Document:

IntelGenx Corp.: Exhibit 10.1 - Filed by newsfilecorp.com

Exhibit 10.1

CONFIDENTIAL TREATMENT REQUESTED 
Redacted portions
are indicated by [****] 

Redacted portions filed separately with
the SEC pursuant 
to the confidential treatment request 

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. 

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1.6                “[****] Agreement” shall mean a binding definitive
agreement that 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. 

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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. 

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1.10                “Product” shall mean [****] - [****] 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.

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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. 

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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. 

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.

8 

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. 

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 [****], and thereafter the Revenue Share under
Section 8.3 shall be [****]. 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.

10 

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.

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	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. 

13 

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.

15

	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: 

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. 

16 

	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. 

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 
	 	Successful completion of scale up, process 	[****] 
	 	development, and production of pivotal batches, that is,
	  
	 	batches capable of being used for clinical trials to 	  
	 	demonstrate the bioequivalence of the Product to the 	  
	 	originator/reference product ([****]) to establish 	  
	 	equivalence and/or efficacy and safety of the Product 	  
	 	  	  
	 	Filing and acceptance of an New Drug Application 	[****] 
	 	(NDA) by the US FDA 	  
	 	  	  
	 	Marketing Approval of the Product by the US FDA 	[****] 

17

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)
[****] of Net Sales if Product is marketed by RedHill or one of its Affiliates
or (ii) [****] of Sublicense Sales Royalties actually received by RedHill if
Product is marketed by Sublicensees; provided that the Revenue Share as
aforesaid shall be [****] 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 [****],.

8.4               
Notwithstanding, the foregoing, up until the receipt by RedHill of the first
[****] 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 [****] of Sublicense Sales Royalties actually received by
RedHill (the “Initial Proceeds Split”) [****]. 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 [****] 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 [****] 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.

18 

8.4.2                RedHill shall receive [****] of all [****]. 

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 

19

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 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. 

20 

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. 

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.

21

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.. 

22

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. 

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. 

23 

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 (“[****] Agreement”) 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. 

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. 

24 

10.2.4             Additional Licenses. To the best of IntelGenx’
knowledge and other than as described in the [****] Agreement, 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. 

	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. 

25 

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. 

26 

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.

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
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.

27 

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.

28

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.

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. 

29 

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. 

30

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; 

(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. 

31

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;  

(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);

32 

(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 

(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. 

33     

	 	 
	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.

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. 

34 

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. 

	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. 

35

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.

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. 

36

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. 

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);

37

	 	(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.

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. 

38 

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.

	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 

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. 

39

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. 

40 

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:

41

	 	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. 

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. 

42 

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.

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. 

43

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: _______________________	Signature:    
    _______________________
	Name:       
    _______________________	Name: Dror Ben-Asher 
	Title:         
    _______________________	Title: CEO 

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: 
	Name: 
	Title: 

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 
[Attached] 

47

[****]

48

[****] 

49Longhai Steel Inc.: Exhibit 4.6 - Filed by newsfilecorp.com

Exhibit 4.6 

WARRANT AGREEMENT 

This Warrant Agreement (the “Agreement”) is made as of
______________, 2010 between Longhai Steel Inc., a Nevada corporation, with offices at No. 1 Jingguang Road, Neiqiu County, Xingtai City, Hebei Province, China (the
“Company”), and Pacific Stock Transfer, LLC, a Nevada corporation, with offices at 4045 South Spencer Street, Suite 403, Las Vegas, NV 89119 (the “Warrant Agent”). 

WHEREAS, the Company is engaged in a public offering (the “Public Offering”) of units (the “Units”) and, in connection therewith, has determined to issue and deliver up to 1,250,000
warrants to the public investors (the “Warrants”) evidencing the right of the holder thereof to purchase shares of the Company’s common stock, $0.0001 par value per share (the “Common Stock”), as described herein;

WHEREAS, the Company has filed with the Securities and Exchange Commission a Registration Statement on Form S-1, No. 333- 168226, as amended, (the “Registration Statement”), for the
registration, under the Securities Act of 1933, as amended (the “Act”) of, among other securities, the Warrants and the Common Stock issuable upon exercise of the Warrants; WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange, cancellation and exercise of the Warrants; WHEREAS, the Company desires to provide for the form and
provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and WHEREAS, all acts and
things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent as provided herein, the valid, binding and legal obligations of the Company,
and to authorize the execution and delivery of this Agreement. 

