Document:

Exhibit 4.1

 

THE SYMBOL "****" DENOTES
PLACES WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

EXCLUSIVE LICENSE AGREEMENT

 

THIS EXCLUSIVE LICENSE AGREEMENT
(this “Agreement”) is made and entered into effective as of November 18, 2009 (the “Effective Date”),
by and between Egalet a/s, a Danish corporation also registered under the name BM Research a/s (“Egalet”),
and RedHill Biopharma Ltd., an Israeli company (“RedHill”). Egalet and RedHill each may be referred to herein
individually as a “Party,” or collectively as the “Parties”.

 

WHEREAS,
Egalet is the sole and exclusive owner of certain patents and other intellectual property rights relating to a certain
Product (as such term is defined herein);

 

WHEREAS, Egalet
wishes to license to RedHill all Egalet's rights in and to the Product, including all patent rights and other intellectual property
rights relating thereto, and RedHill wishes to receive such license from Egalet, so that RedHill may develop and commercialize
Products for all indications and for all uses, all on the terms set forth below; and, 

 

WHEREAS,
the license to be granted shall be granted on an exclusive and global basis in so far as the rights and positions licensed relate
solely to the Product, whereas rights and positions, which may also be commercialized or exploited for purposes unrelated to the
Product, shall be granted on a non-exclusive basis, all as more fully set out below.

 

NOW THEREFORE, THE PARTIES HERETO AGREE
AS FOLLOWS:

 

		1.	DEFINITIONS

 

1.1           “Affiliate”
of a Party means any other entity that, directly or indirectly, through one or more intermediaries, controls, is controlled
by, or is under common control with such first Party. For purposes of this definition only, “control” and, with correlative
meanings, the terms “controlled by” and “under common control with” will mean the possession, directly
or indirectly, of the power to direct the management or policies of an entity, whether through the ownership of fifty percent
or more of the voting securities of the other organization or entity or by contract relating to voting rights or corporate governance.

 

    	 

    	 

    

 

1.2           “Combination
Product” shall mean a product which comprises (a) a Product and (b) at least one
other active ingredient or medical device, which, if administered or used independently of the Product, would have a clinical,
diagnostic or therapeutic effect and be capable of being priced and marketed separately.

 

1.3           “Competing
Product” shall mean (i) a product for the treatment/prevention of heart failure
and/or hypertension, including, without limitation, any product belonging to ATC Class C07AG and (ii) a product for the treatment/prevention
of any other cardiovascular indication for which RedHill intends in good faith to market the Product provided that Egalet's obligations
regarding such additional indications shall only be with respect to the grant of rights made following RedHill's notice of its
intention to commercialize the Product for such additional indication. 

 

1.4           "Field
of Use" means all indications, and includes therapeutic, diagnostic and other human and/or animal uses.

 

1.5           “First
Commercial Sale” shall mean the first commercial sale of a Product, in exchange for cash or some equivalent to which
value can be assigned, after regulatory approval has been granted by a Regulatory Authority, other than the use of the Product
for testing purposes and/or a sale for experimental, promotional, compassionate named patient or test market purposes. For the
avoidance of any doubt, First Commercial Sale can only occur once worldwide, regardless of the jurisdiction in which it took place.

 

1.6           
“Licensed Know-How” means all information (other than that contained in the Patents) whether patentable or
not and physical objects related to the Product, including but not limited to Product data, Product related results and information,
including, but not limited to, clinical data, analytical test results, non-clinical pharmacology and safety data, other R&D
data, Regulatory Documentation, manufacturing and formulation information of a like nature, known to, generated by, vested in
(or licensed to) and/or controlled by Egalet. Egalet represents and warrants that the entire Licensed Know How is listed in Annex
B of this Agreement.

 

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1.7         “Net
Sales” means the gross invoice price charged by RedHill or its Affiliates in respect of the sale of a Product by RedHill
or its Affiliates, less the following items (collectively, the "Recognized Deductions"):

 

		(i)	allowances or credits granted to
                                                               and taken by customers (including wholesalers) for rejections,
                                                               returns (including as a result of recalls), retroactive price reductions
                                                               and prompt payment, and trade, cash and volume discounts;

		(ii)	amounts incurred resulting from
                                                                government mandated rebate programs (or any agency thereof);

		(iii)	freight, transport, packing and
                                                                 insurance charges;

		(iv)	taxes, including value added tax,
                                                                tariffs or import/export or customs, duties;

		(v)	rebates, charge backs and discounts
                                                               paid or credited,

		(vi)	bad debts;

		(vii)	reasonable quantities of samples;

		(viii)	liability insurance; and

		(ix)	royalties paid to third parties
                                                                in respect of the use of such third party’s intellectual
                                                                property rights for the purpose of generating the Net Sales without
                                                                infringing such third party intellectual property right positions.

 

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Notwithstanding the
foregoing, for the purposes of this definition, the transfer of a Product by RedHill or one of its Affiliates to another Affiliate
of RedHill or to a sublicensee is not a sale and in such cases, Net Sales will be determined based on the amount received by RedHill
or such Affiliate in respect of the Product as sold by the Affiliate or sublicensee to independent third-parties, less the Recognized
Deductions. For Net Sales of a Product sold or supplied as a “Combination Product”, the Net Sales of such a Combination
Product in a country will be determined by multiplying the Net Sales of such Combination Product by the fraction of A/A+B, where
A is the average unit selling price during the period in respect of which Net Sales are being calculated of the Product sold separately
in that country and B is the total average unit selling price during the period in respect of which Net Sales are being calculated
of the other product or device included in the Combination Product, when sold separately in that country. If neither the Product
nor the other product or device included in the Combination Product are sold separately during the period in respect of which
Net Sales are being calculated, then the Parties shall, considering the costs incurred by RedHill bringing about the Combination
Product, in good faith negotiate the value of the other product or device included in the Combination Product that are to be deducted
from the Net Sales of the Combination Product in determining the Net Sales of the Product contained in the Combination Product,
it being agreed that absent such mutual agreement as to the proportion of such Combination Product to be attributed to the Product,
the Parties shall mutually appoint an independent expert to determine such proportion.

 

1.8           “Patents”
shall mean the patents listed in Annex A to this Agreement, as well as such other Product-related (a) U.S. patents and patent
applications, (b) any substitutions, divisions, continuations, continuations-in-part (but only to the extent that they cover the
same invention claimed in the foregoing), reissues, renewals, registrations, confirmations, re-examinations, extensions, supplementary
protection certificates and the like, and any provisional applications, of any such patents or patent applications, and (c) any
foreign or international equivalent of any of the foregoing, of which Egalet during the term of this Agreement becomes owner or
controller.

 

1.9           
“Product” shall mean Egalet Carvedilol - a controlled release pharmaceutical formulation based on a
polymeric matrix composition formulated under one or more of the Patents and comprising Carvedilol as an active substance.

 

1.10         “Regulatory
Approval” means approval by the US FDA of an NDA (New Drug Application), or the equivalent application for marketing
approval, and satisfaction of any related applicable FDA registration and notification requirements (if any).

 

1.11         “Regulatory
Authority” means any applicable government entity regulating or otherwise exercising authority with respect to the development
and commercialization of a Product.

 

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1.12         “Regulatory
Documentation” means all applications, registrations, licenses, authorizations and approvals (including all Regulatory
Approvals), all correspondence submitted to or received from Regulatory Authorities (including minutes and official contact reports
relating to any communications with any Regulatory Authority), all supporting documents and all clinical studies and tests, including
the manufacturing batch records for Products to be assigned, relating to a Product, and all data contained in any of the foregoing,
including all regulatory drug lists, advertising and promotion documents, adverse event files and complaint files.

 

1.13         “Royalty
Term” shall mean the period commencing on the date of this Agreement and ending on the earlier of (i) expiration of
the Patents for which exclusivity is granted, i.e. the Patents covering the core technology of the Product, and (ii) twelve (12)
years after the First Commercial Sale. 

 

1.14         “Sublicense”
means a sublicense from RedHill to a third party under the License granted pursuant to this Agreement and the term “Sublicensee”
shall be construed accordingly. Any Sublicense may include the right to grant further Sublicenses.

 

1.15         “Sublicensee
Sales Royalties” means payments, whether comprising royalties and/or other payments, actually received by RedHill from
third party distributors and/or Sublicensees in respect of sales of the Product effected by such distributors and/or Sublicensees
(and/or any further Sublicensees thereof), less deduction of (i) debt financing; (ii) equity (and conditional equity, such as
warrants, convertible debt and the like) investments in RedHill or any Affiliate thereof at market value; (iii) payments received
in reimbursement of patent prosecution costs incurred or which shall be incurred by RedHill; (iv) payments received in reimbursement
of the cost of research and/or development activities or services performed or to be performed by RedHill or expended or to be
expended by RedHill, and (v) payments received in reimbursement for marketing expenses which have been or shall be expended by
RedHill with respect to the Product).

 

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		2.	LICENSE
                                                                                   GRANT

 

		2.1	Scope of License.
                                                                 Egalet hereby grants to RedHill a worldwide, perpetual license,
                                                                 under its rights in and to the Patents and the Licensed Know-How
                                                                 to develop, manufacture, commercialize, make, use, sell, offer
                                                                 for sale and import Products, in the Field of Use (the “License”).

 

		2.2	Scope of Exclusivity.
                                                                 The License shall, with respect to the Patents listed in
                                                                 Schedules IP-P06 and IP-P08 in Annex A, be exclusive (even as
                                                                 to Egalet), whereas the License, with respect to the Patents
                                                                 listed in Schedules IP-P03, IP-P05 and IP-P09 in Annex A, shall
                                                                 be non-exclusive. The License shall be non-exclusive with respect
                                                                 to any intellectual property included in the Licensed Know-How
                                                                 listed on Annex B that may be used by Egalet in respect of products
                                                                 other than the Product; provided, however, that Egalet shall
                                                                 not be permitted to make any use or grant any rights to such
                                                                 Licensed Know-How and/or the Patents listed in Schedules IP-P03,
                                                                 IP-P05 and IP-P09 in Annex A (i) in respect of the Product whatsoever,
                                                                 or (ii) in respect of any Competing Product or potentially Competing
                                                                 Product.

 

		2.3	Sublicenses. The
                                                                 License granted to RedHill is Sublicensable (and further Sublicensable)
                                                                 in whole or in part, to third parties (including RedHill’s
                                                                 Affiliates).

 

For the avoidance of doubt,
RedHill shall be entitled to conduct or to perform any activity in respect of the Products by means of any third party sub-contractor,
and such conduct shall not be considered to be a grant of a Sublicense hereunder.

 

		2.4	Registration. Egalet
                                                                 agrees that RedHill shall have the right, at its own account,
                                                                 to register as the licensee of the rights in and to the Patents
                                                                 and the Licensed Know-How as per Sections 2.1 and 2.2 above,
                                                                 and Egalet shall, within the scope of the License, execute all
                                                                 documentation reasonably requested by RedHill and otherwise cooperate
                                                                 with RedHill in order to ensure such registration where required
                                                                 or reasonably deemed relevant by RedHill to commercialize the
                                                                 Product.

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		2.5	Limitations on Other Licenses.
                                                                 Without derogating from any other obligation of Egalet under
                                                                 this Agreement, during the term of this Agreement, Egalet shall
                                                                 not, without RedHill’s prior written consent, grant any
                                                                 rights or licenses to Patents or Licensed Know-How, or transfer
                                                                 any data or know-how to any third party, or otherwise assist
                                                                 any third party in any manner that would conflict with Egalet’s
                                                                 obligations under this Agreement.

 

		3.	DATA AND PRODUCT TRANSFER

 

Within
thirty (30) days following the Effective Date, Egalet will (i) transfer to RedHill all relevant know how and copies of external
service and other contracts relating to the manufacturing of Product vesting in Egalet, all to the extent relevant for RedHill
to exploit the License as envisaged by this Agreement, and (ii) make available to RedHill Ex Works (Incoterms 2000) Værløse,
Denmark, any unexpired quantities of Product and unexpired quantities of raw materials for the Product it has on hand, all at
no charge whatsoever to RedHill. Egalet will transfer to RedHill all additional Licensed Know How and copies of external service
and other contracts relating to the manufacturing of Product vesting in Egalet, promptly following RedHill's request. The information
and data detailed in this Section 3 shall be provided in hard and soft copies whichever is available, all of which shall be well
organized in accordance with industry standards. In the event Egalet has a specific difficulty in providing both hard and soft
copies, it shall discuss with RedHill possible resolutions of such difficulty. From time to time during the period of twelve (12)
months following the Effective Date, Egalet will provide RedHill with any additional data, results and information in the possession
or under the control of Egalet related to the Product requested by RedHill; provided, however, that in no event shall Egalet be
obliged to generate additional materials apart from what it has on file. 

 

		4.	DILIGENCE

 

		4.1	General. RedHill
                                                                 will undertake its best efforts to diligently proceed with the
                                                                 development, manufacture and sale of Products.

 

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		4.2	Specific. Specifically,
                                                                 RedHill will use its best efforts to secure the appropriate financial
                                                                 resources to prepare, initiate and complete the clinical trials
                                                                 necessary to file an NDA with the United States FDA. RedHill
                                                                 undertakes to use its best efforts to initiate the clinical trials
                                                                 to be planned for the Product no later than 24 months following
                                                                 the Effective Date (the "Diligence Obligation").
                                                                 In the event that RedHill shall fail to satisfy the Diligence
                                                                 Obligation, Egalet’s sole and exclusive remedy shall be
                                                                 the return by RedHill of the License rights to Egalet provided
                                                                 that in the event that any such failure is due to (i) any decision
                                                                 of, or delay caused or dictated by, any Regulatory Authority,
                                                                 (ii) any technical problems (including, but not limited to, crystallinity,
                                                                 dissolution and manufacturing problems) and development failure
                                                                 related to the Products, or (iii) any other reasons that are
                                                                 beyond RedHill’s reasonable control or influence (including
                                                                 any actions or defaults by Egalet), same shall not be deemed
                                                                 to constitute a breach of the Diligence Obligation. For purposes
                                                                 of this Agreement, ‘best efforts’ will not be deemed
                                                                 to require a party to undertake extraordinary or unreasonable
                                                                 measures, including the payment of amounts in excess of normal
                                                                 and usual fees and investments made by pharmaceutical companies
                                                                 reasonably comparable to RedHill in terms of size and capital
                                                                 strength for their prioritized products considered having a strategic
                                                                 potential and as being vital to the company.

 

		4.3	No Warranty. For
                                                                 the avoidance of doubt, nothing contained in this Agreement shall
                                                                 be construed as a warranty by RedHill that any development or
                                                                 any commercialization to be carried out by it in connection with
                                                                 this Agreement will actually achieve its aims or any other results
                                                                 and RedHill makes no warranties whatsoever as to any results
                                                                 to be achieved in consequence of the carrying out of any such
                                                                 development. Furthermore, RedHill makes no representation to
                                                                 the effect that the commercialization of the Products, or any
                                                                 part thereof, will succeed, or that it shall be able to sell
                                                                 the Products in any quantity.

 

		5.	REPORTS

 

		5.1	Until the end of the Royalty
                                                                 Term, RedHill agrees as follows:

 

5.1.1      Development
Reports. To keep Egalet informed with respect to activities and progress regarding the development and commercialization
of Product(s), and to submit semi-annual written progress reports to Egalet describing in reasonable detail RedHill's activities
related to the development, testing and commercialization of the Product(s).

 

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5.1.2      First
Commercial Sale Report. To report to Egalet the date of the First Commercial Sale, together with the name of the country
in which such First Commercial Sale occurred.

 

5.1.3      Together
with each Royalty payment detailed in Section 6.3 below, to deliver to Egalet reports ("Periodic Reports") including
the following with respect to the period covered by the Royalty payment:

 

5.1.3.1           The
amount of Net Sales received from Products sold by RedHill, including the Recognized Deductions applicable in computing Net Sales,
and the total Royalties due based on Net Sales.

 

5.1.3.2           Name
and address of all Sublicensees.

 

5.1.3.3           Total
payments due by RedHill to Egalet based on Sublicense Sales Royalties.

 

		5.2	Without prejudice to Egalet's
                                                                 compliance with financial reporting requirements applicable under
                                                                 law for Egalet, any and all information, data or reports supplied
                                                                 by RedHill pursuant to the provisions of this Section 5 shall
                                                                 be treated as RedHill's Confidential Information.

 

		5.3	Upon the termination of this
                                                                 Agreement in accordance with Section 14 below, RedHill shall
                                                                 have no further obligations under this Section 5.

 

		6.	FINANCIAL PROVISIONS
                                                                   

 

		6.1	Up-Front
                                                                                   Payment. Within fifteen (15) days after
                                                                                   the Effective Date and against receipt of a
                                                                                   lawful invoice from Egalet, RedHill will pay
                                                                                   Egalet an up-front license fee of US$100,000.
                                                                                   In the event such payment may require approval
                                                                                   of any governmental authority, RedHill undertakes
                                                                                   to file for approval promptly following closing
                                                                                   of this Agreement and undertakes to effectuate
                                                                                   prompt payment of the up-front payment following
                                                                                   receipt of the necessary approval. To the best
                                                                                   of RedHill’s knowledge and belief, no
                                                                                   significant delay in expected in receiving
                                                                                   government approval for the transfer of the
                                                                                   license fee from Israel to Denmark.

 

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		6.2	Milestone Payments.
                                                                 RedHill will pay to Egalet the following one-time milestone payments
                                                                 (such payments are due only once for the Product and are not
                                                                 payable per indication) not more than 90 days after first achievement
                                                                 of each of the applicable milestones for the first Product to
                                                                 achieve such milestone (and not, for the avoidance of doubt,
                                                                 in respect of each Product or indication of a Product to do so),
                                                                 as follows:

 

	Milestone	 	Payment	 
	First filing for Regulatory
    Approval with the US FDA and Acceptance for review of such Filing by the US FDA	 	$	200,000	 
	Receipt of Regulatory Approval
    from the US FDA	 	$	500,000	 

 

		6.3	Royalty Payments.

 

Royalty Payments
on Sales of Products that are Effected by RedHill or its Affiliates. Until the expiry of the Royalty Term RedHill will
pay Egalet a royalty of 30% of Net Sales actually received by RedHill (the “Royalties”).

