INTELGENX TECHNOLOGIES
CORP.
SUBSCRIPTION AGREEMENT- U.S.
INVESTORS
IntelGenx
Technologies Corp.
6425 Abrams
Ville St. Laurent
Quebec, Canada H4S 1X9
Re:
Subscription for
Units
Gentlemen:
I.
Subscription . On the terms and subject to the
conditions of this subscription agreement (this
“Agreement”), the undersigned (the
“Subscriber”) hereby subscribes for and agrees to
purchase, _______ Units (the “Units”) of INTELGENX
TECHNOLOGIES CORP. , a Delaware corporation (the
“Corporation”) at a price of Cdn$0.40 per Unit.
The Subscriber is delivering to the Corporation (i) a check,
payable to the order of INTELGENX TECHNOLOGIES CORP. , in
the amount of $_________, and (ii) a completed and duly executed
Purchaser Questionnaire in the form attached hereto as Exhibit
A .
II.
Definitions . In this Agreement, the
following terms shall have the following meanings:
A.
“Closing” shall
have the meaning set forth in Section IV below;
B.
“Closing Date” shall
have the meaning set forth in Section IV below;
C.
“Common Share” shall
mean a share of common stock of the Corporation;
D.
“Debt Instrument” shall
mean any loan, bond, debenture, promissory note or other instrument
evidencing indebtedness (demand or otherwise) for borrowed money or
other liability;
E.
“Disclosure Documents”
shall mean collectively, the following filings with the SEC and all
exhibits thereto: the Corporation's annual report on Form 10-K for
the years ended December 31, 2008 and 2007, and all subsequent
documents filed by the Corporation with the SEC pursuant to Section
13(a), 13(c), 14(a) or 15(d) of the Exchange Act prior to the
Closing Date, including the quarterly reports filed on Form 10-Q ,
the current reports filed on Form 8-K since January 1, 2007 and the
proxy statement dated August 12, 2008;
F.
“EDGAR” shall mean the
Electronic Data Gathering, Analysis and Retrieval system of the
SEC;
G.
“Environmental Laws”
shall have the meaning set forth in Section VII.GG.
below;
H.
“Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended;
Subscription Agreement - IntelGenx
Technologies Corp.
I.
“Financial Statements”
shall have the meaning set forth in Section VII.F.
below;
J.
“Intellectual Property”
shall mean, collectively, all intellectual property rights which
pertain to the business of the Corporation or the Material
Subsidiaries of whatsoever nature, kind or description
including:
1.
all trade-marks,
service marks, trade-mark and service mark registrations, trade
mark and service mark applications, rights under registered user
agreements, trade names and other trade-mark and service mark
rights;
2.
all copyrights and
applications therefor, including all computer software and rights
related thereto;
3.
all patent
rights;
4.
all trade secrets and
proprietary and confidential information;
5.
all industrial
designs and registrations thereof and applications therefor; all
renewals, modifications, developments and extensions of any of the
items listed in clauses (1) through (4) above; and
6.
all patterns, plans,
designs, research date, other proprietary know-how, processes,
drawings, technology, inventions, formulae, specifications,
performance data, quality control information, unpatented blue
prints, flow sheets, equipment and parts lists, instructions,
manuals, records and procedures, and all licenses, agreements and
other contracts and commitments relating to any of the
foregoing;
K.
“Leased Premises” shall
mean all premises which are material to the Corporation and which
the Corporation or a Material Subsidiary occupies as
tenant;
L.
“Material Agreement”
shall mean any material note, indenture, mortgage or other form of
indebtedness and any contract, commitment, agreement (written or
oral), instrument, lease or other document, including license
agreements and agreements relating to intellectual property, to
which the Corporation is a party and which is material to the
Corporation;
M.
“Material Subsidiaries”
shall have the meaning set forth in Section VII.B.
below;
N.
“Purchasers” shall mean
the persons who, as purchasers, acquire the Units by duly
completing, executing and delivering Subscription Agreements and
any other required documentation, and permitted assignees or
transferees of such persons from time to time;
O.
“Registrable Securities”
shall mean the Unit Shares, the Warrants and the Warrant
Shares;
P.
