In this task, you're given a passage that represents a legal contract or clause between multiple parties, followed by a question that needs to be answered. Based on the paragraph, you must write the index where the answer starts. If multiple answers seem to exist, write the index of the answer that is the most plausible. If multiple indices must be used to answer the question, the output should be a common separated list of indices.

Exhibit 1.3 AGENCY AGREEMENT May 21, 2015 Tribute Pharmaceuticals Canada Inc. 151 Steeles Avenue East Milton, Ontario L9T 1Y1 Attention: Rob Harris, President and Chief Executive Officer Dear Mr. Harris: The undersigned, Dundee Securities Ltd. (the Lead Agent), Kes 7 Capital Inc., and Bloom Burton & Co. Ltd. (collectively with the Lead Agent, the Agents and each individually an Agent) understand that Tribute Pharmaceuticals Canada Inc. (the Corporation) proposes to issue and sell up to 13,043,695 common shares of the Corporation (the Offered Shares) at a price of $0.92 per Offered Share (the Offering Price) for aggregate gross proceeds of up to $12,000,199.40. The offering of the Offered Shares by the Corporation is referred to in this Agreement as the Offering. In consideration of the Agents' services to be rendered in connection with the Offering, the Corporation shall pay to the Agents a cash fee (the Agents' Fee) equal to 7.0% of the gross proceeds of the Offering. As additional consideration, the Corporation shall issue to the Agents that number of compensation options (the Compensation Options) equal to 3.5% of the number of Offered Shares sold pursuant to the Offering. The Compensation Options will be exercisable for a period of 24 months at the Offering Price. Unless otherwise stated herein, the Offered Shares shall also refer to the Compensation Options. Notwithstanding anything to the contrary contained herein, the entire Agents' Fee and Compensation Options payable in respect of Offered Shares sold pursuant to Regulation D under the United States Securities Act of 1933, as amended, shall be payable to the Lead Agent. Based on the foregoing, and subject to the terms and conditions contained in this Agreement, the Agents severally and not jointly agree to act as, and the Corporation appoints the Agents as, the exclusive agents of the Corporation to offer the Offered Shares for sale on the Closing Date (as defined herein) in the Selling Jurisdictions (as defined herein) on a private placement basis at the Offering Price. It is understood and agreed by the Corporation and the Agents that the Agents shall act as agents only and are under no obligation to purchase any of the Offered Shares. In connection with the offering and sale of the Offered Shares, the Agents shall be entitled, with the written consent of the Corporation, not to be unreasonably withheld or delayed, to retain as sub-agents other securities dealers or financial institutions to solicit subscriptions for Offered Shares. Any fee payable to such sub-agents shall be for the account of the Agents and not the Corporation. The Agents shall be entitled to the fee provided for in Section 1(1)(a). That fee shall be payable at the Closing Time upon the closing of the sale of the Offered Shares, and may be deducted by the Agents from the gross proceeds of the Offering.





Schedules: Schedule A - United States Compliance with Securities Laws 1. Definitions In this Agreement: (a) Agent and Agents have the respective meanings given to them above; (b) Agents' Counsel means Dentons Canada LLP; (c) Agents' Fee has the meaning given in Section 1(1)(a); (d) Agreement means the agreement resulting from the acceptance by the Corporation of the offer made by the Agents by this letter; (e) Applicable Securities Laws means all applicable securities laws, rules, regulations, notices and published policies of the Selling Jurisdictions in Canada and the United States; (f) Business Day means any day other than a Saturday, Sunday or statutory or civic holiday in Toronto, Ontario; (g) Closing means the completion of the Offering; (h) Closing Date means May 21, 2015 or such other date as the Corporation and the Agents may agree upon in writing, or as may be changed pursuant to this Agreement; (i) Closing Time means 8:00 a.m. (Toronto time) on the Closing Date; (j) Corporation has the meaning given to it above; (k) Corporation's Auditors means such firm of chartered accountants as the Corporation may have appointed or may from time to time appoint as auditors of the Corporation, including prior auditors of the Corporation, as applicable; (l) Corporation's Counsel means Fogler Rubinoff LLP; (m) Compensation Options has the meaning ascribed thereto on the face page of this Agreement; (n) Compensation Option Certificates shall mean the certificates representing the Compensation Options; (o) Debt Instrument means any loan, bond, debenture, promissory note or other instrument evidencing indebtedness (demand or otherwise) for borrowed money or other liability; 2





(p) Due Diligence Session means the due diligence question and answer session held with management of the Corporation on May 21, 2015 and July 14, 2014; (q) Environmental Laws means any federal, state, provincial, territorial or local law, statute, ordinance, rule, regulation, order, decree, judgment, injunction, permit, license, authorization or other binding requirement, or common law, relating to health, safety or the regulation, protection, cleanup or restoration of the environment or natural resources, including those relating to the distribution, processing, generation, treatment, control, storage, disposal, transportation, other handling or release or threatened release of Hazardous Materials or Conditions, and Hazardous Materials or Conditions means any material, substance (including, without limitation, pollutants, contaminants, hazardous or toxic substances or wastes) or condition that is regulated by or may give rise to liability under any Environmental Laws; (r) Financial Statements means the audited consolidated financial statements of the Corporation as at and for the years ended December 31, 2013 and 2014 and for the unaudited interim financial statements for the period ended March 31, 2015 together with the notes thereto; (s) Governmental Authority (ies) means governments, regulatory authorities, governmental departments, agencies, commissions, bureaus, officials, ministers, Crown corporations, courts, bodies, boards, tribunals or dispute settlement panels or other law, rule or regulation-making organizations or entities: (i) having or purporting to have jurisdiction over the Corporation on behalf of any nation, province, territory or state or any other geographic or political subdivision of any of them; or (ii) exercising, or entitled or purporting to exercise any administrative, executive, judicial, legislative, policy, regulatory or taxing authority or power over the Corporation; (t) Indemnified Party has the meaning given to it in Section 11(b); (u) Lead Agent has the meaning given to it above; (v) Material Adverse Effect or Material Adverse Change means any effect, change, event or occurrence that is, or is reasonably likely to be, materially adverse to the results of operations, condition (financial or otherwise), assets, properties, capital, liabilities (contingent or otherwise), cash flow, income or business operations of the Corporation and its subsidiaries taken as a whole; (w) Material Agreement means any note, indenture, mortgage or other form of indebtedness and any contract, commitment, agreement (written or oral), joint venture instrument, lease or other document to which the Corporation is a party and which is material to the Corporation on a consolidated basis; (x) notice has the meaning given to it in Section 21; 3





(y) Offered Shares has the meaning given to it above; (z) Offering has the meaning given to it above; (aa) Offering Price has the meaning given to it above; (bb) Person means any individual, sole proprietorship, partnership, firm, entity, unincorporated association, unincorporated syndicate, unincorporated organization, trust, body corporate, limited liability company and unlimited liability company; (cc) Public Record means the public disclosure of the Corporation filed on SEDAR; (dd) SEC means the United States Securities and Exchange Commission; (ee) SEDAR means the System for Electronic Document Analysis and Retrieval; (ff) Securities Commissions means the securities commissions or similar regulatory authorities in the Selling Jurisdictions; (gg) Selling Jurisdictions means all of the provinces of Canada, the United States and such other jurisdictions as the Agents and the Corporation may agree; (hh) Subscriber means, for the purposes of this Agreement, the person who executes a Subscription Agreement or, if such person executes a Subscription Agreement as a duly authorized agent of one or more principals, the principal or principals of such person; (ii) Subscription Agreements means the agreements entered into by each Subscriber and the Corporation in respect of the Subscriber's subscription for Offered Shares in the form and on terms and conditions satisfactory to each of the Corporation and the Agents, each acting reasonably; (jj) TSX-V means the TSX Venture Exchange; (kk) United States means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia; and (ll) U.S. Securities Act means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. In this Agreement, affiliated, misrepresentation, material change, material fact and subsidiary have the meanings ascribed thereto under the Applicable Securities Laws of the Selling Jurisdictions in Canada, and distribution means distribution or distribution to the public, as the case may be, as defined under the Applicable Securities Laws of the Selling Jurisdictions in Canada, and distribute has a corresponding meaning. In this Agreement, unless there is something in the subject matter or context inconsistent therewith: 4





(a) words used herein importing the singular number include the plural and vice versa, words importing the use of any gender include all genders, and words importing persons include individuals, partnerships, associations, trusts, unincorporated organizations and corporations, and the rest of the sentence is construed as if the necessary grammatical and terminological changes had been made; (b) references herein to any agreement or instrument, including this Agreement, are deemed to be references to the agreement or instrument as varied, amended, modified, supplemented or replaced from time to time, and any specific references herein to any legislation or enactment are deemed to be references to such legislation or enactment as the same may be amended or replaced from time to time; and (c) all dollar amounts in this Agreement are expressed in Canadian dollars except where expressly indicated otherwise. The division of this Agreement into sections, subsections, paragraphs, subparagraphs and clauses and the insertion of headings are for convenience of reference only and do not affect the construction or interpretation of this Agreement. The terms this Agreement, hereof', herein, hereunder and similar expressions refer to this Agreement and the schedules hereto and not to any particular section, paragraph, subparagraph, clause or other portion hereof and include any agreement or instrument supplementary or ancillary hereto. 2. Restrictions on Sale Each of the Agents severally and not jointly covenants and agrees with the Corporation that it will: (a) not solicit subscriptions for Offered Shares, trade in Offered Shares or otherwise do any act in furtherance of a trade of Offered Shares outside of the Selling Jurisdictions; (b) in connection with the offer and sale of the Offered Shares in Canada, the Agents will only offer and sell the Offered Shares to persons resident in Canada who are: (i) accredited investors (as defined in National Instrument 45-106 - Prospectus Exemptions or, in Ontario, Section 73.3 of the Securities Act (Ontario)), and (ii) purchasing as principals; and (c) not advertise the proposed sale of the Offered Shares in printed media of general and regular paid circulation, radio, television or the internet nor provide or make available to prospective purchasers of Offered Shares any document or material which would constitute an offering memorandum as defined in Applicable Securities Laws in Canada. 5





The parties hereto acknowledge that the Offered Shares have not been and will not be registered under the U.S. Securities Act or any U.S. state securities laws and may not be offered or sold in the United States except pursuant to transactions that are exempt from the registration requirements of the U.S. Securities Act and the applicable securities laws of any U.S. state. Accordingly, the Corporation and the Agents hereby agree that offers and sales of the Offered Shares in the United States shall be made only to accredited investors within the meaning of Rule 501(a) of Regulation D under the U.S. Securities Act in the manner specified in Schedule A hereto, which terms and conditions are hereby incorporated by reference in and shall form a part of this Agreement. Any agreement between an Agent and the members of any sub-agent group or selling group formed in connection with the Offering shall contain the restrictions in Schedule A hereto. 3. Delivery of Subscription Agreements The Agents agree to obtain from each Subscriber executed Subscription Agreements (including the execution of applicable Schedules to such Subscription Agreements) and deliver such Subscription Agreements (including applicable Schedules) to the Corporation at or prior to the Closing Time. In addition, the Agents agree to obtain from each Subscriber such forms and other documents as may be required by the Securities Commissions and by the Corporation's registrar and provided by the Corporation to the Agents for delivery under this Agreement. The Corporation and the Agents shall agree on the allocation of the Offered Shares amongst the Subscribers. 4. Representations and Warranties of the Corporation The Corporation represents, warrants and covenants to the Agents, and acknowledges that the Agents are relying upon such representations, warranties and covenants, that: (a) the Corporation (i) is duly amalgamated under the Business Corporations Act (Ontario) (the Act) and is up-to-date in respect of all material corporate filings and is in good standing under such Act; (ii) has all requisite corporate power, authority and capacity to carry on its business as now conducted and to own, lease and operate its properties and assets (including as described in the Public Disclosure); and (iii) has all requisite corporate power, authority and capacity to create, issue and sell the Offered Shares, to enter into this Agency Agreement and the Compensation Option Certificates, and to carry out the provisions contained in hereunder and thereunder; (b) the Corporation does not have any material subsidiaries; (c) no proceedings have been taken, instituted or, to the knowledge of the Corporation, are pending for the dissolution or liquidation of the Corporation; (d) the Corporation has conducted its business in compliance, in all material respects, with all applicable laws, rules and regulations (including all applicable federal, national, provincial, municipal, and local environmental anti-pollution and licensing laws, regulations and other lawful requirements of any governmental or regulatory body, of each jurisdiction in which its business is carried on and is licensed, registered or qualified in all jurisdictions in which it owns, leases or operates its property or carries on business to enable its business to be carried on as now conducted and its property and assets to be owned, leased and operated and all such licences, registrations and qualifications are valid, subsisting and in good standing and it has not received a notice of non-compliance, nor knows of, nor has reasonable grounds to know of, any facts that could give rise to a notice of non-compliance with any such laws, regulations or permits which could reasonably be expected to have a Material Adverse Effect and all such licences, registrations and qualifications are valid, subsisting and in good standing; 6





(e) all necessary corporate action has been taken or will have been taken prior to the Closing Time by the Corporation so as to validly issue and sell the Offered Shares and to issue the Compensation Options; (f) except for the approval of the TSXV and any post-closing notice filings required under applicable United States federal or state securities laws, all consents, approvals, authorizations and corporate action have been taken and all necessary documents have been delivered and executed with respect to the Offering; (g) the execution and delivery of this Agency Agreement and the Compensation Option Certificates, and the performance of the transactions contemplated hereby and thereby, including the issuance and sale of the Offered Shares, have been duly authorized by all necessary corporate action of the Corporation and this Agency Agreement has been executed and delivered by the Corporation and constitutes a valid and binding obligation of the Corporation, enforceable against the Corporation in accordance with its terms, provided that enforcement thereof may be limited by laws affecting creditors' rights generally, that specific performance and other equitable remedies may only be granted in the discretion of a court of competent jurisdiction, that the provisions thereof relating to indemnity, contribution and waiver of contribution may be unenforceable under applicable law and that enforceability is subject to the provisions of the Limitations Act, 2002 (Ontario); (h) except for any post-closing notice filings required under applicable United States federal or state securities laws, the execution and delivery of this Agency Agreement and the Compensation Option Certificates, and the fulfilment of the terms hereof and thereof by the Corporation, including the issuance and sale of the Offered Shares, do not and will not require the consent, approval, authorization, registration or qualification of or with any Governmental Authority, stock exchange, Securities Commission or other third party, except such as have been obtained or such as may be required (and shall be obtained prior to the Closing Time) under Applicable Securities Laws or stock exchange regulations; (i) the Offered Shares have been, or prior to the Closing Time will be, duly and validly authorized for issuance and, upon receipt by the Corporation of the purchase price for the Offered Shares, will be validly issued as fully paid and non-assessable Common Shares; 7





