Document:

Exhibit 10.65

 

FIRST AMENDMENT TO

CREDIT AGREEMENT AND GUARANTEE

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of October  1, 2014, is entered into by and between TRIBUTE PHARMACEUTICALS CANADA INC., a corporation incorporated under the laws of Ontario, Canada (“Borrower”), each of the financial institutions from time to time party hereto (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 (in such capacity, “Agent”).

 

RECITALS

 

WHEREAS, Borrower and Agent entered into that certain (i) Credit Agreement dated as of August 8, 2013, (as the same may be further amended, modified or restated from time to time, being hereinafter referred to as the “Credit Agreement”) and (ii) Guarantee and Collateral Agreement dated as of August 8, 2013 (as the same may be further amended, modified or restated from time to time, being hereinafter referred to as the “Guarantee”); and

 

WHEREAS, Borrower and Agent desire to amend the Credit Agreement and Guarantee as set forth herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, agree as follows:

 

ARTICLE I

 

Definitions

 

Capitalized terms used in this Amendment are defined in the Credit Agreement unless otherwise stated.

 

ARTICLE II

 

Amendments to Credit Agreement and Guarantee

 

2.1  Amendment to Annex I to Credit Agreement. Effective as of the First Amendment Effective Date, Annex I to the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

	
Lender
    	
 
    	
Term Loan Commitment
    	
 
    	
Pro Rata Term Loan Share
    	
 
    
	
SWK Funding LLC
    	
 
    	
100
    	
%
    	
$
    	
17,000,000
    	
 
    
							

 

 

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND THE NON-PUBLIC INFORMATION HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

2.2  Amendment to Exhibit D to Credit Agreement. Effective as of the First Amendment Effective Date, Exhibit D to the Credit Agreement is hereby amended and restated in the form attached hereto as Exhibit A.

 

2.3  Amendment to Schedules to Credit Agreement. Effective as of the First Amendment Effective Date, the Schedules to the Credit Agreement are hereby amended and restated in the forms attached hereto as Exhibit B, as applicable.

 

2.4  Amendments to Section 1.1 of the Credit Agreement.

 

(a) Effective as of the First Amendment Effective Date, Section 1.1 of the Credit Agreement is amended by adding the following definitions thereto in its appropriate alphabetical order:

 

“Aggregate Revenue has the meaning set forth in Section 2.9(a).”

 

“First Amendment Effective Date means October 1, 2014.”

 

(b) Effective as of the First Amendment Effective Date, the following definitions in Section 1.1 of the Credit Agreement are hereby amended and restated in their entirety to read as follows:

 

“Subsequent Term Loan Warrant means a warrant to be issued to SWK by Borrower, in the form attached hereto as Exhibit D, on or prior to the date of any subsequent Term Loan made by Lenders pursuant to Section 2.2.2 on or after the First Amendment Effective Date.”

 

“Term Loan Commitment means $17,000,000.”

 

“Term Loan Maturity Date means December 31, 2018 or such earlier date on which the Commitments terminate pursaunt to Section 8.”

 

2.5  Amendment to Section 2.2 of the Credit Agreement. Effective as of the First Amendment Effective Date, Section 2.2 of the Credit Agreement is amended and restated in its entirety to read as follows:

 

“2.2 Loan Procedures

 

2.2.1 Prior Advances and Advance on First Amendment Effective Date.

 

On the Closing Date, Lenders advanced to Borrower an amount equal to Six Million and No/100 Dollars ($6,000,000), and on or about February 4, 2014, Lenders advanced an additional Two Million and No/100 Dollars ($2,000,000) to Borrower. Borrower, Agent and Lenders hereby agree and acknolwedge that, as of the First Amendment Effective date (and immediately prior to the subsequent Advance described in the next sentence), the outstanding principal balance of the Term Loan is Eight Million and No/100 Dollars ($8,000,000). On the First Amendment Effective Date, Lenders shall advance to Borrower an additional Six Million and No/100 Dollars ($6,000,000) upon satisfaction by Borrower of the conditions to closing described in that certain First Amendment to Credit Agreement and Guarantee dated as of the First Amendment Effective Date

 

2

 

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND THE NON-PUBLIC INFORMATION HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

2.2.2 Subsequent Term Loan

 

Upon Agent’s receipt of a written request from Borrower for a subsequent advance of the Loan during the period beginning on the First Amendment Effective Date and ending December 31, 2015, Lenders shall, so long as (i) no Default or Event of Default has occurred and is continuing and (ii) Agent shall have received the fully-executed Subsequent Term Loan Warrant, make one additional advance (within thirty (30) days of receipt by Agent of such written request for advance) to Borrower in an amount equal to Three Million and No/100 Dollars ($3,000,000).”

 

2.6  Amendment to Section 2.8.2(b) of the Credit Agreement. Effective as of the First Amendment Effective Date, Section 2.8.2(b) of the Credit Agreement is amended and restated in its entirety to read as follows:

 

“(b) Subject to Section 2.8.2(c) and Section 2.9.3(c), if Borrower makes any prepayment of the Term Loans under Section 2.8.2(a), it shall pay to the Lenders on the date of such prepayment a prepayment premium as follows: (i) if such prepayment is made on or after the First Amendment Effective Date but prior to the first anniversary of the First Amendment Effective Date, 4% of the aggregate amount of the Term Loans so prepaid, (ii) if such prepayment is made on or after the first anniversary of the First Amendment Effective Date but prior to the second anniversary of the First Amendment Effective Date, 3% of the aggregate amount of the Term Loans so prepaid, (iii) if such prepayment is made on or after the second anniversary of the First Amendment Effective Date but prior to the third anniversary of the First Amendment Effective Date, 1% of the aggregate amount of the Term Loans so prepaid and (iv) if such prepayment is made on or after the third anniversary of the First Amendment Effective Date no prepayment premium shall be due and owing in connection therewith.”

 

2.7  Amendment to Section 2.9.1(a) of the Credit Agreement. Effective as of the First Amendment Effective Date, Section 2.9.1(a) of the Credit Agreement is amended and restated in its entirety to read as follows:

 

“(a) During the period commencing on the First Amendment Effective Date until the Obligations are Paid in Full, Borrower promises to pay, for the account of each Lender according to its Pro Rata Term Loan Share, an amount based on a percentage of the aggregate of Net Sales, Royalties and any other income or revenue actually received by (or otherwise recognized by in accordance with GAAP) Borrower or its Subsidiary (the “Aggregate Revenue”) in each Fiscal Quarter (the “Revenue-Based Payment”), which will be applied to the Obligations as provided in Section 2.9.1(b). The Revenue-Based Payment with respect to each Fiscal Quarter shall be payable on the Payment Date next following the end of such Fiscal Quarter. Commencing with the Fiscal Quarter ending September 30, 2014, the Revenue-Based Payment with respect to each Fiscal Quarter shall be equal to the difference between (x) the aggregate Revenue-Based Payments payable from January 1 of the Fiscal Year of which the Fiscal Quarter is part through the end of such Fiscal Quarter, calculated as the sum of:

 

(i) eighteen percent (18%) of the Aggregate Revenue up to $10,000,000 in such Fiscal Year; and

 

(ii) twelve and one-half of one percent (12.5%) of Aggregate Revenue in excess of $10,000,000,

 

and (y) the amount of Revenue-Based Payments, if any, made with respect to prior Fiscal Quarters in such Fiscal Year, if any.

 

The Revenue-Based Payment (A) is payable solely upon the Aggregate Revenue in a Fiscal Year, and will not be calculated on a cumulative, year-over-year basis and (B) shall be calculated using the Average Exchange Rate applicable to such period being measured as described in this Section 2.9.1(a).”

 

2.8  Amendment to Section 2.9.1(b) of the Credit Agreement. Effective as of the First Amendment Effective Date, clause (iv) of Section 2.9.1(b) of the Credit Agreement is amended and restated in its entirety to read as follows:

 

“(iv) FOURTH, as it relates to each Payment Date on or after Payment Date in April 2015, to the payment of all principal of the Loans, pro rata based on each Lender’s Pro Rata Term Loan Share, up to an aggregate amount of $1,000,000 on any Payment Date;”

 

2.9  Amendment to Section 7.13.2 of the Credit Agreement. Effective as of the First Amendment Effective Date, Section 7.13.2 of the Credit Agreement is amended and restated in its entirety to read as follows:

 

“7.13.2 Minimum Net Sales.

 

Not permit the aggregate Net Sales and Royalties for the twelve consecutive month period ending on the last Business Day of any Fiscal Quarter to be less than the applicable amount set forth below for such period.

 

Minimum LTM Net Sales and Royalties ( in millions of Canadian Dollars) as of the end of:

 

	
Q1 2015
    	
 
    	
Q2 2015
    	
 
    	
Q3 2015
    	
 
    	
Q4 2015
    	
 
    	
Q1 2016
    	
 
    	
Q2 2016 and each Fiscal Quarter thereafter
    	
 
    
	
$
    	
[*]
    	
(1)
    	
$
    	
[*]
    	
(1)
    	
$
    	
[*]
    	
(1)
    	
$
    	
[*]
    	
(1)
    	
$
    	
[*]
    	
(1)
    	
$
    	
[*]
    	
(1)
    
																		

 

(1) [*] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

 

3

 

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND THE NON-PUBLIC INFORMATION HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

2.10  Amendment to Schedules to Guarantee. Effective as of the First Amendment Effective Date, Schedules 5 and 6 of the Guarantee are hereby amended and restated in the forms attached hereto as Exhibit C, as applicable.

 

ARTICLE III

 

Conditions Precedent and Post-Closing Obligations

 

3.1 The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent in a manner satisfactory to Agent, unless specifically waived in writing by Agent:

 

A. Agent shall have received this Amendment duly executed by Borrower.

 

B. Agent shall have received, for the benefit of Lenders, a non-refundable commitment fee in the amount of Ninety Thousand and NO/100 Dollars ($90,000.00) with respect to the increase of the Commitments.

 

C. Agent shall have received a Consolidated Amended and Restated Promissory Note duly executed by Borrower, as maker, and SWK, as payee, in the amount of $14,000,000, and otherwise in form and substance acceptable to Agent.

 

D. Agent shall have received a warrant issued to SWK by Borrower on the First Amendment Effective Date in form and substance acceptable to Agent.

 

E. Agent shall have received evidence acceptable to Agent that the purchase by Borrower of those certain pharmaceutical products heretofore marketed by Novartis Pharma AG and Novartis AG in Canada under the trade names Fiorinal, Fiorinal C, Visken and Viskazide will be consummated on or about the date hereof pending the advance of $6,000,000 contemplated in Section 2.5 of this Amendment.

 

F. Agent shall have received the opinion of Borrower’s legal counsel in form and substance acceptable to Agent.

 

G. The representations and warranties contained herein and in the Credit Agreement and the other Loan Documents, as each is amended hereby, shall be true and correct as of the date hereof, as if made on the date hereof, except for such representations and warranties as are by their express terms limited to a specific date.

 

H. No Default or Event of Default shall have occurred and be continuing, unless such Default or Event of Default has been otherwise specifically waived in writing by Agent.

 

I. All corporate proceedings taken in connection with the transactions contemplated by this Amendment and all documents, instruments and other legal matters incident thereto shall be satisfactory to Agent; and Borrower shall provide to Agent a secretary’s certificate with resolutions in form and substance acceptable to Agent.

 

3.2 Borrower shall, within five (5) Business Days of the date hereof, deliver to Agent an amendment to the IP Security Agreement, or an additional intellectual property security agreement in substantially the form delivered on the Closing Date, in either such case addressing the additional intellectual property set forth in the updated Schedules attached hereto and otherwise in form and substance acceptable to Agent.

 

ARTICLE IV

 

Ratifications, Representations and Warranties

 

4.1 Ratifications. The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Credit Agreement and the other Loan Documents, and, except as expressly modified and superseded by this Amendment, the terms and provisions of the Credit Agreement and the other Loan Documents are ratified and confirmed and shall continue in full force and effect. Borrower and Agent agree that the Credit Agreement and the other Loan Documents, as amended hereby, shall continue to be legal, valid, binding and enforceable in accordance with their respective terms. Borrower agrees that this Amendment is not intended to and shall not cause a novation with respect to any or all of the Obligations.

 

4.2 Representations and Warranties. Borrower hereby represents and warrants to Agent that (a) the execution, delivery and performance of this Amendment and any and all other Loan Documents executed and/or delivered in connection herewith have been authorized by all requisite action (as applicable) on the part of Borrower and will not violate the organizational documents of Borrower; (b) Borrower’ directors have authorized the execution, delivery and performance of this Amendment and any and all other Loan Documents executed and/or delivered in connection herewith; (c) the representations and warranties contained in the Credit Agreement, as amended hereby, and any other Loan Document are true and correct on and as of the date hereof and on and as of the date of execution hereof as though made on and as of each such date (except to the extent such representations and warranties expressly relate to an earlier date); (d) no Default or Event of Default under the Credit Agreement, as amended hereby, has occurred and is continuing; (e) Borrower is in full compliance in all material respects with all covenants and agreements contained in the Credit Agreement and the other Loan Documents, as amended hereby; and (f) except as disclosed to Agent, Borrower has not amended its organizational documents since the date of the Credit Agreement.

 

4

 

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND THE NON-PUBLIC INFORMATION HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

ARTICLE V

 

Miscellaneous Provisions

 

5.1 Survival of Representations and Warranties. All representations and warranties made in the Credit Agreement or any other Loan Document, including, without limitation, any document furnished in connection with this Amendment, shall survive the execution and delivery of this Amendment and the other Loan Documents, and no investigation by Agent or any Lender or any closing shall affect the representations and warranties or the right of Agent and each Lender to rely upon them.

 

5.2 Reference to Credit Agreement. Each of the Credit Agreement and the other Loan Documents, and any and all other Loan Documents, documents or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Credit Agreement, as amended hereby, are hereby amended so that any reference in the Credit Agreement and such other Loan Documents to the Credit Agreement shall mean a reference to the Credit Agreement, as amended hereby.

 

5.3 Expenses of Agent. As provided in the Credit Agreement, Borrower agrees to pay on demand all costs and expenses incurred by Agent, or its Affiliates, in connection with the preparation, negotiation, and execution of this Amendment and the other Loan Documents executed pursuant hereto and any and all amendments, modifications, and supplements thereto, including, without limitation, the reasonable costs and fees of legal counsel, and all costs and expenses incurred by Agent and each Lender in connection with the enforcement or preservation of any rights under the Credit Agreement, as amended hereby, or any other Loan Documents, including, without, limitation, the reasonable costs and fees of legal counsel.

 

5.4 Severability. Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable.

 

5.5 Successors and Assigns. This Amendment is binding upon and shall inure to the benefit of Agent and each Lender and Borrower and their respective successors and assigns, except that Borrower may not assign or transfer any of its rights or obligations hereunder without the prior written consent of Agent.

 

5.6 Counterparts. This Amendment may be executed in one or more counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument. This Amendment may be executed by facsimile or electronic (.pdf) transmission, which facsimile or electronic (.pdf) signatures shall be considered original executed counterparts for purposes of this Section 5.6, and each party to this Amendment agrees that it will be bound by its own facsimile or electronic (.pdf) signature and that it accepts the facsimile or electronic (.pdf) signature of each other party to this Amendment.

 

5.7 Effect of Waiver. No consent or waiver, express or implied, by Agent to or for any breach of or deviation from any covenant or condition by Borrower shall be deemed a consent to or waiver of any other breach of the same or any other covenant, condition or duty.

 

5.8 Headings. The headings, captions, and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

 

5.9 Applicable Law. THE TERMS AND PROVISIONS OF SECTIONS 10.17 (GOVERNING LAW) AND 10.18 (FORUM SELECTION; CONSENT TO JURISDICTION) OF THE CREDIT AGREEMENT ARE HEREBY INCORPORATED HEREIN BY REFERENCE, AND SHALL APPLY TO THIS AMENDMENT MUTATIS MUTANDIS AS IF FULLY SET FORTH HEREIN.

 

5.10 Final Agreement. THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS, EACH AS AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS EXECUTED. THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS AMENDED HEREBY, MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NO MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THIS AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY BORROWER AND AGENT.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

5

 

IN WITNESS WHEREOF, this Amendment has been executed and is effective as of the date first above-written.

 

	
 
    	
BORROWER:
    
	
 
    	
 
    
	
 
    	
TRIBUTE PHARMACEUTICALS   CANADA INC., a corporation organized under the laws of Ontario, Canada,
    
	
 
    	
as Borrower
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Scott Langille
    
	
 
    	
Name: Scott Langille
    
	
 
    	
Title: Chief Financial   Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
AGENT   AND LENDER:
    
	
 
    	
 
    
	
 
    	
SWK FUNDING LLC,
    
	
 
    	
as Agent and a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Winston Black
    
	
 
    	
Name: Winston Black
    
	
 
    	
Title: Managing   Director
    

 

6

 

Exhibit A

 

Exhibit D to Credit Agreement

(Form of Subsequent Warrant)

 

[See attached]

 

7

 

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

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE CORPORATION THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY: (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH LOCAL LAWS AND REGULATIONS, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 OR RULE 144A THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY STATE SECURITIES LAWS, OR (D) IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, IF IN EACH CASE AN OPINION OF COUNSEL OF RECOGNIZED STANDING OR OTHER EVIDENCE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE CORPORATION HAS BEEN PROVIDED TO THE CORPORATION TO THAT EFFECT. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON EXCHANGES IN CANADA.

 

THIS WARRANT AND THE SECURITIES DELIVERABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT, OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THIS WARRANT MAY NOT BE EXERCISED IN THE UNITED STATES OR BY OR ON BEHALF OF A PERSON IN THE UNITED STATES OR A U.S. PERSON UNLESS THE WARRANT AND THE UNDERLYING SECURITIES HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE U.S. SECURITIES ACT.

 

Void after 5:00 p.m. (Toronto time) on the · day of ·, ·

 

	
Number of Warrants: ·(2)
    	
Warrant   Certificate No. USWA-201·-02-002
    

 

TRIBUTE PHARMACEUTICALS CANADA INC.

(Organized under the laws of the Province of Ontario)

 

This is to certify that, for value received, SWK FUNDING LLC, 15770 Dallas Parkway, Suite 1290, Dallas, TX 75248  (the “Holder” which shall be deemed to include an assignee of this Warrant Certificate if this Warrant Certificate is assigned pursuant to the terms below), shall have the right to purchase from TRIBUTE PHARMACEUTICALS CANADA INC. (the “Corporation”), at any time and from time to time up to 5:00 p.m. (Toronto time) on · (the “Expiry Time”), one fully paid and non-assessable Common Share for each Warrant (individually, a “Warrant”) represented hereby at a price of US$·(1) per Common Share (the “Exercise Price”), such number of Warrants and the Exercise Price being subject to adjustment as provided herein, upon and subject to the terms and conditions set forth herein.

 

8

 

1. For the purposes of this certificate (the “Warrant Certificate”), the following terms shall have the following meanings:

 

	
a.
    	
“Common Shares” means common shares   without par value in the capital of the Corporation as constituted as of the   date hereof, provided that in the event of a subdivision, redivision,   reduction, combination or consolidation thereof or any other adjustment under   Section 8 herein, or successive such subdivisions, redivisions, reductions,   combinations, consolidations or other adjustments, then subject to the   adjustments, if any, having been made in accordance with the provisions of   this Warrant Certificate, “Common Shares”   shall thereafter mean the shares, other securities or other property   resulting from such subdivision, redivision, reduction, combination or   consolidation or other adjustment.
    
	
 
    	
 
    
	
b.
    	
“Credit Agreement” means the Credit   Agreement dated as of August 8, 2013 and as amended as of October •,   2014 between the Corporation, as Borrower, the Lenders party thereto and SWK   Funding LLC, as Agent, Sole Lead Arranger and Sole Bookrunner.
    
	
 
    	
 
    
	
c.
    	
“Purchase Price” means, with respect to   any exercise of this Warrant (whether in whole or in part), an amount equal   to the then-effective Exercise Price multiplied by the number of Common   Shares as to which this Warrant is then exercised.
    

