Document:

Stipulation of Settlement dated May 12, 2005

 Exhibit 10.6 
  
 STIPULATION OF SETTLEMENT 
  
 WHEREAS, seven securities class actions were filed against PriceSmart, Inc. (“PriceSmart” or the “Company”), Gilbert A. Partida
(“Partida”) and Allan C. Youngberg (“Youngberg”) (collectively the “Defendants”), alleging violations of the federal securities laws on behalf of a class of certain of PriceSmart’s shareholders; and 
  
 WHEREAS, on September 9, 2004 the Court consolidated the various actions,
appointed Donald Tick (“Tick”) as Lead Plaintiff (“Lead Plaintiff”) and appointed Goodkind Labaton Rudoff & Sucharow LLP (“Goodkind Labaton”) as Lead Counsel in the consolidated action; and 
  
 WHEREAS, after over a year of vigorous litigation, and arm’s-length
negotiations assisted by Judge Lawrence Irving, a highly experienced, neutral mediator, Lead Plaintiff and Defendants agreed to settle this class action; and 
  
 WHEREAS, based on the extensive investigation by Lead Plaintiff’s counsel, including (i) interviews with at least half a dozen former PriceSmart
employees, and (ii) Lead Counsel’s conducting confirmatory discovery prior to the submission of the Stipulation of Settlement to the Court for preliminary approval consisting of: (1) the review and analysis of documents produced by PriceSmart
relating to the financial records underlying PriceSmart’s restatement announced in November, 2003; (2) a deposition of former U.S. Attorney Charles La Bella, who was retained by PriceSmart’s Audit Committee to conduct an investigation
regarding the transactions that were the subject of the restatement; and (3) Lead Counsel’s analysis of the claims and defenses in this action (with the assistance of an experienced expert in calculating damages in securities class action
cases) and the various risks attendant to continued litigation, Lead Plaintiff, Defendants and their respective counsel believe that the terms of the Settlement set forth herein are fair, reasonable and adequate; 
  
 NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED, by and among Lead
Plaintiff Donald Tick, individually and in his representative capacity, and Defendants PriceSmart Inc., Gilbert A. Partida and Allan C. Youngberg, by and through their duly authorized counsel, that this action will be settled, compromised and
dismissed on the merits and with prejudice on the terms and conditions set forth herein (including the payment by Defendants of $2.35 million in cash), subject to the approval of the Court. 
  

 STIPULATION OF SETTLEMENT 

	I.	INTRODUCTION AND DEFINITIONS 

  

	 	A.	Procedural History 

  
 1. On or about December 9, 2003, Donald Tick as a shareholder of the Company filed a class action against Defendants. 
  
 2. Six other substantially similar class actions were filed naming
PriceSmart, Inc., Gilbert A. Partida and Allan C. Youngberg as defendants, 
  

					
	 Abbreviated Case Name

	  	 Civil Action Number

	  	 Date Filed

	 Dolowich v. PriceSmart Inc.
	  	3:03-CV-02260	  	11/17/03
	 Mikalson v. PriceSmart Inc.
	  	3:03-CV-02273	  	11/18/03
	 Recio v. PriceSmart Inc.
	  	3:03-CV-02400	  	12/02/03
	 Stewart v. PriceSmart Inc.
	  	3:03-CV-02506	  	12/15/03
	 Schnell v. PriceSmart Inc.
	  	3:03-CV-02559	  	12/22/03
	 Performance Capital v. PriceSmart Inc.
	  	3:03-CV-02561	  	12/22/03

  
 3. On September 9,
2004, the Court, pursuant to the provisions of the Private Securities Litigation Reform Act of 1995 (“PSLRA”), consolidated the actions, appointed Donald Tick as Lead Plaintiff in the consolidated class action and approved his selection of
Goodkind Labaton as Lead Counsel. 
  
 4. Lead Plaintiff filed his
Consolidated Amended Class Action Complaint (the “Complaint”) on November 29, 2004, naming the Defendants listed above. 
  
 5. The Complaint alleges that during the Class Period, Defendants disseminated or approved false statements about the PriceSmart business and its
prospects, which they knew or recklessly disregarded were materially false and misleading. More specifically, the Complaint alleges that as a result of the Company’s insufficient internal controls to track and control merchandise inventory, the
Company did not accurately report what was in its foreign-based warehouse stores, and that this was known to the Company’s corporate managers, including the individual Defendants. 
  
 6. On November 10, 2003, PriceSmart admitted that it inaccurately recorded transactions included in its 2002 to 2003
results, and had restated those results to remove 

  

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approximately $29 million of inaccurately reported revenues. Subsequently, shares of PriceSmart declined from $8.34 to $7.64 on a day of unusually heavy
trading. During the alleged class period, the highest trading price of PriceSmart stock was $42 per share. 
  
 7. The Complaint asserts claims for violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) on behalf
of all persons and entities who purchased or otherwise acquired shares of PriceSmart between November 1, 2001 and December 16, 2003 (the “Class Period”). 
  

	 	B.	Discovery and Settlement Discussions 

  
 1. Lead Counsel, on behalf of Lead Plaintiff, conducted and completed a thorough investigation in this Action. This investigation included: (i) review and
analysis of prospectuses and other documents filed by the Company with the SEC; (ii) interviews with at least six former PriceSmart employees; and (iii) confirmatory discovery prior to the submission of the Stipulation of Settlement to the Court for
preliminary approval consisting of: (1) review and analysis of documents produced by PriceSmart relating to the financial records underlying PriceSmart’s restatement; and (2) a deposition of Mr. La Bella. 
  
 2. Following the filing of the Complaint, the Parties in this Action agreed
to participate in non-binding mediation before Judge Lawrence Irving, a retired United States District Court Judge for the Southern District of California. 
  
 3. In accordance with Judge Irving’s procedures, Lead Plaintiff and Defendants submitted comprehensive mediation statements. 
  
 4. The mediation was held on February 24, 2005, at the offices of Judge
Irving in San Diego, California. Lead Plaintiff and Defendants each made presentations to Judge Irving in the presence of all Parties, and proceeded to engage in arm’s length negotiations. 
  
 5. On February 24, 2005, at the conclusion of the mediation, the Parties
reached an oral agreement-in-principle to settle the Action. Thereafter, the Parties negotiated a Memorandum of Understanding to preliminarily memorialize the agreement-in-principle, which was signed on March 2, 2005. The Memorandum of Understanding
contemplated a more formal Settlement Agreement. 
  

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	 	C.	Settlement Considerations 

  
 1. Based upon their discovery, investigation and evaluation of the facts and law relating to the claims alleged in the Complaint, Lead Plaintiff and Lead
Counsel (which have extensive experience in securities class action litigation) have agreed to settle this Action pursuant to the terms and conditions of this Settlement Agreement after considering, among other things, (i) the substantial cash
benefits to Class Members (as described in Section II below); (ii) the possibility that Defendants might move to dismiss the Complaint and the possibility that the Court might grant some of all of that motion; (iii) the uncertainty of being able to
prove the allegations in the Complaint; (iv) the attendant risks of litigation, especially in complex actions such as this, as well as the difficulties and delays inherent in such litigation (including any appeals); (v) the uncertainty, even if Lead
Plaintiff was to establish liability on the part of Defendants, inherent to the various and competing theories of damages under the Exchange Act; (vi) their awareness of Defendants’ likely positions on the various liability and damages issues;
(vii) the desirability of consummating this Settlement Agreement in order to provide certain and effective relief to Class Members; and (viii) their belief that the Settlement is fair, reasonable and adequate, and in the best interest of all Class
Members. 
  
 2. Defendants expressly deny any wrongdoing alleged
in the Complaint and do not admit or concede any wrongdoing or liability in connection with any facts or claims that have been or could have been alleged against them in the Action, but consider it desirable for the Action to be settled and
dismissed because the proposed Settlement will (i) bring to an end the substantial expenses, burdens, risks and uncertainties associated with continued litigation of this Action; (ii) finally put to rest those claims and the underlying matters; and
(iii) confer substantial benefits upon Defendants, Lead Plaintiff and Class Members including, without limitation, the avoidance of further expense and disruption of the management and operation of PriceSmart’s business due to the pendency and
defense of this Action. 
  

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 STIPULATION OF SETTLEMENT 

	 	D.	Definitions 

  
 As used in this Stipulation of Settlement and the annexed exhibits, the following terms have the following meanings, unless a section or subsection of
this Stipulation of Settlement or an exhibit otherwise provides: 
  
 1. “Action” means the action titled In re PriceSmart Inc. Securities Litigation, Master File No. 03 Cv. 2260 JAH – (BLM) (S.D. Cal.). 
  
 2. “Administrator” means the third-party agent or administrator whom the Court shall appoint in the Hearing Order
to implement the Notice, claims process, administration and distribution of the Net Settlement Fund in accordance with the terms of the proposed Settlement Agreement. Lead Counsel has retained Complete Claims Solutions as the Administrator.

  
 3. “Approval Date” means the date on which a Final
Judgment Approving Settlement and Dismissing Action are entered in the Action. 
  
 4. “Attorney’s Fees and Expenses” means such amounts as may be awarded to Lead Counsel to compensate it for its fees and expenses in connection with the Action, including, without limitation, costs and
expenses attributable to experts and/or consultants retained by Lead Counsel. 
  
 5. “Authorized Claimant” means a Class Member (or the representative of such Class Member including, without limitation, agents, administrators, executors, heirs, successors and assigns), who timely returns
a signed Claim Information Form under the procedures set forth in this Settlement Agreement. 
  
 6. “Tick” means Lead Plaintiff Donald Tick, both in his individual capacity and in his capacity as representative of the Class. 
  
 7. “Claim” means (i) a demand (whether written or oral) or cause of action for monetary or non-monetary relief or
(ii) a demand, cause of action or allegation in a civil, criminal or administrative proceeding in any judicial, arbitral or other forum for monetary or non-monetary relief. 
  

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 8. “Claim Information Form” means the form, completed by the Administrator using data and
information provided by Defendants concerning Class Members’ transactions in shares of PriceSmart during the Class Period, which will be mailed to Class Members with the Notice and pursuant to which Class Members will submit a claim by signing,
dating and returning it to the Administrator in accordance with the procedures set forth in this Settlement Agreement. A sample Claim Information Form proposed by Lead Plaintiff is annexed hereto as Exhibit B. 
  
 9. “Class” or “Class Members” means all persons or
entities who purchased or otherwise acquired shares of PriceSmart during the Class Period, provided, however, that “Class” or “Class Members” does not include (i) the Defendants, members of the immediate family of any
individual Defendants, any entity in which any Defendant has a controlling interest, and the legal affiliates, representatives, heirs, controlling persons, successors, and predecessors-in-interest or assigns of any such excluded party and (ii) any
Class Member who timely files or delivers a completed request to be excluded form pursuant to Section VIA of this Settlement Agreement. 
  
 10. “Class Period” means the period of time from November 1, 2001 through December 23, 2003, inclusive. 
  
 11. “Complaint” means the Consolidated Amended Class Action
Complaint For Violations of the Federal Securities Laws filed on November 29, 2004. 
  
 12. “Court” means the United States District Court for the Southern District of California. 
  
 13. “Defendants” means PriceSmart Inc., Gilbert A. Partida and Allan C. Youngberg, and each of them. 
  
 14. “Defendants’ Counsel” means the law firms of Latham &
Watkins LLP (attorneys for PriceSmart Inc.), Bohm Francis Kegel & Aguilera LLP (attorneys for Gilbert A. Partida), and Cooley Godward LLP (attorneys for Allan C. Youngberg), and each of them. 
  
 15. “Execution Date” means the date on which this Settlement
Agreement has been executed by all Parties. 
  

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 16. “Fairness Hearing” means the hearing at or after which the Court will make a final decision
whether to approve this Settlement Agreement as fair, reasonable, and adequate pursuant to Rule 23 of the Federal Rules of Civil Procedure. 
  
 17. “Final Judgment” means the Final Judgment approving the Settlement and Settlement Agreement and dismissing this Action, as contemplated in
Section XI of this Settlement Agreement. A copy of the Final Judgment proposed by the Parties is annexed hereto as Exhibit F. 
  
