Exhibit 10.5
 
THIS COMPENSATION OPTION AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "U.S. SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES.  THIS COMPENSATION OPTION MAY NOT BE EXERCISED IN THE UNITED STATES OR
BY OR ON BEHALF OF, OR FOR THE ACCOUNT OR BENEFIT OF, A PERSON IN THE UNITED
STATES OR A U.S. PERSON UNLESS THIS COMPENSATION OPTION AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THIS COMPENSATION OPTION HAVE BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH
STATE OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE.  "UNITED
STATES" AND "U.S. PERSON" ARE AS DEFINED BY REGULATION S UNDER THE U.S.
SECURITIES ACT.
 
Void after 4:00 p.m. (Toronto time) on the 15th day of July, 2016.
 
COMPENSATION OPTIONS
 
Number of Compensation Options: ●
Compensation Option Certificate No. CO-14/01/●

 
TRIBUTE PHARMACEUTICALS CANADA INC.
(Amalgamated under the laws of the Province of Ontario)
 
This is to certify that, for value received, ● (the "Holder"), shall have the
right to purchase from Tribute Pharmaceuticals Canada Inc. (the "Corporation"),
at any time and from time to time up to 4:00 p.m. (Toronto time) on July 15,
2016 (the "Expiry Time"), one unit of the Corporation (a "Unit") for each
Compensation Option (individually, a "Compensation Option") represented hereby
at a price of Cdn$0.70 per Unit (the "Exercise Price"), upon and subject to the
terms and conditions set forth herein.  Each Unit shall be comprised of one
fully paid and non-assessable common share in the capital of the Corporation (a
"Common Share") and one-half of one common share purchase warrant (a "Warrant"),
with each whole Warrant entitling the holder thereof to purchase one additional
Common Share (a "Warrant Share") at a price of $0.90 per Warrant Share.
 
The Warrants issuable upon exercise of the Compensation Options evidenced hereby
shall be issued pursuant to and governed by the terms of the warrant indenture
dated July 15, 2014 between the Corporation and Equity Financial Trust Company,
as such indenture may be amended from time to time (the "Warrant Indenture").
 
1. For the purposes of this certificate (the "Compensation Option Certificate"),
the term "Common Shares" means common shares without par value in the capital of
the Corporation as constituted as of the date hereof, provided that in the event
of a subdivision, redivision, reduction, combination or consolidation thereof or
any other adjustment under section 8 herein, or successive such subdivisions,
redivisions, reductions, combinations, consolidations or other adjustments, then
subject to the adjustments, if any, having been made in accordance with the
provisions of this Compensation Option Certificate, "Common Shares" shall
thereafter mean the shares, other securities or other property resulting from
such subdivision, redivision, reduction, combination or consolidation or other
adjustment.
 
2. All Compensation Option Certificates shall be signed by an officer of the
Corporation holding office at the time of signing, or any successor or
replacement of such person and notwithstanding any change in any of the persons
holding said offices between the time of actual signing and the delivery of the
Compensation Option Certificate, the Compensation Option Certificate so signed
shall be valid and binding upon the Corporation.
 
 
 

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3. All rights under any of the Compensation Option Certificates in respect of
which the right of subscription and purchase therein provided for shall not
theretofore have been exercised shall wholly cease and such Compensation Option
Certificates and the Compensation Options evidenced thereby shall be wholly void
and of no valid or binding effect after the Expiry Time.
 
4. The right to purchase Units pursuant to the Compensation Options may only be
exercised by the Holder at or before the Expiry Time by:
 
(a)           duly completing and executing a subscription substantially in the
form attached as Schedule "A" (the "Subscription Form"), in the manner therein
indicated; and
 
(b)           surrendering this Compensation Option Certificate and the duly
completed and executed Subscription Form to the Corporation prior to the Expiry
Time at 151 Steeles Avenue East, Milton, Ontario L9T 1Y1, together with payment
of the purchase price for the Units subscribed for in the form of cash,
certified cheque, money order or bank draft payable to the Corporation in an
amount equal to the then applicable Exercise Price multiplied by the number of
Units subscribed for.  Any Compensation Option Certificate, subscription form
and cash, certified cheque, money order or bank draft shall be deemed to be
surrendered only upon delivery thereof to the Corporation at its principal
office in the manner provided for in this item 4.
 
5. Upon delivery and payment as set forth in section 4 herein, the Corporation
shall cause to be issued to the Holder the number of Units subscribed for by the
Holder and the Holder shall become a shareholder of the Corporation in respect
of the Common Shares comprised in such Units with effect from the date of such
delivery and payment and shall be entitled to delivery of certificates
evidencing the Common Shares and Warrants comprising the Units.  The Corporation
shall cause such certificates to be mailed to the Holder at the address or
addresses specified in the Subscription Form within five (5) business days of
such delivery and payment as set forth in section 4 herein or, if so instructed
by the Holder, held for pick-up by the Holder at the principal office of the
Corporation. Notwithstanding any adjustment provided for in section 8 herein,
the Corporation shall not be required upon the exercise of any Compensation
Options to issue fractional Common Shares or Warrants in satisfaction of its
obligations hereunder and the Holder understands and agrees that it will not be
entitled to any cash payment or other form of compensation in respect of a
fractional Common Share or Warrant that might otherwise have been issued.
 
