Form of Subscription Agreement

Complete and sign pages 1 and 2 of the Subscription Agreement.

If you are a non-individual subscriber, complete and sign the TSX-V Form 4C – Corporate Placee Registration Form – Appendix II, unless you have filed a Form 4C with the TSX-V within the last year and it remains current.

If you are resident in Canada, complete and sign the Accredited Investor Certificate – Appendix III.

If you are resident in an International Jurisdiction (other than Canada or the United States), complete and sign the International Investor Certificate – Appendix IV.

To subscribe complete, as applicable, and forward (i) this Subscription Agreement; (ii) all applicable Appendixes; and (iii) the subscription proceeds, to one of:

(Please print name of individual whose signature appears above if different than the name of the Subscriber printed above.)

Please complete if purchasing as an agent for a  disclosed principal and not deemed to be purchasing as a principal under the applicable securities legislation

Name

Account reference, if applicable

Account reference, if applicable

Contact Name

Address

Address

Telephone Number

Facsimile Number

INTERPRETATION

In this Agreement, unless the context otherwise requires:

“1933 Act” means the United States Securities Act of 1933, as amended;

“Accredited Investor” has the same meaning ascribed to that term in National Instrument 45-106;

“Agency Agreement” means the agency agreement to be entered into at Closing between the Issuer and the Agents;

“Agents” means, collectively, Paradigm Capital Inc., Bolder Investment Partners, Ltd. and Union Securities Ltd.;

“Aggregate Special Warrants” means the aggregate number of Special Warrants sold pursuant to the Private Placement;

“Aggregate Subscription Price” means the aggregate dollar amount of the subscription under this Agreement as set out on the face page hereof;

“Agreement” means this subscription agreement to be entered into between the Issuer and the Subscriber for the purchase of Special Warrants and includes all schedules and appendices attached hereto, in each case as they may be amended or supplemented from time to time;

“AMF” means Autorité des Marchés Financiers;

“Automatic Exercise Date” means 5:00 p.m. (Toronto time) on the date that is the earlier of (a) the Clearance Date, and (b) the Clearance Deadline;

“Business Day” means a day other than a Saturday, Sunday or any other day on which the principal chartered banks located in Toronto, Ontario are not open for business;

“Clearance Date” means the date which is five Business Days following the later of (i) the date the Issuer receives a Decision Document for the Prospectus from the last of the Commissions, and (ii) the date the Registration Statement is declared effective by the SEC;

“Clearance Deadline” means the date which is 120 days following the Closing Date;

“Closing” means the closing of the Private Placement, on the Closing Date, pursuant to which the Special Warrants are issued to the Subscribers in accordance with the terms and conditions of this Agreement;

“Closing Date” means June 30, 2009 or such other earlier or later date as the Issuer and the Agents may agree;

“Commissions” means, collectively, the provincial securities commission or other regulatory authority in each of the Jurisdictions;

“Common Shares” means common shares in the authorized capital of the Issuer;

“Compensation Options” has the meaning ascribed to that term in Section 5.1(x);

“Decision Document” means a decision document issued by the AMF in its capacity as principal regulator in accordance with Multilateral Instrument 11-202 – Passport System and National Policy 11-202 – Process for Prospectus Reviews in Multiple Jurisdictions evidencing that a receipt has been issued by each of the Commissions (other than the Ontario Securities Commission) and a receipt has been issued by the Ontario Securities Commission;

“Disclosed Principal” has the meaning ascribed in subsection 5.1(c)(ii);

“Disclosure Record” means the financial statements, management discussion and analysis, certifications, circulars, reports, forms, press releases and other documents filed by the Issuer on the System for Electronic Data Analysis and Retrieval (SEDAR) since December 31, 2006;

“Exemptions” means the exemptions from the prospectus requirements outlined at sections 2.3 and 2.10 of National Instrument 45-106;

“Insider” has the meaning ascribed in s.1(1) of the Ontario Act;

“International Jurisdiction” means a jurisdiction other than and outside Canada and the United States;

“Issue Price” means $0.40 per Special Warrant;

“Jurisdictions” means the provinces of British Columbia, Alberta, Ontario and Quebec and such other Canadian provinces as agreed upon by the Company and the Agents where Subscribers are resident;

“National Instrument 45-102” means National Instrument 45-102 – Resale of Securities published by the Canadian Securities Administrators;

“National Instrument 45-106” means National Instrument 45-106 – Prospectus and Registration Exemptions published by the Canadian Securities Administrators;

“Ontario Act” means the Securities Act (Ontario), the regulations and rules made thereunder and all published policy statements, blanket orders, notices, directions and rulings issued or adopted by the Ontario Securities Commission, all as amended;

“Parties” or “Party” means the Subscriber, the Issuer or both, as the context requires;

“Personal Information” has the meaning ascribed in section 11.5;

“Private Placement” means the issue and sale of the Special Warrants;