 18. “Final Settlement Date” means the date on which the Final Judgment becomes final. For purposes of this definition, the Final Judgment shall
become final one business day following the later of the following events: (i) the date on which the time to appeal from the Final Judgment has expired, or (ii) if any appeal is taken from the Final Judgment, other than an appeal or appeals solely
with respect to Attorneys’ Fees and Reimbursement of Expenses, the date on which all appeals therefrom, including petitions for rehearing or reargument, petitions for rehearing en banc and petitions for certiorari or any other form or review,
have been finally disposed of in a manner resulting in an affirmance of the Final Judgment without any material modification. 
  
 19. “Goodkind Labaton” means the law firm of Goodkind Labaton Rudoff & Sucharow LLP. 
  
 20. “Hearing Order” means the Order to be entered by the Court
concerning notice, administration and the Fairness Hearing, as contemplated in Section IX of this Settlement Agreement. A copy of the Hearing Order proposed by the Parties is annexed hereto as Exhibit E. 
  
 21. “Interest Rate” means interest calculated at the rate of 4% per
annum. 
  
 22. “Lead Counsel” means the law firm of
Goodkind Labaton Rudoff & Sucharow LLP. 
  
 23. “Lead
Plaintiff” means Donald Tick, both in his individual capacity and in his capacity as representative of the Class. 
  

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 24. “Net Settlement Fund” means the Settlement Fund less (i) any Attorney’s Fees and
Expenses awarded by the Court; (ii) any Notice and Administration Expenses; and (iii) any Tax Expenses payable from the Settlement Fund. 
  
 25. “Notice” means the notice to be sent to Class Members pursuant to this Settlement Agreement. A copy of the Notice proposed by the Parties is
annexed hereto as Exhibit C. 
  
 26. “Notice and
Administration Expenses” means all Court-approved costs associated with the administration of the Settlement, including, without limitation, the costs associated with printing and mailing the Notice to Class Members, publishing the Summary
Notice, processing requests for exclusion, processing withdrawals of requests for exclusion, preparing and processing Claim Information Forms, and distributing the Net Settlement Fund; provided, however, that Notice and Administration Expenses shall
not include Attorney’s Fees and Expenses. 
  
 27.
“Partida” means Defendant Gilbert A. Partida. 
  
 28.
“Parties” means the Lead Plaintiff and the Defendants. 
  
 29. “Plan of Allocation” means the terms and procedures for allocating the Net Settlement Fund among, and distributing the Net Settlement Fund to, Authorized Claimants as set forth in the Notice, or such other Plan of Allocation
as the Court shall approve. A copy of the Plan of Allocation proposed by Lead Plaintiff is annexed hereto as Exhibit A. 
  
 30. “PriceSmart” means Defendant PriceSmart Inc. 
  
 31. “Preliminary Approval Hearing” means the hearing at or after which the Court will make a decision whether the Notice of the Action and the
proposed Settlement Agreement may be given to the Class Members. 
  
 32. “PSLRA” means the Private Securities Litigation Reform Act of 1995. 
  
 33. “Qualified Settlement Fund” means a fund within the meaning of Treasury Regulations § 1.468B-1. 
  
 34. “Related Parties” means each of the Defendants’ and Lead Plaintiff’s past, present or future directors, officers, employees,
partnerships, partners, members, principals, 

  

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agents, underwriters, insurers, co-insurers, reinsurers, controlling stockholders, attorneys, accountants or auditors, advisors, banks or investment banks or
bankers, analysts, associates, personal or legal representatives, predecessors, successors, parents, subsidiaries, divisions, joint ventures, assigns, executors, administrators, spouses, heirs, related or affiliated entities, any entity in which any
of the Defendants, Lead Plaintiff, and/or any member of any of their immediate families has a controlling interest, any members of their immediate families, or any trust of which any of the Defendants or Lead Plaintiff is the settlor or which is for
the benefit of any of them or member(s) of any of their families. 
  
 35. “Release” means the release and waiver set forth in Section VII of this Settlement Agreement. 
  
 36. “Released Claims” means with respect to the Releasees, defined below, the release by Lead Plaintiff and all Class Members of all Claims
(including “Unknown Claims” as defined below, and except as may exist with respect to Claims belonging to the Defendants against their insurers), demands, rights, liabilities and causes of action of every nature and description whatsoever,
known or unknown, whether or not concealed or hidden, asserted or that could have been asserted by Lead Plaintiff or any member of the Class against any of the Defendants and their respective Related Parties arising out of, based upon or related to
the purchase or acquisition of PriceSmart’s publicly traded securities (including claims for violation of any state, federal or any foreign country’s securities laws and regulations, any misstatement or omission, any breach of duty, any
negligence or fraud or any other alleged wrongdoing or misconduct) during the Class Period and that were or could have been asserted in the Action. In addition, by operation of law and of the Final Judgment, “Released Claims” also includes
the release by Lead Plaintiff and Class Members of all claims of every nature and description, known and unknown, arising out of or relating, directly or indirectly, as to any or all Releasees and Parties, to any or all acts, omissions,
nondisclosures, facts, matters, transactions, occurrences or oral or written statements or representations in connection with or directly or indirectly relating to the Settlement Agreement or the Settlement of this Action. 
  

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 37. “Releasees” means the Defendants, their respective present and former parents,
subsidiaries, divisions and affiliates, the present and former employees, officers and directors of each of them, the present and former attorneys, accountants, insurers, partners, principals, and agents of each of them, and the predecessors, heirs,
executors, administrators, successors and assigns of each, and any person or entity which is or was related to or affiliated with any Releasee or in which any Releasee has or had a controlling interest and the present and former employees, officers
and directors, attorneys, accountants, insurers, partners, principals, and agents of each of them. 
  
 38. “SEC” means the United States Securities and Exchange Commission. 
  
 39. “Settlement” means the agreement between and among the Parties to settle, compromise and dismiss this Action
with prejudice and on the merits, under the terms, conditions, and provisions set forth in this Settlement Agreement. 
  
 40. “Settlement Agreement” means this Stipulation of Settlement and its accompanying exhibits, including any subsequent amendments thereto and
any exhibits to such amendments. 
  
 41. “Settlement
Fund” means the fund described in Section II.A of this Settlement Agreement. 
  
 42. “Settlement Fund Account” means an interest-bearing account under the control of Lead Counsel into which the Settlement Fund shall be deposited, which account shall be an escrow account held at Citibank
and maintained as a Qualified Settlement Fund. 
  
 43.
“Summary Notice” means the published notice of the proposed Settlement. A copy of the Summary Notice proposed by the Parties is annexed hereto as Exhibit D. 
  
 44. “Tax Expenses” means (i) all taxes on the income of the Settlement Fund and (ii) expenses and costs incurred
in connection with the taxation of the Settlement Fund, including, without limitation, expenses of tax attorneys and accountants. 
  
 45. “Unknown Claims” means any Released Claims or Released Defendants’ Claims that the Plaintiff, any member of the Class, the Defendants,
and any other persons and 

  

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entities whose claims are being released do not know or suspect to exist in their favor at the time of the release which, if known by him, her, or it might
have affected the decision to compromise, or the decision whether to agree, object, or not object to this Settlement. Lead Plaintiff, the Defendants, and any other persons or entities whose claims are being released expressly waives and
relinquishes, and the other member of the Class shall be deemed to have, and by operation of the Judgment shall have, expressly waived and relinquished, to the fullest extent permitted by law, the provisions, rights, and benefits conferred by §
1542 of the California Civil Code, which provides: 
  
 A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS, WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

  
 46. “Youngberg” means Defendant Allan C. Youngberg.

  

	II.	TERMS AND CONDITIONS OF THE SETTLEMENT 

  

	 	A.	The Settlement Fund 

  
 1. The Settlement Fund shall consist of two million three hundred and fifty thousand dollars ($2,350,000.00), which shall be paid in cash by Defendants
into the Settlement Fund Account. Within ten (10) business days following entry of the Final Judgment, two million three hundred and fifty thousand dollars ($2,350,000.00) shall be paid by Defendants into the Settlement Fund Account. 
  
 2. The funds in the Settlement Fund Account shall not be distributed except
in accordance with this Settlement Agreement or by order of the Court, and shall continue to accrue interest until such time as the funds are distributed in accordance with this Settlement Agreement and orders of the Court. 
  
 3. As of the Final Settlement Date, Defendants shall cease to have any
interest in or control over the Settlement Fund. 
  
 4. Except as
provided by operation of Section XI.G below, in no event shall any money that Defendants have paid into the Settlement Fund be refunded to Defendants. 
  

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 5. All necessary steps to enable the Settlement Fund Account to be a Qualified Settlement Fund shall be
taken, including the timely filing by the Administrator of all elections and statements required pursuant to Treas. Reg. §§ 1.468B-0 through 1.468B-5, or any other relevant statutes, regulations or published rulings now or hereafter
enacted or promulgated, for all taxable years of the Settlement Fund Account, beginning with the date of its establishment. The Administrator shall be the Administrator of the Qualified Settlement Fund for purposes of the Settlement Fund Account.
The Administrator, on behalf of the Settlement Fund Account, shall file or cause to be filed on a timely basis all required federal, state, and local tax returns and shall, at the direction of Lead Counsel, pay taxes in a manner consistent with its
treatment as a Qualified Settlement Fund, as provided in Treas. Reg. §§ 1.468B-0 through 1.468B-5. In no event shall Defendants have any responsibility for filing election or other required statements, or tax returns, the costs associated
therewith, the payment of any taxes due, or the expenses of notice or administration of the Settlement Fund Account. Defendants and Lead Counsel shall cooperate with the Administrator to the extent necessary for the Administrator to comply with the
provisions of this paragraph. 
  
 6. Upon request by any
Defendant, the Administrator shall promptly provide to Defendants all information requested by Defendants in connection with any tax returns the Administrator must file or other report or filing it must make with respect to the Settlement Fund.

  

	 	B.	The Net Settlement Fund 

  
 1. All Attorney’s Fees and Expenses, Notice and Administrative Expenses, and Tax Expenses, if any, shall be paid from the Settlement Fund.

  
 2. The balance of the Settlement Fund, after all items listed
in Section II.B.1 above have been paid, shall be the Net Settlement Fund. 
  
 3. The Net Settlement Fund shall be distributed to Authorized Claimants pursuant to a Plan of Allocation, which Lead Plaintiff shall propose and with respect to which Lead Plaintiff shall seek approval of the Court. A
copy of the Plan of Allocation proposed by Lead Plaintiff is annexed hereto as Exhibit A. It is understood and agreed to by the Parties that, 

  

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 STIPULATION OF SETTLEMENT 

 
notwithstanding any other provision of this Settlement Agreement, any proposed Plan of Allocation is not a part of this Settlement Agreement, and any order
or proceedings modifying the Plan of Allocation shall not operate to terminate or cancel this Settlement Agreement or affect the finality of the Final Judgment or any other orders entered by the Court pursuant to this Settlement Agreement.

  
 4. Defendants, Releasees, and their respective counsel shall
have no role in or responsibility for the Plan of Allocation, the form, substance, method or matter of administration, or distribution of the Net Settlement Fund to Authorized Claimants, any tax liability that a Class Member may incur as a result of
this Settlement Agreement or as a result of any action taken pursuant to this Settlement Agreement, the administration or processing of claims, or the allocation of the Net Settlement Fund, including, without limitation, determinations as to the
timeliness or validity of Claim Information Forms, the amounts of claims or distribution of the Net Settlement Fund. 
  
 5. Class Members shall look solely to the Net Settlement Fund for settlement and satisfaction of all Released Claims. 
  

	 	C.	Distribution of the Net Settlement Fund 

  
 1. To receive a distribution from the Net Settlement Fund pursuant to the Plan of Allocation, a Class Member must be an Authorized Claimant pursuant to
the procedures set forth in this Settlement Agreement or by order of the Court. 
  
 2. All distributions to Authorized Claimants shall be in the form of cash from the Net Settlement Fund pursuant to the Plan of Allocation. 
  

