Document:

Exhibit 10.3

eGAIN CORPORATION 

AMENDED AND RESTATED 2005 MANAGEMENT STOCK OPTION PLAN 

(Initially Adopted by the Board of Directors on May 27, 2005) 

Table of Contents 

 

	
 
	
  
	
Page

	
SECTION 1. ESTABLISHMENT AND PURPOSE.
	
  
	
1

	
 
	
 
	
 

	
SECTION 2. DEFINITIONS.
	
  
	
1

	
 
	
 
	
 

	
 
	
 
	
(a)
	
  
	
“Affiliate”
	
  
	
1

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
  
	
“Award”
	
  
	
1

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
  
	
“Board of Directors”
	
  
	
1

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(d)
	
  
	
“Change in Control”
	
  
	
1

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(e)
	
  
	
“Code”
	
  
	
2

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(f)
	
  
	
“Committee”
	
  
	
2

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(g)
	
  
	
“Company”
	
  
	
2

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(h)
	
  
	
“Exchange Act”
	
  
	
2

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(i)
	
  
	
“Exercise Price”
	
  
	
2

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(j)
	
  
	
“Fair Market Value”
	
  
	
2

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(k)
	
  
	
“Nonstatutory Option” or “NSO”
	
  
	
2

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(l)
	
  
	
“Officer”
	
  
	
2

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(m)
	
  
	
“Option”
	
  
	
2

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(n)
	
  
	
“Optionee”
	
  
	
2

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(o)
	
  
	
“Parent”
	
  
	
2

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(p)
	
  
	
“Participant”
	
  
	
2

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(q)
	
  
	
“Plan”
	
  
	
2

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(r)
	
  
	
“Service”
	
  
	
2

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(s)
	
  
	
“Share”
	
  
	
3

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(t)
	
  
	
“Stock”
	
  
	
3

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(u)
	
  
	
“Stock Option Agreement”
	
  
	
3

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(v)
	
  
	
“Subsidiary”
	
  
	
3

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
SECTION 3. ADMINISTRATION
	
  
	
3

	
 
	
 
	
 

	
 
	
 
	
(a)
	
  
	
Committee Composition
	
  
	
3

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
  
	
Committee Procedures
	
  
	
3

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
  
	
Committee Responsibilities
	
  
	
3

	
 
	
 
	
 
	
 
	
 
	
 
	
 

 

 

	
 
	
  
	
Page

	
SECTION 4. ELIGIBILITY
	
  
	
4

	
 
	
 
	
 

	
 
	
 
	
(a)
	
  
	
General Rule
	
  
	
4

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
SECTION 5. STOCK SUBJECT TO PLAN
	
  
	
4

	
 
	
 
	
 

	
 
	
 
	
(a)
	
  
	
Basic Limitation
	
  
	
4

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
  
	
Award Limitation
	
  
	
4

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
  
	
Additional Shares
	
  
	
4

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
SECTION 6. TERMS AND CONDITIONS OF OPTIONS
	
  
	
4

	
 
	
 
	
 

	
 
	
 
	
(a)
	
  
	
Stock Option Agreement
	
  
	
4

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
  
	
Number of Shares
	
  
	
4

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
  
	
Exercise Price
	
  
	
4

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(d)
	
  
	
Withholding Taxes
	
  
	
4

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(e)
	
  
	
Exercisability and Term
	
  
	
4

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(f)
	
  
	
Exercise of Options Upon Termination of Service
	
  
	
5

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(g)
	
  
	
Effect of Change in Control
	
  
	
5

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(h)
	
  
	
Leaves of Absence
	
  
	
5

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(i)
	
  
	
No Rights as a Stockholder
	
  
	
5

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(j)
	
  
	
Modification, Extension and Renewal of Options
	
  
	
5

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(k)
	
  
	
Restrictions on Transfer of Shares
	
  
	
5

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(l)
	
  
	
Buyout Provisions
	
  
	
5

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
SECTION 7. PAYMENT FOR SHARES
	
  
	
5

	
 
	
 
	
 

	
 
	
 
	
(a)
	
  
	
General Rule
	
  
	
5

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
  
	
Surrender of Stock
	
  
	
5

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
  
	
Services Rendered
	
  
	
5

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(d)
	
  
	
Cashless Exercise
	
  
	
6

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(e)
	
  
	
Exercise/Pledge
	
  
	
6

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(f)
	
  
	
Promissory Note
	
  
	
6

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(g)
	
  
	
Other Forms of Payment
	
  
	
6

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(h)
	
  
	
Limitations under Applicable Law
	
  
	
6

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
SECTION 8. ADJUSTMENT OF SHARES
	
  
	
6

	
 
	
 
	
 

	
 
	
 
	
(a)
	
  
	
Adjustments
	
  
	
6

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
  
	
Dissolution or Liquidation
	
  
	
6

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
  
	
Reorganizations
	
  
	
6

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(d)
	
  
	
Reservation of Rights
	
  
	
6

	
 
	
 
	
 
	
 
	
 
	
 
	
 

 

 

	
 
	
  
	
Page

	
SECTION 9. DEFERRAL OF AWARDS
	
  
	
7

	
 
	
 
	
 

	
 
	
 
	
(a)
	
  
	
Committee Powers
	
  
	
7

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
  
	
General Rules
	
  
	
7

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
SECTION 10. AWARDS UNDER OTHER PLANS
	
  
	
7

	
 
	
 
	
 

	
SECTION 11. LEGAL AND REGULATORY REQUIREMENTS
	
  
	
7

	
 