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows: 

1. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act
as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Agreement. 

2. Warrants. 

2.1 Form of Warrant. Each Warrant shall be issued in registered form only, shall be in substantially the form of Exhibit A hereto, the provisions of which are incorporated herein, and shall be
signed by, or bear the facsimile signature of, the President and the Secretary of the Company or such other officer(s) of the Company designated by its board of directors. In the event the person whose facsimile signature has been placed upon any
Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance. 

2.2 Effect of Countersignature. Unless and until countersigned by the Warrant Agent pursuant to this Agreement, a Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.

2.3 Registration. 

2.3.1 Warrant Register. The Warrant Agent shall maintain books (the “Warrant Register”), for the registration of original issuance and the registration of transfer of the Warrants. Upon the
initial issuance of the
Warrants, the Warrant Agent shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company. 

2.3.2 Registered Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name such Warrant shall be registered
upon the Warrant Register (the “registered holder”), as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on the Warrant made by anyone other than the
Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. 

3. Terms and Exercise of Warrants. 

3.1 Warrant Price. One Warrant shall, when countersigned by the Warrant Agent, entitle the registered holder thereof, subject to the provisions of such Warrant and of this Agreement, to purchase from the
Company one share of Common Stock, at the price of $ per whole share, subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section 3.1. The term “Warrant Price” as used in this Agreement refers to
the price per share at which Common Stock may be purchased at the time a Warrant is exercised. The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date. 

3.2 Duration of Warrants. A Warrant may be exercised only during the period (the “Exercise Period”) commencing on , 2010 and terminating at 5:00 p.m., New York City time on , 2014
(“Expiration Date”). Each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Agreement shall cease at the close of business on the Expiration
Date.

3.3 Exercise of Warrants. 

3.3.1 Payment. Subject to the provisions of the Warrant and this Agreement, a Warrant, when countersigned by the Warrant Agent, may be exercised by the registered holder thereof by surrendering it, at the
office of the Warrant Agent, or at the office of its successor as Warrant Agent, with the subscription form, as set forth in the Warrant, duly executed, and by paying in full, in lawful money of the United States, in cash, good certified check or
good bank draft payable to the order of the Company (or as otherwise agreed to by the Company), the Warrant Price for each full share of Common Stock as to which the Warrant is exercised and any and all applicable taxes due in connection with the
exercise of the Warrant, the exchange of the Warrant for the Common Stock, and the issuance of the Common Stock. 

3.3.2 Issuance of Certificates. As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment of the Warrant Price, the Company shall issue to the registered holder of
such Warrant a certificate or certificates for the number of full shares of Common Stock to which such holder is entitled, registered in such name or names as may be directed by such holder, and if such Warrant shall not have been exercised in full,
a new countersigned Warrant for the number of shares as to which such Warrant shall not have been exercised. Notwithstanding the foregoing, the Company shall not be obligated to deliver any securities pursuant to the exercise of a Warrant unless a
registration statement under the Act with respect to the Common Stock is effective. Warrants may not be exercised by, or securities issued to, any registered holder in any state in which such exercise would be unlawful. 

3.3.3 Valid Issuance. All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Agreement shall be validly issued, fully paid and nonassessable. 

3.3.4 Date of Issuance. Each person in whose name any such certificate for shares of Common Stock is issued shall for all purposes be deemed to have become the holder of record of such shares on the date
on which the Warrant was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company
are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. 

 2

4. Adjustments. 

4.1 Stock Dividends — Split-Ups. If after the date hereof, and subject to the provisions of Section 4.6 below, the number of outstanding shares of Common Stock is increased by a stock dividend
payable in shares of Common Stock, or by a split-up of shares of Common Stock, or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of Common Stock issuable upon exercise of each
Warrant shall be increased in proportion to such increase in outstanding shares of Common Stock. 

4.2 Aggregation of Shares. If after the date hereof, and subject to the provisions of Section 4.6, the number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse
stock split or reclassification of shares of Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Common Stock issuable
upon exercise of each Warrant shall be decreased in proportion to such decrease in outstanding shares of Common Stock. 