“Registration Rights
Agreement” shall mean the registration rights agreement to be
entered into by the Corporation and the Purchasers;
Subscription Agreement - IntelGenx
Technologies Corp.
Q.
“Registration Statement”
shall mean a registration statement on Form S-1 of the Corporation
to be filed with the SEC in order to register, or register the
resale of, the Registrable Securities;
R.
“SEC” shall mean the
United States Securities and Exchange Commission;
S.
“Securities Act” shall
mean the Securities Act of 1933, as amended;
T.
“Subscription
Agreements” shall mean the subscription agreements in the
form agreed upon by the Purchasers and the Corporation pursuant to
which the Purchasers agree to subscribe for and purchase the Units,
and all schedules and exhibits thereto, including without
limitation, this Agreement;
U.
“Taxes” shall have the
meaning set forth in Section VII.I. below;
V.
“Time of Expiry” shall
have the meaning set forth in Section III.A. below;
W.
“Transaction Documents”
shall mean, collectively, this Agreement, the Registration Rights
Agreement and the Warrant Certificates;
X.
“Transfer Agent” shall
mean Stock Trans, Inc.;
Y.
“TSXV” shall mean the
TSX Venture Exchange;
Z.
“Unit” shall have the
meaning set forth in Section III.A. below;
AA.
“Unit Shares” shall have
the meaning set forth in Section III.B. below;
BB.
“Warrant” shall have the
meaning set forth in Section III.B. below;
CC.
“Warrant Certificates”
shall mean the certificates evidencing the Warrants and containing
the terms thereof; and
III.
Units . Each Unit will consist of
one share of common stock of the Corporation (a “Unit
Share”) and one common share purchase warrant (a
“Warrant”). Each Warrant will entitle to holder
thereof to purchase one Common Share for 36 months following the
Closing at an exercise price of USD$0.80 per Common
Share.
IV.
Closing . The closing of the
subscription for Units (the “Closing”) will take place
at such place as may be agreed upon by the Corporation and the
Subscriber, on such date as the Corporation will advise on
reasonable notice to the Subscriber (the “Closing
Date”). The Subscriber understands that the
aforementioned check will be held in an account at a financial
institution selected by the Corporation until the
Closing.
V.
Acceptance of
Subscription . The Corporation may, in its
sole discretion, accept or reject this subscription in whole or in
part. The Subscriber acknowledges that this subscription is
irrevocable by the Subscriber and may only be terminated by the
Corporation by rejection of this subscription in whole or in part.
This subscription is not binding upon the Corporation, and
the Corporation is not obligated to issue the Units to the
Subscriber until the Corporation accepts this subscription in whole
or in part at a Closing. If the Corporation rejects all or
part of this subscription, subscription proceeds will be returned
to the Subscriber promptly without deduction and without interest.
Upon acceptance of this Agreement by the Corporation, the
Corporation will immediately be entitled to retain the funds
provided herewith, and to demand and receive the remainder of the
Subscriber’s total capital commitment.
Subscription Agreement - IntelGenx
Technologies Corp.
VI.
Representations and Warranties of
the Subscriber . The Subscriber hereby
represents, warrants and covenants to the Corporation as
follows:
A.
The information contained in the
Subscriber's Purchaser Questionnaire is true and complete, and the
Subscriber will promptly provide the Corporation with an executed
amendment to such Purchaser Questionnaire if any statement made
therein ceases to be true and complete at any time.
B.
The Subscriber has been furnished
all materials relating to the Corporation, its business and
financial condition, the offering of the Units and any other matter
that the Subscriber has requested and has been afforded the
opportunity to ask all questions and receive all answers the
Subscriber wished concerning the terms and conditions of the
offering and to obtain any additional information the Corporation
possesses or can acquire without unreasonable effort or
expense.
C.
The Corporation has answered all
inquiries that the Subscriber and its representative(s), if any,
have made of it concerning the Corporation, its business and
financial condition, or any other matter relating to the operation
of the Corporation and the offering and sale of the Units. No
person has made to the Subscriber any written or oral
representations.
D.