 

2. All Warrant Certificates shall be signed by an officer of the Corporation holding office at the time of signing, or any successor or replacement of such person and notwithstanding any change in any of the persons holding said offices between the time of actual signing and the delivery of the Warrant Certificate, the Warrant Certificate so signed shall be valid and binding upon the Corporation.

 

3. All rights under any of the Warrants in respect of which the right of subscription and purchase therein provided for shall not theretofore have been exercised shall wholly cease and such Warrants shall be wholly void and of no valid or binding effect after the Expiry Time.

 

4. The right to purchase Common Shares of the Corporation pursuant to the Warrants may only be exercised by the Holder at or before the Expiry Time by:

 

	
a.
    	
duly completing and   executing a subscription substantially in the form attached as Schedule “A”   (the “Subscription Form”), in   the manner therein indicated; and
    
	
 
    	
 
    
	
b.
    	
surrendering this   Warrant Certificate and the duly completed and executed Subscription Form to   the Corporation prior to the Expiry Time at its office at 151 Steeles Avenue   East, Milton, Ontario, Canada 19T 1Y1, together with payment of the purchase   price for the Common Shares subscribed for in the form of cash or a certified   cheque payable to the Corporation or via wire transfer to an account   designated by the Corporation in an amount equal to the then applicable   Exercise Price multiplied by the number of Common Shares subscribed for.
    
	
 
    	
 
    
	
c.
    	
The foregoing tangible   deliveries may be made electronically by the Holder (including via fax), and   the foregoing payment may made via wire transfer to the following account:   HSBC Bank, HKBCCATT,016,10352,039167-070, 285 King Street, London, ON N6B 3M6   or such other account as may be designated by the Corporation from time to   time (an “Electronic Exercise”).   Holder shall deliver originals of the tangible deliveries within three   business days of the date of an Electronic Exercise.
    
	
 
    	
 
    
	
d.
    	
In lieu of exercising   this Warrant upon payment of the Exercise Price, the Holder may, prior to the   Expiry Time, at its sole option, elect to receive Common Shares equal to the   value (as determined below) of this Warrant (or the portion thereof being   cancelled) by surrendering this Warrant and delivering the Subscription Form   with the election thereon to receive the Common Shares without payment of the   Exercise Price (the “Cashless Exercise”).   In the event the Cashless Exercise is elected, the Company shall issue to the   Holder a number of Common Shares computed and determined by the following   formula:
    

 

9

 

Common Shares to be issued = ((A x B) - (Purchase Price))/B

pursuant to the Cashless Exercise

 

Where:

 

(i) “A” is equal to the total number of Common Shares as to which this Warrant is then being exercised; and

 

(ii) “B” is equal to the Current Market Price (defined below).

 

5. Upon delivery and payment as set forth in Section 4 herein (including via an Electronic Exercise), the Corporation shall cause to be issued to the Holder the number of Common Shares subscribed for by the Holder and the Holder shall become a shareholder of the Corporation in respect of such Common Shares with effect from the date of such delivery and payment and shall be entitled to delivery of a certificate or certificates evidencing such shares. The Corporation shall cause such certificate or certificates to be mailed to the Holder at the address or addresses specified in the Subscription Form within five (5) business days of such delivery and payment as set forth in Section 4 herein or, if so instructed by the Holder, held for pick-up by the Holder at the principal office of the Corporation. Notwithstanding any adjustment provided for in Section 8 herein, the Corporation shall not be required upon the exercise of any Warrants to issue fractional Common Shares in satisfaction of its obligations hereunder and the Holder understands and agrees that it will not be entitled to any cash payment or other form of compensation in respect of a fractional Common Share that might otherwise have been issued.

 

6. The holding of a Warrant shall not constitute the Holder a shareholder of the Corporation nor entitle him to any right or interest in respect thereof except as herein expressly provided.

 

7. The Corporation covenants and agrees that until the Expiry Time, while any of the Warrants shall be outstanding, it shall reserve and there shall remain unissued out of its authorized capital a sufficient number of Common Shares to satisfy the right of purchase herein provided, as such right of purchase may be adjusted pursuant to Sections 8 and 9 herein. The Corporation further covenants and agrees that while any of the Warrants shall be outstanding, the Corporation shall (a) comply with the securities legislation applicable to it in order that the Corporation not be in default of any requirements of such legislation; (b) use its commercially reasonable best efforts to do or cause to be done all things necessary to preserve and maintain its corporate existence; and (c) at its own expense expeditiously use its commercially reasonable best efforts to obtain the listing of such Common Shares (subject to issue or notice of issue) on each stock exchange or over-the-counter market on which the Common Shares may be listed from time to time. All Common Shares which shall be issued upon the exercise of the right to purchase herein provided for, upon payment therefor of the amount at which such Common Shares may at the time be purchased pursuant to the provisions hereof, shall be issued as fully paid and non-assessable shares and the holders thereof shall not be liable to the Corporation or its creditors in respect thereof.

 

8. (a)For the purpose of this section 8, unless there is something in the subject matter or context inconsistent therewith, the words and terms defined below shall have the respective meanings specified therefor:

 

“Current Market Price” of the Common Shares at any date means the price per share equal to the weighted average price at which the Common Shares have traded on the OTCQB or, if the Common Shares are not then listed on the OTCQB, on such other stock exchange on which the shares trade as may be selected by the directors of the Corporation for such purpose; provided that the weighted average price shall be determined by dividing the aggregate sale price of all Common Shares sold on the said exchange or market, as the case may be, during the said twenty (20) consecutive trading days by the total number of Common Shares so sold; and provided further that if the Common Shares are not then listed on any stock exchange or traded in the over-the-counter market, then the Current Market Price shall be determined by such independent valuation firm as mutually selected by the directors of the Corporation and the Holder;

 

“director” means a director of the Corporation for the time being and, unless otherwise specified herein, a reference to action “by the directors” means action by the directors of the Corporation as a board or, whenever empowered, action by the executive committee of such board; and

 

“trading day” with respect to a stock exchange or over-the-counter market means a day on which such stock exchange or market is open for business.

 

10

 

(b)                                 If and whenever at any time after the date hereof and prior to the Expiry Time the Corporation shall (i) subdivide or redivide its then outstanding Common Shares into a greater number of Common Shares, (ii) reduce, combine or consolidate its then outstanding Common Shares into a lesser number of Common Shares or (iii) issue Common Shares (or securities exchangeable for or convertible into Common Shares) to the holders of all or substantially all of its then outstanding Common Shares by way of a stock dividend or other distribution (any of such events herein called a “Common Share Reorganization”), then the Exercise Price shall be adjusted effective immediately after the effective date of any such event in (i) or (ii) above or the record date at which the holders of Common Shares are determined for the purpose of any such dividend or distribution in (iii) above, as the case may be, by multiplying the Exercise Price in effect on such effective date or record date, as the case may be, by a fraction, the numerator of which shall be the number of Common Shares outstanding on such effective date or record date, as the case may be, before giving effect to such Common Share Reorganization and the denominator of which shall be the number of Common Shares outstanding immediately after giving effect to such Common Share Reorganization including, in the case where securities exchangeable for or convertible into Common Shares are distributed, the number of Common Shares that would be outstanding if such securities were exchanged for or converted into Common Shares.

 

(c)                                  If at any time after the date hereof and prior to the Expiry Time the Corporation shall fix a record date for the issuance or distribution to the holders of all or substantially all of the outstanding Common Shares, of rights, options or warrants pursuant to which such holders are entitled, during a period expiring not more than 45 days after the record date for such issue (such period being the “Rights Period”), to subscribe for or purchase Common Shares or securities exchangeable for or convertible into Common Shares at a price per share (or in the case of securities exchangeable for or convertible into Common Shares at an exchange or conversion price per share at the date of issue of such securities) of less than 95% of the Current Market Price of the Common Shares on such record date (any of such events being herein called a “Rights Offering”), the Exercise Price shall be adjusted effective immediately after the record date for the Rights Offering to the amount determined by multiplying the Exercise Price in effect on such record date by a fraction:

 

(i) the numerator of which shall be the aggregate of

 

(A)                               the number of Common Shares outstanding on the record date for the Rights Offering; and

 

(B) the quotient determined by dividing

 

(I)                                   either (a) the product of the number of Common Shares offered during the Rights Period pursuant to the Rights Offering and the price at which such Common Shares are offered, or, (b) the product of the exchange or conversion price of the securities so offered and the number of Common Shares for or into which the securities offered pursuant to the Rights Offering may be exchanged or converted, as the case may be, by

 

(II)                              the Current Market Price of the Common Shares as of the record date for the Rights Offering; and

 

(ii)                                  the denominator of which shall be the aggregate of the number of Common Shares outstanding on such record date and the number of Common Shares offered pursuant to the Rights Offering (including in the case of the issue or distribution of securities exchangeable for or convertible into Common Shares the number of Common Shares for or into which such securities may be exchanged or converted).

 

If by the terms of the rights, options, or warrants referred to in this Section 8(c), there is more than one purchase, conversion or exchange price per Common Share, the aggregate price of the total number of additional Common Shares offered for subscription or purchase, or the aggregate conversion or exchange price of the convertible or exchangeable securities so offered, shall be calculated for purposes of the adjustment on the basis of the lowest purchase, conversion or exchange price per Common Share, as the case may be. Any Common Shares owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of any such calculation. To the extent that any adjustment in the Exercise Price occurs pursuant to this Section 8(c) as a result of the fixing by the Corporation of a record date for the issue or distribution of rights, options or warrants referred to in this Section 8(c), the Exercise Price shall be readjusted immediately after the expiry of any relevant exchange, conversion or exercise right to the Exercise Price which would then be in effect based upon the number of Common Shares actually issued and remaining issuable after such expiry and shall be further readjusted in such manner upon the expiry of any further such right.

 

(d)                                 If at any time after the date hereof and prior to the Expiry Time, the Corporation shall fix a record date for the issue or distribution to the holders of all or substantially all of the Common Shares of:

 

(i) shares of the Corporation of any class other than Common Shares;

 

11

 

(ii)                                  rights, options or warrants to acquire Common Shares or securities exchangeable for or convertible into Common Shares (other than rights, options or warrants pursuant to which holders of Common Shares are entitled, during a period expiring not more than 45 days after the record date for such issue, to subscribe for or purchase Common Shares at a price per share (or in the case of securities exchangeable for or convertible into Common Shares at an exchange or conversion price per share at the date of issue of such securities) of at least 95% of the Current Market Price of the Common Shares on such record date);

 

(iii) evidences of indebtedness of the Corporation; or

 

(iv)                              any property or assets of the Corporation (including cash, but excluding cash dividends paid in the ordinary course);

 

and if such issue or distribution does not constitute a Common Share Reorganization or a Rights Offering (any of such non-excluded events being herein called a “Special Distribution”), the Exercise Price shall be adjusted effective immediately after the record date for the Special Distribution to the amount determined by multiplying the Exercise Price in effect on the record date for the Special Distribution by a fraction:

 

(A) the numerator of which shall be the difference between

 

(I)                                   the product of the number of Common Shares outstanding on such record date and the Current Market Price of the Common Shares on such record date, and

 

(II)                              the fair value, as determined by the directors of the Corporation, to the holders of the Common Shares of the shares, rights, options, warrants, evidences of indebtedness or property or assets to be issued or distributed in the Special Distribution, and

 

(B)                               the denominator of which shall be the product obtained by multiplying the number of Common Shares outstanding on such record date by the Current Market Price of the Common Shares on such record date.

 

Any Common Shares owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of such calculation. To the extent that any adjustment in the Exercise Price occurs pursuant to this Section 8(d) as a result of the fixing by the Corporation of a record date for the issue or distribution of rights, options or warrants to acquire Common Shares or securities exchangeable for or convertible into Common Shares referred to in this Section 8(d), the Exercise Price shall be readjusted immediately after the expiry of any relevant exercise, exchange or conversion right to the amount which would then be in effect if the Current Market Price had been determined on the basis of the number of Common Shares issued and remaining issuable immediately after such expiry, and shall be further readjusted in such manner upon the expiry of any further such right.

 

(e)                                  If and whenever at any time after the date hereof and prior to the Expiry Time there is a capital reorganization of the Corporation or a reclassification or other change in the Common Shares (other than a Common Share Reorganization) or a consolidation or merger or amalgamation of the Corporation with or into any other corporation or other entity (other than a consolidation, merger or amalgamation which does not result in any reclassification of the outstanding Common Shares or a change of the Common Shares into other securities), or a transfer of all or substantially all of the Corporation’s undertaking and assets to another corporation or other entity in which the holders of Common Shares are entitled to receive shares, other securities or other property (any of such events being called a “Capital Reorganization”), after the effective date of the Capital Reorganization the Holder shall be entitled to receive, and shall accept, for the same aggregate consideration, upon exercise of the Warrants, in lieu of the number of Common Shares to which the Holder was theretofore entitled upon the exercise of the Warrants, the kind and aggregate number of Common Shares and other securities or property resulting from the Capital Reorganization which the Holder would have been entitled to receive as a result of the Capital Reorganization if, on the effective date thereof, the Holder has been the registered holder of the number of Common Shares to which the Holder was theretofore entitled to purchase or receive upon the exercise of the Warrants. If necessary, as a result of any Capital Reorganization, appropriate adjustments shall be made in the application of the provisions of this Warrant Certificate with respect to the rights and interest thereafter of the Holder to the end that the provisions of this Warrant Certificate shall thereafter correspondingly be made applicable as nearly as may reasonably be possible in relation to any shares or other securities or property thereafter deliverable upon the exercise of this Warrant Certificate.

 

(f)                                   If and whenever at any time after the date hereof and prior to the Expiry Time, any of the events set out in Sections 8(b), (c), (d) or (e) herein shall occur and the occurrence of such event results in an adjustment of the Exercise Price pursuant to the provisions of this Section 8, then the number of Common Shares purchasable pursuant to this Warrant shall be adjusted contemporaneously with the adjustment of the Exercise Price by multiplying the number of Common Shares then otherwise purchasable on the exercise thereof by a fraction, the numerator of which shall be the Exercise Price in effect immediately prior to the adjustment and the denominator of which shall be the Exercise Price resulting from such adjustment.

 

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(g)                                  If the Corporation takes any action affecting its Common Shares to which the foregoing provisions of this Section 8, in the opinion of the board of directors of the Corporation, acting in good faith, are not strictly applicable, or if strictly applicable would not fairly adjust the rights of the Holder against dilution in accordance with the intent and purposes hereof, or would otherwise materially affect the rights of the Holder hereunder, then the Corporation shall, subject to the approval of the OTCQB and TSX Venture Exchange (or such other stock exchange or quotation system on which the Common Shares are then listed and posted (or quoted) for trading, as applicable), execute and deliver to the Holder an amendment hereto providing for an adjustment in the application of such provisions so as to adjust such rights as aforesaid in such manner as the board of directors of the Corporation may determine to be equitable in the circumstances, acting in good faith. The failure of the taking of action by the board of directors of the Corporation to so provide for any adjustment on or prior to the effective date of any action or occurrence giving rise to such state of facts will be conclusive evidence that the board of directors has determined that it is equitable to make no adjustment in the circumstances.

 

9. The following rules and procedures shall be applicable to the adjustments made pursuant to Section 8 herein:

 

a.                                                                                      any Common Shares owned or held by or for the account of the Corporation shall be deemed not be to outstanding except that, for the purposes of Section 8 herein, any Common Shares owned by a pension plan or profit sharing plan for employees of the Corporation or any of its subsidiaries shall not be considered to be owned or held by or for the account of the Corporation;

 

b.                                                                                      no adjustment in the Exercise Price or the number of Common Shares purchasable pursuant to this Warrant shall be required unless a change of at least 1% of the prevailing Exercise Price or the number of Common Shares purchasable pursuant to this Warrant would result, provided, however, that any adjustment which, except for the provisions of this Section 9(b), would otherwise have been required to be made, shall be carried forward and taken into account in any subsequent adjustment;

 

c.                                                                                       the adjustments provided for in Section 8 herein are cumulative and shall apply to successive subdivisions, consolidations, dividends, distributions and other events resulting in any adjustment under the provisions of such item;

 

d.                                                                                      in the absence of a resolution of the board of directors of the Corporation fixing a record date for any dividend or distribution referred to in Sections 8(b)(iii) and 8(d) herein, the Corporation shall be deemed to have fixed as the record date therefor the date on which such dividend or distribution is effected;

 

e.                                                                                       if the Corporation sets a record date to take any action and thereafter and before the taking of such action abandons its plan to take such action, then no adjustment to the Exercise Price will be required by reason of the setting of such record date;

 

f.                                                                                        as a condition precedent to the taking of any action which would require any adjustment to the Warrants evidenced hereby, including the Exercise Price, the Corporation must take any corporate action which may be necessary in order that the Corporation shall have unissued and reserved in its authorized capital and may validly and legally issue as fully paid and non-assessable all of the shares or other securities which the Holder is entitled to receive on the full exercise thereof in accordance with the provisions hereof;

 

g.                                                                                       forthwith, but no later than fourteen (14) days, after any adjustment to the Exercise Price or the number of Common Shares purchasable pursuant to the Warrants, the Corporation shall provide to the Holder a certificate of an officer of the Corporation certifying as to the amount of such adjustment and, in reasonable detail, describing the event requiring and the manner of computing or determining such adjustment;

 

h.                                                                                      any question that at any time or from time to time arises with respect to the amount of any adjustment to the Exercise Price or other adjustment pursuant to Section 8 herein shall be conclusively determined by an independent valuation firm (as mutually selected by the Corporation and Holder) and shall be binding upon the Corporation and the Holder;

 

i.                                                                                          any adjustment to the Exercise Price under the terms of this Warrant Certificate shall (if required) be subject to the prior approval of the OTCQB and TSX Venture Exchange (or such other stock exchange or quotation system on which the Common Shares are then listed and posted (or quoted) for trading, as applicable); and

 

13

 

j.                                                                                         in case the Corporation, after the date of issue of this Warrant Certificate, takes any action affecting the Common Shares, other than an action described in Section 8 herein, which in the opinion of the directors of the Corporation would materially affect the rights of the Holder, the Exercise Price will be adjusted in such manner, if any, and at such time, by action by the directors of the Corporation but subject in all cases to any necessary regulatory approval, including approval of the OTCQB and TSX Venture Exchange (or such other stock exchange or quotation system on which the Common Shares are then listed and posted (or quoted) for trading, as applicable). Failure of the taking of action by the directors of the Corporation so as to provide for an adjustment on or prior to the effective date of any action by the Corporation affecting the Common Shares will be conclusive evidence that the board of directors of the Corporation has determined that it is equitable to make no adjustment in the circumstances.

 

10. On the happening of each and every such event set out in Section 8 herein, the applicable provisions of this Warrant Certificate, including the Exercise Price, shall, ipso facto, be deemed to be amended accordingly and the Corporation shall take all necessary action so as to comply with such provisions as so amended.

 

11. The Corporation shall not be required to deliver certificates for Common Shares while the share transfer books of the Corporation are properly closed, having regard to the provisions of Sections 8 and 9 herein, prior to any meeting of shareholders or for the payment of dividends or for any other purpose and in the event of the surrender of any Warrant in accordance with the provisions hereof and the making of any subscription and payment for the Common Shares called for thereby during any such period, delivery of certificates for Common Shares may be postponed for not more than five (5) business days after the date of the reopening of said share transfer books; provided, however, that any such postponement of delivery of certificates shall be without prejudice to the right of the Holder so surrendering the same and making payment during such period to receive after the share transfer books shall have been re-opened such certificates for the Common Shares called for, as the same may be adjusted pursuant to Sections 8 and 9 herein as a result of the completion of the event in respect of which the transfer books were closed.

 

12. Subject as hereinafter provided, all or any of the rights conferred upon the Holder by the terms hereof may be enforced by the Holder by appropriate legal proceedings. No recourse under or upon any obligation, covenant or agreement contained herein shall be had against any shareholder or officer of the Corporation either directly or through the Corporation, it being expressly agreed and declared that the obligations under the Warrants are solely corporate obligations and that no personal liability whatever shall attach to or be incurred by the shareholders or officers of the Corporation or any of them in respect thereof, any and all rights and claims against every such shareholder or officer being hereby expressly waived as a condition of and as a consideration for the issue of the Warrants.