	III.	SUBMISSION OF CLAIMS 

  
 A. Each Class Member who wishes to participate in the Net Settlement Fund must return a signed Claim Information Form by first class mail, postmarked no
later than the date set forth in the Notice. A sample Claim Information Form proposed by the Parties is annexed hereto as Exhibit B. The address to which the Claim Information Form must be mailed shall be set forth on the Claim Information Form
itself and shall also be printed in the Notice. If a Class Member chooses to return his, her or its Claim Information Form in a manner other than by first-class 

  

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mail, then it must be actually received at the address on the Claim Information Form by the date set forth in the Notice, unless (i) that date is extended by
order of the Court or (ii) Lead Counsel or their designee determines that an extension should be granted; provided, however, that such extension shall not be more than sixty (60) days after the date set forth in the Notice or the date ordered
by the Court. 
  
 B. The Claim Information Form must be sworn on
oath or made subject to the penalties of perjury pursuant to 28 U.S.C. § 1746. 
  
 C. In accordance with procedures set forth in the Notice and the Claim Information Form, Class Members will have the opportunity to object to the share transaction information set forth on the Claim Information Form
by submitting to the Claims Administrator appropriate documentation that corrects or modifies such share transaction information. 
  
 D. The validity of each claim submitted will be initially determined by the Administrator, acting under Lead Counsel’s supervision, in accordance
with the Plan of Allocation approved by the Court, who shall promptly advise the Class Member in writing if the Administrator determines to reject the claim. Neither Lead Counsel, their designees or agents, nor Defendants shall have any liability
arising out of said determination. In the event a Class Member disagrees with such determination, the dispute shall be submitted to the Court for summary resolution. 
  
 E. All initial determinations as to the validity of a Claim Information Form, the calculation of the extent to which each
Authorized Claimant will participate in the Net Settlement Fund, the preparation and mailing of distributions to Authorized Claimants, the distribution of the Settlement Fund and Net Settlement Fund shall be performed by Lead Counsel, their
designees or agents, the Administrator, or such other persons or entities as Lead Counsel may, in its sole discretion, deem necessary or advisable to assist it in the administration of this Settlement Agreement. The administration of the Settlement
Fund and Net Settlement Fund, and decisions on all disputed questions of law and fact with respect to the validity of any Claim Information Form or regarding rejection of claims, shall remain under the jurisdiction of the Court. All Parties
expressly waive trial by jury (to the extent such right may exist) with respect to such determinations. 
  

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 F. Except as otherwise ordered by the Court, any Class Member who fails to return a timely and signed
Claim Information Form consistent with the procedures set forth in this Section shall be barred from receiving a distribution from the Net Settlement Fund, but shall nevertheless be bound by the Release and all proceedings, orders and judgments in
this Action. 
  

	IV.	NOTICE TO THE CLASS 

  
 A. Subject to the requirements of the Hearing Order and not later than sixty (60) days before the Fairness Hearing, Lead Plaintiff and Lead Counsel shall
cause to be mailed, by first class mail, postage prepaid, to each person and entity in the Class who can be identified by reasonable effort, a copy of the Notice and Claim Information Form substantially in the forms annexed hereto as Exhibits C and
B, respectively. 
  
 B. In cases of pending litigation,
arbitration or mediation against any Defendant involving any Released Claims, subject to the requirements of the Hearing Order and not later than sixty (60) days before the Fairness Hearing, the Parties shall cause to be mailed, by first class mail,
postage prepaid, a copy of the Notice and Claim Information Form (substantially in the forms annexed hereto as Exhibits C and B, respectively) to all legal counsel known by Defendants to represent the Class Member, provided, however, that Defendants
shall describe such pending litigation to Lead Counsel within forty-five (45) days of the Execution Date. 
  
 C. The Notice shall conform to all applicable requirements of the Federal Rules of Civil Procedure, the PSLRA, the rules of the Court and any other
applicable law, and shall otherwise be in the manner and form agreed upon by the Parties and approved by the Court. 
  
 D. No later than fifty-five (55) days before the Fairness Hearing, the Parties shall cause the Summary Notice, substantially in the form annexed hereto as
Exhibit D, to be published once in the national edition of The New York Times and once on a widely circulated national business-oriented wire service. 
  

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	V.	RETENTION OF ADMINISTRATOR 

  
 A. Defendants acknowledge that Lead Counsel has retained Complete Claims Solutions as the Administrator to help implement the terms of this Settlement
Agreement. 
  
 B. The Administrator may assist with various tasks,
including, without limitation: (i) mailing or arranging for the mailing of the Notice and Claim Information Form to Class Members; (ii) arranging for publication of the Summary Notice; (iii) arranging for and staffing a toll-free telephone number to
assist Lead Plaintiff in responding to inquiries from Class Members; (iv) answering written inquiries from Class Members and/or forwarding such inquiries to Lead Counsel or their designee; (v) providing additional copies of the Notice and Claim
Information Form, upon request, to Class Members; (vi) receiving and maintaining any Class Member’s request for exclusion from the settlement; (vii) receiving and maintaining any Class Member’s withdrawal of request for exclusion from the
settlement; (viii) preparing, receiving and processing Claim Information Forms returned by Class Members; (ix) mailing or causing to be mailed to Authorized Claimants their distribution from the Net Settlement Fund under the Plan of Allocation; and
(x) otherwise assisting Lead Counsel with administration and implementation of the Settlement Agreement. 
  
 C. The Administrator shall apply to the Court for its fees and reimbursement of expenses in connection with the administration and implementation of the
Settlement Agreement at the time Lead Plaintiff seek Court approval for distribution of the Net Settlement Fund. All such fees and expenses, which may include fees and expenses to be charged or incurred in the future in order to complete the
administration and/or implementation of the Settlement Agreement, shall be paid solely out of the Settlement Fund. 
  
 D. The Administrator may make additional applications for fees and reimbursement of expenses in connection with the administration and implementation of
the Settlement Agreement. 
  
 E. In the event that the Court (or
any appellate court) does not grant final approval to the Settlement, Defendants shall pay the reasonable cost of Notice and Administrator expenses incurred up to that time. 
  

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	VI.	OBJECTIONS TO SETTLEMENT 

  
 A. Any Class Member who wishes to be excluded from the Class pursuant to Federal Rule of Civil Procedure 23(e)(3) in response to the Notice or Summary
Notice must file by first class mail or deliver a completed request for exclusion form pursuant to the Notice at the address provided in the Notice, postmarked or delivered no later than twenty-one (21) days before the Fairness Hearing or as the
Court may otherwise direct. 
  
 B. Any Class Member who has not
filed a timely written request for exclusion from the Class and who wishes to object to the fairness, reasonableness or adequacy of this Settlement, to any terms of the proposed Settlement Agreement, to the Plan of Allocation, or to the proposed
Attorney’s Fees and Expenses must serve upon Lead Counsel and Defendants’ Counsel, and must file with the Court no later than twenty-one (21) days before the Fairness Hearing or as the Court may otherwise direct, a statement of the
objection, as well as the specific reason or reasons, if any, for each such objection, including any legal support the Class Member wishes to bring to the Court’s attention and any evidence the Class Member wishes to introduce in support of the
objection. 
  
 C. Class Members may file an objection on their own
or through an attorney hired at their own expense. 
  
 D. Any
Class Member who files and serves a written objection pursuant to this Section may appear at the Fairness Hearing, either in person or through an attorney hired at the Class Member’s own expense, to object to the fairness, reasonableness or
adequacy of the Settlement, to any term of the proposed Settlement Agreement, to the Plan of Allocation, or to the proposed Attorney’s Fees and Expenses. Class Members or their attorneys intending to make an appearance at the Fairness Hearing
must serve upon Lead Counsel and Defendants’ Counsel and must file with the Court no later than twenty-one (21) days before the Fairness Hearing or as the Court may otherwise direct, a notice of intention to appear. 
  
 E. Any Class Member who fails to comply with any of the provisions of this
Section shall waive and forfeit any and all rights he, she or it may have to appear separately and/or object, and shall be bound by all of the terms of this Settlement Agreement and by all proceedings, orders and judgments in this Action.

  

 17 
 STIPULATION OF SETTLEMENT 

	VII.	RELEASE AND WAIVER, AND ORDER OF DISMISSAL 

  
 A. As of the Final Settlement Date, Lead Plaintiff and all Class Members agree to Release all Released Claims against the Defendants, Releasees and
Related Parties. 
  
 B. On and after the Final Settlement Date,
each Class Member, including Class Members who are parties to any other actions, arbitrations, or other proceedings against any of the Defendants, Releasees or Related Parties that are pending on the Final Settlement Date, on behalf of themselves,
their heirs, executors, administrators, predecessors, successors, assigns, and any person they represent, for good and sufficient consideration, the receipt and adequacy of which are hereby acknowledged, shall be deemed to have, and by operation of
law and of the Final Judgment shall have, fully, finally, and forever released, relinquished, settled, and discharged all Released Claims against each and every one of the Releasees and Related Parties, and whether or not a Claim Information Form is
signed and returned by, or on behalf of, such Class Member; provided, however, that nothing in the Final Judgment shall bar any action or claim to enforce the terms of the Settlement Agreement or the Final Judgment; provided further,
that all Class Members, on behalf of themselves, their heirs, executors, administrators, predecessors, successors, assigns, and any person they represent, for good and sufficient consideration, the receipt and adequacy of which are hereby
acknowledged, shall be deemed to have, and by operation of law and of the Final Judgment shall have, fully, finally, and forever released, relinquished, settled, and discharged all claims of every nature and description, known and unknown, arising
out of or relating, directly or indirectly, as to any or all Releasees, Related Parties and Parties, to any or all acts, omissions, nondisclosures, facts, matters, transactions, occurrences or oral or written statements or representations in
connection with or directly or indirectly relating to the Settlement Agreement or the Settlement of this Action. 
  
 C. With respect to any and all Released Claims, the Parties stipulate and agree that, by the terms of the Final Judgment each Class Member specifically
waives the benefit of the provisions of Section 1542 of the Civil Code of the State of California, which provides as 

  

 18 
 STIPULATION OF SETTLEMENT 

 
follows: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.” Class Members acknowledge the significance and consequence of this wavier of the provision of Section 1542, waive the provisions and protections of
Section 1542, assume full responsibility for any loss that may be incurred by reason of such waiver, and hereby release unknown and unsuspected claims. 
  
 D. Notwithstanding the provisions of Section 1542 and all similar provisions in California or in any other state of the United States or the District of
Columbia or in any foreign jurisdiction, Class Members understand and agree that this Release is intended to include all Released Claims that Class Members may have, including those Unknown Claims which Class Members do not now know or suspect to
exist in their favor against the Releasees and Related Parties, and that this Release extinguishes those Released Claims, including those Unknown Claims. Class Members may hereafter discover facts in addition to or different from those that they
know or believe to be true with respect to the subject matter of the Released Claims, but Class Members hereby stipulate and agree that they have, and shall be deemed to have, on or after the Final Settlement Date, fully, finally and forever settled
and released any and all Released Claims, including those Unknown Claims, and without regard to subsequent discovery or existence of such different or additional facts. The foregoing waiver was separately bargained for and is a key element of the
Settlement Agreement. 
  
 E. The Parties will seek and obtain from
the Court a Final Judgment (for which, as a condition of settlement, the time of appeal has expired without any modifications in the Final Judgment) as further described in Section X below. The Final Judgment shall, among other things, (i) approve
this Settlement Agreement as fair, reasonable and adequate; (ii) dismiss the Action with prejudice and on the merits; and (iii) incorporate the terms of the Release. 
  

	VIII. ATTORNEY’S	FEES AND EXPENSES 

  
 A. As provided in Section II.B.1 above, Attorney’s Fees and Expenses shall be paid solely out of the Settlement Fund. 
  

 19 
 STIPULATION OF SETTLEMENT 

 B. Lead Counsel will file a motion with the Court for an award of Attorney’s Fees and Expenses at
the time of the Fairness Hearing, which motion shall seek an award of attorney’s fees not exceeding thirty (30%) of the Settlement Fund. Defendants agree to take no position with respect to such motion. 
  
 C. All Attorney’s Fees and Expenses awarded by the Court or any
appellate court shall be payable to Lead Counsel on the Final Settlement Date. 
  
 D. Neither the Defendants nor any Releasees shall be liable or obligated to pay any fees, expenses, costs or disbursements to, or incur any expense on behalf of, any person, either directly or indirectly, in
connection with this Action or this Settlement Agreement, except as expressly provided for in this Settlement Agreement. 
  
