with the BIA and the August 17th Proposal. REMUNERATION OF THE PROPOSAL TRUSTEE As described above, the Administrative Fees and Expenses shall be be paid in in priority to all Claims. The Proposal Trustee may take interim draws of its fees and disbursements, including the Proposal Trustee's legal fees and disbursements, from the funds paid to the

30 Proposal Trustee and all draws will be subject to final taxation by the Court. Amounts stated with respect to professional fees are estimates only, and will not restrict the Proposal Trustee or the Proposal Trustee's legal counsel from invoicing, taxing, and being paid all of their reasonable fees and charges based upon actual time at normal billable rates. OTHER The Proposal Trustee is not aware of any other issues at this time. ESTIMATED REALIZATION TO CREDITORS Attached as Schedule "A" is a schedule showing the estimated distribution to Unsecured Creditors from a bankruptcy of CFI compared to acceptance of the August 17th Proposal, based on the amounts owing to Unsecured Creditors as reported by CFI in the Statement of Affairs, which is summarized as follows: % Recovery to Unsecured Creditors Bankruptcy Proposal Unsecured Creditors 0.02% 6.5% PROPOSAL TRUSTEE'S RECOMMENDATION Assuming the assets of CFI in a. a bankruptcy scenario are limited to the small amount of cash on hand, the recovery to Unsecured Creditors from a bankruptcy of CFI will be negligible. In'a a bankruptcy, sections 95 to 101 of the WA BIA will apply and the creditors will maintain the right to pursue further investigations of the Debtor, however any such investigations and subsequent proceedings will likely require protracted and costly efforts, the results of which are highly uncertain. Based on all of the information that has come to the Proposal Trustee's attention to date, the Proposal Trustee recommends acceptance of the August th Proposal as it provides for an overall greater recovery for the Unsecured Creditors than would otherwise be achieved through a bankruptcy. Dated at Toronto, Ontario this 21st day of August, The Fuller Landau Group Inc. Proposal Trustee of the Estate of Cogent Fibre Inc. Per: Ken Pearl, MBA, CPA, CA, C1RP CIRP Senior Vice President 7

31 325 SCHEDULE A Estimated Statement of Net Realization and Distribution to Unsecured Creditors Bankruptcy I Proposal I Cash on Hand- August 13, ,743 $ 18,743 Proposal Funds - 1,281,250 18,743 $ 1,299,993 Estimated Administrative Fees and Expenses 15,000 50,000 Estimated Funds Available for Distribution 3, $ 1,249,993 Projected Distribution Bankruptcy Proposal Estimated Estimated Total Estimated % Estimated Total :. Estimated % Claims. Distribution Recovery Distribution. Recovery Unsecured Creditors S $ 19,309,933 $ 3, % $ 1,249, % 01 CO

32 District of Ontario Division No. 09-Toronto Court No Estate No FORM 92 Notice of Proposal to Creditors (Section 51 of the Act) In the Matter of the Proposal of Cogent Fibre Inc. Of the City of Toronto, In the Province of Ontario Take notice that Cogent Fibre Inc. of the City of Toronto in the Province of Ontario has lodged with us a proposal under the Bankruptcy and Insolvency Act. The proposal was lodged with the Official Receiver on the 13th 1Jh day of August, 2015 and amended on August 11h, Oh, 2015 (the "Amended Proposal"). A copy of the Amended Proposal, the Report of the Trustee to the General Meeting of Creditors and the Debtor's Statement of Affairs as at August 13, 2015 are enclosed herewith. A general meeting of the creditors of the debtor will be held at the offices of the Trustee, The Fuller Landau Group Inc., 151 Bloor St. West, 12h Floor, Toronto, Ontario on the 2nd 2'1 day of September 2015 at 2:00 PM. The creditors or any class of creditors qualified to vote at the meeting may by resolution accept the proposal either as made or as altered or modified at the meeting. If so accepted and if approved by the Court, the proposal is binding on all the creditors or the class of creditors affected. Proofs of claim, proxies and voting letters intended to be used at the meeting must be lodged with us prior to the commencement of the meeting. Dated at the City of Toronto, in the Province of Ontario, this 2 r ft day of August, The Fuller Landau Group Inc. Trustee Per: Trustee Page 1 of 2

33 Court File No ONTARIO SUPERIOR COURT OF JUSTICE (IN BANKRUPTCY AND INSOLVENCY) IN THE MATTER OF THE PROPOSAL OF COGENT FIBRE INC. AMENDED PROPOSAL Cogent Fibre Inc. ("CFI"), hereby submits the following Proposal pursuant to the provisions of Bankruptcy and Insolvency Act Act (Canada), R.S.C. 1985, c. B-3. PART I Interpretation Definitions 1.1 In this Proposal unless otherwise stated or the context otherwise requires, capitalized terms shall have the following meanings: (a) (b) (c) (d) (e) "Act" means Bankruptcy and Insolvency Act Act (Canada), R.S.C. 1985, c. B-3, as it may be amended from time to time; "Administrative Fees and Expenses" means the proper fees and expenses of the Trustee, including all legal fees and disbursements incurred by the Trustee, arising from or related to, (i) the preparation, presentation, consideration and implementation of the Proposal and any amendments thereto, and (ii) the proceedings, transactions and agreements contemplated by the Proposal or arising therefrom; "Approval Order" means an Order of the Court approving this Proposal pursuant to the provisions of the Act, "Business Day" means a day, other than a Saturday, Sunday or a day observed as a holiday under the laws of the Province of Ontario or the federal laws of Canada applicable therein on which banks are generally open for business in Toronto, Ontario; "Claim" means any right of any person against CFI in connection with any indebtedness, liability, or obligation of any nature whatsoever of CFI to any person, whether liquidated, unliquidated, fixed, contingent, matured, legal, equitable, secured, unsecured, present, future, known or unknown, and whether

34 by guarantee, surety or otherwise, incurred or arising or relating to the period prior to the Filing Date, and "Claims" has a corresponding meaning; (f) "Claims Bar Date" has the meaning set forth in Section 5.3; (g) "Court" means the Ontario Superior Court of Justice in Bankruptcy and Insolvency; (h) (i) (j) (k) "Creditor" means any person who holds one or more Claims, including Secured Creditors, Preferred Creditors and Unsecured Creditors, and "Creditors" has a corresponding meaning; "Creditors' Meeting" means a meeting of the Creditors called for the purpose of considering and voting on the Proposal; "Effective Date" means the date that all conditions set out in Part VIII have been satisfied; "Employees" means the employees and former employees of CFI, not including independent commissioned sales agents or contractors; (1) "Filing Date" means the date of filing the Notice of Intention, being July 15, 2015; (m) (n) (o) (a) (b) (c) (d) "Fuller Landau" means The Fuller Landau Group Inc.; "Notice of Intention" intention" means the notice of intention to make a proposal pursuant to the BIA filed by CFI with the Official Receiver on July 15, 2015; "Preferred Creditor" means a Creditor with a Proven Claim that is entitled to receive payment thereof without interest in priority to other Creditors as provided for in Section 136 of the Act; "Proposal" means this Proposal and any amendments thereto; "Proof of Claim" means the proof of claim required by the Act to be provided to each known Creditor prior to the Creditors' Meeting; "Proven Claim" means the value of any Claim as accepted by the Trustee and proven in accordance with Section 135 of the Act; "Secured Creditor" means any person holding a mortgage, hypothec, pledge, charge, lien, encumbrance, security interest or privilege on or against the property of CFI or any part thereof as security for a Claim, and "Secured Creditors" has a corresponding meaning;