4.3 Adjustments in Exercise Price. Whenever the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided in Section 4.1 and 4.2 above, the Warrant Price shall
be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately
prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter. 

4.4 Replacement of Securities Upon Reorganization, Etc. In case of any reclassification or reorganization of the outstanding shares of Common Stock (other than a change covered by Section 4.1 or 4.2
hereof or that solely affects the par value of such shares of Common Stock), or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing
corporation and that does not result in any reclassification or reorganization of the outstanding shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of the Company as an
entirety or substantially as an entirety in connection with which the Company is dissolved, the Warrant holders shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and
in lieu of the shares of Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash)
receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the Warrant holder would have received if such Warrant holder had exercised his, her or its Warrant(s)
immediately prior to such event; and if any reclassification also results in a change in shares of Common Stock covered by Section 4.1 or 4.2, then such adjustment shall be made pursuant to Sections 4.1, 4.2, 4.3 and this Section 4.4. The provisions
of this Section 4.4 shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers. 

4.5 Notices of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of shares issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant
Agent, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3 or 4.4, then, in any such event, the Company shall give written notice to each Warrant holder, at the last address
set forth for such holder in the Warrant Register, of the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event. 

4.6 No Fractional Shares. Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional shares upon exercise of Warrants and no payment will be made with
respect to any fractional share of Common Stock to which any holder of Warrants might otherwise be entitled upon exercise of Warrants. 

 3

4.7 Form of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same Warrant Price and the same
number of shares as is stated in the Warrants initially issued pursuant to this Agreement. However, the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not
affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed. 

5. Transfer and Exchange of Warrants. 

5.1 Registration of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer, properly
endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by
the Warrant Agent. The Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request. 

5.2 Procedure for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer, and thereupon the Warrant Agent shall issue in exchange
therefor one or more new Warrants as requested by the registered holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that in the event that a Warrant surrendered for transfer bears a
restrictive legend, the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange therefor until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether
the new Warrants must also bear a restrictive legend. 

5.3 Fractional Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the issuance of a warrant certificate for a fraction of a warrant.

5.4 Service Charges. No service charge shall be made for any exchange or registration of transfer of Warrants. 

5.5 Warrant Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Agreement, the Warrants required to be issued pursuant
to the provisions of this Section 5, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose. 

6. Other Provisions Relating to Rights of Holders of Warrants. 

6.1 No Rights As Shareholder. A Warrant does not entitle the registered holder thereof to any of the rights of a shareholder of the Company, including, without limitation, the right to receive dividends,
or other distributions, to exercise any preemptive rights to vote or to consent or to receive notice as shareholders in respect of the meetings of shareholders or the election of directors of the Company or any other matter. 

6.2 Lost, Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may on such terms as to indemnity or otherwise as they may in
their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall
constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone. 

6.3 Reservation of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common Stock that will be sufficient to permit the exercise in
full of all outstanding Warrants issued pursuant to this Agreement. 

 4

6.4 Registration of Common Stock. The Company has filed with the Securities and Exchange Commission a Registration Statement for the registration, under the Act, of, and it shall take such action as is
necessary to qualify for sale, in those states in which the Warrants were initially offered by the Company, the Common Stock issuable upon exercise of the Warrants. The Company will use its best efforts to maintain the effectiveness of such
Registration Statement until the expiration of the Warrants in accordance with the provisions of this Agreement. 

7. Concerning the Warrant Agent and Other Matters. 

7.1 Payment of Taxes. The Company will from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in connection with the issuance or delivery of shares
of Common Stock upon the exercise of the Warrants, but the Company shall not be obligated to pay any transfer taxes in connection with the Warrants or such shares. 

7.2 Resignation, Consolidation, or Merger of Warrant Agent. 

7.2.1 Appointment of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after
giving sixty (60) days’ notice in writing to the Company. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the
Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of the Warrant (who shall, with such notice,
submit his Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost. Any
successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation in good standing and authorized to exercise corporate trust powers and subject to supervision or examination by federal or state authority. After
appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any
further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority,
powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in
and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations. 

7.2.2 Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the transfer agent for the
Common Stock not later than the effective date of any such appointment. 

