Document:

Exhibit 4.12

 

Certificate No. 2015-   .

 

SECURED SUBORDINATE DEBENTURE

 

OF

 

TRIBUTE PHARMACEUTICALS CANADA INC.

 

 

TABLE OF CONTENTS

 

	
Article 1  INTERPRETATION
    	
3
    
	
1.1
    	
Definitions
    	
3
    
	
1.2
    	
Meaning of Outstanding
    	
4
    
	
1.3
    	
Non-Business Days
    	
4
    
	
1.4
    	
Currency
    	
5
    
	
1.5
    	
Headings
    	
5
    
	
1.6
    	
Governing Law
    	
5
    
	
1.7
    	
Singular, Gender, Legislation,   Etc.
    	
5
    
	
1.8
    	
Severability
    	
5
    
	
1.9
    	
Binding Effect
    	
5
    
	
1.1
    	
Time
    	
5
    
	
Article 2  The debenture
    	
6
    
	
2.1
    	
Indebtedness
    	
6
    
	
2.2
    	
Application of Payments.
    	
6
    
	
2.3
    	
Calculation and Payment of   Interest, etc.
    	
6
    
	
2.4
    	
Designation and Terms of   Debenture
    	
7
    
	
2.5
    	
Registration and Transfer
    	
7
    
	
2.6
    	
Ownership and Payment
    	
8
    
	
2.7
    	
Redemption
    	
9
    
	
2.8
    	
Change of Control
    	
9
    
	
2.9
    	
Termination Fee
    	
9
    
	
2.1
    	
Mutilation, Loss or Destruction   of Debenture
    	
9
    
	
Article 3  Security interest
    	
9
    
	
3.1
    	
Security Interest
    	
9
    
	
3.2
    	
Further Assurances
    	
10
    
	
3.3
    	
Registration
    	
10
    
	
Article 4  Covenants of the   Corporation
    	
10
    
	
4.1
    	
General Covenants
    	
10
    
	
4.2
    	
Audit
    	
12
    
	
Article 5  Default and Enforcement
    	
12
    
	
5.1
    	
Acceleration of Maturity on   Default
    	
12
    
	
5.2
    	
Waiver of Default
    	
13
    
	
5.3
    	
Costs
    	
14
    
	
5.4
    	
Remedies Cumulative
    	
14
    
	
Article 6  Consolidation and   Amalgamation
    	
14
    
	
6.1
    	
Successor Corporation
    	
14
    
	
6.2
    	
Successor to Possess Powers of   the Corporation
    	
14
    
	
Article 7  Notices
    	
15
    
	
7.1
    	
Notice
    	
15
    
	
Article 8  Supplement to Debenture
    	
15
    
	
8.1
    	
Supplement to Debenture
    	
15
    
	
Article 9  Satisfaction and   Discharge
    	
16
    
	
9.1
    	
Discharge
    	
16
    
	
Article 10  MISCELLANEOUS PROVISIONS
    	
16
    
	
10.1
    	
Debenture Duly Authorized,   Executed and Binding
    	
16
    
	
SCHEDULE “A” TRANSFER FORM
    	
18
    

 

 

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE OCTOBER 17, 2015.

 

SERIES A SECURED DEBENTURE

 

TRIBUTE PHARMACEUTICALS CANADA INC.

 

(a company existing under the laws of Ontario)

 

SERIES A SECURED DEBENTURE DUE JUNE 16, 2016

 

WHEREAS the Holder has agreed to subscribe for the Debenture issued by the Corporation;

 

NOW THEREFORE it is hereby covenanted, agreed and declared as follows:

 

ARTICLE 1

INTERPRETATION

 

1.1 Definitions

 

In this Debenture, unless something in the subject matter or context is inconsistent therewith:

 

“Business Day” means any day other than a Saturday, Sunday, legal holiday or a day on which banking institutions are closed in Toronto, Ontario;

 

“Change of Control” shall have the meaning given thereto in the Corporate Finance Manual of the TSX Venture Exchange;

 

“Corporation” means Tribute Pharmaceuticals Canada Inc., a corporation existing under the laws of Ontario and its successors and assigns;

 

“Date of Issue” means the date as of which this Debenture is issued;

 

“Debenture,” the “Debenture,” “herein,” “hereby,” “hereof,” “hereto,” “hereunder” and similar expressions mean or refer to this interest bearing, secured series A debenture and any debenture, deed or instrument supplemental or ancillary thereto and any schedules hereto or thereto and not to any particular article, section, subsection, clause, subclause or other portion hereof;

 

“Director” means a director of the Corporation, and reference to “action by the Directors” means action by the Directors as a board or, whenever duly empowered, by the executive committee of the board;

 

“Event of Default” means any of the events specified in Article 5 hereof;

 

“Holder” or “Debentureholder” has the meaning set out in Section 2.1;

 

3

 

“Interest Rate” has the meaning set out in Section 2.2;

 

“Lead Agent” means KES 7 Capital Inc.;

 

“Lien” means any security interest, mortgage, deed of trust, pledge, lien, charge, encumbrance, title retention agreement or analogous instrument or device, including the interest of each lessor under any capitalized lease and the interest of any bondsman under any payment or performance bond, in, of or on any assets or properties of a Person, whether now owned or hereafter acquired and whether arising by agreement or operation of law;

 

“Maturity Date” has the meaning set out in Section 2.1;

 

“Person” means an individual, corporation, partnership, unincorporated syndicate, unincorporated organization, trust, trustee, executor, administrator, or other legal representative, or any group or combination thereof;

 

“Redemption Fee” has the meaning set out in Section 2.7;

 

“Principal Sum” has the meaning set out in Section 2.1;

 

“Property” means, with respect to any Person, all or any portion of that Person’s undertaking, property and assets, both real and personal, including, for greater certainty, any share in the capital of a corporation or ownership interest in any other Person;

 

“Secured Assets” shall have the meaning ascribed to such term in Section 3.1; and

 

“Security” means all security held from time to time by or on behalf of the Holder, securing or intended to secure directly or indirectly the indebtedness, liability and obligations of this Debenture and includes all security described in Section 3.1.

 

“Subscription Agreement” means the Subscription Agreement dated as of June 16, 2015 between the Corporation and the Holder.

 

1.2 Meaning of Outstanding

 

This Debenture shall be deemed to be outstanding until it is indefeasibly re-paid in accordance with its terms and cancelled or delivered to the Corporation for cancellation, provided that where a new Debenture has been issued in substitution for a Debenture that has been mutilated, lost, stolen or destroyed, only one of such Debentures shall be counted for the purpose of determining the aggregate principal amount of Debentures outstanding.

 

1.3 Non-Business Days

 

Whenever any payment to be made hereunder shall be stated to be due, any period of time would begin or end, any calculation is to be made or any other action to be taken hereunder shall be stated to be required to be taken on a day other than a Business Day, such payment, period of time, or other action shall be taken on the next succeeding Business Day and an extension of time shall be included for the purposes of computation of interest thereon. Any payment made after 3:00 p.m. (Toronto time) on a Business Day shall be deemed to be made on the following Business Day.

 

4

 

1.4 Currency

 

All references to currency herein are to lawful money of Canada and all payments towards the Principal Sum shall be made in such currency.