(j) the Compensation Options have been, or prior to the Closing Time will be duly and validly authorized and created; (k) the Compensation Option Shares to be issued upon exercise of the Compensation Options, including payment in full of the applicable exercise price, will be validly issued as fully paid and non-assessable Common Shares; (l) the authorized capital of the Corporation consists of an unlimited number of Common Shares, of which, as of May 20, 2015, 100,675,988 Common Shares were outstanding as fully paid and non-assessable Common Shares; (m) the Corporation is not aware of any legislation, or proposed legislation published by a legislative body, which it anticipates will materially and adversely affect the business, affairs, operations, assets, liabilities (contingent or otherwise) or prospects of the Corporation on a consolidated basis; (n) no order ceasing or suspending trading in any securities of the Corporation or prohibiting the sale of the Offered Shares or the trading of any of the Corporation's issued securities has been issued and no proceedings for such purpose are threatened or, to the best of the Corporation's knowledge, pending; (o) except as disclosed to the Agents, no person now has any agreement or option or right or privilege (whether at law, pre- emptive or contractual) capable of becoming an agreement for the purchase, subscription or issuance of, or conversion into, any unissued shares, securities, warrants or convertible obligations of any nature of the Corporation; (p) since December 31, 2013, except as disclosed in the Public Record: (i) there has not been any material change in the assets, liabilities, obligations (absolute, accrued, contingent or otherwise), business, condition (financial or otherwise) or results of operations of the Corporation on a consolidated basis; (ii) there has not been any material change in the capital stock or long-term debt of the Corporation on a consolidated basis; and (iii) the Corporation has carried on its business in the ordinary course; (q) the Financial Statements of the Corporation present fairly, in all material respects, the financial condition of the Corporation on a consolidated basis for the periods then ended; (r) the Corporation does not have any liabilities, direct or indirect, contingent or otherwise, not disclosed in the Public Record which could reasonably be expected to have a Material Adverse Effect; (s) except as disclosed in the Public Record (and certain other matters disclosed in writing to the Agents that the Corporation believes are without merit and/or would not have a Material Adverse Effect), there are no threats of actions, proceedings or investigations (whether or not purportedly by or on behalf of the Corporation) that have been made to the Corporation or, to the knowledge of the Corporation, that are pending or affecting the Corporation at law or in equity (whether in any court, arbitration or similar tribunal) or before or by any federal, provincial, state, municipal or other governmental department, commission, board or agency, domestic or foreign, which could reasonably be expected to have a Material Adverse Effect; 8





(t) the execution and delivery of this Agency Agreement and the Compensation Option Certificates, and the fulfilment of the terms hereof and thereof by the Corporation, including the issuance and sale of the Offered Shares, do not and will not (as the case may be) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, whether after notice or lapse of time or both, (A) any statute, rule or regulation applicable to the Corporation, including Applicable Securities Laws; (B) the constating documents, by-laws or resolutions of the Corporation; (C) the terms of any Debt Instrument, Material Agreement, mortgage, note, indenture, instrument, lease or any other material agreement to which the Corporation is a party or by which they are bound; or (D) any judgment, decree or order binding the Corporation or the respective property or assets of the Corporation; (u) to the knowledge of the Corporation, no agreement is in force or effect which in any manner affects the voting or control of any of the securities of the Corporation; (v) the Corporation is not included in a list of defaulting reporting issuers maintained by the Securities Commissions in the Qualifying Jurisdictions and in particular, without limiting the foregoing, the Corporation has at all relevant times complied with its obligations to make timely disclosure of all material changes relating to it, no such disclosure has been made on a confidential basis that is still maintained on a confidential basis, and there is no material change relating to the Corporation which has occurred and with respect to which the requisite material change report has not been filed with the Securities Commissions and the Corporation is in all material respects in compliance with the rules and regulations of the TSXV; (w) the Corporation has complied in all material respects with requirements to file all reports, schedules, forms, statements and other documents that it is required to file under the U.S. Exchange Act, including pursuant to Section 13(a) or 15(d) of the U.S. Exchange Act, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the SEC Reports) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the respective requirements of the U.S. Exchange Act and the rules and regulations of the SEC promulgated thereunder. The financial statements of the Corporation included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with U.S. generally accepted accounting principles applied on a consistent basis during the periods involved (GAAP), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Corporation as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments; 9





(x) neither the Corporation nor, to the knowledge of the Corporation, any director, officer, agent, employee, affiliate or other person acting on behalf of the Corporation is aware of or has taken any action, directly or indirectly, that has resulted or would result in a violation of the Foreign Corrupt Practices Act of 1977 (United States), as amended, and the rules and regulations thereunder (the FCPA), and the Corruption of Foreign Public Officials Act (Canada) (the CFPOA) including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any foreign official (as such term is defined in the FCPA) or any foreign public official (as such term is defined in the CFPOA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and the CFPOA; and the Corporation will monitor its respective businesses to ensure compliance with the FCPA and the CFPOA, as applicable, and, if violations of the FCPA or the CFPOA are found, will take remedial action to remedy such violations; (y) the operations of the Corporation are, and have been conducted at all times, in compliance with all material applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970 (United States), as amended, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar applicable rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the Money Laundering Laws) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Corporation with respect to the Money Laundering Laws is pending or, to the knowledge of the Corporation, threatened; (z) neither the Corporation nor, to the knowledge of the Corporation, any director, officer, agent, employee, affiliate or person acting on behalf of the Corporation is currently subject to any United States sanctions administered by the Office of Foreign Assets Control of the United States Treasury Department (OFAC); and the Corporation will not directly or indirectly use the proceeds of this Offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any United States sanctions administered by OFAC; 10

(aa) all filings and fees required to be made and paid by the Corporation pursuant to Applicable Securities Laws have been paid or will be promptly paid by the Corporation following the Closing Time; (bb) the Corporation's Auditors who audited the consolidated financial statements of the Corporation for the year ended December 31, 2014 and delivered their auditors' report thereto are independent public accountants as required by the Canadian Securities Laws; (cc) there has not been any reportable event (within the meaning of National Instrument 51- 102 - Continuous Disclosure Obligations with the Corporation's Auditors; (dd) all taxes (including income tax, capital tax, payroll taxes, employer health tax, workers' compensation payments, property taxes, custom and land transfer taxes), duties, royalties, levies, imposts, assessments, deductions, charges or withholdings and all liabilities with respect thereto including any penalty and interest payable with respect thereto (collectively, Taxes) due and payable by the Corporation have been paid, except for where the failure to pay such taxes would not constitute an adverse material fact of the Corporation or result in a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and materially accurate and no material fact or facts have been omitted therefrom which would make any of them misleading except where the inaccuracy or failure to file such documents would not constitute an adverse material fact of the Corporation or result in a Material Adverse Effect. No examination of any tax return of the Corporation is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any taxes that have been paid, or may be payable, by the Corporation, in any case, except where such examinations, issues or disputes would not constitute an adverse material fact of the Corporation or result in a Material Adverse Effect; (ee) neither the Corporation or to the knowledge of the Corporation any other person, is in default in the observance or performance of any term, covenant or obligation to be performed by the Corporation or such other person under any Debt Instrument, Material Agreement, agreement, or arrangement to which the Corporation is a party or otherwise bound which could reasonably be expected to have a Material Adverse Effect, and all such contracts, agreements or arrangements are in good standing, and to the knowledge of the Corporation no event has occurred which with notice or lapse of time or both would constitute such a default by the Corporation or any other party; (ff) Equity Financial Trust Company at its principal transfer office in the City of Toronto, Ontario has been duly appointed as the registrar and transfer agent for the Common Shares; (gg) except as disclosed in the Public Record, none of the directors or officers of the Corporation, any known holder of more than 10% of any class of shares of the Corporation, or any known associate or affiliate of any of the foregoing persons, has had any material interest, direct or indirect, in any transaction during the three most recently completed financial years or during the current financial year, or any proposed material transaction which, as the case may be, materially affected, is material to or will materially affect the Corporation on a consolidated basis; 11





(hh) each Debt Instrument to which the Corporation is a party is in good standing and the Corporation is not in default of any obligation or covenant under such Debt Instruments and, except for intercompany debt, the Corporation is not party to any material Debt Instrument or has any material loans or other indebtedness outstanding which has been made to any of its shareholders, officers, directors or employees, past or present, or any person not dealing at arm's length with them; (ii) the Corporation is in compliance, in all material respects, with all applicable federal, provincial, state, municipal and local laws, statutes, ordinances, by laws and regulations and orders, directives and decisions rendered by any ministry, department or administrative or regulatory agency, domestic or foreign (the Environmental Laws) relating to the protection of the environment, occupational health and safety or the processing, use, treatment, storage, disposal, discharge, transport or handling of any pollutants, contaminants, chemicals or industrial, toxic or hazardous wastes or substance (Hazardous Substances); (jj) the Corporation has collectively, obtained all material licences, permits, approvals, consents, certificates, registrations and other authorizations under all applicable Environmental Laws (the Environmental Permits) necessary as at the date hereof for the operation of the business carried by the Corporation; (kk) the Corporation has not used, except in compliance in all material respects with all Environmental Laws and Environmental Permits, any property or facility which it owns or leases or previously owned or leased, to generate, manufacture, process, distribute, use, treat, store, dispose of, transport or handle any Hazardous Substance; (ll) the Corporation has not received any notice of, or been prosecuted for an offence alleging, non-compliance with any Environmental Law. There are no orders or directions relating to environmental matters requiring any material work, repairs, construction or capital expenditures to be made with respect to any of the assets of the Corporation which are material to the Corporation, nor has the Corporation received notice of any of the same; (mm) the Corporation has not received any notice wherein it is alleged or stated that it is potentially responsible for a federal, provincial, state, municipal or local clean-up site or corrective action under any Environmental Laws and the Corporation has not received any request for information in connection with any federal, state, provincial, municipal or local inquiries as to disposal sites; 12





(nn) except as disclosed in the Public Record, the Corporation is the sole and exclusive owner of all right, title and interest in and to, or has a valid and enforceable right to use pursuant to a written license, all trademarks, trade names, service marks, patents, patent applications, other patent rights, copyrights, domain names, software, inventions, processes, databases, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) and other similar intellectual property rights, whether registered or unregistered and in any jurisdiction (collectively, Intellectual Property Rights) reasonably necessary to conduct its business as now conducted or proposed to be conducted. To the knowledge of the Corporation, the Corporation's business as now conducted or proposed to be conducted as described in the Public Record, does not infringe, conflict with or otherwise violate any Intellectual Property Rights of others, and the Corporation has not received, and has no reason to believe that it will receive, any notice of infringement or conflict with asserted Intellectual Property Rights of others, or any facts or circumstances which would render any Intellectual Property Rights invalid or inadequate to protect the interest of the Corporation therein. Except as disclosed to the Agent, to the knowledge of the Corporation, there is no infringement by third parties of any Intellectual Property Rights owned by the Corporation. Except as disclosed in the Public Record, there is no pending or, to the knowledge of the Corporation, threatened action, suit, proceeding or claim relating to Intellectual Property Rights owned by the Corporation. Except as disclosed in the Public Record, the Corporation is not a party to or bound by any options, licenses or agreements with respect to the Intellectual Property Rights of any other person or entity. All licenses for Intellectual Property Rights owned or used by the Corporation are valid, binding upon and enforceable by or against the Corporation and, to the Corporation's knowledge, against the parties thereto in accordance with their terms. To the knowledge of the Corporation, none of the technology employed by the Corporation has been obtained or is being used by the Corporation in violation of any contractual obligation binding on the Corporation or, to the Corporation's knowledge, any of its officers, directors or employees or otherwise in violation of the rights of any third party. All assignments from inventors to the Corporation have been obtained and filed with the appropriate patent offices for all of the Corporation's patent applications. Except as disclosed in the Public Record the Corporation does not have knowledge of any claims of third parties to any ownership interest or lien with respect to the Corporation's or its licensors' patents and patent applications. The Corporation does not know of any facts which would form a basis for a finding of unenforceability or invalidity of any of the patents, trademarks or service marks of the Corporation. The Corporation does not know of any material defects of form in the preparation or filing of the patent applications of the Corporation. To the knowledge of the Corporation, the Corporation has complied with the U.S. Patents and Trademark Office duties and Canadian equivalent duties of candor and disclosure for each patent and patent application of the Corporation. The Corporation does not know of any fact with respect to the patent applications of the Corporation presently on file that (i) would preclude the issuance of patents with respect to such applications, (ii) would lead the Corporation to conclude that such patents, when issued, would not be valid and enforceable in accordance with applicable regulations or (iii) would result in a third party having any rights in any patents issuing from such patent applications. The Corporation has taken all commercially reasonable steps to protect, maintain and safeguard its rights in all material Intellectual Property Rights, including the execution of appropriate nondisclosure and confidentiality agreements; 13





(oo) except as disclosed to the Agents, the Corporation (or parties under contractual obligation to the Corporation) holds all licenses, certificates, approvals and permits from all provincial, federal, state, United States, foreign and other regulatory authorities, including but not limited to the United States Food and Drug Administration (the FDA), Health Canada (HC), the European Medicines Agency (the EMA) and any foreign regulatory authorities performing functions similar to those performed by the FDA, HC and the EMA, that are material to the conduct of the business of the Corporation as such business is now conducted or proposed to be conducted as described in the Public Record, all of which are valid and in full force and effect and there is no proceeding pending or, to the knowledge of the Corporation, threatened which may cause any such license, certificate, approval or permit to be withdrawn, cancelled, suspended or not renewed. Nothing has come to the attention of the Corporation that has caused the Corporation to believe that the completed studies, tests, preclinical studies and clinical trials conducted by or on behalf of the Corporation that are described in the Public Record were not conducted, in all material respects, in accordance with experimental protocols, procedures and controls pursuant to, where applicable, accepted professional and scientific standards for products or product candidates comparable to those being developed by the Corporation; or that the drug substances used in the clinical trials have not been manufactured, under current good manufacturing practices, when required, in the United States, Canada and other jurisdictions in which such clinical trials have been and are being conducted. No filing or submission to the FDA, HC, the EMA or any other regulatory body, that was or is intended to be the basis for any approval of the Corporation's products or product candidates, to the knowledge of the Corporation, contains any material omission or material false information. The Corporation is not in violation of any material law, order, rule, regulation, writ, injunction or decree of any court or governmental agency or body, applicable to the investigation of new drugs in humans and animals, including, but not limited to, those promulgated by the FDA, HC or the EMA; (pp) the descriptions in the Public Record of the results of the clinical trials referred to therein are consistent in all material respects with such results and no other studies or other clinical trials whose results are known to the Corporation are materially inconsistent with or otherwise materially call into question the results described or referred to in the Public Record. To the Corporation's knowledge, the studies, tests and preclinical and clinical trials conducted by or on behalf of the Corporation were and, if still pending, are, in all material respects, being conducted in accordance with experimental protocols, procedures and controls pursuant to accepted professional scientific standards and all applicable laws and authorizations; (qq) the Corporation possesses such valid and current certificates, authorizations or permits issued by the appropriate federal, provincial, state, local or foreign regulatory agencies or bodies necessary to conduct its business, except where the failure to possess such certificates, authorizations or permits would not, individually or in the aggregate, result in a Material Adverse Change, and the Corporation has not received, nor has any reason to believe that it will receive, any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavourable decision, ruling or finding, could result in a Material Adverse Change; 14