 

13. The Holder may subscribe for and purchase (including via Cashless Exercise) any lesser number of Common Shares than the number of Common Shares expressed in any Warrant Certificate. In the case of any subscription for a lesser number of Common Shares than expressed in any Warrant Certificate (including via Cashless Exercise), the Holder hereof shall be entitled to receive, at no cost to the Holder, a new Warrant Certificate in respect of the balance of Warrants not then exercised. Such new Warrant Certificate shall be mailed to the Holder by the Corporation or, at its direction, the transfer agent of the Corporation, contemporaneously with the mailing of the certificate or certificates representing the Common Shares issued pursuant to Section 5 herein.

 

14. If any Warrant Certificate becomes stolen, lost, mutilated or destroyed, the Corporation shall, on such terms as it may in its discretion impose, acting reasonably, issue and sign a new Warrant Certificate of like denomination, tenor and date as the Warrant Certificate so stolen, lost, mutilated or destroyed for delivery to the Holder. The applicant for the issue of a new Warrant Certificate pursuant to this section 14 shall bear the cost of the issue thereof and in the case of mutilation shall as a condition precedent to the issue thereof, deliver to the Corporation the mutilated Warrant Certificate, and in case of loss, destruction or theft shall, as a condition precedent to the issue thereof, furnish to the Corporation such evidence of ownership and of the loss, destruction or theft of the Warrant Certificate so lost, destroyed or stolen as shall be satisfactory to the Corporation in its discretion, acting reasonably, and the applicant shall also be required to furnish an indemnity and surety bond in amount and form satisfactory to the Corporation in its discretion, acting reasonably, and shall pay the reasonable charges of the Corporation in connection therewith.

 

15.                               The Holder may transfer the Warrants represented hereby by:

 

(a)                                 duly completing and executing the transfer form attached as Schedule “B” (“Transfer Form”); and

(b)                                 surrendering this Warrant Certificate and the completed Transfer Form, together with such other documents as the Corporation may reasonably request, subject to the last sentence of this Section 15 to the Corporation at the address set forth on the Transfer Form or such other office as may be specified by the Corporation, in a written notice to the Holder, from time to time,

 

provided that all such transfers shall be effected in accordance with all applicable securities laws, and provided that, after such transfer, the term “Holder” shall mean and include any transferee or assignee of the current or any future Holder. In order to establish compliance with applicable securities legislation, the Corporation may require the delivery of a legal opinion delivered by legal counsel of recognized standing in form and substance reasonably satisfactory to the Corporation to the effect that the transfer does not require registration under the U.S. Securities Act or any applicable state securities laws. If only part of the Warrant evidenced hereby is transferred, the Corporation will deliver to the Holder and the transferee a replacement Warrant substantially in the form of this Warrant. The foregoing deliveries in this Section 15 may be delivered by Holder electronically (including via fax) with originals to follow three (3) business days thereafter. If such transfer is by a Holder to its Affiliate (as defined under the U.S. Securities Act and to the extent such Affiliate organized in the United States), such transfer shall be effectuated pursuant to Section 15(a) and (b).

 

14

 

16. This Warrant may only be exercised by a person that: (a) certifies that it is not a U.S. Person and that such Warrant is not being exercised within the United States or on behalf of, or for the account or benefit of, a U.S. Person or a person in the United States; or (b) furnishes a written opinion of counsel satisfactory to the Corporation to the effect that the Common Shares issuable upon exercise of the Warrant have been registered under the U.S. Securities Act and applicable state securities laws or are exempt from registration thereunder; or (c) is purchasing the Common Shares directly from the Corporation pursuant to a duly completed Subscription Form for its own account or for the account of a beneficial purchaser, is exercising the Warrant for its own account or for the account of such original beneficial purchaser (if any), and is (and such beneficial purchaser, if any, also is) an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the U.S. Securities Act. The Holder acknowledges that a legend to that effect may be placed on any certificates representing the Common Shares issued on exercise of the rights represented by this Warrant. Terms used in this paragraph have the meanings given to them in Regulation S under the 1933 Act.

 

17. Any certificate representing Common Shares issued upon the exercise of this Warrant will bear the following legends:

 

“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE ·.”

 

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE CORPORATION THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY: (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH LOCAL LAWS AND REGULATIONS, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 OR RULE 144A THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY STATE SECURITIES LAWS, OR (D) IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, IF IN EACH CASE AN OPINION OF COUNSEL OF RECOGNIZED STANDING OR OTHER EVIDENCE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE CORPORATION HAS BEEN PROVIDED TO THE CORPORATION TO THAT EFFECT. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON EXCHANGES IN CANADA.”

 

provided, that if the Common Shares are being sold outside the United States in compliance with the requirements of Rule 904 of Regulation S at a time when the Corporation is a “foreign issuer” as defined in Regulation S at the time of sale, the legend set forth above in this Section 8 may be removed by providing a declaration to the registrar and transfer agent of the Corporation, as set forth in Schedule “C” attached hereto (or in such other form as the Corporation may prescribe from time to time); and provided, further, that, if the Common Shares are being sold otherwise than in accordance with Rule 904 of Regulation S and other than to the Corporation, the legend may be removed by delivery to the registrar and transfer agent and the Corporation of an opinion of counsel, of recognized standing reasonably satisfactory to the Corporation, that such legend is no longer required under applicable requirements of the U.S. Securities Act or state securities laws.

 

18.                             In the event the Corporation, at any time prior to the Expiry Time, proposes to file on behalf of any shareholder a registration statement under the U.S. Securities Act on any form (other than a registration statement on Form S-4 or S-8) for shares held by any such shareholder, the Corporation shall offer to include in such registration statement the Common Shares of Holder (whether issued or issuable under the Warrants). Such shares shall be registered, along with such other shares, on a pro rata basis on terms customary for a transaction of this type and nature.

 

19.                             The Corporation will maintain a register of holders of Warrants at its principal office. The Corporation may deem and treat the registered holder of any Warrant Certificate as the absolute owner of the Warrants represented thereby for all purposes, and the Corporation shall not be affected by any notice or knowledge to the contrary except where the Corporation is required to take notice by statute or by order of a court of competent jurisdiction. A Holder shall be entitled to the rights evidenced by such Warrant free from all equities or rights of set-off or counterclaim between the Corporation and the original or any intermediate holder thereof and all persons may act accordingly and the receipt by any such Holder of the Common Shares purchasable pursuant to such Warrant shall be a good discharge to the Corporation for the same and the Corporation shall not be bound to inquire into the title of any such Holder, except where the Corporation is required to take notice by statute or by order of a court of competent jurisdiction.

 

20.                             The Corporation shall notify the Holder forthwith of any change of the Corporation’s address.

 

15

 

21.                               The Corporation represents, warrants and covenants as follows:

 

	
a.
    	
 
    	
The Corporation hereby represents and warrants that   it is authorized to create and issue the Warrant and covenants and agrees   that it will cause the Common Shares from time to time subscribed for and   purchased in the manner provided in this Warrant and the certificate or   certificates representing such Common Shares to be issued and that, at all   times prior to the Expiry Time, it will reserve and there will remain   unissued a sufficient number of Common Shares to satisfy the right of   purchase provided for in this Warrant. All Common Shares which are issued   upon the exercise of the right of purchase provided in this Warrant, upon   payment therefor of the amount at which such Common Shares may be purchased   pursuant to the provisions of this Warrant, shall be and be deemed to be   fully paid and non-assessable shares and free from all taxes, liens and   charges with respect to the issue thereof. This Warrant does not violate the   Corporation’s articles of amalgamation or current by-laws. The Corporation   hereby represents and warrants that this Warrant is a legal, valid and enforceable   obligation of the Corporation, enforceable in accordance with the provisions   of this Warrant subject to bankruptcy, insolvency and similar laws affecting   the enforceability of creditors’ rights generally and to general principles   of equity and concepts of reasonableness.
    
	
 
    	
 
    	
 
    
	
b.
    	
 
    	
No consent or approval of, giving of notice to,   registration with, or taking of any other action in respect of any state,   federal or other governmental authority or agency is required with respect to   the execution, delivery and performance by the Corporation of its obligations   under this Warrant, except for any filings required under applicable local   securities laws.
    
	
 
    	
 
    	
 
    
	
c.
    	
 
    	
All issued and outstanding Common Shares and other   securities of the Corporation have been duly authorized and validly issued   and are fully paid and nonassessable. To the Corporation’s knowledge, all   outstanding Common Shares and other securities were issued in full compliance   with all applicable securities laws.
    
	
 
    	
 
    	
 
    
	
d.
    	
 
    	
The Corporation has in full force and effect   insurance policies, with extended coverage, insuring the Corporation and its   property and business against such losses and risks, and in such amounts, as   are customary for corporations engaged in a similar business and similarly   situated and as otherwise may be required pursuant to the terms of any other   contract or agreement.
    
	
 
    	
 
    	
 
    
	
e.
    	
 
    	
At all times (if any) during the term of this   Warrant when (i) the Corporation shall not be required to file reports   pursuant to Section 13 or 15(d) of the Securities Exchange Act of   1934, as amended (the “Exchange Act”),   and/or (ii) the Common Shares shall no longer be listed or quoted for   trading on a national securities exchange or over-the-counter market, Holder   shall be entitled to the information rights contained in Section 6.1 of   the Credit Agreement and, to such extent, Section 6.1 of the Credit   Agreement is hereby incorporated into this Warrant by this reference as   though fully set forth herein.
    
	
 
    	
 
    	
 
    
	
f.
    	
 
    	
To Company’s knowledge, all material information   regarding the Company has been publicly disclosed that is required to be   disclosed under the Exchange Act (with respect to such information disclosed   on a Form 8-K, without regard for the Form 8-K item number under   which it was filed).
    

 

22. Subject to the express terms above, Section 10.2 of the Credit Agreement with respect to notices is incorporated herein by reference.

 

23. If for any reason, other than the failure or default of the Holder, the Corporation is legally prohibited to issue and deliver the Common Shares or other securities as contemplated herein to the Holder upon the proper exercise by the Holder of the right to purchase any of the Common Shares purchasable upon exercise of the Warrants represented hereby, the Corporation may pay, at its option and in complete satisfaction of its obligations and the rights of the Holder hereunder, to the Holder, in cash, an amount equal to the difference between the Exercise Price and the Current Market Price of such Common Shares or other securities on the date of exercise by the Holder, and upon such payment the Corporation shall have no liability or other obligation to the Holder relating to or in respect of the Warrants or this Warrant Certificate.

 

24. This Warrant Certificate shall be governed by the laws of the Province of Ontario and the federal laws of Canada applicable herein.

 

25. This Warrant Certificate shall inure to the benefit of and shall be binding upon the Holder and the Corporation and their respective successors and assigns.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

16

 

2 The number of warrants will be determined by multiplying the principal amount of the subsequent loan by .08 and then dividing the product by the exercise price of the warrants. The exercise price of the warrants will be equivalent to 20% above the lower of (a) the average closing price of the Tribute common shares on the OTCQX of the previous 20 trading days before the closing date of the subsequent loan (the “Closing Date”) or (b) the closing price at the Closing Date on the OTCQX. For example if US$3,000,000 is advanced on the Closing Date and the appropriate strike price is US$0.70, the Lender will be issued US$240,000 of common share purchase warrants or 342,857 common share purchase warrants ($3,000,000 x 8.0% / $0.70 = 342,857).

 

IN WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be signed by its duly authorized officer.

 

DATED as of the · day of ·, ·.

 

	
 
    	
TRIBUTE   PHARMACEUTICALS CANADA INC.
    
	
 
    	
 
    
	
 
    	
Per:
    	
/s/
    

 

17

 

[Warrant Signature Page]

 

Schedule “A”

 

SUBSCRIPTION FORM

 

TO BE COMPLETED IF WARRANTS ARE TO BE EXERCISED:

 

	
TO:
    	
TRIBUTE   PHARMACEUTICALS CANADA INC.
    
	
 
    	
151 Steeles Avenue   East, Milton, Ontario, Canada 19T 1Y1
    

 

The undersigned hereby subscribes for   Common Shares of Tribute Pharmaceuticals Canada Inc. according to the terms and conditions set forth in the annexed Warrant Certificate (or such number of other securities or property to which such Warrant Certificate entitles the undersigned to acquire under the terms and conditions set forth in such Warrant Certificate).

 

As at the time of exercise hereunder, the undersigned represents, warrants and certifies as follows:

 

o                                    it (and any person named hereunder to which common shares are to be issued) is not a U.S. person or a person within the United States and the Warrant is not being exercised within the United States or on behalf of or for the account or benefit of, a U.S. person or a person within the United States (“United States” and “U.S. person” have the meanings given to them in Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”)); OR

 

o                                    it, or any beneficial purchase from whom it is exercising the Warrant, purchased the Warrant directly from the Corporation and it is exercising the Warrant for its own account or for the account of such original beneficial purchaser (if any), and is (and such beneficial purchaser, if any, also is) an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the U.S. Securities Act and it has filled out the U.S. Accredited Investor Status Certificate accompanying this Subscription Form; OR

 

o                                    it is furnishing herewith a written opinion of counsel (which must be satisfactory to the Corporation) to the effect that the common shares issuable upon exercise of the Warrant have been registered under the U.S. Securities Act and applicable state securities laws or are exempt from registration requirements thereunder.

 

If the undersigned has indicated that the undersigned is an “accredited investor” by checking the second box above, the undersigned additionally represents and warrants to the Corporation that:

 

1.                                      the undersigned has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the common shares, and the undersigned is able to bear the economic risk of loss of his or her entire investment;

 

2.                                      the undersigned is: (i) purchasing the common shares for his or her own account or for the account of one or more “accredited investors” with respect to which the undersigned is exercising sole investment discretion, and not on behalf of any other person; (ii) is purchasing the common shares for investment purposes only and not with a view to resale, distribution or other disposition in violation of United States federal or state securities laws; and (iii) in the case of the purchase by the undersigned of the common shares as agent or trustee for any other person or persons (each a “Beneficial Owner”), the undersigned holder has due and proper authority to act as agent or trustee for and on behalf of each such Beneficial Owner in connection with the transactions contemplated hereby; provided that: (x) if the undersigned holder, or any Beneficial Owner, is a corporation or a partnership, syndicate, trust or other form of unincorporated organization, the undersigned holder or each such Beneficial Owner was not incorporated or created solely, nor is it being used primarily to permit purchases without a prospectus or registration statement under applicable law; and (y) each Beneficial Owner, if any, is an “accredited investors”; and

 

3.                                      the undersigned has not exercised the Warrants as a result of any form of “general solicitation” or “general advertising” (as those terms are used in Regulation D under the U.S. Securities Act), including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or on the internet or broadcast over radio, television, the internet or other form of telecommunications, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising.

 

 

If the undersigned has indicated that the undersigned is an “accredited investors” by checking the second box above, the undersigned also acknowledges and agrees that:

 

1.                                      the Corporation has provided to the undersigned the opportunity to ask questions and receive answers concerning the terms and conditions of the offering, and the undersigned has had access to such information concerning the Corporation as the undersigned has considered necessary or appropriate in connection with the undersigned’s investment decision to acquire the common shares;

 

2.                                      if the undersigned decides to offer, sell or otherwise transfer any of the common shares, the undersigned must not, and will not, offer, sell or otherwise transfer any of such common shares directly or indirectly, unless:

 

(a)           the sale is to the Corporation;

 

(b)                                 the sale is made outside the United States in a transaction meeting the requirements of Rule 904 of Regulation S under the U.S. Securities Act and in compliance with applicable local laws and regulations;

 

(c)                                  the sale is made pursuant to the exemption from the registration requirements under the U.S. Securities Act provided by (i) Rule 144 thereunder, if available, or (ii) Rule 144A thereunder, if available, to a person who the seller reasonably believes is a “qualified institutional buyer” (as defined in Rule 144A under the U.S. Securities Act, a “Qualified Institutional Buyer”) that is purchasing for its own account or for the account of a Qualified Institutional Buyer to whom notice is given that the offer, sale or transfer is being made in reliance of Rule 144A under the U.S. Securities Act, and, in both cases, in accordance with any applicable state securities laws; or

 

(d)                                 the common shares are sold in a transaction that does not require registration under the U.S. Securities Act or any applicable state laws and regulations governing the offer and sale of securities, and it has prior to such sale furnished to the Corporation an opinion of counsel reasonably satisfactory to the Corporation;

 

3.                                      the common shares are “restricted securities” under applicable federal securities laws and that the U.S. Securities Act and the rules of the United States Securities and Exchange Commission provide in substance that the undersigned may dispose of the common shares only pursuant to an effective registration statement under the U.S. Securities Act or an exemption therefrom;

 

4.                                      the Corporation has no obligation to register any of the common shares or to take action so as to permit sales pursuant to the U.S. Securities Act (including Rule 144 thereunder) and if the Corporation is deemed to have been at any time previously an issuer with no or nominal operations and no or nominal assets other than cash and cash equivalents, Rule 144 may not be available for resales of the common shares;

 

5.                                      the certificates representing the common shares (and any certificates issued in exchange or substitution for the common shares) will bear a legend stating that such securities have not been registered under the U.S. Securities Act or the securities laws of any state of the United States and may not be offered for sale or sold unless registered under the U.S. Securities Act and the securities laws of all applicable states of the United States or an exemption from such registration requirements is available;

 

6.                                      delivery of certificates bearing such a legend may not constitute “good delivery” in settlement of transactions on Canadian stock exchanges or over-the-counter markets, but if the Corporation is a “foreign issuer” within the meaning of Regulation S under the U.S. Securities Act at the time of sale, a new certificate will be made available to the undersigned upon provision by the undersigned of a declaration in the form attached hereto; provided however, that the Corporation (i) is not obligated to remain a “foreign issuer” within the meaning of Regulation S, (ii) may not, at the time the common shares are resold by it or at any other time, be a foreign issuer, and (iii) may engage in one or more transactions which could cause the Corporation not to be a foreign issuer, and if the Corporation is not a foreign issuer at the time of any sale or other transfer of such Securities pursuant to Rule 904 of Regulation S, the certificates representing such securities may continue to bear the legend described above;

 

7.                                      purchasing, holding and disposing of the common shares may have tax consequences under the laws of both Canada and the United States, and the undersigned is solely responsible for determining the tax consequences applicable to its particular circumstances and should consult its own tax advisors concerning investment in such common shares; and

 

8.                                      the financial statements of the Corporation have been prepared in accordance with Canadian generally accepted accounting principles, which differ in some respects from United States generally accepted accounting principles, and thus may not be comparable to financial statements of United States companies.

 

19

 

Address for Delivery of Common Shares:

 

 

 

 

Attention :

 

o Exercise Price Tendered (US$0.· per Common Share or as adjusted) $               OR

o Cashless Exercise Election.

 

Dated at   , this   day of   ,  20  .

 

	
 
    	
)

)

)

)

)

)

)

)
    	
 
    
	
Witness:
    	
Holder’s   Name

 
    
	
Authorized   Signature

 
    
	
Title   (if applicable)
    

 

Signature guaranteed1:

 

1.       If the Common Shares are to be registered in a name other than the name of the registered Warrant Holder, the signature of the Warrant Holder must be medallion guaranteed by a bank, trust company or a member of a stock exchange in Canada.