	
 
	
 

	
SECTION 12. WITHHOLDING TAXES
	
  
	
7

	
 
	
 
	
 

	
 
	
 
	
(a)
	
  
	
General
	
  
	
7

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
  
	
Share Withholding
	
  
	
7

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
SECTION 13. OTHER PROVISIONS APPLICABLE TO AWARDS
	
  
	
7

	
 
	
 
	
 

	
 
	
 
	
(a)
	
  
	
Transferability
	
  
	
7

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
  
	
Qualifying Performance Criteria
	
  
	
8

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
SECTION 14. NO EMPLOYMENT RIGHTS
	
  
	
8

	
 
	
 
	
 

	
SECTION 15. DURATION AND AMENDMENTS
	
  
	
8

	
 
	
 
	
 

	
 
	
 
	
(a)
	
  
	
Term of the Plan
	
  
	
8

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
  
	
Right to Amend or Terminate the Plan
	
  
	
8

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
  
	
Effect of Termination
	
  
	
8

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
SECTION 16. EXECUTION
	
  
	
8

 

 

 

 

 

eGAIN CORPORATION 

AMENDED AND RESTATED 2005 MANAGEMENT STOCK OPTION PLAN 

SECTION 1. ESTABLISHMENT AND PURPOSE. 

The Plan was adopted by the Board of Directors effective May 27, 2005 (the “Effective Date”) , and most recently amended on August 29, 2014. The purpose of the Plan is to promote the long-term success of the Company and the creation of stockholder value by (a) encouraging Officers of the Company to focus on critical long-range objectives, (b) encouraging the retention of Officers with exceptional qualifications and (c) linking Officers directly to stockholder interests through increased stock ownership. The Plan seeks to achieve this purpose by providing for Awards in the form of options. 

SECTION 2. DEFINITIONS. 

(a) “Affiliate” shall mean any entity other than a Subsidiary, if the Company and/or one of more Subsidiaries own not less than 50% of such entity. 

(b) “Award” shall mean any award of an Option under the Plan. 

(c) “Board of Directors” shall mean the Board of Directors of the Company, as constituted from time to time. 

(d) “Change in Control” shall mean the occurrence of any of the following events: 

(i) A change in the composition of the Board of Directors occurs, as a result of which fewer than one-half of the incumbent directors are directors who either: 

(A) Had been directors of the Company on the “look-back date” (as defined below) (the “original directors”); or 

(B) Were elected, or nominated for election, to the Board of Directors with the affirmative votes of at least a majority of the aggregate of the original directors who were still in office at the time of the election or nomination and the directors whose election or nomination was previously so approved (the “continuing directors”); or 

(ii) Any “person” (as defined below) who by the acquisition or aggregation of securities, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities ordinarily (and apart from rights accruing under special circumstances) having the right to vote at elections of directors (the “Base Capital Stock”); except that any change in the relative beneficial ownership of the Company’s securities by any person resulting solely from a reduction in the aggregate number of outstanding shares of Base Capital Stock, and any decrease thereafter in such person’s ownership of securities, shall be disregarded until such person increases in any manner, directly or indirectly, such person’s beneficial ownership of any securities of the Company; or 

(iii) The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if persons who were not stockholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization 50% or more of the voting power of the outstanding securities of each of (A) the continuing or surviving entity and (B) any direct or indirect parent corporation of such continuing or surviving entity; or 

(iv) The sale, transfer or other disposition of all or substantially all of the Company’s assets. 

For purposes of subsection (d)(i) above, the term “look-back” date shall mean the later of (1) the Effective Date or (2) the date 24 months prior to the date of the event that may constitute a Change in Control. 

For purposes of subsection (d)(ii)) above, the term “person” shall have the same meaning as when used in Sections 13(d) and 14(d) of the Exchange Act but shall exclude (1) a trustee or other fiduciary holding securities under an employee benefit plan maintained by the Company or a Parent or Subsidiary and (2) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the Stock. 

- 1 -

 

Any other provision of this Section 2(d) notwithstanding, a transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction, and a Change in Control shall not be deemed to occur if the Company files a registration statement with the Securities and Exchange Commission for the initial offering of Stock to the public. 

(e) “Code” shall mean the Internal Revenue Code of 1986, as amended. 

(f) “Committee” shall mean the Compensation Committee as designated by the Board of Directors, which is authorized to administer the Plan, as described in Section 3 hereof. 

(g) “Company” shall mean eGain Corporation, a Delaware corporation. 

(h) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. 

(i) “Exercise Price” shall mean the amount for which one Share may be purchased upon exercise of such Option, as specified in the applicable Stock Option Agreement. 

(j) “Fair Market Value” with respect to a Share, shall mean the market price of one Share, determined by the Committee as follows: 

(i) If the Stock was traded over-the-counter on the date in question but was not traded on The Nasdaq Stock Market, then the Fair Market Value shall be equal to the last transaction price quoted for such date by the OTC Bulletin Board or, if not so quoted, shall be equal to the mean between the last reported representative bid and asked prices quoted for such date by the principal automated inter-dealer quotation system on which the Stock is quoted or, if the Stock is not quoted on any such system, by the Pink Sheets LLC; 

(ii) If the Stock was traded on The Nasdaq Stock Market, then the Fair Market Value shall be equal to the last reported sale price quoted for such date by The Nasdaq Stock Market; 

(iii) If the Stock was traded on a United States stock exchange on the date in question, then the Fair Market Value shall be equal to the closing price reported for such date by the applicable composite-transactions report; and 

(iv) If none of the foregoing provisions is applicable, then the Fair Market Value shall be determined by the Committee in good faith on such basis as it deems appropriate. In all cases, the determination of Fair Market Value by the Committee shall be conclusive and binding on all persons. 