 

1.5 Headings

 

The headings of all the Articles and Sections hereof and the table of contents are inserted for convenience of reference only and shall not affect the construction or interpretation of this Debenture.

 

1.6 Governing Law

 

This Debenture shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein and shall be treated in all respects as an Ontario contract.

 

1.7 Singular, Gender, Legislation, Etc.

 

Words importing the singular number only include the plural and vice versa, words importing any gender include any other gender and words importing persons include individuals, partnerships, associations, trusts, unincorporated organizations and corporations and any reference to any statute or other legislation shall be deemed to be a reference to such legislation as now enacted or as the same may from time to time be amended, re-enacted or replaced.

 

1.8 Severability

 

If any one or more of the provisions or parts thereof contained in this Debenture should be or become invalid, illegal or unenforceable, the remaining provisions or parts thereof contained herein shall be and shall be conclusively deemed to be, severable therefrom and the validity, legality or enforceability of such remaining provisions or parts thereof shall not in any way be affected or impaired by the severance of the provisions or parts thereof severed.

 

1.9 Binding Effect

 

This Debenture and all of its provisions shall enure to the benefit of the Holder, its successors and assigns, and shall be binding upon the Corporation and its successors and assigns. The expression the “Holder” as used herein shall include the Holder’s assigns whether immediate or derivative

 

1.10 Time

 

Time shall be of the essence of this Debenture.

 

5

 

ARTICLE 2

THE DEBENTURE

 

2.1 Indebtedness.

 

The Corporation, for value received, and in consideration of the premises hereby acknowledges itself indebted and promises and covenants to pay to             , the registered holder hereof (the “Holder”):

 

(1)                                                                                 the principal sum of $                (the “Principal Sum”) on June 16, 2016 (the “Maturity Date”) or sooner upon the occurrence of an Event of Default or upon such other date as specified herein at the principal office of the Holder ­­­­­­­­----                                 ;

 

(2)                                                                                 interest on any monies owing by the Corporation to the Holder hereunder and under the Security, all as specifically calculated hereunder and thereunder; and

 

(3)                                                                                 all other monies which may be owing by the Corporation to the Holder pursuant to this Debenture and under the Security.

 

2.2 Application of Payments.

 

The Holder shall, and the Corporation hereby authorizes the Holder to apply all payments made by the Corporation against the Principal Amount and interest thereon and other monies which are payable by the Corporation under this Debenture in the following order: (i) all expenses and other monies from time to time payable hereunder (other than the Principal Amount and interest thereon), (ii) interest payable hereunder, and (iii) the Principal Amount.

 

2.3 Calculation and Payment of Interest, etc.

 

(1)                                                                                 The Corporation shall pay interest on that portion of the Principal Sum outstanding from time to time from the date hereof up to and including the date of payment of the Principal Sum at the rate of 6% per annum (simple interest not compounded) (the “Interest Rate”), in like money at the said place, calculated on a calendar year basis and payable quarterly in arrears (less any tax required by law to be deducted), with the first payment being made on July 31, 2015. The quarterly interest due on the Principal Sum shall be computed for the actual number of days elapsed during the period in question on the basis of a year consisting of three hundred sixty five (365) days and shall be calculated by determining the average daily principal balance outstanding for each day of the period in question. The daily rate shall be equal to 1/365th times the Interest Rate.

 

6

 

(2)                                                                               All interest payable hereunder on becoming overdue shall bear interest at the rate of ten percent (10%) per annum until such overdue interest is paid in full. Overdue interest shall be payable forthwith without demand by the Holder.

 

(3)                                                                               The covenant of the Corporation to pay interest at the rate provided herein shall not merge in any judgement in respect of any obligation of the Corporation hereunder and such judgement shall bear interest in the manner set out in this Section 2.2 and be payable on the same days when interest (whether hereunder or otherwise) is payable hereunder.

 

(4)                                                                               For purposes of disclosure pursuant to the Interest Act (Canada), the annual rates of interest or fees to which the rates of interest or fees provided in this Debenture (and stated herein or therein, as applicable, to be computed on the basis of a three hundred sixty-five (365) day year or any other period of time less than a calendar year) are equivalent to the rates so determined multiplied by the actual number of days in the applicable calendar year and divided by three hundred sixty-five or (365) or such other period of time, respectively

 

2.4 Designation and Terms of Debenture

 

(1)                                                                               This Debenture is one of a series of like debentures, except as to principal amount, of the Corporation issued and to be issued for evidencing a principal sum not exceeding in the aggregate of $15,000,000 (the “ Series A 2015 Debentures”) all bearing interest at the rate and in the manner provided in Article 2 hereof. All Series A 2015 Debentures of the said series are to rank pari passu without any preference or priority one over another.

                                                                                                

(2)                                                                               This Debenture shall be issued and fully registered as a Series A 2015 Debenture in the denomination of $1,000,000, shall be dated as of the Date of Issue and shall mature on the Maturity Date.

 

2.5 Registration and Transfer

 

(1)                                                                                 The Corporation shall cause to be kept at a central register at the principal office of the Corporation in the city of Milton, Ontario, in which shall be entered the name and address of the Holder of the Debenture and particulars of the Debenture held by the Holder. Such registration shall be noted on the Debenture by the Corporation or other registrar designated by the Corporation.

 

(2)                                                                                 The Holder shall be entitled to have the Debenture transferred upon compliance with applicable securities laws, rules and regulations.

 

(3)                                                                                 A transferee of a Debenture shall, upon compliance with any and all requirements prescribed under this Debenture or by law and after a duly completed transfer form substantially in the form of Schedule “B” hereto is lodged with the Corporation, be entitled to be entered on a register as the owner of such Debenture.

 

7

 

(4)                                                                               For the purposes of this Section 2.5, a “transfer” shall include a transfer or pledge to a lender, pledgee, mortgagee or other encumbrancer for the purpose of giving collateral for a debt.

 

(5)                                                                               Neither the Corporation nor any other registrar shall be bound to take notice of or see to the execution of any trust, whether express, implied or constructive, in respect of this Debenture, and this Debenture may be transferred on the direction of the Holder thereof, whether named as trustee or otherwise, as though that person were also the beneficial owner thereof.

 

(6)                                                                               The Holder shall be entitled to inspect the register of Debentureholders at any time during normal business hours of the Corporation or other registrar and to make extracts therefrom.

 

(7)                                                                               The rights contained in any replacement Debenture resulting from a transfer shall rank in all respects pari passu with the rights contained in the Debenture which it replaces and such replacement Debenture shall for all purposes be taken and deemed to be the Debenture as originally issued.

 

(8)                                                                               The Holder of this certificate shall have the benefit of all representations, warranties and covenants contained in the Subscription Agreement whether such Holder was a party to such Agreement.

 

2.6 Ownership and Payment

 

(1)                                                                                 Subject to any applicable law, the person in whose name any Debenture is registered shall for all the purposes hereof be and be deemed to be the owner thereof and payment of or on account of the Principal Sum and accrued interest, shall be made only to or upon the order in writing of such person and such payment shall be a good and sufficient discharge to the Corporation and any other registrar for the amount so paid.