(rr) neither the Corporation or, to the best of its knowledge, any employee or agent thereof, has made any unlawful contribution or other payment to any official of, or candidate for, any federal, state, provincial or foreign office, or failed to disclose fully any contribution, in violation of any law, or made any payment to any foreign, Canadian, governmental officer or official, or other Person charged with similar public or quasi-public duties, other than payments required or permitted by applicable laws; (ss) there are no environmental audits, evaluations, assessments, studies or tests relating to the Corporation except for ongoing assessments conducted by or on behalf of the Corporation in the ordinary course; (tt) each material plan for retirement, bonus, stock purchase, profit sharing, stock option, deferred compensation, severance or termination pay, insurance, medical, hospital, dental, vision care, drug, sick leave, disability, salary continuation, legal benefits, unemployment benefits, vacation, incentive or otherwise contributed to or required to be contributed to, by the Corporation for the benefit of any current or former director, officer, employee or consultant of the Corporation (the Employee Plans) has been maintained in compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations that are applicable to such Employee Plans, in each case in all material respects and has been publicly disclosed to the extent required by Applicable Securities Laws; (uu) all material accruals for unpaid vacation pay, premiums for employment insurance, health premiums, federal or state pension plan premiums, accrued wages, salaries and commissions and employee benefit plan payments have been reflected in the books and records of the Corporation; (vv) there has never been, there is not currently and the Corporation does not anticipate any labour disruption with respect to the employees or consultants of the Corporation which is adversely affecting or could adversely affect the carrying on of the business of the Corporation; (ww) the minute books of the Corporation made available to the Agents contain copies of all constating documents and all proceedings of security holders and directors (and committees thereof) and are complete in all material respects; (xx) the Corporation is not aware of any circumstances presently existing under which liability is or could reasonably be expected to be incurred under Part XXIII.1 - Civil Liability for Secondary Market Disclosure of the Securities Act (Ontario) or analogous securities laws in the other Qualifying Jurisdictions; 15





(yy) other than the Agents, there is no person acting or purporting to act at the request or on behalf of the Corporation that is entitled to any brokerage or finder's fee in connection with the transactions contemplated by this Agency Agreement; (zz) the Corporation will use the proceeds from the Offering for acquisitions and working capital; and (aaa) the Corporation has complied and will comply with the representation, warranties and covenants applicable to it in Schedule A and Schedule A is true and correct in all material respects. 5. Agents' Fee In consideration for the Agents' services hereunder, the Corporation will pay to the Agents the Agents' Fee and the Corporation shall issue to the Agents that number of Compensation Options equal to 3.5% of the number of Offered Shares sold pursuant to the Offering. Unless otherwise stated herein, the Offered Shares shall also refer to the Compensation Options. The Agents' Fee shall be apportioned among the Agents as follows: Dundee Securities Ltd. 40% Kes 7 Capital Inc. 30% Bloom Burton & Co. Ltd. 30% 100% 6. Closing The sale of the Offered Shares shall be completed at the Closing Time at the offices of Corporation's Counsel in Toronto, Ontario or at such other place as the Corporation and the Agents may agree. At the Closing Time, the Corporation shall deliver to the Agents: (a) the opinions, certificates and agreements referred to in Section 9 and all other documents required to be provided by the Corporation to the Agents pursuant to this Agreement and the Subscription Agreements; (b) except for any Offered Shares offered or sold in the United States which shall be represented by individual definitive share certificates, one or more definitive share certificate(s)/and or book-entry only securities, duly registered as the Lead Agent may direct the Corporation; (c) the Corporation's receipt for payment by the Agents of an amount equal to the aggregate purchase price for the Offered Shares sold pursuant to the Offering; and (d) such further documentation as may be contemplated by this Agreement or as Agents' Counsel or the applicable regulatory authorities may reasonably require; against delivery by the Agents of: 16





(e) all duly completed Subscription Agreements tendered by the Subscribers for the Offered Shares being issued and sold and, where applicable, all completed forms, schedules and certificates contemplated by such Subscription Agreements; (f) a wire transfer of immediately available funds in an amount equal to the aggregate purchase price for the Offered Shares sold pursuant to the Offering, less an amount equal to the Agents' Fee and the costs and expenses of the Agent provided for in Section 14; and (g) the Agents' receipt for the Agents' Fee and the definitive certificates delivered to the Agents in accordance with Section 6(b). 7. Delivery of Offered Shares The Corporation shall, prior to the Closing Date, make all necessary arrangements for the preparation and delivery (and, in the case of definitive certificates, execution of such definitive certificate(s) representing the Offered Shares) of the Offered Shares on the Closing Date in the City of Toronto. The Corporation shall pay all fees and expenses payable to its transfer agent in connection with the preparation and delivery (and, in the case of definitive certificates, execution of such definitive certificate(s) representing the Offered Shares) of the Offered Shares contemplated by this Section 7 and the fees and expenses payable to its transfer agent as may be required in the course of the distribution of the Offered Shares. 8. Agency Basis The Corporation agrees that the Agents are acting as agents of the Corporation in seeking purchasers of Offered Shares without underwriter liability, and nothing in this Agreement or any other agreement shall require the Agents to purchase any of the Offered Shares in connection with the Offering. 9. Conditions to Closing The sale of the Offered Shares shall be subject to the representations, warranties and covenants of the Corporation contained in this Agreement being accurate as of the date of this Agreement and as of the Closing Date, to the Corporation having performed all of its obligations under this Agreement and to the following additional conditions, and the Agents shall have the right on the Closing Date on behalf of Subscribers for Offered Shares to withdraw, all Subscription Agreements delivered and not previously withdrawn by Subscribers unless such conditions have been satisfied: (a) Delivery of Opinions (i) The Agents shall have received at the Closing Time a legal opinion dated the Closing Date, in form and substance satisfactory to the Agents, acting reasonably, addressed to the Agents (and, if required for opinion purposes, counsel to the Agents) from Corporation's Counsel as to the laws of Canada and the Selling Jurisdictions in Canada, which counsel in turn may rely upon the opinions of local counsel where it deems such reliance proper as to the laws other than those of Canada and such provinces in Canada where Corporation's Counsel is licensed to practice law (or alternatively make arrangements to have such opinions directly addressed to the Agents) and as to matters of fact, on certificates of Governmental Authorities and officers of the Corporation and letters from stock exchange representatives and transfer agents, with respect to customary corporate, securities law and other matters requested by the Agents. (ii) The Agents shall have received at the Closing Time an opinion of U.S. counsel to the Corporation, Troutman Sanders LLP, in form and substance satisfactory to the Agents, acting reasonably, to the effect that the offer and sale of the Offered Shares in the United States do not require registration under the U.S. Securities Act. 17





(iii) The Agents having received at the Closing Time such further opinions, certificates and other documentation from the Corporation as may be contemplated herein or as the Agents may reasonably require, provided, however, that the Agents shall request any such opinion, certificate or document within a reasonable period prior to the Closing Time that is sufficient for the Corporation to obtain and deliver such certificate or document. (b) Delivery of Certificates (i) The Agents shall have received at the Closing Time a certificate dated the Closing Date, addressed to the Agents (and, if necessary for opinion purposes, counsel to the Agents) and signed by officers of the Corporation acceptable to the Agents, acting reasonably, with respect to the constating documents of the Corporation, no proceedings to voluntarily wind-up or dissolve, all resolutions of the board of directors of the Corporation relating to this Agreement and the transactions contemplated by this Agreement and the incumbency and specimen signatures of signing officers of the Corporation and such other matters as the Agents may reasonably request. (ii) The Agents shall have received at the Closing Time a certificate of good standing of the Corporation. (iii) The Agents shall have received at the Closing Time a certificate dated the Closing Date, addressed to the Agents and counsel to the Agents and signed on behalf of the Corporation by the Chief Executive Officer and the Chief Financial Officer or other officers of the Corporation acceptable to the Agents, certifying for and on behalf of the Corporation and without personal liability, after having made due enquiry: (A) the Corporation has complied with and satisfied all terms and conditions of this Agreement and the Subscription Agreements on its part to be complied with or satisfied at or prior to the Closing Time; 18





(B) the representations and warranties of the Corporation contained in this Agreement and the Subscription Agreements are true and correct at the Closing Time with the same force and effect as if made at and as of the Closing Time after giving effect to the transactions contemplated by this Agreement; (C) the responses provided by the Corporation at the Due Diligence Session are true and correct and would not be different in any material respect if the Due Diligence Session were held immediately prior to the Closing Time; (D) the Corporation has made and/or obtained, on or prior to the Closing Time, all necessary filings, approvals, consents and acceptances of applicable regulatory authorities and under any applicable agreement or document to which the Corporation is a party or by which it is bound, required for the execution and delivery of this Agreement, the offering and sale of the Offered Shares in the Selling Jurisdictions in Canada and the consummation of the other transactions contemplated hereby (subject to completion of filings with certain regulatory authorities following the Closing Date); (E) no order, ruling or determination having the effect of suspending the sale of or cease trading the Offered Shares or any other securities of the Corporation has been issued by any regulatory authority and is continuing in effect and no proceedings for that purpose have been instituted or are pending or, to the knowledge of such officer of the Corporation, contemplated or threatened under any Applicable Securities Laws or by any other regulatory authority; and (F) such other matters as may be reasonably requested by the Agents or the Agents' Counsel. (c) Exchange Approval The Corporation shall have obtained the conditional approval of the TSX-V and any other applicable exchange in respect of the issuance and sale of the Offered Shares and all other necessary regulatory approvals prior to the Closing. (d) Consents All required third party consents and waivers necessary for the Corporation to enter into this Agreement and to consummate the transactions contemplated by this Agreement shall have been received at or prior to the Closing Time. 19





The foregoing conditions contained in this Section 9 are for the sole benefit of the Agents and may be waived in whole or in part by the Agents at any time and without limitation. If any of the foregoing conditions have not been met at the Closing Time, the Agents may terminate their obligations under this Agreement without prejudice to any other remedies they may have and the Agents shall have the right on behalf of the Subscribers to withdraw all Subscription Agreements delivered and not previously withdrawn by Subscribers. 10. Rights of Termination (a) Regulatory Proceedings Out If, after the date hereof and prior to the Closing Time, any enquiry, action, suit, investigation or other proceeding, whether formal or informal, is instituted or announced or any order is made by any federal, provincial or other Governmental Authority in relation to the Corporation which, in the opinion of any of the Agents, operates to prevent or restrict the distribution or trading of the Offered Shares, then such Agent shall be entitled, at its option and in accordance with Section 10(e), to terminate its obligations under this Agreement by notice to that effect given to the Corporation any time at or prior to the Closing Time. (b) Disaster Out If prior to the Closing Time there should develop, occur or come into effect or existence any event, action, state, condition or major financial occurrence of national or international consequence or any law or regulation which, in the opinion of any of the Agents, seriously adversely affects, or involves, or will seriously adversely affect, or involve, the financial markets or the business, operations or affairs of the Corporation and its subsidiaries taken as a whole, then such Agent shall be entitled, at its option and in accordance with Section 10(e), to terminate its obligations under this Agreement by written notice to that effect given to the Corporation at any time at or prior to the Closing Time. (c) Material Change or Change in Material Fact Out If, after the date hereof and prior to the Closing Time, there shall occur any material change or change in a material fact which, in the reasonable opinion of any of the Agents, would be expected to have a significant adverse effect on the business, affairs, prospects or financial condition of the Corporation and its subsidiaries taken as a whole or the market price or value of the securities of the Corporation, then such Agent shall be entitled, at its option, in accordance with Section 10(e), to terminate its obligations under this Agreement by written notice to that effect given to the Corporation any time at or prior to the Closing Time. (d) Non-Compliance with Conditions The Corporation agrees that all terms and conditions in Section 9 shall be construed as conditions and complied with so far as they relate to acts to be performed or caused to be performed by it, that it will use its best efforts to cause such conditions to be complied with, and that any breach or failure by the Corporation to comply with any such conditions shall entitle any of the Agents, in accordance with Section 10(e), to terminate its obligations under this Agreement by written notice to that effect given to the Corporation at any time at or prior to the Closing Time, unless otherwise expressly provided in this Agreement. Each Agent may waive, in whole or in part, or extend the time for compliance with, any terms and conditions without prejudice to its rights in respect of any other terms and conditions or any other or subsequent breach or non- compliance, provided that any such waiver or extension shall be binding upon an Agent only if such waiver or extension is in writing and signed by the Agent. 20