(k) “Nonstatutory Option” or “NSO” shall mean an employee stock option that is not an employee incentive stock option described in Section 422 of the Code. 

(l) “Officer” shall mean any individual who is a common-law employee who are directors, officers or other key employees of the Company as approved by the Company’s Board of Directors. 

(m) “Option” shall mean a Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares. 

(n) “Optionee” shall mean an individual or estate who holds an Option. 

(o) “Parent” shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be a Parent commencing as of such date. 

(p) “Participant” shall mean an individual or estate who holds an Award. 

(q) “Plan” shall mean this 2005 Management Stock Option Plan of eGain Corporation, as amended from time to time. 

(r) “Service” shall mean service as an Officer. 

- 2 -

 

(s) “Share” shall mean one share of Stock, as adjusted in accordance with Section 8 (if applicable). 

(t) “Stock” shall mean the Common Stock of the Company. 

(u) “Stock Option Agreement” shall mean the agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to his Option. 

(v) “Subsidiary” shall mean any corporation, if the Company and/or one or more other Subsidiaries own not less than 50% of the total combined voting power of all classes of outstanding stock of such corporation. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date. 

SECTION 3. ADMINISTRATION. 

(a) Committee Composition. The Plan shall be administered by the Committee. The Committee shall consist of two or more directors of the Company, who shall be appointed by the Board of Directors. In addition, the composition of the Committee shall satisfy (i) such requirements as the Securities and Exchange Commission may establish for administrators acting under plans intended to qualify for exemption under Rule 16b-3 (or its successor) under the Exchange Act; and (ii) such requirements as the Internal Revenue Service may establish for outside directors acting under plans intended to qualify for exemption under Section 162(m)(4)(C) of the Code. 

(b) Committee Procedures. The Board of Directors shall designate one of the members of the Committee as chairman. The Committee may hold meetings at such times and places as it shall determine. The acts of a majority of the Committee members present at meetings at which a quorum exists, or acts reduced to or approved in writing by all Committee members, shall be valid acts of the Committee. 

(c) Committee Responsibilities. Subject to the provisions of the Plan, the Committee shall have full authority and discretion to take the following actions: 

(i) To interpret the Plan and to apply its provisions; 

(ii) To adopt, amend or rescind rules, procedures and forms relating to the Plan; 

(iii) To authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan; 

(iv) To determine when Awards are to be granted under the Plan; 

(v) To select the Optionees; 

(vi) To determine the number of Shares to be made subject to each Award; 

(vii) To prescribe the terms and conditions of each Award, including (without limitation) the Exercise Price and Purchase Price, and the vesting or duration of the Award (including accelerating the vesting of Awards, either at the time of the Award or thereafter, without the consent of the Participant), and to specify the provisions of the agreement relating to such Award; 

(viii) To amend any outstanding Award agreement, subject to applicable legal restrictions and to the consent of the Participant if the Participant’s rights or obligations would be materially impaired; 

(ix) To prescribe the consideration for the grant of each Award or other right under the Plan and to determine the sufficiency of such consideration; 

(x) To determine the disposition of each Award or other right under the Plan in the event of a Participant’s divorce or dissolution of marriage; 

(xi) To determine whether Awards under the Plan will be granted in replacement of other grants under an incentive or other compensation plan of an acquired business; 

(xii) To correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Award agreement; 

- 3 -

 

(xiii) To establish or verify the extent of satisfaction of any performance goals or other conditions applicable to the grant, issuance, exercisability, vesting and/or ability to retain any Award; and 

(xiv) To take any other actions deemed necessary or advisable for the administration of the Plan. 

Subject to the requirements of applicable law, the Committee may designate persons other than members of the Committee to carry out its responsibilities and may prescribe such conditions and limitations as it may deem appropriate, except that the Committee may not delegate its authority with regard to the selection for participation of or the granting of Options or other rights under the Plan to persons subject to Section 16 of the Exchange Act. All decisions, interpretations and other actions of the Committee shall be final and binding on all Optionees and all persons deriving their rights from an Optionee. No member of the Committee shall be liable for any action that he has taken or has failed to take in good faith with respect to the Plan or any Option. 

SECTION 4. ELIGIBILITY. 

(a) General Rule. Only Officers shall be eligible for the grant of Nonstatutory Options. 

SECTION 5. STOCK SUBJECT TO PLAN. 

(a) Basic Limitation. The aggregate number of Shares which may be issued under the Plan shall not exceed 2,962,400 Shares. The limitations of this Section 5(a) shall be subject to adjustment pursuant to Section 8. The number of Shares which are subject to Options outstanding at any time shall not exceed the number of Shares which then remain available for issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan. Shares offered under the Plan may be authorized but unissued Shares or treasury Shares. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan. 

(b) Award Limitation. Subject to the provisions of Section 8, no Participant may receive Options under the Plan in any calendar year that relate to more than 250,000 Shares. 

(c) Additional Shares. If Shares issued upon the exercise of Options are forfeited, then such Shares shall again become available for Awards under the Plan. If Options are forfeited or terminate for any other reason before being exercised, then the corresponding Shares shall again become available for Awards under the Plan. 

SECTION 6. TERMS AND CONDITIONS OF OPTIONS. 