The Subscriber is an
“accredited investor” (as defined in the Subscriber's
Purchaser Questionnaire) AND the Subscriber, either alone or
together with its representative(s), has such knowledge and
experience in financial and business matters to enable him, her or
it to utilize the information made available to him, her or it in
connection with the offering of the Units, to evaluate the merits
and risks of the prospective investment, and to make an informed
investment decision with respect thereto.
E.
The Subscriber (i) has adequate
means of providing for his, her or its current needs and possible
personal contingencies, (ii) has no need for liquidity in this
investment, (iii) is able to bear completely all of the economic
risks of his investment in the Units, and (iv) can afford a
complete loss of such investment.
F.
If the Subscriber is subject to the
Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), in making the proposed investment, it is
aware of and has taken into consideration the diversification
requirements of Section 404(a)(3) of ERISA, and it has concluded
that the proposed investment in the Corporation is
prudent.
Subscription Agreement - IntelGenx
Technologies Corp.
G.
If an entity, the Subscriber was not
formed for the purpose of making an investment in the Corporation
and the Subscriber has substantial business activities, in addition
to its investment in the Corporation, other than that of investing,
reinvesting, owning, holding or trading in securities.
H.
The Subscriber is not an
“investment company” or an “affiliated
person” of, or a “promoter” or “principal
underwriter” for an investment company, within the meaning of
the Investment Company Act of 1940, as amended.
I.
The Units to be acquired under this
Agreement are being acquired solely by and for the Subscriber for
investment and not as a nominee or agent for the benefit of any
other person, and the Subscriber has no current intention to, and
will not, distribute, resell or assign the Units, other than in
accordance with the provisions of the Securities Act, the rules and
regulations promulgated thereunder and any other applicable laws
including, without limitation, state securities laws.
J.
The Subscriber understands and
acknowledges that (i) there is no right to demand any
distribution from the Corporation, (ii) there is not and will
be no public or other market for the Units, (iii) the Units
have not been registered under the Securities Act, (iv) the sale of
the Units is being made in reliance on the exemption for non-public
offerings provided by Section 4(2) of the Securities Act and/or
Regulation D promulgated thereunder, (v) the Units must be held
indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available,
and (vi) the Units may not be sold under Rule 144 promulgated
by the Securities and Exchange Commission pursuant to the
Securities Act unless all of the conditions of that Rule are
met.
K.
The Subscriber understands that no
federal or state agency has passed upon the Units, or made any
finding or determination as to the fairness of the investment or
any recommendation or endorsement of the Units. The
Subscriber understands that no offering documents have been filed
with or reviewed by state securities administrators because of
representations made by the Corporation as to the private or
limited nature of the offering.
L.
The Subscriber has not been
furnished any offering literature other than materials the
Corporation may have provided at the request of the Subscriber in
connection with its purchase of the Units and those materials
publicly available on EDGAR, and the Subscriber has relied only on
the information contained in this Agreement or on EDGAR and the
information furnished or made available to the Subscriber by the
Corporation, as described in subparagraphs B and C above, and not
on any information, representation or warranty made by any person
in any other document or otherwise communicated, whether verbally
or in writing.
M.
The Subscriber is a resident of the
United States of America, is at least 21 years of age, and has the
legal capacity to execute, deliver, and perform this
Agreement.
N.
All information that the Subscriber
has provided to the Corporation concerning himself, herself or
itself, his, her or its financial position, and his, her or its
knowledge of financial and business matters, including all
information contained herein and in the Purchaser Questionnaire, is
true and complete as of the date set forth at the end hereof, and
if there is any adverse change in such information before this
subscription is accepted, the Subscriber will immediately provide
the Corporation with accurate and complete information concerning
any such change.
Subscription Agreement - IntelGenx
Technologies Corp.
O.
The Subscriber certifies, under
penalties of perjury, (i) that the social security number shown on
the signature page of this Agreement is true and complete and (ii)
that the Subscriber is not subject to backup withholding either
because the Subscriber has not been notified that he, she or it is
subject to backup withholding as a result of a failure to report
all interest or dividends, or the Internal Revenue Service has
notified the Subscriber that he, she or it is no longer subject to
backup withholding.
VII.