(e) Exercise of Termination Rights The rights of termination contained in Sections 10(a), (b), (c) and (d) may be exercised by any of the Agents and are in addition to any other rights or remedies any of the Agents may have in respect of any default, act or failure to act or non- compliance by the Corporation in respect of any of the matters contemplated by this Agreement or otherwise. In the event of any such termination, there shall be no further liability on the part of the Agents to the Corporation or on the part of the Corporation to the Agents except in respect of any liability which may have arisen prior to or arise after such termination under Sections 11, 12 and 14. A notice of termination given by an Agent under Section 10(a), (b), (c) or (d) shall not be binding upon any other Agent who has not also executed such notice. 11. Indemnity (a) Rights of Indemnity (1) The Corporation covenants and agrees to protect, indemnify, and save harmless, each of the Agents and their respective affiliates, and each and every one of the directors, officers, employees, partners and agents of the Agents (individually, an Indemnified Party and collectively, the Indemnified Parties) harmless from and against any and all expenses, losses (excluding loss of profits), claims, actions, damages (other than consequential or punitive damages) or liabilities, joint or several (including the aggregate amount paid in settlement of any actions, suits, proceedings or claims and the reasonable fees and expenses of their counsel that may be incurred in advising with respect to and/or defending any claim that may be made against the Indemnified Parties) to which any Indemnified Party may become subject or otherwise involved in any capacity under any statute or common law or otherwise insofar as such expenses, losses, claims, damages, liabilities or actions arise out of or are based, directly or indirectly, upon the performance of professional services rendered to the Corporation by the Indemnified Parties (or any of them), whether directly or indirectly, including by reason of: (a) any information or statement contained in this Agreement, the Corporation's publicly available disclosed documents filed on SEDAR or elsewhere, or in any other material prepared by the Corporation used for marketing the Offering or any certificate of the Corporation delivered hereunder or pursuant hereto, which at the time and in the light of the circumstances under which it was made contains or is alleged to contain a misrepresentation or any misstatement of a material fact; 21





(b) the omission or alleged omission to state in in this Agreement, the Corporation's publicly available disclosed documents filed on SEDAR or elsewhere, or in any other material prepared by the Corporation used for marketing the Offering or any certificate of the Corporation delivered hereunder or pursuant hereto, any material fact required to be stated therein or necessary to make any statement therein not misleading in light of the circumstances in which it was made; (c) any order made, or inquiry, investigation or proceeding commenced by any securities regulatory authority or other competent authority based upon any misrepresentation, untrue statement or omission or alleged untrue statement or omission in this Agreement, the Corporation's publicly available disclosed documents filed on SEDAR or elsewhere, or in any other material prepared by the Corporation used for marketing the Offering or any certificate of the Corporation delivered hereunder or pursuant hereto that prevents or restricts the trading in any of the Corporation's securities or the distribution or distribution to the public, as the case may be, of any of the Offered Shares in any of the Qualifying Jurisdictions; (d) the Corporation not complying with any requirement of Applicable Securities Laws or stock exchange requirements in connection with the transactions contemplated herein, including the Corporation's non-compliance with any statutory requirement to make any document available for inspection; or (e) any breach of a representation or warranty of the Corporation contained in this Agreement or the failure of the Corporation to comply with any of its obligations hereunder. (2) Notwithstanding Subsection 11(a) (1), the indemnification in Subsection 11(a)(1) does not and shall not apply to the extent that a court of competent jurisdiction in a final judgment that has become non- appealable shall determine that (a) the Agents and their respective affiliates have been negligent or have committed any fraudulent or illegal act in the course of the professional services rendered to the Corporation, and (b) such expenses, losses, claims, damages, liabilities or actions were caused or incurred by the gross negligence, fraud or wilful misconduct of the Agents. (3) If any matter or thing contemplated by this Section 11 shall be asserted against any Indemnified Party in respect of which indemnification is or might reasonably be considered to be provided, such Indemnified Party will notify the Corporation in writing as soon as possible of the nature of such claim (provided that omission to so notify the Corporation will not relieve the Corporation of any liability that it may otherwise have to the Indemnified Party hereunder, except to the extent the Corporation is materially prejudiced by such omission) and the Corporation shall be entitled (but not required) to assume the defence of any suit brought to enforce such claim; provided, however, that the defence shall be through legal counsel reasonably acceptable to such Indemnified Party and that no settlement may be made by the Corporation or such Indemnified Party without the prior written consent of the other, such consent not to be unreasonably withheld. 22





(4) In any such claim, such Indemnified Party shall have the right to retain other legal counsel to act on such Indemnified Party's behalf, provided that the fees and disbursements of such other legal counsel shall be paid by such Indemnified Party, unless: (a) the employment of such counsel has been authorized by the Corporation; or (b) the Corporation has not assumed the defence and employed counsel thereof promptly after receiving notice of such claim; or (c) the named parties to any such claim include both the Indemnified Party and the Corporation, and the Indemnified Party has been advised by legal counsel thereto that representation of both the Corporation and the Indemnified Party by the same legal counsel would be inappropriate due to actual or potential differing interests between them; or (d) there are one or more defences available to the Indemnified Party which are different from and in addition to those available to the Corporation, provided that the Corporation shall not be responsible for the fees or expenses of more than one legal firm in any single jurisdiction for all of the Indemnified Parties. (5) To the extent that any Indemnified Party is not a party to this Underwriting Agreement, the Agents shall obtain and hold the right and benefit of this Section 11 in trust for and on behalf of such Indemnified Party. (6) The Corporation hereby consents to personal jurisdiction in any court in which any claim that is subject to indemnification hereunder is brought against the Agents or any Indemnified Party and to the assignment of the benefit of this Section 11 to any Indemnified Party for the purpose of enforcement provided that nothing herein shall limit the Corporation's right or ability to contest the appropriate jurisdiction or forum for the determination of any such claims. (7) The rights of the Corporation contained in this Section 11 shall not enure to the benefit of any Indemnified Party if the Agents were provided with a copy of any amendment or supplement to this Agreement which corrects any untrue statement or omission or alleged omission that is the basis of a claim by a party against such Indemnified Party and that is required, under the Applicable Securities Laws, to be delivered to such party by the Agents. (8) The Corporation shall not be liable under this Section 11 for any settlement of any claim or action effected without its prior written consent. 23





(b) Notification of Claims If any matter or thing contemplated by Section 11(a) (any such matter or thing being referred to as a Claim) is asserted against any person or company in respect of which indemnification is or might reasonably be considered to be provided, such person or company (the Indemnified Party) will notify the Corporation as soon as possible of the nature of such Claim (but the omission so to notify the Corporation of any potential Claim shall not relieve the Corporation from any liability which they may have to any Indemnified Party and any omission so to notify the Corporation of any actual Claim shall affect the Corporation's liability only to the extent that the Corporation is materially prejudiced by that failure). The Corporation shall assume the defence of any suit brought to enforce such Claim, provided, however, that (i) the defence shall be conducted through legal counsel acceptable to the Indemnified Party, acting reasonably, and (ii) no settlement of any such Claim or admission of liability may be made by the Corporation without the prior written consent of the Indemnified Party, acting reasonably, unless such settlement includes an unconditional release of the Indemnified Party from all liability arising out of such action or claim and does not include a statement as to or an admission of fault, culpability or failure to act, by or on behalf of any Indemnified Party. (c) Right of Indemnity in Favour of Others With respect to any Indemnified Party who is not a party to this Agreement, the Agents shall obtain and hold the rights and benefits of this Section 11 in trust for and on behalf of such Indemnified Party. (d) Retaining Counsel In any such Claim, the Indemnified Party shall have the right to retain one separate counsel to act on his or its behalf, provided that the fees and disbursements of such counsel shall be paid by the Indemnified Party unless: (i) the Corporation and the Indemnified Party shall have mutually agreed in writing to the retention of the other counsel; (ii) the named parties to any such Claim (including any added third or impleaded party) include both the Indemnified Party and the Corporation and the Indemnified Party shall have been advised in writing by counsel to the Indemnified Party that the representation of both parties by the same counsel would be inappropriate due to an actual or potential conflict of interest between the Corporation and the Indemnified Party; or (iii) the Corporation shall not have retained counsel within seven Business Days following receipt by the Corporation of notice of any such Claim from the Indemnified Party; provided that the Corporation shall not be responsible for the fees or expenses of more than one legal firm in any single jurisdiction for all of the Indemnified Parties. 24





12. Contribution (a) Rights of Contribution In order to provide for a just and equitable contribution in circumstances in which the indemnity provided in Section 11 would otherwise be available in accordance with its terms but is, for any reason, held to be unavailable to or unenforceable by the Agents or enforceable otherwise than in accordance with its terms, the Corporation and the Agents shall contribute to the aggregate of all claims, expenses, costs and liabilities and all losses (other than loss of profits) of a nature contemplated by Section 11 in such proportions so that the Agents shall be responsible for the portion represented by the percentage that the aggregate Agents' Fee hereunder bears to the aggregate offering price of the Offered Shares being sold by the Corporation and the Corporation shall be responsible for the balance, whether or not they have been sued together or sued separately, provided, however, that (i) the Agents shall not in any event be liable to contribute, in the aggregate, any amounts in excess of the aggregate Agents' Fee actually received by the Agents from the Corporation under this Agreement; (ii) each Agent shall not in any event be liable to contribute, individually, any amount in excess of such Agents' portion of the aggregate Agents' Fee actually received from the Corporation under this Agreement; and (iii) no party who has engaged in any fraud, fraudulent misrepresentation, wilful misconduct or negligence shall be entitled to claim contribution from any person who has not engaged in such fraud, fraudulent misrepresentation, wilful misconduct or negligence. (b) Rights of Contribution in Addition to Other Rights The rights to contribution provided in this Section 12 shall be in addition to and not in derogation of any other right to contribution which the Agents may have by statute or otherwise at law. (c) Right of Contribution in Favour of Others With respect to this Section 12, the Corporation acknowledges and agrees that the Agents are contracting on their own behalf and as agents for their affiliates, directors, officers, employees and agents. For purposes of this Section 12, each person, if any, who controls an Agent within the meaning of Section 15 of the U.S. Securities Act or Section 20 of the U.S. Exchange Act and each Agents' affiliates and selling agents shall have the same rights to contribution as such Agent and each person, if any, who controls the Corporation within the meaning of Section 15 of the U.S. Securities Act or Section 20 of the U.S. Exchange Act shall have the same rights to contribution as the Corporation. The Agents' respective obligations to contribute pursuant to this Section 12 are several in proportion to the percentages of Agents' Fee set forth opposite their respective names in Section 5(a) hereof and not joint. 25





(d) Remedy Not Exclusive The remedies provided for in this Section 12 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any party at law or in equity. 13. Severability If any provision of this Agreement is determined to be void or unenforceable in whole or in part, it shall be deemed not to affect or impair the validity of any other provision of this Agreement and such void or unenforceable provision shall be severable from this Agreement. 14. Expenses (a) Whether or not the transactions contemplated by this Agreement shall be completed, all expenses of or incidental to the issue, sale and delivery of the Offered Shares and all expenses of or incidental to all other matters in connection with the offering of the Offered Shares shall be borne by the Corporation including, without limitation, all fees and disbursements of all legal counsel to the Corporation (including U.S., foreign and local counsel), all fees and disbursements of the Corporation's accountants and auditors, all expenses related to road shows and marketing activities, all printing costs incurred in connection with the offering of the Offered Shares, including certificates, if any, representing the Offered Shares, all filing fees, all fees and expenses relating to listing the Offered Shares on any exchanges, all transfer agent fees and expenses, and all reasonable out-of-pocket expenses of the Agents incurred in connection with the offering of the Offered Shares, including without limitation the fees of Canadian counsel to the Agents which shall not exceed $50,000 (not including applicable taxes and disbursements and $10,000 USD plus tax and disbursements for U.S. Counsel), and any advertising, printing, courier, telecommunications, data search, presentation, travel and other expenses incurred by the Agents together with all related taxes (including, without limitation, provincial sales taxes and HST). (b) All expenses payable by the Corporation to the Agent in accordance with this Agreement shall be payable whether or not the Offering is completed. 15. Survival of Representations and Warranties The representations, warranties, obligations and agreements of the Corporation contained in this Agreement and in any certificate delivered pursuant to this Agreement or in connection with the purchase and sale of the Offered Shares shall survive the payment by the Agents for the Offered Shares, if any, and the distribution of the Offered Shares, and shall continue in full force and effect unaffected by the termination of the Agents' obligations and shall not be limited or prejudiced by any investigation made by or on behalf of the Agents in connection with the distribution of the Offered Shares. 26





16. Entire Agreement This Agreement, including any schedules hereto, represents the entire agreement of the parties hereto relating to the subject matter hereof and there are no representations, warranties, covenants or other agreements relating to the subject matter hereof except as stated or referred to herein. This Agreement shall not be amended or varied in its terms by oral agreement or by representations or otherwise except by instrument in writing executed by the duly authorized representatives of the parties hereto or their respective successors or assigns. It is understood that the terms and conditions of this Agreement supersede any previous verbal or written agreement between the Agents and the Corporation relating to the subject matter hereof. 17. Amendment No modification or amendment to this Agreement may be made unless agreed upon by the Corporation and the Agents in writing. 18. Assignment and Enurement No party may transfer or assign its rights or obligations under this Agreement without the prior written consent of the other parties and any transfer or assignment or purported transfer or assignment in contravention of this Section 18 shall be void and without force or effect. This Agreement shall be binding upon and shall enure to the benefit of the parties hereto and their respective successors and permitted assigns. 19. Time Time is of the essence in the performance of the parties' respective obligations under this Agreement. 20. Governing Law This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable in the Province of Ontario. 21. Notice Unless otherwise expressly provided in this Agreement, any notice or other communication to be given under this Agreement (a notice) shall be in writing addressed as follows: If to the Corporation, addressed and sent to: Tribute Pharmaceuticals Canada Inc. 151 Steeles Avenue East Milton, Ontario L9T 1Y1 Attention: Rob Harris Facsimile No.: 519.434.4382 e-mail: rob.harris@tributepharma.com 27





with a copy to (which copy shall not constitute notice): Fogler, Rubinoff LLP 77 King Street West Suite 3000, P.O. Box 95 TD Centre North Tower Toronto, Ontario M5K 1G8 Attention: Eric Roblin Facsimile No.: 416.941.8852 e-mail: eroblin@foglers.com to the Agents at: Dundee Securities Ltd. 1 Adelaide Street East, Suite 2000 Toronto, Ontario M5C 2V9 Attention: Aaron Unger Facsimile No.: 416.849.1380 e-mail: aunger@dundeecapitalmarkets.com Kes 7 Capital Inc. 2 Bloor Street East, Suite 2102 Toronto, Ontario M4W 1A8 Attention: Marc Lustig e-mail: marcl@kes7capital.com Bloom Burton & Co. Ltd. 65 Front Street West Suite 300 Toronto, Ontario M5E 1B5 Attention: Jolyon Burton Facsimile No.: 416.640.7573 e-mail: jburton@bloomburton.com with a copy to (which copy shall not constitute notice): Dentons Canada LLP 77 King Street West, Suite 400, TD Centre Toronto, Ontario M5K 0A1 28