35 (e) (f) (g) (1) "Termination Order" means the order of the Court, dated August 12, 2015, terminating the time for CFI to file a proposal pursuant to Section 50.4(11) of the Act; "Trustee" means Fuller Landau, or its duly appointed successor, in its capacity as trustee acting under the Proposal; "Unsecured Creditor" means a Creditor with a Proven Claim that is not a Secured Creditor or a Preferred Creditor and "Unsecured Creditors" has a corresponding meaning. "Voting Letter" shall mean the voting letter required by subsection 51(1) of the Act to be mailed or sent by electronic transmission to each known Creditor prior to the Creditors' Meeting. Headings 1.2 The division of this Proposal into Parts and Sections and the insertion of headings are for the convenience of reference only and do not affect the construction or interpretation of this Proposal. The terms "this Proposal", "hereof", "hereof', "hereunder" and similar expressions refer to this entire Proposal and not to any particular Part, Section or other portion hereof and include any agreement supplemental hereto. Unless something in the subject matter or context is inconsistent herewith, references herein to Parts and Sections are to Parts and Sections of this Proposal. Extended Meanings 1.3 In this Proposal words importing the singular number only include the plural and vice versa, words importing any gender include all genders and words importing persons include individuals, partnerships, associations, trusts, unincorporated organizations and corporations. Date for Any Action 1.4 If any date on which any action required to be taken hereunder by any of the parties is not a Business Day, such action must be taken on the next succeeding day which is a Business Day unless precluded by statute. PART II Classification of Creditors Classes of Creditors 2.1 For the purposes of voting on the Proposal, the Creditors of CFI shall be composed of one class consisting of all Preferred Creditors and Unsecured Creditors.

36 PART III Proposal Purpose and Implementation of Proposal 3.1 The purpose of this Proposal is to provide for a distribution to Creditors and the assignment of the balance of their Claims to Cogent Biomass Inc., on the expectation that all Creditors will derive a greater benefit from payment of their Claims pursuant to the terms of the Proposal than would result from a forced liquidation of CFI's assets. 3.2 CFI will pay a total of USD $1,025,000 to the Trustee, pursuant to the schedule set out below, for distribution amongst the Creditors as set forth in the Proposal: (a) on the Business Day next following the issuance of the Approval Order, CFI will pay USD $500,000 to the Trustee; (b) on each anniversary of the Approval Order, CFI will pay an additional $175,000 to the Trustee, up to a maximum of USD $525, The due and timely payment of all amounts payable by CFI pursuant to Section 3.2 are guaranteed by Cogent Biomass Inc. A copy of the Guarantee from Cogent Biomass Inc. is attached hereto as Schedule "A". PART IV Treatment of Creditors Payment of Administrative Fees and Expenses 4.1 All of the Administrative Fees and Expenses shall be paid from the funds paid to the Trustee under Section 3.2 prior to all Claims and shall be a first charge thereon. 4.2 The Trustee may take interim draws of its fees and disbursements, including the Trustee's legal fees and disbursements, from the funds paid under Section 3.2 of this Proposal as follows: (a) (b) interim draws may be taken based on actual time and charges at normal billable rates plus applicable taxes as funds become available; and all draws are subject to final taxation by the Court. Payment of Levy 4.3 All payments contemplated by the Proposal shall be net of any applicable levy payable to the Office of the Superintendent of Bankruptcy as required by the Act.

37 Employees 4.4 Immediately following the granting of the Approval Order, CFI shall pay all Employees the amounts that they are qualified to receive under subsection 136(1)(d) of the Act. Her Majesty in Right of Canada or a Province 4.5 Within six months following the granting of the Approval Order, CFI shall pay in full to Her Majesty in Right of Canada or a Province all amounts that were outstanding as of the Filing Date and are of a kind that could be subject to a demand under: (a) (b) (c) subsection 244(1.2) of the Income Tax Act (Canada); any provision of the Canada Pension Plan or of the Employment Insurance Act Act that refers to subsection 244(2.2) of the Income Tax Act (Canada) and provides for the collection of a contribution, as defined in the Canada Pension Plan, or an employee's premium, or employer's premium, as defined in the Employment Insurance Act, and of any related interest, penalties or other amounts; or any provision of provincial legislation that has a similar purpose to subsection 244(1.2) of the Income Tax Act (Canada), or that refers to that subsection, to the extent that it provides for the collection of a sum, and of any related interest, penalties or other amounts, where the sum: (0 (i) has been withheld or deducted by a person from a payment to another person and is in respect of a tax similar in nature to the income tax imposed on individuals under the Income Tax Act (Canada); or (ii) is of the same nature as a contribution under the Canada Pension Plan if the province is a "province providing a comprehensive pension plan" as defined in subsection 3(1) 30) of the Canada Pension Plan and the provincial legislation establishes a "provincial pension plan" as defined in that subsection; Secured Creditors 4.6 Secured Creditors will be paid in accordance with existing or future agreements between CFI and each Secured Creditor. All Claims of Secured Creditors and security held by Secured Creditors in respect of such Claims shall be unaffected by this Proposal. 4.7 All Secured Creditors who are related to CFI (as such term is defined in the Act) are not entitled to any distributions under the Proposal. Distribution To Preferred Creditors 4.8 The Proven Claims of Preferred Creditors are to be paid in full in priority to all claims of Unsecured Creditors in accordance with the scheme of distribution set forth in the Act.

38 Distribution To Unsecured Creditors 4.9 The balance of the funds paid by CFI pursuant to Section 3.2, after payment of Administrative Fees and Expenses, any payments made pursuant to Sections 4.3 and 4.4, and payment of the Proven Claims of Preferred Creditors, shall be distributed by the Trustee pro rata among all of the Unsecured Creditors to the extent of their Proven Claims. Claims Against Directors 4.10 Any Claims against CFI by any Creditor that are also Claims against the directors and officers of CFI that relate to obligations of CFI where directors are under any law liable in their capacity as directors for the payment of such obligations shall be, and upon Court approval of this Proposal, are hereby, to the extent permitted by the Act, compromised and released and forever discharged as against the directors of CFI upon acceptance of this Proposal by the Creditors and approval by the Court. Interest on Claims 4.11 No Creditors shall be entitled to claim interest accruing on their Claim after the Filing Date. Post Filing Claims 4.12 All All Claims arising after the the Filing Date are unaffected by this Proposal. Timing of Distributions 4.13 The first distribution to Creditors pursuant to the Proposal shall be paid by the Trustee within sixty (60) Business Days of receipt of funds or as determined by the Trustee. All subsequent distributions to Creditors shall be paid by the Trustee within sixty (60) Business Days of receipt of funds or as determined by the Trustee. PART V Procedure For Validation and Valuation of Claims Allowance or Disallowance of Claims by the Trustee and CFI 5.1 Upon receipt of a completed Proof of Claim, the Trustee and CFI shall examine the Proof of Claim and shall deal with each Claim in accordance with the provisions of the Act. Valuation of Claims 5.2 The procedure for valuing Claims of Creditors and resolving disputes with respect to such Claims will be as provided for in the Act. The Trustee and CFI reserve the right to seek the assistance of the Court in valuing any Claim of a Creditor and in respect of any other matter as may be required.