 

U.S. ACCREDITED INVESTOR STATUS CERTIFICATE

 

In connection with the exercise of certain outstanding warrants of TRIBUTE PHARMACEUTICALS CANADA INC. (the “Corporation”) by the holder, the holder hereby represents and warrants to the Corporation that the holder, and each beneficial owner (each a “Beneficial Owner”), if any, on whose behalf the holder is exercising such warrants, satisfies one or more of the following categories of Accredited Investor (please write “W/H” for the undersigned holder, and “B/O” for each beneficial owner, if any, on each line that applies):

 

(1)                                 Any bank as defined in Section 3(a)(2) of the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the U.S. Securities Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to Section 15 of the U.S. Securities Exchange Act of 1934 or any insurance company as defined in Section 2(a)(13) of the U.S. Securities Act; any investment company registered under the U.S. Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; any Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the U.S. Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees if such plan has total assets in excess of US$5,000,000; any employee benefit plan within the meaning of the U.S. Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of US$5,000,000, or, if a self-directed plan, with investment decisions made solely by persons that are “accredited investors” (as such term is defined in Rule 501 of Regulation D of the U.S. Securities Act);

(2)                                 Any private business development company as defined in Section 202(a)(22) of the U.S. Investment Advisers Act of 1940;

(3)                                 Any organization described in Section 501(c)(3) of the U.S. Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of US$5,000,000;

(4)                                 Any trust with total assets in excess of US$5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person (being defined as a person who has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of the prospective investment);

(5)                                 Any natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his purchase exceeds US$1,000,000; for purposes of this calculation, if the mortgage or other indebtedness secured by the Subscriber’s primary residence exceeds its value and the mortgagee or other lender has recourse to the Subscriber personally for any deficiency, the amount of any excess must be considered a liability and deducted from the Subscriber’s net worth; or

(6)                                 Any natural person who had an individual income in excess of US$200,000 in each of the two most recent years or joint income with that person’s spouse in excess of US$300,000 in each of those years, and has a reasonable expectation of reaching the same income level in the current year.

 

20

 

Schedule “B”

WARRANT TRANSFER FORM

 

FOR VALUE RECEIVED, the undersigned (the “Transferor”) hereby sells, assigns and transfers unto (name)                                           (the “Transferee”) of (address)                                                                       those certain Warrants (and the rights therein) of TRIBUTE PHARMACEUTICALS CANADA INC. (the “Corporation”) registered in the name of the undersigned, and irrevocably appoints the Corporation as the attorney of the undersigned to transfer the said securities on the register of transfers for said Warrant, with full power of substitution.

 

The undersigned hereby certifies for the benefit of the Corporation that it has otherwise complied with the transfer restrictions and limitations noted on any legend appearing on the Warrant.

 

NOTICE: The signature of this assignment must correspond with the name as written upon the face of the Warrant, in every particular, without alteration or enlargement or any change whatever, and must be guaranteed by a bank, trust company or a member of a recognized stock exchange. The guarantor must affix a stamp bearing the actual words “Signature Guaranteed”.

 

Dated at                      this       day of                , 20  .

 

 

	
(Signature of   transferring Warrantholder)
    
	
Name (please print)
    
	
 
    
	
Address
    

 

21

 

TRANSFEREE ACKNOWLEDGMENT

 

In connection with this transfer (check one):

 

o                                    The undersigned transferee hereby certifies that (i) it was not offered the Warrants while in the United States and did not execute this certificate while within the United States; (ii) it is not acquiring any of the Warrants represented by this Warrant Certificate by or on behalf of person within the United States; and (iii) it has in all other respects complied with the terms of Regulation S of United States Securities Act of 1933, as amended (the “1933 Act”), or any successor rule or regulation of the United States Securities and Exchange Commission as presently in effect; OR

 

o                                    The undersigned transferee is delivering a written opinion of U.S. Counsel acceptable to the Company to the effect that this transfer of Warrants has been registered under the 1933 Act or is exempt from registration thereunder.

 

(Signature of Transferee)

 

Date Name of Transferee (please print)

 

The Warrants and the common shares issuable upon exercise of the Warrants shall only be transferable in accordance with applicable laws. The Warrants may only be exercised in the manner required by the certificate representing the Warrants and the Warrant Exercise Form attached thereto. Any common shares acquired pursuant to this Warrant shall be subject to applicable hold periods and any certificate representing such common shares will bear restrictive legends.

 

22

 

Schedule “C”

DECLARATION FOR REMOVAL OF LEGEND

 

	
TO:
    	
 
    	
                                 as registrar and transfer agent for the common shares of Tribute   Pharmaceuticals Canada Inc. (the “Corporation”).
    

 

The undersigned (A) acknowledges that the sale of the                      represented by certificate number                , to which this declaration relates, is being made in reliance on Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), and (B) certifies that (1) the undersigned is not an “affiliate” (as defined in Rule 405 under the U.S. Securities Act) of the Corporation or a “distributor”, as defined in Regulation S, or an affiliate of a “distributor”; (2) the offer of such securities was not made to a person in the United States and either (a) at the time the buy order was originated, the buyer was outside the United States, or the seller and any person acting on its behalf reasonably believe that the buyer was outside the United States, or (b) the transaction was executed on or through the facilities of the Toronto Stock Exchange or any other designated offshore securities market within the meaning of Rule 902(b) of Regulation S under the U.S. Securities Act, and neither the seller nor any person acting on its behalf knows that the transaction has been prearranged with a buyer in the United States; (3) neither the seller nor any affiliate of the seller nor any person acting on their behalf has engaged in any directed selling efforts in connection with the offer and sale of such securities; (4) the sale is bona fide and not for the purpose of “washing off” the resale restrictions imposed because the securities are “restricted securities” (as such term is defined in Rule 144(a)(3) under the U.S. Securities Act); (5) the seller does not intend to replace the securities sold in reliance on Rule 904 of Regulation S under the U.S. Securities Act with fungible unrestricted securities; and (6) the contemplated sale is not a transaction, or part of a series of transactions which, although in technical compliance with Regulation S, is part of a plan or a scheme to evade the registration provisions of the U.S. Securities Act.

 

	
Dated:
    	
 
    	
 
    
	
 
    	
 
    
	
Signature of individual   (if Purchaser is an individual)
    	
 
    
	
 
    	
 
    
	
Authorized signatory   (if Purchaser is not an individual)
    	
 
    
	
 
    	
 
    
	
Name of Purchaser   (please print)
    	
 
    
	
 
    	
 
    
	
Name of authorized signatory   (please print)
    	
 
    
	
 
    	
 
    
	
Official capacity of   authorized signatory (please print)
    	
 
    

 

23

 

Exhibit B

 

MISC. RESTATED SCHEDULES TO CREDIT AGREEMENT

 

24

 

Exhibit C

 

MISC. RESTATED SCHEDULES TO GUARANTEE

 

SCHEDULE 5

 

INTELLECTUAL PROPERTY

 

[APPLIES TO ALL Intellectual Property and License Agreements]

 

	
Grantor
    	
 
    	
Name / Identifier of IP or
   License
    	
 
    	
Type of IP (e.g., patent,
   TM, ©, mask work) or
   License Agreement
    	
 
    	
Expiration Date
   (if a License, expiration of
   License and Licensed
   Property)
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #6,083,933 (US Patent)
    	
 
    	
Patent
    	
 
    	
04/19/2019
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #2,269,260 (Canadian Patent)
    	
 
    	
Patent
    	
 
    	
04/16/2019
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #US 7772210 (United States)
    	
 
    	
Patent
    	
 
    	
11/07/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #ZL200480006467.1
   (China)
    	
 
    	
Patent
    	
 
    	
02/18/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #4778888
   (Japan)
    	
 
    	
Patent
    	
 
    	
02/18/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #AU
   2004212650 (Australia)
    	
 
    	
Patent
    	
 
    	
02/18/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - Application #04711966.4 (Europe - pending)
    	
 
    	
Patent Application
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - Application #4050/DELNP (India - pending)
    	
 
    	
Patent Application
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - Application #170309 (Israel - pending)
    	
 
    	
Patent Application
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #2515512 (Canada)
    	
 
    	
Patent
    	
 
    	
02/18/2024
    

 

25

 

[APPLIES TO ALL Intellectual Property and License Agreements]

 

	
Grantor
    	
 
    	
Name / Identifier of IP or
   License
    	
 
    	
Type of IP (e.g., patent,
   TM, ©, mask work) or
   License Agreement
    	
 
    	
Expiration Date
   (if a License, expiration of
   License and Licensed
   Property)
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #8084441 (United States - second high dose   patent)
    	
 
    	
Patent
    	
 
    	
11/07/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #8334276 (United States - third high dose   patent)
    	
 
    	
Patent
    	
 
    	
11/07/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - 8.778,908(United States - fourth high dose   patent)
    	
 
    	
Patent
    	
 
    	
11/07/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
NeoVisc Trademarks - Canada (TMA 486692), Germany   (30457514.3), European Community (004376208), Dominican Republic (140250),   Mexico (823752)
    	
 
    	
Trademarks
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst Trademarks - Canada (TMA486693),
   United States (2677199),
   European Community (002297653), Korea (40-0849594), Turkey 2008055507
    	
 
    	
Trademarks
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uropol Trademarks - Germany (303 46 971), Austria   (230 503), Switzerland (514 536)
   EU (010499218)
    	
 
    	
Trademarks
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Tribute Pharmaceuticals Application # 86/006,569 and   86/006,574 (United States); Application #1609470
    	
 
    	
Trademark Application
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Tribute Pharmaceuticals Application #
   1,609,443 (Canada)
    	
 
    	
Trademark
    	
 
    	
N/A
    

 

26

 

[APPLIES TO ALL Intellectual Property and License Agreements]

 

	
Grantor
    	
 
    	
Name / Identifier of IP or
   License
    	
 
    	
Type of IP (e.g., patent,
   TM, ©, mask work) or
   License Agreement
    	
 
    	
Expiration Date
   (if a License, expiration of
   License and Licensed
   Property)
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Tribute Pharmaceuticals Application #
   1,609,447 (Canada)
    	
 
    	
Trademark
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Tribute Pharmaceuticals Application #
   1,609,440 (Canada)
    	
 
    	
Trademark
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Ltd.
    	
 
    	
Cambia Patent #CA 2,254,144 (Canada) (granted)
   Cambia Patent #CA Application #2,632,375 (Canada) (pending)
    	
 
    	
Patent
    	
 
    	
May 15, 2017
   June 16, 2026 (if granted)
    
	
Tribute Pharmaceuticals Canada Ltd.
    	
 
    	
Cambia Trademark
   TMA806381
    	
 
    	
Trademark License Agreement
    	
 
    	
December 31, 2025
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Benzimidazole
   derivatives
   (bilastine) patent CA#2,206,754
    	
 
    	
Patent
    	
 
    	
June 3, 2017
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Benzimidazole
   derivatives
   (bilastine)
   CA#2,206,754
    	
 
    	
Patent
    	
 
    	
April 19, 2022
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Visken & Viskazide
   Reg no: TMA231315
   Novartis Pharmaceuticals Canada Inc
    	
 
    	
Trademark
    	
 
    	
Perpetuity
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Fiorinal
   Reg no: TMA285639
   Novartis Pharmaceuticals Canada Inc
    	
 
    	
Trademark
    	
 
    	
Perpetuity
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Soriatane Trademarks
   TMA436505
    	
 
    	
License to use Trademarks
    	
 
    	
December 31, 2018
    

 

27

 

[APPLIES TO ALL Intellectual Property and License Agreements]

 

	
Grantor
    	
 
    	
Name / Identifier of IP or
   License
    	
 
    	
Type of IP (e.g., patent,
   TM, ©, mask work) or
   License Agreement
    	
 
    	
Expiration Date
   (if a License, expiration of
   License and Licensed
   Property)
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Bezalip SR Trademarks
   TMA247035
    	
 
    	
License to use Trademarks
    	
 
    	
December 31, 2018
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
License Agreement for Bezalip and Soriatane in   Canada
    	
 
    	
License Agreement
    	
 
    	
December 31, 2018
    
	
Tribute Pharmaceuticals Canada Ltd.
    	
 
    	
License Agreement for Bezalip in the United States
    	
 
    	
License Agreement
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Ltd.
    	
 
    	
License Agreement for Cambia in Canada
    	
 
    	
License Agreement
    	
 
    	
December 31, 2025
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
License Agreement for MycoVa in Canada
    	
 
    	
License Agreement
    	
 
    	
December 30, 2026
    
	
Tribute Pharmaceuticals Canada Inc
    	
 
    	
Asset Purchase for Fiorinal from Novartis
    	
 
    	
Asset Purchase Agreement
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc
    	
 
    	
License Agreement for Visken, Viskazide from   Novartis
    	
 
    	
License Agreement
    	
 
    	
In perpetuity
    
	
Tribute Pharmaceuticals Canada Inc
    	
 
    	
Supply (Transition) Agreement for Visken, Viskazide,   & Fiorinal from Novartis
    	
 
    	
Transition Agreement
    	
 
    	
Approximately 1 year or   upon the transfer of marketing authorizations
    

 

28

 

[APPLIES TO License Agreements ONLY]

 

	
Name and Address of
   Licensor
    	
 
    	
Name and Date of
   License Agreement
    	
 
    	
Exclusive License?
   (Yes/No)
    	
 
    	
Restrictions to grant a
   lien, assign or sublicense?
   (Yes/No)
    	
 
    	
Default or
   Termination
   affect Agent’s
   ability to sell or
   assign?
   (Yes/No)
    
	
Actavis Group PTC ehf Reykjavikurve gi 76-78 P.O.   Box 420 IS-220 Hafnarfjodor, Iceland
    	
 
    	
Sales Marketing and Distribution Agreement (re   Bezalip and Soriatane) dated June 30, 2008 as amended on January 1, 2010 and   on March 31, 2011
    	
 
    	
No
    	
 
    	
Lien - restricted Subcontracting/sublicensing -   restricted Assignment - restricted
    	
 
    	
Yes
    
	
Actavis Group PTC ehf Reykjavikurve gi 76-78 P.O.   Box 420 IS-220 Hafnarfjodor, Iceland
    	
 
    	
Product Development and Profit Share Agreement (re   Bezalip) dated May 4, 2011
    	
 
    	
Yes
    	
 
    	
Lien - no restriction Sublicense - no restriction   Assignment - restricted
    	
 
    	
Yes
    
	
Nautilus Neurosciences, Inc. 135 Rte. 202-206 Suite   4 Bedminste, NJ 07921
    	
 
    	
License Agreement dated November 9, 2010 re Cambia
    	
 
    	
Yes
    	
 
    	
Lien - no restriction Sublicense - restricted   Assignment - restricted
    	
 
    	
Yes
    
	
Nautilus Neurosciences, Inc. 135 Rte. 202-206 Suite   4 Bedminster, NJ 07921
    	
 
    	
Trademark License Agreement dated November 9, 2010   re Cambia
    	
 
    	
Yes
    	
 
    	
Lien - no restriction Sublicense - restricted   Assignment - restricted
    	
 
    	
Yes
    
	
NexMed (U.S.A.), Inc. 11975 El Camino Real, Suite   300, San Diego, CA 92130
    	
 
    	
License Agreement dated December 30, 2011 re MycoVa
    	
 
    	
Yes
    	
 
    	
Lien - no restriction Sublicense - restricted   Assignment - restricted
    	
 
    	
Yes
    
	
Novartis AG & Novartis Pharma AG & Novartis   Pharmaceuticals Canada Inc.
    	
 
    	
License Agreement dated on or about October 2, 2014   re Visken & Viskazide
    	
 
    	
Yes
    	
 
    	
Lien - no restriction Sublicense - restricted   Assignment - restricted (need consent)
    	
 
    	
Yes
    
	
Novartis AG & Novartis Pharma AG & Novartis   Pharmaceuticals Canada Inc.
    	
 
    	
Supply Agreement dated on or about October 2, 2014   re Visken & Viskazide & Fiorinal & Fiorinal C
    	
 
    	
Yes
    	
 
    	
Lien - no restriction Sublicense - restricted   Assignment - restricted (need consent)
    	
 
    	
Yes
    

 

29

 

SCHEDULE 6

 

DEPOSIT ACCOUNTS AND OTHER ACCOUNTS

 

30

 

Exhibit C

 

MISC. RESTATED SCHEDULES TO GUARANTEE

 

SCHEDULE 5

 

INTELLECTUAL PROPERTY

 

[APPLIES TO ALL Intellectual Property and License Agreements]

 

	
Grantor
    	
 
    	
Name / Identifier of IP or
   License
    	
 
    	
Type of IP (e.g., patent,
   TM, ©, mask work) or
   License Agreement
    	
 
    	
Expiration Date
   (if a License, expiration of
   License and Licensed
   Property)
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #6,083,933 (US Patent)
    	
 
    	
Patent
    	
 
    	
04/19/2019
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #2,269,260 (Canadian Patent)
    	
 
    	
Patent
    	
 
    	
04/16/2019
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #US 7772210 (United States)
    	
 
    	
Patent
    	
 
    	
11/07/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #ZL200480006467.1
   (China)
    	
 
    	
Patent
    	
 
    	
02/18/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #4778888
   (Japan)
    	
 
    	
Patent
    	
 
    	
02/18/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #AU
   2004212650 (Australia)
    	
 
    	
Patent
    	
 
    	
02/18/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - Application #04711966.4 (Europe - pending)
    	
 
    	
Patent Application
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - Application #4050/DELNP (India - pending)
    	
 
    	
Patent Application
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - Application #170309 (Israel - pending)
    	
 
    	
Patent Application
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #2515512 (Canada)
    	
 
    	
Patent
    	
 
    	
02/18/2024
    

 

25

 

	
Grantor
    	
 
    	
Name / Identifier of IP or
   License
    	
 
    	
Type of IP (e.g., patent,
   TM, ©, mask work) or
   License Agreement
    	
 
    	
Expiration Date
   (if a License, expiration of
   License and Licensed
   Property)
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #8084441 (United States - second high dose   patent)
    	
 
    	
Patent
    	
 
    	
11/07/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #8334276 (United States - third high dose   patent)
    	
 
    	
Patent
    	
 
    	
11/07/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - 8.778,908(United States - fourth high dose   patent)
    	
 
    	
Patent
    	
 
    	
11/07/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
NeoVisc Trademarks - Canada (TMA 486692), Germany   (30457514.3), European Community (004376208), Dominican Republic (140250),   Mexico (823752)
    	
 
    	
Trademarks
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst Trademarks - Canada (TMA486693),
   United States (2677199),
   European Community (002297653), Korea (40-0849594), Turkey 2008055507
    	
 
    	
Trademarks
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uropol Trademarks - Germany (303 46 971), Austria   (230 503), Switzerland (514 536)
   EU (010499218)
    	
 
    	
Trademarks
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Tribute Pharmaceuticals Application # 86/006,569 and   86/006,574 (United States); Application #1609470
    	
 
    	
Trademark Application
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Tribute Pharmaceuticals Application #
   1,609,443 (Canada)
    	
 
    	
Trademark
    	
 
    	
N/A
    

 

26

 

	
Grantor
    	
 
    	
Name / Identifier of IP or
   License
    	
 
    	
Type of IP (e.g., patent,
   TM, ©, mask work) or
   License Agreement
    	
 
    	
Expiration Date
   (if a License, expiration of
   License and Licensed
   Property)
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Tribute Pharmaceuticals Application #
   1,609,447 (Canada)
    	
 
    	
Trademark
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Tribute Pharmaceuticals Application #
   1,609,440 (Canada)
    	
 
    	
Trademark
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Ltd.
    	
 
    	
Cambia Patent #CA 2,254,144 (Canada) (granted)
   Cambia Patent #CA Application #2,632,375 (Canada) (pending)
    	
 
    	
Patent
    	
 
    	
May 15, 2017
   June 16, 2026 (if granted)
    
	
Tribute Pharmaceuticals Canada Ltd.
    	