Attention: Andrew Elbaz Facsimile No.: 416.863.4592 email: andrew.elbaz@dentons.com or to such other address as any of the parties may designate by giving notice to the others in accordance with this Section 21. Each notice shall be personally delivered to the addressee or sent by fax or e-mail to the addressee. A notice which is personally delivered or delivered by fax or e-mail shall, if delivered prior to 5:00 p.m. (Toronto time) on a Business Day, be deemed to be given and received on that day and, in any other case, be deemed to be given and received on the first Business Day following the day on which it is delivered. 22. Authority of the Lead Agent The Lead Agent is hereby authorized by each of the other Agents to act on its behalf, except in respect of any consent to a settlement pursuant to Section 11(b) which consent shall be given by the Indemnified Party, a notice of termination pursuant to Section 10 which notice may be given by any of the Agents, or any waiver pursuant to Section 10(d), which waiver must be signed by all of the Agents. 23. Agents as Trustee The Corporation acknowledges and agrees that it is the intention of the parties to this Agreement and the Corporation hereby constitutes the Agents as trustees for each of the Subscribers in respect of each of the representations and warranties of the Corporation contained in this Agreement and the Agents shall be entitled, as trustees, in addition to any rights of the Subscribers, to enforce such representations and warranties on behalf of the Subscribers. 24. Counterparts This Agreement may be executed by the parties to this Agreement in counterpart and may be executed and delivered by facsimile and all such counterparts and facsimiles shall together constitute one and the same agreement. [The remainder of this page has been left blank intentionally.] 29





If the foregoing is in accordance with your understanding and is agreed to by you, please signify your acceptance by executing the enclosed copies of this letter where indicated below and returning the same to the Lead Agent upon which this letter as so accepted shall constitute an Agreement among us. Yours very truly, DUNDEE SECURITIES LTD. By: /s/ Aaron Unger Name: Aaron Unger Title: Managing Director KES 7 CAPITAL INC. By: /s/ Mark Christensen Name: Mark Christensen Title: President and CEO BLOOM BURTON & CO. LTD. By: /s/ Jolyon Burton Name: Jolyon Burton Title: CEO 30





The foregoing offer is accepted and agreed to as of the date first above written. TRIBUTE PHARMACEUTICALS INC. By: /s/ Rob Harris Name: Rob Harris Title: President and CEO 31

SCHEDULE A COMPLIANCE WITH UNITED STATES SECURITIES LAWS As used in this Schedule and related exhibits, the following terms shall have the meanings indicated: (a) Accredited Investors means institutions that are accredited investors meeting the criteria set forth in Rule 501(a) of Regulation D; (b) Directed Selling Efforts means directed selling efforts as that term is defined in Rule 902(c) of Regulation S, which, without limiting the foregoing, but for greater clarity in this Schedule, includes, subject to the exclusions from the definition of directed selling efforts contained in Regulation S, any activity undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for any of the Offered Shares and includes the placement of any advertisement in a publication with a general circulation in the United States that refers to the offering of the Offered Shares; (c) Foreign Issuer means foreign issuer as that term is defined in Rule 902(e) of Regulation S; (d) General Solicitation and General Advertising means general solicitation and general advertising, respectively, as used in Rule 502(c) of Regulation D, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or the internet or broadcast over radio or television or the internet, or any seminar or meeting whose attendees had been invited by general solicitation or general advertising; (e) Offshore Transaction means an offshore transaction as that term is defined in Rule 902(h) of Regulation S; (f) Regulation D means Regulation D adopted by the SEC under the U.S. Securities Act; (g) Regulation S means Regulation S adopted by the SEC under the U.S. Securities Act; (h) SEC means the United States Securities and Exchange Commission; (i) Substantial U.S. Market Interest means substantial U.S. market interest as that term is defined in Rule 902(j) of Regulation S; (j) U.S. Affiliate of any Lead Agent means the U.S. registered broker-dealer affiliate of the Lead Agent; (k) U.S. Exchange Act means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder; and (l) U.S. Subscriber means a Subscriber located in the United States, who was offered Offered Shares in the United States, who originated their purchase at or from the United States or who executes a Subscription Agreement while in the United States.





All other capitalized terms used but not otherwise defined in this Schedule shall have the meanings assigned to them in the Agency Agreement to which this Schedule is attached. Representations, Warranties and Covenants of the Corporation The Corporation represents, warrants, covenants and acknowledges to and with the Agents and the U.S. Affiliates that: 1. The Corporation is a Foreign Issuer and reasonably believes that there is no Substantial U.S. Market Interest with respect to the common shares of the Corporation. 2. The Corporation is not, and after giving effect to the Offering and the application of the proceeds as contemplated hereby, will not be, required to register as an investment company as such term is defined under the United States Investment Corporation Act of 1940, as amended. 3. Except with respect to offers and sales to Accredited Investors identified by the Agents in reliance upon Regulation D, none of the Corporation, its affiliates, or any person acting on any of their behalf (other than the Agents, the U.S. Affiliates, any members of the banking and selling group formed by them, or any person acting on any of their behalf, as to whom the Corporation makes no representation, warranty, covenant or acknowledgment), has made or will make: (A) any offer to sell, or any solicitation of an offer to buy, any Offered Shares to a person in the United States; or (B) any sale of Offered Shares unless, at the time the buy order was or will have been originated, the Subscriber is (i) outside the United States, or (ii) the Corporation, its affiliates, and any person acting on any of their behalf reasonably believe that the Subscriber is outside the United States. 4. None of the Corporation, its affiliates, or any person acting on any of their behalf (other than the Agents, the U.S. Affiliates, any members of the banking and selling group formed by them, or any person acting on any of their behalf, as to whom the Corporation makes no representation, warranty, covenant or acknowledgment), has engaged or will engage in any Directed Selling Efforts, or has taken or will take any action that would cause the registration exemption and exclusion afforded by Rule 506(b) of Regulation D or Rule 903 of Regulation S, respectively, to be unavailable for offers and sales of the Offered Shares pursuant to this Agreement. 5. None of the Corporation, any of its affiliates or any person acting on any of their behalf (other than the Agents, the U.S. Affiliates, or any members of the banking and selling group formed by them, or any person acting on any of their behalf, as to whom the Corporation makes no representation, warranty, covenant or acknowledgment) has offered or will offer to sell, or has solicited or will solicit offers to buy, any of the Offered Shares in the United States by means of any form of General Solicitation or General Advertising or in any manner involving a public offering within the meaning of Section 4(a)(2) of the U.S. Securities Act. 2





6. For the period commencing six months prior to the date hereof and ending six months following the completion of the Offering, none of the Corporation, its affiliates, or any person acting on any of their behalf (other than the Agents, the U.S. Affiliates, or any members of the banking and selling group formed by them, or any person acting on any of their behalf, as to whom the Corporation makes no representation, warranty, covenant or acknowledgment) has sold, offered for sale or solicited any offer to buy or will sell, offer to sell or solicit any offer to buy any of the Corporation's securities in a manner that would be integrated with the offer and sale of the Offered Shares and would cause the exemption from registration afforded by Rule 506(b) of Regulation D to become unavailable with respect to the offer and sale of the Offered Shares. 7. Neither the Corporation nor any of its predecessors or affiliates has been subject to any order, judgment, or decree of any court of competent jurisdiction temporarily, preliminarily or permanently enjoining such person for failure to comply with Rule 503 of Regulation D. 8. None of the Corporation, its affiliates or any person on any of their behalf (other than the Agents, the U.S. Affiliates, or any members of the banking and selling group formed by them, or any person acting on any of their behalf, as to whom the Corporation makes no representation, warranty, covenant or acknowledgment) has taken or will take any action that would constitute a violation of Regulation M under the U.S. Exchange Act in connection with the Offering. 9. The Corporation will cause a Form D to be filed with the SEC within 15 days of the first sale of the Offered Shares to a U.S. Subscriber, and will, within the prescribed time periods, prepare and file any other forms or notices required under any state securities laws in connection with the offer and sale of Offered Shares. 10. With respect to Offered Shares to be offered and sold in reliance on Rule 506(b) of Regulation D, none of the Corporation, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Corporation participating in the Offering, any beneficial owner of 20% or more of the Corporation's outstanding voting equity securities, calculated on the basis of voting power, or any promoter (as that term is defined in Rule 405 under the U.S. Securities Act) connected with the Corporation in any capacity at the time of sale (each, an Issuer Covered Person and, together, Issuer Covered Persons) is subject to any of the Bad Actor disqualifications described in Rule 506(d)(1)(i) to (viii) of Regulation D (a Disqualification Event), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) of Regulation D. The Corporation has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Corporation has complied, to the extent applicable, with its disclosure obligations under Rule 506(e) of Regulation D, and has furnished to the Agents a copy of any disclosures provided thereunder. 11. The Corporation is not aware of any person (other than any Dealer Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of Subscribers in connection with the sale of any Offered Shares pursuant to Rule 506(b) of Regulation D. 3





12. The Corporation will notify the Agents, in writing, prior to the Closing Date of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Issuer Covered Person. Representations, Warranties and Covenants of the Agents Each of the Agents represents, warrants, covenants and acknowledges to and with the Corporation that: 1. The Offered Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws and may be offered and sold only in transactions exempt from or not subject to the registration requirements of the U.S. Securities Act and applicable state securities laws. It has not offered and sold, and will not offer and sell, any Offered Shares except: (a), in case of all Agents, offers and sales in Offshore Transactions in accordance with Rule 903 of Regulation S; or (b), in the case of the Lead Agent, offers in the United States to Accredited Investors as permitted by this Agreement. Accordingly, none of the Agent, its affiliates or any persons acting on any of their behalf, has made or will make (except as permitted in this Agreement): (i) any offer to sell, or any solicitation of an offer to buy, any Offered Shares to any person in the United States; (ii) any sale of Offered Shares to any Subscriber unless, at the time the buy order was or will have been originated, the Subscriber was outside the United States, or such Agent, affiliate or person acting on any of their behalf reasonably believed that such Subscriber was outside the United States. 2. It has not entered and will not enter into any contractual arrangement with respect to the offer and sale of the Offered Shares, except with its U.S. Affiliate, any selling group members or with the prior written consent of the Corporation. It shall require its U.S. Affiliate and each selling group member to agree, for the benefit of the Corporation, to comply with, and shall use its reasonable best efforts to ensure that its U.S. Affiliate and each selling group member complies with, the provisions of this Schedule applicable to the Agent as if such provisions applied to such U.S. Affiliate and such selling group members. 3. All offers of Offered Shares in the United States shall be made only by the Lead Agent through its U.S. Affiliate, which on the dates of such offers and subsequent sales by the Corporation was and will be duly registered as a broker-dealer under the U.S. Exchange Act and under all applicable state securities laws (unless exempt from the registration requirements thereof) and a member of, and in good standing with, the Financial Industry Regulatory Authority, Inc. The U.S. Affiliate will make all offers and arrange for all sales by the Corporation of Offered Shares in compliance with all applicable United States federal and state broker-dealer requirements and this Schedule. 4





4. None of the Agent, its affiliates, or any person acting on behalf of any of them, have engaged in any Directed Selling Efforts or have solicited or will solicit offers to buy, or have offered to sell or will offer to sell, any of the Offered Shares in the United States by any form of General Solicitation or General Advertising or in any manner involving a public offering within the meaning of Section 4(a)(2) of the U.S. Securities Act. 5. Any offer to sell or solicitation of an offer to buy Offered Shares that has been made or will be made in the United States by the Lead Agent through the U.S. Affiliate was or will be made only to Accredited Investors in transaction that in compliance with Rule 506(b) of Regulation D and to be exempt from registration under and in compliance with applicable state securities laws. 6. Immediately prior to soliciting any U.S. Subscriber, the Lead Agent, its U.S. Affiliate, their respective affiliates, and any person acting on behalf of any of them, had reasonable grounds to believe and did believe that each such U.S. Subscriber was an Accredited Investor, based upon a pre-existing relationship, and at the time of completion of each sale by the Corporation to such U.S. Subscriber, the Lead Agent, its U.S. Affiliate, their respective affiliates, and any person acting on behalf of any of them will have reasonable grounds to believe and will believe, that each U.S. Subscriber designated by the Lead Agent or its U.S. Affiliate to purchase Offered Shares from the Corporation is an Accredited Investor. 7. Prior to arranging for any sale by the Corporation of Offered Shares to U.S. Subscribers, the Lead Agent shall cause each such U.S. Subscriber to duly complete and execute a Subscription Agreement to be used for U.S. Subscribers. 8. At least one business day prior to the Closing Date, the transfer agent for the Corporation will be provided with a list of all U.S. Subscribers. 9. At the Closing Time, the Lead Agent, together with its U.S. Affiliate, will provide a certificate, substantially in the form of Exhibit I to this Schedule A relating to the manner of the offer of the Offered Shares in the United States or will be deemed to have represented and warranted to the Corporation that neither it nor its U.S. Affiliate has offered or sold Offered Shares in the United States. 10. Prior to arranging any sale by the Corporation of Offered Shares to a U.S. Subscriber, each such person will be informed that the Offered Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws and are being offered and sold to such U.S. Subscriber in reliance on an exemption from the registration requirements of the U.S. Securities Act provided by Rule 506(b) of Regulation D and similar exemptions under applicable state securities laws. 11. None of the Agent, the U.S. Affiliate, or any person acting on its or their behalf has taken or will take any action in violation of Regulation M under the U.S. Exchange Act in connection with the Offering. 12. Other than Lead Agent and the U.S. Affiliate, it has not made and will not make any offers or sales of Offered Shares in the United States in connection with the Offering. 5





13. The Lead Agent represents and warrants that with respect to Offered Shares to be sold in reliance on Rule 506(b) of Regulation D, none of it, or the U.S. Affiliate, or any of its or the U.S. Affiliate's directors, executive officers, general partners, managing members or other officers participating in the Offering, or any other person associated with the Lead Agent who will receive, directly or indirectly, remuneration for solicitation of Subscribers of Offered Shares pursuant to Rule 506(b) of Regulation D (each, a Dealer Covered Person and, together, Dealer Covered Persons), is subject to any Disqualification Event (as defined below) except for a Disqualification Event (i) covered by Rule 506(d)(2)(i) of Regulation D and (ii) a description of which has been furnished in writing to the Corporation prior to the date hereof or, in the case of a Disqualification Event occurring after the date hereof, prior to the Closing Date. 14. The Lead Agent represents that it is not aware of any person (other than any Dealer Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of Subscribers in connection with the sale of any Offered Shares pursuant to Rule 506(b) of Regulation D. It will notify the Corporation, prior to the Closing Date of any agreement entered into between it and any such person in connection with such sale. 15. The Lead Agent will notify the Corporation, in writing, prior to the Closing Date, of (i) any Disqualification Event relating to any Dealer Covered Person not previously disclosed to the Corporation in accordance herewith, and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Dealer Covered Person. 6 
Question: Highlight the parts (if any) of this contract related to Third Party Beneficiary that should be reviewed by a lawyer. Details: Is there a non-contracting party who is a beneficiary to some or all of the clauses in the contract and therefore can enforce its rights against a contracting party?
68565

REDACTED COPY

CONFIDENTIAL TREATMENT REQUESTED

CONFIDENTIAL PORTIONS OF THIS

DOCUMENT HAVE BEEN REDACTED

AND HAVE BEEN SEPARATELY

FILED WITH THE COMMISSION

  1





ENDORSEMENT AGREEMENT

This Agreement is entered into on January 13, 2005 between professional golfer, TOM WATSON, (hereinafter referred to as CONSULTANT) and ADAMS GOLF, LTD. (hereinafter referred to as ADAMS GOLF).