 E. None of the Parties may terminate the Settlement Agreement on the basis of the amount of Attorney’s Fees and Expenses awarded by the Court or any
appellate court. 
  

	IX.	PRELIMINARY APPROVAL HEARING AND HEARING ORDER 

  
 A. Unless otherwise agreed to by the Parties, within thirty (30) days of execution of the Settlement Agreement, the Parties shall submit the Settlement
Agreement to the Court and apply for a Hearing Order: 
  
 1.
granting preliminary approval for certification of the Class for settlement purposes; 
  
 2. finding that the proposed Settlement is sufficient to warrant the sending of notice to the Class; 
  
 3. scheduling the Fairness Hearing to be held on such date as the Court may direct, to consider the fairness, reasonableness and adequacy of the proposed
Settlement and whether it should be approved by the Court; 
  
 4.
approving the proposed Notice and Summary Notice and the notice methodology described in this Settlement Agreement; 
  
 5. directing the Notice to be mailed and the Summary Notice to be published as described in this Settlement Agreement; 
  

 20 
 STIPULATION OF SETTLEMENT 

 6. determining that the notice to be provided to Class Members in this case, including the Notice, the
Summary Notice and the methodology employed to disseminate all, (i) is the best practicable notice; (ii) is reasonably calculated, under the circumstances, to apprise Class Members of their right to object or to exclude themselves from the proposed
Settlement; (iii) is reasonable and constitutes due, adequate and sufficient notice to all persons entitled to receive notice; and (iv) meets all applicable requirements of the Federal Rules of Civil Procedure, the PSLRA, the rules of the Court and
any other applicable law; 
  
 7. providing Class Members with an
opportunity to request exclusion from the Class, pursuant to the Federal Rule of Civil Procedure 23(e)(3); 
  
 8. requiring each Class Member who wishes to object to the fairness, reasonableness or adequacy of the Settlement, to any term of this Settlement
Agreement, the Plan of Allocation, or the proposed Attorney’s Fees and Expenses to do so strictly in accordance with Section VI of this Settlement Agreement; 
  
 9. directing Lead Counsel or their designated agent to rent one or more post office boxes to be used for receiving requests
for exclusion and any other communications, and providing that only Lead Counsel, the Administrator, Defendants’ Counsel, the Court, and their designated agents shall have access to such post office box or boxes; 
  
 10. directing Defendants’ Counsel and Lead Counsel promptly to furnish
each other with copies of any and all objections, requests for exclusion, or withdrawals of requests for exclusion that might come into their possession; and 
  
 11. any additional provisions that might be necessary to implement and administer the terms of this Settlement Agreement and the proposed Settlement.

  
 B. A copy of the Hearing Order proposed by the Parties is
annexed hereto as Exhibit E. 
  

	X.	FINAL APPROVAL AND FINAL JUDGMENT 

  
 A. After the Fairness Hearing, and upon the Court’s approval of this Settlement Agreement, and the certification of the Class for settlement
purposes, the Parties shall seek and obtain from the Court a Final Judgment which shall, among other things: 
  

 21 
 STIPULATION OF SETTLEMENT 

 1. find that the Court has personal jurisdiction over all Class Members and that the Court has subject
matter jurisdiction to approve this Settlement Agreement and all exhibits thereto; 
  
 2. approve this Settlement Agreement as fair, reasonable and adequate, consistent and in compliance with all applicable requirements of the Federal Rules of Civil Procedure, the PSLRA, the rules of the Court and any
other applicable law, and in the best interests of each of the Parties and the Class Members; direct the Parties and their counsel to implement and consummate this Settlement Agreement according to its terms and provisions; and declare this
Settlement Agreement to be binding as to all claims and issues that have or could have been raised in this Action on Lead Plaintiff and all other Class Members, as well as their heirs, executors and administrators, successors and assigns;

  
 3. find that the Notice, the Summary Notice and the notice
methodology implemented pursuant to this Settlement Agreement: (i) constituted the best practicable notice; (ii) constituted notice that was reasonably calculated, under the circumstances, to apprise Class Members of their right to object to or
exclude themselves from the proposed Settlement and their right to appear at the Fairness Hearing; (iii) were reasonable and constituted due, adequate and sufficient notice to all persons entitled to receive notice; and (iv) met all applicable
requirements of the Federal Rules of Civil Procedure, the PSLRA, the rules of the Court and any other applicable law; 
  
 4. find that Lead Counsel and the Lead Plaintiff adequately represented the Class for purposes of entering into and implementing the Settlement;

  
 5. dismiss the Action (including all individual claims and
Class claims presented thereby) on the merits and with prejudice, and without fees or costs to any Party except as provided in this Settlement Agreement; 
  
 6. permanently bar and enjoin the institution and prosecution by Class Members of any action against the Defendants in any court asserting a Released
Claim; 
  
 7. incorporate the Release set forth in Section VII
above, make the Release effective as of the date of the Final Settlement Date, and forever discharge the Releasees, and Related Parties from any and all claims or liabilities arising from or related to the Released Claims; 
  

 22 
 STIPULATION OF SETTLEMENT 

 8. authorize the Parties, without further approval of the Court, to agree to and adopt such amendments,
modifications and expansions of this Settlement Agreement and all exhibits attached to the Settlement Agreement as (i) are not materially inconsistent with the Final Judgment and (ii) do not materially limit the rights of Class Members under the
Settlement Agreement; 
  
 9. award Attorneys’ Fees and
Expenses; 
  
 10. without affecting the finality of the Final
Judgment for purposes of appeal, retain jurisdiction as to all matters relating to the administration, consummation, enforcement and interpretation of this Settlement Agreement and the Final Judgment, and for any other necessary purpose; and

  
 11. incorporate any other provisions that the Court deems
necessary and just. 
  
 B. A copy of the Final Judgment proposed
by the Parties is annexed hereto as Exhibit F. 
  

	XI.	MODIFICATION OR TERMINATION OF THIS SETTLEMENT 

  
 A. The terms and provisions of this Settlement Agreement may be amended, modified or expanded by agreement of the Parties and approval of the Court;
provided, however, that after entry of the Final Judgment, the Parties may by agreement effect such amendments, modifications or expansions of this Settlement Agreement and its implementing documents (including all exhibits to the Settlement
Agreement) without notice to or approval by the Court if such changes are not materially inconsistent with the Court’s Final Judgment and do not (a) materially limit the rights of Class Members under the Settlement Agreement; or (b) materially
limit the rights of the Releasees under the Settlement Agreement. 
  
 B. This Settlement Agreement will terminate at the sole option and discretion of Lead Plaintiff or Defendants if (i) the Court or any appellate court rejects, modifies or denies approval of any portion of this Settlement Agreement or the
proposed Settlement that the terminating Party reasonably and in good faith determines is material, including, without 

  

 23 
 STIPULATION OF SETTLEMENT 

 
limitation, the terms of relief, the findings of the Court, the provisions relating to Notice, and/or the terms of the Release, except with respect to the
portions of this Settlement Agreement or the proposed Settlement relating to Attorney’s Fees and Expenses and the Plan of Allocation; or (ii) the Court or any appellate court does not enter or completely affirm, or alters or expands, any
portion of the Final Judgment, that the terminating Party reasonably and in good faith believes is material. The terminating Party must exercise the option to withdraw from and terminate this Settlement Agreement as provided in this Section no later
than twenty (20) days after receiving actual notice of the event prompting the termination. 
  
 C. Notwithstanding the preceding Section XI.B, the Parties may not terminate this Settlement Agreement because of the amount of Attorney’s Fees and Expenses awarded by the Court or any appellate court.

  
 D. Notwithstanding the preceding Section XI.B, the Parties may
not terminate this Settlement Agreement or the proposed Settlement because of any order or proceedings modifying the Plan of Allocation. 
  
 E. Not later than seven (7) days before the Fairness Hearing, Defendants also may unilaterally withdraw from and terminate this Settlement Agreement if
valid and timely requests for exclusion are received from Class Members who, in the aggregate, purchased an amount greater than seven and one-half percent (7-1/2%) of the aggregate number of affected shares of PriceSmart purchased by all Class
Members during the Class Period. Requests for exclusion that are not timely submitted, that are timely and validly withdrawn, or that fail to provide all of the information required by this Settlement Agreement shall not be counted. Solely for
purposes of this Section XI.E, the Parties stipulate that the aggregate number of affected shares of PriceSmart purchased by all Class Members during the Class Period equals 6,812,112 shares. 
  
 F. If an option to withdraw from and terminate this Settlement Agreement
arises under Sections XI.B or XI.E, (i) neither Defendants nor Lead Plaintiff will be required for any reason or under any circumstance to exercise that option, and (ii) any exercise of that option shall be made in good faith. 
  

 24 
 STIPULATION OF SETTLEMENT 

 G. If this Settlement Agreement is terminated pursuant to Sections XI.B or XI.E, then: 
  
 1. this Settlement Agreement shall be null and void and shall have no force
or effect, and no Party to this Settlement Agreement shall be bound by any of its terms, except for the terms of this Section XI.G and Section XII.B below; 
  
 2. this Settlement Agreement, all of its provisions, and all negotiations, statements, and proceedings relating to it shall be without prejudice to the
rights of Defendants, Lead Plaintiff or any other Class Member, all of whom shall be restored to their respective positions existing immediately before the execution of this Settlement Agreement; 
  
 3. Defendants, Releasees, and their current or former directors, officers,
employees, agents, partners, attorneys and representatives expressly and affirmatively reserve all defenses, arguments and motions as to all claims that have been or might later be asserted in the Action; 
  
 4. Lead Plaintiff and his current and former predecessors, successors, heirs,
agents, attorneys, representatives or assigns, individually and on behalf of the Class, expressly and affirmatively reserves all motions as to, and arguments in support of, all claims that have been or might later be asserted in the Action;

  
 5. neither this Settlement Agreement, nor the fact of its
having been made, shall be admissible or entered into evidence for any purpose whatsoever; 
  
 6. Lead Plaintiff shall promptly return to Defendants any monies (including any interest accrued) in the Settlement Fund Account less any Notice and Administration Expenses incurred but not yet paid; 
  
 7. Lead Plaintiff, Lead Counsel, members of the Class and any other
plaintiffs’ counsel shall not be entitled to use any of the documents or information obtained in confirmatory discovery for any purpose in this Action, including opposing any motion to dismiss or filing an amended complaint; and 
  

 25 
 STIPULATION OF SETTLEMENT 

 8. any order or judgment entered after the date of this Settlement Agreement that relates to this
Settlement Agreement shall be deemed vacated and will be without any force or effect. 
  

	XII.	GENERAL MATTERS AND RESERVATIONS 

  
 A. The obligation, although not the ability, of the Parties to conclude the proposed Settlement is and will be contingent upon each of the following:

  
 1. occurrence of the Final Settlement Date; and 

 
 2. any other conditions stated in this Settlement Agreement. 

 
 B. By executing this Settlement Agreement, Defendants do not intend to
release any claim against any insurer for any costs or expenses hereunder, including attorney’s fees and costs. 
  
 C. Lead Counsel represents that it is authorized to enter into this Settlement Agreement on behalf of Lead Plaintiff and the Class. 
  
 D. Defendants’ Counsel represent that they are authorized to enter into
this Settlement Agreement on behalf of their respective clients who are Defendants in this Action. 
  
 E. This Settlement Agreement sets forth the entire agreement among the Parties with respect to its subject matter, and it may not be altered or modified
except by written instrument executed by Lead Counsel and Defendants’ Counsel. The Parties expressly acknowledge that no other agreements, arrangements or understandings not expressed in this Settlement Agreement exist between or among them. In
entering into this Settlement Agreement, no party has relied upon any representation or warranty not set forth expressly herein. 
  
 F. This Settlement Agreement and any ancillary agreements shall be governed by and interpreted according to the law of the California, excluding its
conflict of laws provisions. 
  
 G. Any action to enforce this
Settlement Agreement shall be commenced and maintained only in the Court. 
  
 H. Whenever this Settlement Agreement requires or contemplates that one Party shall or may give notice to the other, notice shall be provided by facsimile transmission and/or next-day (excluding Saturday and Sunday)
express delivery service as follows and shall be 

  

 26 
 STIPULATION OF SETTLEMENT 

 
deemed effective upon such facsimile transmission, or delivery, to the facsimile number, or address, as the case may be, below: 
  

	 	1.	If to Defendants, then to: 

  
 Peter Benzian, Esq. 
 LATHAM & WATKINS,
LLP 
 600 West Broadway, Suite 1800 
 San Diego, California 92101 
 Telephone: (619) 236-1234 
 Facsimile: (619) 696-7419 
  
 Attorneys for PriceSmart Inc.  
  