(a) Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Committee deems appropriate for inclusion in a Stock Option Agreement. The Stock Option Agreement shall specify that the Option is an NSO. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical. Options may be granted in consideration of a reduction in the Optionee’s other compensation. 

(b) Number of Shares. Each Stock Option Agreement shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 8. 

(c) Exercise Price. Each Stock Option Agreement shall specify the Exercise Price. The Exercise Price of an NSO shall not be less 100% of the Fair Market Value of a Share on the date of grant. Notwithstanding the foregoing, a Stock Option Agreement may specify that the exercise price of an NSO may vary in accordance with a predetermined formula. Subject to the foregoing in this Section 6(c), the Exercise Price under any Option shall be determined by the Committee at its sole discretion. The Exercise Price shall be payable in one of the forms described in Section 7. 

(d) Withholding Taxes. As a condition to the exercise of an Option, the Optionee shall make such arrangements as the Committee may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such exercise. The Optionee shall also make such arrangements as the Committee may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with the disposition of Shares acquired by exercising an Option. 

(e) Exercisability and Term. Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable. The Stock Option Agreement shall also specify the term of the Option; provided that the term shall in no event 

- 4 -

 

exceed five years from the date of grant. A Stock Option Agreement may provide for accelerated exercisability in the event of the Optionee’s death, disability, or retirement or other events and may provide for expiration prior to the end of its term in the event of the termination of the Optionee’s Service. Subject to the foregoing in this Section 6(e), the Committee at its sole discretion shall determine when all or any installment of an Option is to become exercisable and when an Option is to expire. 

(f) Exercise of Options Upon Termination of Service. Each Stock Option Agreement shall set forth the extent to which the Optionee shall have the right to exercise the Option following termination of the Optionee’s Service with the Company and its Subsidiaries, and the right to exercise the Option of any executors or administrators of the Optionee’s estate or any person who has acquired such Option(s) directly from the Optionee by bequest or inheritance. Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service. 

(g) Effect of Change in Control. The Committee may determine, at the time of granting an Option or thereafter, that such Option shall become exercisable as to all or part of the Shares subject to such Option in the event that a Change in Control occurs with respect to the Company. 

(h) Leaves of Absence. An Employee’s Service shall cease when such Employee ceases to be actively employed by, or a Consultant to, the Company (or any subsidiary) as determined in the sole discretion of the Board of Directors. For purposes of Options, Service does not terminate when an Employee goes on a bona fide leave of absence, that was approved by the Company in writing, if the terms of the leave provide for continued service crediting, or when continued service crediting is required by applicable law. Service terminates in any event when the approved leave ends, unless such Employee immediately returns to active work. The Company determines which leaves count toward Service, and when Service terminates for all purposes under the Plan. 

(i) No Rights as a Stockholder. An Optionee, or a transferee of an Optionee, shall have no rights as a stockholder with respect to any Shares covered by his Option until the date of the issuance of a stock certificate for such Shares. No adjustments shall be made, except as provided in Section 8. 

(j) Modification, Extension and Renewal of Options. Within the limitations of the Plan, the Committee may modify, extend or renew outstanding options or may accept the cancellation of outstanding options (to the extent not previously exercised), whether or not granted hereunder, in return for the grant of new Options for the same or a different number of Shares and at the same or a different exercise price, or in return for the grant of the same or a different number of Shares. The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, materially impair his or her rights or obligations under such Option. 

(k) Restrictions on Transfer of Shares. Any Shares issued upon exercise of an Option shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Committee may determine. Such restrictions shall be set forth in the applicable Stock Option Agreement and shall apply in addition to any general restrictions that may apply to all holders of Shares. 

(l) Buyout Provisions. The Committee may at any time (a) offer to buy out for a payment in cash or cash equivalents an Option previously granted or (b) authorize an Optionee to elect to cash out an Option previously granted, in either case at such time and based upon such terms and conditions as the Committee shall establish. 

SECTION 7. PAYMENT FOR SHARES. 

(a) General Rule. The entire Exercise Price or Purchase Price of Shares issued under the Plan shall be payable in lawful money of the United States of America at the time when such Shares are purchased, except as provided in Section 7(b) through Section 7(g) below. 

(b) Surrender of Stock. To the extent that a Stock Option Agreement so provides, payment may be made all or in part by surrendering, or attesting to the ownership of, Shares which have already been owned by the Optionee or his representative. Such Shares shall be valued at their Fair Market Value on the date when the new Shares are purchased under the Plan. The Optionee shall not surrender, or attest to the ownership of, Shares in payment of the Exercise Price if such action would cause the Company to recognize compensation expense (or additional compensation expense) with respect to the Option for financial reporting purposes. 

(c) Services Rendered. At the discretion of the Committee, Shares may be awarded under the Plan in consideration of services rendered to the Company or a Subsidiary prior to the award. 

- 5 -

 

(d) Cashless Exercise. To the extent that a Stock Option Agreement so provides, payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price. 

(e) Exercise/Pledge. To the extent that a Stock Option Agreement so provides, payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker or lender to pledge Shares, as security for a loan, and to deliver all or part of the loan proceeds to the Company in payment of the aggregate Exercise Price. 

(f) Promissory Note. To the extent that a Stock Option Agreement so provides, payment may be made all or in part by delivering (on a form prescribed by the Company) a full-recourse promissory note. 

(g) Other Forms of Payment. To the extent that a Stock Option Agreement so provides, payment may be made in any other form that is consistent with applicable laws, regulations and rules. 