 

(2)                                                                                 The registered holder for the time being of any Debenture shall be entitled to the Principal Sum and all accrued interest, free from all equities or rights of set off or counterclaim between the Corporation and the original or any intermediate holder thereof (except any equities of which the Corporation is required to take notice by statute or by order of a court of competent jurisdiction) and all persons may act accordingly, and the payment to any such holder of any such Principal Sum and all accrued interest shall be a good discharge to the Corporation for the same, and neither the Corporation nor any registrar shall be bound to enquire into the title of any such holder.

 

8

 

2.7 Redemption

 

The Series A 2015 Debentures may be redeemed at any time by the Corporation subject to the payment to the Holder of the Principal Sum plus any accrued and unpaid interest and a redemption fee equal to 4.0% of the Principal Sum (the “Redemption Fee”). On any redemption the Principal Sum plus any accrued and unpaid interest and the Redemption Fee will be payable forthwith by the Corporation to the Lead Agent, on behalf of the Holder or as otherwise determined by the Lead Agent, acting in its sole discretion.

 

2.8 Change of Control

 

In the event of a Change of Control of the Corporation the Series A 2015 Debentures shall be deemed to be automatically redeemed and the Principal Sum plus any accrued and unpaid interest, the Redemption Fee and all other amounts due hereunder or under the Security will become immediately due and payable to the Lead Agent, on behalf of the Holder or as otherwise determined by the Lead Agent, acting in its sole discretion immediately following such Change of Control.

 

2.9 Termination Fee

 

At the Maturity Date or upon the acceleration of the obligations under Section 5.1 hereof the Corporation will pay a termination fee to the Holder in an amount equal to 2.0% of the Principal Sum.

 

2.10 Mutilation, Loss or Destruction of Debenture

 

In case this Debenture shall become mutilated or be lost, destroyed or stolen, the Corporation, in its discretion, may issue a new Debenture of like date and tenor in substantially the same form upon surrender and cancellation of the mutilated Debenture or, in the case of a lost, destroyed or stolen Debenture, in lieu of and in substitution for the same. In the case of loss or destruction or theft, the applicant for a substituted Debenture shall furnish to the Corporation such evidence of such loss or destruction or theft as shall be satisfactory to the Corporation in its discretion and shall also furnish an indemnity or letter of credit of a Canadian chartered bank or such other indemnity as is satisfactory to the Corporation in its discretion. The applicant for a new or substituted Debenture shall pay all expenses incidental to the issuance of such new or substituted Debenture.

 

ARTICLE 3

SECURITY INTEREST

 

3.1 Security Interest

 

As general and continuing security for the due payment of the Debenture by the Corporation to the Holder, the Holder shall be granted a general security agreement from the Corporation in favour of the Holder, constituting a Lien on all of the present and future Property of the Corporation (the “Secured Assets”) pari passu with all other Holders of Debentures but subordinated to the security granted from time to time by the Corporation pursuant to the credit agreement dated as of August 8, 2013, as amended, (the “Senior Credit Agreement”) entered into by and between the Corporation and each of the financial institutions from time to time party thereto (individually each a “Lender” and collectively “Lenders”) and SWK Funding LLC, a Delaware limited liability company, in its capacity as administrative agent for the other Lenders (the “Senior Debt”).

 

9

 

3.2 Further Assurances

 

The Corporation shall, subject as herein provided, forthwith and from time to time, execute and do or cause to be executed and done all deeds, documents and things which, in the opinion of the Holder or its solicitor, are necessary or advisable for giving the Holder (so far as may be possible under the local laws of the places where the Secured Assets are situated) a valid security interest of the nature herein specified upon any undertaking, property, rights and assets, whether now owned or hereafter acquired, intended to be included therein and a valid cession and transfer thereof for and to secure the payment of the indebtedness, liabilities and obligations of the Corporation under this Debenture and the Security.

 

3.3 Registration

 

The Corporation shall record, file or register this Debenture, and all other instruments of further assurance (including financial statements), without delay, wherever and whenever in the opinion of the Lead Agent or its solicitor it would be necessary or advisable to perfect, preserve and protect the Lien hereof, the rights of the Holder hereunder for such action to be taken, under the provisions of any and all statutes providing for or permitting the registration of the Security in the Province of Ontario and shall renew such recordings, filings, enterings or registrations from time to time as and when required to keep them in full force and effect.

 

ARTICLE 4

COVENANTS OF THE CORPORATION

 

4.1 General Covenants

 

The Corporation hereby represents and warrants that, so long as this Debenture is in force and except as otherwise permitted with the Holder’s prior written consent:

 

(1)                                                                               it will duly and punctually pay to the Holder the Principal Sum, the interest thereon and all other sums payable hereunder on the dates and at the places, and in the manner provided for herein;

 

(2)                                                                               it will at all times maintain its corporate existence; will carry on and conduct, and will cause to be carried on and conducted, its business in a proper, efficient and businesslike manner and in accordance with good business practice;

 

10

 

(3)                                                                               other than in respect of the Senior Debt, it will not grant or permit to exist any Liens over any of its property or assets except Permitted Liens (as defined in the Security);

 

(4)                                                                               it will fully and effectually maintain and keep maintained the security granted to the Holder as a valid and effective security at all times;

 

(5)                                                                               it will do, observe and perform all of its obligations and all matters and things necessary or expedient to be done, observed or performed under or by virtue of any lease agreement, joint venture agreement, license, or other contract, so long as the same is, in the opinion of the Directors, acting reasonably, of commercial value, in order to preserve, protect and maintain the rights of the Corporation and will not suffer or permit any default for which any such lease, agreement, joint venture agreement, license, or contract might be terminated or for which any other party thereto might be relieved of any of its obligations thereunder or for which any obligations of any such party might be reduced;

 

(6)                                                                               it will not sell or otherwise dispose of by conveyance, transfer, lease or otherwise any of its assets or undertaking other than in the ordinary course of business;

 

(7)                                                                               it will keep and maintain proper books of account and records accurately covering all aspects of the business affairs of the Corporation;

 

(8)                                                                               it will at all times promptly observe, perform, execute and comply with all applicable laws, rules, requirements, orders, directions, by-laws, ordinances, work orders and regulations of every governmental authority and agency whether federal, provincial, state, municipal or otherwise, except where any such non-compliance would not have a material adverse effect on the Corporation and its subsidiaries, taken as a whole; and

 

(9)                                                                               it will give the Holder prompt written notice of the occurrence of any Event of Default, or any event or circumstance that, with the giving of notice or lapse of time or both, would constitute an Event of Default.

 

11

 

4.2 Audit

 

The Corporation shall furnish to the Debentureholder a copy of the consolidated audited annual and quarterly financial statements of the Corporation and of the report, if any, of the Corporation’s Auditors thereon at the same time as they are furnished to the shareholders of the Corporation.