39 Claims Bar Date 5.3 In order to receive a distribution under the Proposal, all Proofs of Claim must be delivered by the Creditors and received by the Trustee within fifteen (15) days of the issuance of the Approval Order (the "Claims Bar Date"). Any and all Creditors who do not file a Proof of Claim by the Claims Bar Date shall not be entitled to any distributions under the Proposal. PART VI Meetings of Creditors Creditors' Meetings 6.1 The Trustee will call the Creditors' Meeting in order for the Creditors' Meeting to be held 21 days after the filing of the Proposal with the Official Receiver on such date, time and at such place as may be agreed upon by the Trustee and CFI. Notice of Creditors' Meetings 6.2 The Trustee shall provide the Creditors with notice of the time and place of the Creditors' Meeting by mail pursuant to the Act. All Proofs of Claim shall be delivered in accordance with the provisions of the Proposal, the Act and any order which may be issued by the Court in respect of the procedure governing the Creditors' Meeting. Conduct of Creditors' Meetings 6.3 The Official Receiver, or any nominee thereof, shall preside as the chair of the Creditors' Meeting and will decide all matters relating to the conduct of the Creditors' Meeting. The only persons entitled to attend the Creditors' Meeting are those persons (including the holders of proxies) entitled to vote at the Creditors' Meeting and the officers, directors and legal counsel of CFI together with such representatives of the Trustee as the Trustee may appoint in its discretion. Any other persons may be admitted on invitation of the chair of the Creditors' Meeting or with the consent of the Creditors. Adjournment of Meeting 6.4 The Creditors' Meeting may be adjourned in accordance with Section 52 of the Act. Voting by Creditors 6.5 To the extent provided for herein, each Creditor will be entitled to vote at the Creditors' Meeting to the extent of the amount which is equal to the Proven Claim of such Creditor as allowed by the Act. Approval by Creditors 6.6 In order for the Proposal to be binding on all of the Creditors, it must first be accepted by the Creditors by a majority in number of the Creditors with Proven Claims who actually

40 vote upon the Proposal (whether in person or by proxy) at the relevant Creditors' Meeting or by a Voting Letter, representing two-thirds in value of the Proven Claims of the Creditors who actually vote upon the Proposal (whether in person or by proxy) at the relevant Creditors' Meeting or by a Voting Letter. PART VII Inspectors 7.1 At the Creditors' Meeting, the Creditors will be entitled to appoint one or more, but not exceeding five, Inspectors whose powers shall be as follows: (a) (b) (c) (d) advising the Trustee in respect of such matters as may be referred to the Inspectors by the Trustee; advising the Trustee concerning any dispute that may arise as to the validity of the Claims of Creditors under this Proposal; exercising all powers given to the Inspectors of a bankrupt estate appointed pursuant to the provisions of the Act; and altering or extending the time for payments to be made pursuant to this Proposal, as recommended by the Trustee, but not the total amount paid. PART VIII Conditions Precedent to Implementation of the Proposal 8.1 As provided for in the Act, the arrangements set out in this Proposal will not take effect unless the conditions set forth below are satisfied: (a) (b) (e) all approvals and consents to the Proposal that may be required have been obtained; the Approval Order has been issued and the appeal period in respect of such order has expired; and no order or decree restraining or enjoining the consummation of the transactions contemplated by this Proposal has been issued. PART IX Miscellaneous Effect of Payment 9.1 Upon the delivery of the certificate of performance contemplated by Section 9.3 of the Proposal, the balance of all Claims shall, automatically, be irrevocably and unconditionally assigned to Cogent Biomass Inc., without any further action required on the part of CFI, Cogent Biomass Inc., the Trustee or any Creditor.

41 Amendment to Proposal 9.2 This Proposal may be amended by CFI with the consent of the Trustee at any time prior to the conclusion of the Creditors' Meeting called to consider the Proposal, provided that any amendment made pursuant to this section shall not reduce the rights and benefits given to the Creditors under the Proposal before any such amendment, and provided further that any and all amendments shall be deemed to be effective as of the filing date of the Proposal. Performance Certificate 9.3 The Trustee will give CFI and the Official Receiver a certificate of performance, contemplated by Section 65.3 of the Act, following the Trustee being satisfied that all distributions to Creditors contemplated herein are complete. Court Approval 9.4 After the Creditors' acceptance of the Proposal, the Trustee will proceed to seek the Approval Order from the Court pursuant to Section 58 of the Act. Binding Effect 9.5 The provisions of this Proposal will be binding on the Creditors, CFI, and their respective heirs, executors, administrators, successors and assigns, upon the Effective Date. Reviewable Transactions 9.6 Sections 95 to 101 of the Act do not apply to this Proposal. Outstanding Appeals 9.7 On August 12, 2015, the Court granted the Termination Order. On that same date, CFI served a Notice of Appeal of the Termination Order as well as a Notice of Appeal of the Order of the United States District Court for the Southern District of New York, dated July 14, 2015, which confirmed an arbitration award granted in favour of NS United Kaiun Kaisha Ltd. 9.8 The appeals described in Section 9.7 may affect the timing of the Creditors' Meeting, the granting of the Approval Order and/or the distributions to Creditors contemplated by the Proposal. Notices 9.9 Any notices or communication to be made or given hereunder shall be in writing and shall refer to this Proposal and may be given by personal delivery, fax or by addressed to the respective parties as follows:

42 (a) If to CFI: do Arthur Birnbaum Eglinton Ave East Toronto Ontario M4P 2Y3 Fax: arthur.bimbaum@roaers.blackberrv.net arthur.bimbaum@roaers.blackberry.net Copy to: Dentons Canada LLP 77 King Street West, Suite 400 Toronto, ON M5K OA1 0A1 Attention: Ken Kraft Fax: kenneth.kraft@dentons.com (b) If to the Trustee: The Fuller Landau Group Inc. 151 Bloor Street West, 12th I2th Floor Toronto, ON M5S 1S4 154 Attention: Ken Pearl Fax: KPearl@FullerLLP.com (c) If to an Unsecured Creditor, to the address, fax number or for such Unsecured Creditor specified in their Proof of Claim filed by such Unsecured Creditor or, if no Proof of Claim has been filed, to such other address, or fax number at which the notifying party may reasonably believe that the Unsecured Creditor may be contacted; or such other address as any party may from time to time notify the others in accordance with this Section. All such notices and communications will be deemed to have been received, in the case of notice by fax, or delivery prior to 5:00 p.m. on a Business Day, when received or if received after 5:00 p.m. on a Business Day or at any time on a non-business Day, on the next following Business Day. Any unintentional failure to give a notice contemplated hereunder to any particular Creditor will not invalidate this Proposal or any action taken by any person pursuant to this Proposal, including CFI.

43 PART X Trustee 10.1 Fuller Landau, shall be the Trustee under this Proposal and all monies payable under this Proposal shall be paid;over to the Trustee who shall make the payment of all dividends in accordance with the terms of this Proposal Fuller Landau is acting in its capacity as Trustee and not in its personal capacity and no officer, director, employee or agent of Fuller Landau shall incur any obligations or liabilities in connection with this Proposal or in respect of the business or liabilities of CFI. 103 Upon payment by the Trustee of the amounts contemplated in Part IV of this Proposal, the Trustee shall have discharged its duties as Trustee, and the Trustee shall be entitled to apply for its discharge as Trustee hereunder. 10,4 For greater certainty, the Trustee will not be responsible or liable for any obligations of CFI and will be exempt from any personal liability in fulfilling any duties or exercising any powers conferred upon it by the Proposal unless such acts have been carried out in bad faith and constitute a willful or wrongful act or default. Dated at Collie,. ok, Ontario this fl n day of August, COGENT FIBRE INC. Name: bark Title: ; p car r Title: p car r I have authority to bind the corporation Agreed to this, /lly i of August, 2015 COGENT BIOMASS INC, N Title: ke %ea I have authority to bind the corporation