 
    	
Cambia Trademark
   TMA806381
    	
 
    	
Trademark License Agreement
    	
 
    	
December 31, 2025
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Benzimidazole
   derivatives
   (bilastine) patent CA#2,206,754
    	
 
    	
Patent
    	
 
    	
June 3, 2017
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Benzimidazole
   derivatives
   (bilastine)
   CA#2,206,754
    	
 
    	
Patent
    	
 
    	
April 19, 2022
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Visken & Viskazide
   Reg no: TMA231315
   Novartis Pharmaceuticals Canada Inc
    	
 
    	
Trademark
    	
 
    	
Perpetuity
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Fiorinal
   Reg no: TMA285639
   Novartis Pharmaceuticals Canada Inc
    	
 
    	
Trademark
    	
 
    	
Perpetuity
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Soriatane Trademarks
   TMA436505
    	
 
    	
License to use Trademarks
    	
 
    	
December 31, 2018
    

 

27

 

	
Grantor
    	
 
    	
Name / Identifier of IP or
   License
    	
 
    	
Type of IP (e.g., patent,
   TM, ©, mask work) or
   License Agreement
    	
 
    	
Expiration Date
   (if a License, expiration of
   License and Licensed
   Property)
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Bezalip SR Trademarks
   TMA247035
    	
 
    	
License to use Trademarks
    	
 
    	
December 31, 2018
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
License Agreement for Bezalip and Soriatane in   Canada
    	
 
    	
License Agreement
    	
 
    	
December 31, 2018
    
	
Tribute Pharmaceuticals Canada Ltd.
    	
 
    	
License Agreement for Bezalip in the United States
    	
 
    	
License Agreement
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Ltd.
    	
 
    	
License Agreement for Cambia in Canada
    	
 
    	
License Agreement
    	
 
    	
December 31, 2025
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
License Agreement for MycoVa in Canada
    	
 
    	
License Agreement
    	
 
    	
December 30, 2026
    
	
Tribute Pharmaceuticals Canada Inc
    	
 
    	
Asset Purchase for Fiorinal from Novartis
    	
 
    	
Asset Purchase Agreement
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc
    	
 
    	
License Agreement for Visken, Viskazide from   Novartis
    	
 
    	
License Agreement
    	
 
    	
In perpetuity
    
	
Tribute Pharmaceuticals Canada Inc
    	
 
    	
Supply (Transition) Agreement for Visken, Viskazide,   & Fiorinal from Novartis
    	
 
    	
Transition Agreement
    	
 
    	
Approximately 1 year or   upon the transfer of marketing authorizations
    

 

28

 

[APPLIES TO License Agreements ONLY]

 

	
Name and Address of
   Licensor
    	
 
    	
Name and Date of
   License Agreement
    	
 
    	
Exclusive License?
   (Yes/No)
    	
 
    	
Restrictions to grant a
   lien, assign or sublicense?
   (Yes/No)
    	
 
    	
Default or
   Termination
   affect Agent’s
   ability to sell or
   assign?
   (Yes/No)
    
	
Actavis Group PTC ehf Reykjavikurve gi 76-78 P.O.   Box 420 IS-220 Hafnarfjodor, Iceland
    	
 
    	
Sales Marketing and Distribution Agreement (re   Bezalip and Soriatane) dated June 30, 2008 as amended on January 1, 2010 and   on March 31, 2011
    	
 
    	
No
    	
 
    	
Lien - restricted Subcontracting/sublicensing -   restricted Assignment - restricted
    	
 
    	
Yes
    
	
Actavis Group PTC ehf Reykjavikurve gi 76-78 P.O.   Box 420 IS-220 Hafnarfjodor, Iceland
    	
 
    	
Product Development and Profit Share Agreement (re   Bezalip) dated May 4, 2011
    	
 
    	
Yes
    	
 
    	
Lien - no restriction Sublicense - no restriction   Assignment - restricted
    	
 
    	
Yes
    
	
Nautilus Neurosciences, Inc. 135 Rte. 202-206 Suite   4 Bedminste, NJ 07921
    	
 
    	
License Agreement dated November 9, 2010 re Cambia
    	
 
    	
Yes
    	
 
    	
Lien - no restriction Sublicense - restricted Assignment   - restricted
    	
 
    	
Yes
    
	
Nautilus Neurosciences, Inc. 135 Rte. 202-206 Suite   4 Bedminster, NJ 07921
    	
 
    	
Trademark License Agreement dated November 9, 2010   re Cambia
    	
 
    	
Yes
    	
 
    	
Lien - no restriction Sublicense - restricted   Assignment - restricted
    	
 
    	
Yes
    
	
NexMed (U.S.A.), Inc. 11975 El Camino Real, Suite   300, San Diego, CA 92130
    	
 
    	
License Agreement dated December 30, 2011 re MycoVa
    	
 
    	
Yes
    	
 
    	
Lien - no restriction Sublicense - restricted   Assignment - restricted
    	
 
    	
Yes
    
	
Novartis AG & Novartis Pharma AG & Novartis Pharmaceuticals   Canada Inc.
    	
 
    	
License Agreement dated on or about October 2, 2014   re Visken & Viskazide
    	
 
    	
Yes
    	
 
    	
Lien - no restriction Sublicense - restricted   Assignment - restricted (need consent)
    	
 
    	
Yes
    
	
Novartis AG & Novartis Pharma AG & Novartis Pharmaceuticals   Canada Inc.
    	
 
    	
Supply Agreement dated on or about October 2, 2014   re Visken & Viskazide & Fiorinal & Fiorinal C
    	
 
    	
Yes
    	
 
    	
Lien - no restriction Sublicense - restricted   Assignment - restricted (need consent)
    	
 
    	
Yes
    

 

29

 

SCHEDULE 6

 

DEPOSIT ACCOUNTS AND OTHER ACCOUNTS

 

30Exhibit 10.66

 

	
 
    	
 
    	
 
    

 

GUARANTEE AND COLLATERAL AGREEMENT

 

dated as of August 8, 2013

 

among

 

TRIBUTE PHARMACEUTICALS CANADA INC.

 

as Grantor,

 

and

 

SWK FUNDING LLC,

as Agent

 

	
 
    	
 
    	
 
    

 

[Tribute] Guarantee and Collateral Agreement

 

1

 

GUARANTEE AND COLLATERAL AGREEMENT

 

Guarantee and Collateral Agreement, dated as of August 8, 2013 (this “Agreement”), made by each signatory hereto (together with any other Person that becomes a party hereto as provided herein, “Grantors”), in favor of SWK Funding LLC, as Agent (“Agent”) for the benefit of all Lenders party to the Credit Agreement (as hereafter defined).

 

Lenders have severally agreed to extend credit to Borrower pursuant to the Credit Agreement. The Borrower is affiliated with each other Grantor. The Borrower and the other Grantors are engaged in interrelated businesses, and each Grantor will derive substantial direct and indirect benefit from extensions of credit under the Credit Agreement. It is a condition precedent to each Lender’s obligation to extend credit under the Credit Agreement that Grantors shall have executed and delivered this Agreement to Agent for the ratable benefit of all Lenders.

 

In consideration of the premises and to induce Agent and Lenders to enter into the Credit Agreement and to induce Lenders to extend credit thereunder, each Grantor hereby agrees with Agent, for the ratable benefit of Lenders, as follows:

 

1.                                      Definitions.

 

1.1. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement, and the following terms are used herein as defined in the Code: Accounts, Certificated Security, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Farm Products, Goods, Health-Care-Insurance Receivables, Instruments, Inventory, Letter-of-Credit Rights, Software and Supporting Obligations.

 

1.2. When used herein the following terms shall have the following meanings:

 

Agreement has the meaning set forth in the preamble hereto.

 

Borrower Obligations means all Obligations of Borrower.

 

Code means the Uniform Commercial Code as in effect in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Code as in effect in a jurisdiction other than the State of New York, “Code” means the Uniform Commercial Code or the PPSA, as applicable if the context requires, as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

 

Collateral has the meaning set forth in Section 3 hereof. Where the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer to such Grantor’s Collateral or the relevant part thereof.

 

Copyright Licenses means all written agreements naming any Grantor as licensor or licensee, including those listed on Schedule 5, granting any right under any Copyright, including the grant of rights to manufacture, distribute, exploit and sell materials derived from any Copyright (other than agreements relating to widely-available software subject to “shrink-wrap” or “click-through” software licenses).1

 

2

 

Credit Agreement means the Credit Agreement of even date herewith among Borrower, Lenders and Agent, as amended, supplemented, restated or otherwise modified from time to time.

 

Excluded Property means, with respect to a Grantor, any item of General Intangibles or other property that is now or hereafter held by such Grantor but only to the extent that such item of General Intangibles or property, including, for the avoidance of doubt, Intellectual Property (or any agreement evidencing such item of General Intangibles or property) contains a term or is subject to a rule of law, statute or regulation that restricts, prohibits, or requires a consent (that has not been obtained) of a Person (other than such Grantor) to, the creation, attachment or perfection of the security interest granted herein, and any such restriction, prohibition and/or requirement of consent is effective and enforceable under applicable law and is not rendered ineffective by applicable law (including, without limitation, pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Code); provided, however, that (x) Excluded Property shall not include any Proceeds of any item of General Intangibles or other property described in this definition, and (y) any item of General Intangibles or such other property described in this definition that at any time ceases to satisfy the criteria for Excluded Property (whether as a result of the applicable Grantor obtaining any necessary consent, any change in any rule of law, statute or regulation, or otherwise) shall no longer be Excluded Property.

 

Fixtures means all of the following, whether now owned or hereafter acquired by a Grantor: plant fixtures; business fixtures; other fixtures and storage facilities, wherever located; and all additions and accessories thereto and replacements therefor.

 

General Intangibles means all “general intangibles” as such term is defined in Section 9-102(a)(42) of the Code and, in any event, including with respect to any Grantor, all contracts, agreements, instruments and indentures in any form, and portions thereof, to which such Grantor is a party or under which such Grantor has any right, title or interest or to which such Grantor or any property of such Grantor is subject, as the same from time to time may be amended, supplemented or otherwise modified, including, without limitation, (a) all rights of such Grantor to receive moneys due and to become due to it thereunder or in connection therewith, (b) all rights of such Grantor to damages arising thereunder and (c) all rights of such Grantor to perform and to exercise all remedies thereunder.

 

Guarantor Obligations means, collectively, with respect to each Guarantor, all payment and performance obligations of such Guarantor hereunder or under any other Loan Document to which such Guarantor is party.

 

Guarantors means the collective reference to each Grantor other than Borrower.

 

Identified Claims means the Commercial Tort Claims described on Schedule 7 as such schedule may be supplemented from time to time.

 

Intellectual Property shall mean all present and future: trade secrets, know-how and other proprietary information; Trademarks and Trademark Licenses, internet domain names, service marks, trade dress, trade names, business names, designs, logos, slogans (and all translations, adaptations, derivations and combinations of the foregoing) indicia and other source and/or business identifiers, and the goodwill of the business relating thereto and all registrations or applications for registrations which have heretofore been or may hereafter be issued thereon throughout the world; Copyrights (including Copyrights for computer programs, but excluding commercially available off-the-shelf software and any Intellectual Property rights relating thereto) and Copyright Licenses, and all tangible and intangible property embodying the Copyrights, unpatented inventions (whether or not patentable); Patents and Patent Licenses; industrial design applications and registered industrial designs; license agreements related to any of the foregoing and income therefrom, books, records, writings, computer tapes or disks, flow diagrams, specification sheets, computer software, source codes, object codes, executable code, data, databases and other physical manifestations, embodiments or incorporations of any of the foregoing; customer lists and customer information, the right to sue for all past, present and future infringements of any of the foregoing; all other intellectual property; and all common law and other rights throughout the world in and to all of the foregoing.

 

3

 

Intercompany Note means any promissory note evidencing loans made by any Grantor to any other Grantor or its Affiliate.

 

Investment Property means the collective reference to (a) all “investment property” as such term is defined in Section 9-102(a)(49) of the Code (other than the equity interest of any Subsidiary excluded from the definition of Pledged Equity), (b) all “financial assets” as such term is defined in Section 8-102(a)(9) of the Code, and (c) whether or not constituting “investment property” as so defined, all Pledged Notes and all Pledged Equity.

 

Issuers means the collective reference to each issuer of any Investment Property.

 

Patent Licenses means all agreements, whether written or oral, providing for the grant by or to any Grantor of any right to manufacture, use or sell any invention covered in whole or in part by a Patent, including any of the foregoing referred to in Schedule 5.

 

Pledged Equity means the equity interests listed on Schedule 1, as amended from time to time, together with any other equity interests, certificates, options or rights of any nature whatsoever in respect of the equity interests of any Person that may be issued or granted to, or held by, any Grantor while this Agreement is in effect.

 

Pledged Notes means all promissory notes listed on Schedule 1, all Intercompany Notes at any time issued to any Grantor and all other promissory notes issued to or held by any Grantor (other than promissory notes issued in connection with extensions of trade credit by any Grantor in the ordinary course of business).

 

PPSA means the Personal Property Security Act (Ontario), R.S.O. 1990, C. P.10, as amended, and all regulations promulgated thereunder.

 

Proceeds means all “proceeds” as such term is defined in Section 9-102(a)(64) of the Code and, in any event, shall include all dividends or other income from the Investment Property, collections thereon or distributions or payments with respect thereto.

 

Receivable means any right to payment for goods sold or leased or for services rendered, whether or not such right is evidenced by an Instrument or Chattel Paper and whether or not it has been earned by performance (including any Accounts).

 

Secured Obligations means, collectively, all Borrower Obligations and Guarantor Obligations.

 

Securities Act means the Securities Act (Ontario).

 

4

 

Trademark Licenses means, collectively, each agreement, whether written or oral, providing for the grant by or to any Grantor of any right to use any Trademark, including any of the foregoing referred to in Schedule 5.

 

2.                                      Guarantee.

 

2.1. Guarantee.

 

(a) Each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to Agent, for the ratable benefit of Lenders and their respective successors, indorsees, transferees and assigns to the extent permitted by and in accordance with the Credit Agreement, the prompt and complete payment and performance by Borrower when due (whether at the stated maturity, by acceleration or otherwise) of the Borrower Obligations.

 

(b) The guarantee contained in this Section 2 shall remain in full force and effect until all of the Secured Obligations shall have been Paid in Full.

 

(c) No payment made by Borrower, any of the Guarantors, any other guarantor or any other Person or received or collected by Agent or any Lender from Borrower, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Secured Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Secured Obligations or any payment received or collected from such Guarantor in respect of the Secured Obligations), remain liable for the Secured Obligations up to the maximum liability of such Guarantor hereunder until the Secured Obligations are Paid in Full.

 

2.2. Right of Contribution. Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor’s right of contribution shall be subject to the terms and conditions of Section 2.3. The provisions of this Section 2.2 shall in no respect limit the obligations and liabilities of any Guarantor to Agent and Lenders, and each Guarantor shall remain liable to Agent and Lenders for the full amount guaranteed by such Guarantor hereunder.

 

2.3. No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by Agent or any Lender, no Guarantor shall be entitled to be subrogated to any of the rights of Agent or any Lender against Borrower or any other Guarantor or any collateral security or guarantee or right of offset held by Agent or any Lender for the payment of the Secured Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from Borrower or any other Guarantor in respect of payments made by such Guarantor hereunder, until all of the Secured Obligations are Paid in Full. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Secured Obligations shall not have been Paid in Full, such amount shall be held by such Guarantor in trust for Agent and Lenders, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be promptly turned over to Agent in the exact form received by such Guarantor (duly indorsed (but without any representation or warranty) by such Guarantor to Agent, if required), to be applied against the Secured Obligations, whether matured or unmatured, in a manner that is consistent with the provisions of Section 2.10.2 of the Credit Agreement.

 

5

 

2.4. Amendments, etc. with Respect to the Secured Obligations. Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Secured Obligations made by Agent or any Lender may be rescinded by Agent or such Lender and any of the Secured Obligations continued, and the Secured Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by Agent or any Lender, and the Credit Agreement and the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as Agent (or the Required Lenders or all Lenders, as the case may be) may deem advisable from time to time (provided that any such amendment, modification, supplement or termination complies with the relevant provisions of the Credit Agreement, this Agreement and/or such Loan Document), and any collateral security, guarantee or right of offset at any time held by Agent or any Lender for the payment of the Secured Obligations may be sold, exchanged, waived, surrendered or released to the extent permitted by the Credit Agreement, this Agreement and the other Loan Documents. Neither Agent nor any Lender shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Secured Obligations or for the guarantee contained in this Section 2 or any property subject thereto.

 

2.5. Guarantee Absolute and Unconditional; Waivers.

 

(a) Each Guarantor agrees that this Guaranty is a guaranty of payment and performance when due and not of collectability. The liability of Guarantor under this Guaranty shall be absolute, irrevocable and unconditional irrespective of:

 

(i) any lack of validity, regularity or enforceability of any Loan Document;

 

(ii) any lack of validity, regularity or enforceability of this Agreement;

 

(iii) any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to departure from any Loan Document;

 

(iv) any exchange, release or non-perfection of any security interest in any Collateral, or any release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Secured Obligations;

 

(v) any failure on the part of Agent or any other Person to exercise, or any delay in exercising, any right under any Loan Document; and

 

(vi) any other circumstance which might otherwise constitute a defense available to, or a discharge of, Borrower any Guarantor or any other guarantor with respect to the Secured Obligations (including, without limitation, all defenses based on suretyship or impairment of collateral, and all defenses that either of Borrower may assert to the repayment of the Secured Obligations, including, without limitation, failure of consideration, breach of warranty, payment, statute of frauds, bankruptcy, lack of legal capacity, lender liability, accord and satisfaction, and usury), this Agreement and the obligations of Guarantor under this Agreement, other than payment in full of the Guarantor Obligations.

 

6

 

(b) Each Guarantor hereby agrees that if Borrower or any other guarantor of all or a portion of the Secured Obligations is the subject of a bankruptcy or insolvency case under applicable law, it will not assert the pendency of such case or any order entered therein as a defense to the timely payment of the Secured Obligations. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Secured Obligations and notice of or proof of reliance by Agent or any Lender upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2; the Secured Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2, and all dealings between Borrower and any of the Guarantors, on the one hand, and Agent and Lenders, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2. Each Guarantor waives (a) diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon Borrower or any of the Guarantors with respect to the Secured Obligations; (b) notice of the existence or creation or renewal or non-payment of all or any of the Secured Obligations; (c) all diligence in collection or protection of or realization upon any Secured Obligations or any security for or guaranty of any Secured Obligations; (d) any right to require Agent or any Lender, as a condition of payment or performance by Guarantor, to (i) proceed against Borrower, any other guarantor of the Guarantor Obligations or any other Person, (ii) proceed against or exhaust any security held from Borrower, any such other guarantor or any other Person, (iii) proceed against or have resort to any balance of any deposit account or credit on the books of Agent or any Lender in favor of Borrower or any other Person or (iv) pursue any other remedy in the power of Agent or any Lender whatsoever; (e) any defense arising by reason of the incapacity, lack of authority or any disability or other defense of Borrower or any other Guarantor including any defense based on or arising out of the lack of validity or the unenforceability of the Guarantor Obligations or any agreement or instrument relating thereto or by reason of the cessation of the liability of Borrower or any other Guarantor from any cause other than payment in full of the Guarantor Obligations; (f) any defense based upon Agent or any Lender’s errors or omissions in the administration of the Guarantor Obligations, except errors and omissions resulting from Agent or any Lender’s negligence, bad faith, or willful misconduct and (g)(i) any legal or equitable discharge of Guarantor’s obligations hereunder and (ii) any rights to set-offs, recoupments and counterclaims.

 

(c) When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, Agent or any Lender may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against Borrower, any other Guarantor or any other Person or against any collateral security or guarantee for the Secured Obligations or any right of offset with respect thereto, and any failure by Agent or any Lender to make any such demand, to pursue such other rights or remedies or to collect any payments from Borrower, any other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of Borrower, any other Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of Agent or any Lender against any Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings. Each Guarantor agrees that it is not a surety for purposes of any state statutes providing defenses for sureties, and each Guarantor waives any right that it may have under such statutes to assert the applicability thereof to the provisions of this Agreement to require that Agent commence action against Borrower or any other Person or against any of the Collateral.