(h) Limitations under Applicable Law. Notwithstanding anything herein or in a Stock Option Agreement to the contrary, payment may not be made in any form that is unlawful, as determined by the Committee in its sole discretion. 

SECTION 8. ADJUSTMENT OF SHARES. 

(a) Adjustments. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a declaration of a dividend payable in a form other than Shares in an amount that has a material effect on the price of Shares, a combination or consolidation of the outstanding Stock (by reclassification or otherwise) into a lesser number of Shares, a recapitalization, a spin-off or a similar occurrence, the Committee shall make such adjustments as it, in its sole discretion, deems appropriate in one or more of: 

(i) The number of Options available for future Awards under Section 5; 

(ii) The limitations set forth in Sections 5(a) and (b); 

(iii) The number of Shares covered by each outstanding Option; or 

(iv) The Exercise Price under each outstanding Option. 

Except as provided in this Section 8, a Participant shall have no rights by reason of any issue by the Company of stock of any class or securities convertible into stock of any class, any subdivision or consolidation of shares of stock of any class, the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class. 

(b) Dissolution or Liquidation. To the extent not previously exercised or settled, Options shall terminate immediately prior to the dissolution or liquidation of the Company. 

(c) Reorganizations. In the event that the Company is a party to a merger or other reorganization, outstanding Awards shall be subject to the agreement of merger or reorganization. Such agreement shall provide for: 

(i) The continuation of the outstanding Awards by the Company, if the Company is a surviving corporation; 

(ii) The assumption of the outstanding Awards by the surviving corporation or its parent or subsidiary; 

(iii) The substitution by the surviving corporation or its parent or subsidiary of its own awards for the outstanding Awards; 

(iv) Full exercisability or vesting and accelerated expiration of the outstanding Awards; or 

(v) Settlement of the full value of the outstanding Awards in cash or cash equivalents followed by cancellation of such Awards. 

(d) Reservation of Rights. Except as provided in this Section 8, an Optionee shall have no rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend or any other increase or decrease in the number of shares of stock of any class. Any issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to 

- 6 -

 

an Option. The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets. 

SECTION 9. DEFERRAL OF AWARDS. 

(a) Committee Powers. The Committee (in its sole discretion) may permit or require a Participant to have Shares that otherwise would be delivered to such Participant as a result of the exercise of an Option converted into amounts credited to a deferred compensation account established for such Participant by the Committee as an entry on the Company’s books. Such amounts shall be determined by reference to the Fair Market Value of such Shares as of the date when they otherwise would have been delivered to such Participant. 

(b) General Rules. A deferred compensation account established under this Section 9 may be credited with interest or other forms of investment return, as determined by the Committee. A Participant for whom such an account is established shall have no rights other than those of a general creditor of the Company. Such an account shall represent an unfunded and unsecured obligation of the Company and shall be subject to the terms and conditions of the applicable agreement between such Participant and the Company. If the deferral or conversion of Awards is permitted or required, the Committee (in its sole discretion) may establish rules, procedures and forms pertaining to such Awards, including (without limitation) the settlement of deferred compensation accounts established under this Section 9. 

SECTION 10. AWARDS UNDER OTHER PLANS. 

The Company may grant awards under other plans or programs. Such awards may not be settled in the form of Shares issued under this Plan. 

SECTION 11. LEGAL AND REGULATORY REQUIREMENTS. 

Shares shall not be issued under the Plan unless the issuance and delivery of such Shares complies with (or is exempt from) all applicable requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations and the regulations of any stock exchange on which the Company’s securities may then be listed, and the Company has obtained the approval or favorable ruling from any governmental agency which the Company determines is necessary or advisable. The Company shall not be liable to a Participant or other persons as to: (a) the non-issuance or sale of Shares as to which the Company has been unable to obtain from any regulatory body having jurisdiction the authority deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares under the Plan; and (b) any tax consequences expected, but not realized, by any Participant or other person due to the receipt, exercise or settlement of any Award granted under the Plan. 

SECTION 12. WITHHOLDING TAXES. 

(a) General. To the extent required by applicable federal, state, local or foreign law, a Participant or his or her successor shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with the Plan. The Company shall not be required to issue any Shares or make any cash payment under the Plan until such obligations are satisfied. 

(b) Share Withholding. The Committee may permit a Participant to satisfy all or part of his or her withholding or income tax obligations by having the Company withhold all or a portion of any Shares that otherwise would be issued to him or her or by surrendering all or a portion of any Shares that he or she previously acquired. Such Shares shall be valued at their Fair Market Value on the date when taxes otherwise would be withheld in cash. In no event may a Participant have Shares withheld that would otherwise be issued to him or her in excess of the number necessary to satisfy the legally required minimum tax withholding. 

SECTION 13. OTHER PROVISIONS APPLICABLE TO AWARDS. 

(a) Transferability. Unless the agreement evidencing an Award (or an amendment thereto authorized by the Committee) expressly provides otherwise, no Award granted under this Plan, nor any interest in such Award, may be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner (prior to the vesting and lapse of any and all restrictions applicable to Shares issued under such Award), other than by will or the laws of descent and distribution. Any purported assignment, transfer or encumbrance in violation of this Section 13(a) shall be void and unenforceable against the Company. 