Representations and Warranties of
the Corporation . The Corporation hereby
represents, warrants and covenants to the Subscriber as
follows:
A.
the Corporation and the Material
Subsidiaries (as hereinafter defined) have been duly incorporated
and are in good standing under the laws of their respective
jurisdictions, and are current and up-to-date with all filings
required to be made by them in such jurisdiction, have all
requisite corporate power and authority and are duly qualified and
possess all certificates, authorizations, permits and licenses
issued by the appropriate state, provincial, municipal, federal
regulatory agencies or bodies necessary (and has not received or is
aware of any modification or revocation to such licenses,
authorizations, certificates or permits) to carry on its business
as now conducted and to own its properties and assets and the
Corporation and the Material Subsidiaries have all requisite
corporate power and authority to carry out their respective
obligations under the Transaction Documents, as
applicable;
B.
other than as set out in the
Disclosure Documents, the Corporation has no subsidiaries other
than as listed below (the “Material Subsidiaries”) and
the Corporation beneficially owns, directly or indirectly, the
percentage indicated below of the issued and outstanding shares in
the capital of the Material Subsidiaries free and clear of all
mortgages, liens, charges, pledges, security interests,
encumbrances, claims or demands of any kind whatsoever, all of such
shares have been duly authorized and validly issued and are
outstanding as fully paid and non-assessable shares and no person
has any right, agreement or option, present or future, contingent
or absolute, or any right capable of becoming a right, agreement or
option, for the purchase from the Corporation of any interest in
any of such shares or for the issue or allotment of any unissued
shares in the capital of the Material Subsidiaries or any other
security convertible into or exchangeable for any such
shares:
|
Name
|
Jurisdiction of
Incorporation or
Continuance
|
Beneficial
Equity/Voting
Ownership
|
|
IntelGenx
Corp.
|
Canada
|
100%
|
|
6544631 Canada Inc.
(1)
|
Canada
|
100%
|
Note:
(1)
Provided an aggregate
of 10,991,000 special shares of 6544631 Canada Inc., which are
exchangeable for common shares of the Corporation are held by Horst
Zerbe, Ingrid Zerbe and Joel Cohen.
Subscription Agreement - IntelGenx
Technologies Corp.
C.
all consents, approvals, permits,
authorizations or filings as may be required for the execution and
delivery of the Transaction Documents, the issuance and sale of the
Units and the creation and issuance of the Unit Shares and Warrants
are all in conformance with this Agreement, and the consummation of
the transactions contemplated in this Agreement, have been made or
obtained, as applicable, except for the filing of the notification
on Form D with the SEC required to be made within 15 days of
Closing;
D.
each of the execution and delivery
of the Transaction Documents, the performance by the Corporation of
its obligations hereunder or thereunder, the issuance and sale of
the Units, the creation and issuance of the Unit Shares and
Warrants upon the exercise of the Units, and the consummation of
the transactions contemplated in this Agreement, do not and will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, (whether
after notice or lapse of time or both), (A) any statute, rule or
regulation applicable to the Corporation including, without
limitation, all applicable securities laws; (B) the constating
documents, articles or resolutions of the Corporation which are in
effect at the date hereof; (C) any Debt Instruments, Material
Agreement, mortgage, note, indenture, contract, agreement,
instrument, lease or other document to which the Corporation is a
party or by which it is bound; or (D) any judgment, decree order,
statute, rule, law or regulation binding the Corporation or the
property or assets of the Corporation;
E.
the Disclosure Documents, when they
were or are filed with the SEC, conformed or will conform in all
material respects to the applicable requirements of applicable the
Exchange Act and the applicable rules and regulations of the SEC
thereunder and when read together did not and will not contain an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading;
F.
the audited financial statements of
the Corporation as at and for the year ended December 31, 2008 and
unaudited interim financial statements as at and for the three
month period ended March 31, 2009 (collectively, the
“Financial Statements”) have been prepared in
accordance with generally accepted accounting principles in the
United States, as applicable, and present fairly, in all material
respects, the financial position (including the assets and
liabilities, whether absolute, contingent or otherwise) of the
Corporation as at such dates and results of operations of the
Corporation for the periods then ended and there has been no
material change in accounting policies or practices of the
Corporation or the Material Subsidiaries since December 31, 2008.