 

(d) Agent or any Lender may, from time to time, at its sole discretion and without notice to any Guarantor (or any of them), take any or all of the following actions: (a) retain or obtain a security interest in any property to secure any of the Secured Obligations or any obligation hereunder, (b) retain or obtain the primary or secondary obligation of any obligor or obligors with respect to any of the Secured Obligations, (c) extend or renew any of the Secured Obligations for one or more periods (whether or not longer than the original period), alter or exchange any of the Secured Obligations, or release or compromise any obligation of any Guarantor or any obligation of any nature of any other obligor with respect to any of the Secured Obligations, (d) release any guaranty or right of offset or its security interest in, or surrender, release or permit any substitution or exchange for, all or any part of any property securing any of the Secured Obligations or any obligation hereunder, or extend or renew for one or more periods (whether or not longer than the original period) or release, compromise, alter or exchange any obligations of any nature of any obligor with respect to any such property, and (e) resort to any Guarantor for payment of any of the Secured Obligations when due, whether or not Agent or such Lender shall have resorted to any property securing any of the Secured Obligations or any obligation hereunder or shall have proceeded against any other Guarantor or any other obligor primarily or secondarily obligated with respect to any of the Secured Obligations.

 

7

 

2.6. Payments. Each Guarantor hereby guarantees that payments hereunder will be paid to Agent without set-off or counterclaim in Dollars at the office of Agent specified in the Credit Agreement.

 

3.                                      Grant of Security Interest.

 

Each Grantor hereby assigns and transfers to Agent, and hereby grants to Agent, for the ratable benefit of Lenders and (to the extent provided herein) their Affiliates, a security interest in all of the following:

 

(a) all of each Grantor’s right, title and interest in and to all of such Grantor’s assets, including any and all personal property, Accounts, Chattel Paper (including Electronic Chattel Paper), Deposit Accounts, Documents, Equipment, Farm Products, Fixtures, General Intangibles, Goods, Health-Care-Insurance Receivables, Instruments, Intellectual Property, Inventory, Investment Property, Letter-of-Credit Rights, Software, Money, Supporting Obligations, Identified Claims, in each case whether now owned or at any time hereafter acquired or arising,

 

(b) all books and records pertaining to any of the foregoing,

 

(c) all Proceeds and products of any of the foregoing, and

 

(d) all collateral security and guarantees given by any Person with respect to any of the foregoing,

 

(all of the foregoing, collectively, the “Collateral”), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Secured Obligations; provided, that the Collateral shall not include the Excluded Property.

 

(e) Borrower shall promptly notify Agent of any Commercial Tort Claims related to the Loans in which Borrower has an interest arising after the Closing Date and shall provide all necessary information concerning each such Commercial Tort Claim and make all necessary filings with respect thereto to perfect Agent’s first-priority security interest therein.

 

(f) Borrower has full right and power to grant to Agent, for the benefit of Agent, a perfected, first-priority security interest and Lien on the Collateral pursuant to this Agreement, subject to no transfer or other restrictions or Liens of any kind in favor of any other Person. Except with respect to any financing statement (i) securing debt to be paid off as of the Closing Date, or (ii) filed on behalf of Agent, no financing statement relating to any of the Collateral is on file in any public office. Borrower is not party to any agreement, document or instruction that conflicts with this Section 3.

 

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(g) Borrower hereby authorizes Agent to prepare and file financing statements provided for by the Code and to take such other action as may be required, in Agent’s sole discretion, to perfect and to continue the perfection of Agent’s security interest in the Collateral.

 

4.                                      Representations and Warranties.

 

To induce Agent and Lenders to enter into the Credit Agreement and to induce Lenders to make their respective extensions of credit to Borrower thereunder, each Grantor jointly and severally hereby represents and warrants to Agent and each Lender that:

 

4.1. Title; No Other Liens. Except for Permitted Liens, the Grantors own each item of the Collateral that they purport to own free and clear of any and all Liens or claims of others. As of the Closing Date (or the date such Grantor joins this Agreement as it relates to such Grantor), no financing statement or other public notice with respect to all or any part of the Collateral is on file or of record in any public office, except filings evidencing Permitted Liens and filings for which termination statements have been delivered to Agent.

 

4.2. Perfected First Priority Liens. Each Grantor has full right and power to grant to Agent the security interests contemplated herein, and the security interests granted pursuant to this Agreement are prior to all other Liens on the Collateral in existence on the date hereof except for Permitted Liens expressly permitted by the Credit Agreement.

 

4.3. Grantor Information. Schedule 3 sets forth, as of the Closing Date (or the date such Grantor joins this Agreement as it relates to such Grantor), (a) each Grantor’s jurisdiction of organization, (b) the location of each Grantor’s chief executive office, (c) each Grantor’s exact legal name as it appears on its organizational documents, (d) each Grantor’s federal business or tax identification number, and (e) each Grantor’s organizational identification number.

 

4.4. Collateral Locations. Schedule 4 sets forth, as of the Closing Date (or the date such Grantor joins this Agreement as it relates to such Grantor), (a) each place of business of each Grantor (including its chief executive office), (b) all locations where all Inventory and the Equipment owned by each Grantor is kept, which may be located at other locations within the United States or Canada, and (c) whether each such Collateral location and place of business (including each Grantor’s chief executive office) is owned or leased (and if leased, specifies the complete name and notice address of each lessor as set forth in the relevant lease). No Collateral is located outside the United States or Canada or in the possession of any lessor, bailee, warehouseman or consignee, except as indicated on Schedule 4.

 

4.5. Certain Property. None of the Collateral constitutes, or is the Proceeds of, (a) Farm Products, (b) Health-Care-Insurance Receivables or (c) vessels, aircraft or any other property subject to any certificate of title or other registration statute of Canada, any province or other jurisdiction, except for personal vehicles owned by the Grantors and used by employees of the Grantors in the ordinary course of business.

 

4.6. Investment Property.

 

(a) The shares of Pledged Equity pledged by each Grantor hereunder constitute all the issued and outstanding equity interests of each Issuer owned by such Grantor.

 

(b) All of the Pledged Equity issued by a Subsidiary of the Grantor has been duly and validly issued and is fully paid and nonassessable.

 

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(c) Each of the Intercompany Notes constitutes the legal, valid and binding obligation of the obligor with respect thereto, enforceable in accordance with its terms (subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing).

 

(d) Schedule 1 lists all Investment Property owned by each Grantor as of the Closing Date (or the date such Grantor joins this Agreement as it relates to such Grantor). Each Grantor is the record and beneficial owner of the Investment Property pledged by it hereunder that it purports to own, free of any and all Liens or options in favor of, or claims of, any other Person, except the security interest created by this Agreement and, in the case of Investment Property which does not constitute Pledged Equity issued by a Subsidiary of the Grantor or Intercompany Notes, for Permitted Liens.

 

4.7. Receivables.

 

(a) No amount payable to such Grantor under or in connection with any Receivable is evidenced by any Instrument or Chattel Paper which has not been delivered to Agent.

 

(b) The amounts represented by such Grantor to Lenders from time to time as owing to such Grantor in respect of the Receivables (to the extent such representations are required by any of the Loan Documents) will at all such times be accurate in all material respects, subject to the inability to collect Receivables in the ordinary course of business.

 

4.8. Intellectual Property.

 

(a) Schedule 5 lists all Intellectual Property owned by each Grantor in its own name (or a former name) on the Closing Date (or the date such Grantor joins this Agreement as it relates to such Grantor).

 

(b) On the Closing Date (or the date such Grantor joins this Agreement as it relates to such Grantor), all Intellectual Property owned by any Grantor is valid, subsisting, unexpired and enforceable, has not been abandoned and, to such Grantor’s knowledge, does not infringe on the intellectual property rights of any other Person.

 

(c) Except as set forth in Schedule 5, as of the Closing Date (or the date such Grantor joins this Agreement as it relates to such Grantor), none of the Intellectual Property owned by a Grantor is the subject of any licensing or franchise agreement pursuant to which such Grantor is the licensor or franchisor.

 

(d) Except as set forth in Schedule 5, no holding, decision or judgment has been rendered by any Governmental Authority which would limit, cancel or question the validity of, or any Grantor’s rights in, any Intellectual Property owned by any Grantor.

 

(e) Except as set forth in Schedule 5, no action or proceeding is pending, or, to the knowledge of such Grantor, threatened, as of the Closing Date (or the date such Grantor joins this Agreement as it relates to such Grantor) (i) seeking to limit, cancel or question the validity of any Intellectual Property or any Grantor’s ownership interest therein, or (ii) which, if adversely determined, would materially and adversely affect the value of any Intellectual Property.

 

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(f) Each Grantor owns and possesses or has a license or other right to use all Intellectual Property as is necessary for the conduct of the businesses of such Grantor, without any infringement, to such Grantor’s knowledge, upon rights of others.

 

4.9. Deposit Accounts and Other Accounts. All Deposit Accounts and all other bank accounts, securities accounts and other accounts maintained by each Grantor as of the Closing Date (or the date such Grantor joins this Agreement as it relates to such Grantor), are described on Schedule 6 hereto, which description includes for each such account the name of the Grantor maintaining such account, the name, address, telephone and fax numbers of the financial institution at which such account is maintained, the account number and the account officer, if any, of such account.

 

4.10. Excluded Property. Except as set forth in Schedule 8, each Grantor represents, warrants and covenants that it does not, as of the Closing Date (or the date such Grantor joins this Agreement as it relates to such Grantor, own any Excluded Property, which when aggregated, are material to the business of such Grantor.

 

5.                                      Covenants.

 

Each Grantor covenants and agrees with Agent and Lenders that, from and after the date of this Agreement until the Secured Obligations shall have been Paid in Full:

 

5.1. Delivery of Instruments, Certificated Securities and Chattel Paper. If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any Instrument (other than, for greater certainty, a license agreement), Certificated Security or Chattel Paper, such Instrument, Certificated Security or Chattel Paper shall be promptly delivered to Agent, duly indorsed in a manner reasonably satisfactory to Agent, to be held as Collateral pursuant to this Agreement and in the case of Electronic Chattel Paper, the applicable Grantor shall cause Agent to have control thereof within the meaning set forth in Section 9-105 of the Code. In the event that an Event of Default shall have occurred and be continuing, upon the request of Agent, any Instrument, Certificated Security or Chattel Paper not theretofore delivered to Agent and at such time being held by any Grantor shall be immediately delivered to Agent, duly indorsed in a manner satisfactory to Agent, to be held as Collateral pursuant to this Agreement and in the case of Electronic Chattel Paper, the applicable Grantor shall cause Agent to have control thereof within the meaning set forth in Section 9-105 of the Code.

 

5.2. Maintenance of Perfected Security Interest; Further Documentation.

 

(a) Except as expressly permitted by this Agreement or the Credit Agreement, such Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in Section 4.2 and shall defend such security interest against the claims and demands of all Persons whomsoever, provided that, unless otherwise required by Agent in writing at any time following the occurrence and continuance of an Event of Default, such security interest need not be perfected in property of the Grantor in which a security interest may not be perfected by filing a financing statement under the Code, having a value less than $100,000 individually or $350,000 in the aggregate.

 

(b) Such Grantor will furnish to Agent and Lenders from time to time statements and schedules further identifying and describing the assets and property of such Grantor and such other reports in connection therewith as Agent may reasonably request, all in reasonable detail.

 

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(c) At any time and from time to time, upon the reasonable written request of Agent, and at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver, and have recorded, such further instruments and documents and take such further actions as Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, including (i) filing any financing or continuation statements under the Code (or other similar laws) in effect in any jurisdiction with respect to the security interests created hereby, (ii) in the case of Investment Property, Deposit Accounts, Electronic Chattel Paper and Letter of Credit Rights and any other relevant Collateral, taking any actions necessary to enable Agent to obtain “control” (within the meaning of Code) with respect thereto, in each case pursuant to documents in form and substance reasonably satisfactory to Agent, provided that so long as no Event of Default has occurred and is continuing, no Grantor shall be required to cause the Agent to have control over such Investment Property, Electronic Chattel Paper, Letter of Credit Rights or other relevant Collateral (other than any Deposit Account) having a value less than $100,000 individually or $350,000 in the aggregate and (iii) during the continuance of an Event of Default, if requested by Agent, delivering, to the extent permitted by law, any original motor vehicle certificates of title received by such Grantor from the applicable secretary of state or other Governmental Authority after information reflecting Agent’s security interest has been recorded therein.

 

(d) Such Grantor authorizes Agent to, at any time and from time to time, file financing statements, continuation statements, and amendments thereto that describe the Collateral (including describing the Collateral as “all assets” of each Grantor, or words of similar effect), and which contain any other information required pursuant to the Code for the sufficiency of filing office acceptance of any financing statement, continuation statement, or amendment, and each Grantor agrees to furnish any such information to Agent promptly upon request. Any such financing statement, continuation statement, or amendment may be signed (to the extent signature of a Grantor is required under applicable law) by Agent on behalf of any Grantor and may be filed at any time in any jurisdiction.

 

(e) Such Grantor shall, at any time and from time to time, take such steps as Agent may reasonably request for Agent (i) to obtain an acknowledgement, in form and substance reasonably satisfactory to Agent, of any bailee having possession of any of the Collateral (provided that such Grantor shall not be required to obtain any such acknowledgement as it relates to Collateral having a value less than $100,000 individually or $350,000 in the aggregate(unless otherwise required by Agent in writing at any time following the occurrence and continuance of an Event of Default), stating that the bailee holds such Collateral for Agent, (ii) to obtain “control” of any Letter-of-Credit Rights, or Electronic Chattel Paper (within the meaning of the code) with any agreements establishing control to be in form and substance reasonably satisfactory to Agent (provided that such Grantor shall not be required to ensure Agent has “control” over any such Collateral described in this clause (ii) having a value less than $100,000 individually or $350,000 in the aggregate unless otherwise required by Agent in writing at any time following the occurrence and continuance of an Event of Default) and (iii) otherwise to insure the continued perfection and priority of Agent’s security interest in any of the Collateral and of the preservation of its rights therein to the extent required in this Agreement and the Credit Agreement.

 

(f) Without limiting the generality of the foregoing, if such Grantor at any time holds or acquires an interest in any Electronic Chattel Paper or any “transferable record”, as that term is defined in Section 201 of the federal Electronic Signatures in Global and National Commerce Act, or in §16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction, such Grantor shall promptly notify Agent thereof and, at the request of Agent, shall take such action as Agent may reasonably request to vest in Agent “control” under Section 9-105 of the Code of such electronic chattel paper or control under Section 201 of the federal Electronic Signatures in Global and National Commerce Act or, as the case may be, §16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable record. Agent agrees with the Grantors that Agent will arrange, pursuant to procedures reasonably satisfactory to Agent and so long as such procedures will not result in Agent’s loss of control, for the Grantors to make alterations to such electronic chattel paper or transferable record permitted under Section 9-105 of the Code or, as the case may be, Section 201 of the federal Electronic Signatures in Global and National Commerce Act or §16 of the Uniform Electronic Transactions Act for a party in control to make without loss of control, unless an Event of Default has occurred and is continuing or would occur after taking into account any action by any Grantor with respect to such electronic chattel paper or transferable record.

 

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5.3. Changes in Locations, Name, etc. Except as permitted by the Credit Agreement, such Grantor shall not, except upon 30 days’ prior written notice to Agent and delivery to Agent of (a) all additional financing statements and other documents reasonably requested by Agent as to the validity, perfection and priority of the security interests provided for herein and (b) if applicable, a written supplement to Schedule 4 showing any additional location at which Inventory or Equipment having a value greater than $50,000 in the aggregate shall be kept:

 

(i) permit any of the Inventory or Equipment to be kept at a location other than those listed on Schedule 4; provided, that up to $50,000 (in the aggregate for all Grantors) in fair market value of any such Inventory and Equipment may be kept at other locations;

 

(ii) change the location of its chief executive office from that specified on Schedule 3 or in any subsequent notice delivered pursuant to this Section 5.3; or

 

(iii) change its name, identity or corporate structure (including without limitation, the merger into or with any other Person).

 

Such Grantor shall not change its jurisdiction of organization without the prior written consent of Required Lenders, which consent will not be unreasonably withheld or delayed.

 

5.4. Notices. Such Grantor will advise Agent and Lenders promptly, in reasonable detail, of:

 

(a) any Lien (other than Permitted Liens) on any of the Collateral; and

 

(b) the occurrence of any other event which could reasonably be expected to have a material and adverse effect on the aggregate value of the Collateral or on the Liens created hereby.

 

5.5. Investment Property.

 

(a) If such Grantor shall become entitled to receive or shall receive any certificate, option or rights in respect of the equity interests of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any of the Pledged Equity, or otherwise in respect thereof, such Grantor shall accept the same as the agent of Agent and Lenders, hold the same in trust for Agent and Lenders and deliver the same forthwith to Agent in the exact form received, duly indorsed (but without any representation or warranty) by such Grantor to Agent, if required, together with an undated instrument of transfer covering such certificate duly executed in blank by such Grantor and with, if Agent so reasonably requests, signature guaranteed, to be held by Agent, subject to the terms hereof, as additional Collateral for the Secured Obligations. Upon the occurrence and during the continuance of an Event of Default, (i) any sums paid upon or in respect of the Investment Property upon the liquidation or dissolution of any Issuer shall be paid over to Agent to be held, at Agent’s option, either by it hereunder as additional Collateral for the Secured Obligations or applied to the Secured Obligations as provided in Section 6.5, and (ii) in case any distribution of capital shall be made on or in respect of the Investment Property or any property shall be distributed upon or with respect to the Investment Property pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected Lien in favor of Agent, be delivered to Agent to be held, at Agent’s option, either by it hereunder as additional Collateral for the Secured Obligations or applied to the Secured Obligations as provided in Section 6.5. Upon the occurrence and during the continuance of an Event of Default, if any sums of money or property so paid or distributed in respect of the Investment Property shall be received by such Grantor, such Grantor shall, until such money or property is paid or delivered to Agent, hold such money or property in trust for Lenders, segregated from other funds of such Grantor, as additional Collateral for the Secured Obligations.

 

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(b) Without the prior written consent of Agent, such Grantor will not, so long as an Event of Default has occurred and is continuing and to the extent permitted by the Credit Agreement, (i) vote to enable, or take any other action to permit, any Issuer to issue any equity interests of any nature or to issue any other securities or interests convertible into or granting the right to purchase or exchange for any equity interests of any nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Investment Property or Proceeds thereof (except pursuant to a transaction expressly permitted by the Credit Agreement) other than, with respect to Investment Property not constituting Pledged Stock or Pledged Notes, and such action which is not prohibited by the Credit Agreement, (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Investment Property or Proceeds thereof, or any interest therein, except for Permitted Liens, or (iv) enter into any agreement or undertaking restricting the right or ability of such Grantor or Agent to sell, assign or transfer any of the Investment Property or Proceeds thereof, except, with respect to such Investment Property, shareholders’ agreements entered into by such Grantor with respect to Persons in which such Grantor maintains an ownership interest of 50% or less.

 

(c) In the case of each Grantor which is an Issuer, such Issuer agrees that (i) it will be bound by the terms of this Agreement relating to the Investment Property issued by it and will comply with such terms insofar as such terms are applicable to it, (ii) it will notify Agent promptly in writing of the occurrence of any of the events described in Section 5.5(a) with respect to the Investment Property issued by it and (iii) the terms of Sections 6.3(c) shall apply to such Grantor with respect to all actions that may be required of it pursuant to Section 6.3(c) regarding the Investment Property issued by it.

 

5.6. Receivables.

 

(a) Other than in the ordinary course of business, without the prior written consent of Agent, such Grantor will not (i) grant any extension of the time of payment of any Receivable, (ii) compromise or settle any Receivable for less than the full amount thereof, (iii) release, wholly or partially, any Person liable for the payment of any Receivable, (iv) allow any credit or discount whatsoever on any Receivable or (v) amend, supplement or modify any Receivable in any manner that could materially adversely affect the value thereof, to the extent that any action in clauses (i) - (iv) above could reasonably be expected to have a Material Adverse Effect

 

(b) Such Grantor will deliver to Agent a copy of each material demand, notice or document received by it that questions or calls into doubt the validity or enforceability of more than 5% of the aggregate amount of the then outstanding Receivables for all Grantors.