 

Royalty Payments
in respect of Sublicensee Sales Royalties. Until the expiry of the Royalty Term, RedHill will pay Egalet 30% of
all Sublicensee Sales Royalties (“Sublicense Royalty Fees”).

 

		6.4	Due Dates for Payment.
                                                                 All payments due pursuant to the provisions of Section 6.3 above
                                                                 shall be due and payable to Egalet on a calendar quarterly basis
                                                                 within 90 days of the end of the applicable quarter, all against
                                                                 the receipt of a lawful invoice from Egalet for same.

 

		6.5	Payment
                                                                 Method.  Any amounts due to Egalet under this
                                                                 Agreement will be paid in U.S. dollars, by wire transfer in immediately
                                                                 available funds to an account designated in writing at least
                                                                 fifteen (15) days in advance by Egalet.

 

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		6.6	Currency;
                                                                 Foreign Payments.  If any currency conversion
                                                                 will be required in connection with the calculation of any payment
                                                                 hereunder, such conversion will be made by using the exchange
                                                                 rate for the purchase of U.S. dollars as published in The
                                                                 Wall Street Journal, Eastern Edition, on the last business
                                                                 day of the calendar quarter to which such payments relate. If
                                                                 at any time legal restrictions prevent the prompt remittance
                                                                 of any payments in any jurisdiction, RedHill may notify Egalet
                                                                 and make such payments by depositing the amount thereof in local
                                                                 currency in a bank account or other depository in such country
                                                                 in the name of Egalet or its designee, and RedHill will have
                                                                 no further obligations under this Agreement with respect thereto.

 

		6.7	Taxes.
                                                                  RedHill may deduct from any amounts it is required to
                                                                 pay to Egalet pursuant to this Agreement an
                                                                 amount equal to that withheld for or due on account of
                                                                 any taxes (including VAT to the extent applicable, but other
                                                                 than taxes imposed on or measured by net income of RedHill) or
                                                                 similar governmental charge imposed by any jurisdiction based
                                                                 on such payments to Egalet (“Withholding Taxes”).
                                                                 RedHill will provide Egalet a certificate evidencing payment
                                                                 of any Withholding Taxes hereunder within 30 days of such payment
                                                                 and will reasonably assist Egalet, at Egalet’s expense,
                                                                 to obtain the benefit of any applicable tax treaty.

 

		6.8	Continuing
                                                                 Right. Following the expiration of the Royalty
                                                                 Term in any country, RedHill shall be entitled to continue to
                                                                 exploit the License in such country with respect to the Product(s)
                                                                 without having to pay Royalties, Sublicense Royalty Fees or make
                                                                 any other payment to Egalet in respect of such activities.

 

		7.	RECORDS RETENTION AND AUDIT.

 

		7.1	Record Retention.
                                                                 Until the expiry of the Royalty Term, RedHill will maintain
                                                                 (and will ensure that its Affiliates maintain) complete and accurate
                                                                 books, records and accounts that fairly reflect Net Sales and
                                                                 Sublicensee Sales Royalties, in sufficient detail to confirm
                                                                 the accuracy of any payments required hereunder, which books,
                                                                 records and accounts will be retained for five (5) years after
                                                                 the end of the period to which such books, records and accounts
                                                                 pertain.

 

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		7.2	Audit. Egalet will
                                                                 have the right, at its own cost, to have an independent certified
                                                                 public accounting firm of nationally recognized standing, reasonably
                                                                 acceptable to RedHill and who agrees to be bound by a customary
                                                                 undertaking of confidentiality, have access during normal business
                                                                 hours, and upon reasonable prior written notice, to RedHill’s
                                                                 records (and those of its Affiliates) as may be reasonably necessary
                                                                 to verify the accuracy of Net Sales and Sublicensee Sales Royalties,
                                                                 as applicable, for any period ending not more than 24 months
                                                                 prior to the date of such request; provided, however,
                                                                 that Egalet will not, unless material discrepancies are identified,
                                                                 have the right to conduct more than one such audit in any calendar
                                                                 year or more than one such audit covering any given time period.
                                                                 The auditing firm will disclose to Egalet only the results of
                                                                 its audit and not any other information. Any such audit shall
                                                                 be made during RedHill’s normal business hours and shall
                                                                 not unreasonably interfere with the business of RedHill and shall
                                                                 be completed within a reasonable time. Egalet will bear all the
                                                                 costs of such audit. Without derogating from the forgoing, Egalet's
                                                                 audit rights shall be conducted no later than one year following
                                                                 the final payment under this Agreement.

 

		7.3	Payment
                                                                                   of Additional Amounts. If, based on
                                                                                   the results of such audit, additional payments
                                                                                   are owed by RedHill under this Agreement, RedHill
                                                                                   shall, at its own cost, have an additional
                                                                                   60 days to conduct an additional (second) audit
                                                                                   to verify Egalet’s audit results, and,
                                                                                   assuming the two audits reconcile, RedHill
                                                                                   shall make such additional payments within
                                                                                   60 days after the date on which such second
                                                                                   accounting firm’s written report is delivered
                                                                                   to RedHill. If the results of the two audits
                                                                                   do not reconcile, the parties shall, unless
                                                                                   otherwise agreed, appoint a third independent
                                                                                   auditor, who – on basis of the audit
                                                                                   results achieved by the first two auditors
                                                                                   and such additional investigations and reviews,
                                                                                   which the third auditor may find to be required
                                                                                   – shall conduct a third and final audit
                                                                                   the result of which shall be applied by the
                                                                                   Parties. The Parties shall equally share the
                                                                                   costs of for the third audit to be conducted.

 

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		7.4	Confidentiality.
                                                                 Egalet will treat all information subject to review under this
                                                                 Section 7 in accordance with the confidentiality provisions of
                                                                 Section 11 below.

 

		8.	REPRESENTATIONS AND WARRANTIES

 

		8.1	By Both Parties.
                                                                 Each Party hereby represents, warrants and covenants to the other
                                                                 Party as of the Effective Date as follows:

 

8.1.1           Corporate
Authority. Such Party (a) has the power and authority and the legal right to enter into this Agreement and perform its
obligations hereunder, and (b) has taken all necessary action on its part required to authorize the execution and delivery of
this Agreement and the performance of its obligations hereunder. This Agreement has been duly executed and delivered on behalf
of such Party and constitutes a legal, valid and binding obligation of such Party and is enforceable against it in accordance
with its terms subject to the effects of bankruptcy, insolvency or other laws of general application affecting the enforcement
of creditor rights and judicial principles affecting the availability of specific performance and general principles of equity,
whether enforceability is considered a proceeding at law or equity.

 

8.1.2           Consents,
Approvals, etc. All necessary consents, approvals and authorizations of all governmental authorities and other parties
required to be obtained by such Party in connection with the execution and delivery of this Agreement and the performance of its
obligations hereunder have been obtained.

 

8.1.3           Conflicts.
The execution and delivery of this Agreement and the performance of such Party’s obligations hereunder (a) do not conflict
with or violate any requirement of applicable law or any provision of the articles of incorporation, bylaws or any similar instrument
of such Party, as applicable, in any material way, and (b) do not conflict with, violate, or breach or constitute a default or
require any consent not already obtained under, any contractual obligation or court or administrative order by which such Party
is bound.

 

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		8.2	By Egalet. Egalet
                                                                 hereby further represents, warrants, and covenants to RedHill
                                                                 as of the Effective Date as follows:

 

8.2.1           IP
Ownership. Egalet has, the sufficient legal and/or beneficial title and ownership of the Patents and, to the best
of its knowledge and belief, to the Licensed Know-How as is necessary to fulfill its obligations under this Agreement and to grant
the License to RedHill pursuant to this Agreement, and the Patents and the Licensed Know-How are free and clear of any liens,
encumbrances or third party rights (including without limitation, the right to receive royalties or other compensation). Furthermore,
Egalet undertakes that to the extent that RedHill, its Affiliates, or any Sublicensee requires a license under any additional
patents or related rights controlled by Egalet in order to develop, use, sell, offer for sale or import Products, Egalet
shall grant such a license to RedHill, its Affiliates, and any Sublicensee on a non-exclusive royalty-free basis.

 

8.2.2           No
Conflicting Grants. Egalet has not and shall not grant any rights to the Patents, or the Licensed Know-How
that may derogate from the rights granted to RedHill hereunder, and no third party has any rights whatsoever (including the right
to receive royalties or any other compensation) to the Patents or the Licensed Know-How.

 

8.2.3           Third
Party Actions. Outside the scope of the IP positions listed in Annex [C], the exercise of the License by RedHill
will not - to the best of Egalet’s knowledge and belief - infringe upon the patent or other intellectual property rights
of any third party, and further that no actions, suits, claims, disputes, or proceedings concerning the Patents, the Licensed
Know-How or the Product are currently pending or have been threatened in writing, that if determined adversely to Egalet would
have an adverse effect on the Product or would impair Egalet’s ability to perform its obligations under this Agreement.
Furthermore, there are no legal suits or proceedings by a third party (including without limitation employees or former employees
of Egalet) contesting the ownership or validity of the Patents, the Licensed Know-How or the Product or any part thereof, and
that if Egalet shall become aware of any such third party, Egalet shall immediately notify RedHill of such, and undertakes to
effect any payments required (including the payment of royalties or other compensation) to be made to such third party, and to
hold RedHill harmless from, and indemnify RedHill against, any such claims or payments.

 

8.2.4           Additional
Licenses. To Egalet’s knowledge, no additional licenses to any patents (including patents owned or controlled by third
parties) or know how are required to develop, manufacture, use or sell the Product.

 

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		9.	LIMITATION OF LIABILITY.

 

Except
in the case of a willful or fraudulent misrepresentation under Section 8, and except in the case of indemnification for payments
to third parties under Section 13, in no event shall either Party be liable to the other or any of its Affiliates for any consequential,
incidental, indirect, special, punitive or exemplary damages (including, without limitation, lost profits, business or goodwill)
suffered or incurred by such other Party or its Affiliates, whether based upon a claim or action of contract, warranty, negligence
or tort, or otherwise, arising out of this Agreement.

 

		10.	PATENTS

 

		10.1	PATENT PROSECUTION AND
                                                                  MAINTENANCE

 

10.1.1           Prosecution
by RedHill. RedHill undertakes and shall have the sole, exclusive and first right to prosecute and maintain the
patents comprising the Patents that are licensed on an exclusive basis using counsel of its choice, in the jurisdictions and to
the extent that RedHill shall deem appropriate at its sole discretion. RedHill will provide Egalet with copies of all relevant
documentation so that Egalet will be informed of the continuing prosecution and may comment upon such documentation sufficiently
in advance of any initial deadline for filing a response, provided, however, that if Egalet has not commented upon such documentation
in a reasonable time for RedHill to sufficiently consider Egalet’s comments prior to a deadline with the relevant government
patent office, or RedHill must act to preserve the Patents, RedHill will be free to act without consideration of Egalet’s
comments, if any.

 

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10.1.2           Egalet
undertakes to prosecute and maintain the patents comprising the Patents that are licensed on a non-exclusive basis using counsel
of its choice in the jurisdictions and to the extent that Egalet shall deem appropriate at its sole discretion. Egalet will provide
RedHill with copies of all relevant documentation so that RedHill will be informed of the continuing prosecution and may comment
upon such documentation sufficiently in advance of any initial deadline for filing a response, provided, however, that if RedHill
has not commented upon such documentation in a reasonable time for Egalet to sufficiently consider RedHill’s comments prior
to a deadline with the relevant government patent office, or Egalet must act to preserve the Patents, Egalet will be free to act
without consideration of RedHill’s comments, if any. Egalet undertakes to inform RedHill promptly if Egalet decides
not to prosecute and maintain a Patent in order for RedHill to take such action as per RedHill’s discretion. RedHill shall
have the right but no obligation to prosecute and maintain the patents comprising the Patents that are licensed on a non-exclusive
basis.

 

10.1.3           RedHill’s
Requests. Egalet shall use reasonable efforts to amend any Patent application to include claims or any other changes
reasonably requested by RedHill to protect the Products contemplated to be sold under this Agreement. Moreover, Egalet
will cooperate in the preparation, filing, prosecution, and maintenance
of the Patents, including (a) promptly executing all papers and
instruments and requiring employees to execute such papers and instruments as reasonable and appropriate so as to enable RedHill
to file, prosecute, and maintain the Patents in any country; and (b)
promptly informing RedHill of matters that may affect the preparation,
filing, prosecution, or maintenance of any Patents.

 

10.1.4           Patent
Prosecution Costs. RedHill will bear the costs of preparing, filing, prosecuting and maintaining all patent applications
contemplated by Section 10.1.1 and Egalet will bear the costs of preparing, filing, prosecuting and maintaining all patent applications
contemplated by Section 10.1.2.

 

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10.1.5           Co-operation.
The Parties will provide reasonable assistance to each other, including providing access to relevant documents and other evidence,
making its employees available at reasonable business hours, and joining the action to the extent necessary to allow the prosecuting
and maintaining Party to prosecute and maintain the relevant Patent.

 

		10.2	PATENT
                                                                                                       ENFORCEMENT

 

10.2.1           Infringement
Notice. If Egalet or RedHill determines that any Patent licensed hereunder is being infringed by a third party’s
activities and that such infringement could affect the exercise of the License under this Agreement, it will promptly notify the
other Party in writing. In addition, If Egalet or RedHill determines that any Licensed Know How is being misappropriated by a
third party’s activities and that such misappropriation could affect the exercise of the License under this Agreement, it
will promptly notify the other Party in writing.

 

10.2.2           Action
by RedHill. RedHill will have the sole, exclusive and first right but not the obligation to remove such infringement and/or
misappropriation and to control all litigation to remove such infringement and/or misappropriation, all to the extent the rights
infringed are exclusively licensed to RedHill and in such case as RedHill shall deem appropriate in its sole discretion. However,
RedHill undertakes to inform Egalet promptly if RedHill decides not to take infringement or misappropriation action in order for
Egalet to assume responsibility of infringement or misappropriation action to be taken as per Egalet’s discretion. Egalet
shall have the right, but no obligation to take any infringement or misappropriation action to the extent the rights infringed
are not exclusively licensed to RedHill.

 

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10.2.3           In
the event at Eagalet does, at its discretion, undertake any infringement or misappropriation action, Egalet will provide RedHill
with copies of all relevant documentation so that RedHill will be informed of the continuing action and may comment upon such
documentation sufficiently in advance of any initial deadline for filing a response, provided, however, that if RedHill has not
commented upon such documentation in a reasonable time for Egalet to sufficiently consider RedHill’s comments prior to a
deadline, or Egalet must act to preserve the action, Egalet will be free to act without consideration of RedHill’s comments,
if any. Egalet undertakes to inform RedHill promptly if Egalet decides not to take any infringement or misappropriation
action in order for RedHill to take such action as per RedHill’s discretion. RedHill shall have the right but no obligation
to take any action to remove any infringement and/or misappropriation, to the extent the rights infringed are not exclusively
licensed to RedHill.

 

10.2.4           Co-operation.
The Parties will provide reasonable assistance to each other, including providing access to relevant documents and other evidence,
making its employees available at reasonable business hours, and joining the action to the extent necessary to allow the prosecuting
Party to maintain the action.

 

10.2.5           Recovery.
Any amounts recovered in connection with or as a result of any action contemplated by Sections 10.2.2 and 10.2.3, whether by settlement
or judgment, will be used to reimburse the Parties for their reasonable costs and expenses in making such recovery (which amounts
will be allocated pro rata if insufficient to cover the totality of such expenses), and any remainder received by RedHill in excess
of the reasonable costs and expenses in making such recovery will be treated as Net Sales or Sublicensee Sales Royalties and payments
will be due in respect of same pursuant to this Agreement.

 

		10.3	PATENT INFRINGEMENT

 

10.3.1           License.
In the event that the manufacturing, use or commercialization of the Products or any other action authorized under the License
or any part thereof, is such that RedHill determines, after prior consultation with Egalet, that it is commercially reasonable
to seek a license to the intellectual property rights of any third party (as reasonably determined by RedHill), RedHill shall
be entitled to enter into negotiations with such third party in order to reach an agreement according to which RedHill shall obtain
a license or other applicable right or a waiver from such party with respect to such intellectual property rights. In such event
RedHill shall be entitled to deduct such payments made from Net Sales and/or Sublicensee Sales Royalties.

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10.3.2           Claim
- Rights and Procedures. In the event that either Egalet or RedHill, or both of them, are sued by a third party alleging
that the commercialization of a Product infringes upon any intellectual property rights of such third party, the Party being so
sued shall immediately give the other Party notice of same. In so far the infringement alleged relates to rights licensed to RedHill
hereunder on an exclusive basis, RedHill shall have the sole, exclusive and first right, but not the obligation, to defend against
such action and to control the defense of such action, on behalf of both Parties, within 60 business days from the date the relevant
suit becomes known to RedHill. In so far as the infringement alleged relates to rights licensed to RedHill hereunder on a non-exclusive
basis, Egalet shall have the sole, exclusive and first right, but not the obligation, to defend against such action and to control
the defense of such action, on behalf of both Parties, within 60 business days from the date the relevant suit becomes known to
Egalet. Any expenses or costs incurred by RedHill in connection with such action(s) RedHill shall be entitled to deduct such payments
made from Net Sales and/or Sublicensee Sales Royalties, and any costs or amounts awarded to the counterparties in such action(s)
shall be fully borne by RedHill and shall be offset from Royalties and Sublicense Royalty Fees or any other amounts of whatsoever
nature due to Egalet. Any recovery in such action shall be retained by RedHill in full after reimbursing Egalet for any of its
reasonable costs and expenses related to such suit (provided that such claim is not the result of a breach of warranty or representation
by Egalet).

 

10.3.3           In
the event that RedHill does not exercise its right to so defend, then Egalet shall be entitled to defend against such claim at
its own cost and expense, including any costs or amounts awarded to the counterparties in such action(s), and any recovery in
such action shall be retained by Egalet in full. In the event that Egalet does not exercise its right to defend in so far as the
infringement alleged relates to rights licensed to RedHill hereunder on a non-exclusive basis, then RedHill shall be entitled
to defend against such claim at its own cost and expense, including any costs or amounts awarded to the counterparties in such
action(s), and any recovery in such action shall be retained by RedHill in full.