6. The holding of a Compensation Option shall not constitute the Holder a
shareholder of the Corporation nor entitle him to any right or interest in
respect thereof except as herein expressly provided.
 
7. The Corporation covenants and agrees that until the Expiry Time, while any of
the Compensation Options shall be outstanding, it shall reserve and there shall
remain unissued out of its authorized capital a sufficient number of Common
Shares to satisfy the right of purchase herein provided, as such right of
purchase may be adjusted pursuant to sections 8 herein. All Common Shares which
shall be issued upon the exercise of the right to purchase herein provided for,
upon payment therefor of the amount at which such Common Shares may at the time
be purchased pursuant to the provisions hereof, shall be issued as fully paid
and non-assessable shares and the holders thereof shall not be liable to the
Corporation or its creditors in respect thereof.
 
 
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8. Article 5 of the Warrant Indenture, including any consequential definitions
and any amendments to the terms of Article 5, shall apply to the Compensation
Options represented by this Compensation Option Certificate mutatis mutandis,
and for that purpose shall be incorporated by reference herein.
 
9. On the happening of each and every such event set out in section 8 herein,
the applicable provisions of this Compensation Option Certificate, including the
Exercise Price, shall, ipso facto, be deemed to be amended accordingly and the
Corporation shall take all necessary action so as to comply with such provisions
as so amended.
 
10. The Corporation shall not be required to deliver certificates for Common
Shares or Warrants while the share transfer books of the Corporation are
properly closed, having regard to the provisions of section 8 herein, prior to
any meeting of shareholders or for the payment of dividends or for any other
purpose and in the event of the surrender of any Compensation Option in
accordance with the provisions hereof and the making of any subscription and
payment for the Units called for thereby during any such period, delivery of
certificates for Common Shares or Warrants may be postponed for not more than
five (5) business days after the date of the re-opening of said share transfer
books; provided, however, that any such postponement of delivery of certificates
shall be without prejudice to the right of the Holder so surrendering the same
and making payment during such period to receive after the share transfer books
shall have been re-opened such certificates for the Common Shares or Warrants
called for, as the same may be adjusted pursuant to section 8 herein as a result
of the completion of the event in respect of which the transfer books were
closed.
 
11. Subject as hereinafter provided, all or any of the rights conferred upon the
Holder by the terms hereof may be enforced by the Holder by appropriate legal
proceedings.  No recourse under or upon any obligation, covenant or agreement
contained herein shall be had against any shareholder or officer of the
Corporation either directly or through the Corporation, it being expressly
agreed and declared that the obligations under the Compensation Options are
solely corporate obligations and that no personal liability whatever shall
attach to or be incurred by the shareholders or officers of the Corporation or
any of them in respect thereof, any and all rights and claims against every such
shareholder, officer or director being hereby expressly waived as a condition of
and as a consideration for the issue of the Compensation Options.
 
12. The Holder may subscribe for and purchase any lesser number of Units than
the number of Units expressed in any Compensation Option Certificate.  In the
case of any subscription for a lesser number of Units than expressed in any
Compensation Option Certificate, the Holder hereof shall be entitled to receive,
at no cost to the Holder, a new Compensation Option Certificate in respect of
the balance of Compensation Options not then exercised.  Such new Compensation
Option Certificate shall be mailed to the Holder by the Corporation or, at its
direction, the transfer agent of the Corporation, contemporaneously with the
mailing of the certificate or certificates representing the Common Shares and
Warrants issued pursuant to section 5 herein.
 
13. If any Compensation Option Certificate becomes stolen, lost, mutilated or
destroyed, the Corporation shall, on such terms as it may in its discretion
impose, acting reasonably, issue and sign a new Compensation Option Certificate
of like denomination, tenor and date as the Compensation Option Certificate so
stolen, lost, mutilated or destroyed for delivery to the Holder.  The applicant
for the issue of a new Compensation Option Certificate pursuant to this section
shall bear the cost of the issue thereof and in the case of mutilation shall as
a condition precedent to the issue thereof, deliver to the Corporation the
mutilated Compensation Option Certificate, and in case of loss, destruction or
theft shall, as a condition precedent to the issue thereof, furnish to the
Corporation such evidence of ownership and of the loss, destruction or theft of
the Compensation Option Certificate so lost, destroyed or stolen as shall be
satisfactory to the Corporation in its discretion and the applicant shall also
be required to furnish an indemnity and surety bond in amount and form
satisfactory to the Corporation in its discretion and shall pay the reasonable
charges of the Corporation in connection therewith.
 
 
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14.  The Holder may not transfer or assign the Compensation Options represented
hereby.
 