 

5.7. Intellectual Property.

 

(a) Such Grantor (either itself or through licensees) will (i) continue to use each Trademark on each and every trademark class of goods applicable to its current line as reflected in its current catalogs, brochures and price lists in order to maintain such Trademark in full force free from any claim of abandonment for non-use, (ii) maintain as in the past the quality of products and services offered under such Trademark, (iii) use such Trademark with the appropriate notice of registration and all other notices and legends required by applicable law, (iv) not adopt or use any mark which is confusingly similar or a colorable imitation of such Trademark unless Agent, for the ratable benefit of Lenders, shall obtain a perfected security interest in such mark pursuant to this Agreement and the IP Security Agreement, and (v) not (and not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby such Trademark may become invalidated or impaired in any way, to the extent that any action in clauses (i) - (v) could reasonably be expected to have a Material Adverse Effect.

 

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(b) Such Grantor (either itself or through licensees) will not do any act, or omit to do any act, whereby any Patent may become forfeited, abandoned or dedicated to the public, to the extent such act or omission could reasonably be expected to have a Material Adverse Effect.

 

(c) Such Grantor (either itself or through licensees) (i) will employ each Copyright and (ii) will not (and will not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby any material portion of the Copyrights may become invalidated or otherwise impaired and which could reasonably be expected to have a Material Adverse Effect. Such Grantor will not (either itself or through licensees) do any act whereby any material portion of the Copyrights may fall into the public domain and which could reasonably be expected to have a Material Adverse Effect.

 

(d) Such Grantor (either itself or through licensees) will not do any act that knowingly uses any Intellectual Property to infringe the intellectual property rights of any other Person.

 

(e) Such Grantor will notify Agent and Lenders promptly if it knows, or has reason to know, that any application or registration relating to any Intellectual Property may become forfeited, abandoned or dedicated to the public, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office, the Canadian Intellectual Property Office, or any court or tribunal in any country) regarding, such Grantor’s ownership of, or the validity of, any Intellectual Property or such Grantor’s right to register the same or to own and maintain the same, except to the extent that such forfeiture, abandonment or dedication, or adverse determination or development would not reasonably be expected to have a Material Adverse Effect.

 

(f) Whenever such Grantor, either by itself or through any agent, employee, licensee or designee, shall file an application for the registration of any Intellectual Property with the United States Patent and Trademark Office, the United States Copyright Office, the Canadian Intellectual Property Office, or any similar office or agency in any other country or any political subdivision thereof, such Grantor shall report such filing to Agent concurrently with the next delivery of financial statements of Borrower pursuant to Section 6.1.1 or 6.1.2 of the Credit Agreement, as applicable. Upon the request of Agent, such Grantor shall execute and deliver, and have recorded, any and all agreements, instruments, documents, and papers as Agent may reasonably request to evidence Agent’s and Lenders’ security interest in any Copyright, Patent or Trademark and the goodwill and general intangibles of such Grantor relating thereto or represented thereby.

 

(g) Such Grantor will take all reasonable and necessary steps to maintain and pursue each application referred to in Section 5.17(f), (and to obtain the relevant registration), except to the extent the failure to maintain and pursue such application would not reasonably be expected to have a Material Adverse Effect, and to maintain each registration of all Intellectual Property owned by it, except to the extent that the failure to maintain registration of all Intellectual Property owned by it would not reasonably be expected to have a Material Adverse Effect.

 

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(h) In the event that any Intellectual Property is infringed upon or misappropriated or diluted by a third party, such Grantor shall (i) take such actions as such Grantor shall reasonably deem appropriate under the circumstances to protect such Intellectual Property and (ii) if such Intellectual Property is of material economic value, promptly notify Agent after it learns thereof and, to the extent, in its reasonable judgment, such Grantor determines it appropriate under the circumstances, sue for infringement, misappropriation or dilution, to seek injunctive relief where appropriate and to recover any and all damages for such infringement, misappropriation or dilution.

 

5.8. Deposit Accounts and Other Accounts. Such Grantor hereby authorizes the financial institutions at which such Grantor maintains a Deposit Account, other bank account, securities account or other account to provide Agent with such information with respect to such account as Agent may from time to time reasonably request, and each Grantor hereby consents to such information being provided to Agent. Such Grantor will cause each financial institution at which such Grantor maintains a Deposit Account or other account to enter into a control agreement or other similar agreement with Agent and such Grantor, in form and substance reasonably satisfactory to Agent, in order to give Agent “control” (within the meaning set forth in Section 9-104 of the Code) of such account, except for Exempt Accounts.

 

5.9. Other Matters. Such Grantor shall cause to be delivered to Agent, at Agent’s request, a Collateral Access Agreement with respect to (a) each bailee with which such Grantor keeps Inventory or other assets as of the Closing Date having a value in excess of $50,000 and (b) each landlord which leases real property (and the accompanying facilities) to such Grantor as of the Closing Date at which it maintains its chief executive office or a substantial amount of its books or records. If such Grantor shall (x) cause to be delivered Inventory or other property having a value in excess of $50,000 to any bailee after the Closing Date, such Grantor shall on or prior to such delivery cause such bailee to sign a Collateral Access Agreement or (y) enter into any lease for real property after the Closing Date at which it maintains its chief executive office or a substantial amount of its books and records, such Grantor shall on or prior to the first day of the term of such lease cause the landlord to sign a Collateral Access Agreement.

 

5.10. Commercial Tort Claims. If such Grantor shall at any time acquire any Commercial Tort Claim, such Grantor shall promptly notify Agent thereof in writing, therein providing a reasonable description and summary thereof, and upon delivery thereof to Agent. Such Grantor shall be deemed to thereby grant to Agent (and such Grantor hereby grants to Agent) a security interest in such Commercial Tort Claim and all proceeds thereof, and such Grantor shall execute such documentation as Agent shall require in order to document and effectuate such grant of a security interest.

 

6.                                      Remedial Provisions.

 

6.1. Certain Matters Relating to Receivables.

 

(a) At any time and from time to time after the occurrence and during the continuance of an Event of Default, Agent shall have the right to make test verifications of the Receivables in any manner and through any medium that it reasonably considers advisable, and each Grantor shall furnish all such assistance and information Agent may reasonably require in connection with such test verifications. At any time and from time to time after the occurrence and during the continuance of an Event of Default, upon Agent’s reasonable request and at the expense of the relevant Grantor, such Grantor shall cause independent public accountants or others reasonably satisfactory to Agent to furnish to Agent reports showing reconciliations, agings and test verifications of, and trial balances for, the Receivables.

 

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(b) If required by Agent at any time after the occurrence and during the continuance of an Event of Default, any payments of Receivables, when collected or received by or on behalf of any Grantor, (i) shall be forthwith (and, in any event, within 2 Business Days) deposited by such Grantor in the exact form received, duly indorsed (but without any representation or warranty) by such Grantor to Agent if required, in a collateral account maintained under the sole dominion and control of Agent, for application to the Secured Obligations in accordance with Section 6.5, and (ii) until so turned over, shall be held by such Grantor in trust for Agent and Lenders, segregated from other funds of such Grantor. Each such deposit of Proceeds of Receivables shall be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit.

 

(c) At any time and from time to time after the occurrence and during the continuance of an Event of Default, at Agent’s request, each Grantor shall deliver to Agent all original and other documents evidencing, and relating to, the agreements and transactions which gave rise to the Receivables, including all original orders, invoices and shipping receipts.

 

6.2. Communications with Obligors; Grantors Remain Liable.

 

(a) Agent in its own name or in the name of others may at any time after the occurrence and during the continuance of an Event of Default communicate with obligors under the Receivables to verify with them to Agent’s reasonable satisfaction the existence, amount and terms of any Receivables.

 

(b) Upon the request of Agent at any time after the occurrence and during the continuance of an Event of Default, each Grantor shall notify obligors on the Receivables that the Receivables have been assigned to Agent for the ratable benefit of Lenders and that payments in respect thereof shall be made directly to Agent.

 

(c) Anything herein to the contrary notwithstanding, each Grantor shall remain liable in respect of each of the Receivables to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto. Neither Agent nor any Lender shall have any obligation or liability under any Receivable (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by Agent or any Lender of any payment relating thereto, nor shall Agent or any Lender be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Receivable (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

 

(d) For the purpose of enabling Agent to exercise rights and remedies under this Agreement, each Grantor hereby grants to Agent, for the benefit of Agent and Lenders, an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to such Grantor) to use, license or sublicense any Intellectual Property that constitutes part of the Collateral now owned or hereafter acquired by such Grantor, to the extent such Intellectual Property may be so licensed or sublicensed, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof.

 

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6.3. Investment Property.

 

(a) Unless an Event of Default shall have occurred and be continuing and Agent shall have given notice to the relevant Grantor of Agent’s intent to exercise its corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted to receive all cash dividends and distributions, payments and Proceeds paid in respect of the Pledged Equity, the Pledged Notes and all other Investment Property that constitutes Collateral, to the extent permitted in the Credit Agreement, and to exercise all voting and other rights and any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Pledged Equity, Pledged Notes and Investment Property (including the right to exchange at its discretion any and all of the Investment Property upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate or other structure of any Issuer, or upon the exercise by such Grantor of any right, privilege or option pertaining to such Pledged Equity, Pledged Notes or Investment Property, and in connection therewith, the right to deposit and deliver any and all of such Pledged Equity, Pledged Notes and Investment Property with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as such Grantor may determine); provided, that no vote shall be cast or other right exercised or action taken which would be inconsistent with or result in any violation of any provision of the Credit Agreement, this Agreement or any other Loan Document.

 

(b) If an Event of Default shall occur and be continuing, upon notice to the relevant Grantor, Agent shall have the right to (i) receive any and all cash dividends and distributions, payments or other Proceeds paid in respect of the Investment Property and make application thereof to the Secured Obligations in accordance with Section 6.5, (ii) register any or all of the Investment Property in the name of Agent or its nominee, (iii) exercise, or permit its nominee to exercise, all voting and other rights pertaining to such Investment Property, and (iv) exercise, or permit its nominee to exercise, any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Investment Property as if it were the absolute owner thereof (including the right to exchange at its discretion any and all of the Investment Property upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate or other structure of any Issuer, or upon the exercise by any Grantor or Agent of any right, privilege or option pertaining to such Investment Property, and in connection therewith, the right to deposit and deliver any and all of the Investment Property with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as Agent may determine), all without liability except to account for property actually received by it, but Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.

 

(c) Each Grantor hereby authorizes and instructs each Issuer of any Investment Property pledged by such Grantor hereunder to (i) comply with any instruction received by it from Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement and the Credit Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that each Issuer shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends, distributions or other payments with respect to the Investment Property directly to Agent.

 

6.4. Proceeds to be Turned Over To Agent. In addition to the rights of Agent specified in Section 6.1 with respect to payments of Receivables, if an Event of Default shall occur and be continuing, all such Proceeds of Collateral received by or on behalf of any Grantor consisting of cash, checks and other cash equivalent items shall be held by such Grantor in trust for Agent and Lenders, segregated from other funds of such Grantor, and shall, at the written request of Agent, forthwith upon receipt by such Grantor, be turned over to Agent in the exact form received by such Grantor (duly indorsed (but without any representation or warranty) by such Grantor to Agent, if required). All Proceeds received by Agent hereunder shall be applied to the Secured Obligations as provided in Section 6.5.

 

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6.5. Application of Proceeds. If an Event of Default shall have occurred and be continuing, Agent shall apply all or any part of Proceeds held in any collateral account established pursuant hereto or otherwise received by Agent to the payment of the Secured Obligations in a manner that is consistent with the provisions of Section 2.10.2 of the Credit Agreement.

 

6.6. Code and Other Remedies. If an Event of Default shall occur and be continuing, Agent, on behalf of Lenders, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Secured Obligations, all rights and remedies of a secured party under the Code, or any other applicable foreign or domestic law. Without limiting the generality of the foregoing, if an Event of Default shall occur or be continuing, Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of Agent or any Lender or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery with assumption of any credit risk. Agent may disclaim any warranties that might arise in connection with any such lease, assignment, grant of option or other disposition of Collateral and have no obligation to provide any warranties at such time. Agent or any Lender shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or equity is hereby waived and released. Such sales may be adjourned and continued from time to time with or without notice. Agent shall have the right to conduct such sales on any Grantor’s premises or elsewhere and shall have the right to use any Grantor’s premises without charge for such time or times as Agent deems necessary or advisable. Each Grantor further agrees after an Event of Default has occurred and is continuing, at Agent’s request, to assemble the Collateral and make it available to Agent at places which Agent shall reasonably select, whether at such Grantor’s premises or elsewhere. Agent shall apply the net proceeds of any action taken by it pursuant to this Section 6.6, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of Agent and Lenders hereunder, including reasonable attorneys’ fees and disbursements, to the payment of the Secured Obligations in a manner that is consistent with the provisions of Section 2.10.2 of the Credit Agreement. To the extent permitted by applicable law, each Grantor waives all claims, damages and demands it may acquire against Agent or any Lender arising out of the exercise by them of any rights hereunder, except to the extent such claims, damages or demands arise from the gross negligence, willful misconduct or bad faith of the Agent or Lenders. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper so long as (a) it is given at least 15 days before such sale or other disposition, and (b) contains such information as may be prescribed by applicable law.

 

6.7. Pledged Equity. Each Grantor recognizes that Agent may be unable to effect a public sale of any or all the Pledged Equity, by reason of certain prohibitions contained in the Securities Act and other applicable securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. Agent shall be under no obligation to delay a sale of any of the Pledged Equity for the period of time necessary to permit the Issuer thereof to register such securities or other interests for public sale under the Securities Act, or other applicable state securities laws, even if such Issuer would agree to do so.

 

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6.8. Deficiency. Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient for the Secured Obligations to be Paid in Full and the fees and disbursements of any attorneys employed by Agent or any Lender to collect such deficiency.

 

7.                                      Agent.

 

7.1. Agent’s Appointment as Attorney-in-Fact, etc.

 

(a) Each Grantor hereby irrevocably constitutes and appoints Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact and proxy with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of strictly carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, each Grantor hereby gives Agent the power and right, on behalf of and at the expense of such Grantor, without notice to or assent by such Grantor, to do any or all of the following to the extent otherwise expressly permitted by the terms of this Agreement and the Credit Agreement (including the satisfaction of any requirement to give notice to such Grantor prior to doing any of the following):

 

(i) in the name of such Grantor or its own name, or otherwise, take possession of and indorse (but without any representation or warranty) and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Receivable or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise reasonably deemed appropriate by Agent for the purpose of collecting any and all such moneys due under any Receivable or with respect to any other Collateral whenever payable;

 

(ii) in the case of any Intellectual Property, execute and deliver, and have recorded, any and all agreements, instruments, documents and papers as Agent may reasonably request to evidence Agent’s security interest in such Intellectual Property and the goodwill and general intangibles of such Grantor relating thereto or represented thereby;

 

(iii) discharge Liens levied or placed on or threatened against the Collateral, and effect any repairs or insurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof;

 

(iv) execute, in connection with any sale provided for in Section 6.6 or 6.7, any indorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral;

 

(v)  Reserved; and

 

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(vi) (1) direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to Agent or as Agent shall direct; (2) ask or demand for, collect, and receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral; (3) sign and indorse (but without any representation or warranty) any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral; (4) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any other right in respect of any Collateral; (5) defend any suit, action or proceeding brought against such Grantor with respect to any Collateral; (6) settle, compromise or adjust any such suit, action or proceeding and, in connection therewith, give such discharges or releases as Agent may deem appropriate; (7) assign any Copyright, Patent or Trademark, throughout the world for such term or terms, on such conditions, and in such manner, as Agent shall in its sole discretion determine; (8) vote any right or interest with respect to any Investment Property; (9) order good standing certificates and conduct lien searches in respect of such jurisdictions or offices as Agent may deem appropriate; and (10) generally sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though Agent were the absolute owner thereof for all purposes, and do, at Agent’s option and such Grantor’s expense, at any time, or from time to time, all acts and things which Agent deems necessary to protect, preserve or realize upon the Collateral and Agent’s security interests therein and to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.

 

THE POWER-OF-ATTORNEY AND PROXY GRANTED HEREBY IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW. SUCH PROXY SHALL BE EFFECTIVE AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY INVESTMENT PROPERTY ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF THE INVESTMENT PROPERTY OR ANY OFFICER OR AGENT THEREOF). Each Grantor acknowledges and agrees that in any event such power-of-attorney and proxy is intended to and shall, to the fullest extent permitted by applicable law, be valid and irrevocable until (a) the Secured Obligations have been Paid in Full and (b) Lenders and Agent have no further obligations under the Loan Documents. Such power-of-attorney and proxy shall be valid and irrevocable as provided herein notwithstanding any limitations to the contrary set forth in the charter, bylaws or other organizational documents of the relevant entities.

 

Upon exercise of the proxy set forth herein, all prior proxies given by any Grantor with respect to any of the Investment Property (other than to Agent or otherwise pursuant to the Loan Documents) are hereby revoked, and until the Secured Obligations are Paid in Full no subsequent proxies (other than to Agent or otherwise under the Loan Documents) will be given with respect to any of the Investment Property. To the extent permitted by this Agreement, Agent, as proxy, will be empowered and may exercise the irrevocable proxy to vote the Investment Property at any and all times, including but not limited to, at any meeting of shareholders, partners or members, as the case may be, however called, and at any adjournment thereof, or in any action by written consent, and may waive any notice otherwise required in connection therewith. To the fullest extent permitted by applicable law, Agent shall have no agency, fiduciary or other implied duties to any Grantor or any other party when acting in its capacity as such attorney-in-fact or proxy. Each Grantor hereby waives and releases any claims that it may otherwise have against Agent with respect to any breach or alleged breach of any such agency, fiduciary or other duty, other than claims resulting from the gross negligence, bad faith or willful misconduct of Agent. Notwithstanding the foregoing grant of a power of attorney and proxy, Agent shall have no duty to exercise any such right or to preserve the same and shall not be liable for any failure to do so or for any delay in doing so.

 

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Anything in this Section 7.1(a) to the contrary notwithstanding, Agent agrees that it will not exercise any rights under the power of attorney provided for in this Section 7.1(a) unless an Event of Default shall have occurred and be continuing.

 

(b) If any Grantor fails to perform or comply with any of its agreements contained herein, Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement at such Grantor’s sole cost and expense.

 

(c) Each Grantor hereby ratifies all that such attorneys shall be authorized hereunder to lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released.

 

7.2. Duty of Agent. Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession shall be to deal with it in the same manner as Agent deals with similar property for its own account. Neither Agent or any Lender nor any of their respective officers, directors, employees or agents shall be liable for any failure to demand, collect or realize upon any of the Collateral or for any delay in doing so (except to the extent Agent, such Lender or such officers, directors, employees or agents acted with gross negligence, bad faith or in willful misconduct as determined by a court of competent jurisdiction) or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on Agent and Lenders hereunder are solely to protect Agent’s and Lenders’ interests in the Collateral and shall not impose any duty upon Agent or any Lender to exercise any such powers. Agent and Lenders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except to the extent Agent or a Lender (or such officer, director, employee or agent) acted with gross negligence, bad faith or in willful misconduct as determined by a court of competent jurisdiction.

 

7.3. Photocopy of this Agreement. A photographic or other reproduction of this Agreement shall be sufficient as a financing statement or other filing or recording document or instrument for filing or recording in any jurisdiction.

 

7.4. Authority of Agent. Each Grantor acknowledges that the rights and responsibilities of Agent under this Agreement with respect to any action taken by Agent or the exercise or non-exercise by Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between Agent and Lenders, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between Agent and the Grantors, Agent shall be conclusively presumed to be acting as agent for Lenders with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority.

 

8.                                      Miscellaneous.

 

8.1. Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance with Section 10.1 of the Credit Agreement.

 

8.2. Notices. All notices, requests and demands to or upon Agent or any Grantor hereunder shall be effected in the manner provided for in Section 10.2 of the Credit Agreement and each such notice, request or demand to or upon any Grantor shall be addressed to such Grantor in care of Borrower at Borrower’s notice address set forth on Schedule 1.