 

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10.3.4           Neither
Party shall, without the consent of the other Party, enter into any settlement or compromise or consent to any judgment in respect
of any claim related to rights licensed on an exclusive basis to RedHill under this Agreement, unless such settlement, compromise
or consent includes an unconditional release of the other Party from all liability arising out of the claim and does not otherwise
limit the other Party.

 

		11.	CONFIDENTIALITY

 

		11.1	Disclosure
                                                                  and Use Restriction.  The Parties agree that,
                                                                  during the Term of this Agreement and thereafter, each Party
                                                                  will keep completely confidential
                                                                  and will not publish, submit for publication or otherwise disclose,
                                                                  and will not use for any purpose except for the purposes contemplated
                                                                  by this Agreement, any Confidential Information (as such term
                                                                  is defined below) received from the other Party.

 

		11.2	Confidential Information.
                                                                  “Confidential Information” shall mean all
                                                                  information and know-how and any tangible embodiments thereof
                                                                  provided by or on behalf of one Party to the other Party either
                                                                  in connection with the discussions and negotiations pertaining
                                                                  to this Agreement or in the course of performing this Agreement,
                                                                  which may include data; knowledge; practices; processes; ideas;
                                                                  research plans; engineering designs and drawings; research data;
                                                                  manufacturing processes and techniques; scientific, manufacturing,
                                                                  marketing and business plans; and financial and personnel matters
                                                                  relating to the disclosing Party or to its present or future
                                                                  products, sales, suppliers, customers, employees, investors
                                                                  or business. Notwithstanding the foregoing, information or know-how
                                                                  of a Party shall not be deemed Confidential Information of such
                                                                  Party for purposes of this Agreement if such information or
                                                                  know-how:

 

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(a)          was
already known to the receiving Party, other than under an obligation of confidentiality or non-use, at the time of disclosure
to such receiving Party;

 

(b)          was
generally available or known to parties reasonably skilled in the field to which such information or know-how pertains, or was
otherwise part of the public domain, at the time of its disclosure to such receiving Party;

 

(c)          became
generally available or known to parties reasonably skilled in the field to which such information or know-how pertains, or otherwise
became part of the public domain, after its disclosure to such receiving Party through no fault of the receiving Party;

 

(d)          was
disclosed to such receiving Party, other than under an obligation of confidentiality or non-use, by a third party who had no obligation
to the disclosing Party not to disclose such information or know-how to others; or

 

(e)          was
independently discovered or developed by such receiving Party, as evidenced by their written records, without the use of Confidential
Information belonging to the disclosing Party and prior to any subsequent disclosure by the receiving Party.

 

All Licensed Know-How shall
be deemed to be Confidential Information of Egalet; provided that RedHill shall be entitled to disclose such information under
the same confidentiality undertakings as listed in section 11.2 to third parties that are relevant for the commercialization of
the Product and to use any Licensed Know-How in the exercise of its rights under this Agreement.

 

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11.3        Authorized
Disclosure. Notwithstanding the provisions of Section 11.1 above, a Party shall be entitled to disclose the Confidential
Information of the other Party hereto to the extent that such disclosure is:

 

(i) 
         made in response to a valid order of a court of competent jurisdiction; provided,
however, that such Party will first (to the extent practicably possible) have given notice to such other Party and given
such other Party a reasonable opportunity to quash such order and to obtain a protective order requiring that the
Confidential Information and documents that are the subject of such order be held in confidence by such court or agency or,
if disclosed, be used only for the purposes for which the order was issued; and provided further that if a disclosure
order is not quashed or a protective order is not obtained, the Confidential Information disclosed in response to such court
or governmental order will be limited to that information which is legally required to be disclosed in response to such court
or governmental order;

 

(ii)         otherwise
required by law; provided, however, that the disclosing Party will provide such other Party with notice of such disclosure
in advance thereof to the extent practicably possible;

 

(iii)
        made by such Party to the Regulatory Authorities as necessary for the
development or commercialization of a medicinal product, including the Product, in a country, as required in connection with
any filing, application or request for Regulatory Approval or as required by applicable securities laws and regulations;

 

(iv)
        made by such Party, in connection with the performance of this Agreement, to
Sublicensees, directors, officers, employees, consultants, representatives or agents, each of whom prior to disclosure must
be bound by obligations of confidentiality and non-use at least equivalent in scope to those set forth in this Agreement;
or

 

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(v) 
        made by such Party in the course of submitting financial accounts to relevant
authorities as per local statutory requirements or to existing or potential acquirers; existing or potential collaborators;
investment bankers; existing or potential investors, merger candidates, partners, venture capital firms or other financial
institutions or investors for purposes of obtaining financing; or, bona fide strategic potential partners; each of whom prior
to disclosure must be bound by obligations of confidentiality and non-use at least equivalent in scope to those set forth in
this Agreement.

 

12.        
PRESS RELEASES 

 

Press
Releases. Press releases or other similar public communication by either Party relating to the terms
of this Agreement (but not, for the avoidance of doubt, unless reference is made to the other Party or the terms of this Agreement,
with respect to activities in exercise of its rights under this Agreement) will be approved in advance by the other Party, which
approval will not be unreasonably withheld or delayed, except for those communications required by applicable law, regulation
or securities exchange rule (including, but not limited to, a public offering prospectus), disclosures of information for which
consent has previously been obtained, and information of a similar nature to that which has been previously disclosed publicly
with respect to this Agreement, each of which will not require advance approval, but will be provided to the other Party as soon
as practicable after the release or communication thereof. For the avoidance of doubt, the Parties may issue press releases regarding
the fact that this Agreement has been signed so long as they do not describe the specific provisions hereof.

 

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13.         
INDEMNIFICATION AND INSURANCE

 

13.1        Indemnification
of Egalet. RedHill will indemnify Egalet and its directors, officers, employees and agents (“Egalet Parties”)
and defend and hold each of them harmless, from and against any and all losses, damages, liabilities, costs and expenses (including
reasonable attorneys’ fees and expenses) to the extent arising from or occurring as a result of any and all liability suits,
investigations, claims or demands by a third party (collectively, “Losses”) arising from or occurring as a
result of or in connection with (a) the negligence or willful misconduct on the part of RedHill in performing any activity contemplated
by this Agreement, (b) breach by RedHill of any representations, warranties, or covenants set forth in this Agreement and/or (c)
losses stemming from Product liability related losses or claims; except to the extent a Loss arises from the (i) negligence or
willful misconduct on the part of an Egalet Party; or (ii) breach by Egalet of any representations, warranties or covenants set
forth in this Agreement.

 

13.2        Indemnification
of RedHill. Egalet will indemnify RedHill, its Affiliates, and their respective directors, officers, employees
and agents (“RedHill Parties”), and defend and hold each of them harmless, from and against any and
all Losses to the extent arising from or occurring as a result of or in connection with (a) negligence or willful misconduct on
the part of Egalet; or (b) breach by Egalet of any representations, warranties, or covenants set forth in this Agreement, except
to the extent a Loss arises from or occurs as a result of or in connection with (i) negligence or willful misconduct on the part
of a RedHill Party; or (ii) breach by RedHill of any representations, warranties, or covenants set forth in this Agreement. Egalet
shall further be responsible for and shall indemnify and hold RedHill harmless in respect of:

 

13.2.1  All
royalties and other payments existing under an agreement signed by Egalet or any obligation undertaken by Egalet, required to
be paid to third parties in respect of the commercialization of the Products.

 

13.2.2
All royalty and other payments required to be paid to other third parties in respect of the Product as a result of a claim by
any of Egalet’s existing or former employees, consultants or shareholders, or any person named in Egalet’s patents
or patent applications, or any person claiming it should have been named as an inventor in such patent applications.

 

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13.3        In
the event that additional license(s) to intellectual property (irrespective of whether such is the intellectual property covered
herein or any other intellectual property) are necessary to enable RedHill, its Affiliates or Sublicensees to exercise the License,
and the receipt of or license to use such additional intellectual property requires payment of royalties, settlement payments,
awards or any other payments made to and taken by any third party on account of the use of such third party’s intellectual
property, then RedHill shall effect a reduction in the Royalties and Sublicense Sales Royalties payable to Egalet hereunder
by the amount of such third party payments (without derogating from any other deductions permitted herein, including without limitation,
on account of a Combination Product reduction).

 

13.4        Conditions
to Indemnity.
Each Party’s agreement to indemnify and hold the other harmless is conditioned upon the indemnified Party (i) providing
written notice to the indemnifying Party of any claim, demand or action arising out of the indemnified activities within thirty
(30) days after the indemnified Party has knowledge of such claim, demand or action, (ii) permitting the indemnifying Party to
assume full responsibility to investigate, prepare for and defend against any such claim or demand, (iii) assisting the indemnifying
Party, at the indemnifying Party’s reasonable expense, in the investigation of, preparation of and defense of any such claim
or demand; and (iv) the indemnifying Party not compromising or settling such claim or demand without the indemnified Party’s
prior written consent, unless such settlement includes as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified Party a complete release from all liability in respect of such claim or litigation; provided that,
if the Party entitled to indemnification fails to promptly notify the indemnifying Party pursuant to the foregoing clause
(i), the indemnifying Party shall only be relieved of its indemnification obligation to the extent prejudiced by such failure
and that provided that the indemnified Party is not obligated to notifying the indemnifying Party of claims,
demands and/or actions made directly against the indemnifying Party. Notwithstanding the foregoing, if in the reasonable
judgment of the indemnified party, such suit or claim involves an issue or matter which could have a materially adverse affect
on the business, operations or assets of the indemnified party, the indemnified party may waive its rights to indemnity under
this Agreement and control the defense or settlement thereof, but in no event shall any such waiver be construed as a waiver of
any indemnification rights such indemnified party may have at law or in equity.

 

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13.5        Insurance.
RedHill will have and maintain such types and amounts of liability insurance, including clinical trial and product liability insurance,
as is normal and customary in the industry generally for parties similarly situated. RedHill undertakes to send a copy of such
insurance at the request of Egalet.

 

14.        
TERM AND TERMINATION

 

14.1        Term.
Unless earlier terminated in accordance with the provisions of this Article 14, the term of this Agreement (the “Term”)
commences upon the Effective Date and will continue until terminated in accordance with the terms hereof.

 

14.2        Termination.

 

14.2.1           Termination
for Breach. Failure by a Party to comply with any of its material obligations contained herein will entitle the Party
not in default to give to the defaulting Party notice specifying the nature of the material breach, requiring the defaulting Party
to make good or otherwise cure such material breach, providing specific actions that the defaulting Party could take to cure such
material breach, and stating its intention to invoke the provisions of Section 14.3 if such material breach is not cured. If such
material breach is not cured within 90 days after the receipt of such notice (or, if such material breach cannot be cured within
such 90-day period, if the defaulting Party does not commence actions to cure such material breach within such period and thereafter
diligently continue such actions), the Party not in default will be entitled, without limiting any of its other rights conferred
on it by this Agreement (except as expressly set forth herein), to terminate this Agreement by providing written notice to the
breaching Party.

  

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Notwithstanding anything to
the contrary herein, in the event of Egalet’s material breach of this Agreement, and without derogating from any of RedHill’s
other rights at law, RedHill shall have the right to continue all activities under the License granted herein and to continue
utilizing the Patents for the exploitation of the License, with the right to set-off, from any sums due to the Egalet hereunder,
amounts equivalent to any damage caused to RedHill as a result of Egalet’s breach hereunder.

 

Notwithstanding, it is clarified
that Egalet shall not be entitled to terminate this Agreement for any reason whatsoever once the Royalty Term has expired, provided
that this shall not derogate from any right of termination available to Egalet if RedHill has not complied with any and all of
its obligations hereunder as per elapse of the Royalty Term.

 

14.2.2           Voluntary
Termination. RedHill shall be entitled, in its sole discretion, to terminate this Agreement at any time on thirty
(30) days written notice to Egalet, without the need to pay Egalet any compensation in respect of such termination, in which case
RedHill will immediately cease any and all development and other activities regarding the Product. Outside the scope of Sections
14.2.1 and 15.11 Egalet shall have no right to terminate this Agreement.

 

14.3        Consequences
of Termination.

 

14.3.1           License.
Upon early termination of this Agreement in its entirety pursuant to Section 14.2, the License granted by Egalet
to RedHill hereunder will terminate; provided that RedHill shall have a period of 180 days after the date of termination
to dispose, for consideration or otherwise as RedHill deems fit, of all previously made or partially made Product, subject to
Royalties and Sublicense Royalty Fees on such sales being duly paid to Egalet.

 

14.3.2           Continuation
following Egalet’s Bankruptcy. The Parties agree that in the event that Egalet becomes
insolvent or makes a filing under bankruptcy or similar laws in any jurisdiction, RedHill shall have the protection afforded to
the licensee under the United States Bankruptcy Code, including but not limited to, the protections set forth in 11 U.S.C §365(n)
or its equivalent in any other jurisdiction which allows the licensee, upon rejection of the license agreement by the debtor-licensor
or its representative, the option to either retain the licensee’s rights in the intellectual property under the existing
contract while continuing to pay royalties, or to treat the executory contract as terminated. Egalet
does not warrant that the rights granted to RedHill under this Section 14.3.2 will be enforceable under the laws of the jurisdiction
under which Egalet operates.

 

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14.3.3           Return
of Information and Materials. Upon early termination of this Agreement in its entirety pursuant to Section 14.2, each
Party will return to the other all Confidential Information of the other Party (except one copy of which may be retained for archival
and compliance purposes), RedHill will return to Egalet or its designee all Licensed Know How and any other tangible materials
received by RedHill under this Agreement and RedHill will further waive and actively deregister or assign as requested by Egalet,
all Patent right registrations made under Section 2.4 above.

 

14.3.4           Accrued
Rights. Termination or expiration of this Agreement for any reason will be without prejudice to any rights or financial
compensation that will have accrued to the benefit of a Party prior to such termination or expiration. Such termination or expiration
will not relieve a Party from obligations that are expressly indicated to survive the termination or expiration of this Agreement.

 

14.3.5           Survival.
Sections [6.8, 7, 9, 11, 12, 13.1-13.4, 14.3 and 15.3] of this Agreement will survive expiration or termination of this Agreement
for any reason.

 

14.3.6           License
Survival. Once the Royalty Term shall expire, RedHill shall, provided that the Agreement has not been terminated by Egalet
under Section 14.2.1 or by RedHill under Section 14.2.2, be entitled to continue to manufacture and/or sell the Product throughout
the world without having to pay Royalties or Sublicense Royalty Fees or any other amounts of whatsoever nature to Egalet in respect
of such activities subsequent to such date. This Section 14.3.6 shall survive termination or expiration of this Agreement.

 

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15.         
MISCELLANEOUS

 

15.1       Assignment.
Without the prior written consent of the other Party hereto, neither Party will sell, transfer, assign, delegate, pledge or
otherwise dispose of, whether voluntarily, involuntarily, by operation of law or otherwise, this Agreement or any of its rights
or duties hereunder; provided, however, that (i) either Party hereto may assign or transfer this Agreement or any of its rights
or obligations hereunder without the consent of the other Party to any Affiliate, or to any third party successor in interest
with which it has merged or consolidated, or to which it has transferred all or substantial part of its assets or stock to which
this Agreement relates. Any purported assignment or transfer in violation of this Section 15.1 will be void ab initio and
of no force or effect. This provision shall not prevent Egalet from assigning or prohibit the transfer of the rights to future
Royalties and Sublicense Royalty Fees to a third party, provided however that such third party in no event shall enjoy any better
rights vis-à-vis RedHill than Egalet.

 

15.2      Severability.
Should any term or provision of this Agreement be or become invalid or unenforceable or should this Agreement contain an omission,
the validity or enforceability of the remaining terms or provisions shall not be affected. In such case, subject to the next following
sentence, the parties shall immediately commence to negotiate in good faith in order to replace the invalid or unenforceable term
or provision by such other valid or enforceable term or provision which comes as close as possible to the original intent and
effect of the invalid or unenforceable term or provision, or respectively, to fill the omission by inserting such term or provision
which the parties would have reasonably agreed to, if they had considered the omission at the date hereof. In the event that any
term or provision as aforesaid is invalid, void or unenforceable by reason of its scope, duration or area of applicability or
some similar limitation as aforesaid, then the court making such determination shall have the power to reduce the scope, duration,
area or applicability of the term or provision so that they shall be enforceable to the maximum scope, duration, area or applicability
permitted by applicable law which shall not exceed those specified in this Agreement or to replace such term or provision with
a term or provision that comes closest to expressing the intention of the invalid or unenforceable term or provision.

 

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15.3      Governing
Law. This Agreement will be governed by and construed in accordance with the laws of England, without reference to
any rules of conflicts of laws.

 

15.4  
    Notices. All notices or other communications that are required or permitted hereunder
will be in writing and delivered personally with acknowledgement of receipt, sent by electronic mail (provided receipt is
acknowledged), facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier as
provided herein), sent by nationally-recognized overnight courier or sent by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:

 

If to Egalet, to:

 

Egalet a/s

Lejrvej 37-41

DK-3500Værløse,

Denmark

Phone: +45 4447 8080

Telefax: +45 4447
8081

 

If to RedHill, to:

 

RedHill Biopharma Ltd.

42 Givati St.

Ramat Gan 52232

Israel

Fax: +972 (3) 725 5723

 

or
to such other address as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance
herewith. Any such communication will be deemed to have been given (i) when delivered, if personally delivered, (ii) on the business
day (on the receiving end) after dispatch, if sent by nationally-recognized overnight courier (third business day if sent internationally),
(iii) on the third business day following the date of mailing, if sent by mail (fifth business day if sent internationally) and
(iv) on the first business day (on the receiving end) after being sent by facsimile or by if sent by electronic mail followed
by facsimile. It is understood and agreed that this Section 15.4 is not intended to govern the day-to-day business communications
necessary between the Parties in performing their duties, in due course, under the terms of this Agreement.