44 SCHEDULE A GUARANTEE TO: FROM: The Creditors of Cogent Fibre Inc. (the "Creditors') Cogent Biomass Inc. ("Guarantor") WHEREAS Cogent Fibre Inc. ("Cl?!") has made a Proposal to its Creditors pursuant to the provisions of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, dated as of today's date (the "Proposal"); AND WHEREAS all capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Proposal; AND WHEREAS the Guarantor has agreed to guarantee the financial obligations of CFI pursuant to the Proposal; NOW THEREFORE THIS GUARANTEE WITNESSETH that in consideration for the benefits to the Guarantor of CFI making a Proposal to its Creditors: 1.. Guarantee. The Guarantor hereby unconditionally, absolutely and irrevocably guarantees, as a primary obligor and not merely as surety, the due and timely payment of all amounts payable by CFI pursuant to Section 3.2 of the Proposal (the "Obligations"). In the event that CFI fails to make the, payments contemplated by Section 3.2 of the Proposal, the Guarantor will make such payments to the Trustee within five (5) Business Days of a request in writing delivered to the Guarantor by the Trustee or any Creditor. 2. Governing Law. This Guarantee shall be construed and enforced in accordance with, and shall be governed by, the laws of the Province of Ontario and the laws of Canada applicable therein (without application of any conflict of laws rules). DATED the rib's day of August, 2015 COGENT BIOMASS INC. By: Name: Rsagr4 Title: '2; r.e_ca...r" r

45 District Disbict rt, Ontario 73 1:Original ElAritended Division No, 09 - Toronto ['Original Amended Court No Estate No Form Fonn 78 7B- Statement of of Affairs (Business (DUO* Proposal) madeby an entity pibteclion.49(2). (Subsection and Paragraph 158(d) 158(d) of the of Act I Subsections. 50(2) and 62(1) of ol the Act) AO' In Sri the Matter Of of the Proposal of Cogentfibre Fibre Inc, Of 01 the City of.toronto, hi the Province of Ontario Tothe debtor: You voyareneufred ere moulted to tore carefully hi and. accurately. complete this form bin and the applicable 'adathrneelo attach:nerds shoiring showing the stale of your affaks Ahem on the dale date of the fling Eng of your proposal.(or notice of Intention,. inland" if it appeal:le), appticatie), on on the the 19h 15th day day of at July July When completed, Ibis this Semi font and the applicable attachments alachmenti sit wit constitute ahistutt the Statement of Affabsend Affaisand must be verffied verified by Oath woolen or solemn declarations. dedanthort LIABILITIES LIABILITES (as stated and 'sting:id estineled by by Me the officer) tif5cer) ABETS ASSETS (as slated stated and estimated by the:weer) 1. Unsecured crediors =dims as per Ilst Ilet ,309, nuentory 1.1iwentory 0,00 Balance of secured duos claims asnorth-i per Mir,, Trade r (Littman, &hues, etc C.:;-., ,00 Total unsecured unsealed creditors creams,, ,309,93287, Aciounts AcConnts receivable and other receivablai, receivables, as as per prat list T Goad.. food..:., 6.1.6"11, oho Sutured Unwed oredkore cre4gom as as per artist Ust '3` Doubtful Pretend Preferred crectilonti mamas as perrat V perils; 0.00 Bad 0.00 Estimated to produce , ,00 4. Contingent. Donungem. trust dohs orother ruttier liabblies!tablas es, as per list 'er V Etilsot 88sof exchange, promissory mondssoiy nobs, note, etc., etc, as as per pellet lk,t*f" V..., es:knitted estimated lobe!atm recialmable ricksha* for;. for Deposits In in fmencial Mendel institutions, 0.00 Total liabilities * Surplus NIL SOO 0,00 & 8. Maartary.'eguicenent Machinery, equipment and and plant. plat Real property at' or brintorable immovable as pet perks! 504+2' Furniture S It RcISPo,RRIFe,lia RRSPs, RRIFs, htstiranse, fife Insurance... eto....;:.;.':a:,., Securities (shares, bonds, debentures, debemurek elm) etc.) ' interests under +pals iris , Vehicles 0.00 Is. Other Otiler ProPerhi. PtoPertv. as per5st est 'H* 0.00 It If debtor is s.a a corporation, add Amount of subscribed capttel capital cra 0.00 Amount oakt paid on capital 0.00 Balance subscribed and impaid. unpaid 0.00 Esbrnated Estimated to pmduce produce 0.00 Total assets 18, , Deficiency 10291, ,291, I, Robed Mantrap; Manley, of of the Town p1 ot Collingwood In in the Province of Ortlatb, Weis, do do swear throat (cr (or solemnly declare} *Ware) that this Pis statement and the attached lists are.to the best of my lossilad9o, knovilectili afun, a tit helmet boo and Gametal. complete statement rimy of galls affairs on on the131h 1301 day day of of August 2015 end and fullydiscloseall &close properly property of mienr every de.scription descdptionthat that is in my possession abet or that nosy may devolve on on me In In accordance whit sib the Act. SWORN(or SOLEMNLY DEC1414ED) DENIM")) before me at entropy thepty et of Tomnto)n Taroritc)n the Province Provitceof of an 17th 171h day of August cotufm0,0 -rand cr GILINA.ob , Chri a. a Dawn Carter Garter A Co rnissialier, missiotter, etc., County of Simcoe, for the Corpciratio Cotporatiop p of the Town of Collingwood lingwood a expires Expires April 25, 2017 Robert Month* Page 1

46 Dishict Districtot of: Ontario: Division No, Na Toronto Court No, No Estate No, FORM FORN :t- Con6nueil Continued ' 1.96 List A» linsecureil Unsecured Creditors Cream Cogent FEtteinc. Hue Mt No. Nameafore do:attar r A&Irees Adthal Unmoral Unsecured claim elate; Salaam) Illalanee of Jelin claim Total claim 1 CanseaRerrenue Canada Revenue Agency 1 I Rent% Flora% West , RC0001 Toronto Taranto ON til5c WC 2X8 50, , Nippon Nmpan Yusen Keistva Naha do ctonyk Bulkship Bulltship(USA) {LISA} Inc, lee. 3483, ,583, , Lighting Way, 4th 801Floor 3,0, Secaucus NJ07094 NJ01094 USA 3 NS.United UnNed Kean Kafue Kalstka Katie Ltd do cio Richanl MOW Singleton I, ft. Blank Rome 19676, ,676, ,676,800,00 15,616, The Claysier Chrysler Bu1tiing,405 9urding,405 Lexington LeK,nglon Ave.. New it& Yak NY USA Totak Total: 19, ,309, ,309,932,87 10, Atsg Aug-2015 Date / Page 2 of 9

47 District of: Ontario Division No Toronto Court No Estate No FORM 78 Continued (hi lr Secured Credftois Credtors , Cogent Fibm Film Inc, No. O. Nomad Nand creditor Address, - - Amountat of Estintsted Estimated Estimated Esilrialed. of security value of hem Fulsome claim Particulars ductility When given valuta surplus from Fiance of security security claim Total: Tab traug-2015 Date Data Page Pao 3 of 9

48 districts[: Distnctof: Ontario Masson Division No Toronto Court No Estate No, No FORM Continued LW List V Referred Preferred Credikut CrediMrs for tor Wages, Recd; Rent etc. Cogent Fibre Fere Inc No. Name of creditor Address and a/occupation occupation Newts Nature of claim Period Puri during during.amount A m*unto,' of which claim Mem dem accrued Amount payablein In full gigliningi Mutate ranking Iltklail for far dividend Total: ,00 17, Aug-2015 Date?spit Page4af of 9 Jf

49 District of: Ontario. Division Milton No., 09 - Toronto Court No. 31= Estate No FORM 7E1 78 Continued bistro" List "Ir Contingent or Other Liabilliles , Cogent Five Fine InC. Inc. No. Noma Name of al enditor croditor arclaimant 0 r di!moot Address Mins and occupation A Amount of Oa Ma bifdy WIN or dale, claim - Awn AnW4141 "Pnotild alpectall tr. to oink rank for dividend divtdand Datil Data whan AhlIllialaly liability I Incurred ncuffed Nature tiatin of ar IMMO/ liabnity 'Mat Total: , aug., Aug4015 Date Robed Mankop. Page 5 of 98