 

ARTICLE 5

DEFAULT AND ENFORCEMENT

 

5.1 Acceleration of Maturity on Default

 

Each of the following shall constitute an event of default (hereinafter referred to as an “Event of Default”):

 

(1)                                                                                 if the Corporation does not pay when due any amount of the Principal Sum or interest or other amount payable by it under the Debenture at the place and in the currency in which such amount is expressed to be payable;

 

(2)                                                                                 any default shall occur under the terms applicable to any indebtedness (other than this Debenture) in an aggregate principal amount (for all such indebtedness so affected and including undrawn committed or available amounts and amounts owing to all creditors under any combined or syndicated credit arrangement) exceeding $250,000 and such default shall (a) consist of the failure to pay such indebtedness when due (after giving effect to applicable grace periods), whether by acceleration or otherwise, or (b) accelerate the maturity of such indebtedness or permit the holder or holders thereof, or any trustee or agent for such holder or holders, to cause such indebtedness to become due and payable prior to its expressed maturity;

 

(3)                                                                                 if the Corporation makes a general assignment for the benefit of creditors; or any proceeding is instituted by it seeking relief as debtor, or to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding-up, reorganization, arrangement, adjustment or composition of it or its debts or for an order for similar relief under any law relating to bankruptcy, insolvency, reorganization or relief of debtors (including under any statutes relating to the incorporation of companies) or seeking appointment of a receiver or trustee, or other similar official for it or for any substantial part of its properties or assets; or any corporate or partnership action is taken to authorize any of the actions referred to in this Section 5.1(3);

 

(4)                                                                                 if any proceedings are instituted against the Corporation seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding-up, reorganization, arrangement, adjustment or composition of it or its debts or an order for similar relief under any law relating to bankruptcy, insolvency, reorganization or relief of debtors (including under any statutes relating to the incorporation of companies) or seeking appointment of a receiver, trustee or other similar official for it or for any substantial part of its properties or assets;

 

12

 

(5)                                                                                 if any proceedings with respect to the Corporation are commenced under the Companies’ Creditors Arrangement Act (Canada);

 

(6)                                                                                 if the Corporation takes any corporate proceedings for its dissolution, liquidation or if the corporate existence of the Corporation shall be terminated by expiration, forfeiture, order or otherwise, or if the Corporation ceases or threatens to cease, to carry on all or a substantial part of its business;

 

(7)                                                                                 if a petition is filed for the winding up of the Corporation;

 

(8)                                                                                 if an Event of Default (as such term is defined in the Senior Credit Agreement) occurs which is not waived by the Lenders;

 

(9)                                                                                 if any execution, sequestration, extent or any other process of any court becomes enforceable against the Corporation or if a distress or analogous process is levied upon the property of the Corporation or any part thereof, provided that such execution, sequestration, extent or other process is not in good faith being contested by the Corporation;

 

(10)                                                                          if the Corporation ceases or threatens to cease to carry on its business or if the Corporation commits or threatens to commit any act of bankruptcy;

 

(11)                                                                          if the Corporation defaults in the performance or observance of any term, condition, covenant, representation or warranty contained in this Debenture or in any of the Security documents; or

 

(12)                                                                          if the Security, or any part thereof, ceases at any time after its execution and delivery to constitute a second lien against the assets of the Corporation.

 

Should an Event of Default occur and be continuing, the Holder may in its sole discretion declare the Principal Sum, any accrued interest thereon of this Debenture, the Termination Fee and all other sums due hereunder and under the Security to be due and payable on demand, and the same shall forthwith become immediately due and payable provided that, upon the occurrence of any Event of Default described in Sections 5.1(3), (4) or (5) hereof no notice or declaration shall be required and all such amounts shall become immediately due and payable.

 

5.2 Waiver of Default

 

The Holder shall have the power to waive any default or to cancel any declaration made by the Holder upon such terms and conditions as the Debentureholder shall prescribe provided always that no waiver, act or omission of the Holder shall extend to or be taken in any manner whatsoever to affect any subsequent breach or default of the same or any other provision of this Debenture.

 

13

 

5.3 Costs.

 

The Corporation agrees to pay to the Holder forthwith upon demand all costs, charges and expenses, including reasonable legal fees on a full indemnity basis, of or incurred by the Holder in recovering or enforcing payment of any of the monies owing hereunder, together with interest thereon at the rate as herein set forth in this Debenture from the date of incurring such costs, charges and expenses until paid.

 

5.4 Remedies Cumulative

 

No remedy herein conferred upon or to the Debentureholder is intended to be exclusive of any other remedy, but each and every other remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now existing or hereafter to exist by law or by statute.

 

ARTICLE 6

CONSOLIDATION AND AMALGAMATION

 

6.1 Successor Corporation

 

The Corporation shall not enter into any transaction whereby all or substantially all of its undertaking, property and assets would become the property of any other corporation (herein called a “successor corporation”) whether by way of reorganization, reconstruction, consolidation, amalgamation, merger, transfer, sale or otherwise, unless (i) such transaction constitutes a Change of Control and the Corporation complies with Section 2.8 or (ii) prior to or contemporaneously with the consummation of such transaction, the Holder’s written consent has been obtained and, the Corporation and the successor corporation shall have executed such instruments and done such things as, in the opinion of the Holder’s solicitor, are necessary or advisable to establish that upon the consummation of such transaction:

 

(1)                                                                                 the successor corporation will have assumed all the covenants and obligations of the Corporation under this Debenture; and

 

(2)                                                                                 this Debenture will be a valid and binding obligation of the successor corporation entitling the Holder, as against the successor corporation, to all the rights of the Debentureholder under this Debenture.

 

6.2 Successor to Possess Powers of the Corporation

 

Whenever the conditions of Section 6.1 hereof shall have been duly observed and performed, the successor corporation shall possess and from time to time may exercise each and every right and power of the Corporation under this Debenture in the name of the Corporation or otherwise and any act or proceeding by any provision hereof required to be done or performed by any Director or officer of the Corporation may be done and performed with like force and effect by the like directors or officers of the successor corporation.

 

14

 

ARTICLE 7

NOTICES

 

7.1 Notice

 

Any notice by one party to the other party under the provisions hereof shall be valid and effective if delivered, sent by e-mail, facsimile or mailed by prepaid registered mail to the other party at:

 

In the case of the Corporation:

 

Tribute Pharmaceuticals Canada Inc.

 

151 Steeles Avenue East

Milton, Ontario

L9T 1Y1

 

Attention:

Fax Number:

e-mail:

 

In the case of the Holder:

 

at the address set forth on the register of holders required to be maintained pursuant to Section 2.4 hereof.

 

and, subject as provided in this Section 7.1, shall be deemed to have been given at the time of delivery or sending by facsimile or electronic transmission or on the fifth Business Day after mailing. Any delivery made or facsimile or electronic transmission sent on a day other than a Business Day or after 4:00 p.m. (Toronto time) on a Business Day, shall be deemed to be received on the next following Business Day. In the case of disruption in postal services, any notice shall be delivered or sent by facsimile or electronic transmission. Either party may from time to time notify the other party of a change in address or facsimile number which thereafter, until changed by like notice, shall be the address or facsimile number of such party giving notice for all purposes of this Debenture.

 

ARTICLE 8

SUPPLEMENT TO DEBENTURE

 

8.1 Supplement to Debenture

 

From time to time the Corporation shall, when so directed by the Holder, execute, acknowledge and deliver by their proper officers deeds or instruments supplemental hereto, which thereafter shall form part hereof, for any one or more of the following purposes:

 

15

 

(1)                                                                                 making such provisions not inconsistent with this Debenture as may be necessary or desirable with respect to matters or questions arising hereunder, including the making of any modifications in the form of the Debenture which do not affect the substance thereof and which provisions and modifications will not, in the opinion of the Holder’s solicitor, be prejudicial to the interests of the Holder;

 

(2)                                                                                 evidencing the succession or the successive successions of other corporations to the Corporation and the covenants of and obligations assumed by any such successor in accordance with the provisions of this Debenture; and

 

(3)                                                                                 for any other purpose not inconsistent with the terms of this Debenture.