WITNESSETH

WHEREAS, ADAMS GOLF desires to obtain the right to use the name, likeness and ENDORSEMENT of CONSULTANT in connection with the advertisement and promotion of ADAMS GOLF'S PRODUCT;

NOW THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

CONTRACT PERIOD

1.   TERM OF CONTRACT

The Term of this Agreement shall be for a period of [* ****] years and [*****] months commencing the 1st day of September 2004 and terminating the [*****] day of [*****].

2.   DEFINITIONS

As used in this Agreement, the following terms shall be defined as set forth below:

    A. CONSULTANT'S ENDORSEMENT means the right to use the CONSULTANT'S name, fame, nickname, autograph, voice, facsimile, signature, photograph, likeness, and image in connection with the marketing, advertising, promotion and sale of ADAMS GOLF'S PRODUCT.

B.PRODUCT shall mean all golf clubs including, but not limited to, metal woods,  drivers, fairway woods, irons, iron- woods, utility clubs, wedges, and putters, bags, and headwear.   C.MANDATORY PRODUCTS shall mean the following ADAMS GOLF PRODUCTS  that CONSULTANT must exclusively play/use in all Champions/Senior Professional Golf Association (SPGA) and Professional Golf Association (PGA) events at all times:

[***** ]  Confidential Material redacted and filed separately with the Commission.   2





  1.[*****] 2.Sufficient [*****] to maintain total minimum of [*****] ADAMS GOLF  [*****] (includes [*****])[*****] at all times 3.[*****] 4.[*****] (CONSULTANT may continue to place the [*****] logo on the [*****] consistent with historical practice.)

D. CONTRACT TERRITORY shall mean the entire world.

CONSULTANT'S OBLIGATIONS

3.   CONSULTANT'S ENDORSEMENT

CONSULTANT hereby gives and grants to ADAMS GOLF the exclusive right and license to use CONSULTANT'S ENDORSEMENT in connection with the manufacture, sale, distribution, advertising and promotion of PRODUCT in the CONTRACT TERRITORY.   4. EXCLUSIVITY OF ENDORSEMENT   During the term of this Agreement, unless otherwise authorized at the sole discretion of ADAMS GOLF in writing, CONSULTANT shall not:   A.give the right to use or permit the use of CONSULTANT'S name, facsimile signature, nickname, voice or likeness to any other manufacturer or seller of PRODUCT;

B.sponsor or endorse PRODUCT made or sold by any other manufacturer or seller; or

C.serve as a CONSULTANT or advisor of any other manufacturer or seller of PRODUCT.

D.Notwithstanding paragraphs 4A, 4B and 4C above, CONSULTANT shall be entitled to endorse and play the [*****]. The parties expressly  agree that CONSULTANT may  permit [*****] the use of CONSULTANT'S  name and/or likeness in [*****] print and/or television advertisement provided that this is executed in a manner consistent with [*****] past  [*****] advertising practice using similarly situated professional golfers  with competing golf club endorsement agreements that include [*****]. If  [*****] use of CONSULTANT  varies from past practice of utilizing similarly situated professionals, CONSULTANT will take action to remedy the situation [*****]. If CONSULTANT participates directly in any [*****] sponsored photo shoots for advertising or PR, CONSULTANT shall wear his ADAMS GOLF [*****]. The parties further expressly agree that CONSULTANT'S endorsement of the [*****] shall not include the right to place a [*****] logo on his ADAMS GOLF [*****] or the ADAMS GOLF  [*****]. If CONSULTANT'S relationship with [*****] terminates during this Agreement, CONSULTANT shall be permitted to replace the [*****] endorsement with another [*****] endorsement under the same terms and conditions expressed herein.

[***** ]  Confidential Material redacted and filed separately with the Commission.   3





  E.Notwithstanding  paragraphs 4A, 4B and 4C above, CONSULTANT  shall not be required to wear ADAMS  GOLF [*****] in [*****] ads.

5.   EXCLUSIVE USE OF PRODUCT

During the term of this Agreement, CONSULTANT shall exclusively play/use the MANDATORY PRODUCT. (It is expressly understood by the parties that CONSULTANT may play [* ****] clubs in the bag other than ADAMS GOLF clubs including, but not limited to, a putter by a manufacturer other than ADAMS GOLF but may not endorse those clubs and/or putter.)

6.    CONSULTANT'S ENDORSEMENT OF NON-COMPETITIVE PRODUCT

If CONSULTANT endorses or promotes a non-competitive product and in that endorsement or promotion CONSULTANT wears, plays, uses, holds or is in any way associated with a product that would constitute PRODUCT as defined under this Agreement, CONSULTANT shall use objectively reasonable best efforts to ensure that PRODUCT is an ADAMS GOLF PRODUCT and it shall not be altered or changed in appearance in the endorsement in any manner whatsoever without the express written consent of ADAMS GOLF. When endorsing a non-competitive product, under no circumstances shall CONSULTANT wear, play, use, hold or in any way be associated with an ADAMS GOLF competitor's Product.

7.   CONSULTANT'S SATISFACTION OF MANDATORY PRODUCT

It is particularly and expressly understood and agreed that if CONSULTANT shall find in his sincere best reasonable judgment that the MANDATORY PRODUCT so supplied is not suitable for his use in tournament competition, then he shall promptly notify ADAMS GOLF in writing of such fact and the reasons therefor. Thereafter, ADAMS GOLF shall have a period of thirty (30) days to either, at ADAMS GOLF'S sole discretion, supply CONSULTANT with MANDATORY PRODUCT that is acceptable to him or terminate the agreement. It is agreed that if the contract is terminated pursuant to this paragraph, the compensation due CONSULTANT shall be prorated from the date this Agreement is terminated. Proration of compensation shall be determined on the same repayment schedule as provide in paragraph 8A below.

[***** ]  Confidential Material redacted and filed separately with the Commission.   4





  8. MINIMUM NUMBER OF TOURNAMENTS AND POTENTIAL REPAYMENT OF BASE COMPENSATION

    A.  In each and every calendar year of this Agreement, CONSULTANT shall achieve a satisfactory record of play in a minimum of [* ****] professional golf association events on the SPGA and/or PGA tour (which shall include both the PGA and SPGA Tour Skins Games). If for any reason, CONSULTANT should achieve a satisfactory record of play in less than [*****] SPGA and/or PGA tour events in a calendar year, he shall repay ADAMS GOLF an amount per event for each event under [*****] achieved in the given calendar year as follows:

The agreed upon repayment amount per event per calendar year:

1.  Year 1. $[*****] 2.  Year 2 $[*****] 3.  Year 3 $[*****] 4.  Year 4 $[*****] 5.  Year 5 $[*****]

B.Payment shall be made to ADAMS GOLF within one month following the end of the calendar year. For example, if in the calendar year 2005 CONSULTANT  achieves a satisfactory record of play in [*****] events, he shall repay ADAMS GOLF [*****] dollars no later than January 31, 2006.

C.In the event that CONSULTANT is prevented from competing for reasons outside his control, the parties  agree to a good faith attempt to resolve the issues. If a resolution can not be reached, ADAMS GOLF may, at its sole discretion, demand prorated repayment pursuant to the repayment schedule in paragraph 8A above.

9.     PRODUCT DESIGN   During the term of this Agreement, CONSULTANT shall use best efforts to cooperate with ADAMS GOLF in giving advice, suggestions and recommendations concerning the acceptability and playability of current ADAMS GOLF lines, the development of new ADAMS GOLF lines, and information about significant golf PRODUCT and golf market trends, and meet as reasonably requested with ADAMS GOLF'S Design/Testing Teams.   10.    PROMOTION OF PRODUCT

     During the term of this Agreement, CONSULTANT shall use best efforts to wear the headwear and display ADAMS GOLF'S brand name and to demonstrate, discuss and emphasize the newest features of ADAMS GOLF PRODUCT at every opportunity including but not limited to all Senior PGA tour events and promotional and advertising events in which CONSULTANT takes part.

[***** ]  Confidential Material redacted and filed separately with the Commission.   5





  11.    PROMOTIONAL APPEARANCES

A.During the term of this Agreement, CONSULTANT shall use best efforts to be available for such press interviews, radio or TV appearances arranged for CONSULTANT by ADAMS GOLF which are compatible with CONSULTANT'S own practice, play and personal time requirements. CONSULTANT will be required to be available after a tournament for selected interviews, either the Sunday afternoon or Monday morning following the tournament. In all such interviews and appearances, CONSULTANT will use his best efforts to make reference to the ADAMS GOLF PRODUCT and wear [*****] and display ADAMS GOLF'S brand name.

B.During  the term of this Agreement, CONSULTANT  shall make himself available on not more than [*****]  days for television and radio commercials, photo shoots, modeling and  promotional appearances compatible with CONSULTANT'S  own practice, play and personal time requirements. Said activities shall  be directly related to the promotion of ADAMS GOLF PRODUCT. ADAMS GOLF  shall  reimburse CONSULTANT  for reasonable travel expenses for CONSULTANT when making special appearances for ADAMS GOLF pursuant to this paragraph but ADAMS GOLF shall not pay CONSULTANT session fees, residual payments or the like for television appearances. Travel expenses shall include jet fuel or first-class round-trip airfare and lodging, meals and local transportation.

12.   BEHAVIOR

During the term of this Agreement, CONSULTANT will conduct himself at all times with due regard to public morals and conventions. If the value of CONSULTANT'S ENDORSEMENT is materially reduced or impaired because CONSULTANT:

A.committed or shall commit any public act that involves moral turpitude, B.commits or violates any material foreign, U.S., federal, or other applicable state or local law, C.commits any act which brings him into public disrepute, contempt, scandal or  ridicule, or which insults or offends the community, D.makes any statements in derogation, in any material respect, of ADAMS GOLF or any of its affiliates or any of their respective PRODUCT or  services and such statement is made to the general public or becomes a matter of public knowledge,

then at any time after the occurrence of such act, thing or statement, ADAMS GOLF shall have the right, in addition to its other legal and equitable remedies, to immediately terminate this Agreement, by giving written notice to CONSULTANT. ADAMS GOLF must exercise its right of termination within ninety (90) days of its senior management becoming aware of the conduct giving rise to the right of termination.

[***** ]  Confidential Material redacted and filed separately with the Commission.   6





  13.  FREEDOM TO CONTRACT

CONSULTANT represents and warrants that CONSULTANT is free of all prior undertakings and obligations which would prevent or tend to impair either the full performance of CONSULTANT'S obligations hereunder or ADAMS GOLF'S full enjoyment of the rights and privileges granted to it by CONSULTANT.

14. INDEMNITY

CONSULTANT agrees to protect, indemnify and hold ADAMS GOLF harmless from any and all liability, claims, causes of action, suits, damages and expenses (including reasonable attorneys' fees and expenses) for which it becomes liable or is compelled to pay by reason of a breach of any covenant or representation by CONSULTANT in this Agreement.

15.  ABSENCE OF AGENCY

CONSULTANT shall not and will not have the right or authority to bind ADAMS GOLF by any representation or in any other respect whatsoever or to incur any obligation or liability in the name of or on behalf of ADAMS GOLF.

16. MEMBERSHIPS

CONSULTANT warrants and represents that during the term of this Agreement he is a member in good standing of SAG, AFTRA or any other organization having jurisdiction over CONSULTANT'S services hereunder. This Agreement is subject to all of the terms and conditions of the collective bargaining agreements with SAG, AFTRA, or any other union agreements or codes having jurisdiction over CONSULTANT'S services hereunder. Any and all payments required to be made to SAG or AFTRA or any other organization having jurisdiction over CONSULTANT'S services hereunder, shall be the sole responsibility of CONSULTANT.

ADAMS GOLF'S OBLIGATIONS

17.   SUPPLY OF PRODUCT

A. During the term of this Agreement, ADAMS GOLF shall provide CONSULTANT  with sufficient quantities of such MANDATORY  PRODUCTS  for CONSULTANT'S  use as CONSULTANT  may reasonably need to fulfill his obligations under this agreement.  ADAMS  GOLF  shall pay all charges in connection with the delivery of MANDATORY PRODUCTS to CONSULTANT.

B.In  addition to paragraph 17A above, ADAMS GOLF  shall provide CONSULTANT  with [*****] sets of clubs for CONSULTANT'S family and friends each calendar year of this Agreement.

[***** ]  Confidential Material redacted and filed separately with the Commission.   7





  18.  BASE COMPENSATION

For the entire term of this Agreement, from September 1, 2004 through [*****] ADAMS GOLF shall pay CONSULTANT a base compensation of [*****] dollars. The base compensation shall be paid [*****].

19.   PERFORMANCE BONUSES AND TOTAL COMPENSATION LIMITATION

  A. In addition to his base compensation, CONSULTANT shall also be entitled to bonuses based on performance in particular PGA and SPGA events and year-end standing as follows:

  1. If CONSULTANT wins a PGA Tour Major (consisting of the Masters, US Open, PGA and British Open) or the Champion's Tour (SPGA) US Open, CONSULTANT shall receive a bonus of $ [*****].

  2. If CONSULTANT wins a Champions/Seniors Tour (SPGA) major other than the US Open (which shall for the purposes of this agreement consist of the Senior PGA, Senior British, the Tradition and the Ford Seniors) CONSULTANT shall receive a bonus of $ [*****].