50 District of: Ontario Division No. 09- Toronto Court No E8 Estate No. 3' FORM FO-Ftfil WS 15 Continued List 'Es Debts Nike Due bathe to Debtor Cogent The Fire Inc Na No. Nem. Wankel ot debtor Address Addr0S1 and Nab,. Nature of ef debt Amount of debt Folio of ledgers or. When Estimated tp to Particularsof Particular:pinny any occupation occupation (goad, (good, doubtful, other book bcwk when: contracted cordracted produce product enmities securities held for bad) particulars to be he found dabt debt. t. MOO 0.00 Wit Total: C ,00 1T-Aug A Date j Page 6 6 of 0199

51 District of: Ontario Division No. 09- Toronto Court No Estate No FORM 78 Cominued List c Bills of Exchange, Pronnssory Notes, Lins Notes, Chattel Modgages,etc.,Avaiable as Assets Cogent Fibre Inc No' Name of all promissory, anceptorsreadorsers, mortgagom and guarantors Address Occupation Amountof NI or noe, etc. Date when due Estil produce la Padloutars of any property Mild as securitythr paymentor hal or outtalk. Total: Aug4015 Date Page 7 of 9

52 District of: Ontario Division No Toronto Court No Estate No FORM 78 C.antinued Continued List 'V V' Rearopertyor Property Immovables ar IrentogOes Owned d by Debtor Cogent H5te Mt Inc Description ofproeetty property Woven, Nature of debtorinterest debtoriettrest In in wh *ID"' ose namil almo does sode litie Mind Tata/ ICI tai vahni volin particulars Pertkulats of mortgages. rut rtneges, itypothecs, tlypoth nes, or *rote,/ allay encumbrances comb rendes (name, (nwe, address, atichessremount) amount) c. Equity EquhY (If or suiplus sulpha Total: i Aug-2015 (7dug 2015 Date Oate Page8 8 of 09

53 Districtof: Ontario Division No, 09 - Toronto Court No Estate. No FORM Concluded IAA List M' PrDNAr PloPellY Cogent Flare Me Inc.. FULL STATELIENTOF STATEMEITIOF PROPERTY......!I tilitir0.00 Fef 448reirir Pr*Peq... tavagap Location, Dete0s of Details of property Original cost co0 Estinieted Estimitail Jo to OiOduCe pioduct,(0)slack-in-irecte (a) Slock4n.trade '.... (b) ib) Trade (alums. foliints, etc, ) (c)cash 0 caiii4itoillici In toiandat institutions institidions. oto (d) Cash dash en on hand C Cash on hand 18, ' ,14252 (e)llitesiock Livestock., (0,4achilety,equipmentand mhfachilety, equipment and plant 0.00 OA olio. (g) to) Furniture Pumkure.., eta: 0.00 (ti) 0i) END Lee Insurance i*ratvil P011015; policies, MisPs, RRSPs, etc.... 0, (0 0 sectoes Sectitiks 0.00 e.: (0 0) Interests under unier wils,.eic. elc. ODO 0.00 COO 0,00 (Ic) (10 Vehicles yetddes she (I) 0) Taxes , (m} inliolher Other Totark TotaL 18, A142,52 17-Aug-2015 Date -- Rob, lro -r-7p Page 9 of 9

54 Court No File No, In the Matter of the Proposal of Cogent Fibre Inc. Of the City of Toronto, In the Province of Ontario Form 78 (Bill C-12) Statement of affairs (Business bankruptcy) The Fuller Landau Group Inc. - Trustee 151 Bloor St. West, 12th Floor Toronto ON MSS 184 Phone: (416) Fax: (416)

55 The Fuller Landau Group Inc, 151 Bloor St. West, 12th Floor Toronto ON M5S 1S4 184 Phone: (416) Fax: (416) District of: Ontario Division No Toronto Court No, Estate No '` FORM 31 Proof of Claim (Sections 50.1, 81,5, 81.5, 81.6, Subsections 65.2(4),81.2(1), 81.2(1),,81.3(8),81.4(8), 812(8), 81.4(8), 102(2), 124(2), 128(1), and Paragraphs 51(1)(e) and 66.14(b) of the thri Act) in In the Matter of the Proposal of Cogent Fibre Inc, I= Of the City of Toronto,. In the Province of Ontario All notices or correspondence regarding this claim must be forwarded to the folkwoing following address; In the matter of the proposal of Cogent Fibre Inc. of the City of Toronto In in the Province of Ontario and the claim of creditor. (name of creditor or representative of the creditor), of the city of province of do hereby certify: in the 1,That I I am a creditor of the above named debtor (or I am (position/title) (posltlonitilte) of creditor). 2. That I have knowledge of all the circumstances connected with the claim referred to below. 3, That the debtor was, at the date of proposal, namely the 15th day of July 2015, and still Is, is, indebted to the creditor in the sum of $, as specified In in the statement of account (or affidavit) attached and marked Schedule 'A*, W, after deducting any counterclaims to which the debtor Is entitled. (The attached statement of account or affidavit must specify the vouchers or other evidence in support of the claim.) 4. (Check and complete appropriate category.) CI A, UNSECURED CLAIM OF $ (other than as a customer contemplated by Section 262 of the Act) That in respect of this debt, I do not hold any assets of the debtor as security and (Check appropriate description.) description) f:1 Regarding the amount of $ I I claim a right to a priority under section 136 of the Act.. 1:1 Regarding the amount of $, I do not daim claim a right to a priority, priority. (Set out on an attached sheet details to support priority claim;) claim.) 0 B. CLAIM OF LESSOR FOR DISCLAIMER OF A LEASE $ That I hereby make a claim under subsection 65.2(4) of the Act, particulars of which are as follows: followsị (Give full particulars of the claim, including the calculations upon which the claim is based.) 1:1 C. SECURED CLAIM OF $ That in respect of this debt, I hold assets of the debtor valued at $ as security, particulars partidulars of which are as follows: follows; (Give full particulars of the security, Including including the date on which the security was given and the value of at which you assess the security, and attach a copy of the security documents.) documents) 0 D. CLAIM BY FARMER, FISHERMAN OR AQUACULTURIST OF $ That I i hereby make a claim under subsection 81.2(1) of the Act for the unpaid amount of $ (Attach a copy of sales agreement and delivery receipts.) Page 1 of 2