7.2.3 Merger or Consolidation of Warrant Agent. Any corporation into which the Warrant Agent may be merged or with which it may be consolidated or any corporation resulting from any merger or consolidation
to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement without any further act. 

7.3 Fees and Expenses of Warrant Agent. 

7.3.1 Remuneration. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and will reimburse the Warrant Agent upon demand for all
expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder. 

7.3.2 Further Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered all such further and other acts, instruments, and
assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement. 

 5

7.4 Liability of Warrant Agent. 

7.4.1 Reliance on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the
President, Chairman of the Board or Secretary of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement. 

7.4.2 Indemnity. The Warrant Agent shall be liable hereunder only for its own negligence, willful misconduct or bad faith. The Company agrees to indemnify the Warrant Agent and save it harmless against any
and all liabilities, including judgments, costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement except as a result of the Warrant Agent’s negligence, willful misconduct, or bad
faith. 

7.4.3 Exclusions. The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution of any Warrant (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant; nor shall it be responsible to make any adjustments required under the provisions of Section 4 hereof or
responsible for the manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether any shares of Common Stock will when issued be valid and fully paid and nonassessable. 

7.5 Acceptance of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the terms and conditions herein set forth and, among other things,
shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the Company, all moneys received by the Warrant Agent for the purchase of shares of Common Stock through the exercise of Warrants. 

8. Miscellaneous Provisions. 

8.1 Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns.

8.2 Notices. Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall be sufficiently given when so
delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Company with the Warrant
Agent), as follows: 

Longhai Steel Inc. 

No. 1 Jingguang Road 

Neiqiu County, Xingtai City, Hebei Province, China 

Attn: Dr. Eberhard Kornotzki, CFO 

Any notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by
certified mail or private courier service within five days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company), as follows: 

Pacific Stock Transfer, LLC 

4045 South Spencer Street 

Suite 403, Las Vegas, NV 89119 

6

8.3 Applicable Law. The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York, without giving effect to
conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The Company and the Warrant Agent hereby agree that any action, proceeding or claim arising out of or relating in any way to this
Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submit to such jurisdiction, which jurisdiction shall be exclusive. The Warrant
Agent hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any such process or summons to be served upon the Warrant Agent may be served by transmitting a copy thereof by registered or
certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 8.2 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Warrant Agent in any action, proceeding
or claim. 

8.4 Persons Having Rights Under This Agreement. Nothing in this Agreement expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or
give to, any person or corporation other than the parties hereto and the registered holders of the Warrants, any right, remedy, or claim under or by reason of this Agreement or any covenant, condition, stipulation, promise, or agreement herein. All
covenants, conditions, stipulations, promises, and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the registered holders of the Warrants. 

8.5 Examination of the Warrant Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent for inspection by the registered holder of any Warrant. The
Warrant Agent may require any such holder to submit his Warrant for inspection by it. 

8.6 Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument. 

8.7 Effect of Headings. The Section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof. 

7

IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the day and year first above written. 

	
Attest:
		
 	
LONGHAI STEEL INC.
	
	
 
		
 	
 
	
	
 
		
 	
By:
	
	
 
		
 	
Name:
	
	
 
		
 	
Title:
	
	
 
		
 	
 
	
	
Attest:
		
 	
PACIFIC STOCK TRANSFER, LLC
	
	
 
		
 	
 
	
	
 
		
 	
By:
	
	
 
		
 	
Name:
	
	
 
		
 	
Title:
	

EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT 

AGENT AS PROVIDED HEREIN 

Warrant Certificate evidencing 

Warrants to Purchase Common Stock, $0.0001 par value per share, as described herein.

Longhai Steel Inc. 

	
No. ________	
CUSIP No. ________

VOID AFTER 5:00 P.M., NEW YORK CITY TIME, 

ON ________, 2014, OR UPON EARLIER CANCELLATION 

This certifies that ________________________, or its registered assigns, is the registered holder of
___________________ warrants to purchase certain securities (each a “Warrant”). Each Warrant entitles the holder thereof, subject to the
provisions contained herein and in the Warrant Agreement (as defined below), to purchase from Longhai Steel Inc., a Nevada corporation (the “Company”), one share of the Company’s Common Stock (each, a
“Share”) at $ ____ initially (the “Exercise Price”) shall be, subject to adjustments as set forth in the Warrant Agreement (as defined below). 