 James G. Bohm, Esq. 
 A. Eric Aguilera

 BOHM FRANCIS KEGEL & AGUILERA LLP 
 695 Town Center Drive, Suite 700 
 Costa Mesa, California 92626 
 Telephone: (714) 384-6500 
 Facsimile: (714)
384-6501 
  
 Attorneys for Gilbert A. Partida  

 
 William Grauer, Esq. 
 Koji Fukumura, Esq. 
 Dennis Crovella, Esq.

 COOLEY & GODWARD LLP 
 4401 Eastgate Mall 
 San Diego, California 92121 
 Telephone: (858) 550-6000 
 Facsimile: (858) 550-6420 
  
 Attorneys for Allan C. Youngberg  
  

	 	2.	If to Lead Plaintiff or the Class, then to: 

  
 Jonathan M. Plasse, Esq. 
 Louis Gottlieb,
Esq. 
 GOODKIND LABATON RUDOFF & SUCHAROW LLP 
 100 Park Avenue 
 New York, New York 10017-5563 
 Telephone: (212) 907-0700 
 Facsimile: (212)
818-0477 
  

 27 
 STIPULATION OF SETTLEMENT 

 and 
  
 Lionel Z. Glancey, Esq. 
 Peter A. Binkow,
Esq. 
 GLANCY BINKOW LLP 
 1801
Avenue of the Stars, Suite 311 
 Los Angeles, California 
 Telephone: (310) 201-9150 
 Facsimile: (310) 201-9160 
  
 I. All time periods set forth herein shall be computed in calendar days
unless otherwise expressly provided. In computing any period of time prescribed or allowed by this Settlement Agreement or by order of the Court, the day of the act, event, or default from which the designated period of time begins to run shall not
be included. The last day of the period so computed shall be included, unless it is a Saturday, Sunday or a legal holiday, or, when the act to be done is the filing of a paper in Court, a day on which weather or other conditions have made the Office
of the Clerk of the Court inaccessible, in which event the period shall run until the end of the next day that is not one of the aforementioned days. As used in this Section, “legal holiday” includes New Year’s Day, the observance of
Martin Luther King, Jr.’s birthday, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans’ Day, Thanksgiving Day, Christmas Day, or any other day appointed as a federal holiday. 
  
 J. The Parties reserve the right, subject to the Court’s approval, to
make any reasonable extensions of time that might be necessary to carry out any of the provisions of this Settlement Agreement. 
  
 K. All Parties agree that this Settlement Agreement was drafted by counsel for the Parties at arm’s-length, and that no parol or other evidence may
be offered to explain, construe, contradict or clarify its terms, the intent of the Parties or their counsel, or the circumstances under which the Settlement Agreement was made or executed; provided, however, that there shall be no presumption for
or against any Party that drafted all or any portion of this Settlement Agreement. 
  
 L. In no event shall the Settlement Agreement, any of its provisions, or any negotiations, statements or court proceedings relating to its provisions in any way be construed as, offered as, received as, used as or
deemed to be evidence of any kind in this Action or any proceeding to enforce this Settlement Agreement. Without limiting the foregoing, neither this 

  

 28 
 STIPULATION OF SETTLEMENT 

 
Settlement Agreement nor any related negotiations, statements or court proceedings shall be construed as, offered as, received as, used as or deemed to be
evidence or an admission or concession of any liability or wrongdoing whatsoever on the part of any person or entity, including but not limited to Defendants, or as a waiver by Defendants of any applicable defense or as a waiver by Lead Plaintiff or
the Class of any claims, causes of action or remedies. 
  
 M.
Defendants expressly deny any wrongdoing alleged in the pleadings and do not admit or concede any wrongdoing or liability in connection with any facts or claims that have been or could have been alleged against them in the Action, but consider it
desirable for the Action to be settled and dismissed because this Settlement will (i) bring to an end the substantial expenses, burdens, risks and uncertainties associated with continued litigation of this Action; (ii) finally put to rest those
claims and the underlying matters; and (iii) confer substantial benefits upon Defendants, Lead Plaintiff and Class Members including, without limitation, the avoidance of further expense and disruption of the management and operation of
PriceSmart’s business due to the pendency and defense of this Action. 
  
 N. Lead Plaintiff expressly affirms that the allegations contained in the Complaint were made in good faith and have a substantial basis in fact, but considers it desirable for the Action to be settled and dismissed
because of the substantial cash benefits the proposed Settlement will provide to Lead Plaintiff and Class Members, and to bring to an end the substantial expenses, burdens, risks and uncertainties associated with continued litigation of this Action.

  
 O. No opinion or advice concerning the tax consequences of the
proposed Settlement to individual Class Members is being given or will be given by Defendants’ Counsel or Lead Counsel, nor is any representation or warranty in this regard made by virtue of this Settlement Agreement. The Notice will direct
Class Members to consult their own tax advisors regarding the tax consequences of the proposed Settlement, and any tax reporting obligations they may have with respect thereto. Each Class Member’s tax obligations, and the determination thereof,
are the sole responsibility of the individual Class Member, and it is understood that the tax consequences may vary depending on the particular circumstances of each individual Class Member. 
  

 29 
 STIPULATION OF SETTLEMENT 

 P. The Parties, their successors and assigns, and their attorneys undertake to implement the terms of
this Settlement Agreement in good faith, and to use good faith in resolving any disputes that may arise in the course of implementing the terms of this Settlement Agreement. 
  
 Q. The Parties, their successors and assigns, and their attorneys agree to cooperate fully with one another in seeking Court
approval of this Settlement Agreement and to use their best efforts to effect the prompt consummation of this Settlement Agreement and the proposed Settlement. 
  

R. This Settlement Agreement may be signed in counterparts, each of which shall constitute a duplicate original. Execution by facsimile transmission
shall be fully and legally binding on a Party, and the Party so executing shall promptly provide a fully executed counterpart to each of the other Parties. 
  

 30 
 STIPULATION OF SETTLEMENT 

 S. All Releasees who are not parties to this Settlement Agreement are intended third-party beneficiaries
entitled to enforce the terms of the Release set forth herein. 
  
 T. Except with respect to motions and hearings necessary to secure complete and final approval of this settlement including final judgment and dismissal, Lead Plaintiff and Lead Counsel will not make any public disclosure or statement
concerning the settlement that goes beyond the information contained in the notice to class members; however, this restriction will not apply to the fact of the settlement, the settlement amount or general information concerning the Lead Plaintiff
or Lead Counsel or any direct quotations from any order of the Court. Nothing in this Settlement shall prevent the Company from making such disclosures or press releases of this settlement as it may determine in its sole discretion to be required by
the securities laws and other law or regulations, or in the interest of shareholders. Any violation of this paragraph will not affect the remaining provisions of this Settlement; will not relieve any party of its remaining obligations under this
Settlement; and will not impair, void, or affect in anyway the Settlement of this action. Further, the terms of this paragraph do not act as a waiver of any litigation privilege and the terms of this paragraph do not apply to any pleadings filed
with the Court or statements made by the parties in support of the Settlement, in any court proceeding. 
  

 31 
 STIPULATION OF SETTLEMENT 

 U. Within 30 days of the Final Settlement Date, Lead Counsel shall return to Defendant’s Counsel
copies of all documents produced by Defendants or certify in writing that all such documents have been destroyed. 
  
 Agreed to as of this 12 day of May, 2005. 
  

			
	GOODKIND LABATON RUDOFF & SUCHAROW LLP
		
	 By:
	 	 /s/ Louis Gottlieb

	 	 	 Jonathan M. Plasse (JP- 7515)

	 	 	 Louis Gottlieb (LG- 9169)

	 	 	 100 Park Avenue

	 	 	 New York, New York 10017-5563

	 	 	 (212) 907-0700

	 	 	 (212) 818-0477 (fax)

		
	 	 	 Lead Counsel for

	 	 	 Lead Plaintiff and the Class

	
	 LATHAM & WATKINS LLP

		
	 By:
	 	 /s/ Peter Benzian

	 	 	 Peter Benzian (047456)

	 	 	 600 West Broadway, Suite 1800

	 	 	 San Diego, California 92101

	 	 	 Telephone: (619) 236-1234

	 	 	 Facsimile: (619) 696-7419

		
	 	 	 Counsel for PriceSmart Inc.

  

 32 
 STIPULATION OF SETTLEMENT 

			
	 BOHM FRANCIS KEGEL & AGUILERA LLP

		
	 By:
	 	 /s/ James G. Bohm

	 	 	 James G. Bohm (132430)

	 	 	 A. Eric Aguilera (192390)

	 	 	 695 Town Center Drive, Suite 700

	 	 	 Costa Mesa, California 92626

	 	 	 Telephone: (714) 384-6500

	 	 	 Facsimile: (714) 384-6501

		
	 	 	 Counsel for Gilbert A. Partida

	
	 COOLEY GODWARD LLP

		
	 By:
	 	 /s/ Koji Fukumura

	 	 	 William Grauer (138339)

	 	 	 Koji Fukumura (189719)

	 	 	 Dennis Crovella (190781)

	 	 	 4401 Eastgate Mall

	 	 	 San Diego, California 92121

	 	 	 Telephone: (858) 550-6000

	 	 	 Facsimile: (858) 550-6420

		
	 	 	 Counsel for Allan C. Youngberg

	
	 LEWIS BRISBOIS BISGAARD & SMITH LLP

		
	 By:
	 	 /s/ Richard George

	 	 	 Richard George

	 	 	 Alifya Vasi

	 	 	 199 Water Street, 25th Floor

	 	 	 New York, N.Y. 10038

	 	 	 Telephone: (212) 232-1300

	 	 	 Facsimile: (212) 232-1399

		
	 	 	Counsel for National Union Fire Insurance of Pittsburgh, PA

  

 33 
 STIPULATION OF SETTLEMENTAmended and Restated Adherex Technologies Inc. Stock Option Plan

 EXHIBIT 10.9 
  
 ADHEREX TECHNOLOGIES INC. 
 AMENDED AND RESTATED STOCK OPTION PLAN 
  
 PLAN DESCRIPTION 
  
 1. Purpose
of the Plan 
  
 The purpose of the Adherex Technologies Inc. Amended and
Restated Stock Option Plan is to develop the interest and incentive of eligible employees, directors and other service providers of ADHEREX TECHNOLOGIES INC. (the “Company”), in the Company’s growth and development by providing
incentives (thereby advancing the interests of the Company, enhancing the value of the Common Shares for the benefit of all the shareholders and increasing the ability of the Company to attract and retain skilled and motivated individuals in the
service of the Company): 
  
 (a) to Employees of the Company, or
its parent (if any) or any of its present or future subsidiaries (collectively, “Related Corporations”), by providing them with opportunities to purchase Common Shares (as defined below) of the Company pursuant to options granted hereunder
that qualify as “incentive stock options” (“ISOs”) under Section 422 of the Internal Revenue Code of 1986, as amended, or any successor statute (the “Code”); and 
  
 (b) to Directors, Employees and Service Providers of the Company and Related
Corporations by providing them with opportunities to purchase Common Shares pursuant to options granted hereunder that do not qualify as ISOs (Nonstatutory Stock Options, or “NSOs”). 
  
 Both ISOs and NSOs are referred to hereafter individually as “Options. As used herein,
the terms “parent” and “subsidiary” mean “parent corporation” and “subsidiary corporation”, respectively, as those terms are defined in Section 424 of the Code. 
  
 This Plan was adopted by the Board on March 18, 2005 (the “Effective Date”),
subject to approval of the Plan by the shareholders of the Company. 
  