56 FORM 31 Concluded 84 E.,. CLAIM BY WAGE EARNER OF $ 13 That I hereby make a claim under subsection 81.3(8) of the Act in the amount of $ 13 That I hereby make a claim under subsection 81:4(8) A(8)cf of the Act In hi the amount of $ O P. F. CLAIM BY EMPLOYEE FOR UNPAID AMOUNT REGARDING PENSIONPIAN101q. PLAN OF $ O That thereby I:hereby make a claim under subsection 81.5 of the Act in the amount of $ O That I hereby make a claim under subsection 81.6 of the Act in in the amount of OM $ t O G. CLAIM AGAINST DIRECTORS,. (To be completed when a proposal provides forlhe the compromise of pieties claims against directors.) direelots) That I hereby make a claim clelm under subsection 50(13) of the Act, particulars of which are as ai,foilows., follows: (Give full particulars of the claim, including the calculations upon which the claim is based.) H. CLAIM OF A CUSTOMER OF A BANKRUPT SECURITIES FIRM $ That I hereby make a claim as a customer for net eqtrity equity as contemplated by section 262 of the Act, particulars of Mich which are as as follows;:, follows:. (Give full particulars of the claim, including the calculations upon which the claim is based.) 5, Thal, to the best of my knowledge, 1 I (amfam (amfarn not) (or the abovenamed creditor (Is/is (islis not)) related to kite the debtor within the meaning of section 4 of the Act,..and.(have/hasrhave (have/has/hive notrhas notlhas not) dealt with the debtor In in a inon-amrs-length non-arm's-length manner, 6. That the following are the payments that f I have received from, frorny,and the credits that I have nave allowed to, and the transfers at undervalue Within within the meaning of subsection 2(1) of the Act that I have been privy to or a party to with the debtor:within the three months (or, it if the creditor and the debtor are related within the meaning of section 4 of the Act or of were not dealing with each other at arm's length, within the 12 months). Immediately immediately before the date of the Initial initial bankruptcy event*thin the meaning of Section 2 of the Act: Actr(Provide details of payments, payments; credits and transfers at al undervalue.). 7. 7, (Applicable only in the case of the bankruptcy of an individual) individuel.) 0 Whenever the the trustee reviews. the the financial finandel situation of a bankrupt to redetermine whether or not.the the bankrupt' is required to make payments under section 68 of the Act; Act, I request to be Informed,. informed, pursuant to paragraph 68(4) of the Acto:of Act, of the new fixed amount or of the fact that there is no, longer surplus income...0 CI t f request that that a a copy of of the the report 16 filed by by the the trustee regarding the the bankrupt's application for discharge pursuant to subsection 170(1) of the Act be sent to the above addressi, address. Dated at fhis day Witness Phone Number. Fax Number: Address : Creditor NOTE NO1E 11 an anibia JAW Is allachataatuslitava attache& must nave tee been ma& made bake bet= a person a wafted quadded b Lika kr talus andavas. arida*. WARNING& WARNINGS A Maki busies roy, noy,pursuas4 Pursuant la skim-150a sabsadon 1243) 12ENcl cilbs A4t kt skean Wean a a sectary sew* on an iernentb NaNnennote the saved woad creditor =Nor tithe Mae debtor debta the Wks rd Min ale security secuw as assessed. In a mufti PICailY.bY warily, by Ihe ell secured SOMA dedibt. crediar. SubserSaa201(1)drie Subset3an 20X1} tithe Act Act ortrrides panicles severe Nose makes palls for b mratng =Wag antis, any Sass thins thin posalanclatadon mot dectararion or statement Nate/rent or olaccauat account Page 2 of 2

57 District of: Ontario Division No Toronto Court No Estate No FORM 36 Proxy (Subsection 102(2) and paragraphs 51(1)(e) and 66.15(3)(b) of the Act) In the Matter of the Proposal of Cogent Fibre Inc. Of the City of Toronto, In the Province of Ontario I,, of, a creditor in the above matter, hereby appoint, of, to be my proxyholder in the above matter, except as to the receipt of dividends, (with or without) power to appoint another proxyholder in his or her place. Dated at this day of Witness Individual Creditor Witness Return To: Name of Corporate Cmporate Creditor Per Name and Title of Signing Officer The Fuller Landau Group Inc. - Trustee 151Bloor St. West, 12th Floor Toronto ON M5S MSS 1S4 Phone: (416) Fax: (416) Page 1 of 1

58 District of: Ontario Division No. 09 -Toronto Court No, No Estate No FORM 37 Voting Letter (Paragraph 51(1)(f) of the Act) In the Matter of the Proposal of Cogent Fibre Inc, Inc. Of the City of Toronto, In the Province of Ontario I,, creditor (or I,, representative of, creditor), of, a creditor in the above matter for the sum of,$, hereby request the trustee acting with respect to the proposal of Cogent Fibre Inc., to record my vote (for or against) the acceptance of of the the proposal as as made on on the the 13th fr day of August 2015, and amended on the 17th day of August, Dated at, this day of Witness Witness Individual Creditor Name of Corporate Creditor Per Name and Title of Signing Officer Return To: The Fuller Landau Group Inc. Inc, - Trustee Per: 151 %Dor Bloor St. St, West, 12th Floor Toronto ON M5S 1S4 154 Phone: (416) Fax: (416) Page 1 of 1

59 Exhibit "G" to the Affidavit of Arthur Bimbaum, sworn before me this 26th day of October, A Com aking affidavits, etc.

60 Doug Smith T F dsmith big.com demith big.com October 1, I, 2015 DELIVERED VIA Ms. Alison Warner Senior Legal Officer Court of Appeal of Ontario Osgoode Hall 130 Queen Street West Toronto, Ontario M5H 2N5 Dear Ms. Warner: Borden Ladner Gervais LLP Scotia Plaza, King St St W W Toronto, ON, Canada M5H 3Y4 T F blg.com Borden Ladner Gervais Re: In the Matter of the Bankruptcy and Insolvency Act, Act, R.S.C. 1985, c. B-3, as amended and in the Matter of the Proposal of Cogent Fibre Inc. ("Cl?!") ("CFI") Court of Appeal File No. C60871 We act for the Respondent NS United Kaiun Kaisha, Ltd. ("NSU") in the above-captioned matter. Please be advised that all of NSU's rights, title, interest and obligations as respondent to the Appeal have been assigned to Leeward Debt Acquisition Inc. ("Leeward") and that NSU will no longer be participating in the Appeal. Yours very truly, BORDEN LADNER GERVAIS LLP Ymin.e4r Doug;$mitb boug,smith Da4; Da:Pl? cc, Kenneth Kraft, Dentons LLP, counsel for CFI A. Jowett, Appleby, counsel for Leeward Sam Babe, Aird & Berlis LLP, counsel for Proposal Trustee Lawyers I Patent & Trade-mark Agents

61 IN THE MATTER OF OF THE THE PROPOSAL OF COGENT OF COGENT FIBRE FIBRE INC. INC. Court File No.: Estate No.: ONTARIO SUPERIOR COURT OF OF JUSTICE (IN BANKRUPTCY AND AND INSOLVENCY) [COMMERCIAL LIST] AFFIDAVIT OF OF ARTHUR BIRNBAUM (sworn October 26, 2015) DENTONS CANADA LLP LLP 77 King Street West, Suite 400 Toronto-Dominion Centre Toronto, ON M5K 0A1 Fax: (416) Kenneth Kraft LSUC No P Tel: (416) kenneth.lcraft(&dentons.com Sara-Ann Van Allen LSUC No C Tel: (416) Lawyers for the Appellant, Cogent Fibre Fibre Inc. Inc. 03 CID CO al al 355

62 CITATION: In the Matter of the Proposal of Cogent Fibre Inc., 2015 ONSC 5139 COURT FILE NO.: DATE: SUPERIOR COURT OF JUSTICE - ONTARIO RE: NS United Kaiun Kaisha, Ltd., Moving Party (Respondent in the Proposal) AND: Cogent-Fibre-Inc-Responding-Party.-(Applicant,Responding (Applicantirt_the in the Proposal)_ BEFORE: Penny J. J. COUNSEL: Doug Smith and Roger Jaipargas for NS United Kaiun Kaisha, Ltd. Ken Kraft Kra/1 and and Sara-Ann Ann Van Van Allen Allen for Cogent Fibre Inc. Sam Babe for the Proposal Trustee HEARD: August 12, 2015 ENDORSEMENT [1] In a brief handwritten endorsement of of August 12, 12, 2015, 2015, I dismissed I the motion the motion of the of the debtor, Cogent Fibre Inc., for an an extension of of the the day day stay stay under under s. 50.4(9) s. 50.4(9) of the of the Bankruptcy and Insolvency Act Act and allowed the motion of of the the judgment creditor, NS NS United United Kaiun Kaiun Kaisha, Kaisha, Ltd. for an order terminating the 30-day stay stay under s. 50.4(11) s. of the of the BIA, BIA, with with reasons reasons to to follow. These are those reasons. [2] Cogent is in the woodchip business. It It had had a five-year a shipping contract contract with with NS United. NS United. There was a dispute which became the the subject of an of arbitration an commenced in February in February An arbitral award was made against Cogent for for Cdn$15.3 million million in January in January In July In July 2015, 2015, the District Court for the Southern District of of New New York York confirmed confirmed the award. the award. The day The after day the after the release of the confirming judgment, Cogent filed filed its its NOI. NOI. [3] In an affidavit sworn in in collateral bankruptcy proceedings in New in New York, York, Mr. Montrop, Mr. Montrop, a a director of Cogent, deposed that Cogent's management decided to wind to wind down down Cogent's Cogent's business business well before the release of of the the arbitral award or or confirming judgment. It did It so, did he so, said, he said, on the on the basis not only of of pending maritime arbitrations but but other other factors factors including including a "hostile a "hostile market." market." [4] Mr. Montrop's evidence is, is, however, that that Cogent was was prompted to file to its file NOI its NOI on the on the basis of its "belief' that NS United "will "will expeditiously seek seek to record to record the judgment the judgment and proceed and proceed with collection actions." [5] The evidence is is that Cogent currently has has assets of of approximately $261,000 and and has no has no operations, revenues or cash flow. The professional fees of these proceedings are being paid by by its parent corporation.