 

The Corporation may correct any typographical or other manifest errors in this Debenture, provided that in the opinion of the Holder such corrections will not prejudice the rights of the Holder hereunder and may execute all such documents as may be necessary to correct such errors.

 

ARTICLE 9

 

SATISFACTION AND DISCHARGE

 

9.1 Discharge

 

Upon the Principal Sum and interest (including interest on amounts in default, if any) on this Debenture and all other money payable hereunder having been paid or satisfied, the Debentureholder shall forthwith, at the request of the Corporation, release and discharge this Debenture. Upon such request, the Debentureholder shall execute and deliver such instruments as it shall be advised by the Corporation’s counsel are requisite to release the Corporation from its covenants herein contained.

 

ARTICLE 10

 

MISCELLANEOUS PROVISIONS

 

10.1 Debenture Duly Authorized, Executed and Binding

 

The Corporation represents and warrants to and in favour of the Holder that this Debenture has been issued in accordance with resolutions of the directors of the Corporation, and all other matters and things have been done and performed so as to authorize and make the creating and issue of the Debenture and its execution and delivery legal, valid and binding in accordance with the constitutional documents of the Corporation and all other statutes and laws in that behalf, and this Debenture is given as security for unconditional and absolute payment of the Principal Amount and all other monies entitled to the benefit of the security hereby created, with interest thereon at the rate aforesaid, payable in the manner and at the times and places hereinbefore set forth and also as security for the due performance of all obligations of the Corporation hereunder and for the purposes and subject to the conditions, provisions, covenants and stipulations herein expressed.

 

The Debenture shall be signed by a duly authorized representative of the Corporation. Notwithstanding any change in any of the persons holding office between the time of the actual signing of the Debenture and the certification and delivery of such Debenture, any Debenture signed as aforesaid shall be valid and binding upon the Corporation.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

16

 

IN WITNESS WHEREOF the Corporation has caused this Debenture to be signed by its Chief Financial Officer as of the Date of Issue, being June 16, 2015.

 

	
 
    	
 
    	
TRIBUTE   PHARMACEUTICALS CANADA INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Per:
    	
 
    
	
 
    	
 
    	
 
    	
Name: Steven Goldman
    
	
 
    	
 
    	
 
    	
Title: Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
I have authority to   bind the Corporation
    

 

17

 

SCHEDULE “A”

 

TRANSFER FORM

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to (name of transferee) $ (indicate principal amount of debentures being transferred) principal amount Secured Series A Debenture of Tribute Pharmaceuticals Canada Inc. (the “Corporation”) represented by certificate(s) no.  (indicate number(s) of certificate(s) being transferred) and irrevocably constitutes and appoints (indicate name of transferee) attorney to transfer such debenture(s) on the securities register of the Corporation, with full power of substitution.

 

DATED:

 

	
 
    	
 
    	
IF TRANSFEROR IS A   CORPORATION:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

Signature guaranteed:

 

The signature must be guaranteed by a Canadian chartered bank or a member of a recognized stock exchange or other entity acceptable to the Corporation.

 

18Exhibit 10.53

 

STELLAR PHARMACEUTICALS INC.

 

AMENDED AND RESTATED STOCK OPTION PLAN

 

The Corporation hereby amends and restates the Plan as follows:

 

1. Purpose of the Plan

 

1.1 The purpose of the Plan is to attract, retain and motivate persons of training, experience and leadership to the Corporation and its Subsidiaries, including their directors, officers and employees, and to advance the interests of the Corporation by providing such persons with the opportunity, through share options, to acquire an increased proprietary interest in the Corporation.

 

2. Defined Terms

 

Where used herein, the following terms shall have the following meanings, respectively:

 

2.1 “Affiliate” means an affiliate, as such term is defined in Subsection 1(2) of the Securities Act (Ontario), of the Corporation.

 

2.2 “Associate” means an associate, as such term is defined in Subsection 1(1) of the Securities Act (Ontario).

 

2.3 “Board” means the board of directors of the Corporation or, if established and duly authorized to act, the Executive Committee of the board of directors of the Corporation.

 

2.4 “Committee” means the Human Resources Committee of the Board provided that, if at any time the Committee has not been constituted, the Committee shall be deemed for all purposes of the Plan to be the Board.

 

2.5 “Consultant” means an individual (or an Eligible Corporation) who:

 

(a)                                                                                 provides ongoing consulting services to the Corporation or an Affiliate under a written contract;

 

(b)                                                                                 possesses technical, business or management expertise of value to the Corporation or an Affiliate;

 

(c)                                                                                  spends a significant amount of time and attention on the business and affairs of the Corporation or an Affiliate; and

 

(d)                                                                                 has a relationship with the Corporation or an Affiliate that enables the individual to be knowledgeable about the business and affairs of the Corporation.

 

2.6 “Corporation” means Stellar Pharmaceuticals Inc. and includes any successor corporation thereof.

 

2.7 “director” means a director, senior officer or Management Company Employee of the Corporation or a director, senior officer or Management Company Employee of a Subsidiary.

 

2.8 “Discounted Market Price” means the Market Price less the discount set forth below, subject to a minimum price of $0.10:

 

	
Closing Price
    	
 
    	
Discount
    	
 
    
	
Up to $0.50
    	
 
    	
25
    	
%
    
	
$0.51 to $2.00
    	
 
    	
20
    	
%
    
	
Above $2.00
    	
 
    	
15
    	
%
    

 

1

 

2.9 “Eligible Corporation” means a corporation all of the issued and outstanding voting shares of which are beneficially owned, directly or indirectly, by an Eligible Person.

 

2.10 “Eligible Person” means a bona fide:

 

(a)                                                                                 director;

 

(b)                                                                                 employee;

 

(c)                                                                                  Management Company Employee;

 

(d)                                                                                 Consultant; or

 

(e)                                                                                  Eligible Corporation.

 

2.11 “employee” means:

 

(a)                                                                                 an individual who is considered an employee under the Income Tax Act (Canada); or

 

(b)                                                                                 an individual who works full-time for the Corporation providing services normally provided by an employee and who is subject to the same control and direction by the Corporation over the details and methods of work as an employee of the Corporation, but for whom income tax deductions are not made at source.

 

2.12 “Expiry Time” means, with respect to any Option, the close of business on the date upon which such Option will expire or within ten (10) trading days immediately following, a date upon which such Eligible Person is prohibited from exercising such Option due to a black-out period or other trading restriction imposed by the Corporation, then the Expiry Time of such Option shall be automatically extended to the tenth (10th) trading day following the date the relevant black-out period or other trading restriction imposed by the Corporation is lifted, terminated or removed;.

 

2.13 “Insider” means an insider, as such term is defined in Subsection 1(1) of the Securities Act (Ontario), of the Corporation, other than a person who falls within that definition solely by virtue of being a director or senior officer of a Subsidiary, and includes any Associate of such Insider.