 2.
Definitions 
  
 In this Plan: 
  

	(a)	“Board” means the board of directors of the Company; 

  

	(b)	“Committee” means the appropriate compensation committee, if any, appointed by the Board of Directors to administer the Plan; 

  

	(c)	“Common Shares” means the Common Shares of the Company or, in the event of an adjustment contemplated in Section 8 hereof, such other securities to which a
Participant may be entitled upon the exercise of an Option as a result of such adjustment; 

  

	(d)	“Date of Grant” means the date a Participant is granted an Option to purchase Option Shares; 

  

	(e)	“Director” means a person occupying the position of director on the Board of the Company or any Related Corporation; 

	(f)	“Employee” means a full time employee of the Company or any Related Corporation; 

  

	(g)	“Exchange” means the Toronto Stock Exchange or, if the Common Shares are not then listed and posted for trading on the Toronto Stock Exchange, on such stock
exchange or quotation system on which such shares are listed, posted for trading or quoted as may be selected by the Committee. 

  

	(h)	“Exercise Date” means the date the Company receives from the Participant a completed Stock Option Purchase Form with payment for the Option Shares being purchased;

  

	(i)	“Fair Market Value” at any date in respect of the Common Shares is the fair value of the Common Shares as determined by the Committee in its sole discretion. If, at
the time an Option is granted under the Plan, the Common Shares are publicly traded and listed on the Exchange or the American Stock Exchange, “Fair Market Value” shall be equal to the closing price of the Common Shares on the Exchange or
the American Stock Exchange on the trading day immediately preceding the Date of Grant; provided that if the Common Shares are then traded on the American Stock Exchange or on the Nasdaq National Market or the Nasdaq SmallCap Market, “Fair
Market Value” shall, if the Common Shares are not then listed on the Exchange or the American Stock Exchange or otherwise if so determined by the Committee in its sole discretion, be equal to the closing sale price for such stock on such
exchange or market trading day immediately preceding the Date of Grant. 

  

	(j)	“Option Price” means the price per share at which a Participant may purchase Option Shares; 

  

	(k)	“Option Shares” means the Common Shares of the Company which a Participant is entitled to purchase under the Plan; 

  

	(l)	“Participants” means Directors, Employees and Service Providers to whom Options are granted pursuant to the Plan; 

  

	(m)	“Plan” means the Adherex Technologies Inc. Stock Option Plan, as the same may be amended and restated from time to time; 

  

	(n)	“Service Provider” means any person other than an Employee or Director, engaged to provide ongoing management, advisory or consulting services for the Company or a
Related Corporation; 

  

	(o)	“Stock Option Agreement” means (i) prior to March 18, 2005, the stock option agreement to be entered into between the Company and a Participant in the form of
Appendix “A” and (ii) after such date, the stock option agreement to be entered into between the Company and a Participant in the form of Appendix “C”; and 

  

	(p)	“Vesting Period” means the period(s) as stipulated herein or in the Stock Option Agreement that the Participant may purchase the Option Shares.

  

 2 

 3. Eligibility and Number of Option Shares Subject to Plan 
  
 Participation in the Plan shall be limited to Participants who are designated from time to
time by the Committee. ISOs may be granted to any Employee resident in the United States. Those officers of the Company who are not employees may not be granted ISOs under the Plan. NSOs may be granted to any Director, Employee or Service Provider.
Participation shall be voluntary and the extent to which any Participant shall be entitled to participate in the Plan shall be determined by the Committee. Until changed in accordance with Section 16, the maximum number of shares issuable under this
Plan shall be 28,000,000 Common Shares, subject to adjustment in accordance with Section 8. Granting of any Option to any individual or entity shall neither entitle that individual or entity to, nor disqualify him or her from, participation in any
other grant of Options. If any Option granted under the Plan shall expire or terminate for any reason without having been exercised in full or shall cease for any reason to be exercisable in whole or in part, or if the Company shall reacquire any
shares issued pursuant to Options, the unpurchased shares subject to such Options and any shares so reacquired by the Company shall again be available for grants of Options under the Plan. 
  
 The selection of a Director or an officer who is a Reporting Person (as the terms
“director” and “officer” are defined for purposes of Rule 16b-3) as a recipient of an Option, the timing of the Option grant, the exercise price, if any, of the Option and the number of shares subject to the Option shall be
determined either (i) by the Board, or (ii) by a committee of the Board that is composed solely of two or more Non-Employee Directors having full authority to act in the matter. For the purposes of the Plan, a director shall be deemed to be a
“Non-Employee Director” only if such person is defined as such under Rule 16b-3(b)(3), as interpreted from time to time. 
  
 No fractional shares may be purchased or issued hereunder. 
  
 4. Price for Shares; ISO Limitations 
  
 The Committee shall advise each Participant, as applicable, of the number of shares subject to such Participant’s Option, the Option Price at which Option Shares may
be purchased and the Vesting Period applicable to the Option. The Option Price at which the Option Shares may be purchased under the Plan shall be fixed by the Committee based upon the Fair Market Value of the Common Shares. The Committee may
impose, in its discretion, performance thresholds which will need to be met prior to vesting of any Options granted. 
  
 The price per share specified in the Stock Option Agreement relating to each ISO granted under the Plan shall not be less than the Fair Market Value of the Common Shares
on the date of such grant. In the case of an ISO to be granted to an employee owning stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Related Corporation, the price per share specified
in the agreement relating to such ISO shall not be less than 110% of the fair market value per Common Share on the date of the grant. 
  
 To the extent that the aggregate Fair Market Value of the Common Shares (determined at the time an ISO is granted) for which ISOs granted to any employee are exercisable
for the first time by such employee during any calendar year (under all stock option plans of the Company and any Related Corporation) exceeds $100,000; or such higher value as permitted under Code Section 422 at the time of determination, such
Options will be treated as NSOs, provided that this Section shall have no force or effect to the extent that its inclusion in the Plan is not necessary for Options issued as ISOs to qualify as ISOs pursuant to Section 422 of the Code. The rule of
this Section shall be applied by taking Options in the order in which they were granted. 
  

 3 

 5. Exercise 
  
 Options granted under the Plan must be exercised within a period of seven (7) years from the Date of Grant, failing which the Option shall expire. Notwithstanding,
Options granted under the Plan shall expire five (5) years from the Date of Grant in the case of ISOs granted to an employee owning stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any
Related Corporation. Unless otherwise determined by the Committee and specifically set forth in the Stock Option Agreement, the Vesting Periods during which Options or a portion thereof vest and may be exercised by the Participant shall be as
follows: 
  
 one-third of the Option may be exercised after the
first anniversary of the date of grant; 
  
 one-third of the
Option may be exercised after the second anniversary of the date of grant; and 
  
 one-third of the Option may be exercised after the third anniversary of the date of grant. 
  
 Notwithstanding such vesting period or that certain vesting period set forth in the Stock Option Agreement, the Committee may, in its sole discretion, by written notice
to any Participant, accelerate the vesting of all or any of the Options such that the Options become immediately fully vested. In such circumstances, the Committee may by written notice compel the Participant to exercise the Options within 30 days
of the date of such written notice to exercise, failing which the Participant’s right to purchase such Option Shares lapses. 
  
 The Committee in its discretion may require that the exercise of an Option shall be conditional on the Participant making any representations and warranty to the Company
as may be required under applicable laws or regulations. 
  
 6. Payment

  
 Except as otherwise provided in this Plan or the instrument evidencing
the Option, an Option (or any part or installment thereof) shall be exercised by giving written notice to the Company at its principal office address to the attention of its Corporate Secretary. Such notice shall identify the Option being exercised
and specify the number of shares as to which such Option is being exercised, accompanied by full payment of the exercise price therefor, if any, payable as follows (a) in Canadian or United States dollars in cash, check or money order, or (b) at the
discretion of the Committee, by delivery of a notice that the grantee has placed a market sell order with a broker with respect to Common Shares then issuable upon exercise of the Option and that the broker has been directed to pay a sufficient
portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price, provided that payment of such proceeds is then made to the Company upon settlement of the sale or (c) at the discretion of the Committee, by any
combination of (a) and (b) such other consideration and method of payment for the issuance of shares to the extent permitted by applicable law or the Plan. Notwithstanding, with regard to Options granted before March 18, 2005, such notice shall be
in the form attached hereto as Appendix “B.” If the Committee exercises its discretion to permit payment of the exercise price of an ISO by means of the methods set forth in clause (b) of the preceding sentence, such discretion shall be
exercised in writing at the time of the grant of the ISO in question and such exercise shall also be governed by any terms set forth in the written agreement evidencing the grant of the Option. 
  
 7. Share Certificates 
  
 Upon exercise of an Option and payment in full of the purchase price, the Company shall cause to be delivered to the Participant within a
reasonable period of time a duplicate certificate or certificates in the name of the Participant representing the number of Common Shares the Participant has purchased. 
  

 4 

 8. Adjustment in Shares 
  

In the event of any subdivision, redivision or change of the Common Shares of the Company at any time prior to the expiration of the Option into a greater number of
shares, the Company shall deliver at the time of any exercise thereafter of the Option such additional number of shares as would have resulted from such subdivision, redivision or change if such exercise of the Option hereby granted had been prior
to the date of such subdivision, redivision or change. In the event of any consolidation or change of the Common Shares of the Company at any time prior to the expiration of the Option into a lesser number of shares, the number of shares deliverable
by the Company on any exercise thereafter of the Option shall be reduced to such number of shares as would have resulted from such consolidation or change if such exercise of the Option hereby granted had been prior to the date of such consolidation
or change. In all such cases, any Option Price shall also be adjusted accordingly. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares subject to the Option. 
  
 In the event of a proposed Change in Control (as defined below) of the Company, the Company shall give written notice thereof to each Participant holding Options under
the Plan and such Participants shall be entitled to exercise all or a portion of the Option granted to such Participants, whether or not such Option has previously vested, within the 30 days period following the giving of such notice. To the extent
the proposed Change in Control is not completed in a reasonable time, the Company may purchase at the Option Price the Option Shares acquired by the Participant pursuant to Options which would not have vested but for the acceleration of the Vesting
Period as set forth in the preceding sentence. Upon the expiration of such 30 day period, all unexercised Options shall terminate and cease to have any further force and effect. “Change of Control” shall mean the acquisition (at one time
or over a period of time) of shares of the Company or of securities (“Convertible Securities”) convertible into, exchangeable for or representing the right to acquire shares of the Company as a result of which a person, group of persons or
persons acting jointly or in concert, or persons associated or affiliated within the meaning of the Canada Business Corporation Act with any such person, group of persons or persons acting jointly or in concert (collectively, the
“Acquirors”), beneficially own shares of the Company and/or Convertible Securities that would entitle the holders thereof to cast more than 50% of the votes attaching to all shares in the capital of the Company that may cast to elect
directors of the Company (assuming the conversion, exchange or exercise of Convertible Securities beneficially owned by the Acquirors). For the avoidance of doubt, a Change of Control shall not include a reverse takeover or other reorganization
whereby the holders of shares and Convertible Securities of the Company immediately prior to such transaction beneficially own, following the completion of the transaction, shares of the parent or surviving corporation that would entitle the holders
thereof to cast more than 50% of the votes attaching to all shares in the capital of such parent or surviving corporation that may cast to elect directors of such parent or surviving corporation. In the event of Change in Control of the Company, the
Participant irrevocably agrees that any shares owned by him/her at the time of such Change in Control shall be tendered for sale in accordance with the terms of such Change in Control. 
  
 In the event of a transaction, including without limitation, a recapitalization or reorganization of the Company (other than a transaction
described in the preceding paragraph) pursuant to which securities of the Company or of another corporation are issued with respect to the outstanding Common Shares, an optionee or grantee upon exercising an Options shall be entitled to receive for
the purchase price paid upon such exercise the securities he or she would have received if he or she had exercised the Option immediately prior to such recapitalization or reorganization. 
  
 In the event of the proposed dissolution or liquidation of the Company, each Option will terminate immediately prior to the consummation of
such proposed action or at such other time and subject to such other conditions as shall be determined by the Committee. 
  