- 7 -

 

(b) Qualifying Performance Criteria. The number of Shares or other benefits granted, issued, retainable and/or vested under an Award may be made subject to the attainment of performance goals for a specified period of time relating to one or more of the following performance criteria, either individually, alternatively or in any combination, applied to either the Company as a whole or to a business unit or Subsidiary, either individually, alternatively or in any combination, and measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years’ results or to a designated comparison group or index, in each case as specified by the Committee in the Award: (a) cash flow, (b) earnings per share, (c) earnings before interest, taxes and amortization, (d) return on equity, (e) total stockholder return, (f) share price performance, (g) return on capital, (h) return on assets or net assets, (i) revenue, (j) income or net income, (k) operating income or net operating income, (l) operating profit or net operating profit, (m) operating margin or profit margin, (n) return on operating revenue, (o) return on invested capital, or (p) market segment shares (“Qualifying Performance Criteria”). 

The Committee may appropriately adjust any evaluation of performance under a Qualifying Performance Criteria to exclude any of the following events that occurs during a performance period: (i) asset write-downs, (ii) litigation or claim judgments or settlements, (iii) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results, (iv) accruals for reorganization and restructuring programs and (v) any extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 and/or in managements’ discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to stockholders for the applicable year. If applicable, the Committee shall determine the Qualifying Performance Criteria not later than the 90th day of the performance period, and shall determine and certify, for each Participant, the extent to which the Qualifying Performance Criteria have been met. The Committee may not in any event increase the amount of compensation payable under the Plan upon the attainment of a Qualifying Performance Goal to a Participant who is a “covered employee” within the meaning of Section 162(m) of the Code. 

SECTION 14. NO EMPLOYMENT RIGHTS. 

No provision of the Plan, nor any right or Option granted under the Plan, shall be construed to give any person any right to become, to be treated as, or to remain an Employee. The Company and its Subsidiaries reserve the right to terminate any person’s Service at any time and for any reason, with or without notice. 

SECTION 15. DURATION AND AMENDMENTS. 

(a) Term of the Plan. The Plan, as set forth herein, shall terminate automatically on May 27, 2015 and may be terminated on any earlier date pursuant to Subsection (b) below. 

(b) Right to Amend or Terminate the Plan. The Board of Directors may amend the Plan at any time and from time to time. Rights and obligations under any Award granted before amendment of the Plan shall not be materially impaired by such amendment, except with consent of the Participant. An amendment of the Plan shall be subject to the approval of the Company’s stockholders only to the extent required by applicable laws, regulations or rules. 

(c) Effect of Termination. No Awards shall be granted under the Plan after the termination thereof. The termination of the Plan shall not affect Awards previously granted under the Plan. 

SECTION 16. EXECUTION. 

To record the adoption of the Plan by the Board of Directors, the Company has caused its authorized officer to execute the same. 

 

	
 
	
eGAIN CORPORATION

	
 
	
 

By
	
 
	
 

/s/ Eric N. Smit

	
 
	
 

Name
	
 
	
 

Eric N. Smit

	
 
	
 

Title
	
 
	
 

Chief financial Officer

 

 

 

- 8 -

 

eGAIN CORPORATION 

2005 MANAGEMENT STOCK OPTION PLAN 

NOTICE OF STOCK OPTION GRANT 

You have been granted the following Option to purchase Common Stock of eGAIN CORPORATION, a Delaware corporation (the “Company”) under the Company’s 2005 Management Stock Option Plan (the “Plan”): 

 

	
Name of Optionee:
	
 
	
[Name of Optionee]

	
 
	
 
	
 

	
Total Number of Option Shares Granted:
	
 
	
[Total Number of Shares]

	
 
	
 
	
 

	
Type of Option:
	
 
	
Nonstatutory Stock Option

	
 
	
 
	
 

	
Exercise Price Per Share:
	
 
	
$                    

	
 
	
 
	
 

	
Grant Date:
	
 
	
[Date of Grant]

	
 
	
 
	
 

	
Vesting Commencement Date:
	
 
	
[Vesting Commencement Date]

	
 
	
 
	
 

	
Vesting Schedule:
	
 
	
This Option becomes exercisable with respect to 1/48th of the shares subject to this Option when you complete each month of continuous “Service” (as defined in the Plan) from the Vesting Commencement Date.

	
 
	
 
	
 

	
Expiration Date:
	
 
	
[Expiration Date] This Option expires earlier if your Service terminates earlier, as descried in the Stock Option Agreement.

By your signature and the signature of the Company’s representative below, you and the Company agree that this Option is granted under and governed by the term and conditions of the Plan and the Stock Option Agreement, both of which are attached to and made a part of this document. 

 

	
OPTIONEE:
	
 
	
eGAIN CORPORATION

	
 
	
 
	
 

	
 

 
	
 
	
By:
	
 
	
 

 

	
Optionee’s Signature
	
 
	
 
	
 
	
 

	
 

 
	
 
	
Title:
	
 
	
 

 

	
Optionee’s Printed Name
	
 
	
 
	
 
	
 

 

 

 

 

 

eGAIN CORPORATION 

2005 MANAGEMENT STOCK OPTION PLAN 

STOCK OPTION AGREEMENT 

 

	
Tax Treatment
	
 
	
This Option is intended to be a nonstatutory option, as provided in the Notice of Stock Option Grant.

	
 
	
 
	
 

	
Vesting
	
 
	
This Option becomes exercisable in installments, as shown in the Notice of Stock Option Grant. This Option will in no event become exercisable for additional shares after your Service has terminated for any reason.

	
 
	
 
	
 

	
Term
	
 
	
This Option expires in any event at the close of business at Company headquarters on the day before the 5th anniversary of the Grant Date, as shown on the Notice of Stock Option Grant. This Option may expire earlier if your Service terminates, as described below.