16.           This Compensation Option may not be exercised in the United States
or by or on behalf of a “U.S. person” (a “U.S. Person”), as such term is defined
in Regulation S under the United States Securities Act of 1933, as amended,
unless an exemption from registration is available under the U.S. Securities Act
and any applicable state securities laws and the Corporation has received an
opinion of counsel of recognized standing to such effect in form and substance
reasonably satisfactory to the Corporation.
 
17.           The Corporation will maintain a register of holders of
Compensation Options at its principal office.  The Corporation may deem and
treat the registered holder of any Compensation Option Certificate as the
absolute owner of the Compensation Options represented thereby for all purposes,
and the Corporation shall not be affected by any notice or knowledge to the
contrary except where the Corporation is required to take notice by statute or
by order of a court of competent jurisdiction.  A Holder shall be entitled to
the rights evidenced by such Compensation Option free from all equities or
rights of set-off or counterclaim between the Corporation and the original or
any intermediate holder thereof and all persons may act accordingly and the
receipt by any such Holder of the Common Shares and Warrants purchasable
pursuant to such Compensation Option shall be a good discharge to the
Corporation for the same and the Corporation shall not be bound to inquire into
the title of any such Holder except where the Corporation is required to take
notice by statute or by order of a court of competent jurisdiction.
 
18.           The Corporation shall notify the Holder forthwith of any change of
the Corporation’s address.
 
19.           All notices to be sent hereunder shall be deemed to be validly
given to the registered holders of the Compensation Options if delivered
personally or if sent by registered letter through the post addressed to such
holders at their post office addresses appearing in the register of Compensation
Option holders caused to be maintained by the Corporation, and such notice shall
be deemed to have been given, if delivered personally when so delivered, and if
sent by post on the fifth business day next following the post thereof.
 
20.           If for any reason, other than the failure or default of the
Holder, the Corporation is unable to issue and deliver the Units or other
securities as contemplated herein to the Holder upon the proper exercise by the
Holder of the right to purchase any of the Units purchasable upon exercise of
the Compensation Options represented hereby, the Corporation may pay, at its
option and in complete satisfaction of its obligations and the rights of the
Holder hereunder, to the Holder, in cash, an amount equal to the difference
between the Exercise Price and the Current Market Price of such Units or other
securities on the date of exercise by the Holder, and upon such payment the
Corporation shall have no liability or other obligation to the Holder relating
to or in respect of the Compensation Options or this Compensation Option
Certificate.
 
21.           This Compensation Option Certificate shall be governed by the laws
of the Province of Ontario and the federal laws of Canada applicable herein.
 
22.           All Compensation Options shall rank pari passu, whatever may be
the actual date of issue of the same.
 
 
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23.           If one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Compensation Option Certificate, but this Compensation Option
Certificate shall be construed as if such invalid, illegal or unenforceable
provision or provisions had never been contained herein.
 
24.           This Compensation Option Certificate shall enure to the benefit of
and shall be binding upon the Holder and the Corporation and their respective
successors and assigns.
 
 
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IN WITNESS WHEREOF the Corporation has caused this Compensation Option
Certificate to be signed by its duly authorized officer.
 
DATED as of the 15th day of July, 2014.
 
TRIBUTE PHARMACEUTICALS CANADA INC.
Per:
   
Name:
 
Title:

 
 
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Schedule "A"
 
SUBSCRIPTION FORM
 
TO BE COMPLETED IF BROKER OPTIONS ARE TO BE EXERCISED:
 
 
TO:
TRIBUTE PHARMACEUTICALS CANADA INC.

 
151 Steeles Avenue East, Milton, Ontario L9T 1Y1

The undersigned hereby subscribes for   Units of Tribute Pharmaceuticals Canada
Inc. according to the terms and conditions set forth in the annexed Compensation
Option Certificate (or such number of other securities or property to which such
Compensation Option Certificate entitles the undersigned to acquire under the
terms and conditions set forth in such Compensation Option Certificate).
 
Address for Delivery of
Units:                                                      
 
______________________________________
 
Attention:                    
 
Exercise Price Tendered (Cdn.$0.70 Per Unit or as adjusted)
$
 

The undersigned represents, warrants and certifies that at the time of exercise
of this Compensation Option that it (i) is not in the United States and is not
exercising this Compensation Option on behalf of a person in the United States;
(ii) is not a “U.S. person” (a “U.S. Person”), as defined in Regulation S under
the United States Securities Act of 1933, as amended, and is not exercising this
Compensation Option on behalf of a U.S. Person; and (iii) did not execute or
deliver this subscription form in the United States.
Capitalized terms not defined herein shall have the meanings assigned to them in
the Compensation Option Certificate to which this subscription form is attached.

Dated at  , this   day of  ,     20        .
 

 
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Witness:
Holder's Name
 
Authorized Signature
 
Title (if applicable)

Signature guaranteed1:
 
1.           If the Units are to be registered in a name other than the name of
the registered Compensation Option Holder, the signature of the Compensation
Option Holder must be medallion guaranteed by a bank, trust company or a member
of a stock exchange in Canada.