 5 

 9. Termination Of Participant For Any Reason 
  
 In the event that a Employee’s employment is terminated for any reason, a Director shall cease to be a Director for any reason or a
Service Provider ceases to provide services to the Company or a Related Corporation (and such person is a Participant), the Participant or the Participant’s legal representative, as the case may be, may elect to exercise any Option held by him
or her (to the extent of the number of shares with respect to which he or she could have exercised it on the date of termination) at any time during the 30 day period following the date of such termination of employment or position on the Board or
termination of services of a Service Provider (the “Participant Termination Date”), or if specifically approved by the Board, at any time prior to the earlier of (x) the expiration date thereof, or (y) the date that is three (3) years
following the Participant Termination Date, provided, however, in the event the grantee exercises any ISO after the date that is three months following the Participant Termination Date, such ISO will automatically be converted into an NSO subject to
the terms of the Plan. If the Participant fails to exercise such Option prior to the Participant Termination Date (or such later date as specifically approved by the Board), such Option shall terminate. For the purposes of this Plan, the transfer of
the Employee’s employment to the Company or to Related Corporation shall not be considered a termination of employment and the Employee’s rights under an Option shall be the same as if such transfer had not occurred. For purposes of this
Plan, a change in status from Employee to Service Provider, or from Service Provider to Employee, will not constitute a termination of employment, provided that a change in status from an Employee to Service Provider may cause an ISO to become an
NSO under the Code. 
  
 10. Transfer and Assignment 
  
 The Participant’s rights under Options granted under the Plan are not assignable or
transferable by the Participant or subject to any other alienation, sale, pledge or encumbrance by such Participant during the Participant’s lifetime and therefore the Options are exercisable during the Participant’s lifetime only by the
Participant. The obligations of each Participant shall be binding on his or her heirs, executors and administrators. 
  
 11. Employment and Board of Directors Position Non-Contractual 
  
 The granting of an Option to a Participant under the Plan does not confer upon the Participant any right to continue in the employment of the Company or any Related
Corporation or as a member of the Board or as a Service Provider, as the case may be, nor does it interfere in any way with the rights of the Employee or of the Company’s rights to terminate the Employee’s employment at any time or of the
shareholders’ right to elect Directors. 
  
 12. Rights As Shareholders

  
 Participants shall not have any rights as a shareholder with respect to
Options until exercise and full payment has been made to the Company and a share certificate or share certificates have been duly issued. 
  
 13. Administration Of The Plan 
  
 The Plan shall be administered by (i) the Board or (ii) the Committee. The appointment of the members of, and the delegation of powers to, the Committee by the Board
shall be consistent with applicable laws and regulations (including, without limitation, the Code, Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any successor rule thereto (“Rule
16b-3”), and any applicable state law (collectively, the “Applicable Laws”)). Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. From time to time, the Board may

  

 6 

 
increase the size of the Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the Committee and thereafter directly administer the Plan, all to the extent permitted by the Applicable Laws. Any determination with regard to the Plan by the Committee shall be
final and conclusive on all persons affected thereby unless otherwise determined by the Board. The day-to-day administration of the Plan may be delegated to such officers and Employees as the Committee shall determine. 
  
 Subject to ratification of the grant or authorization of each Option by the Board (if so
required by an Applicable Law), and subject to the terms of the Plan, if applicable,, the Committee, if so appointed, shall have the authority, in its discretion, to: 
  
 (i) determine the employees of the Company and Related Corporations (from among the class of employees eligible under
Section 3 to receive ISOs) to whom ISOs may be granted, and to determine (from among the classes of individuals and entities eligible under Section 3 to receive NSOs) to whom NSOs may be granted; 
  
 (ii) determine the time or times at which Options may be granted (which may
be based on performance criteria); 
  
 (iii) determine the number
of Common Shares subject to any Option granted by the Committee; 
  
 (iv) determine the Option Price, which price shall not be less than the minimum price specified in Section 4 hereof, as appropriate; 
  
 (v) determine whether each Option granted shall be an ISO or NSO; 
  

(vi) determine (subject to Section 5) the time or times when each Option shall become exercisable and the duration of the exercise period; 

 
 (vii) determine whether restrictions such as repurchase options are to be
imposed on shares subject to Options and the nature of such restrictions, if any; 
  
 (viii) approve forms of agreement for use under the Plan; 
  
 (x) accelerate vesting on any Option or to waive any forfeiture restrictions, or to waive any other limitation or restriction with respect to an Option; 
  
 (xi) reduce the exercise price of any Option if the fair market value of the Common Shares covered by such Option shall have
declined since the date the Option was granted, subject to prior approval of the Exchange, if applicable; 
  
 (xii) institute a program whereby outstanding Options can be surrendered in exchange for Options with a lower exercise price, subject to prior approval of
the Exchange and/or shareholders of the Company, if applicable; 
  
 (xiii) modify or amend each Option (subject to Section 5) including the discretionary authority to extend the post-termination exercisability period of Options longer than is otherwise provided for by terms of the Plan or the Option,
subject to prior approval of the Exchange and/or shareholders of the Company, if applicable; 
  

 7 

 (xv) construe and interpret the Plan and Options granted hereunder and prescribe and rescind rules and
regulations relating to the Plan; and 
  
 (xvi) make all other
determinations necessary or advisable for the administration of the Plan. 
  
 If
the Committee determines to issue a NSO, it shall take whatever actions it deems necessary, under Section 422 of the Code and the regulations promulgated thereunder, to ensure that such Option is not treated as an ISO. The interpretation and
construction by the Committee of any provisions of the Plan or of any Option granted under it shall be final unless otherwise determined by the Board. The Committee may from time to time adopt such rules and regulations for carrying out the Plan as
it may deem best. No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Option granted under it. 
  
 The Committee may select one of its members as its chairman, and shall hold meetings at such times and places as it may determine. Acts by a
majority of the Committee, approved in person at a meeting or in writing, shall be the valid acts of the Committee. All references in this Plan to the Committee shall mean the Board if no Committee has been appointed. From time to time the Board may
increase the size of the Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies however caused, or remove all members thereof and thereafter directly
administer the Plan. 
  
 Those provisions of the Plan that make express reference
to Rule 16b-3 shall apply to the Company only at such time as the Company’s Common Shares are registered under the Exchange Act, and then only to such persons as are required to file reports under Section 16(a) of the Exchange Act (a
“Reporting Person”). 
  
 To the extent that Options are to be qualified
as “performance-based” compensation within the meaning of Section 162(m) of the Code, the Plan shall be administered by a committee consisting of two or more “outside directors” as determined under Section 162(m) of the Code.

  
 The Committee, with the consent of any Participant, may in its discretion take
such actions as may be necessary to convert a Participant’s ISOs (or any instalments or portions of instalments thereof) that have not been exercised on the date of conversion into NSOs at any time prior to the expiration of such ISOs. These
actions may include, but not be limited to, accelerating the exercisability, extending the exercise period or reducing the exercise price of the appropriate instalments of optionee’s Options. At the time of such conversion, the Committee (with
the consent of the optionee) may impose these conditions on the exercise of the resulting NSOs as the Committee in its discretion may determine, provided that the conditions shall not be inconsistent with the Plan. Nothing in the Plan shall be
deemed to give any Participant the right to have such Participant ‘s ISOs converted into NSOs, and no conversion shall occur until and unless the Committee takes appropriate action. 
  
 14. Notices 
  
 All written notices to be given by the Participant to the Company may be delivered personally or by registered mail, postage prepaid, addressed as follows: 
  
 Adherex Technologies Inc. 
 2300 Englert Drive, Suite G 
 Durham, North Carolina 27713 USA 
 Attention: Corporate Secretary 
  

 8 

 Any notice given by the Participant pursuant to the terms of the Option shall not be effective until actually received by
the Company at the above address. Any notice to be given to the Participant shall be sufficiently given if delivered personally or by postage prepaid mail to the last address of the Participant on the records of the Company and shall be effective
seven days after mailing. 
  
 15. Corporate Action 
  
 Nothing contained in the Plan or in any agreement evidencing an Option shall be construed so
as to prevent the Company or any Related Corporation from taking corporate action which is deemed by the Company or the Related Corporation to be appropriate or in its best interest, whether or not such action would have an adverse effect on the
Plan. 
  
 16. Amendments 
  
 The Board shall have the right, in its sole discretion, to alter, amend or discontinue the
Plan from time to time and at any time. No such amendment or discontinuation, however, may, without the consent of the Participant, alter or impair the Participant’s rights or increase the Participant’s obligations under the Plan. Any
material amendment to the Plan or existing options is subject to prior approval of the Exchange and/or any other stock exchange on which Common Shares may then be listed and may require the approval of the Company’s shareholders. The Plan shall
expire 10 years after the Effective Date (except as to Options outstanding on that date). 
  
 17. Interpretation 
  
 In construing this
Plan, the singular shall include the plural and the masculine gender shall include the feminine and neuter, unless the context otherwise requires. 
  
 18. Government Regulation 
  
 The Company’s obligation to issue and deliver Common Shares under any Option is subject to: 
  

	(a)	the satisfaction of all requirements under applicable securities law in respect thereof and obtaining all regulatory approvals as the Company shall determine to be necessary or
advisable in connection with the authorization, issuance or sale thereof, including shareholder approval, if required; 

  

	(b)	the admission of such Common Shares to listing on the Exchange or any other stock exchange on which Common Shares may then be listed; and 

  

	(c)	the receipt from the Participant of such representations, agreements and undertakings as to future dealings in such Common Shares as the Company determines to be necessary or
advisable in order to safeguard against the violation of the securities law of any jurisdiction. 

  
 In this connection, the Company shall take all reasonable steps to obtain such approvals and registrations as may be necessary for the issuance of such Common Shares in compliance with applicable securities law and
for the listing of such Common Shares on any Exchange on which such Common Shares are then listed. 
  
 19. Withholding of Additional Income Taxes 
  
 Upon the exercise of an NSO for less than the Fair Market Value of the Common Shares or the making of a Disqualifying Disposition (as defined in Section 20), the Company, in accordance with Section 3402(a) of the 

  

 9 

 
Code and any applicable state statute or regulation, may require the Participant to pay to the Company additional withholding taxes in respect of the amount
that is considered compensation includable in such person’s gross income. With respect to the exercise of an Option, the Committee in its discretion may condition such event on the payment by the Participant of any such additional withholding
taxes. 
  
 At the sole and absolute discretion of the Committee, the holder of
Options may pay all or any part of the total estimated federal and state income tax liability arising out of the exercise or receipt of such Options or the making of a Disqualifying Disposition (each of the foregoing, a “Tax Event”) by
tendering already-owned Common Shares (except in the case of a Disqualifying Disposition) by directing the Company to withhold Common Shares otherwise to be transferred to the holder of such Options as a result of the exercise or receipt thereof in
an amount equal to the estimated federal and state income tax liability arising out of such event, provided that no more shares may be withheld than are necessary to satisfy the holder’s actual minimum withholding obligation with respect to the
exercise of Options. In such event, the holder of Options must, however, notify the Committee of his or her desire to pay all or any part of the total estimated federal and state income tax liability arising out of a Tax Event by tendering
already-owned Common Shares or having Common Shares withheld prior to the date that the amount of federal or state income tax to be withheld is to be determined. For purposes of this Section 19, Common Shares shall be valued at their Fair Market
Value on the date that the amount of the tax withholdings is to be determined. 
  
 20. Notice to Company of Disqualifying Disposition 
  
 Each
Employee who receives an ISO must agree to notify the Company in writing immediately after the Employee makes a Disqualifying Disposition (as defined below) of any Common Shares acquired pursuant to the exercise of an ISO. A “Disqualifying
Disposition” is any disposition (including any sale) of such Common Shares before either (a) two years after the date the Employee was granted the ISO, or (b) one year after the date the Employee acquired Common Shares by exercising the ISO. If
the employee has died before such stock is sold, these holding period requirements do not apply and no Disqualifying Disposition can occur thereafter. 
  
 21. Lock-up Agreement 
  
 Each recipient of securities hereunder agrees, in connection with the first registration with the United States Securities and Exchange Commission under the Securities Act of 1933, as amended, of the public sale of
the Company’s Common Shares, not to sell, make any short sale of, loan, grant any option for the purchase of or otherwise dispose of any securities of the Company (other than those included in the registration) without the prior written consent
of the Company or such underwriters, as the case may be, for such period of time (not to exceed 180 days) from the effective date of such registration as the Company or the underwriters, as the case may be, shall specify. Each such recipient agrees
that the Company may instruct its transfer agent to place stop-transfer notations in its records to enforce this Section 21. Each such recipient agrees to execute a form of agreement reflecting the foregoing restrictions as requested by the
underwriters managing such offering. 
  