3. If CONSULTANT finishes in the top [*****] on the official year end money list of the Champion's Tour (SPGA), CONSULTANT shall also be entitled to a year end performance bonus according to the following schedule:

a.2005 $ [*****] b.2006$ [*****] c.2007$ [*****] d.2008$ [*****] e.2009$ [*****]

B.Notwithstanding  paragraph A and its subparts above, the maximum total annual bonuses shall  in no case exceed the following schedule:

1.2005 $ [*****] 2.2006$ [*****] 3.2007$ [*****] 4.2008$ [*****] 5.2009$ [*****]

(For example, if in the calendar year [*****]CONSULTANT wins every PGA tour major and finishes in the top [*****] on the official year end money list of the Champion's Tour (SPGA), CONSULTANT'S total bonuses shall be [*****] dollars.

[***** ]  Confidential Material redacted and filed separately with the Commission.   8





      C.  In the event of ADAMS GOLF'S insolvency or bankruptcy, it is expressly agreed to by the parties that CONSULTANT shall not be obligated to repay any money so long as CONSULTANT continues to fully perform his obligations under this Agreement.   20.  APPROVAL OF ADVERTISING

Prior to publishing or placing any advertising or promotional material which uses CONSULTANT'S name, facsimile signature, nickname, voice or likeness, ADAMS GOLF shall submit the same to CONSULTANT, or CONSULTANT'S designee, for approval, which approval shall not be unreasonably withheld or delayed. If CONSULTANT disapproves, the reasons therefore shall be given to ADAMS GOLF in writing within three (3) business days or shall be deemed approved. ADAMS GOLF agrees to protect, indemnify and hold CONSULTANT harmless from and against any and all expenses, damages, claims, suits, actions, judgments and costs whatsoever, arising out of, or in any way connected with, any advertising material furnished by, or on behalf of, the company.

21.  INDEMNITY

  ADAMS GOLF agrees to defend, indemnify and hold harmless CONSULTANT from any and all liability, claims, causes of action, suits, damages and expenses (including reasonable attorneys' fees and expenses) for which he becomes liable or is compelled to pay by reason of or arising out of any claim or action for personal injury, death or otherwise involving alleged defects in ADAMS GOLF'S PRODUCT, provided that ADAMS GOLF is promptly given notice in writing and is given complete authority and information required for the defense, and ADAMS GOLF shall pay all damages or costs awarded therein against CONSULTANT and any other cost incurred by CONSULTANT in defense of any suit, but shall not be responsible for any cost, expense or compromise incurred or made by CONSULTANT without ADAMS GOLF'S prior written consent.

TERMINATION

22.  FAILURE TO PLAY

Notwithstanding any other paragraph of this Agreement, in the event that CONSULTANT dies or is unable to play tour golf at all, ADAMS GOLF may terminate this Agreement on thirty (30) days' written notice. Upon such termination, CONSULTANT and/or CONSULTANT'S estate shall be required to repay ADAMS GOLF for that period of the Agreement not performed by CONSULTANT. The repayment amount shall be calculated in the same way as repayment is calculated under paragraph 8A.   9





  23.  TERMINATION FOR CAUSE

Notwithstanding any other paragraph of this Agreement, if either party commits any material breach of this Agreement, the other party may terminate for cause upon giving fifteen (15) days written notice of such cause and provided the breach is not rectified within such fifteen (15) day period. Upon such termination, CONSULTANT shall be required to repay ADAMS GOLF for that period of the Agreement not performed by CONSULTANT. The repayment amount shall be calculated in the same way as repayment is calculated under paragraph 8A.

24.  ADAMS GOLF'S RIGHTS UPON TERMINATION

A.In  the event of termination of this Agreement,  ADAMS  GOLF  shall cease using the name and/or likeness of CONSULTANT in advertising within [*****] days.

B.In  the event of termination of this Agreement,  ADAMS  GOLF  shall cease using the name and/or likeness of CONSULTANT on Product within [*****] months after termination of this Agreement.

MISCELLANEOUS PROVISIONS

24. SIGNIFICANCE OF HEADINGS

Section headings contained herein are solely for the purpose of aiding in speedy location of subject matter and are not in any sense to be given weight in the construction of this Agreement. Accordingly, in case of any question with respect to the construction of this Agreement, it is to be construed as though such section headings had been omitted.

25. APPLICABLE LAW

This Agreement shall be governed and construed according to the laws of the State of Kansas.

26. ENTIRE AGREEMENT

The provisions of this Agreement are intended by the parties as a complete, conclusive and final expression of their agreement concerning the subject matter hereof, which Agreement supersedes all prior agreements concerning the subject matter, and no other statement, representation, agreement or understanding, oral or written, made prior to or at the execution hereof, shall vary or modify the written terms hereof. No amendments, modifications or releases from any provision hereof shall be effective unless in writing and signed by both parties.

27. WAIVER

Unless otherwise mutually agreed in writing, no departure from, waiver of, or omission to require compliance with any of the terms hereof by either party shall be deemed to authorize any prior or subsequent departure or waiver, or obligate either party to continue any departure or waiver.

[***** ]  Confidential Material redacted and filed separately with the Commission.   10





  28. EXECUTION AND DELIVERY REQUIRED

This instrument shall not be considered to be an agreement or contract nor shall it create any obligation whatsoever on the part of CONSULTANT or ADAMS GOLF unless and until it has been signed by CONSULTANT, or a duly authorized representative, and by duly authorized representatives of ADAMS GOLF and delivery has been made of a fully signed original to both parties.

29. SEVERABILITY

Any provision or part of this Agreement prohibited by applicable law shall be ineffective to the extent of such prohibition without invalidating the remaining provisions or parts hereof.

30. RELATIONSHIP

Both parties agree that this Agreement does not constitute and shall not be construed as a constituting of a partnership or joint venture between ADAMS GOLF and CONSULTANT. Neither party shall have any right to obligate or bind the other party in any manner whatsoever, and nothing herein contained shall give or is intended to give any rights of any kind to any third person.

31. ASSIGNMENT AND CHANGE OF CONTROL

Neither ADAMS GOLF nor CONSULTANT shall have the right to grant sublicenses hereunder or to assign, alienate or otherwise transfer any of its rights or obligations hereunder.

32. CONFIDENTIALITY

Both parties understand that the contents of this Agreement, including, but not limited to, all amounts paid or to be paid and any additional consideration, are extremely confidential, and that disclosure of same to any third party could be detrimental to the interests of one or both parties. Therefore, both parties agree not to disclose the terms of this Agreement, without the permission of the other party, to any third party other than to CONSULTANT'S business, legal and financial advisors, and with respect to all such advisors, CONSULTANT shall take all reasonable steps to ensure such confidentiality to ADAMS GOLF. Furthermore, CONSULTANT recognizes that during the course of performing his duties hereunder he may become aware of proprietary, confidential information concerning ADAMS GOLF, its PRODUCT, methods, processes, billing practices, financial condition, etc., or information ADAMS GOLF designates as confidential (collectively Confidential Information). CONSULTANT agrees that he will maintain in confidence and not disclose to any third party at any time any such Confidential Information and shall not use any such information to the detriment of ADAMS GOLF or for any purpose not contemplated by the Agreement.     11





  33.  ARBITRATION

In the event a dispute arises under this Agreement which cannot be resolved, such dispute shall be submitted to arbitration and resolved by a panel of three arbitrators (who shall be lawyers), in a decision required by a majority of the arbitrators. If the parties cannot agree upon the panel of three arbitrators, then each party may pick an arbitrator and the two chosen arbitrators shall choose upon the three-arbitrator panel. The arbitration shall be conducted in accordance with the Arbitration Rules of the American Arbitration Association. Venue shall be Kansas. The award or decision rendered by the arbitration panel shall be final, binding and conclusive and judgment may be entered upon such award by any court of competent jurisdiction.

34. NOTICE

Every written notice or written report which may be served upon CONSULTANT, according to the terms of this Agreement, may be served by enclosing it in a postpaid envelope addressed to:

Mr. Tom Watson C/O Assured Management Company 1901 W. 47th Place, Suite 200 Westwood, Kansas 66205

or at such other address as is given in writing to ADAMS GOLF by CONSULTANT.

Every written notice which may be served upon ADAMS GOLF, according to the terms of this Agreement, shall be served by enclosing it in a postpaid envelope addressed to:

Attention Legal Department ADAMS GOLF, LTD. 2801 East Plano Parkway Plano, Texas 75074

or at such other address as is given in writing by ADAMS GOLF to CONSULTANT.

12





  IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first set forth above.

    APPROVED FOR CONSULTANT                       By: /s/ Tom Watson     Date: January 13, 2005

Tom Watson



    APPROVED FOR ADAMS GOLF, LTD.                       By: /s/ Oliver G. Chip Brewer III     Date: January 13, 2005

Oliver G. (Chip) Brewer III

  CEO, ADAMS GOLF

    13 
Question: Highlight the parts (if any) of this contract related to License Grant that should be reviewed by a lawyer. Details: Does the contract contain a license granted by one party to its counterparty?
2245

EXHIBIT 10.8

DISTRIBUTOR AGREEMENT         Tripath Technology, Inc. 3900 Freedom Circle Suite # 200 Santa Clara, CA 95054 Tel: (408) 567-3000 Fax: (408) 567-3003

This Agreement is effective 7/1/98 (Effective Date) between Tripath Technology, Inc. (Tripath), and

Uniquest Corporation 780 Montague Expressway Suite 406 Santa Jose, CA 95131

Tripath and Distributor intend to establish Distributor as a non-exclusive Distributor for Tripath products in the following designated Territory, subject to the terms and conditions of this Agreement.

Korea

1. Products

1.1 Products means the Tripath semiconductor products identified by Tripath in writing from time to time.

1.2 Tripath may discontinue manufacture or sale, or otherwise treat as obsolete, any or all of the Products covered by this Agreement upon thirty days written notice.

2. Appointment and Term

2.1 For the term of this Agreement, Tripath appoints Distributor as a non-exclusive distributor for the Products in the Territory, subject to Tripath's direct sales activities under Section 4.

2.2 Distributor will use best efforts to develop the local market and promote the sales of Products within the Territory. Distributor will not sell outside the Territory without Tripath's prior written permission, which will not be unreasonably withheld.

2.3 After one month's written notice, Tripath may in its discretion amend (i) the Products, and/or (ii) the Territory.

2.4 Tripath reserves the right to appoint other distributors in or out of the Territory who may sell into the Territory.

2.5 Distributor's appointment is for a term of one year from the Effective Date, renewable automatically unless terminated under Section 18

3. Distributor Responsibilities

3.1 Distributor will maintain an adequately trained sales organization, capable of fulfilling its obligation under Subsection 2.2.

3.2 Tripath will furnish technical and marketing information (such as sales aids and







Distributor Agreement

literature, data sheets, application notes, etc.) for the Products, and Distributor will maintain an organized and well stocked collection of such technical and marketing information for distribution to prospective customers.

3.3 Distributor will employ sufficient trained personnel (Application Engineers) to provide technical and marketing support for Tripath's Products. Distributor and Tripath will cooperate to ensure that the Application Engineers are and remain adequately trained and qualified.

3.4 Distributor will maintain a reasonable number of Demonstration Products (customer samples), with appropriate technical and marketing literature, available for demonstration by knowledgeable Distributor personnel, provided that Distributor must obtain prior approval by Tripath before any customer receives demonstration Products (customer samples).

3.5 Distributor has no authorization to make, and will not make, any guarantee or warranty with respect to any Product — all Product warranties are to be communicated to Customers directly by Tripath in writing. Distributor will make no representations as to quality, performance, capabilities, and the like except as are expressly authorized in writing by Tripath (such as in Tripath's standard, published specifications for a Product).

4. Other Product Lines

4.1 In appointing Distributor, Tripath is relying to a significant extent on Distributor's undertaking in Subsection 2.2.

4.2 Distributor will not carry any competitive products without Tripath's consent, which shall not be unreasonable.

5. Tripath Direct Sales Activity

5.1 Tripath may in its sole discretion, immediately upon written notice to Distributor, make direct sales to certain accounts in the Territory (Direct Sales Accounts), including accounts to which Distributor has made sales.

6. Pricing, credits, and allowances

6.1 Prices for Products will be as set forth in the then effective distributor price list (Distributor Price List) which will be furnished to Distributor from time to time. Any suggested resale prices shown in the Distributor Price List are to be considered as guidelines only.

6.2 The Distributor Price List may be changed without prior notice, and will be effective as of the effective date indicated. The amount and timing of such change will be exclusively at Tripath's discretion.

6.3 Orders for Products received and acknowledged by Tripath prior to a change in the Price List but shipped after the effective date of such change will be invoiced as follows: (a) in the case of a price decrease, the existing order backlog will be invoiced at the lower price, and (b) in the case of a price increase, the existing order backlog due for delivery within one month of the effective date of such change will be invoiced at the lower price. Outstanding written quotations will be held good for the same two-month period.

6.4 Distributor's inventory of any Product will be price protected for reductions in the price of such Product as follows: the lesser of Distributor's (a) entire inventory of the Product, or (b) previous one month's shipments of the Product from Tripath.

7. Purchase Orders and Payment

7.1 Distributor will maintain sufficient inventory of Products (but not less than one month's inventory without Tripath's approval) to provide prompt delivery to Distributor's customers, in furtherance of Distributor's undertaking in Subsection 2.2.

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Distributor Agreement

7.2 Distributor will purchase Products for resale to its customers in accordance with Tripath's then effective terms and conditions of sale set forth in the Tripath sales order acknowledgment (Sales Order Acknowledgment), and the pricing terms of the then effective Distributor Price List (including minimum order quantities). The terms and conditions of sale in the Sales Order Acknowledgment may be changed without prior notice, exclusively at Tripath's discretion.

7.3 No purchase order from Distributor is binding on Tripath until Tripath issues a Sales Order Acknowledgment to Distributor for such order, or makes a shipment against such order. Tripath will use commercially reasonable efforts to acknowledge Distributor purchase orders promptly.

7.4 Tripath will invoice Distributor for Products when Tripath ships such Products.

7.5 All credits will be handled as separate financial transactions from the original invoice, and will be evidenced by a written credit request submitted to Tripath. Distributor will not reduce any payment to Tripath to account for anticipated or unauthorized credits (except for short shipments and non-receipt of Products), either at the time of the payment of original invoice, or at the time of providing a credit request. Credit requests should be submitted by Distributor within one month after the date of Distributor's invoice for the related transactions.

7.6 Any credit request will be based on the price shown on the then current Distributor Price List, or the actual net price paid by Distributor for the Product, whichever is lower.