 

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8.3. Indemnification by Grantors. Each Grantor hereby agrees, on a joint and several basis, to indemnify, exonerate and hold Agent, each Lender and each of the officers, directors, employees, Affiliates and agents of Agent and each Lender (each a “Lender Party” and collectively, the “Lender Parties”) free and harmless from and against any and all actions, causes of action, suits, losses, liabilities, damages and expenses, including Legal Costs, but expressly excluding any consequential, special or lost profits damages (collectively, the “Indemnified Liabilities”), incurred by Lender Parties or any of them as a result of, or arising out of, or relating to any act or omission by Borrower or any of its officer, directors, agents, including without limitation (a) any tender offer, merger, purchase of equity interests, purchase of assets or other similar transaction financed or proposed to be financed in whole or in part, directly or indirectly, with the proceeds of any of the Loans, (b) the use, handling, release, emission, discharge, transportation, storage, treatment or disposal of any hazardous substance at any property owned or leased by any Grantor or any Subsidiary, (c) any violation of any Environmental Laws with respect to conditions at any property owned or leased by any Grantor or any Subsidiary or the operations conducted thereon, (d) the investigation, cleanup or remediation of offsite locations at which any Grantor or any Subsidiary or their respective predecessors are alleged to have directly or indirectly disposed of hazardous substances, or (e) the execution, delivery, performance or enforcement of this Agreement or any other Loan Document by any Lender Party, except to the extent any such Indemnified Liabilities result from the applicable Lender Party’s own gross negligence, bad faith or willful misconduct as determined by a court of competent jurisdiction. If and to the extent that the foregoing undertaking may be unenforceable for any reason, each Grantor hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. The agreements in this Section 8.3 shall survive repayment of the Secured Obligations, any foreclosure under, or any modification, release or discharge of, any or all of the Collateral Documents and termination of this Agreement.

 

8.4. Enforcement Expenses.

 

(a) Each Grantor agrees, on a joint and several basis, to pay or reimburse on demand each Lender and Agent for all duly documented, reasonable out-of-pocket costs and expenses (including Legal Costs) incurred in collecting against any Guarantor under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Agreement and the other Loan Documents.

 

(b) Each Grantor agrees to pay, and to save Agent and Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement.

 

(c) The agreements in this Section 8.4 shall survive repayment of the Secured Obligations, any foreclosure under, or any modification, release or discharge of, any or all of the Collateral Documents and termination of this Agreement.

 

8.5. Captions. Captions used in this Agreement are for convenience only and shall not affect the construction of this Agreement.

 

8.6. Nature of Remedies. All Secured Obligations of each Grantor and rights of Agent and Lenders expressed herein or in any other Loan Document shall be in addition to and not in limitation of those provided by applicable law. No failure to exercise and no delay in exercising, on the part of Agent or any Lender, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

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8.7. Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Agreement. Receipt by facsimile machine or in “.pdf” format through electronic mail of any executed signature page to this Agreement or any other Loan Document shall constitute effective delivery of such signature page. This Agreement and the other Loan Documents to the extent signed and delivered by means of a facsimile machine or other electronic transmission (including “.pdf”), shall be treated in all manner and respects and for all purposes as an original agreement or amendment and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No party hereto or to any such other Loan Document shall raise the use of a facsimile machine or other electronic transmission to deliver a signature or the fact that any signature or agreement or amendment was transmitted or communicated through the use of a facsimile machine or other electronic transmission as a defense to the formation or enforceability of a contract and each such party forever waives any such defense.

 

8.8. Severability. The illegality or unenforceability of any provision of this Agreement or any instrument or agreement required hereunder shall not in any way affect or impair the legality or enforceability of the remaining provisions of this Agreement or any instrument or agreement required hereunder.

 

8.9. Entire Agreement. This Agreement, together with the other Loan Documents, embodies the entire agreement and understanding among the parties hereto and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof and any prior arrangements made with respect to the payment by any Grantor of (or any indemnification for) any fees, costs or expenses payable to or incurred (or to be incurred) by or on behalf of Agent or Lenders.

 

8.10. Successors; Assigns. This Agreement shall be binding upon Grantors, Lenders and Agent and their respective successors and assigns, and shall inure to the benefit of Grantors, Lenders and Agent and the successors and assigns of Lenders and Agent. No other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the other Loan Documents. No Grantor may assign or transfer any of its rights or Obligations under this Agreement without the prior written consent of Agent.

 

8.11. Governing Law. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

 

8.12. Forum Selection; Consent to Jurisdiction. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH PARTY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, U.S. FIRST CLASS POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

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8.13. Waiver of Jury Trial. EACH GRANTOR, AGENT AND EACH LENDER, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

8.14. Set-off. Each Grantor agrees that Agent and each Lender have all rights of set-off and bankers’ lien provided by applicable law, and in addition thereto, each Grantor agrees that at any time any Event of Default has occurred and is continuing, Agent and each Lender may apply to the payment of any Secured Obligations, whether or not then due, any and all balances, credits, deposits, accounts or moneys of such Grantor then or thereafter with Agent or such Lender.

 

8.15. Acknowledgements. Each Grantor hereby acknowledges that:

 

(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party;

 

(b) it has received a fully executed copy of this Agreement;

 

(c) neither Agent nor any Lender has any fiduciary relationship with or duty to any Grantor arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Grantors, on the one hand, and Agent and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

 

(d) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among Lenders or among the Grantors and Lenders.

 

8.16. Additional Grantors. Each Loan Party that is required to become a party to this Agreement pursuant to Section 6.8 of the Credit Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Loan Party of a joinder agreement in the form of Annex I hereto.

 

8.17. Releases.

 

(a) At such time as the Secured Obligations have been Paid in Full, the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors. At the request and sole expense of any Grantor following any such termination, Agent shall deliver to the Grantors any Collateral held by Agent hereunder, and execute and deliver to the Grantors such documents as the Grantors shall reasonably request to evidence such termination.

 

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(b) If any of the Collateral shall be sold or otherwise disposed of by any Grantor in a transaction permitted by the Credit Agreement, then Agent, at the request and sole expense of such Grantor, shall execute and deliver to such Grantor all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral, so long as Borrower delivers to Agent a certificate of an officer of Borrower as to such sale or disposition being made in compliance with the Loan Documents. At the request and sole expense of Borrower, a Subsidiary Guarantor shall be released from its obligations hereunder in the event that all the equity interests of such Subsidiary Guarantor shall be sold, transferred or otherwise disposed of in a transaction permitted by the Credit Agreement; provided that Borrower shall have delivered to Agent, with reasonable notice prior to the date of the proposed release, a written request for release identifying the relevant Subsidiary Guarantor and the terms of the sale or other disposition in reasonable detail, including the price thereof and any expenses in connection therewith, together with a certification by Borrower stating that such transaction is in compliance with the Credit Agreement and the other Loan Documents.

 

8.18.  Obligations and Liens Absolute and Unconditional. Each Grantor understands and agrees that the obligations of each Grantor under this Agreement shall be construed as continuing, absolute and unconditional without regard to (a) the validity or enforceability of any Loan Document, any of the Secured Obligations or any other collateral security therefor or guaranty or right of offset with respect thereto at any time or from time to time held by Agent or any Lender, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by any Grantor or any other Person against Agent or any Lender, or (c) any other circumstance whatsoever (with or without notice to or knowledge of any Grantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of any Grantor for the Secured Obligations, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Grantor, Agent or any Lender may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against any other Grantor or any other Person or against any collateral security or guaranty for the Secured Obligations or any right of offset with respect thereto, and any failure by Agent or any Lender to make any such demand, to pursue such other rights or remedies or to collect any payments from any other Grantor or any other Person or to realize upon any such collateral security or guaranty or to exercise any such right of offset, or any release of any other Grantor or any other Person or any such collateral security, guaranty or right of offset, shall not relieve any Grantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of Agent or any Lender against any Grantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

 

8.19.  Reinstatement. This Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any Grantor or any Issuer for liquidation or reorganization, should any Grantor or any Issuer become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of any Grantor’s or any Issuer’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a “voidable preference”, “fraudulent conveyance”, or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

 

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8.20.  Conflicting Terms. In the event of any conflict between the terms of this Agreement and the terms of the Credit Agreement, the terms of the Credit Agreement shall control.

 

[Signature page follows]

 

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Each of the undersigned has caused this Guarantee and Collateral Agreement to be duly executed and delivered as of the date first above written.

 

	
 
    	
GRANTORS:
    
	
 
    	
 
    	
 
    
	
 
    	
TRIBUTE   PHARMACEUTICALS CANADA INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Scott Langille
    
	
 
    	
 
    	
Name: Scott Langille
    
	
 
    	
 
    	
Title: Chief Financial   Officer
    
	
 
    	
 
    	
 
    
	
 
    	
AGENT:
    
	
 
    	
 
    	
 
    
	
 
    	
SWK   FUNDING LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/Winston   Black
    
	
 
    	
 
    	
Name: Winston Black
    
	
 
    	
 
    	
Title: Managing   Director
    

 

[SCHEDULE 8 TO GUARANTEE AND COLLATERAL AGREEMENT]

 

28

 

SCHEDULE 1

 

INVESTMENT PROPERTY

 

A. PLEDGED EQUITY

 

None.

 

B. PLEDGED NOTES

 

None.

 

C. OTHER INVESTMENT PROPERTY

 

None.

 

D. NOTICE ADDRESS

 

151 Steeles Ave. E. Milton, Ontario, Canada L9T1Y1

 

[SCHEDULE 1 TO GUARANTEE AND COLLATERAL AGREEMENT]

 

29

 

SCHEDULE 2

 

Reserved.

 

[SCHEDULE 2 TO GUARANTEE AND COLLATERAL AGREEMENT]

 

30

 

 

SCHEDULE 3

 

GRANTOR INFORMATION

 

	
GRANTOR
   (exact legal name)
    	
 
    	
STATE OF
   ORGANIZATION
    	
 
    	
FEDERAL
   EMPLOYER
   IDENTIFICATION
   NUMBER
    	
 
    	
CHIEF
   EXECUTIVE
   OFFICE
    	
 
    	
ORGANIZATIONAL
   IDENTIFICATION
   NUMBER
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Province of Onario
    	
 
    	
CRA No. - 85828

4979 RC 0003
    	
 
    	
544 Egerton Street,

London, Ontario,

N5W 3Z8
    	
 
    	
Ontario Corporate No.   1887858
    

 

[SCHEDULE 3 TO GUARANTEE AND COLLATERAL AGREEMENT]

 

31

 

SCHEDULE 4

 

A. COLLATERAL LOCATIONS

 

	
GRANTOR
    	
 
    	
COLLATERAL LOCATION
   OR
   PLACE OF BUSINESS (INCLUDING
   CHIEF EXECUTIVE OFFICE)
    	
 
    	
OWNER/LESSOR
   (IF LEASED)
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
544 Egerton Street, London, Ontario N5W 3Z8
    	
 
    	
Owned by Tribute
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
151 Steeles Ave. E., Milton, Ontario Canada L9T1Y1
    	
 
    	
Lessor: High Point Industrial Parks Inc.
   401 Wheelabrator Way, Ontario, L9T 3C1
    

 

B. COLLATERAL IN POSSESSION OF LESSOR,

 

BAILEE, CONSIGNEE OR WAREHOUSEMAN

 

	
GRANTOR
    	
 
    	
COLLATERAL
    	
 
    	
LESSOR/BAILEE/CONSIGNEE/
   WAREHOUSEMAN
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst Manufacturing Equipment
    	
 
    	
Jubilant HollisterStier, 1675 Trans-Canada Road,   Kirkland, Quebec, H9H4J4
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
NeoVisc Manufacturing Equipment
    	
 
    	
Therapure Biopharma Inc., 2285 Meadowpine Blvd.,   Mississauga, Ontario
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Finish Goods Inventory
    	
 
    	
Accuristix, 2844 Bristol Circle, Oakville, Ontario
    

 

[SCHEDULE 4 TO GUARANTEE AND COLLATERAL AGREEMENT]

 

32

 

SCHEDULE 5

 

INTELLECTUAL PROPERTY

 

[APPLIES TO ALL Intellectual Property and License Agreements]

 

	
Grantor
    	
 
    	
Name / Identifier of IP or License
    	
 
    	
Type of IP (e.g., patent, TM, ©,
   mask work)
   or
   License Agreement
    	
 
    	
Expiration
   Date
   (if a License,
   expiration of
   License and
   Licensed
   Property)
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #6,083,933 (US Patent)
    	
 
    	
Patent
    	
 
    	
04/19/2019
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #2,269,260 (Canadian Patent)
    	
 
    	
Patent
    	
 
    	
04/16/2019
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #US 7772210 (United States)
    	
 
    	
Patent
    	
 
    	
11/07/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #ZL200480006467.1(China)
    	
 
    	
Patent
    	
 
    	
02/18/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #4778888 (Japan)
    	
 
    	
Patent
    	
 
    	
02/18/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #AU2004212650 (Australia)
    	
 
    	
Patent
    	
 
    	
02/18/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - Application #04711966.4 (Europe - pending)
    	
 
    	
Patent Application
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - Application #4050/DELNP (India - pending)
    	
 
    	
Patent Application
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - Application #170309 (Israel - pending)
    	
 
    	
Patent Application
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #2515512 (Canada)
    	
 
    	
Patent
    	
 
    	
02/18/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #8084441 (United States - second high dose   patent)
    	
 
    	
Patent
    	
 
    	
11/07/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - #8334276 (United States - third high dose   patent)
    	
 
    	
Patent
    	
 
    	
11/07/2024
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst - Application #13/717551 (United States -   fourth high dose patent)
    	
 
    	
Patent Application
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
NeoVisc Trademarks - Canada (TMA 486692), Germany   (30457514.3), European Community (004376208), Dominican Republic (140250),   Mexico (823752)
    	
 
    	
 
    	
 
    	
 
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst Trademarks - Canada (TMA486693),
   United States (2677199),
   European Community (002297653), Korea (40-0849594), Turkey 2008055507
    	
 
    	
Trademarks
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uracyst Trademarks - Canada (TMA486693),
   United States (2677199),
   European Community (002297653), Korea (40-0849594), Turkey 2008055507
    	
 
    	
Trademarks
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Uropol Trademarks - Germany (303 46 971), Austria   (230 503), Switzerland (514 536)
   EU (010499218)
    	
 
    	
Trademarks
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Tribute Pharmaceuticals Application # 86/006,569 and   86/006,574 (United States); Application # 1609470, 1609446(Canada)
    	
 
    	
Trademark Application
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Ltd.
    	
 
    	
Tribute Pharma Application #
   1,609,447 (Canada)
    	
 
    	
Trademark Application
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Ltd.
    	
 
    	
Cambia Patent #CA 2,254,144 (Canada) (granted)
   Cambia Patent #CA Application #2,632,375 (Canada) (pending)
    	
 
    	
Patent
    	
 
    	
May 15, 2017
   June 16, 2026 (if granted)
    
	
Tribute Pharmaceuticals Canada Ltd.
    	
 
    	
Cambia Trademark
   TMA806381
    	
 
    	
Trademark License Agreement
    	
 
    	
December 31, 2025
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Soriatane Trademarks
   TMA436505
    	
 
    	
License to use Trademarks
    	
 
    	
December 31, 2018
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
Bezalip SR Trademarks
   TMA247035
    	
 
    	
License to use Trademarks
    	
 
    	
December 31, 2018
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
License Agreement for Bezalip and Soriatane in   Canada
    	
 
    	
License Agreement
    	
 
    	
December 31, 2018
    
	
Tribute Pharmaceuticals Canada Ltd.
    	
 
    	
License Agreement for Bezalip in the United States
    	
 
    	
License Agreement
    	
 
    	
N/A
    
	
Tribute Pharmaceuticals Canada Ltd.
    	
 
    	
License Agreement for Cambia in Canada
    	
 
    	
License Agreement
    	
 
    	
December 31, 2025
    
	
Tribute Pharmaceuticals Canada Inc.
    	
 
    	
License Agreement for MycoVa in Canada
    	
 
    	
License Agreement
    	
 
    	
December 30, 2026
    

 

[SCHEDULE 5 TO GUARANTEE AND COLLATERAL AGREEMENT]

 

33

 

SCHEDULE 6

 

DEPOSIT ACCOUNTS AND OTHER ACCOUNTS

 

34

 

SCHEDULE 7

 

COMMERCIAL TORT CLAIMS

 

None.

 

[SCHEDULE 7 TO GUARANTEE AND COLLATERAL AGREEMENT]

 

35

 

SCHEDULE 8

 

EXCLUDED PROPERTY

 

License agreements representing Intellectual Property licensed to the Grantor and such other Material Contracts as listed on Schedule 5.21 of the Credit Agreement which constitute assets of the Grantor and fall within the definition of Excluded Property by virtue of restrictions on transfer or assignment contained therein, provided, however, for the avoidance of doubt, that the reference above does not include the Proceeds (as defined in Section 9-102(a)(64) (A), (B), (D), and (E) of the Code) of such license agreements and other Material Contracts listed on Schedule 5.21 of the Credit Agreement.

 

[SCHEDULE 8 TO GUARANTEE AND COLLATERAL AGREEMENT]

 

36

 

ANNEX I

 

FORM OF JOINDER TO GUARANTEE AND COLLATERAL AGREEMENT

 

This JOINDER AGREEMENT (this “Agreement”) dated as of [            ] is executed by the undersigned for the benefit of SWK Funding LLC, as Agent (the “Agent”) in connection with that certain Guarantee and Collateral Agreement dated as of August 8, 2013 among the Grantors party thereto and Agent (as amended, supplemented or modified from time to time, the “Guarantee and Collateral Agreement”). Capitalized terms not otherwise defined herein are being used herein as defined in the Guarantee and Collateral Agreement.

 

Each Person signatory hereto is required to execute this Agreement pursuant to Section 8.16 of the Guarantee and Collateral Agreement.

 

NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each signatory hereby agrees as follows:

 

1. Each such Person assumes all the obligations of a Grantor and a Guarantor under the Guarantee and Collateral Agreement and agrees that such Person is a Grantor and a Guarantor and bound as a Grantor and a Guarantor under the terms of the Guarantee and Collateral Agreement, as if it had been an original signatory to the Guarantee and Collateral Agreement. In furtherance of the foregoing, such Person hereby (i) assigns, pledges and grants to Agent a security interest in all of its right, title and interest in and to the Collateral owned thereby to secure the Secured Obligations and (ii) guarantees the prompt and complete payment and performance by Borrower when due (whether at the stated maturity, by acceleration or otherwise) of Borrower Obligations.

 

2. Schedules 1, 2, 3, 4, 5, 6, 7, and 8, of the Guarantee and Collateral Agreement are hereby amended and restated in the forms of Schedules 1, 2, 3, 4, 5, 6, 7, and 8, respectively, hereof. Each such Person and all existing Grantors hereby make to Agent the representations and warranties set forth in the Guarantee and Collateral Agreement applicable to such Person and the applicable Collateral and confirms that such representations and warranties are true and correct after giving effect to such amendment to such Schedules.

 

3. In furtherance of its obligations under Section 5.2 of the Guarantee and Collateral Agreement, each such Person agrees to execute and deliver to Agent appropriately complete Code financing statements naming such person or entity as debtor and Agent as secured party, and describing its Collateral and such other documentation as Agent (or its successors or assigns) may require to evidence, protect and perfect the Liens created by the Guarantee and Collateral Agreement, as modified hereby.

 

4. Each such Person’s address and fax number for notices under the Guarantee and Collateral Agreement shall be that of the Borrower as set forth in the Guarantee and Collateral Agreement.

 

5. This Agreement shall be deemed to be part of, and a modification to, the Guarantee and Collateral Agreement and shall be governed by all the terms and provisions of the Guarantee and Collateral Agreement, with respect to the modifications intended to be made to such agreement, which terms are incorporated herein by reference, are ratified and confirmed and shall continue in full force and effect as valid and binding agreements of each such person or entity enforceable against such person or entity. Each such person or entity hereby waives notice of Agent’s acceptance of this Agreement. Each such person or entity will deliver an executed original of this Agreement to Agent.

 

[add signature block for each new Grantor and an acknowledgement by each existing Grantor]

 

[Annex I to Guarantee and Collateral Agreement]

 

37

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