EXHIBIT 10.42
 
CANADIAN COLLATERAL PLEDGE AGREEMENT
 
This Canadian Collateral Pledge Agreement (“Agreement”), dated as of May 11,
2012, is made by STELLAR PHARMACEUTICALS INC., a corporation formed under the
laws of the Province of Ontario(the “Pledgor”) in favor of MIDCAP FUNDING III,
LLC, a Delaware limited liability company, as agent under the Loan Agreement
referenced below (“Secured Party”).
 
BACKGROUND
 
A.           This Agreement is executed in connection with that certain Loan and
Security Agreement (as amended, supplemented, restated or otherwise modified
from time to time, the “Loan Agreement”), dated as of even date herewith,
entered into by and among Pledgor, Tribute Pharma Canada Inc, and Tribute
Pharmaceuticals Canada Ltd. (individually, each a “Borrower” and collectively
the “Borrowers”), Secured Party and the Lenders.  All capitalized terms used
herein and not defined shall have the same meanings assigned to such terms in
the Loan Agreement.
 
B.           This Agreement is given and is intended to provide additional
security for the obligations owing by Borrowers (including Pledgor) to Secured
Party and the Lenders.
 
NOW THEREFORE, in consideration of the premises and covenants and agreements
hereinafter set forth and for other good and sufficient consideration, the
receipt of which is hereby acknowledged, Pledgor, intending to be legally bound
hereby, covenants and agrees as follows:
 
1. Pledgor, for the purpose of granting a continuing lien and security interest,
does hereby assign, pledge, hypothecate, deliver and set over to Secured Party,
its successors and assigns, for the ratable benefit of Agent and Lenders, all of
the following property, together with any additions, exchanges, replacements and
substitutions therefor, dividends and distributions with respect therefore, and
the proceeds thereof (collectively, the “Pledged Collateral”):
 
(a) all of the shares of capital stock of those corporations listed on
Schedule I attached hereto, whether now owned or hereafter acquired by such
Pledgor or in which such Pledgor now or hereafter has any rights, options or
warrants, together with all certificates representing such shares and all rights
(but none of the obligations) under or arising out of the applicable
organizational documents of such corporations;
 
(b) all of the partnership interests in those limited partnerships and general
partnerships listed on Schedule I attached hereto, whether now owned or
hereafter acquired by such Pledgor or in which such Pledgor now or hereafter has
any rights, options or warrants, together with all certificates representing
such interests and all rights (but none of the obligations) under or arising out
of the applicable organizational documents of such companies; and
 
(c) all of the membership interests in those limited liability companies listed
on Schedule I attached hereto, whether now owned or hereafter acquired by such
Pledgor or in which such Pledgor now or hereafter has any rights, options or
warrants, together with all certificates representing such interests and all
rights (but none of the obligations) under or arising out of the applicable
organizational documents of such companies.
 
 
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2. The pledge and security interest described herein shall continue in effect to
secure all Obligations from time to time incurred or arising unless and until
all Obligations have been indefeasibly paid and satisfied in full and all
commitments of Agent and the Lenders to make Term Loans or any other advances of
credit under the Loan Agreement have been terminated.
 
3. Pledgor hereby represents and warrants that:
 
(a) Except as pledged herein, no Pledgor has sold, assigned, transferred,
pledged or granted any option or security interest in or otherwise hypothecated
the Pledged Collateral in any manner whatsoever, and the Pledged Collateral is
pledged herewith free and clear of any and all liens, security interests,
encumbrances, claims, pledges, restrictions, legends, and options;
 
(b) Pledgor has the full power and authority to execute, deliver, and perform
its obligations under this Agreement and to pledge the Pledged Collateral
hereunder;
 
(c) This Agreement constitutes the valid and binding obligation of Pledgor,
enforceable in accordance with its terms, and the pledge of the Pledged
Collateral referred to herein is not in violation of and shall not create any
default under any agreement, undertaking or obligation of any Pledgor;
 
(d) The Pledged Collateral has been duly and validly authorized and issued by
the issuer thereof and, if applicable, such Pledged Collateral is fully paid for
and non-assessable;
 