	
 
	
 
	
 

	
Regular Termination
	
 
	
If your Service terminates for any reason except death or “Total and Permanent Disability” (as defined in the Plan), then this Option will expire at the close of business at Company headquarters on the date three (3) months after the date your Service terminates (or, if earlier, the Expiration Date). The Company has discretion to determine when your Service terminates for all purposes of the Plan and its determinations are conclusive and binding on all persons.

	
 
	
 
	
 

	
Death
	
 
	
If you die, then this Option will expire at the close of business at Company headquarters on the date 12 months after the date your Service terminates (or, if earlier, the Expiration Date). During that period of up to 12 months, your estate or heirs may exercise the Option.

	
 
	
 
	
 

	
Disability
	
 
	
If your Service terminates because of your Total and Permanent Disability, then this Option will expire at the close of business at Company headquarters on the date 12 months after the date your Service terminates (or, if earlier, the Expiration Date).

	
 
	
 
	
 

	
Leaves of Absence
	
 
	
For purposes of this Option, your Service does not terminate when you go on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by the Company in writing and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to active work.

 

If you go on a leave of absence, then the vesting schedule specified in the Notice of Stock Option Grant may be adjusted in accordance with the Company’s leave of absence policy or the terms of your leave. If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Stock Option Grant may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule.

	
 
	
 

	
Restrictions on Exercise
	
 
	
The Company will not permit you to exercise this Option if the issuance of shares at that time would violate any law or regulation. The inability of the Company to obtain approval from any regulatory body having authority deemed by the Company to be necessary to the lawful issuance and sale of the Company stock pursuant to this Option shall relieve the Company of any liability with respect to the non-issuance or sale of the Company stock as to which such approval shall not have been obtained. However, the Company shall use its best efforts to obtain such approval.

	
 
	
 
	
 

	
Notice of Exercise
	
 
	
When you wish to exercise this Option you must notify the Company by completing the attached “Notice of Exercise of Stock Option” form and filing it with the Human Resources Department of the Company. You notice must specify how many shares you wish to purchase. Your notice must also specify how your shares should be registered. The notice will be effective when it is received by the Company. If someone else wants to exercise this Option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.

 

 

	
Form of Payment
	
 
	
When you submit your notice of exercise, you must include payment of the Option exercise price for the shares you are purchasing. Payment may be made in the following form(s):

	
 
	
 
	
 

	
 
	
 
	
·     Your personal check, a cashier’s check or a money order.

	
 
	
 
	
 

	
 
	
 
	
·     Certificates for shares of Company stock that you own, along with any forms needed to effect a transfer of those shares to the Company. The value of the shares, determined as of the effective date of the Option exercise, will be applied to the Option exercise price. Instead of surrendering shares of Company stock, you may attest to the ownership of those shares on a form provided by the Company and have the same number of shares subtracted from the Option shares issued to you. However, you may not surrender, or attest to the ownership of shares of Company stock in payment of the exercise price if your action would cause the Company to recognize a compensation expense (or additional compensation expense) with respect to this Option for financial reporting purposes.

	
 
	
 
	
 

	
 
	
 
	
·     By delivering on a form approved by the Committee of an irrevocable direction to a securities broker approved by the Company to sell all or part of your Option shares and to deliver to the Company from the sale proceeds in an amount sufficient to pay the Option exercise price and any withholding taxes. The balance of the sale proceeds, if any, will be delivered to you. The directions must be given by signing a special “Notice of Exercise” form provided by the Company.

	
 
	
 
	
 

	
 
	
 
	
·     Irrevocable directions to a securities broker or lender approved by the Company to pledge Option shares as security for a loan and to deliver to the Company from the loan proceeds an amount sufficient to pay the Option exercise price and any withholding taxes. The directions must be given by signing a special “Notice of Exercise” form provided by the Company.

	
 
	
 
	
 

	
 
	
 
	
Notwithstanding the foregoing, payment may not be made in any form that is unlawful, as determined by the Company in its sole discretion.

	
 
	
 

	
Withholding Taxes and Stock Withholding
	
 
	
You will not be allowed to exercise this Option unless you make arrangements acceptable to the Company to pay any withholding taxes that may be due as a result of the Option exercise. These arrangements may include withholding shares of Company stock that otherwise would be issued to you when you exercise this Option. The value of these shares, determined as of the effective date of the Option exercise, will be applied to the withholding taxes.

	
 
	
 
	
 

	
Restrictions on Resale
	
 
	
By signing this Agreement, you agree not to sell any Option shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale (e.g., a lock-up period after the Company goes public). This restriction will apply as long as you are an employee, consultant or director of the Company or a subsidiary of the Company.

	
 
	
 
	
 

	
Transfer of Option
	
 
	
In general, only you can exercise this Option prior to your death. You cannot transfer or assign this Option, other than as designated by you by will or by the laws of descent and distribution, except as provided below. For instance, you may not sell this Option or use it as security for a loan. If you attempt to do any of these things, this Option will immediately become invalid. You may in any event dispose of this Option in your will. Regardless of any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your former spouse, nor is the Company obligated to recognize your former spouse’s interest in your Option in any other way.

	
 
	
 
	
 

	
 
	
 
	
However, the “Committee” (as defined in the Plan) may, in its sole discretion, allow you to transfer this Option as a gift to one or more family members. For purposes of this Agreement, “family member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law or sister-in-law (including adoptive relationships), any individual sharing your household (other than a tenant or employee), a trust in which one or more of these individuals have more than 50% of the beneficial interest, a foundation in which you or one or more of these persons control the management of assets, and any entity in which you or one or more of these persons own more than 50% of the voting interest.