Subject to the terms of the Warrant Agreement, each Warrant evidenced hereby may be exercised, as specified herein, on any Business Day (as defined below) occurring during the period (the “Exercise
Period”) commencing on ________________, 2010 and ending at 5:00 P.M., EST, on
________________, 2014 (the “Expiration Date”). Each Warrant remaining unexercised after 5:00 P.M., New York City time on the Expiration Date shall become void, and all
rights of the holder of this Warrant Certificate evidencing such Warrant shall cease. 

The holder of the Warrants represented by this Warrant Certificate may exercise a Warrant by delivering, not later than 5:00 P.M., New York City time, on any Business Day during the Exercise Period (the
“Exercise Date”) to Pacific Stock Transfer, LLC (the “Warrant Agent,” which term includes any successor warrant agent under the Warrant Agreement described below) at its corporate trust department at 4045 South
Spencer Street, Suite 403, Las Vegas, NV 89119 (i) this Warrant Certificate and the Warrants to be exercised (the “Book-Entry Warrants”) free on the records of The Depository Trust Company (the “Depository”) to
an account of the Warrant Agent at the Depository designated for such purpose in writing by the Warrant Agent to the Depository, (ii) an election to
purchase (“Election to Purchase”), properly executed (A) by the holder hereof on the reverse of this Warrant Certificate or (B) properly executed by the institution in whose account the Warrant is recorded on the records of the
Depository (the “Participant”) substantially in the form included on the reverse hereof, as applicable and (iii) the Exercise Price for each set of Warrants to be exercised in lawful money of the United States of America by
certified or official bank check or by bank wire transfer in immediately available funds. If any of (a) this Warrant Certificate or the Book-Entry Warrants, (b) the Election to Purchase, or (c) the Exercise Price therefor, is received by the Warrant
Agent after 5:00 P.M., New York City time, the Warrants will be deemed to be received and exercised on the Business Day next succeeding the date such items are received and such date shall be the Exercise Date for purposes hereof. If the date such
items are received is not a Business Day, the Warrants will be deemed to be received and exercised on the next succeeding day which is a Business Day and such date shall be the Exercise Date. If the Warrants to be exercised are received or deemed to
be received after the Expiration Date, the exercise thereof will be null and void and any funds delivered to the Warrant Agent will be returned to the holder as soon as practicable. In no event will interest accrue on funds deposited with the
Warrant Agent in respect of an exercise or attempted exercise of Warrants. The validity of any exercise of Warrants will be determined by the Warrant Agent in its sole discretion and such determination will be final and binding upon the holder of
the Warrants and the Company. Neither the Warrant Agent nor the Company shall have any obligation to inform a holder of Warrants of the invalidity of any exercise of Warrants. 

As used herein, the term “Business Day” means any day that is not a Saturday or Sunday and is not a United States federal holiday or a day on which banking institutions generally are authorized or
obligated by law or regulation to close in New York City. 

Warrants may be exercised only in whole numbers of Warrants. No fractional shares of Common Stock are to be issued upon the exercise of any Warrant and no payment will be made with respect to any fractional share of
Common Stock to which any holder of Warrants might otherwise be entitled upon exercise of Warrants. If fewer than all of the Warrants evidenced by this Warrant Certificate are exercised, a new Warrant Certificate for the number of Warrants remaining
unexercised shall be executed by the Company and countersigned by the Warrant Agent as provided in Section 2 of the Warrant Agreement, and delivered to the holder of this Warrant Certificate at the address specified on the books of the Warrant Agent
or as otherwise specified by such Registered Holder. 

This Warrant Certificate is issued under and in accordance with the Warrant Agreement, dated as of , 2010 (the “Warrant Agreement”), between the Company and the Warrant Agent and is subject to the
terms and provisions contained in the Warrant Agreement, to all of which terms and provisions the holder of this Warrant Certificate and the beneficial owners of the Warrants represented by this Warrant Certificate consent by acceptance hereof.
Copies of the Warrant Agreement are on file and can be inspected at the above-mentioned office of the Warrant Agent and at the office of the Company at No. 1 Jingguang Road, Neiqiu County, Xingtai City, Hebei Province, China. 