(e) Pledgor is pledging hereunder all of Pledgor’s interest and ownership in all
entities listed on Schedule I attached hereto (each entity, an “Issuer”);
 
(f) Schedule I and Schedule II are true, correct and complete in all respects;
 
(g) Contemporaneously with the execution hereof, Pledgor is delivering to
Secured Party all certificates representing or evidencing the Pledged
Collateral, if any, accompanied by duly executed instruments of transfer or
assignments in blank, to be held by Secured Party, in accordance with the terms
hereof;
 
(h) Contemporaneously with the execution hereof, Pledgor is delivering to
Secured Party a copy of the articles or certificate of incorporation and/or
certificate of registration or formation (as applicable) and the bylaws,
partnership agreement and/or operating agreement (as applicable) governing (as
of the date hereof) each corporation, limited partnership, general partnership
or limited liability company listed on Schedule I attached hereto; and
 
(i) Pledgor has delivered to each Issuer a Pledge Instruction, substantially in
the form of Exhibit “A” attached hereto, wherein Pledgor has instructed each
such Issuer to comply with any instructions originated by the Secured Party with
respect to the interests of Pledgor in such entity without further consent of
Pledgor.  Pledgor has also caused each such Issuer to register the security
interest granted hereunder on its books and records and to deliver to Secured
Party a Pledge Acknowledgment, substantially in the form of Exhibit “B” attached
thereto, wherein such Issuer shall acknowledge that it has been instructed to
and shall comply with any instructions originated by the Secured Party with
respect to the interests of Pledgor in such entity without further consent of
Pledgor.
 
 
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4. Pledgor hereby represents and warrants that the equity interests issued by it
or any other part of the Pledged Collateral shall be a “security”  as governed
by and defined in the Securities Transfer Act (Ontario) (the “STA”).  As of the
date hereof, none of the equity interests issued by any Issuer that is not a
corporation (or any other part of the Pledged Collateral related thereto) are
evidenced by certificates.  No Pledgor shall permit any such Issuer that is not
a corporation to either (x) adopt any amendments or modifications to any of its
certificate or articles of formation, partnership agreement, operating agreement
or any other entity governance document or any other document governing or
evidencing the equity interests issued by such Issuer (or any other part of the
Pledged Collateral related thereto) to provide that such equity interest (or any
other part of the Pledged Collateral related thereto) shall be a “security” as
governed by and defined in the STA or (y) issue any certificates to evidence the
equity interests issued by any such Issuer (or any other part of the Pledged
Collateral related thereto).
 
5. Pledgor hereby authorizes Secured Party to file Personal Property Security
Act (Ontario) (“PPSA”) financing statements listing Pledgor as the “debtor” and
Secured Party as the “secured party” and giving a description of the Pledged
Collateral as the “collateral” covered by such financing statement in
jurisdictions, and to file any and all amendments and continuations thereof, as
Secured Party may from time to time determine to be necessary, prudent or
desirable in order to perfect any security interest granted hereunder under the
PPSA, all whether or not Pledgor has signed or authenticated any financing
statement, amendment or continuation (to the extent filing of any financing
statement, amendment or continuation without the signature or authentication of
Pledgor is permitted by applicable law).  Pledgor hereby represents and warrants
that the full legal name of Pledgor as reflected on the records of its
jurisdiction of incorporation is as set forth in the preamble to this Agreement,
and a valid mailing address of Pledgor is the notice address specified in
Section 25 below, and the full legal name of each Issuer is as set forth on
Schedule I.  Pledgor also represents and warrants that it is a corporation
incorporated under the laws of the Province of Ontario, and as set forth in the
preamble to this Agreement, and no other or additional jurisdiction.  Pledgor
shall give at least thirty (30) days prior written notice to Secured Party of
(i) any change by Pledgor to Pledgor’s legal name or (ii) any action by Pledgor
to change its jurisdiction of organization, to become organized in more than one
jurisdiction of organization or to enter into any merger or consolidation or
(iii) any change by Pledgor to its mailing address (and Pledgor shall deliver to
Secured Party certified copies of the documents filed with the respective
governmental filing or recording offices effecting any such change).
 