All disclosures in the Disclosure Documents regarding
“non-GAAP financial measures” (as such term is defined
by the rules and regulations of the SEC) comply in all material
respects to U.S. securities laws, to the extent
applicable;
G.
there has been no adverse material
change to the Corporation or the Material Subsidiaries (actual,
proposed or prospective, whether financial or otherwise) in the
business, affairs, operations, assets, liabilities (contingent or
otherwise) or shareholders' equity of the Corporation or the
Material Subsidiaries since December 31, 2008, which has not been
generally disclosed to the public and, in all material respects,
the business of the Corporation and the Material Subsidiaries have
been carried on in the usual and ordinary course consistent with
past practice since December 31, 2008;
Subscription Agreement - IntelGenx
Technologies Corp.
H.
there are no material off-balance
sheet transactions, arrangements, obligations (including contingent
obligations) or other relationships of the Corporation or its
Material Subsidiaries with unconsolidated entities or other
persons;
I.
all taxes (including income tax,
capital tax, payroll taxes, employer health tax, workers'
compensation payments, property taxes, custom and land transfer
taxes), duties, royalties, levies, imposts, assessments,
deductions, charges or withholdings and all liabilities with
respect thereto including any penalty and interest payable with
respect thereto (collectively, “Taxes”) due and payable
or required to be collected or withheld and remitted, by the
Corporation and the Material Subsidiaries have been paid, collected
or withheld and remitted, as applicable. All tax returns,
declarations, remittances and filings required to be filed by the
Corporation and the Material Subsidiaries have been filed with all
appropriate governmental authorities and all such returns,
declarations, remittances and filings are complete and accurate and
no material fact or facts have been omitted therefrom which would
make any of them misleading. To the knowledge of the Corporation,
no examination of any tax return of the Corporation or the Material
Subsidiaries is currently in progress and there are no issues or
disputes outstanding with any governmental authority respecting any
taxes that have been paid, or may be payable, by the Corporation
and the Material Subsidiaries. There are no agreements, waivers or
other arrangements with any taxation authority providing for an
extension of time for any assessment or reassessment of taxes with
respect to the Corporation and the Material
Subsidiaries;
J.
the Corporation’s Auditors who
audited the Financial Statements of the Corporation and the
Material Subsidiaries for the year ended December 31, 2008 and the
year ended December 31, 2007 and who provided their audit report
thereon are independent public accountants as required under
applicable securities laws in Canada, the Securities Act and the
Exchange Act;
K.
except as set out in the Disclosure
Documents, neither the Corporation nor any of its subsidiaries are
a party to or bound or affected by any commitment, agreement or
document containing any covenant which expressly limits the freedom
of the Corporation or the Material Subsidiaries to compete in any
line of business, transfer or move any of its assets or operations
or which materially or adversely affects the business practices,
operations or condition of the Corporation and the Material
Subsidiaries taken as a whole;
L.
the Corporation and the Material
Subsidiaries owns, or has obtained valid and enforceable licenses
for, or other rights to use, the Intellectual Property as are
sufficient to conduct its business, respectively.
M.
the Corporation and the Material
Subsidiaries have conducted and are conducting their business in
compliance in all material respects with all applicable laws and
regulations of each jurisdiction in which it holds assets or
carries on business (including, without limitation, all applicable
federal, provincial, municipal, local licensing or environmental
anti-pollution laws, regulations and other lawful requirements of
any Canadian, United States or foreign governmental or regulatory
body including production and research and development permits and
licenses) and has not received a notice of non-compliance, nor
knows of, nor has reasonable grounds to know of, any facts that
could give rise to a notice of non-compliance with any such laws,
regulations or permits;
Subscription Agreement - IntelGenx
Technologies Corp.