The accrual of dividends, if any, on the Shares issued upon the valid exercise of any Warrant will be governed by the terms generally applicable to such Shares. From and after the issuance of such Shares, the former
holder of the Warrants exercised will be entitled to the benefits generally available to other holders of Shares and such former holder’s right to receive payments of dividends and any other amounts payable in respect of the Shares shall be
governed by, and shall be subject to, the terms and provisions generally applicable to such Shares. 

The Exercise Price and the number of Shares purchasable upon the exercise of each set of two Warrants shall be subject to adjustment as provided pursuant to Section 4 of the Warrant Agreement. 

Upon due presentment for registration of transfer or exchange of this Warrant Certificate at the stock transfer division of the Warrant Agent, the Company shall execute, and the Warrant Agent shall countersign and
deliver, as provided in Section 5 of the Warrant Agreement, in the name of the designated transferee one or more new Warrant Certificates of any authorized denomination evidencing in the aggregate a like number of unexercised Warrants, subject to
the limitations provided in the Warrant Agreement. 

Neither this Warrant Certificate nor the Warrants evidenced hereby shall entitle the holder hereof or thereof to any of the rights of a holder of the Shares, including, without limitation, the right to receive
dividends, if any, or payments upon the liquidation, dissolution or winding up of the Company or to exercise voting rights, if any. 

The Warrant Agreement and this Warrant Certificate may be amended as provided in the Warrant Agreement including, under certain circumstances described therein, without the consent of the holder of this Warrant
Certificate or the Warrants evidenced thereby. 

THIS WARRANT CERTIFICATE AND ALL RIGHTS HEREUNDER AND UNDER THE WARRANT
AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS FORMED AND TO BE
PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS
OF LAW PROVISIONS THEREOF TO THE EXTENT SUCH PRINCIPLES OR RULES WOULD REQUIRE
OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. 

This Warrant Certificate shall not be entitled to any benefit under the Warrant Agreement or be valid or obligatory for any purpose, and no Warrant evidenced hereby may be exercised, unless this Warrant Certificate has
been countersigned by the manual signature of the Warrant Agent. 

 2

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

	
Dated as of ________, 2010
	

	
 LONGHAI STEEL INC.
	
	
 
	
	
 By:
	
	
 Name:
	
	
 Title:
	
	
 
	

	
PACIFIC STOCK TRANSFER, LLC
	
	
COMPANY, AS WARRANT AGENT
	
	
 
	
	
By:
	
	
Name:
	
	
Title:
	

3

[REVERSE]  

Instructions for Exercise of Warrant 

To exercise the Warrants evidenced hereby, the holder or Participant must, by 5:00 P.M., New York City time, on the specified Exercise Date, deliver to the Warrant Agent at its stock transfer division, a certified or
official bank check or a wire transfer in immediately available funds, in each case payable to the Warrant Agent at Account No.
___________________, in an amount equal to the Exercise Price in full for the Warrants exercised. In addition, the Warrant holder or
Participant must provide the information required below and deliver this Warrant Certificate to the Warrant Agent at the address set forth below and the Book-Entry Warrants to the Warrant Agent in its account with the Depository designated for such
purpose. The Warrant Certificate and this Election to Purchase must be received by the Warrant Agent by 5:00 P.M., New York time, on the specified Exercise Date.

ELECTION TO PURCHASE 

TO BE EXECUTED IF WARRANT HOLDER DESIRES 

TO EXERCISE THE WARRANTS EVIDENCED HEREBY 

The undersigned hereby irrevocably elects to exercise, on ___________________,
_______  (the “Exercise Date”),  ___________________ Warrants, evidenced by this Warrant Certificate, to purchase,
___________________ of the shares of Common Stock (each a
“Share”) of Longhai Steel Inc., a Nevada corporation (the “Company”), and represents that, on or before the Exercise Date, such holder has tendered payment for such Shares by certified or official bank check or
bank wire transfer in immediately available funds to the order of the Company c/o Pacific Stock Transfer, LLC, 4045 South Spencer Street, Suite 403, Las Vegas, NV 89119, in the amount of $
_______  in accordance with the terms hereof. The undersigned
requests that said number of Shares be in fully registered form, registered in such names and delivered, all as specified in accordance with the instructions set forth below.