7.7 If Tripath notifies Distributor of any discrepancy in a credit request, Distributor has one month to resolve the discrepancy and pay the amount of the discrepancy.

7.8 No purchase orders for which a Sales Order Acknowledgment has been issued may be canceled or rescheduled within one month of the scheduled shipment date without Tripath's approval.

8. Special Pricing and Other Allowances

8.1 The provisions of this Section 8 will be applicable only to transactions on DPA (distributor price authorization) basis in which Distributor first obtains a DPA confirmation from Tripath.

8.2 Requests for special pricing and/or allowances will be submitted by Distributor to the appropriate Tripath sales office, and must be first approved in writing by that office.

8.3 Quotes for special pricing are good for one month, and must be backed by a Tripath quote number. Distributor will supply supporting documentation showing Products listed by part number, date of transaction, end customer name and address, and the appropriate special pricing details, not later than two weeks after shipment to the associated customer.

8.4 If Tripath has granted Distributor special pricing on a sale in which Distributor's customer has later returned the Product to Distributor, Distributor will reimburse Tripath for the amount of the DPA allowance within one month after such return.

8.5 Any debit memo submitted by Distributor for a DPA allowance will be based on the price shown on the then current Distributor Price List, or the actual net price paid by Distributor for the Product, whichever is lower.

9. Returns

9.1 Distributor may return Products only after receiving written authorization from Tripath. All authorized returns will be shipped by Distributor freight prepaid. Unauthorized returns may be reshipped to Distributor, freight collect.

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Distributor Agreement

9.2 Distributor may request stock rotation return of slow moving Products, which will be authorized by Tripath provided that: (a) the Product is contained in Tripath's then current Distributor Price List, (b) the Product is packaged as it was originally shipped, and (c) a purchase order for equal value accompanies the request for return. Such stock rotation returns will not exceed five percent (5%) of the dollar value of Distributor's previous six (6) months net purchase orders from Tripath.

9.3 Discontinued Product may be returned only with prior written authorization.

9.4 Credit will be allowed for returned Products based on the price actually paid by Distributor, less any prior DPAs, credits and other allowances.

9.5 If, in the reasonable opinion of Tripath, previously authorized returned Products have been used or damaged, a credit or replacement may be refused. Distributor will be notified within one month after receipt of Product by Tripath of any such Product Tripath is claiming to be used or damaged.

10. Limited Warranty

10.1 Tripath provides an end user limited warranty for retail Products, and one-year limited warranty for OEM products. The terms of the end user limited warranty are set forth in documentation provided with the retail Product.

10.2 For OEM Products, Tripath warrants that the Products will be free of manufacturing and workmanship defects for one year from the date of shipment by Distributor to a customer, or eighteen months from the date of shipment to Distributor, whichever is sooner.

10.3 If any OEM Products prove defective during this one year period as set forth in Section 10.2, Tripath will, at its option, either (a) repair or replace the Product with a new or reconditioned Product, (b) use reasonable efforts to provide Distributor with a correction of the defect, or (c) refund to Distributor the purchase price paid for the Product. Any Product replaced will become Tripath property.

10.4 Distributor must return the defective OEM Product pursuant to a return material authorization under Section 9.1 in the original shipping carton (or an equivalent protective carton), and pay the shipping and insurance charges. Distributor assumes the risk of loss or damage during shipment.

10.5 OEM Products that are defective as set forth in Section 10.2 as a result of improper handling, incorrect installation or other misuse, or as a result of accident, disaster, acts of God or other such events, as determined by Tripath in its reasonable discretion, are not covered by this limited warranty.

10.6 For OEM Products, Tripath provides only the warranties set forth in this limited one year limited warranty. For retail Products, Tripath provides to the end user only the warranties set forth in the applicable end user warranty. Any and all other warranties, either express, implied or statutory, including, without limitation, warranties of fitness for a particular purpose, or of merchantability, are hereby expressly excluded and disclaimed by Tripath.

11. Reports and Audits

11.1 Distributor will submit reports as may be reasonably requested by Tripath, including, without limitation, monthly reports of inventory on hand and sales relating to the Products. Sales data will include, without limitation, Product part number, quantity, resale price, special pricing, distributor invoice number, and customer name. Distributor will submit these reports electronically on a timely basis each month and in no case later than two weeks after the beginning of the month.

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Distributor Agreement

11.2 Tripath may have an authorized Tripath representative, at Tripath's cost, audit Distributor's records relating to sales and inventories of Products, including, without limitation, records pertaining to any claims submitted by Distributor for price protection, stock rotation, returned Products, ship from stock and debit, DPA allowances, and credit requests. Upon prior written notice, Distributor will provide reasonable access to such records during normal business hours at Distributor's office. Distributor agrees to maintain all such records for a minimum of three years.

12. Distributor's Financial Condition

12.1 Tripath may withhold shipments because of Distributor's general financial condition and/or conditions of Distributor's account with Tripath. Such withholding will be not construed as a breach of this Agreement.

12.2 Distributor will supply Tripath with credit data sufficient to establish Distributor's credit worthiness.

13. Advertising and Sales Promotion

13.1 Distributor's tradename may be used by Tripath in its advertisements, provided that such use is in proper form.

13.2 Distributor will be eligible to participate in Tripath distributor cooperative advertising programs designated by Tripath for the Territory. However, prior approval must be obtained in writing from Tripath before any expenditures of funds by Distributor are eligible for reimbursement.

14. Tripath Trademarks

14.1 Tripath grants to Distributor a non-exclusive license to use Tripath's trademarks, trade names and service marks only in connection with the Products and in the performance of Distributor's obligations under this Agreement. All such uses are subject to Tripath's prior review and consent, which will not be unreasonably withheld or delayed.

14.2 All use of Tripath trademarks and service marks will be in proper form, giving appropriate attribution to Tripath as the owner of the mark. Distributor will not undertake any use of a mark in a manner that might jeopardize Tripath's rights to use or register such mark, or Tripath's rights to prevent unauthorized use. Distributor will promptly notify Tripath of any acts of unfair competition or trade or service mark infringement, and reasonably cooperate with efforts to protect Tripath's rights.

14.3 All use of Tripath trade marks and service marks by Distributor will inure to the benefit of Tripath, and Distributor will reasonably cooperate, at Tripath's expense with Tripath's efforts to register or otherwise secure rights in such marks. Upon termination of this Agreement, Distributor will immediately cease all further use of Tripath's trademarks, trade names or service marks except as may be required in the sale of Products in inventory.

15. Relationship Between the Parties

15.1 Both Distributor and Tripath are independent contractors, and no agency or other joint relationship is created.

15.2 Neither party has any authority to act for and/or to bind the other in any way, or to represent that either is in any way responsible for the acts of the other.

16. Confidentiality

16.1 Confidential information (Information) of Tripath and/or Distributor will mean information that the disclosing party desires to protect against unauthorized use or disclosure, and which is furnished under this Agreement as follows: (a) written or other tangible information clearly marked with a notice, such as

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Distributor Agreement

CONFIDENTIAL; and (b) oral information that is identified at the time of disclosure as being confidential. Confidential Information will not include information that: (a) enters the public domain without a breach of this Agreement, (b) is known to the recipient prior to the time of disclosure, or is independently developed by the recipient without using any Information, or (c) is obtained from another source that the receiving party has no reasonable cause to believe is under any obligation of confidentiality with respect to Information.

16.2 The recipient of Information will treat it as proprietary and confidential, safeguarding the Information at least as carefully as it would its own confidential information, and will use all reasonable efforts to prevent any unauthorized use or disclosure, including restricting access to the Information within its organization and ensuring that its employees comply with this Agreement. A receiving party will not disclose any information to any third party without prior written consent. Either party learning of any unauthorized use or disclosure of any Information will promptly notify the other party, and will reasonably cooperate with efforts to protect such Information.

16.3 The recipient of information will use it only in the furtherance of the business relationship established by this Agreement, and for no other purpose without prior written consent. All Information will remain the property of the disclosing party, and will be returned or destroyed upon written request.

16.4 The confidentiality obligations in this Agreement will be binding during the Agreement and for a period of three years after any termination or non-renewal of the Agreement.

16.5 Neither party will disclose the existence or terms of this Agreement without prior written consent.

17. Export Control

17.1 Distributor will not engage in exporting activities within the Territory without the prior written approval of Tripath, and the United States Government if such approval is necessary. Nothing in this Subsection is meant to authorize Distributor shipments outside the Territory.

17.2 Distributor understands that the Products and Tripath confidential information are restricted by the United States Government from export to certain countries, and Distributor agrees that it will not sell or license Products or transfer Tripath confidential information in any way will violate any of the export control laws or regulations of the United States.

18. Term and Termination

18.1 The terms of this Agreement shall be one year from the effective date and will be automatically renewed on each anniversary of the effective date, for a renewal term of one year unless either party provides written notification of its intention not to renew this Agreement at least one month prior to the expiration of the initial or any renewal terms. Tripath will honor all orders acknowledged prior to the effective date of any such termination by nonrenewable.

18.2 Tripath or Distributor may terminate this Agreement for any reason with thirty days written notice.

18.3 Either party may terminate this Agreement immediately if the other party becomes insolvent, or takes any steps to make an arrangement with its creditors, or has a receiver appointed.

18.4 If Tripath terminates pursuant to Subsection 18.1 or 18.2, or if Distributor terminates pursuant to Subsection 18.3, Tripath will purchase and Distributor will resell to Tripath Distributor's inventory of Products (excluding

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discontinued and demonstration Products) which Tripath determines to be undamaged and in good condition (including, at Tripath's option on-site inspection). The price for such inventory will be the price actually paid by the Distributor, less any prior credit or allowances.

18.5 If Distributor terminates pursuant to Subsection 18.1 or 18.2, or if Tripath terminates pursuant to Subsection 18.3, Tripath may, at its option, purchase and Distributor will resell to Tripath all or part of Distributor's inventory at the price set forth in Subsection 18.4, less a ten percent restocking charge.

18.6 On termination of this Agreement for whatever cause, Distributor will immediately (a) cease to engage in marketing and distribution activities as Tripath's official distributor, and (b) cease representing in any manner that it is a distributor of Tripath Products in the Territory.

18.7 All obligations of Distributor to make payments under this Agreement will survive any termination of this Agreement for whatever cause, along with the following provisions: Section 10 (Limited Warranty), Section 11 (Reports and Audits), Section 16 (Confidentiality), Section 17 (Export Control), Section 19 (Intellectual Property Indemnity), and Subsection 21.6 (Governing Law), and Subsection 21.7 (Arbitration).

19. Intellectual property indemnity

19.1 Indemnification. Distributor agrees that Tripath has the right to, and Tripath agrees that it will at its expense, defend or at its option settle any claim, suit, proceeding, or other action brought against Distributor or its customer for infringement of any United States copyright, trademark or other United States intellectual property right related to the Products or their use, subject to the limitations set forth in this Section. Tripath will have sole control of any such action or settlement negotiations (Tripath will not be liable for any costs or expenses incurred without its prior written authorization), and Tripath will pay any final judgment entered against Distributor or its customer based on such infringement. Tripath at its sole option will be relieved of the foregoing obligations unless Distributor or its customer notifies Tripath promptly in writing of such action and gives Tripath full information and assistance to settle and/or defend any such action. If it is adjudicated that a Product infringes, or if the sale or use of a Product is, as a result, enjoined, then Tripath will, at its option and expense either: (i) procure for Distributor and its customers the right to sell or use the Product; or (ii) replace the Product with other suitable Product; or (iii) suitably modify the Product to be noninfringing; or (iv) if none of the foregoing are commercially reasonable, as determined by Tripath, accept return of the affected Products and refund Distributor's aggregate payments for such Products, less a reasonable sum for use and/or damage, if any.

19.2 Limitation. Notwithstanding the provisions of Section 19.1, Tripath assumes no liability for, and Distributor agrees to indemnify Tripath to the same extent as Tripath's indemnity under Section 19.1 for: (i) any infringements covering completed equipment or any assembly, circuit, combination, or method in which any of the Products may be used but not covering such Products standing alone; or (ii) any trademark infringements involving any marking or branding not applied by Tripath or involving any marking or branding applied at the request of Distributor; or (iii) any modification of the Products unless such modification was made by Tripath.

19.3 Entire Liability. The foregoing provisions of this section 19 state the entire liability and obligations of Tripath and the exclusive remedy of Distributor and its customers, with respect to any actual or alleged intellectual property infringement by the Products.

20. Limitation of Liability

20.1 Neither Tripath nor Distributor will be liable for any incidental or consequential

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Distributor Agreement

damages (including, without limitation, damages for loss of business profits, business interruption, loss of business information, or other pecuniary loss) arising out of this Agreement, even if advised of the possibility of such damages.

21. General

21.1 Assignment. This Agreement is not assignable by Distributor without prior written consent of Tripath, which will not be unreasonably withheld. Tripath is free to assign this contract without Distributor's consent.

21.2 Modifications. This Agreement may be modified only in writing signed by an officer of each party.

21.3 Headings. The headings of the several Sections are inserted for convenience of reference only, and are not intended to be part of nor to affect the meaning or interpretation of this Agreement.

21.4 Notices. All notices under this Agreement will be sent by receipted courier (e.g., U.P.S.).

21.5 Non-Waiver. The failure of either party to enforce at any time any of the provisions of this Agreement will not be construed as a waiver of the right of such party to subsequently enforce any such provisions or a waiver of the provision itself.

21.6 Governing Law. This Agreement will be governed by the laws of California, without reference to conflicts of laws.

21.7 Arbitration. Any dispute or claim arising out of this Agreement will be referred to and resolved by the International Chamber of Commerce (ICC) in accordance with the ICC Arbitration Rules. The venue for such arbitration will be Santa Clara County, California, USA.

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Distributor Agreement

This Agreement supersedes all proposals, oral or written, all negotiations, or discussions between or among the parties relating to this Agreement, and all past course of dealing or industry custom. This Agreement takes precedence over the terms of any Tripath or Distributor order or sales documentation, including the Tripath Sales Order Acknowledgment.

TRIPATH CORPORATION   DISTRIBUTOR             By: /s/ EVERETT ROACH   By: /s/ CHARLES LIM             Name: Everett Roach   Name: Charles Lim             Title: Vice President, World Wide Sales   Title: President             Date: 7/1/98   Date: 7/7/98

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Question: Highlight the parts (if any) of this contract related to Warranty Duration that should be reviewed by a lawyer. Details: What is the duration of any  warranty against defects or errors in technology, products, or services  provided under the contract?

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