 

 

	
 
	
 
	
 

	
 
	
 
	
In addition, the Committee may, in its sole discretion, allow you to transfer this option to your spouse or former spouse pursuant to a domestic relations order in settlement of marital property rights.

	
 
	
 
	
 

	
 
	
 
	
The Committee will allow you to transfer this Option only if both you and the transferee(s) execute the forms prescribed by the Committee, which include the consent of the transferee(s) to be bound by this Agreement.

	
 
	
 
	
 

	
Retention Rights
	
 
	
Neither your Option nor this Agreement gives you the right to be retained by the Company or a subsidiary of the Company in any capacity. The Company and its subsidiaries reserve the right to terminate your Service at any time, with or without cause.

	
 
	
 
	
 

	
Stockholder Rights
	
 
	
You, or your estate or heirs, have no rights as a stockholder of the Company until you have exercised this Option by giving the required notice to the Company and paying the exercise price. No adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this Option, except as described in the Plan.

	
 
	
 
	
 

	
Adjustments
	
 
	
In the event of a stock split, a stock dividend or a similar change in Company stock, the number of shares covered by this Option and the exercise price per share may be adjusted pursuant to the Plan.

	
 
	
 

	
Applicable Law
	
 
	
This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law provisions).

	
 
	
 
	
 

	
The Plan and Other Agreements
	
 
	
The text of the Plan is incorporated in this Agreement by reference. All capitalized terms in the Stock Option Agreement shall have the meanings assigned to them in the Plan. This Agreement and the Plan constitute the entire understanding between you and the Company regarding this Option. Any prior agreements, commitments or negotiations concerning this Option are superseded. This Agreement may be amended only by another written agreement, signed by both parties.

BY SIGNING THE COVER SHEET OF THIS AGREEMENT 

YOU AGREE TO ALL OF THE TERMS AND CONDITIONS 

DESCRIBED ABOVE IN THE PLAN 

 

 

 

 

 

eGAIN CORPORATION 

2005 MANAGEMENT STOCK OPTION PLAN 

NOTICE OF EXERCISE OF STOCK OPTION 

You must sign this Notice on the last page before submitting it to the Company 

OPTIONEE INFORMATION: 

 

	
Name:                                                                                                   
	
 
	
Social Security Number:

	
 
	
 
	
 

	
Address:                                                                                                
	
 
	
Employee Number:

	
 
	
 
	
 

OPTION INFORMATION: 

 

	
Date of Grant:                         , 200    
	
 
	
Type of Stock Option:

	
Exercise Price per Share: $                    
	
 
	
Nonstatutory (NSO)

Total number of shares of Common Stock of eGAIN CORPORATION, a Delaware corporation (the “Company”) covered by option:                      

EXERCISE INFORMATION: 

Number of shares of Common Stock of the Company for which option is being exercised now:                      

(These shares are referred to below as the “Purchased Shares.”) 

Total exercise price for the Purchased Shares: $                     

Form of payment enclosed [check all that apply]: 

 

	
 ̈
	
 
	
Check for $                    , payable to “eGAIN CORPORATION”

	
 

 ̈
	
 
	
 

Certificate(s) for                      shares of Common Stock of the Company that I have owned for at least six months or have purchased in the open market. (These shares will be valued as of the date when the Company receives this notice.)

	
 

 ̈
	
 
	
 

Attestation Form covering shares of Common Stock of the Company. (These shares will be valued as of the date when the Company receives this notice.)

 

 

Name(s) in which the Purchased Shares should be registered 

[please check one box]: 

 

	
 ̈
	
 
	
In my name only
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 ̈
	
 
	
In the names of my spouse and myself as community property
	
 
	
My spouse’s name (if applicable):

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 ̈
	
 
	
In the names of my spouse and myself as joint tenants with the right of survivorship
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 ̈
	
 
	
In the name of an eligible revocable trust
	
 
	
Full legal name of revocable trust:

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 

	
The certificate for the Purchased Shares should be sent to the following address:
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

ACKNOWLEDGMENTS: 

	
1.
	
I understand that all sales of Purchased Shares are subject to compliance with the Company’s policy on securities trades. 

	
2.
	
I hereby acknowledge that I received and read a copy of the prospectus describing the Company’s 2005 Management Stock Option Plan and the tax consequences of an exercise. 

	
3.
	
In the case of a nonstatutory option, I understand that I must recognize ordinary income equal to the spread between the fair market value of the Purchased Shares on the date of exercise and the exercise price. I further understand that I am required to pay withholding taxes at the time of exercising a nonstatutory option. 

	
4.
	
I acknowledge that the Company has encouraged me to consult my own adviser to determine the form of ownership that is appropriate for me. In the event that I choose to transfer my Purchased Shares to a trust that does not satisfy the requirements of the Internal Revenue Service (i.e., a trust that is not an eligible revocable trust), I also acknowledge that the transfer will be treated as a “disposition” for tax purposes. 

SIGNATURE AND DATE: 

                     , 20tbuff_ex101.htm

EXHIBIT 10.1

 

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 Advance

 

s 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

 

2.2.2           Subsequent Term Loan

 

  

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.

 

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.

 

  

12

  

 

	
  

	
(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:

 

	
 ̈

	
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

 

	
 ̈

	
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

 

	
 ̈

	
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.

 

  

18

  

 

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 : ____________________________

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

 ̈           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):

 

	
 ̈

	
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

 

	
 ̈

	
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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00237-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00237-of-00352.parquet"}]]