63 Page 2 - [6] Cogent currently has one material, non-contingent creditor NS United. There are no secured creditors. Another maritime shipping company, NYK, also instituted arbitration proceedings against Cogent, Cogent. NYK alleges it it is owed about $10.9 million. There has been no hearing and there is, obviously, no decision or award. Those proceedings are currently stayed. The NYK claim is entirely contingent. There is no evidence that NYK it it at all interested in whatever it it is that Cogent has discussed. I was advised that NYK takes no position on the motions before me. It It is conceded by Cogent that NS United has a veto over any proposal. The Cogent Motion to Extend [7] Section 50.4(9) sets out a three-part, conjunctive test for the grant of an extension-of of the- 30-day stay. The Tile court may grant an extension, not to exceed 45 days, if satisfied on the evidence tendered in the application that: (i) (ii) (iii) the insolvent person has acted, and is acting, in good faith and with due diligence; the insolvent person would likely be able to make a viable proposal if the extension being applied for were granted; and no creditor would be materially prejudiced if if the extension being applied for were granted [8] There is no doubt that the intent of the BIA proposal sections is to give the insolvent person an opportunity to put forward a plan. The purpose of the legislation is rehabilitation, not liquidation. Insolvent companies should have the chance to put forward their proposal. [9] I am not satisfied, however, on the evidence provided by Cogent that it it has acted and is acting in good faith and with due diligence. I am also not satisfied on the evidence provided by Cogent that it it would likely be able to make a viable proposal if the extension being applied for were granted, granted. [10] I say this principally of the basis of the vague, somewhat vacuous, affidavit evidence of Mr. Montrop filed in support of the Cogent motion and in response to the NS United motion. [II] [11] His evidence amounts to this: (a) (b) (c) (d) Cogent has engaged in settlement discussions with NYK with a view to making a proposal to NYK; Cogent has offered to meet with NS United; Cogent is working towards a proposal; and Cogent requires additional time to continue discussions with NYK and NS United. [12] There is not a hint of what Cogent has to offer NYK and not a hint of what kind of proposal Cogent has in mind. Counsel for Cogent argues that because the settlement discussions

64 Page 3 - are without prejudice, it cannot disclose them. I do not find that argument persuasive. Nothing prevents Cogent from describing its plan or what it hopes to achieve in a proposal. [13] Although Cogent has offered to meet with NS United, NS United has no interest in meeting with Cogent and has not done so. [14] Cogent says it is working towards a proposal but, in the face of this motion, has not provided even a hint of what that proposal might look like. At its highest, it involves talking to the two shipping companies and hoping to make a deal. Counsel made submissions about possible tax_ taxiosses losses which_may have value but but there was not a a mote of evidence to this effect. [15] In this case, the 30-day stay expires at midnight on August 14, Cogent has taken the position, on these motions, that if its request for an extension is denied, it will file a proposal of some kind on Monday, August 17, That, it suggests, would automatically extend the stay for another 21 days. [16] I find it difficult to understand how Cogent could plan to file a proposal on Monday, August 17 but was unable to provide at least the outline of this proposal on Wednesday, August 12. There was no explanation given for this apparent contradiction. [17] In effect, Cogent says it needs more time to continue discussions with its two major creditors when at least one of those creditors (a creditor with veto power) has not engaged in any discussions with Cogent and has no intention of doing so. Cogent's position is, I find, entirely tautological. [18] In his factum and in oral submissions, counsel for Cogent emphasized the rehabilitative nature of the proposal sections. He relied heavily on recent Ontario and B.C. authority to the effect that a veto-empowered creditor's statement that it will never agree to a proposal is not dispositive of whether to terminate or refuse to extend a stay. I quite agree with this position and the supporting law. Creditors often, for strategic reasons, say they will never agree. [19] Nevertheless, it seems to me there must be a certain forthrightness on the part of the debtor about what is sought to be achieved. There must also be an air of reality about the likelihood of any proposal being viable. [20] The 30-day stay (or any extension thereof) is meant to give the debtor time to deal with multiple parties, many moving pieces and potentially complex business and financial arrangements. Here, there is no active business. There are no complex financial arrangements. There are no assets. There are only two material creditors, at least one of which, NS United, has a veto over any proposal. There are, in effect, almost no moving pieces. In the face of a motion to terminate the stay, one would have thought the debtor would be motivated to come up with the best evidence it could of what its proposal might be and, specifically, why an extension is necessary to further the development of that proposal. Yet the debtor has chosen to put forward no concrete evidence but to rely on vague, conclusory assertions. [21] It is this failure to give even a hint of what a proposal might look like, or to provide any content for the bald and conclusory statement that more time is needed to further negotiations (particularly where it is unclear that there are any negotiations), which leads me to the conclusion

65 Page 4 - that Cogent has not met its onus of proving, on a balance of probabilities, that it has acted in good faith and with due diligence and that it is likely to be able to make a viable proposal if only it is given more time. [22] I am also driven to the conclusion that Cogent's emphasis on so-called "rehabilitation" is empty rhetoric in this case. The evidence filed by Cogent in the New York bankruptcy court makes it clear that there is no ongoing effort to "rehabilitate" this company. Management had already decided to wind down its operations before the NS United arbitration award was granted. The summary balance sheets filed by the proposal trustee indicate that Cogent is already well under-waywith-itswind-down." down,ita,vent It-went_from-$ mi Ilion_in_a million in s sets assets. in in 2013 to to $5.02.4_mi $5.02Cmillion Ilion in 2014 to $261,476 in [23] Counsel for the debtor submitted in oral argument that perhaps the company could be restarted. There is no evidence whatsoever to support such a a contention - indeed, all of the evidence is very much to the contrary. [24] For For these these reasons the the debtor's motion to to extend the stay under s. s. 50.4(9) is dismissed. The NS United Motion to Terminate [25] Section 50.4(11) of of the the BIA provides that where a a debtor files a notice of intention to make a proposal, a creditor can apply to the court to terminate the initial 30-day stay on one or more of four disjunctive grounds: (i) (ii) (iii) (iv) the insolvent person has not acted, or is not acting, in good faith and with due diligence; the insolvent person will not likely be able to make a viable proposal before the expiration of the 30-day period; the insolvent person will not likely to be able to make a proposal, before the expiration of the 30-day period that will be accepted by the creditors; or the creditors as a whole would be materially prejudiced if the application to terminate was rejected by the court. [26] NS United took the position that Cogent had not discharged its onus of proving it was acting in good faith and with due diligence on the motion to extend but did not positively assert this ground on the motion to terminate. NS United relies on the second and third grounds of s. 50.4(11). [27] It is clear from the very existence of s. 50.4(11), as well as judicial authority, that while an insolvent debtor is entitled to an automatic stay simply by filing a notice of intention to make a proposal, the BIA does not guarantee an insolvent person a stay without review. There is no absolute immunity from creditors. Section 50.4(11) of the BIA empowers the court to terminate the 30-day stay where the statutory conditions for doing so are met.