 

    	30

    	 

    

 

 

15.5      Entire
Agreement; Modifications. This Agreement sets forth and constitutes the entire agreement and understanding between the
Parties with respect to the subject matter hereof and all prior agreements, understanding, promises and representations, whether
written or oral, with respect thereto are superseded hereby. Each Party confirms that it is not relying on any representations
or warranties of the other Party except as specifically set forth herein. No amendment, modification, release or discharge will
be binding upon the Parties unless in writing and duly executed by authorized representatives of both Parties.

 

15.6       Relationship
of the Parties. It is expressly agreed that the Parties will be independent contractors of one another and that the
relationship between the Parties will not constitute a partnership, joint venture or agency.

 

15.7       Waiver. Any
term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such
waiver will be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such term
or condition. Any such waiver will not be deemed a waiver of any other right or breach hereunder.

 

15.8       Counterparts.
This Agreement may be executed in two (2) or more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

 

15.9       No
Third Party Beneficiaries. The representations, warranties, covenants and agreements set forth in this Agreement are for
the sole benefit of the Parties hereto and their successors and permitted assigns, and they will not be construed as conferring
any rights on any other parties.

 

    	31

    	 

    

 

15.10       Further
Assurances. Each Party will duly execute and deliver, or cause to be duly executed and delivered, such further
instruments and do and cause to be done such further acts and things, including the filing of such assignments, agreements,
documents and instruments, as may be necessary to carry out the provisions and purposes of this Agreement.

 

15.11      Force
Majeure. Neither party shall be responsible to the other for failure or delay in
performing any of its obligations under this Agreement or for other non-performance hereof but only to the extent that such delay
or non-performance is occasioned by a cause beyond the reasonable control and without fault or negligence of such party, including,
but not limited to earthquake, fire, flood, explosion, discontinuity in the supply of power, court order or governmental interference,
act of God, strike or other labor trouble, act of war or terrorism and provided that such party will inform the other party as
soon as is reasonably practicable and that it will entirely perform its obligations immediately after the relevant cause has ceased
its effect. If any such force majeure event continues for a continuous period of 12 months, the Party whose performance is not
prevented by such event may terminate this Agreement with immediate effect by providing the other Party with written notice.

 

    	32

    	 

    

 

IN WITNESS WHEREOF, the Parties
hereto have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date.

 

	Egalet a/s	 	 	RedHill Biopharma Ltd.
	Signature:	/s/ M. Fiorini	 	Signature:	/s/ Dror Ben-Asher
	Name:	M. Fiorini	 	Name:	Dror Ben-Asher
	Title:	Chairman	 	Title:	CEO

 

	Egalet a/s	 	RedHill Biopharma Ltd.
	Signature:	/s/ P. Nordwood	 	Signature:	/s/ Ori Shilo
	Name:	 P. Nordwood	 	Name:	Ori Shilo
	Title:	 CEO	 	Title:	CFO

 

    	33

    	 

    

 

ANNEX A

 

PATENT TABLES

 

Patent
license granted on an exclusive basis: Tables IP-P06 and IP-P08.

Patent
license granted on a non-exclusive basis: Tables IP-P03, IP-P05 and IP-P09.

 

IP-P03 - Coat (coating with cellulose)

  

	
        Application /

        Patent type
	 	Title	 	Patent No.	 	
        Application No. /

        Publication No.
	 	Filing date
	PCT application	 	Controlled release composition	 	-	 	PCT/DK95/00080 /	 	23-02-95
	 	 	 	 	 	 	WO/1995/022962	 	 
	 	 	 	 	 	 	 	 	 
	Japan application	 	Controlled release composition	 	JP 4194114	 	HEI7(1995)-522075 /	 	 
	 	 	 	 	 	 	JP9509184	 	 
	Japan application	 	Controlled release composition	 	-	 	2005-282068 / 2006-	 	Withdrawn
	 	 	 	 	 	 	052228	 	 
	US patent*	 	Controlled release composition	 	US 6,787,156	 	08/693,254	 	 
	US application	 	Controlled release composition	 	-	 	10/827,521 /	 	Abandon
	 	 	 	 	 	 	US2005019405	 	 
	US application	 	Controlled release composition	 	-	 	12/213,087 /	 	Withdrawn
	 	 	 	 	 	 	US2008254124	 	 
	 	 	-	 	 	 	 	 	 
	EP Patent**	 	Controlled release composition	 	EP 0746310	 	95909667.8	 	 
	Switzerland	 	 	 	EP 0746310	 	From EP	 	 
	France	 	 	 	EP 0746310	 	From EP	 	 
	Great Britain	 	 	 	EP 0746310	 	From EP	 	 
	Italy	 	 	 	EP 0746310	 	From EP	 	 
	Germany	 	Zusammensetzung mit gesteuerter	 	DE69506086	 	From EP	 	 
	 	 	freizetzung	 	 	 	 	 	 
	Denmark	 	Præparat med styret afgivelse	 	DK 0746310	 	From EP	 	 

 

Proprietor: BM Research

  

    	34

    	 

    

 

Status:

- EP patent issued in Switzerland, France, Great Britain,
Italy, Germany & Denmark and expires 23 February 2015

- US patent issued and expires 7 September 2021

- JP patent issued and expires 23 February 2015

 

    	35

    	 

    

 

IP-P05 - Polymer release system

 

	
        Application /

        Patent type
	 	
        Title
	 	
        Patent No.
	 	
        Application No. /

        Publication No.
	 	
        Filing

        date

	PCT application	 	Polymer release system	 	-	 	PCT/DK02/00620 /	 	23-09-02
	 	 	 	 	 	 	WO 2003/024429	 	 
	 	 	 	 	 	 	 	 	 
	US application	 	Polymer release system	 	-	 	10/490,308 /	 	Abandon
	 	 	 	 	 	 	US2004/0234602	 	 
	US continuation	 	 	 	 	 	12/073,692 /	 	07-03-08
	 	 	 	 	 	 	US2008254122	 	 
	 	 	 	 	 	 	 	 	 
	EP application	 	Polymer release system	 	 	 	EP 1429739/	 	 
	 	 	 	 	 	 	02779224.1	 	 

 

Proprietor: Egalet a/s

 

    	36

    	 

    

 

IP-P06 - Controlled release solid dispersions

  

	Application /

    Patent type	 	Title	 	Patent No.	 	Application No. /
 Publication No.	 	Filing date
	PCT application	 	Controlled release solid dispersion	 	-	 	PCT/DK02/00621	 	23-09-02
	 	 	 	 	 	 	WO 2003/024426	 	 
	 	 	 	 	 	 	 	 	 
	US application	 	Controlled release solid dispersion	 	-	 	10/490,170 /	 	Abandon
	 	 	 	 	 	 	US2005/0019399	 	 
	 	 	 	 	 	 	 	 	 
	US continuation	 	Controlled release solid dispersion	 	 	 	12/073,691 /	 	07-03-08
	 	 	 	 	 	 	US2008/0234352	 	 
	EP application	 	Controlled release solid dispersion	 	EP 1429734	 	02776907.4	 	 
	AT	 	 	 	AT E 381 924	 	From EP	 	 
	BE	 	 	 	EP 1429734	 	From EP	 	 
	CH	 	 	 	EP 1429734	 	From EP	 	 
	DE	 	 	 	DE 602 24 293	 	From EP	 	 
	DK	 	 	 	EP 1429734	 	From EP	 	 
	ES	 	 	 	EP 1429734	 	From EP	 	 
	FR	 	 	 	EP 1429734	 	From EP	 	 
	GB	 	 	 	EP 1429734	 	From EP	 	 
	IE	 	 	 	EP 1429734	 	From EP	 	 
	IT	 	 	 	EP 1429734	 	From EP	 	 
	EP Divisional	 	Controlled release solid dispersion	 	 	 	EP 1929998/	 	20-12-07
	 	 	 	 	 	 	07024778.8	 	 

 

Proprietor: Egalet a/s

 

Status:

- EP patent granted 26 December 2007 and expires 23. September
2022

 

    	37

    	 

    

 

IP-P08 - Controlled release Carvedilol compositions

 

	Application
    /

    Patent type	 	Title	 	Patent
    No.	 	Application No. /
 Publication No.	 	Filing date
	PCT application	 	Controlled release carvedilol 	 	-	 	PCT/DK03/00765/	 	07-11-03
	 	 	compositions	 	 	 	WO 2004/041252	 	 
	 	 	 	 	 	 	 	 	 
	US application	 	Controlled release solid dispersion	 	-	 	10/703,084 / 	 	Abandon
	 	 	 	 	 	 	US2004/0151772	 	 
	US continuation	 	Controlled release solid dispersion	 	 	 	12/076,105 /	 	13-03-08
	 	 	 	 	 	 	 US2008268057	 	 
	 	 	 	 	 	 	 	 	 
	EP application	 	Controlled release solid dispersion	 	-	 	EP 1562552/	 	Withdrawn
	 	 	 	 	 	 	 03810382.6	 	 

 

Proprietor: Egalet a/s

 

    	38

    	 

    

 

IP-P09 - Polymer blend

 

	Application
    /

    Patent type	 	Title	 	Patent
    No.	 	Application No. /
 Publication No.	 	Filing date
	PCT application	 	Matrix composition for controlled release	 	-	 	PCT/DK04/000217	 	26-03-04
	 	 	 	 	 	 	WO 2004/084869	 	 
	 	 	 	 	 	 	 	 	 
	US application	 	Matrix composition for controlled release	 		 	10/550,685 /	 	 
	 	 	 	 	 	 	 US2007/0042044	 	 
	Canada application	 	Matrix composition for controlled release	 		 	2,520,312	 	 
	 	 	 	 	 	 	 	 	 
	Japan application	 	Matrix composition for controlled release	 		 	2006-504340 /	 	 
	 	 	 	 	 	 	 2006521301	 	 
	 	 	 	 		 	 	 	 
	India application	 	Matrix composition for controlled release	 	IN 233507	 	4439/DELNP/2005	 	 
	 	 	 	 		 	 	 	 
	EP application	 	Matrix composition for controlled release	 	EP 1610768	 	04723523.9	 	 
	 	 	 	 		 	 	 	 
	AT	 		 	AT E 399 538	 	From EP	 	 
	BE	 	 	 	EP 1610768	 	From EP	 	 
	CH	 	 	 	EP 1610768	 	From EP	 	 
	DE	 	 	 	EP 1610768	 	From EP	 	 
	DK	 	 	 	EP 1610768	 	From EP	 	 
	ES	 	 	 	EP 1610768	 	From EP	 	 
	FR	 	 	 	EP 1610768	 	From EP	 	 
	GB	 	 	 	EP 1610768	 	From EP	 	 
	IE	 	 	 	EP 1610768	 	From EP	 	 
	IT	 	 	 	EP 1610768	 	From EP	 	 
	NL	 	 	 	EP 1610768	 	From EP	 	 
	EP Divisional	 	Matrix composition for controlled release	 	 	 	EP 1974726/ 08158752,9	 	 
	 	 	 	 	 	 	1120403	 	 
	HK application	 	 	 	 	 	 	 	 

 

Proprietor: Egalet a/s

 

    	39

    	 

    

 

 

- EP patent granted and expires 26. Marts 2024

- IN Patent granted and expires 26. Marts 2024

 

    	40

    	 

    

 

ANNEX B

[****] [3 pages redacted]

 

    	41

    	 

    

 

ANNEX C

Third Party Patents

 

EP 1272179 (WO 01/74357)

US  5,902,821

 

    	42Exhibit 4.3

 

THE SYMBOL "****" DENOTES
PLACES WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

August 26, 2010

 

CO-DEVELOPMENT AND COMMERCIALIZATION
AGREEMENT

 

THIS CO-DEVELOPMENT
AND COMMERCIALIZATION AGREEMENT (this “Agreement”) is made and entered into as of August 26, 2010 (the “Effective
Date”), by and between IntelGenx Corp., a Canadian corporation (“IntelGenx”), and RedHill Biopharma
Ltd., an Israeli company (“RedHill”). IntelGenx and RedHill each may be referred to herein individually as a
“Party,” or collectively as the “Parties”.

 

WHEREAS,
IntelGenx is the sole and exclusive owner of certain patents and other intellectual
property relating to a certain Product (as such term is defined herein);

 

WHEREAS,
the Parties wish to jointly undertake the further development of the Product, all as more fully set forth herein;

 

WHEREAS,
subject to the terms and conditions set forth in this Agreement, IntelGenx wishes to license to RedHill and RedHill wishes to license
from IntelGenx IntelGenx’ proprietary technology for use in connection with the sale and use of the Product;

 

WHEREAS,
IntelGenx and RedHill wish to set forth in the Agreement the terms upon which IntelGenx may, enter into an agreement with [****]
and/or any of its affiliates or sublicensees, for the purpose of permitting [****] to develop, commercialize, distribute or otherwise
exploit the Product, Patents and/or Licensed Know How; and

 

    	 

    	 

    

 

WHEREAS,
the license to be granted shall be granted on a worldwide basis all as more fully set out below.

 

NOW THEREFORE, THE
PARTIES HERETO AGREE AS FOLLOWS:

 

1.           DEFINITIONS

 

1.1           “Affiliate”
of a Party means any other entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with such Party. For purposes of this definition only, “control” and, with correlative meanings,
the terms “controlled by” and “under common control with” will mean the possession, directly or indirectly,
of the power to direct the management or policies of an entity, whether through the ownership of fifty percent or more of the voting
securities of the other organization or entity or by contract relating to voting rights or corporate governance.

 

1.2           
“Commercialization” shall mean the commercial distribution and/or commercial promotion of the Product for sale.

 

1.3           “Field
of Use” means all indications, including, but not limited to, acute treatment of migraine attacks with or without aura,
and all other therapeutic, diagnostic and other human and/or animal uses.

 

1.4           “Licensed
Know-How” means all information (other than that contained in the Patents) whether patentable or not and physical objects
related to the Product, including but not limited to Product data, Product-related results and information, including, but not
limited to, clinical data, analytical test results, non-clinical pharmacology and safety data, other R&D data, Regulatory Documentation,
manufacturing and formulation information of a like nature, all provided that the Licensed Know-How is known to, generated by,
vested in (or licensed to) and/or controlled by IntelGenx, including, without limitation, the Licensed Know-How listed in Annex
B of this Agreement.

 

1.5           “Marketing
Approval” shall mean the obtaining of all necessary regulatory approvals (excluding the obtainment of pricing reimbursement
approval) required from the applicable regulatory authority in the territory in order to commercially sell or market the Product
for human consumption in such territory, and satisfaction of any related regulatory registration and notification requirements.

 

    	2

    	 

    

 

1.6           “[****]
Agreement” shall mean a binding definitive agreementthat becomes effective following the Effective Date between IntelGenx,
RedHill and [****] and/or any of its Affiliates, for the purpose of permitting [****] and/or any of its Affiliates or sublicensees
to exploit the Patents and the Licensed Know-How to develop, distribute or otherwise Commercialize the Product in the Field of
Use. Notwithstanding the foregoing, in the event a binding term sheet or binding letter-of-intent in respect of a [****] Agreement
(“Interim [****] Agreement”) is executed, the revenue sharing percentages under Section 8.4.3 shall be determined based
on the date said Interim [****] Agreement becomes effective and the period during which a “[****] Agreement” may come
into effect shall be extended to twelve (12) months following the Effective Date; provided that such agreement is consummated within
such twelve (12) month period. For the avoidance of doubt, IntelGenx shall, at its sole discretion, have the right to assume a
leadership role in any negotiations relating to any Interim [****] Agreement and shall have a casting vote in all decisions with
respect thereto. RedHill shall, in all reasonable respects relating to any Interim [****] Agreement, cooperate with IntelGenx to
the extent reasonably requested by IntelGenx and shall expeditiously execute any documents reasonably necessary to permit the Parties
to enter into any agreement with [****] including but not limited to any Interim [****] Agreement.

 

1.7           “[****]
Proceeds” shall mean all (i) amounts actually received by RedHill, IntelGenx and/or their respective Affiliates in respect
of the sale of a Product by RedHill, IntelGenx and/or their respective Affiliates to [****] and/or any of its Affiliates or sublicensees,
less, and following recovery of, Recognized Deductions and (ii) sales royalties, milestones, income
and all cash or equivalents to which value can be assigned directly and/or indirectly actually received by RedHill, IntelGenx
and/or their respective Affiliates from [****] and/or any of its Affiliates or sublicensees in respect of the Product.

 

Notwithstanding the foregoing, for the
purposes of this definition, the transfer of a Product by RedHill or IntelGenx or one of their respective Affiliates to another
Affiliate of RedHill or IntelGenx, as applicable, or to a sublicensee for resale is not a sale and in such cases, [****] Proceeds
will be determined based on the amount received by RedHill or IntelGenx, as applicable, or such Affiliate in respect of the Product
as sold by the Affiliate or sublicensee to independent third-parties, less Recognized Deductions.

 

    	3

    	 

    

 

1.8           
“Net Sales” means amounts actually received by RedHill or its Affiliates in respect of the sale of a Product
by RedHill or its Affiliates, less, and following recovery of, the following items (collectively, the "Recognized Deductions")
as considered under International Accounting Standards (IFRS):

 

		(i)	allowances or credits granted to and taken by customers (including wholesalers) for rejections,
returns (including as a result of recalls), and prompt payment and trade, cash and volume discounts or resulting from inventory
management

 

		(ii)	amounts incurred resulting from government mandated rebate programs (or any agency thereof);

 

		(iii)	freight, transport, packing and insurance charges;

 

		(iv)	taxes, including value added tax, tariffs or import/export or customs, duties;

 

		(v)	rebates, charge backs and discounts paid or credited;

 

Notwithstanding the
foregoing, for the purposes of this definition, the transfer of a Product by RedHill or one of its Affiliates to another Affiliate
of RedHill or to a sublicensee for resale is not a sale and in such cases, Net Sales will be determined based on the amount received
by RedHill or such Affiliate in respect of the Product as sold by the Affiliate or sublicensee to independent third-parties, less
the Recognized Deductions.