6. If an Event of Default occurs under the Loan Agreement, then Secured Party
may, at its sole option, exercise from time to time with respect to the Pledged
Collateral any and/or all rights and remedies available to it hereunder, under
the PPSA, the STA or otherwise available to it, at law or in equity, including,
without limitation, the right to dispose of the Pledged Collateral at public or
private sale(s) or other proceedings, and Pledgor agrees that, if permitted by
law, Secured Party or its nominee may become the purchaser at any such sale(s).
 
 
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7.             (a) In addition to all other rights granted to Secured Party
herein, under the PPSA, the STA or otherwise available at law or in equity,
Secured Party, shall have the following rights, each of which may be exercised
at Secured Party’s sole discretion (but without any obligation to do so), at any
time following the occurrence of an Event of Default under the Loan Agreement,
without further consent of any Pledgor:  (i) transfer the whole or any part of
the Pledged Collateral into the name of itself or its nominee or to conduct a
sale of the Pledged Collateral pursuant to the PPSA, the STA or pursuant to any
other applicable law; (ii) vote the Pledged Collateral; (iii) notify the persons
obligated on any of the Pledged Collateral to make payment to Secured Party, of
any amounts due or to become due thereon; and (iv) release, surrender or
exchange any of the Pledged Collateral at any time, or to compromise any dispute
with respect to the same.  Secured Party may proceed against the Pledged
Collateral, or any other collateral securing the Obligations, in any order, and
against any Pledgor and any other obligor, jointly and/or severally, in any
order to satisfy the Obligations.  Pledgor waives and releases any right to
require Secured Party to first collect any of the Obligations secured hereby
from any other collateral of Pledgor or any other party securing the Obligations
under any theory of marshalling of assets, or otherwise.  All rights and
remedies of Secured Party are cumulative, not alternative.
 
(b) Pledgor hereby irrevocably appoints Secured Party its attorney-in-fact,
subject to the terms hereof, following the occurrence and during the continuance
of an Event of Default under the Loan Agreement, at Secured Party’s option,
(i) to effectuate the transfer of the Pledged Collateral on the books of the
issuer thereof to the name of Secured Party or to the name of Secured Party’s
nominee, designee or assignee; (ii) to endorse and collect checks payable to
Pledgor representing distributions or other payments on the Pledged Collateral;
and (iii) to carry out the terms and provisions hereof.
 
8. The proceeds of any Pledged Collateral received by Secured Party at any time,
whether from the sale of Pledged Collateral or otherwise, may be applied to or
on account of the Obligations and in such order as Secured Party may elect.  In
addition, Secured Party may, in its discretion, apply any such proceeds to or on
account of the payment of all costs, fees and expenses (including, without
limitation, attorneys’ fees) which may be incurred by Secured Party in
connection with this Agreement, the Loan Agreement and/or any of the other Loan
Documents and/or the transactions contemplated hereby or thereby and the
enforcement of the rights of Secured Party, the Agent and/or any Lender in
respect hereof or thereof as and to the extent provided for in Section 9.4 of
the Loan Agreement.
 
9. Pledgor recognizes that Secured Party may be unable to effect, or may effect
only after such delay which would adversely affect the value that might be
realized from the Pledged Collateral, a public sale of all or part of the
Pledged Collateral by reason of certain prohibitions contained in applicable
securities legislation and may be compelled to resort to one or more private
sales to a restricted group of purchasers who will be obliged to agree, among
other things, to acquire such securities for their own account, for investment
and not with a view to the distribution or resale thereof.  Pledgor agrees that
any such private sale may be at prices and on terms less favorable to Secured
Party or the seller than if sold at public sales, and therefore recognizes and
confirms that such private sales shall not be deemed to have been made in a
commercially unreasonable manner solely because they were made
privately.  Pledgor agrees that Secured Party has no obligation to delay the
sale of any such securities for the period of time necessary to permit the
issuer of such securities to register such securities for public sale under
applicable securities legislation.
 