N.
the Corporation and the Material
Subsidiaries are not aware of any pending change or contemplated
change to any applicable law or regulation or governmental position
that would materially affect the business of the Corporation or the
Material Subsidiaries or the business or legal environment under
which the Corporation or the Material Subsidiaries
operate;
O.
each of the Transaction Documents
has been duly authorized, executed and delivered by the Corporation
and constitutes a valid and binding obligation of the Corporation
enforceable against the Corporation in accordance with its
terms;
P.
at the Closing Time, all necessary
corporate action will have been taken by the Corporation to: (a)
authorize the issuance of the Units; (b) allot, reserve and
authorize the issuance of the Unit Shares as fully paid and
non-assessable securities in the capital of the Corporation upon
exercise of the Units; (c) validly create, allot and authorize the
issuance of the Warrants upon exercise of the Units; and (d)
validly allot, reserve and authorize the issuance of the Warrant
Shares upon the payment therefor as fully paid and non-assessable
securities in the capital of the Corporation upon the exercise of
the Warrants;
Q.
all information which has been
prepared by the Corporation relating to the Corporation and the
Material Subsidiaries and their respective business, property and
liabilities and either publicly disclosed or provided to the
Subscriber, including all financial, marketing, sales and
operational information provided to the Subscriber, if any, did not
and will not contain a misrepresentation or an untrue statement of
a material fact;
R.
other than the notification filing
on Form D required to be filed with the SEC 15 days after the
Closing Date, all filings required to be made by the Corporation
and the Material Subsidiaries pursuant to the securities laws and
general corporate law applicable to them have been made and such
filings were true and accurate as at the respective dates thereof
and the Corporation has not filed any confidential material change
reports;
S.
the Corporation and the Material
Subsidiaries are in compliance with all laws respecting employment
and employment practices, terms and conditions of employment,
occupational health and safety, pay equity and wages; and there is
not currently any labor disruption or conflict involving the
Corporation or the Material Subsidiaries;
T.
other than disclosed in the
Disclosure Documents , the Corporation and the Material
Subsidiaries do not have any loans or other indebtedness
outstanding which has been made to any of its shareholders,
officers, directors or employees, past or present, or any person
not dealing at “arm's length” (as such term is defined
in the Income Tax Act (Canada)) with it;
Subscription Agreement - IntelGenx
Technologies Corp.
U.
the assets of the Corporation and
the Material Subsidiaries and their respective business and
operations are insured against loss or damage with responsible
insurers on a basis consistent with insurance obtained by
reasonably prudent participants in comparable businesses, and such
coverage is in full force and effect, and the Corporation and the
Material Subsidiaries have not breached the terms of any policies
in respect thereof or failed to promptly give any notice or present
any material claim thereunder;
V.
there are no persons acting or
purporting to act that are entitled to any brokerage or finder's
fee payable by the Corporation in connection with the transactions
contemplated by this Agreement;
W.
the Corporation and the Material
Subsidiaries are in compliance in all respects with each license
and permit held by it, if and where applicable, and is not in
violation of, or in default under, the applicable statutes,
ordinances, rules, regulations, orders or decrees (including,
without limitation, Environmental Laws) of any Canadian
governmental entities, regulatory agencies or bodies having,
asserting or claiming jurisdiction over it or over any part of its
operations or assets;
X.
the Corporation and the Material
Subsidiaries (i) are in compliance with any and all applicable
federal, provincial, state and local laws and regulations relating
to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(“Environmental Laws”) in each jurisdiction in which
they hold assets or conduct business; (ii) have received all
permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct its business; and (iii)
are in compliance with all terms and conditions of any such permit,
license or approval except where non-compliance did not and will
not result in a material adverse effect on the business of the
Corporation and the Material Subsidiaries;
Y.
there are no known environmental
audits, evaluations, assessments, studies or tests relating to the
Corporation or any of the Material Subsidiaries except for ongoing
assessments conducted by or on behalf of the Corporation in the
ordinary course;
Z.
there have been no past unresolved,
and there are no pending or threatened claims, complaints, notices
or requests for information received by the Corporation or the
Material Subsidiaries with respect to any alleged violation of any
Environmental Law; and no conditions exist at, on or under any
property now or previously owned, operated or leased by the
Corporation or the Material Subsidiaries which, with the passage of
time, or the giving of notice or both, would give rise to liability
under any Environmental Law that, individually or in the aggregate,
has or may reasonably be expected to have, a material adverse
effect with respect to the Corporation or the Material
Subsidiaries;
AA.
except as set out in the Disclosure
Documents , the