 

1.9           
“Patents” shall mean the patents listed in Annex A to this Agreement, as well as Product-related (a)
U.S. patents and patent applications, (b) any substitutions, divisions, continuations, continuations-in-part (but only to the extent
that they cover the same invention claimed in the foregoing), reissues, renewals, registrations, confirmations, re-examinations,
extensions, supplementary protection certificates and the like, and any provisional applications, of any such patents or patent
applications, and (c) any foreign or international equivalent of any of the foregoing, of which IntelGenx is the owner, controller
or licensee.

 

    	4

    	 

    

 

1.10         “Product”
shall mean Rizatriptan - selective 5-hydroxytriptamine1B/1D (5-HT1B/1D)
receptor agonist formulation that is based on IntelGenx’ proprietary and patented VersaFilm oral drug delivery technology,
in all doses and formulations whatsoever.

 

1.11         “Regulatory
Authority” means any applicable government entity regulating or otherwise exercising authority with respect to the development
and Commercialization of a Product.

 

1.12         “Regulatory
Documentation” means all applications, registrations, licenses, authorizations and approvals (including all Marketing
Approvals), all correspondence submitted to or received from Regulatory Authorities (including minutes and official contact reports
relating to any communications with any Regulatory Authority), all supporting documents and all clinical studies and tests, including
the manufacturing batch records for Product to be assigned, relating to a Product, and all data contained in any of the foregoing,
including all regulatory drug lists, advertising and promotion documents, adverse event files and complaint files.

 

1.13         “Sublicense”
means a sublicense from RedHill to a third party under the License granted pursuant to this Agreement and the term “Sublicensee”
shall be construed accordingly. Any Sublicense may include the right to grant further Sublicenses. However, in the event that IntelGenx
and RedHill enter into a [****] Agreement, RedHill will not have rights to grant sublicenses and all sublicenses granted by RedHill
shall terminate.

 

1.14         “Sublicense
Sales Royalties” means sales royalties, milestones, income and all cash or equivalents
to which value can be assigned directly and/or indirectly actually received by RedHill from third party marketing Sublicensees
(and/or any further Sublicensees thereof) in respect of the Product.

 

    	5

    	 

    

 

2.           LICENSE
GRANT

 

2.1           Scope
of License. Subject to all the terms and conditions of this Agreement, IntelGenx hereby grants to RedHill, an exclusive
(including as to IntelGenx except as set forth in this Agreement), worldwide, perpetual (subject to termination in accordance with
the terms hereof) license under the Patents and the Licensed Know-How, with such exclusivity being limited to the right to and
for the sole purpose of co-developing, selling, offering for sale and importing Product, in the Field of Use (the “License”).

 

2.2           Sublicenses.
The License granted to RedHill under this Agreement is Sublicensable (and further Sublicensable) in whole or in part, to third
parties in arms length transactions. For the avoidance of doubt, RedHill shall, subject to the license grant provided herein, be
entitled to conduct or to perform any activity in respect of the Product by means of any third party sub-contractor, and such conduct
shall not be considered to be a grant of a Sublicense hereunder. RedHill shall give IntelGenx written notice of any intended Sublicense,
including the name of the Sublicensee and the material terms thereof. IntelGenx shall have 30 days (or such shorter period as is
reasonably specified by RedHill to address the exigencies of an agreement or negotiation with a Sublicensee) to deliver a notice
that it does not approve the proposed Sublicense. In the event IntelGenx notifies RedHill that it does not approve the proposed
Licensee the matter shall be presented to the Steering Committee for resolution and the provisions of Section 5.7 shall be applicable.
If IntelGenx does not deliver a notice of disapproval within such 30 day period, then RedHill shall have the right to execute the
Sublicense with the Sublicensee. IntelGenx agrees that it cannot unreasonably withhold, delay or condition approval to any proposed
Sublicense hereunder. Any sublicense by the Parties of the rights granted to such Party under this Agreement shall be consistent
with the terms of this Agreement, shall contain provisions necessary to effectuate the terms of this Agreement and shall include
an obligation for the Sublicensee to comply with obligations similar to those of this Agreement. However, in the event that IntelGenx
and RedHill enter into a [****] Agreement, RedHill will not have the right to grant sublicenses and all sublicenses granted by
RedHill shall terminate.

 

    	6

    	 

    

 

2.3           Registration.
IntelGenx agrees that RedHill shall, subject to the express provisions of this Agreement pertaining to an agreement with
[****], for the sole purpose of the fulfillment of the activities contemplated under the terms of this Agreement, have the right,
on its own account, to register as the licensee of exclusive rights in, to and under the Patents and the Licensed Know-How and
IntelGenx shall execute all pertinent documentation reasonably requested by RedHill and otherwise cooperate with RedHill in order
to ensure such registration

 

2.4           Limitations
on Other Licenses. During the term of this Agreement, IntelGenx shall not grant any rights or licenses to any Patents or
Licensed Know-How, or transfer any data or know-how to any third party that conflict with IntelGenx’ obligations under this
Agreement and the rights granted to RedHill under this Agreement.

 

2.5           Manufacturing.
For the avoidance of doubt, IntelGenx reserves the right to grant manufacturing privileges for the Product, subject to approval
by the Steering Committee as described in Section 5.6 below.

 

3.           DATA
TRANSFER

 

3.1           Data
Transfer. Upon and following the successful and valid execution of this Agreement and upon written request from RedHill,
IntelGenx shall reasonably provide to RedHill, at no cost to RedHill, all the pertinent information it has about the Product including,
but not limited to, all Patents, know-how, R&D data, past trials data, communications with Regulatory Authorities in the U.S.,
Europe and elsewhere, manufacturing, supply, external service and other contracts and any and all other information whatsoever
that is relevant for the development, marketing approval, marketing and other Commercialization of the Product.

 

    	7

    	 

    

 

3.2           Assistance.
For the commercial manufacturing post-approval by the appropriate Regulatory Authorities, IntelGenx undertakes to reasonably assist
in a technical transfer of Licensed Know-How to a contract manufacturing organization chosen by the Steering Committee.

 

4.           DEVELOPMENT
RESPONSIBILITIES AND DECISION-MAKING

 

4.1           Co-Development.
The Parties shall, following the Effective Date, undertake the co-development of the Product as more fully set forth hereinbelow.

 

4.2           IntelGenx
Development Costs and Responsibilities. IntelGenx shall perform the development of the Product in accordance with the provisions
of the development program, budget and time schedule attached hereto as Annex 4.2 (the “R&D Program”).
The budget set forth in the R&D Program shall be referred to herein as the “R&D Budget”.

 

IntelGenx will
be responsible for all the internal costs portion of the R&D Budget, as well as all those internal costs that exceed those
set forth in the R&D Budget by up to 10%.

 

The R&D
Program, including the R&D Budget shall be reviewed and approved in writing by the Steering Committee (as defined below) within
sixty (60) days following the Effective Date. Thereafter, at least thirty days prior to the end of each calendar quarter during
the term of the performance of the R&D Program, IntelGenx shall be required to provide the Steering Committee with (i) reasonably
detailed quarterly reports regarding the progress of the R&D Program during the then-ending quarter vis-à-vis the R&D
Program, including, without limitation, the R&D Budget applicable to such quarter, in a form and containing the substance to
be agreed in advance by the Steering Committee and (ii) the reasonably detailed R&D Program and the R&D Budget for the
immediately following quarter, all for review and prior written approval by the Steering Committee.

 

    	8

    	 

    

 

For the avoidance
of doubt, it is clarified that any deviation by IntelGenx from the R&D Program, including, without limitation, the R&D
Budget shall require the prior written approval of the Steering Committee. It is clarified that other than as set forth in Section
4.3 below, RedHill shall not be required to make any additional payments to IntelGenx on account of development of the Product.
It is further clarified that RedHill may cease the performance of any part or all of the R&D Program upon ten (10) days prior
written notice to IntelGenx, without any penalty being imposed on RedHill whatsoever in respect of such cessation, and in such
event, the remaining provisions of this Agreement shall remain in full force and effect, subject to the provisions hereof. In the
event that following notice of RedHill's intent to cease performance of the entire R&D Program as aforesaid RedHill does not
notify IntelGenx of its decision to revoke such notice and to continue with the R&D Program and in fact ceases the performance
of the R&D Program for more than sixty (60) days, then all licenses granted to RedHill and Sublicenses granted by RedHill,
shall subject to 16.3.1 terminate without penalty to IntelGenx and, for the avoidance of doubt, any ownership rights that RedHill
may have to the project or Product including all Patents and Licensed Know-How, shall immediately be assigned to IntelGenx. Payment
obligations by RedHill under this Agreement incurred and/or accrued prior to such termination would remain in effect until completed.

 

IntelGenx shall
keep separate records of the expenses actually incurred by it in the conduct of the R&D Program and shall provide the Steering
Committee with detailed quarterly reports of its expenses and any other information reasonably required by a member of the Steering
Committee in connection therewith.

 

For the avoidance
of doubt, it is clarified that (i) any in-licensing of third party technology by IntelGenx for the purposes of the performance
of the R&D Program and/or (ii) any use of third party technology by IntelGenx for the purposes of the performance of the R&D
Program, shall require the prior written agreement of RedHill, and shall not be in-licensed or used, as applicable, in the event
that such prior written agreement of RedHill is not provided.

 

    	9

    	 

    

 

RedHill’s
representative(s) on the Steering Committee may, from time to time, request updates regarding the progress of the R&D Program,
in addition to the periodic progress reports, and IntelGenx shall provide any additional update that RedHill’s representative(s)
on the Steering Committee may reasonably request.

 

IntelGenx shall
perform its obligations under the R&D Program in accordance with all applicable laws and regulations, and shall procure the
receipt of all approvals and consents necessary for the performance of its obligations under the R&D Program.

 

IntelGenx shall
only be entitled to subcontract its obligations to perform any item or task under the R&D Program to any third party after
receipt of RedHill's project leader’s written approval not to be unreasonably withheld. The performance of any part of the
R&D Program by any subcontractor shall not detract from IntelGenx’ responsibilities hereunder. Furthermore, in the event
that IntelGenx shall subcontract any items under the R&D Program with an assigned value that exceeds [****], IntelGenx shall,
prior to approving any such subcontract, provide RedHill with the proposal received in respect of such item(s) and RedHill shall
have the right to comment on same at RedHill's discretion and shall be required to approve same in writing. .

 

    	10

    	 

    

 

4.3           RedHill’s
Costs and Responsibilities. RedHill shall be required to fund the external costs portion of the R&D Budget (as same
are set forth in Annex 4.2) for the development of the Product in accordance with the provisions of the R&D Program,
up to a maximum of US $[****] (USD[****]), in accordance with the actual progress in the various stages of the development of the
Product. In addition, RedHill will be responsible for bearing and paying all those external costs that exceed those set forth in
the R&D Budget of US $[****], as aforesaid, by up to 10%. Any such payments shall be subject to RedHill's approval and shall
be made only after IntelGenx has provided RedHill with a copy of the relevant receipt from the subcontractor. Notwithstanding the
foregoing, all fees and/or payment obligations due to any Regulatory Authority shall be the burden of the party to whom responsibility
for Commercialization of the Product will be given pursuant to this Agreement. However, if a commercialization partner is not secured
by RedHill before December 31, 2011 (“PDUFA Deadline”), such partner subject to IntelGenx’ approval, such
approval not to be unreasonably withheld or delayed, RedHill shall become financially responsible for the fees associated with
a US FDA regulatory filing if and when such PDUFA Fee becomes due (“PDUFA Fee”), and the Revenue Share under
Section 8.3 shall be 20% until such time as RedHill has recovered such PDUFA Fee plus interest at the rate of ten (10) percent
per annum from the date the PDUFA Fee is paid by RedHill, and thereafter the Revenue Share under Section 8.3 shall be 40%. For
the avoidance of doubt, RedHill shall not be responsible financially or otherwise for any fees and/or payment obligations due to
any Regulatory Authority, except under the scenario just described and in the event the Product is marketed by RedHill or one of
its Affiliates unless otherwise mutually agreed and IntelGenx shall not be responsible financially or otherwise for any fees and/or
payment obligations due to any Regulatory Authority unless otherwise mutually agreed by the parties. Notwithstanding the foregoing,
in the event that RedHill itself becomes financially responsible for the PDUFA Fee as specified above, and informs IntelGenx, with
such notice to be written and provided to IntelGenx by the latter of the PDUFA Deadline or immediately, following a successful
completion of the NDA-enabling pivotal study (including full post-study analysis clearly confirming that the study’s endpoints
have been met), that it does not intend to pay the PDUFA Fee, IntelGenx may elect, for a period of 60 days starting on the date
of such notice, to bear the burden of the PDUFA Fee by itself, in which case the Revenue Shares under Section 8.3 shall be [****]
IntelGenx and [****] RedHill.

 

4.4           Expenses
Exceeding R&D Budget. Any expenses exceeding the agreed R&D Budget by less than 10% must be authorized in advance
and in writing by the Steering Committee. In the event of a deadlock at the Steering Committee on such matter, same shall be addressed
as set forth in Section 5.6 below. In the event that the Parties foresee expenses exceeding the agreed R&D Budget by more than
10% (separately in respect of the internal and external costs), the Parties will discuss in good faith the necessary next steps
that will be required and which each agrees to take in order to advance the development of the Product under these new circumstances.
In the event that the Parties fail to reach an agreement in respect of such next steps within 21 days of first discussing same,
the matter shall be resolved in accordance with the arbitration mechanism set forth in Section 17.3 below.

 

    	11

    	 

    

 

4.5           Deductions.
Any and all third party (government and/or other) financing, credits, rebates, reimbursements and the like received in respect
of the development of the Product as of the Effective Date shall be proportionally deducted, on a pro-rata basis, from the Parties’
respective undertakings toward the internal (IntelGenx) and external (RedHill) costs of the R&D Program
as set forth in the R&D Budget. For the avoidance of doubt, any and all discounts or other price reductions for the development
of the Product, shall be fully reflected as such by reducing RedHill’s commitment to pay such external development costs.

 

4.6           Third
Party Obligations. All royalty and other payment obligations existing under any agreement entered into by either Party
with the approval of the Steering Committee or any other obligation undertaken by either Party with the approval of the Steering
Committee, required to be paid to third parties in respect of the Commercialization of the Product shall be shared equally by the
Parties. In addition, if additional license(s) to intellectual property (irrespective of whether such is the intellectual property
covered herein or any other intellectual property) are necessary to enable the Parties to exercise the License, and the receipt
of or license to use such additional intellectual property requires payment of royalties, settlement payments, awards or any other
payments made to and taken by any third party on account of the use of such third party’s intellectual property shall be
shared equally by the Parties.

 

4.8           Manufacturing
Royalties. Any manufacturing royalties negotiated with and paid to either of the Parties by the contract manufacturer shall
be shared equally by the Parties.

 

4.9           Ownership
of Regulatory Application. If either IntelGenx or RedHill pay the PDUFA Fee as outlined in Section 4.3, the party paying
the fees will file the application and act as the applicant during the regulatory review process. However, the NDA will be jointly
owned by both IntelGenx and RedHill. For the avoidance of doubt, all aspects relating to any regulatory filing shall be controlled
by the Steering Committee.

 

    	12

    	 

    

 

5.           DECISION
MAKING AND STEERING COMMITTEE

 

5.1           Within
thirty (30) days following the Effective Date, the Parties shall establish a joint (50/50) steering committee (“Steering
Committee”) comprising not less than four (4) members and no more than 6 members (excluding observers who are non-members),
with at least two (2) being appointed and replaced by IntelGenx, of which one shall be the IntelGenx Project Leader, and at least
two (2) being appointed and replaced by RedHill, of which one shall be the RedHill Project Leader. All such representatives
shall be individuals of suitable authority and seniority with significant and relevant experience and expertise. Any appointment
or replacement shall be notified to the other Party in writing.

 

5.2           The
Steering Committee shall oversee the overall execution of the objectives of the development of the Product. In particular, the
Steering Committee shall (i) monitor the progress of the R&D Program against the timeframe and budgets and any amendments agreed
between the Parties, (ii) report on delays in the conduct of the R&D Program which would materially affect IntelGenx’
ability to successfully complete the R&D Program within the timeframe or budgets and (iii) determine whether corrective action
is required. All aspects of the Steering Committee including but not limited to Steering Committee decisions shall be consistent
with terms provided in any [****] Agreement.

 

5.3           The
Project Leaders shall facilitate the flow of information and otherwise promote communications and collaboration within and among
the Parties, the Steering Committee, and any other sub-committees or teams that the Steering Committee may appoint or constitute.

 

5.4           The
Steering Committee shall meet at least monthly on the phone or in person at the offices of IntelGenx. Meetings shall be chaired
alternatively by the IntelGenx Project Leader and the RedHill Project Leader. Each Party shall only be responsible for its own
costs related to the Steering Committee and meetings. The Project Leader conducting the meeting also will be responsible for taking
and distributing the minutes. At and between meetings of the Steering Committee, each Party shall keep the other fully and regularly
informed as to its progress with its respective tasks and obligations under the Agreement.

 

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5.5           At
each Steering Committee meeting, at least one (1) member appointed by each Party present in person or by telephone shall constitute
a quorum. Each Party shall have equal voting power, whether represented by one or two committee members, on all matters before
the Steering Committee.

 

5.6           Decision
Making. The Parties hereto shall jointly take all key decisions regarding the development and Commercialization of the
Product, subject to the following:

 

5.6.1           IntelGenx
shall bear primary responsibility for the development of the Product and shall have a deciding vote on the Steering Committee (detailed
below) in respect of development, regulatory and manufacturing decisions regarding the Product development, provided the decision
does not deviate from the R&D Budget and is reasonable in accordance with industry standards.

 

5.6.2           RedHill
shall bear primary responsibility for the licensing, Commercialization and partnering of the Product and shall have a deciding
vote on the Steering Committee in respect of partnering/licensing/Commercialization decisions relating to the Product.

 

5.6.3           Notwithstanding
the foregoing, or any text or content to the contrary provided for herein, during the period of nine (9) months following the Effective
Date, IntelGenx shall have a deciding vote on the Steering Committee in respect of partnering/licensing/Commercialization decisions
relating to a [****] Agreement and in the event a [****] Agreement is entered into during such nine (9) month period, IntelGenx
shall bear primary responsibility for the licensing, Commercialization and partnering of the Product and shall have a deciding
vote on the Steering Committee in respect of partnering/licensing/Commercialization decisions relating to the Product.