If said number of Shares is less than all of the Shares purchasable hereunder, the undersigned requests that a new Warrant Certificate evidencing the remaining balance of the Warrants evidenced hereby be issued and
delivered to the holder of the Warrant Certificate unless otherwise specified in the instructions below. 

Dated: ___________________, _______

	
Name:
	
	
  
	
  
	
 (Please Print) 
	
	
 
	
	
 
	
(Insert Social Security or Other Identifying
Number of Holder)
	
	
 
	
 
	
Address:
	
	
 
	
 
	
 
	
	
 
	
	
Signature:
	
	
 

This Warrant may only be exercised by presentation to the Warrant Agent at the following address: Pacific Stock Transfer, LLC, 4045 South Spencer Street, Suite 403, Las Vegas, NV 89119. 

The method of delivery of this Warrant Certificate is at the option and risk of the exercising holder and the delivery of this Warrant Certificate will be deemed to be made only when actually received by the Warrant
Agent. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to assure timely delivery.

(Instructions as to form and delivery of Shares and/or Warrant Certificates) 

	
Name in which Shares are to be registered if other
		
 
	
than in the name of the registered holder of this
		
 
	
Warrant Certificate:
		
 
	
Address to which Shares are to be mailed if other
		
 
	
than to the address of the registered holder of this
		
 
	
Warrant Certificate as shown on the books of the
		
 
	
Warrant Agent:
		
 
	
  	
  
	
 
		
 
	
  	
 (Street Address)
	
	
  	
  
	
  	
  
	
  	
 (City and State) (Zip Code)
	
	
Name in which Warrant Certificate evidencing
		
 
	
unexercised Warrants, if any, are to be registered if
		
 
	
other than in the name of the registered holder of
		
 
	
this Warrant Certificate:
		
 
	
Address to which certificate representing
		
 
	
unexercised Warrants, if any, are to be mailed if
		
 
	
other than to the address of the registered holder of
		
 
	
this Warrant Certificate as shown on the books of
		
 
	
the Warrant Agent:
		
 
	
  	
 (Street Address)
	
	
 
		
 
	
  	
  
	
 
		
(City and State) (Zip Code)
	
	
 
		
 
	
  	
 Dated:
	
	
 
		
 
	
  	
 Signature
	

Signature must conform in all respects to the name of the holder as specified on the face of this Warrant Certificate. If Shares, or a Warrant Certificate evidencing unexercised Warrants, are to be issued in a name other than that of the
registered holder hereof or are to be delivered to an address other than the address of such holder as shown on the books of the Warrant Agent, the above signature must be guaranteed by a an Eligible Guarantor Institution (as that term is defined in
Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended). 

SIGNATURE GUARANTEE 

	
Name of Firm:
	
	
 
	
Address:
	
	
 
	
Area Code and Number:
	
	
 
	
Authorized
Signature:
	
	
 
	
Name:
	
	
 
	
Title:
	
	
 
	
Dated:
	
	
 

ASSIGNMENT 

(FORM OF ASSIGNMENT TO BE EXECUTED IF WARRANT HOLDER 

DESIRES TO TRANSFER WARRANTS EVIDENCED HEREBY) 

FOR VALUE RECEIVED,  ____________________ HEREBY SELL(S), ASSIGN(S) AND TRANSFER(S) UNTO: 

	
____________________	
____________________
	
(Please print name and
		
(Please insert social
	
	
address including zip code of
		
security or other
	
	
assignee)
		
identifying number of
	
	
 
		
assignee)
	

the rights represented by the within Warrant Certificate and does hereby irrevocably constitute and appoint
____________________ Attorney to transfer said Warrant Certificate on the books of the Warrant Agent with full power of substitution in the premises. 

	
Dated:
	

	
 Signature
	

(Signature must conform in all respects to the name of the holder as specified on the face of this Warrant Certificate and must bear a signature guarantee by an Eligible Guarantor Institution (as that term is defined in Rule 17Ad-15 of the
Securities Exchange Act of  1934, as amended). 

	
SIGNATURE GUARANTEE
	
	
 
	

	
Name of Firm:
	
	
 
	
Address:
	
	
 
	
Area Code and Number:
	
	
 
	
Authorized
Signature:
	
	
 
	
Name:
	
	
 
	
Title:
	
	
 
	
Dated:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00180-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00180-of-00352.parquet"}]]