 
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10. In the event that any stock dividend, reclassification, readjustment or
other change is made or declared in the capital structure of any corporation
listed on Schedule I attached hereto or any Pledgor acquires or in any other
manner receives additional shares of stock in any such corporation, or any
option included within the Pledged Collateral with respect to the stock of such
corporation is exercised, any and all such new, substituted or additional shares
or other securities issued by reason of any such change or exercise to Pledgor
shall immediately and automatically become subject to this Agreement and the
pledge and grant of a security interests created by Pledgor hereunder and
Pledgor hereby grants a security interest in any such future shares to Secured
Party to secure the Obligations.  Any and all certificates issued to any Pledgor
with respect to any such new, substituted or additional shares or other
securities shall be delivered to and held by Secured Party under the terms
hereof in the same manner as the Pledged Collateral originally pledged
hereunder.  No distribution may be paid to or retained by any Pledgor unless
expressly permitted in writing by the Loan Agreement.  Immediately upon the
issuance of any such new, substituted or additional shares or other securities,
Pledgor shall deliver written notice of such issuance to Secured Party, which
such written notice shall include an updated and amended Schedule I (as
applicable) to this Agreement, which shall upon delivery be deemed to have
amended and restated the previously effective version of such Schedule I.
 
11. In the event that any change is made or declared in the capital structure of
any corporation, limited partnership, general partnership or limited liability
company listed on Schedule I attached hereto, or any Pledgor acquires or in any
other manner receives additional equity, partnership, membership or other
ownership interests in any such entity, or any option included within the
Pledged Collateral with respect to the equity interests in such entity is
exercised, any and all such additional equity, partnership, membership or other
ownership interests issued by reason of any such change or exercise to Pledgor
shall immediately and automatically become subject to this Agreement and the
pledge and grant of a security interests created by any Pledgor hereunder and
Pledgor hereby grants a security interest in any such future interests to
Secured Party to secure the Obligations.  Any and all certificates issued to any
Pledgor with respect to any such additional equity, partnership, membership or
other ownership interests shall be delivered to and held by Secured Party under
the terms hereof in the same manner as the Pledged Collateral originally pledged
hereunder.  No distribution may be paid to or retained by any Pledgor unless
expressly permitted in writing by the Loan Agreement.  Immediately upon the
issuance of any such new, substituted or additional interests, Pledgor shall
deliver written notice of such issuance to Secured Party, which such written
notice shall include an updated and amended Schedule I, as the case may be, to
this Agreement, which shall upon delivery be deemed to have amended and restated
the previously effective version of such Schedule I.
 
12. So long as no Event of Default has occurred under the Loan Agreement, and,
until Secured Party notifies Pledgor in writing after the occurrence and during
the continuance of any such Event of Default of the exercise of Secured Party’s
rights hereunder, Pledgor shall retain the sole right to vote the Pledged
Collateral and exercise all rights of ownership with respect to all corporate or
limited liability company questions for all purposes not inconsistent with the
terms hereof.
 
 
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13. Secured Party shall have no obligation to take any steps to preserve,
protect or defend the rights of any Pledgor or Secured Party in the Pledged
Collateral against other parties.  Secured Party shall have no obligation to
sell or otherwise deal with the Pledged Collateral at any time for any reason,
whether or not upon request of any Pledgor, and whether or not the value of the
Pledged Collateral, in the opinion of Secured Party or any Pledgor, is more or
less than the aggregate amount of the Obligations secured hereby, and any such
refusal or inaction by Secured Party shall not be deemed a breach of any duty
which Secured Party may have under law to preserve the Pledged
Collateral.  Except as provided by applicable law, no duty, obligation or
responsibility of any kind is intended to be delegated to or assumed by Secured
Party at any time with respect to the Pledged Collateral.
 
14. To the extent Secured Party is required by law to give Pledgor prior notice
of any public or private sale, or other disposition of the Pledged Collateral,
Pledgor agrees that ten (10) days prior written notice to Pledgor shall be a
commercially reasonable and sufficient notice of such sale or other intended
disposition.  Pledgor further recognizes and agrees that if the Pledged
Collateral, or a portion thereof, threatens to decline speedily in value or is
of a type customarily sold on a recognized market, Pledgor shall not be entitled
to any prior notice of sale or other intended disposition.
 