 

5.7           The
Parties shall undertake their respective obligations under the R&D Program on a collaborative basis.  In case the Steering
Committee cannot reach an agreement on a professional matter related to the development of the Product, the matter may be submitted
by either Party to a third party expert for an additional expert opinion. In any event, IntelGenx shall have the deciding vote
on matters pertaining to development, regulatory and manufacturing decisions and RedHill shall have the deciding vote on matters
pertaining to partnering/licensing/Commercialization decisions, all as described in Section 5.6 above.

 

    	14

    	 

    

 

5.8           The
Steering Committee shall, among its other authorities, have the authority to establish and appoint sub-committees as the Steering
Committee deems necessary. All decisions of a subcommittee are subject to approval by the Steering Committee. The Steering Committee
may prescribe rules of procedure for the foregoing subcommittees. In the event that any such other subcommittees fail to reach
agreement on an issue within its respective area of oversight, the matter shall be referred to the Steering Committee.

 

5.9           Unless
otherwise expressly stated, nothing contained in this Agreement may be deemed to make any member of the Steering Committee a partner,
agent or legal representative of the other, or to create any fiduciary relationship for any purpose whatsoever. No member of the
Steering Committee shall have any authority to act for, or to assume any obligation or responsibility on behalf of, any other member
of the Steering Committee, or the other Party.

 

6.           DILIGENCE

 

6.1           IntelGenx
will make a good faith, continuous and diligent effort to allocate all appropriate resources to prepare, initiate and complete
the clinical development of the Product and file an application for regulatory marketing approval in the United States in accordance
with industry standards, and within the R&D Budget and the timeframe agreed for the R&D Program.

 

7.           REPORTS

 

7.1           IntelGenx
shall keep RedHill informed with respect to activities and progress regarding the development, Marketing Approval and other approvals
of Product.

 

7.2           RedHill
agrees as follows:

 

    	15

    	 

    

 

7.2.1           Commercialization
Reports. Within 30 days following the close of each calendar quarter following the Effective Date, RedHill will provide
IntelGenx with a quarterly report with respect to activities and progress regarding the Commercialization, sublicensing, and government
approvals of Product.

 

7.2.2           First
Commercial Sale Report. To report to IntelGenx the date of the first commercial sale of the Product, together with the
name of the country in which such first commercial sale occurred

 

7.2.3           Revenue
Reports. To deliver to IntelGenx a revenue report with respect to each calendar quarter within thirty (30) days of the
expiration of such calendar quarter, detailing in a manner to be mutually agreed the following: the amount of Net Sales and Sublicense
Sales Royalties received from Product, including the Recognized Deductions applicable in computing Net Sales and the deductions
applicable in computing Sublicense Sales Royalties, and the total Royalties due based on Net Sales and Sublicense Sales Royalties.
Within seven (7) days following receipt of such revenue report, IntelGenx shall issue an appropriate invoice to RedHill for payment
of the amount due pursuant to such revenue report. RedHill shall remit payment within ten (10) business days following receipt
of such invoice.

 

7.3           Any
and all information, data or reports supplied by RedHill pursuant to the provisions of this Section 7 shall be treated as RedHill's
Confidential Information.

 

7.4           If
this Agreement is terminated for any reason, RedHill shall deliver a final report and associated revenue sharing payment to IntelGenx
within sixty (60) days after such termination. Following termination, RedHill shall have no further reporting obligations.

 

8.           FINANCIAL
PROVISIONS 

 

8.1           Up-Front
Payment. RedHill will pay IntelGenx a non-refundable one time up-front license fee in the amount of $[****] within seven
(7) days following the Effective Date.

 

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8.2           Milestone
Payments. RedHill will pay to IntelGenx the following non-refundable one-time milestone payments (such payments are due
only once for the Product and are not payable per indication or per jurisdiction). Within thirty (30) days after first achievement
of each of the applicable milestones for the Product (and not, for the avoidance of doubt, in respect of each indication of the
Product to do so), as follows:

 

	Milestone	 	Payment	 
	 	 	 	 
	[****]	 	 	[****]	 
	 	 	 	 	 
	Filing and acceptance of an New Drug Application (NDA) by the US FDA	 	$	200,000	 
	 	 	 	 	 
	Marketing Approval of the Product by the US FDA	 	$	500,000	 

 

Any
R&D tax credits and all other tax or other credits that relate directly to development or R & D activities of the Product
in Canada or anywhere else in the world (but not, for the avoidance of doubt, corporate tax credits) that are actually received
by IntelGenx as a direct or indirect result of the funds provided or invested by RedHill, shall
be deducted from the Milestone payments required to be paid by RedHill to IntelGenx, or if no
Milestone payment is due and payable at such time, shall be transferred to RedHill within thirty (30) days following IntelGenx’
actual receipt of such tax credit. 

 

8.3           Revenue
Sharing. RedHill will pay IntelGenx an amount equal to (i) 20% of Net Sales if Product is marketed by RedHill or one of
its Affiliates or (ii) 40% of Sublicense Sales Royalties actually received by RedHill if Product is marketed by Sublicensees; provided
that the Revenue Share as aforesaid shall be 20% if RedHill does not become directly responsible for the Commercialization of the
Product and pays the PDUFA Fee until such time as RedHill has recovered such costs, pursuant to Section 4.3 above (“Revenue
Share”), in each case, after recovery by RedHill of all its commercially reasonable costs and expenses, not to exceed
[****], incurred in connection with the partnering of the Product that are in excess of such
costs and expenses of IntelGenx (as shown by appropriate evidence of payment).

 

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8.4           Notwithstanding,
the foregoing, up until the receipt by RedHill of the first US $2,000,000 of Sublicense Sales Royalties, the Revenue Share percentage
of Sublicense Sales Royalties to which IntelGenx shall be entitled and which RedHill shall pay IntelGenx, shall be 60% of Sublicense
Sales Royalties actually received by RedHill (the “Initial Proceeds Split”) (after recovery of costs
and expenses as aforesaid). For the avoidance of any doubt, the Initial Proceeds Split will only apply once for the Product, and
not per indication, per territory or per Sublicensee. Notwithstanding the foregoing, and any text or content to the contrary herein,
in the event that IntelGenx, pursuant to Section 4.3, becomes financially responsible for the PDUFA Fee, RedHill will pay IntelGenx
pursuant to Section 4.3 above, an amount equal to 70% of Sublicense Sales Royalties. [****] Agreement. Notwithstanding
anything to the contrary contained in this Agreement, in the event that IntelGenx and RedHill enter into a [****] Agreement the
following shall apply:

 

8.4.1           All
financial commitments of RedHill including, but not limited to, external development costs under Section 4.3 above and the final
milestone payment pursuant to Section 8.2 above, in which RedHill is obligated to pay $0.5 million upon marketing approval will
be cancelled and RedHill shall have no financial commitment whatsoever with respect to the project and/or the Product. All other
milestone payments payable by RedHill shall remain in effect.

 

8.4.2           RedHill
shall receive [****] of all [****] Proceeds until recovery by RedHill of all external costs and expenses of the R&D Program
actually paid and/or incurred by RedHill following which revenues generated by the Product shall be payable to RedHill and IntelGenx
as otherwise set forth in this Agreement.

 

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8.4.3           Except
as set forth in Section 8.4.2 above, revenue sharing in respect of all [****] Proceeds shall be as follows:

 

(a)          In
the event the [****] Agreement is signed and becomes effective within three (3) months following the Effective Date, revenue sharing
as aforesaid shall be [****] in favor of IntelGenx.

 

(b)          In
the event the [****] Agreement is signed and becomes effective between three (3) and six (6) months following the Effective Date,
revenue sharing as aforesaid shall be [****] in favor of IntelGenx.

 

(c)          In
the event the [****] Agreement is signed and becomes effective after six (6) months following the Effective Date, revenue sharing
as aforesaid shall be [****] in favor of IntelGenx.

 

(d)          For
the greater certainty, and solely for the purposes of determining the revenue sharing percentages under this section, the date
an Interim [****] Agreement becomes effective  shall be the date of the [****] Agreement

 

8.4.4           The
provisions of Sections 7.2, 7.3, 7.4, 8.5, 8.6, 8.7 and 9 shall apply, mutatis mutandis, to IntelGenx and it shall provide
reports and make payments in respect of [****] Proceeds in accordance therewith. IntelGenx undertakes to use its best efforts to
protect the vital interests of RedHill in decisions relating to a [****] Agreement.

 

8.4.5           [****]
Proceeds shall be paid to IntelGenx. Disbursements to RedHill shall be due and payable to RedHill on a quarterly basis within fifteen
(15) days following the end of the calendar quarter.

 

8.5          Due
Dates for Payment. All payments due pursuant to the provisions of Section 8.3 above shall be due and payable to IntelGenx
on a calendar quarterly basis within fifteen (15) days following the submission of the relevant quarterly revenue report but no
earlier than ten (10) business days following receipt of the relevant invoice from IntelGenx

 

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8.6          Payment
Method.  Any amounts due to IntelGenx under this Agreement will be paid in U.S. dollars, by wire transfer in immediately
available funds to an account designated in writing at least fifteen (15) days in advance by IntelGenx.

 

8.7          Currency;
Foreign Payments. If any currency conversion will be required in connection with the calculation of any payment
hereunder, such conversion will be made by using the exchange rate for the purchase of U.S. dollars as published in The Wall
Street Journal, Eastern Edition, on the date of the payment.

 

8.8          Invoice;
Approvals. All payments to be made by RedHill to IntelGenx hereunder shall be made against receipt of an appropriate invoice
in respect of the amount of such payment. In the event any payment may require approval of any governmental authority, RedHill
undertakes to promptly file for approval and in the event that such approval is not received by the due date of payment, RedHill
undertakes to effectuate payment promptly following receipt of the necessary approval.

 

8.9          Taxes.
 RedHill may deduct from amounts it is required to pay IntelGenx pursuant to this Agreement an amount equal to that
withheld for or due on account of any taxes (including VAT to the extent applicable, but other than taxes imposed on or measured
by net income of RedHill) or similar governmental charge imposed by any jurisdiction based on such payments to IntelGenx (“Withholding
Taxes”). RedHill will provide IntelGenx a certificate evidencing payment of any Withholding Taxes.

 

8.10        No
Warranty.

 

8.10.1     For
the avoidance of doubt, nothing contained in this Agreement shall be construed as a warranty by RedHill that any Commercialization
to be carried out by it in connection with this Agreement will actually achieve its aims or any other results and RedHill makes
no warranties whatsoever as to any results to be achieved in consequence of the carrying out of any such Commercialization. Furthermore,
RedHill makes no representation to the effect that the Commercialization of the Product, or any part thereof, will succeed, or
that it shall be able to sell the Product in any quantity.

 

    	20

    	 

    

 

8.10.2     For
the avoidance of doubt, nothing contained in this Agreement shall be construed as a warranty by IntelGenx that any clinical trials
and/or any other activities required for an approval from any Regulatory Authority to market and/or sell the Product to be carried
out in connection with this Agreement will actually achieve its aims or any other results and IntelGenx makes no warranties whatsoever
as to any results to be achieved in consequence of the carrying out of any such activities. Furthermore, IntelGenx makes no representation
to the effect that any clinical trials and/or any other activities required for an approval from any Regulatory Authority to market
and/or sell the Product, or any part thereof, will succeed, or that RedHill shall be able to sell the Product in any quantity.

 

9.           RECORD
RETENTION AND AUDIT

 

9.1          Record
Retention. RedHill will maintain (and will ensure that its Affiliates maintain) complete and accurate books, records
and accounts that fairly reflect Net Sales and Sublicense Sales Royalties, in sufficient detail to confirm the accuracy of any
payments required hereunder, which books, records and accounts will be retained for two (2) years after the end of the period to
which such books, records and accounts pertain.

 

9.2          Audit.
IntelGenx will have the right, at its own cost, to have an independent certified public accounting firm of nationally recognized
standing, reasonably acceptable to RedHill and who agrees to be bound by a customary undertaking of confidentiality (including
an undertaking not to disclose to IntelGenx any information other than the results of its audit), have access during normal business
hours, and upon reasonable prior written notice, to RedHill’s records together with any disclosure necessary to explain the
same as may be reasonably necessary to verify the accuracy of Net Sales, Royalties and Sublicense Sales Royalties, as applicable,
for any fiscal year ending not more than 24 months prior to the date of such request; provided, however, that IntelGenx
will not have the right to conduct more than one such audit in any calendar year or more than one such audit covering any given
time period. Any such audit shall not unreasonably interfere with the business of RedHill and shall be completed within a reasonable
time. Any amounts determined pursuant to any such audit to have been overpaid or underpaid shall promptly be refunded or paid as
applicable. In the event that any such audit reveals an underpayment to IntelGenx of more than five percent (5%), RedHill shall
reimburse IntelGenx for the expense of such audit. Notwithstanding the foregoing, in the event that RedHill disagrees with the
conclusions of any such audit, the Parties shall submit such dispute to arbitration in accordance with Section 17.3 and no payment
shall be made pursuant to this Section 9.2 pending the outcome of such arbitration. As a condition to such audit, the independent
public accountant selected shall execute a written agreement, reasonably satisfactory in form and substance to both Parties, to
maintain in confidence all information obtained during the course of any such audit except for disclosure as necessary for the
above purpose and all reasonable documents will be delivered to the auditor under these confidential terms. Additionally no auditor
may be employed on a contingency basis..

 

    	21

    	 

    

 

9.3          Confidentiality.
IntelGenx will treat all information subject to review under this Section 9 in accordance with the confidentiality provisions of
Section 13 below.

 

10.         REPRESENTATIONS
AND WARRANTIES

 

10.1        By
Both Parties. Each Party hereby represents, warrants and covenants to the other Party as of the Effective Date as follows:

 

10.1.1           Corporate
Authority. Such Party (a) has the power and authority and the legal right to enter into this Agreement and perform its
obligations hereunder, and (b) has taken all necessary action on its part required to authorize the execution and delivery of this
Agreement and the performance of its obligations hereunder. This Agreement has been duly executed and delivered on behalf of such
Party and constitutes a legal, valid and binding obligation of such Party and is enforceable against it in accordance with its
terms subject to the effects of bankruptcy, insolvency or other laws of general application affecting the enforcement of creditor
rights and judicial principles affecting the availability of specific performance and general principles of equity, whether enforceability
is considered a proceeding at law or equity.

 

    	22

    	 

    

 

10.1.2           Consents
and Approvals. Excluding any required regulatory approvals from Regulatory Authorities, and subject to the approvals referenced
in Sections 8.8 and 8.9 above, such Party has obtained all necessary consents, approvals and authorizations from any federal, state
provincial, local or foreign government or subdivision thereof, or any entity, body or authority exercising executive, legislative,
judicial, regulatory or administrative functions of, or pertaining to any federal, state, provincial, local or foreign government
with jurisdiction over the subject matter of the transactions and/or activities contemplated by this Agreement (“Governmental
Authority”) and other parties required to be obtained by such Party in connection with the execution and delivery of
this Agreement and the performance of its obligations hereunder.

 

10.1.3           Conflicts.
The execution and delivery of this Agreement and the performance of such Party’s obligations hereunder, other than as described
in the [****] Agreement, (a) do not conflict with or violate any requirement of applicable law or any provision of the articles
of incorporation, bylaws or any similar instrument of such Party, as applicable, in any material way, and (b) do not conflict with,
violate, or breach or constitute a default or require any consent not already obtained under, any contractual obligation or court
or administrative order by which such Party is bound.

 

10.2        By
IntelGenx. IntelGenx hereby further represents, warrants, and covenants to RedHill as of the Effective Date
as follows:

 

10.2.1           IP
Ownership. IntelGenx has the sole legal and/or beneficial title to and ownership of the Patents and to the Licensed
Know-How as is necessary to grant the License to RedHill pursuant to this Agreement, and the Patents and the Licensed Know-How
are free and clear of any liens, encumbrances or third party rights (including without limitation, the right to receive royalties
or other compensation). Furthermore, IntelGenx undertakes that to the extent that RedHill, its Affiliates, or any Sublicensee
requires a license under any additional patents or related rights controlled by IntelGenx other than the rights granted
to IntelGenx as outlined in the agreement between [****] and IntelGenx dated December 18, 2009 (“[****]”)
in order to use, sell, offer for sale or import Product, IntelGenx shall grant such a license to RedHill, its Affiliates,
and any Sublicensee on a non-exclusive royalty-free basis.

 

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10.2.2           No
Conflicting Grants. IntelGenx has not and during the term of this Agreement shall not, grant any rights to
the Patents or the Licensed Know-How that conflict with the rights granted to RedHill hereunder, and no third party has any rights
whatsoever (including the right to receive royalties or any other compensation) under the Patents or the Licensed Know-How for
the Product.

 

10.2.3           Third
Party Actions. The exercise of the License by RedHill will not, to the best of IntelGenx’ knowledge, infringe
upon the patent or other intellectual property rights of any third party, and no actions, suits, claims, disputes, or proceedings
concerning the Patents, the Licensed Know-How or the Product are currently pending or have been threatened, that could have an
adverse effect on the Product or could impair IntelGenx’ ability to perform its obligations under this Agreement. Furthermore,
there are no legal suits or proceedings by a third party (including without limitation employees or former employees of IntelGenx)
contesting the ownership or validity of the Patents, the Licensed Know-How or the Product or any part thereof, and if IntelGenx
shall become aware of any such third party, IntelGenx shall immediately notify RedHill of such, and IntelGenx undertakes to effect
any payments required (including the payment of royalties or other compensation) to be made to such third party, and to hold RedHill
harmless from, and indemnify RedHill against, any such claims or payments.  

 

10.2.4           Additional
Licenses. To the best of IntelGenx’ knowledge and other than as described in the [****], no additional licenses to any
patents (including patents owned or controlled by third parties) or know how are required to develop, manufacture, use or sell
the Product.

 

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11.         LIMITATION
OF LIABILITY.