 

2.14 “Investor Relations Activities” means any activities or oral or written communications, by or on behalf of the Corporation or shareholder of the Corporation, that promote or reasonably could be expected to promote the purchase or sale of securities of the Corporation, but does not include:

 

(a)                                                                                 the dissemination of information provided, or records prepared, in the ordinary course of business of the Corporation:

 

(i)                                                                                                                                     to promote the sale of products or services of the Corporation; or

 

(ii)                                                                                                                                  to raise public awareness of the Corporation,

 

that cannot reasonably be considered to promote the purchase or sale of securities of the Corporation;

 

(b)                                                                                 activities or communications necessary to comply with the requirements of:

 

(i)                                                                                                                                     applicable securities laws,

 

(ii)                                                                                                                                  the requirements of an applicable stock exchange or the by-laws, rules or other regulatory instruments of any other self regulatory body or exchange having jurisdiction over the Corporation;

 

(c)                                                                                  communications by a publisher of, or writer for, a newspaper, magazine or business or financial publication, that is of general and regular paid circulation, distributed only to subscribers to it for value or to purchasers of it, if

 

(i)                                                                                                                                     the communication is only through the newspaper, magazine or publication, and

 

(ii)                                                                                                                                  the publisher or writer receives no commission or other consideration other than for acting in the capacity of publisher or writer; or

 

2

 

(d)                                                                                 activities or communications that may be otherwise specified by any applicable stock exchange.

 

2.15 “Management Company Employee” means an individual employed by a company providing management services to the Corporation, which are required for the ongoing successful operation of the business enterprise of the Corporation, but excluding an individual or company engaged in Investor Relations Activities.

 

2.16 “Market Price” at any date in respect of the Shares means the last closing price of the Shares on the OTC Markets Group before the issuance of a news release disclosing the transaction(s), pursuant to which the Shares are intended to be issued.

 

2.17 “Option” means an option to purchase Shares granted to an Eligible Person under the Plan.

 

2.18 “Option Price” means the price per Share at which Shares may be purchased under an Option, as the same may be adjusted from time to time in accordance with Article 8 hereof.

 

2.19 “Optioned Shares” means the Shares issuable pursuant to an exercise of Options.

 

2.20 “Optionee” means an Eligible Person to whom an Option has been granted and who continues to hold such Option.

 

2.21 “Plan” means the Stock Option Plan of the Corporation, as the same may be further amended or varied from time to time.

 

2.22 “Shares” means the common shares of the Corporation or, in the event of an adjustment contemplated by Article 8 hereof, such other shares or securities to which an Optionee may be entitled upon the exercise of an Option as a result of such adjustment.

 

2.23 “Subsidiary” means any corporation which is a subsidiary, as such term is defined in Subsection 1(4) of the Securities Act (Ontario), of the Corporation.

 

3. Administration of the Plan

 

3.1 The Plan shall be administered by the Committee.

 

3.2 The Committee shall have the power, where consistent with the general purpose and intent of the Plan and subject to the specific provisions of the Plan:

 

(a)                                                                                 to establish policies and to adopt rules and regulations for carrying out the purposes, provisions and administration of the Plan;

 

(b)                                                                                 to interpret and construe the Plan and to determine all questions arising out of the Plan or any Option, and any such interpretation, construction or determination made by the Committee shall be final, binding and conclusive for all purposes;

 

(c)                                                                                  to determine the number of Shares covered by each Option;

 

(d)                                                                                 to determine the Option Price of each Option;

 

(e)                                                                                  to determine the time or times when Options will be granted and exercisable;

 

(f)                                                                                   to determine if the Shares which are issuable on the exercise of an Option will be subject to any restrictions upon the exercise of such Option; and

 

(g)                                                                                  to prescribe the form of the instruments relating to the grant, exercise and other terms of Options.

 

3.3 A member of the Committee may be entitled to participate in the Plan only if an Option to such member is granted, and the terms and provisions thereof determined, by the Committee without such member of the Committee participating in any manner whatsoever in the granting of an Option to, or the determinations made with respect to, such member of the Committee or to such Option.

 

3.4 The Committee may, in its discretion, require as conditions to the grant or exercise of any Option that the Optionee shall have:

 

(a)                                                                                 represented, warranted and agreed in form and substance satisfactory to the Corporation that such Optionee is acquiring and will acquire such Option and the Shares to be issued upon the exercise thereof or, as the case may be, is acquiring such Shares, for such Optionee’s own account, for investment and not with a view to or in connection with any distribution, that such Optionee has had access to such information as is necessary to enable such Optionee to evaluate the merits and risks of such investment and that such Optionee is able to bear the economic risk of investing in the Shares;

 

3

 

(b)                                                                                 agreed to restrictions on transfer in form and substance satisfactory to the Corporation and to an endorsement on any option agreement or certificate representing the Shares making appropriate reference to such restrictions; and

 

(c)                                                                                  agreed to indemnify the Corporation in connection with the foregoing.

 

3.5 Any Option granted under the Plan shall be subject to the requirement that, if at any time counsel to the Corporation shall determine that the listing, registration or qualification of the Shares subject to such Option upon any securities exchange or under any law or regulation of any jurisdiction, or the consent or approval of any securities exchange or any governmental or regulatory body, is necessary as a condition of, or in connection with, the grant or exercise of such Option or the issuance or purchase of Shares thereunder, such Option may not be accepted or exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained on conditions acceptable to the Committee. Nothing herein shall be deemed to require the Corporation to apply for or to obtain such listing, registration, qualification, consent or approval.

 

3.6 If the Corporation is required under the Income Tax Act (Canada) or any other applicable law to make source deductions in respect of employee stock option benefits and to remit to the applicable governmental authority an amount on account of tax on the value of the taxable benefit associated with the issuance of common shares on exercise of Options, then the Optionee shall:

 

(a)                                                                                 pay to the Corporation, in addition to the exercise price for the Options, sufficient cash as is reasonably determined by the Corporation to be the amount necessary to permit the required tax remittance;

 

(b)                                                                                 authorize the Corporation, on behalf of the Optionee, to sell in the market on such terms and at such time or times as the Corporation determines a portion of the common shares being issued upon exercise of the Options to realize cash proceeds to be used to satisfy the required tax remittance; or

 

(c)                                                                                  make other arrangements acceptable to the Corporation to fund the required tax remittance.

 

4. Shares Subject to the Plan

 

4.1 Options may be granted in respect of authorized and unissued Shares, provided that the aggregate number of Shares reserved for issuance upon the exercise of all Options granted under the Plan, subject to any adjustment of such number pursuant to the provisions of Article 8 hereof, shall not exceed 10% of the number of Shares which are issued and outstanding at the date of such grant. Optioned Shares in respect of which Options are not exercised shall be available for subsequent Options. No fractional Shares may be purchased or issued under the Plan.

 

5. Eligibility, Grant and Terms of Options

 

5.1 Options may be granted to any Eligible Person in accordance with Section 5.2 hereof. If an Option is granted to an Eligible Corporation, such Eligible Corporation shall, as a condition precedent to such grant, execute and deliver any document or instrument required by any applicable stock exchange.

 

5.2 Options may be granted by the Corporation pursuant to the recommendations of the Committee from time to time provided and to the extent that such decisions are approved by the Board.

 

5.3 Subject as herein and otherwise specifically provided in this Article 4.1, the number of Shares subject to each Option, the Option Price, the Expiry Time, the extent to which such Option is exercisable from time to time during the term of the Option and other terms and conditions relating to such Option shall be determined by the Committee.