 10 

 Appendix “A” 
 Adherex Technologies Inc. 
  
 Stock Option Plan 
  
 Stock Option Agreement

  
 Date:
                     
  
 Dear                     : 
  
 This is to advise you that you have been granted an option (the “option”) to
purchase              Common Shares at a price of $             per share under the Adherex Technologies Inc. Stock
Option Plan (the “Plan”). 
  
 This option expires on the later of seven
years following the date of grant, which appears on the right hand corner of this Notice, subject to other conditions of the Plan. 
  
 Subject to such expiry and the other provisions of the Plan, this option is exercisable in such amounts and at any time on or after: 
  
                  shares on
                    , 200    . 
  
 This option is subject to the terms of the Plan. 
  
 Please refer to the Plan explanatory document for any additional information regarding the exercise of your option and completion of the Option Exercise Form. Please
execute a copy of this grant where indicated below and deliver it to the Corporate Secretary of the Company c/o Adherex Technologies Inc., 2300 Englert Drive, Suite G, Durham, North Carolina 27713, to acknowledge your acceptance of the terms hereof.

  
 Sincerely, 
 ADHEREX TECHNOLOGIES INC. 
  
 Per:
                                 
  
 I have read, understood and accept the vesting provisions above and each of the terms and
conditions described in a document called Adherex Technologies Inc. Stock Option Plan and accept the foregoing grant of options on such basis. 
  
 Dated the      day of             ,
            . 
  

	
	  

	Signature

  
  

 Appendix “B” 
 Adherex Technologies Inc. 
  
 Stock Option Plan 
  
 Option Exercise Form

  
 Part 1: Identification 
  

			
	  

	  	  

	 Name of Participant
	  	 Service

	  

	  	  

	 Address
	  	 Office Telephone Number

	  

	  	  

	 Social Insurance Number
	  	 Home Telephone Number

  
 Part 2: Option 
  
 I hereby exercise the Option granted to me by letter dated
                             under the Plan. 
  
 Total number of option stock exercised:
                     
  

					
	 Method of payment:
	  	 (a)
	  	 Cash

	 	  	 (b)
	  	 Certified Cheque

	 	  	 (c)
	  	 Bank Draft

	 	  	 (d)
	  	 Money Order

  

			
	 	 	 Amount:
                                        
                            

		
	 	 	 Number of shares:
                     (value:
                    )

  
 I hereby acknowledge that I have read,
understood and accepted each and all the terms and conditions described in a document called “Adherex Technologies Inc. Stock Option Plan”. 
  

	
	Given at
                                        ,
this,      day of                     
	
	  

	Signature

 Appendix “C” 
 Adherex Technologies Inc. 
  
 Stock Option Plan 
  
 Adherex Technologies
Inc. 
 AMENDED AND RESTATED STOCK OPTION PLAN 
 NOTICE OF STOCK OPTION GRANT 
  

					
	  

	 	 	 	  

	 (Optionee and address)
  

	 	 	 	Grant Number
	  

	 	 	 	 

  
 You have been granted
an option to purchase Common Shares of Adherex Technologies Inc. (the “Company”), as follows: 
  

			
	 Date of Grant
	 	        _____________
		
	 Vesting Commencement Date
	 	        _____________
		
	 Exercise Price per Share
	 	        $____________
		
	 Total Number of Shares Granted
	 	        _____________
		
	 Total Exercise Price
	 	        _____________
		
	 Type of Option:
	 	                         Incentive Stock Option
		
	 	 	                         Nonstatutory Stock
Option
		
	 Term/Expiration Date:
	 	        7
Years/                    
		
	 Vesting Schedule:
	 	Subject to accelerated vesting as set forth in the Plan or in the Stock Option Agreement, (i) one-third of the shares subject to this option shall vest and may be exercised after the first
anniversary of the Vesting Commencement Date; (ii) one-third of the shares subject to this option shall vest and may be exercised after the second anniversary of the Vesting Commencement Date; and (iii) the remaining shares subject to this option
shall vest and may be exercised after the third anniversary of the Vesting Commencement Date.
		
	 Termination Period:
	 	Option may be exercised for up to 30 days after termination of director, employment or service provider relationship for any reason (unless specifically extended by the Board as set forth in
the Plan, but in no event later than the Expiration Date) and will terminate if not exercised prior to the end of such period.

 By your signature and the signature of the Company’s representative below, you and the
Company agree that this option is granted under and governed by the terms and conditions of the Adherex Technologies Inc., Amended and Restated Stock Option Plan (the “Plan”) and the Stock Option Agreement, all of which are attached and
made a part of this document. 
  
  

					
	Dated:                     	 	 	 	 
		
	OPTIONEE:	 	ADHEREX TECHNOLOGIES INC.
			
	
	 	By:	 	  

	 	 	Name:	 	  

	
 Print Name
	 	Title:	 	  

 STOCK OPTION AGREEMENT 
  
 1. Grant of Option. Adherex Technologies Inc., a Canadian corporation (the “Company”), hereby grants to the
Optionee named in the Notice of Grant (the “Optionee”), an option (the “Option”) to purchase a total number of Common Shares (the “Shares”) set forth in the Notice of Grant, at the exercise price per share set forth in
the Notice of Grant (the “Exercise Price”) subject to the terms, definitions and provisions of the Adherex Technologies Inc., Amended and Restated Stock Option Plan (the “Plan”) adopted by the Company, which is incorporated
herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Option. 
  
 If designated an Incentive Stock Option, this Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code, or any
successor provision. 
  
 2. Exercise of Option. This Option
shall be exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Grant and with the provisions of the Plan as follows: 
  
 (a) Right to Exercise. 
  

	 	(i)	This Option may not be exercised for a fraction of a share. 

  

	 	(ii)	In the event of the termination of Optionee’s relationship with the Company or any Related Corporations as an Employee, Director or Service Provider (for any reason
whatsoever), the exercisability of the Option is governed by Section 9 of the Plan, subject to the limitation contained in subsection 2(a)(iii) of this Stock Option Agreement. 

  

	 	(iii)	In no event may this Option be exercised after the Expiration Date set forth in the Notice of Grant. 

  
 (b) Method of Exercise. This Option shall be exercisable by written notice (in the form attached hereto as Exhibit
A) which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised and such other representations and agreements as may be required by the Company pursuant to the provisions of the
Plan. Such written notice shall be signed by the Optionee and shall be delivered in person or by registered mail to the Corporate Secretary of the Company. The written notice shall be accompanied by payment of the Exercise Price. This Option shall
be deemed to be exercised upon receipt by the Company of such written notice accompanied by the Exercise Price. 
  
 No Shares will be issued pursuant to the exercise of an Option unless such issuance and such exercise shall comply with all relevant provisions of law and
the requirements of any Exchange upon which the Shares may then be listed. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to the Optionee on the date on which the Option is exercised with respect to such
Shares. 

 3. Method of Payment. Payment of the Exercise Price shall be made as set forth in Section 6 of the
Plan. 
  
 4. Restrictions on Exercise. This Option may not
be exercised until such time as the Plan and the Shares covered by this Option have been approved by the shareholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares
would constitute a violation of any applicable federal, provincial or state securities or other applicable law or regulation, including any rule under Part 207 of Title 12 of the Code of Federal Regulations (“Regulation G”) as promulgated
by the Federal Reserve Board. As a condition to the exercise of this Option, the Company may require Optionee to make any representation and warranty to the Company as may be required by any applicable law or regulation. 
  
 5. Nontransferability of Option. This Option may not be transferred in
any manner whatsoever and may be exercised during the lifetime of Optionee only by Optionee. The terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee. 
  
 6. Term of Option. This Option may be exercised only within the term
set out in the Notice of Grant and the Plan, and may be exercised during such term only in accordance with the Plan and the terms of this Option. The limitations set out in Section 4 of the Plan regarding Options designated as Incentive Stock
Options and Options granted to more than ten percent (10%) stockholders shall apply to this Option. 
  
 7. Taxation Upon Exercise of Option. Optionee understands that, upon exercising a Nonstatutory Stock Option, he or she may recognize income for tax
purposes in an amount equal to the excess of the then Fair Market Value of the Shares over the exercise price. If the Optionee is an employee, the Company may be required to withhold from Optionee’s compensation, or collect from Optionee and
pay to the applicable taxing authorities an amount equal to a percentage of this compensation income. Additionally, the Optionee may at some point be required to satisfy tax withholding obligations with respect to the Disqualifying Disposition of an
ISO. The Optionee shall satisfy his or her tax withholding obligation arising upon the exercise of this Option by one or some combination of the following methods: (i) by cash payment, or (ii) out of Optionee’s current employment compensation.

  
 8. Tax Consequences. THERE ARE TAX CONSEQUENCES
RESULTING FROM THE EXERCISE OF THIS OPTION OR DISPOSITION OF THE SHARES ACQUIRED PURSUANT TO THIS OPTION. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES. 
  
 9. Successors and Assigns. The Company may assign any of its rights
under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Optionee
and his or her heirs, executors, administrators, successors and assigns. 

 10. Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted
by Optionee or by the Company forthwith to the Committee, which shall review such dispute at its next regular meeting. The resolution of such a dispute by the Committee shall be final and binding on the Company and on Optionee. 
  
 11. Severability. Should any provision of this Agreement be determined
by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable. 
  
 12. Notices. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or
upon deposit in the United States mail by registered mail, with postage and fees prepaid, addressed to the other party at its address as shown below beneath its signature, such address as may be set forth in Section 14 of the Plan or to such other
address as such party may designate in writing from time to time to the other party. 
  
 13. Further Instruments. The parties agree to execute such further instruments and to take such further action as may be reasonably necessary to carry out the purposes and intent of this Agreement. 

 
 14. Stock Plan. Optionee acknowledges receipt of a copy of the Plan
and represents that Optionee is familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof. Optionee has reviewed the Plan and this Option in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option and fully understands all provisions of the Option. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon
any questions arising under the Plan or this Option. 

 EXHIBIT A 
  
 EXERCISE NOTICE 
  

  

  

 Attention:
                     
  
 1. Exercise of Option. Effective as of today, the undersigned (“Optionee”) hereby elects to exercise Optionee’s option to purchase
                             Common Shares (the “Shares”) of Adherex Technologies Inc. (the
“Company”), under and pursuant to the Company’s Amended and Restated Stock Option Plan, as amended (the “Plan”) and the      Incentive      Nonstatutory
Stock Option Agreement dated                          ,
             (the “Option Agreement”). The purchase price for the Shares shall be $         as required by the Option
Agreement. Optionee herewith delivers to the Company the full Exercise Price for the Shares. 
  
 2. Representations of Optionee. Optionee acknowledges that Optionee has received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions.

  
 3. Compliance with Securities Laws. Optionee
understands and acknowledges that, notwithstanding any other provision of the Option Agreement to the contrary, the exercise of any rights to purchase any Shares is expressly conditioned upon compliance with the Securities Act of 1933, as amended
(the “Securities Act”), all applicable state, provincial or other federal securities laws and all applicable requirements of any Exchange or over the counter market on which the Common Shares may be listed or traded at the time of exercise
and transfer. Optionee agrees to cooperate with the Company to ensure compliance with such laws. 
  
 4. Rights as Stockholder. Until the stock certificate evidencing such Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the optioned Shares, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such stock certificate promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided
in the Plan. 
  
 5. Tax Consultation. Optionee understands
that Optionee may suffer adverse tax consequences as a result of Optionee’s purchase or disposition of the Shares. Optionee represents that Optionee has consulted with any tax consultants Optionee deems advisable in connection with the purchase
or disposition of the Shares and that Optionee is not relying on the Company for any tax advice. 

 6. Entire Agreement. The Plan and Notice of Grant/Option Agreement are incorporated herein by
reference. This Exercise Notice, the Plan and the Notice of Grant/Option Agreement executed and delivered to Company by Optionee shall constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter hereof, and is governed by North Carolina law except for that body of law pertaining to conflict of laws. 
  
  

							
	Submitted by:	 	Accepted by:
		
	OPTIONEE:	 	ADHEREX TECHNOLOGIES INC.
			
	  

	 	 By:
	 	  

	 	 	 	 	 Name:
	 	  

	 	 	 	 	 Title:
	 	  

				
	 Address:

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