 

Except in the
case of willful or fraudulent misrepresentation under Section 10 and indemnification for payments to third parties under Section
15, in no event shall either Party be liable to the other or any of its Affiliates for any consequential, incidental, indirect,
special, punitive or exemplary damages (including, without limitation, lost profits, business or goodwill) suffered or incurred
by such other Party or its Affiliates, whether based upon a claim or action of contract, warranty, negligence or tort, or otherwise,
arising out of this Agreement.

 

12.         PATENTS

 

12.1         IP
Ownership. All Product-related IP solely developed by IntelGenx
either prior to the Effective Date, or at any time after the Effective Date, shall be owned by IntelGenx,
and licensed to RedHill pursuant to the License exclusivity granted herein. Any Product-related IP that is jointly developed (including
the use of any financing provided by RedHill) by the Parties will be jointly owned by the Parties (the “Joint IP”)
and IntelGenx’ portion of same shall be included in the License granted hereunder. Notwithstanding the foregoing, each Party
shall have the right to use such Joint IP in respect of Product other than the Product, provided that such other Product do not
compete with the Product or with any other Product of the other Party; and provided further that neither party shall grant any
exclusive rights to, or otherwise dispose of its portion of the Joint IP, without the prior written consent of the other party;
other than (i) an assignment or transfer in connection with a merger of such Party or a sale of all or substantially all of its
assets or shares and (ii) RedHill’s right to sublicense its portion of the Joint IP
in the context of a sublicensing transaction under the License.

 

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12.2        Patent
Prosecution And Maintenance

 

12.2.1           Prosecution.
IntelGenx undertakes to prosecute and maintain the Patents using counsel of its choice in the jurisdictions to the extent such
jurisdictions are decided after conferring with RedHill. IntelGenx will provide RedHill with copies of all relevant documentation
so that RedHill will be informed of the continuing prosecution and may comment upon such documentation sufficiently in advance
of any initial deadline for filing a response, provided, however, that if RedHill has not commented upon such documentation in
a reasonable time for IntelGenx to sufficiently consider RedHill’s comments prior to a deadline with the relevant government
patent office, or IntelGenx must act to preserve the Patents, IntelGenx will be free to act without consideration of RedHill’s
comments, if any. RedHill shall have the right but not the obligation to prosecute and maintain at RedHill’s discretion
and expense the Patents in any jurisdiction as aforesaid as to which IntelGenx decides not to prosecute and maintain a Patent and
IntelGenx undertakes to inform RedHill promptly, at least 30 days prior to expiry, if IntelGenx decides not to prosecute and maintain
a Patent in any jurisdiction in order for RedHill to take such action.

 

12.2.2           RedHill’s
Requests. IntelGenx shall use reasonable efforts to amend any Patent application to include claims or any other
changes reasonably requested by RedHill to protect the Product contemplated to be sold under this Agreement. Moreover, IntelGenx
will cooperate in the preparation, filing, prosecution, and maintenance of the Patents, including (a) promptly executing all papers
and instruments and requiring employees to execute such papers and instruments as reasonable and appropriate so as to enable RedHill
to file, prosecute, and maintain the Patents in any country; and (b) promptly informing RedHill of matters that may affect the
preparation, filing, prosecution, or maintenance of any Patents.

 

12.2.3           Patent
Prosecution Costs. IntelGenx shall bear the costs of preparing, filing, prosecuting and maintaining all patent applications
contemplated by Section 12.2.1, provided, however that RedHill shall pay all costs and expenses incurred in making amendments or
changes required by RedHill, provided such amendments or changes have been expressly and specifically requested from IntelGenx
in advance and in writing by RedHill and provided all such costs and expenses have been pre-approved in writing by RedHill. Costs
associated with Joint IP patent applications shall be shared equally.

 

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12.2.4           Co-operation.
The Parties will provide reasonable assistance to each other, including providing access to relevant documents and other evidence,
making its employees available at reasonable business hours, and joining the action to the extent necessary to allow the prosecuting
and maintaining Party to prosecute and maintain the relevant Patent.

 

12.3        Patent
Enforcement

 

12.3.1           Infringement
Notice. If IntelGenx or RedHill determines that any Patent is being infringed by a third party’s activities
and that such infringement could affect the exercise of the License under this Agreement, it will promptly notify the other Party
in writing. In addition, if IntelGenx or RedHill determines that any Licensed Know-How is being misappropriated by a third party’s
activities and that such misappropriation could affect the exercise of the License under this Agreement, it will promptly notify
the other Party in writing.

 

12.3.2           
RedHill will have the sole, exclusive and first right but not the obligation to remove such infringement and/or misappropriation
and to control all litigation to remove such infringement and/or misappropriation relating to the Product in the Field of Use,
all as RedHill shall deem appropriate in its sole discretion. IntelGenx shall provide notice to RedHill of its decision to co-defend
(i.e., equally share the costs resulting from the action) within sixty (60) calendar days from the date the relevant Proceeding
(as hereinafter defined) becomes known to IntelGenx. In the event RedHill does, at its discretion, undertake any infringement or
misappropriation action and IntelGenx does not co-defend, RedHill will provide IntelGenx with copies of all relevant documentation
so that IntelGenx will be informed of the continuing action and may comment upon such documentation sufficiently in advance of
any initial deadline for filing a response, provided, however, that if IntelGenx has not commented upon such documentation in a
reasonable time for RedHill to sufficiently consider IntelGenx’ comments prior to a deadline, or RedHill must act to preserve
the action, RedHill will be free to act without consideration of IntelGenx’ comments, if any.  Notwithstanding the
foregoing, and/or any language to the contrary, RedHill shall not be permitted to settle any threatened, pending or completed action,
suit, arbitration, or other alternate dispute resolution mechanism, or investigation, inquiry, administrative hearing or any other
actual, threatened or completed proceeding, whether civil, administrative, investigative or criminal including, without limitation,
any appeal therefrom (collectively, “Proceeding”), or any claim, issue or matter therein, on behalf of IntelGenx,
without the prior written consent of IntelGenx, such consent not to be unreasonably withheld, delayed or conditioned

 

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12.3.3           RedHill
agrees to inform IntelGenx promptly if RedHill decides not to take infringement or misappropriation action or not to continue such
action due to IntelGenx’ refusal to consent to a proposed settlement in order for IntelGenx to assume responsibility of infringement
or misappropriation action to be taken as per IntelGenx’ discretion.

 

In the event IntelGenx
does, at its discretion, undertake any infringement or misappropriation action, IntelGenx will provide RedHill with copies of all
relevant documentation so that RedHill will be informed of the continuing action and may comment upon such documentation sufficiently
in advance of any initial deadline for filing a response, provided, however, that if RedHill has not commented upon such documentation
in a reasonable time for IntelGenx to sufficiently consider RedHill’s comments prior to a deadline, or IntelGenx must act
to preserve the action, IntelGenx will be free to act without consideration of RedHill’s comments, if any. 

 

12.3.4           Co-operation.
The Parties will provide reasonable assistance to each other, including providing access to relevant documents and other evidence,
making its employees available at reasonable business hours, and joining the action to the extent necessary to allow the prosecuting
Party to maintain the action.

 

12.3.5           Recovery.
Any amounts recovered in connection with or as a result of any action contemplated by Sections 12.3.2 and 12.3.3, whether by settlement
or judgment, will be used to reimburse the Parties for their reasonable costs and expenses in making such recovery (which amounts
will be allocated pro rata if insufficient to cover the totality of such expenses), and any remainder received by RedHill will
be treated as Sublicense Sales Royalties and payments will be due in respect of same pursuant to this Agreement.

 

12.4        Patent
Infringement

 

12.4.1           License.
In the event that RedHill determines that the manufacturing, use or Commercialization of the Product or any other action authorized
under the License or any part thereof, is such that it is commercially reasonable to seek a license to the intellectual property
rights of any third party, RedHill shall, upon approval of the Steering Committee, be entitled to enter into negotiations with
such third party in order to reach an agreement according to which RedHill shall obtain a license or other applicable right or
a waiver from such party with respect to such intellectual property rights. In such event RedHill shall be entitled to deduct all
the payments made to such third party from Net Sales and/or Sublicense Sale Royalties.

 

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12.4.2           Claim
- Rights and Procedures. In the event that either IntelGenx or RedHill, become aware of any allegation or are sued by a
third party that the development or Commercialization of the Product infringes upon any intellectual property rights of such third
party (an “Infringement Allegation”), notice of an Infringement Allegation shall promptly be given to the other
Party. In the event that IntelGenx is sued independently of RedHill, RedHill shall provide notice to IntelGenx of its decision
to co-defend (i.e., equally share the costs resulting from the action) within sixty (60) calendar days from the date the relevant
suit becomes known to RedHill. Provided that an Infringement Allegation is not the result of a breach of warranty or representation
by IntelGenx, which shall be addressed as provided in Section 15.2 [Indemnification], any damages, losses and royalties or other
amounts awarded to the counterparty or paid in settlement and/or incurred in connection with an Infringement Allegation shall be
shared equally by the Parties.

 

12.4.3           In
the event of an Infringement Allegation wherein IntelGenx is sued independently of RedHill, IntelGenx shall, at its sole discretion,
have the first right to defend any such Infringement Allegation(s) using counsel of its choice. RedHill shall have the right but
not the obligation to join IntelGenx in the suit as may be necessary or advisable, and RedHill will make available its employees
and relevant records to assist in and to provide evidence for such suit. Should RedHill decide to join IntelGenx, all expenses,
fees (including reasonable legal fees and expenses), damages, losses and royalties or other amounts paid in settlement and/or incurred
in connection with the defense of any Infringement Allegation shall be shared equally by the Parties. In the event that IntelGenx
is solely financially responsible for any Proceeding other than the defense of any Infringement Allegation, all royalties and/or
other amounts paid in settlement, and/or recovered in connection with such shall be the sole benefit and/or responsibility of IntelGenx.

  

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12.4.4           Neither
Party shall, without the consent of the other Party, enter into any settlement or compromise or consent to any judgment in respect
of any claim and/or Proceeding related to rights licensed to RedHill under this Agreement, unless such settlement, compromise or
consent includes an unconditional release of the other Party from all liability arising out of the claim, if any, and does not
otherwise limit or impair the other Party’s rights.

 

13.         CONFIDENTIALITY

 

13.1        Disclosure
and Use Restriction.  The Parties agree that during the Term of this Agreement and thereafter, each Party will keep
completely confidential and will not publish, submit for publication or otherwise disclose, and
will not use for any purpose except for the purposes contemplated by this Agreement, any Confidential Information (as such term
is defined below) received from the other Party.

 

13.2        Confidential
Information. “Confidential Information” shall mean all information and know-how and any tangible embodiments
thereof provided by or on behalf of one Party to the other Party either in connection with the discussions and negotiations pertaining
to this Agreement or in the course of performing this Agreement, which may include data; knowledge; practices; processes; ideas;
research plans; engineering designs and drawings; research data; manufacturing processes and techniques; scientific, manufacturing,
marketing and business plans; and financial and personnel matters relating to the disclosing Party or to its present or future
Product, sales, suppliers, customers, employees, investors or business. Notwithstanding the foregoing, information or know-how
of a Party shall not be deemed Confidential Information of such Party for purposes of this Agreement if such information or know-how:

 

(i)          was
already known to the receiving Party, other than under an obligation of confidentiality or non-use, at the time of disclosure to
such receiving Party;

 

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(ii)         was
generally available or known to parties reasonably skilled in the field to which such information or know-how pertains, or was
otherwise part of the public domain, at the time of its disclosure to such receiving Party;

 

(iii)        became
generally available or known to parties reasonably skilled in the field to which such information or know-how pertains, or otherwise
became part of the public domain, after its disclosure to such receiving Party through no fault of the receiving Party;

 

(iv)        was
disclosed to such receiving Party, other than under an obligation of confidentiality or non-use, by a third party who had no obligation
to the disclosing Party not to disclose such information or know-how to others; or

 

(v)         was
independently discovered or developed by such receiving Party, as evidenced by their written records, without the use of Confidential
Information belonging to the disclosing Party and prior to any subsequent disclosure by the receiving Party.

 

All Licensed Know-How shall be deemed to
be Confidential Information of IntelGenx; provided that RedHill shall be entitled to disclose and use any Licensed Know-How in
the exercise of its rights under this Agreement.

 

13.3        Authorized
Disclosure. Notwithstanding the provisions of Section 13.1 above, a Party shall be entitled to disclose the Confidential
Information of the other Party hereto to the extent that such disclosure is:

 

(i)          made
in response to a valid order of a court of competent jurisdiction; provided, however, that such Party will first (to the
extent practicably possible) have given notice to such other Party and given such other Party a reasonable opportunity to quash
such order and to obtain a protective order requiring that the Confidential Information and documents that are the subject of such
order be held in confidence by such court or agency or, if disclosed, be used only for the purposes for which the order was issued;
and provided further that if a disclosure order is not quashed or a protective order is not obtained, the Confidential Information
disclosed in response to such court or governmental order will be limited to that information which is legally required to be disclosed
in response to such court or governmental order;

 

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(ii)         otherwise
required by law; provided, however, that the disclosing Party will provide such other Party with notice of such disclosure
in advance thereof to the extent practicably possible and to the extent permitted, will redact from such disclosure the other party’s
Confidential Information or designate the same as trade secret;

 

(iii)        made
by such Party to any Regulatory Authority or Governmental Authority as necessary for the development or Commercialization of a
Product, including the Product, in a country, as required in connection with any filing, application or request for Regulatory
Approval or as required by applicable securities laws and regulations, subject to the limitations in Section 13.3(ii);

 

(iv)        made
by such Party in connection with the performance of this Agreement, to Sublicensees, Affiliates, directors, officers, employees,
consultants, representatives or agents, each of whom prior to disclosure must be bound by obligations of confidentiality and non-use
at least equivalent in scope to those set forth in this Agreement;

 

(v)         made
by such Party in the course of submitting financial accounts to relevant authorities as per local statutory requirements or to
existing or potential acquirers; existing or potential collaborators; investment bankers; existing or potential investors, merger
candidates, partners, venture capital firms or other financial institutions or investors for purposes of obtaining financing; or,
bona fide strategic potential partners; each of whom prior to disclosure must be bound by obligations of confidentiality and non-use
at least equivalent in scope to those set forth in this Agreement; or

 

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(vi)        a
general description of the Product made by a Party to its shareholders and to potential investors with the aim of securing the
financing needed to continue the development of the Product.

 

14.         PRESS
RELEASES 

 

Press releases
or other similar public communication by either Party relating to the terms of this Agreement (but not, for the avoidance of doubt,
unless reference is made to the other Party or the terms of this Agreement, with respect to activities in exercise of its rights
under this Agreement) will be approved in advance by the other Party, which approval will not be unreasonably withheld or delayed.
Notwithstanding the foregoing, those communications required by applicable law, regulation or securities exchange rule (including,
but not limited to, a public offering prospectus), disclosures of information for which consent has previously been obtained, and
information of a similar nature to that which has been previously disclosed publicly with respect to this Agreement, will not require
advance approval, but will be provided to the other Party as soon as practicable after the release or communication thereof. For
the avoidance of doubt, the Parties may issue press releases regarding the fact that this Agreement has been signed and the nature
of the agreement so long as they do not describe the specific provisions hereof without approval from the other party.

 

15.         INDEMNIFICATION

 

15.1        Indemnification
of IntelGenx. RedHill will defend and hold IntelGenx and its directors, officers, employees and agents (“IntelGenx
Parties”) harmless, from and against any and all liability, suits, investigations, claims or demands by a third party
to the extent arising from or occurring as a result of or in connection with (a) the negligence or willful misconduct on the part
of RedHill in performing any activity contemplated by this Agreement or (b) a breach by RedHill of any representations, warranties,
or covenants set forth in this Agreement; except to the extent arising from the (i) negligence or willful misconduct on the part
of an IntelGenx Party; or (ii) breach by IntelGenx of any representations, warranties or covenants set forth in this Agreement.

 

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15.2        Indemnification
of RedHill. IntelGenx will defend and hold RedHill, its Affiliates, and their respective directors, officers, employees
and agents (“RedHill Parties”), harmless, from and against any and all liability, suits, investigations,
claims or demands by a third party to the extent arising from or occurring as a result of or in connection with (a) negligence
or willful misconduct on the part of IntelGenx or (b) breach by IntelGenx of any representations, warranties, or covenants set
forth in this Agreement, except to the extent the liability or loss arises from or occurs as a result of or in connection with
(i) negligence or willful misconduct on the part of a RedHill Party; or (ii) breach by RedHill of any representations, warranties,
or covenants set forth in this Agreement.

 

IntelGenx shall
further be responsible for and shall indemnify and hold RedHill harmless in respect of:

 

15.2.1  All
royalty and other payments required to be paid to other third parties in respect of the Product as a result of a claim by any of
IntelGenx’ existing or former employees, consultants or shareholders, or any person named in IntelGenx’ patents or
patent applications, or any person claiming it should have been named as an inventor in such patent applications.

 

15.3        Conditions
to Indemnity. Each Party’s agreement to indemnify
and hold the other harmless is conditioned upon the indemnified Party (i) providing written notice to the indemnifying Party of
any claim, demand or action arising out of the indemnified activities within thirty (30) days after the indemnified Party has knowledge
of such claim, demand or action, (ii) permitting the indemnifying Party to assume full responsibility to investigate, prepare for
and defend against any such claim or demand, (iii) assisting the indemnifying Party, at the indemnifying Party’s expense,
in the investigation of, preparation of and defense of any such claim or demand; and (iv) the indemnifying Party not compromising
or settling such claim or demand without the indemnified Party’s prior written consent, unless such settlement includes as
an unconditional term thereof the giving by the claimant or plaintiff to such indemnified Party a complete release from all liability
in respect of such claim or litigation; provided that, if the Party entitled to indemnification fails to promptly
notify the indemnifying Party pursuant to the foregoing clause (i), the indemnifying Party shall only be relieved of its indemnification
obligation to the extent it is prejudiced by such failure and provided further that the indemnified Party is not obligated
to notify the indemnifying Party of claims, demands and/or actions made
directly against the indemnifying Party only. Notwithstanding the foregoing, if in the reasonable judgment of the indemnified
Party, such suit or claim involves an issue or matter which could have a materially adverse affect on the business, operations
or assets of the indemnified Party, the indemnified Party may waive its rights to indemnity under this Agreement and control the
defense or settlement thereof, but in no event shall any such waiver be construed as a waiver of any indemnification rights such
indemnified Party may have at law or in equity.