15. Pledgor shall indemnify, defend and hold harmless Secured Party from and
against any and all claims, losses and liabilities resulting from any breach by
Pledgor of its representations and covenants under this Agreement.  Without
contradicting or limiting the generality of the foregoing, the provisions of
Section 12.2 of the Loan Agreement are applicable to this Agreement and are
incorporated herein by reference
 
16. Except as and if expressly provided otherwise under the Loan Agreement or
any other Loan Document, Pledgor hereby waives notice of (a) acceptance of this
Agreement, (b) the existence and incurrence from time to time of any
Obligations, (c) the existence of any Event of Default or Default, the making of
demand, or the taking of any action by Secured Party under the Loan Agreement
and (d) demand and default hereunder.
 
17. Except as and if expressly provided otherwise under the Loan Agreement or
any other Loan Document, Pledgor hereby consents and agrees that Secured Party
may at any time or from time to time pursuant to the Loan Agreement (a) extend
or change the time of payment and/or the manner, place or terms of payment of
any and all Obligations, (b) supplement, amend, restate, supersede, or replace
the Loan Agreement or any other Loan Documents, (c) renew, extend, modify,
increase or decrease loans and extensions of credit under the Loan Agreement,
(d) modify the terms and conditions under which loans and extensions of credit
may be made under the Loan Agreement, (e) settle, compromise or grant releases
for any Obligations and/or any person or persons liable for payment of any
Obligations, (f) exchange, release, surrender, sell, subordinate or compromise
any collateral of any party now or hereafter securing any of the Obligations,
and (g) apply any and all payments received from any source by Secured Party at
any time against the Obligations in any order as Secured Party may determine;
all of the foregoing in such manner and upon such terms as Secured Party may
determine and without notice to or further consent from any Pledgor and without
impairing or modifying the terms and conditions of this Agreement which shall
remain in full force and effect.
 
 
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18. This Agreement shall remain in full force and effect and shall not be
limited, impaired or otherwise affected in any way by reason of (a) any delay in
making demand on any Pledgor for or delay in enforcing or failure to enforce,
performance or payment of Pledgor’s obligations, (b) any failure, neglect or
omission on Secured Party’s part to perfect any lien upon, protect, exercise
rights against, or realize on, any property of Pledgor or any other party
securing the Obligations, (c) any failure to obtain, retain or preserve, or the
lack of prior enforcement of, any rights against any person or persons or in any
property, (d) the invalidity or unenforceability of any Obligations or rights in
any Collateral under the Security Documents, (e) the existence or nonexistence
of any defenses which may be available to any Pledgor with respect to the
Obligations or (f) the commencement of any bankruptcy, reorganization,
liquidation, dissolution, receivership or other analogous proceeding or case
filed by or against any Pledgor.
 
19. Without limiting the generality of and notwithstanding anything to the
contrary provided for in Section 7 of the Loan Agreement or in any other Loan
Document, Pledgor covenants and agrees that Pledgor shall not, without the prior
written consent of Secured Party, sell, encumber or grant any Lien, security
interest or option on or with respect to any of the Pledged Collateral.
 
20. Pledgor hereby authorizes and instructs each issuer of the Pledged
Collateral to comply with any instruction received by it from Secured Party in
writing without any other or further instructions from any Pledgor, and Pledgor
agrees that each such Issuer shall be fully protected in so complying.
 
21. No failure or delay by Secured Party in exercising any right, power or
privilege under this Agreement shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.  The rights and
remedies herein and therein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.  Any reference in this Agreement to the
“continuing” nature of any Event of Default shall not be construed as
establishing or otherwise indicating that any Pledgor or any other Credit Party
has the independent right to cure any such Event of Default, but is rather
presented merely for convenience should such Event of Default be waived in
accordance with the terms of the applicable Loan Documents.
 
22. This Agreement constitutes the entire agreement between the parties hereto
regarding the subject matter hereof and may be modified only by a written
instrument signed by Pledgor and Secured Party.
 
23. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to conflicts of laws principles.
 
24. In case any provision of or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
 
25. Any notices which Secured Party may provide to Pledgor herein shall be given
in the manner and by the means provided for in Section 10 of the Loan Agreement.
 
 
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26. This Agreement shall be binding upon and inure to the benefit of the parties
hereto, and their respective successors and assigns.
 