66 Page 5 - [28] With respect to the probability of filing a viable proposal at all, I again refer to the paucity of evidence about what a proposal might look like. The debtor has utterly failed to provide even a hint of its plan for a proposal. The facts before the court, from Cogent management's own sworn statement, are that Cogent was already being "wound down" before the arbitral award prompted its filing of a NOI. The evidence before the court, therefore, is that management's plan is not to "rehabilitate" this company. [29] As mentioned earlier, Cogent's stated intention to file a proposal of some sort on the last day, in order to buy another 21 days, seems to me not only disingenuous but to highlight the lack of any-concrete-proposathere-is-simply proposal. There-is -simply-no no-evidence to suggest there tl e is any plan in theffing iiitho-ffing at all, much less one that would probably appear reasonable to a reasonable creditor. [30] Cogent's gambit boils down to this: its proposal depends on negotiating a compromise with its only material, non-contingent creditor. That creditor, however, will not, and is under no obligation to, negotiate any compromise with Cogent. [31] On the second ground, likely to be acceptable to creditors, I agree with Cogent that the mere fact that NS United has a veto power over any proposal is not dispositive on a motion to terminate under s. 50.4(11). It is, however, one factor to be taken into account. [32] What adds credibility to NS United's position that it will, under no circumstances, agree to any proposal is the complete paucity of evidence that any plan is even possible, much less viable and likely to be accepted by creditors. [33] Counsel for Cogent sought to distinguish between the "harsher" line taken by the Ontario courts in cases such as Cumberland Trading Inc. and the more "liberal" approach taken in B.C. and other provinces in cases like Contrail Coach Lines and Enirgi Group Corp. Counsel argued that the more liberal approach is more in keeping with the rehabilitative purpose of the proposal sections of the BIA and current views of how these provisions should be applied. [34] I am not convinced these cases are in conflict. The exercise of the discretion under ss. 50.4(9) and (11) of the BIA is highly fact dependent. Cumberland, for example, was a case where a proposal had already been filed; the issue was whether to terminate the 21-day stay. The facts of Contrail and Enirgi can also be readily distinguished from the present case. In Contrail, the debtor presented evidence of a pending proposal under which the objecting creditor might be paid out in full. In Enirgi, likewise, there was evidence that the debtor had significant assets in other words, the debtor had something to work with. [35] Here, the debtor has essentially nothing to work with, which might explain why it has been so reluctant to come forward with anything concrete. Cogent has no active business, no revenue, no cash flow and effectively no assets. The inference to be drawn from the complete absence of any hint of a concrete proposal is, in these circumstances, that there is no basis for a viable plan and certainly no basis for a conclusion, on a balance of probabilities, that there is likely to be any proposal that would be acceptable to the veto-empowered creditor NS United. [36] Lax J. said in Janodee Investments Ltd. v. Pellegrini I'ellegrini (April 12, 2001), "the proposal sections of the BIA are intended to give a debtor some breathing room. They are not intended to create an obstacle course for creditors."

67 Page 6 - [37] Cogent admits that its only hope for a proposal is to negotiate a compromise with NS United; yet NS United has no interest, and no obligation to engage, in that negotiation. [38] Even applying what counsel for Cogent describes as the more "liberal" or debtor-friendly approach, on the evidence, NS United has discharged its burden under s. 50.4(11). NS United has, I find, proven on a balance of probabilities that it is not likely that Cogent will be able to make a viable proposal and, even if that were likely, the proposal will not likely be accepted by the requisite level of creditor support. [39] _For these reasons, NS United's motion to terminate the 30-day stay is granted. [40] No order as to costs. 3. Penny J. Date: August 17, 2015

68 "Th. MOTION RECORD (Returnable October 30, 2015) IN TIM MATTER OF THE PROPOSAL OF COGENT FIBRE INC. ed kr. irt ^5-As. t C 440-,--v- r la k I r, F.) a ie 'a l-p "4--etc ( fa y r. C---2..,-2., --"e DENTONS CANADA LLP 77 King Street West, Suite 400 Toronto Dominion Centre Toronto, ON M5K OA1 Fax: (416) Kenneth Kraft LSUC N P, Tel: (416) kenneth.kraftodentons.com ei. eir I r 1 ets. at tb r ee i_ Ls.,:,.,.., \ -0: my:1:11? ci 1615 k -Az?, N9Th \ r...., --zar,a, Sard-Aten 'Van AIten LSUC No C Tel: (416) sara.vanallenpdeatons o-- 7 '' I C -7-4 I 1, t. a lar..4cs -C Lawyers for Cogent Fibre Inc. of c. ante- 1 1 Etirli -1/4.14--t in. 1% (5t.5. it.._,..l..tn r-...,...# tr f a - i t...4: ) r---:a a I /..,:se for., 17:.. " CT - OC 1 ' ""--e,-----r)te,..-0 \ Ct1, N " At 1, 7,... t. A,.- ---,25.,...,-,.,- -1 -Q O,L - t -.., 's\.- O SUPERIOR C (COMM MOTIO (Returnable DENTONS CANADA LL 77 King Street West, Suite Toronto-Dominion Centre Toronto, ON M5IC OA1 Fax: (416) Kenneth Kraft LSUC No P Tel: (416) kennetillcraft(thden Sarn-Ann Van Alien LSUC No C rn Tel: (416) sara.vanallenedeat 362 Lawyers for Cogent Fibr

69 UN. uct. 3V. JU. LVI2 LUI) or: lurivi No. b/20 5/20 V. F. 3 j Court File Number. Number:,6-2iv 29/6ace 60,cs Superior Court of Justice Commercial List FILE/DIRECTION/ORDER Judges Endorsment Continued c.x..l.14..v.v z.,- -L:\ 6,,,.., t czp-cl3u4syva...z c.x.)4,:i.a i4s kliv,t.e.ct, kks:ke..k, -cm-ye accrie 0..._ a_tecisar or "-kr te--- tirrikk.44a. k cit,, 1/4.6L...a.A._ arc C=.3.9-&-c cssaau. atv.644h_ cb,..v.. reso zdza icquiattusta_k catta..a:th Crtis-.H 1.1 f1/4) cselas : di) G.) Girs,...x. ecu_ei ca.. V.41: LA,. 4 ts--41 elfulia i a-ua L) CP ajui Ct. rare-cz issa-cw q- t7 Le \N.) CADr...X. U iissi-cgrr -R-stai \i"p4;ii e of- (L--?e?{ wisal 411-vb4--) fa-h:sn S S. Co Ki) IKT) aft Art am-. a"ba: N SI Lk.b.Ztut4 Ou.;..t.t.4s c134:i eito tst i&-e. am. a st.s..:(lit TrAa- 176-% et..4-60nat:w otaskt gnat e, --teem v Aft.d-s-Je v init% sce 17*-4- it-t..2 A raltal.t.4 p-aj 4 4Lti.i.11 fb-art-gkr. Mg CU,..:1 64 G. Q.A.ers fr-q 1/4sbt*-2 ragtaist.: -taak km 'La sh. W)t"'-7 7.-J tfoilikaltiki% Girt a e vue-t cifes,-4 (Lt. cis-s---4-a0-l QL.-, AI Mra "da. its-tut Q41-mbia. ta P Page P2-- 2 of e Judges Initials 1111' Pet'

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