 

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16.         TERM
AND TERMINATION

 

16.1        Term.
Unless earlier terminated in accordance with the provisions of this Article 16, the term of this Agreement (the “Term”)
commences upon the Effective Date and will continue until terminated in accordance with the terms hereof.

 

16.2        Termination.

 

16.2.1           Termination
for Breach. Failure by a Party to comply with any of its material obligations contained herein will entitle the Party not
in default to give to the defaulting Party notice specifying the nature of the material breach, requiring the defaulting Party
to make good or otherwise cure such material breach, providing specific actions that the defaulting Party could take to cure such
material breach, and stating its intention to invoke the provisions of Section 16.2 if such material breach is not cured. If such
material breach is not cured within 90 days after the receipt of such notice (or, if such material breach cannot be cured within
such 90-day period, if the defaulting Party does not commence actions to cure such material breach within such period and thereafter
diligently continue such actions), the Party not in default will be entitled, without limiting any of its other rights conferred
on it by this Agreement (except as expressly set forth herein), to terminate this Agreement by providing written notice to the
breaching Party.

 

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Notwithstanding anything
to the contrary herein, in the event of IntelGenx’ material breach of this Agreement, and without derogating from any of
RedHill’s other rights at law, RedHill shall have the right to continue all activities under the License granted herein and
to continue utilizing the Patents and the Licensed Know-How for the exploitation of the License, with the right to set-off, from
any sums due to IntelGenx hereunder, amounts equivalent to any damage caused to RedHill as a result of IntelGenx’ breach
hereunder.

 

Notwithstanding anything
to the contrary herein, in the event of termination of the Agreement by IntelGenx as a result of RedHill’s material breach
of this Agreement, and without derogating from any of IntelGenx’ other rights at law, IntelGenx shall have the right to continue
any and/or all activities contemplated in under and/or by this Agreement, terminate all rights granted to RedHill, continue utilizing
the Patents and the Know-How for the exploitation of the Products, with the right to set-off, from any sums due to RedHill hereunder,
amounts equivalent to any damage caused to IntelGenx as a result of RedHill breach hereunder.  

 

16.2.2     Voluntary
Termination. RedHill may forthwith terminate this Agreement upon the occurrence of any of the following events:

 

		(a)	IntelGenx fails to perform any of its obligations hereunder or makes any material misrepresentation
in this Agreement, which, if capable of being cured, has not been cured within 90 days after written notice by RedHill (in which
RedHill specifies the nature of such failure or misrepresentation);

 

(b)          IntelGenx
enters into any compromise with creditors or a general agreement for referral of payment with its creditor;

 

(c)          IntelGenx
makes or suffers to be made any transfer to any person, trustee, receiver, liquidator, or referee for the benefit of creditors;

 

(d)          IntelGenx
files a voluntary petition in bankruptcy; and

 

(e)          An
involuntary petition in bankruptcy is filed against IntelGenx and not dismissed within 60 days of filing.

 

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16.2.3     Termination
for Convenience. RedHill shall be entitled, in its sole discretion, to terminate this Agreement at any time on thirty (30)
days written notice to IntelGenx, without the need to pay IntelGenx any compensation in respect of such termination, in which case
the License granted under this Agreement shall immediately terminate and, except as permitted in Section 16.3.1, RedHill will immediately
cease any and all development and other activities regarding the Product. IntelGenx shall have no right to terminate this Agreement
other than for cause in accordance with the provisions of Section 16.2.1 above or in accordance with Section 16.2.4 below. Payment
obligations by RedHill under this Agreement incurred or accrued prior to the termination would remain in effect until completed.

 

16.2.4     IntelGenx
shall in furtherance of and in addition to the provisions of Section 16.2.1 above, be entitled, in its sole discretion, to terminate
this Agreement upon the occurrence of any of the following events:

 

(a)          RedHill
fails to perform any of its obligations hereunder or makes any material misrepresentation in this Agreement, which has not been
cured within 90 days after written notice by IntelGenx (in which IntelGenx specifies the nature of such failure or misrepresentation);

 

(b)          RedHill
enters into any compromise with creditors or a general agreement for referral of payment with its creditor;

 

(c)          RedHill
makes or suffers to be made any transfer to any person, trustee, receiver, liquidator, or referee for the benefit of creditors;

 

(d)          RedHill
files a voluntary petition in bankruptcy; and

 

(e)          An
involuntary petition in bankruptcy is filed against RedHill and not dismissed within 60 days of filing.

 

16.3        Consequences
of Termination

 

16.3.1           License.
Upon early termination of this Agreement, all rights granted to RedHill under Section 2.1 will, subject to the second paragraph
of Section 16.2.1, terminate; provided that RedHill shall have a period of 180 days after the date of termination to sell-off all
previously made Product, subject to Royalties and Sublicense Sale Royalties on such sales being duly paid to IntelGenx. Upon termination
of this Agreement all sublicenses granted by RedHill shall, at IntelGenx’ sole discretion, either terminate or, unless termination
is due to breach by IntelGenx or pursuant to Section 16.2.2, be automatically transferred to IntelGenx upon written request from
IntelGenx if permitted under the terms of the sublicense. For the greater certainty, any agreement with a Sublincensee shall be
consistent with this Agreement.

 

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16.3.2           Continuation
following IntelGenx’ Bankruptcy. The Parties agree that in the event that IntelGenx makes
a filing under bankruptcy or similar laws in any jurisdiction, RedHill shall have the protection afforded to the licensee under
the United States Bankruptcy Code, including but not limited to, the protections set forth in 11 U.S.C §365(n) or its equivalent
in any other jurisdiction which allows the licensee, upon rejection of the license agreement by the debtor-licensor or its
representative, the option to either retain the licensee’s rights in the intellectual property under the existing contract
while continuing to pay royalties, or to treat the executory contract as terminated.

 

16.3.3           Return
of Information and Materials. Upon early termination of this Agreement, each Party will return to the other all Confidential
Information of the other Party (except one copy of which may be retained for archival and compliance purposes), RedHill will return
to IntelGenx or its designee all Licensed Know-How and any other tangible materials received by RedHill under this Agreement and
RedHill will further waive and actively deregister or assign as requested by IntelGenx, all Patent right registrations made hereunder.

 

16.3.4           Accrued
Rights. Termination or expiration of this Agreement for any reason will be without prejudice to any rights or financial
compensation that will have accrued to the benefit of a Party prior to such termination or expiration. Such termination or expiration
will not relieve a Party from obligations that are expressly indicated to survive the termination or expiration of this Agreement.

 

16.3.5           Survival.
Sections 9, 11, 13, 15, 16.3 and 17.3 of this Agreement will survive expiration or termination of this Agreement for any reason.

 

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17.         MISCELLANEOUS

 

17.1        Assignment.
Without the prior written consent of the other Party hereto, neither Party will sell, transfer, assign, delegate, pledge or otherwise
dispose of, whether voluntarily, involuntarily, by operation of law or otherwise, this Agreement or any of its rights or duties
hereunder; provided, however, that (i) either Party hereto may assign or transfer this Agreement or any of its rights or obligations
hereunder without the consent of the other Party to any Affiliate, or to any third party successor in interest with which it has
merged or consolidated, or to which it has transferred all or substantial part of its assets or stock to which this Agreement relates.
Any purported assignment or transfer in violation of this Section 17.1 will be void ab initio and of no force or effect.

 

17.2        Severability.
Should any term or provision of this Agreement be or become invalid or unenforceable or should this Agreement contain
an omission, the validity or enforceability of the remaining terms or provisions shall not be affected. In such case, subject to
the next following sentence, the Parties shall immediately commence to negotiate in good faith in order to replace the invalid
or unenforceable term or provision by such other valid or enforceable term or provision which comes as close as possible to the
original intent and effect of the invalid or unenforceable term or provision, or respectively, to fill the omission by inserting
such term or provision which the Parties would have reasonably agreed to, if they had considered the omission at the date hereof.
In the event that any term or provision as aforesaid is invalid, void or unenforceable by reason of its scope, duration or area
of applicability or some similar limitation as aforesaid, then the court making such determination shall have the power to reduce
the scope, duration, area or applicability of the term or provision so that they shall be enforceable to the maximum scope, duration,
area or applicability permitted by applicable law which shall not exceed those specified in this Agreement or to replace such term
or provision with a term or provision that comes closest to expressing the intention of the invalid or unenforceable term or provision

 

    	39

    	 

    

 

17.3        Governing
Law. This Agreement shall be governed by and construed in accordance with English law, without reference to any rules of
conflicts of laws. Except as expressly otherwise provided in this Agreement, the courts of London, England shall have exclusive
jurisdiction of any dispute arising out of or relating to the interpretation of any provisions of this Agreement, or the failure
of any Party to perform or comply with any obligations or conditions applicable to such Party pursuant to this Agreement; provided
that disputes as expressly set forth in Sections 4.4 and 5.7 above shall be settled by arbitration in accordance with the terms
set forth hereunder.

 

The place of arbitration
of any dispute shall be London, England. The arbitrator shall be a person mutually agreed upon by both Parties and with relevant
experience in the pharmaceutical industry. In the absence of agreement as to the identity of the arbitrator within 7 days, each
Party shall propose the other a candidate to serve as an arbitrator and the other Party shall have to agree or reject and if rejected,
provide detailed explanation for such rejection. This mechanism shall be repeated 3 times but not longer than 45 days. If upon
the expiry of 45 days, the Parties have still not agreed on a certain arbitrator, then the arbitrator shall be appointed by the
Chairman of the English Bar Association, provided that, with respect to scientific or regulatory disputes based on “deadlock”
within the Steering Committee, the appointed arbitrator must have relevant experience in the pharmaceutical industry. Any award
rendered by the arbitrator shall be final and binding upon the Parties. Notwithstanding, if a Party shall be in the opinion that
certain resolution of the arbitrator might have adverse effects on patients then such party shall be entitled to apply to the authorities
to receive their opinion on such matter. The arbitrator shall be bound by the substantive law of England and be liable to give
written grounds for its decision. Judgment upon any award rendered may be entered in any court having jurisdiction, or application
may be made to such court for a judicial acceptance of the award and an order of enforcement, as the case may be. Each Party shall
pay its own expenses of arbitration, and the expenses of the arbitrator shall be equally shared between the Parties, unless the
arbitrator assesses as part of their award all or any part of the arbitration expenses of a Party (including reasonable attorneys’
fees) against the other Party.

 

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This Section 17.3
shall not prohibit a Party from seeking injunctive relief from a court of competent jurisdiction in the event of a breach or prospective
breach of this Agreement by the other Party, which would cause irreparable harm to the first Party.

 

The execution
of this Agreement shall constitute the execution of an arbitration deed.

 

17.4        Notices.
All notices or other communications that are required or permitted hereunder will be in writing and delivered personally with acknowledgement
of receipt, sent by electronic mail (provided receipt is acknowledged), facsimile (and promptly confirmed by personal delivery,
registered or certified mail or overnight courier as provided herein), sent by nationally-recognized overnight courier or sent
by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

 

If to IntelGenx, to:

 

IntelGenx
Corp.

6425 Abrams

Ville St-Laurent (Quebec) H4S 1X9

Canada

Fax: +1 514-331-0436

 

If to RedHill, to:

 

RedHill Biopharma
Ltd.

42 Givati
St.

Ramat Gan
52232

Israel

Fax: +972
(3) 725 5723

 

or to such other
address as the Party to who notice is to be given may have furnished to the other Party in writing in accordance herewith. Any
such communication will be deemed to have been given (i) when delivered, if personally delivered, (ii) on the business day (on
the receiving end) after dispatch, if sent by nationally-recognized overnight courier (third business day if sent internationally),
(iii) on the third business day following the date of mailing, if sent by mail (fifth business day if sent internationally) and
(iv) on the first business day (on the receiving end) after being sent by facsimile or by if sent by electronic mail followed by
facsimile. It is understood and agreed that this Section 17.4 is not intended to govern the day-to-day business communications
necessary between the Parties in performing their duties, in due course, under the terms of this Agreement.

 

    	41

    	 

    

 

17.5        Entire
Agreement; Modifications. This Agreement sets forth and constitutes the entire agreement and understanding between the
Parties with respect to the subject matter hereof and all prior agreements, understanding, promises and representations, whether
written or oral, with respect thereto, including the term sheet executed between the Parties dated April 19, 2010, are superseded
hereby,. Each Party confirms that it is not relying on any representations or warranties of the other Party except as specifically
set forth herein. No amendment, modification, release or discharge will be binding upon the Parties unless in writing and duly
executed by authorized representatives of both Parties.

 

17.6        Relationship
of the Parties. It is expressly agreed that the Parties will be independent contractors of one another and that the relationship
between the Parties will not constitute a partnership, joint venture or agency.

 

17.7        Waiver.
Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no
such waiver will be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such
term or condition. Any such waiver will not be deemed a waiver of any other right or breach hereunder.

 

17.8        Counterparts.
This Agreement may be executed in two (2) or more counterparts, each of which will be deemed an original, but all of which together
will constitute one and the same instrument.

 

17.9        No
Third Party Beneficiaries. The representations, warranties, covenants and agreements set forth in this Agreement are for
the sole benefit of the Parties hereto and their successors and permitted assigns, and they will not be construed as conferring
any rights on any other parties.

 

    	42

    	 

    

 

17.10      Further
Assurances. Each Party will duly execute and deliver, or cause to be duly executed and delivered, such further instruments
and do and cause to be done such further acts and things, including the filing of such assignments, agreements, documents and instruments,
as may be necessary to carry out the provisions and purposes of this Agreement.

 

17.11      Force
Majeure. Neither party shall be responsible to the other for failure or delay in performing
any of its obligations under this Agreement or for other non-performance hereof but only to the extent that such delay or non-performance
is occasioned by a cause beyond the reasonable control and without fault or negligence of such party, including, but not limited
to earthquake, fire, flood, explosion, discontinuity in the supply of power, court order or governmental interference, act of God,
strike or other labor trouble, act of war or terrorism and provided that such party will inform the other party as soon as is reasonably
practicable and that it will entirely perform its obligations immediately after the relevant cause has ceased its effect. If any
such force majeure event continues for a continuous period of 12 months, the Party whose performance is not prevented by such event
may terminate this Agreement with immediate effect by providing the other Party with written notice.

 

IN WITNESS WHEREOF,
the Parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date.

 

	IntelGenx Corp.	 	RedHill Biopharma Ltd.

 

	Signature: 	/s/ Horst G. Zerbe	 	Signature:	/s/ Dror Ben-Asher, /s/ Ori Shilo

 

	Name:	Horst G. Zerbe	 	Name:	Dror Ben-Asher; Ori Shilo

 

	Title:	President & CEO	 	Title:	CEO ; VP Finance & Operation

 

    	43

    	 

    

 

IntelGenx Technologies Corp (“Parent
Guarantor”), hereby guarantees, absolutely and unconditionally, the timely and complete performance by IntelGenx Corp.
of the obligations of IntelGenx Corp., and the payment by IntelGenx Corp. of the amounts required to be paid by IntelGenx Corp.,
in each case as provided for in this Agreement and hereby agrees to pay any and all reasonable expenses (including reasonable attorneys'
fees and disbursements) which may be paid or incurred by RedHill Biopharma Ltd. in enforcing any rights with respect to, or collecting
against, Parent Guarantor or IntelGenx Corp. Parent Guarantor agrees that this constitutes a guarantee of payment and not of collection,
and RedHill Biopharma Ltd. shall not be obligated to initiate, pursue or exhaust any form of recourse or obtain any judgment against
IntelGenx Corp or others or to realize upon or exhaust any collateral security held by or available to RedHill Biopharma Ltd. before
being entitled to payment from Parent Guarantor. The liability of Parent Guarantor shall not be limited, diminished or affected
by (i) any failure by RedHill Biopharma Ltd. to file or enforce any claim against IntelGenx Corp or others (in administration,
bankruptcy or otherwise), or (ii) any other circumstance which might otherwise constitute a legal or equitable discharge of
a guarantor. Parent Guarantor waives diligence, presentment, protest, notice of dishonor or protest or default, demand for payment
upon IntelGenx Corp or the undersigned, notice of acceptance, and all other notices and demands whatsoever. The guarantee set forth
herein is a continuing guarantee, and it will not be discharged until, and will remain in full force and effect until, performance
or payment in full of all actions and other obligations of IntelGenx Corp provided in this Agreement or, if earlier, termination
of this Agreement in accordance with its terms. Notwithstanding the foregoing, IntelGenx Technologies Corp. shall only act as guarantor
for IntelGenx Corp. in the event that RedHill completes and prevails in the arbitration procedure set forth in Section 17.3.

 

IntelGenx Technologies Corp.

	Signature:	/s/ Horst G. Zerbe	 

Name: Horst G. Zerbe

Title: President & CEO

 

    	44

    	 

    

 

Annex A: INTELGENX Patents

US Patent 6231957

US Patent 6660292

US Patent 7132113

US Provisional Application US61/267626

 

    	45

    	 

    

 

ANNEX B INTELGENX LICENSED KNOWHOW

 

Includes, but is not limited to, the following documents:

 

		1.	[****] Immediate Release Film

 

		2.	Disintegration and Dissolution Time

 

		3.	Film Scale-up Info Package

 

		4.	Film General Characteristics

 

		5.	Method of Analysis

 

		6.	Manufacturing Information

 

		7.	Testing Information

 

		8.	Dissolution Studies

 

		9.	Physical Characteristics

 

		10.	Clinical Study Report

 

		11.	Pilot Bio Summary

 

		12.	Description and Composition Summary

 

		13.	Protocol for Pilot BA Study

 

		14.	Packaging Information

 

		15.	CRBIO Data Report

 

		16.	CRBIO Report Riza

 

		17.	Clinical Formation and Optimazation Process

 

		18.	Stability Data-Binary Mixtures

 

		19.	Dissolution Studies (pH=1.2)

 

		20.	pH data and saliva formulation

 

    	46

    	 

    

 

ANNEX 4.2

 

[****] [2 pages redacted]

 

    	47

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