27. PLEDGOR AND SECURED PARTY (BY ITS ACCEPTANCE HEREOF) HEREBY IRREVOCABLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND TO THE
FULLEST EXTENT PERMITTED BY LAW WAIVE ANY RIGHTS THAT IT MAY HAVE TO CLAIM OR
RECEIVE CONSEQUENTIAL OR SPECIAL DAMAGES IN CONNECTION WITH ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
 
28. The parties hereto have participated jointly in the negotiation and drafting
of this Agreement.  In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
 
29. Time is of the essence in Pledgor’s performance under this Agreement.
 
30. PLEDGOR WAIVES THE BENEFIT OF ANY AND EVERY STATUTE, ORDINANCE, OR RULE OF
COURT WHICH MAY BE LAWFULLY WAIVED CONFERRING UPON PLEDGOR ANY RIGHT OR
PRIVILEGE OF EXEMPTION, HOMESTEAD RIGHTS, STAY OF EXECUTION, OR SUPPLEMENTARY
PROCEEDINGS, OR OTHER RELIEF FROM THE ENFORCEMENT OR IMMEDIATE ENFORCEMENT OF A
JUDGMENT OR RELATED PROCEEDINGS ON A JUDGMENT.
 
(Signature Page Follows)
 
 
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(Signature Page to Canadian Collateral Pledge Agreement)

 
IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the
date first set forth above.
 

PLEDGOR: STELLAR PHARMACEUTICALS INC.          
 
By:
/s/ Robert Harris       Robert Harris       Chief Executive Officer  

 
 
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(Signature Page to Canadian Collateral Pledge Agreement)

 

SECURED PARTY:
MIDCAP FUNDING III, LLC,
a Delaware limited liability company
         
 
By:
/s/ Joshua Groman       Joshua Groman, PhD.       Managing Director  

 
 
 
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EXHIBIT A
 
PLEDGE INSTRUCTION
 
BY THIS PLEDGE INSTRUCTION, dated as of May 11, 2012, STELLAR PHARMACEUTICALS
INC. (“Pledgor”) hereby instructs each of Tribute Pharma Canada Inc. and Tribute
Pharmaceuticals Canada Ltd. (individually and collectively, “Company”), to
register a pledge and security interest in, of and to all of Pledgor’s right,
title and interest in the Company now and hereafter owned by Pledgor
(“Interests”) in favor of MIDCAP FUNDING III, LLC, as Agent (“Secured Party”).
 
1. Pledge Instructions.  The Company is hereby instructed by Pledgor to register
all of Pledgor’s right, title and interest in and to all of Pledgor’s Interests
as subject to a pledge and security interest in favor of Secured Party who, upon
such registration of pledge, shall become a registered pledgee of the Interests
with all rights incident thereto.  In connection with such pledge, Pledgor also
hereby instructs and authorizes the Company to comply with any instructions
originated by the Secured Party with respect to the Interests without further
consent of Pledgor.
 
2. Acknowledgment of Registration Statement.  The Company is hereby instructed
by Pledgor to promptly inform Secured Party of the registration of the pledge by
sending a Pledge Acknowledgment, substantially in the form of Exhibit I attached
hereto, to Secured Party at the address of 7255 Woodmont Ave., Suite 200,
Bethesda, MD 20814, Attn:  General Counsel, with a copy to Pledgor at the
address of 544 Egerton Street, London, Ontario, N5W3Z8, Attn:  President.
 
3. Warranties of Pledgor.  Pledgor hereby warrants that (i) Pledgor is an
appropriate person to originate this instruction, and (ii) Pledgor is entitled
to effect the instruction given herein.
 
IN WITNESS WHEREOF, Pledgor has caused this Pledge Instruction to be duly
executed and delivered as of the date first above written.
 
 

 
PLEDGOR:
 
STELLAR PHARMACEUTICALS INC.,
           
By:
      Name :       Title :    

 
 
Exhibit A – Page 1

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EXHIBIT B
 
PLEDGE ACKNOWLEDGMENT
 
THIS STATEMENT IS MERELY A RECORD OF THE RIGHTS OF THE ADDRESSEE AS OF THE TIME
OF ISSUANCE.  DELIVERY OF THIS STATEMENT, OF ITSELF, CONFERS NO RIGHTS ON THE
RECIPIENT.  THIS STATEMENT IS NEITHER A NEGOTIABLE INSTRUMENT NOR A SECURITY.
 