 

5.4 Subject to any adjustments pursuant to the provisions of Article 8 hereof, the Option Price of any Option shall in no circumstances be lower than the Discounted Market Price on the date on which the grant of the Option is approved by the Committee. If, as and when any Shares have been duly purchased and paid for under the terms of an Option, such Shares shall be conclusively deemed allotted and issued as fully paid and non-assessable Shares at the price paid therefor.

 

5.5 The term of an Option shall not exceed five years from the date of the grant of the Option.

 

5.6 No Options shall be granted to any Optionee if the total number of Shares issuable to such Optionee under the Plan, together with any Shares reserved for issuance to such Optionee under options for services or any other stock option plans, would exceed 5% of the issued and outstanding Shares.

 

5.7 An Option shall be personal to the Optionee and shall be non-assignable and non-transferable (whether by operation of law or otherwise), except as between a corporation, all of the issued and outstanding voting shares of which are beneficially owned, directly or indirectly, by such Optionee, and such Optionee, or as otherwise provided for herein. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of an Option contrary to the provisions of the Plan, or upon the levy of any attachment or similar process upon an Option, the Option shall, at the election of the Corporation, cease and terminate and be of no further force or effect whatsoever.

 

4

 

5.8 No Options shall be granted to any Optionee if such grant could result, at any time, in:

 

(a)                                                                                 the number of Shares reserved for issuance pursuant to Options or other stock options granted to Insiders exceeding 10% of the issued and outstanding Shares;

 

(b)                                                                                 the issuance to Insiders, within a one-year period, of a number of Shares exceeding 10% of the issued and outstanding Shares;

 

(c)                                                                                  the issuance to any one Insider and such Insider’s associates, within a one-year period, of a number of Shares exceeding 5% of the issued and outstanding Shares;

 

(d)                                                                                 the issuance to any one Optionee within a one-year period, of a number of Shares purchasable upon the exercise of Options granted during such a one-year period exceeding 5% of the issued and outstanding Shares;

 

(e)                                                                                  the number of Shares reserved for issuance pursuant to Options granted to Consultants exceeding 2% of the issued and outstanding Shares; and

 

(f)                                                                                   the number of Shares reserved for issuance to persons employed in Investor Relation Activities exceeding 2% of the issue and outstanding Shares;

 

unless permitted otherwise by any applicable stock exchange.

 

5.9 In the event that no specific determination is made by the Committee with respect to any of the following matters, each Option shall, subject to any other specific provisions of the Plan, be exercisable as to a maximum of one-third of the number of Shares covered by such Option (on a cumulative basis) following each anniversary of the date upon which the Option was granted.

 

6. Termination of Employment

 

6.1 Subject to Sections 6.2 and 6.3 hereof and to any express resolution passed by the Committee with respect to an Option, an Option and all rights to purchase Shares pursuant thereto shall expire and terminate immediately upon the Optionee who holds such Option ceasing to be an Eligible Person provided that, in the case of termination of employment for any reason, and whether or not for cause, such Option and all rights to purchase Shares thereto shall expire and terminate 30 days following notice of termination of employment.

 

6.2 If, before the expiry of an Option in accordance with the terms thereof, an Optionee shall cease to be an Eligible Person (an “Event of Termination”) by reason of the Optionee’s retirement at normal retirement age (including early retirement in accordance with the Corporation’s then current plans, policies or practices with respect thereto) or as a result of the Optionee’s permanent disability, then the Committee, at its discretion, may allow the Optionee to exercise the Option to the extent that the Optionee was entitled to do so at the time of such Event of Termination, at any time up to and including, but not after, a date that is: three months following the date of such Event of Termination or on the Expiry Time, whichever is earlier, in the case of retirement or permanent disability.

 

6.3 If an Optionee dies before the expiry of an Option in accordance with the terms thereof, the Optionees legal representative(s) may, subject to the terms of the Option and the Plan, exercise the Option to the extent that the Optionee was entitled to do so at the date of the Optionee’s death at any time up to and including, but not after, a date one year following the date of the Optionee’s death or on the Expiry Time, whichever is earlier.

 

6.4 For greater certainty, Options shall not be affected by any change of employment of the Optionee or by the Optionee ceasing to be a director of the Corporation provided that the Optionee continues to be an Eligible Person.

 

6.5 If the Optionee is an Eligible Corporation, the references to the Optionee in this Article 6 shall be deemed to refer to the Eligible Person associated with such Optionee.

 

7. Exercise of Options

 

7.1 Subject to the provisions of the Plan, an Option may be exercised from time to time by delivery to the Corporation at its principal office in London, Ontario of a written notice of exercise addressed to the Chief Financial Officer of the Corporation specifying the number of Shares with respect to which the Option is being exercised and accompanied by payment in full, by cash or cheque, of the Option Price of the Shares then being purchased. Certificates for such Shares shall be issued and delivered to the Optionee within a reasonable time following the receipt of such notice and payment.

 

5

 

7.2 Notwithstanding any of the provisions contained in the Plan or in any Option, the Corporation’s obligation to issue Shares to an Optionee pursuant to the exercise of any Option shall be subject to:

 

(a)                                                                                 completion of such registration or other qualification of such Shares or obtaining approval of such governmental or regulatory authority as the Corporation shall determine to be necessary or advisable in connection with the authorization, issuance or sale thereof;

 

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

 

(c)                                                                                  the receipt from the Optionee of such representations, warranties, agreements and undertakings, as the Corporation determines to be necessary or advisable in order to safeguard against the violation of the securities laws of any jurisdiction; and

 

(d)                                                                                 the satisfaction of any conditions on exercise prescribed pursuant to Section 3.4 hereof.

 

In this connection the Corporation shall, to the extent necessary, take all commercially reasonable steps to obtain such approvals, registrations and qualifications as may be necessary for the issuance of such Shares in compliance with applicable securities laws and for the listing of such Shares on any stock exchange on which the Shares are then listed.

 

7.3 Options shall be evidenced by a share option agreement, instrument or certificate in such form not inconsistent with this Plan as the Committee may from time to time determine as provided for under Subsection 3.2(g), provided that the substance of Article 4.1 shall be included therein.

 

8. Certain Adjustments

 

8.1 In the event of any subdivision or redivision of the Shares into a greater number of Shares at any time after the grant of an Option to any Optionee and prior to the Expiry Time, the Corporation shall deliver to such Optionee at the time of any subsequent exercise of such Optionee’s Option in accordance with the terms hereof, in lieu of the number of Shares to which such Optionee was theretofore entitled upon such exercise, but for the same aggregate consideration payable therefor, such number of Shares as such Optionee would have held as a result of such subdivision or redivision if, on the record date thereof, the Optionee had been the registered holder of the number of Shares to which such Optionee was theretofore entitled upon such exercise.

 

8.2 In the event of any consolidation of the Shares into a lesser number of Shares at any time after the grant of an Option to any Optionee and prior to the Expiry Time, the Corporation shall deliver to such Optionee at the time of any subsequent exercise of such Optionee’s Option in accordance with the terms hereof, in lieu of the number of Shares to which such Optionee was theretofore entitled upon such exercise, but for the same aggregate consideration payable therefor, such number of Shares as such Optionee would have held as a result of such consolidation if, on the record date thereof, the Optionee had been registered holder of the number of Shares to which such Optionee was theretofore entitled upon such exercise.

 

8.3 If at any time after the grant of an Option to any Optionee and prior to the Expiry Time, the Shares shall be reclassified, reorganized or otherwise changed, otherwise than as specified in Sections 8.1 and 8.2 or, subject to the provisions of Subsection 9.2(a) hereof, the Corporation shall consolidate, merge or amalgamate with or into another corporation (the corporation resulting or continuing from such consolidation, merger or amalgamation being herein call the “Successor Corporation”) or the Corporation shall pay a stock dividend (other than any dividends in the ordinary course), the Optionee shall be entitled to receive upon the subsequent exercise of such Optionee’s Option in accordance with the terms hereof and shall accept in lieu of the number of Shares to which such Optionee was theretofore entitled upon such exercise but for the same aggregate consideration payable therefor, the aggregate number of shares of the appropriate class and/or other consideration from the Corporation or the Successor Corporation (as the case may be) that the Optionee would have been entitled to receive as a result of such reclassification, reorganization or other change or, subject to the provisions of Subsection 9.2(a) hereof, as a result of such consolidation, merger, amalgamation, or stock dividend if, on the record date of such reclassification, reorganization, other change or stock dividend or the effective date of such consolidation, merger or amalgamation or dividend payment, as the case may be, such Optionee had been the registered holder of the number of Shares to which such Optionee was theretofore entitled upon such exercise.

 

8.4 In the event the Corporation should declare and pay a special cash dividend or other distribution out of the ordinary course, a special dividend in specie on the Shares, or a stock dividend other than in the ordinary course, the Option Price of all Options outstanding on the record date of such dividend or other distribution shall be reduced by an amount equal to the cash payment or other distribution or the fair market value of the dividend in specie or stock dividend or other distribution, as determined by the Committee in its sole discretion but subject to all necessary regulatory approvals.

 

9. Amendment or Discontinuance of the Plan

 

9.1 The Board may amend or discontinue the Plan at any time, provided, however, that no such amendment may materially and adversely affect any Option previously granted to an Optionee without the consent of the Optionee, except to the extent required by law. Any such amendment shall, if required, be subject to the prior approval of, or acceptance by, any stock exchange on which the Shares are listed and posted for trading.

 

6

 

9.2 Notwithstanding anything contained to the contrary in this Plan or in any resolution of the Board in implementation thereof:

 

(a)                                                                                 in the event the Corporation proposes to amalgamate, merge or consolidate with any other corporation (other than a wholly-owned Subsidiary) or to liquidate, dissolve or wind-up, or in the event an offer to purchase or repurchase the Shares of the Corporation or any part thereof shall be made to all or substantially all holders of Shares of the Corporation, the Corporation shall have the right, upon written notice thereof to each Optionee holding Options under the Plan, to permit the exercise of all such Options within the 20 day period next following the date of such notice and to determine that upon the expiration of such 20 day period, all rights of the Optionees to such Options or to exercise same (to the extent not theretofore exercised) shall ipso facto terminate and cease to have further force or effect whatsoever;

 

(b)                                                                                 in the event of the sale by the Corporation of all or substantially all of the assets of the Corporation as an entirety or substantially as an entirety so that the Corporation shall cease to operate as an active business, any outstanding Option may be exercised as to all or any part of the Optioned Shares in respect of which the Optionee would have been entitled to exercise the Option in accordance with the provisions of the Plan at the date of completion of any such sale at any time up to and including, but not after the earlier of: (i) the close of business on that date which is 30 days following the date of completion of such sale; and (ii) the Expiry Time; but the Optionee shall not be entitled to exercise the Option with respect to any other Optioned Shares;

 

(c)                                                                                  subject to the rules of any applicable stock exchange or other regulatory authority, the Board may, by resolution, advance the date on which any Option may be exercised or extend the Expiry Time provided that the Board shall not, in the event of any such advancement or extension, be under any obligation to advance or extend the date on or by which Options may be exercised by any other Optionee; and

 

(d)                                                                                 the Board may, by resolution, but subject to applicable regulatory requirements, decide that any of the provisions hereof concerning the effect of termination of the Optionee’s employment shall not apply to any Optionee for any reason acceptable to the Board.

 

Notwithstanding the provisions of this Article 9, should changes be required to the Plan by any securities commission, stock exchange or other governmental or regulatory body of any jurisdiction to which the Plan or the Corporation now is or hereafter becomes subject, such changes shall be made to the Plan as are necessary to conform with such requirements and, if such changes are approved by the Board, the Plan, as amended, shall be filed with the records of the Corporation and shall remain in full force and effect in its amended form as of and from the date of its adoption by the Board.

 

10. Miscellaneous Provisions

 

10.1 An Optionee shall not have any rights as a shareholder of the Corporation with respect to any of the Shares covered by such Option until the date of issuance of a certificate for Shares upon the exercise of such Option, in full or in part, and then only with respect to the Shares represented by such certificate or certificates. Without in any way limiting the generality of the foregoing, no adjustment shall be made for dividends or other rights for which the record date is prior to the date such shares certificate is issued.

 

10.2 Nothing in the Plan or any Option shall confer upon an Optionee any right to continue or be re-elected as a director of the Corporation or any right to continue in the employ of the Corporation or any Subsidiary, or affect in any way the right of the Corporation or any Subsidiary to terminate his or her employment at any time; nor shall anything in the Plan or any Option be deemed or construed to constitute an agreement, or an expression of intent, on the part of the Corporation or any Subsidiary to extend the employment of any Optionee beyond the time which he or she would normally be retired pursuant to the provisions of any present or future retirement plan of the Corporation or any Subsidiary or any present or future retirement policy of the Corporation or any Subsidiary, or beyond the time at which he or she would otherwise be retired pursuant to the provisions of any contract of employment with the Corporation or any Subsidiary.

 

10.3 The Plan and all matters to which reference is made herein shall be governed by and interpreted in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.

 

10.4 Effective as of the date of receipt of shareholder ratification and all regulatory approvals of the Plan as contemplated by Section 11.1 hereof, the Plan shall replace and supercede the Corporation’s current stock option plan, if any, (the “Current Plan”) and no further options shall be granted pursuant to the Current Plan; provided that nothing herein shall affect the existence or validity of any options granted under the Current Plan prior to such date, which options shall remain in full force and effect.

 

11. Shareholder and Regulatory Approval

 

11.1 The Plan shall be subject to ratification by the shareholders of the Corporation to be effected by a resolution passed at a meeting of the shareholders of the Corporation, and to acceptance by any other relevant regulatory authority. Any Options granted under the Plan prior to such ratification and acceptance shall be conditional upon such ratification and acceptance being given and no such Options may be exercised unless and until such ratification and acceptance are given.

 

11.2 Any material amendment to an Option held by an Insider, including a change in the Option Price or Expiry Time, must be approved by a majority of votes cast at a meeting of shareholders other than votes attaching to securities beneficially owned by the Optionee and his or her Associates.

 

Effective October 31, 2001

 

Amended April 1, 2011

 

Subject to Shareholder Approval on June 22, 2011

 

7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00253-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00253-of-00352.parquet"}]]