PLEDGOR
Stellar Pharmaceuticals Inc.
57 Martin Street
Milton, Ontario, Canada, L9T 2R1

MIDCAP FUNDING III, LLC, as Agent
7255 Woodmont Ave., Suite 200
Bethesda, MD 20814
Attn:  Account Manager for Stellar Pharmaceuticals
 
On the 11th day of May, 2012, the undersigned, Tribute Pharma Canada Inc.
(“Company”), registered on its books and records the pledge of all of the equity
interests in Company owned by Stellar Pharmaceuticals Inc. (“Pledgor”), which as
of the date hereof is 100% of the equity interests of Company (“Interest”), in
favor of MIDCAP FUNDING III, LLC, as Agent (“Secured Party”).  To the knowledge
of the undersigned (including, without limitation, any information which may
appear on the undersigned’s books and records) there are no other liens,
restrictions or adverse claims to which the Interest is, or may be subject, as
of the date hereof.  In accordance with the instruction and authorization
received by the Company from Pledgor, the Company will hereafter comply with
instructions originated by Secured Party with respect to the Interests without
further consent of Pledgor.
 

 
TRIBUTE PHARMA CANADA INC.
           
By:
      Name :       Title :    

 
 
Exhibit B – Page 1

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THIS STATEMENT IS MERELY A RECORD OF THE RIGHTS OF THE ADDRESSEE AS OF THE TIME
OF ISSUANCE.  DELIVERY OF THIS STATEMENT, OF ITSELF, CONFERS NO RIGHTS ON THE
RECIPIENT.  THIS STATEMENT IS NEITHER A NEGOTIABLE INSTRUMENT NOR A SECURITY.
 
PLEDGOR
Stellar Pharmaceuticals Inc.
57 Martin Street
Milton, Ontario, Canada, L9T 2R1

MIDCAP FUNDING III, LLC, as Agent
7255 Woodmont Ave., Suite 200
Bethesda, MD 20814
Attn:  Account Manager for Stellar Pharmaceuticals
 
On the 11th day of May, 2012, the undersigned, Tribute Pharmaceuticals Canada
Ltd. (“Company”), registered on its books and records the pledge of all of the
equity interests in Company owned by Stellar Pharmaceuticals Inc. (“Pledgor”),
which as of the date hereof is 100% of the equity interests of Company
(“Interest”), in favor of MIDCAP FUNDING III, LLC, as Agent (“Secured
Party”).  To the knowledge of the undersigned (including, without limitation,
any information which may appear on the undersigned’s books and records) there
are no other liens, restrictions or adverse claims to which the Interest is, or
may be subject, as of the date hereof.  In accordance with the instruction and
authorization received by the Company from Pledgor, the Company will hereafter
comply with instructions originated by Secured Party with respect to the
Interests without further consent of Pledgor.
 
 

 
TRIBUTE PHARMACEUTICALS CANADA LTD.
           
By:
      Name :       Title :    

 
 
Exhibit B – Page 2

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SCHEDULE I
 
PLEDGED COLLATERAL
 
The following Collateral is hereby pledged by Pledgor to Secured Party pursuant
to the Collateral Pledge Agreement to which this Schedule is attached:
 
A.
Pledged Shares

 
Pledgor
Name of Corporation.
Province of Incorp. of Issuer
Total Number of Shares per Class Authorized to be Issued
Total Number of Shares Issued per Class
Number of Shares to be Pledged
Stock Certificate Number
Stellar Pharmaceuticals Inc.
Tribute Pharma Canada Inc.
Ontario
Unlimited common shares
182
182
3
Stellar Pharmaceuticals Inc.
Tribute Pharmaceuticals Canada Ltd.
Ontario
Unlimited common shares
182
182
3

 
 
Schedule I – Page 1

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SCHEDULE II
 
Pledgor Information
 
STELLAR PHARMACEUTICALS INC.
 
Province of Organization
Ontario
Type of Organization
Corporation

 
 
 

Schedule II – Page 1

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