“Prospectus” means the final short-form prospectus (or long-form prospectus, if applicable) qualifying the distribution of the Common Shares and Warrants issuable upon exercise of the Special Warrants;

“Registration Statement” means a S-1 registration statement filed with the SEC in accordance with the 1933 Act qualifying the Common Share and Warrants issuable upon exercise of the Special Warrants, the Compensation Options and the Warrant Shares issuable thereunder;

“Regulation S” means Regulation S promulgated under the 1933 Act;

“Regulatory Authorities” means the Commissions and the TSX-V and the securities regulatory authorities in an International Jurisdiction;

“Rule 144” means Rule 144 promulgated under the 1933 Act;

“Rule 144A” means Rule 144A promulgated under the 1933 Act;

“SEC” means the United States Securities and Exchange Commission;

“Securities Laws” means, as applicable, the securities legislation and securities laws of each Jurisdiction and the regulations and rules made thereunder and all published policy statements, blanket orders, notices, directions and ruling issued or adopted by the Commissions, collectively, and the rules of the TSX-V;

“Special Warrants” means the special warrants to be issued and sold by the Issuer in accordance with the terms of this Agreement;

“Subscriber” means the subscriber for the Special Warrants as set out on the face page of this Agreement and includes, as applicable, each Disclosed Principal for whom it is acting;

“Subscription Proceeds” means the gross proceeds from the sale of Special Warrants under the Private Placement;

“Term Sheet” means the term sheet attached hereto as Appendix I;

“TSX-V” means TSX Venture Exchange;

“Unit” means one Common Share and one Warrant;

“United States” means the United States of America, its territories or possessions, any State of the United States and the District of Columbia;

“U.S. Person” has the meaning given to the term “U.S. person” in Rule 902(k) of Regulation S. Without limiting the foregoing, but for greater clarity in this Agreement, a U.S. Person includes, subject to the exclusions set forth in Regulation S, (i) any natural person resident in the United States, (ii) any partnership or corporation organized or incorporated under the laws of the United States, (iii) any estate or trust of which any executor, administrator or trustee is a U.S. Person, (iv) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the United States and (v) any partnership or corporation organized or incorporated under the laws of any non-U.S. jurisdiction which is formed by a U.S. Person principally for the purpose of investing in securities not registered under the 1933 Act, unless it is organized or incorporated, and owned, by U.S. accredited investors who are not natural persons, estates or trusts;

“Warrant” means a Common Share purchase warrant entitling the holder thereof to purchase one Common Share for 36 months following Closing at an exercise price of US$0.80; and

“Warrant Share” means a Common Share issuable upon exercise of the Warrant.

SPECIAL WARRANTS

POWER OF ATTORNEY

if delivered, to receive certificates representing the Special Warrants, to execute in the Subscriber’s name and on its behalf all closing receipts and required documents, if any, to complete and correct any manifest errors or omissions in any form or document provided by the Subscriber, including this Agreement and the appendices and schedules hereto, in connection with the subscription for the Special Warrants and to exercise any rights of termination contained in the Agency Agreement;

to negotiate and settle any documents related to the Private Placement including any opinions, certificates or other documents addressed to the Subscriber;

to extend or shorten any time periods and to modify or waive, in whole or in part, any representations, warranties, covenants or conditions for the Subscriber’s benefit contained in this Agreement and the Agency Agreement or any ancillary or related document, provided that such extensions, modifications, or waivers do not materially affect the Subscriber’s obligations or rights under this Agreement;

to make payment for the Special Warrants purchased hereby on behalf of the Subscriber or any Disclosed Principal;

to terminate this Agreement if any condition precedent is not satisfied, in such manner and on such terms and conditions as Paradigm in its sole discretion may determine and Paradigm shall have no liability to any Subscriber whatsoever in connection with any decision to waive any of such conditions or to extend the time for satisfaction of such conditions or any decision to exercise or not exercise or extend the right to terminate the Agency Agreement; and

without limiting the generality of the foregoing, to negotiate, settle, execute, deliver and amend the Agency Agreement.

REPRESENTATIONS, WARRANTIES, COVENANTS AND ACKNOWLEDGEMENTS OF THE SUBSCRIBER

no prospectus has been filed by the Issuer with any of the Commissions in connection with the issuance of the Special Warrants, such issuance is exempted from the prospectus requirements of applicable Securities Laws and that as a result:

the Subscriber is restricted from using most of the civil remedies available under applicable Securities Laws including statutory rights of rescission and certain statutory remedies against an issuer, underwriters, auditors and officers otherwise available to investors who acquire securities offered by a prospectus;

the Subscriber may not receive information that would otherwise be required to be provided to it under applicable Securities Laws and under applicable securities laws of the United States; and

the Issuer is relieved from certain obligations that would otherwise apply under applicable Securities Laws;

the Subscriber certifies that it and, if applicable, each Disclosed Principal is resident and located in the jurisdiction set out under “Subscriber’s Residential or Head Office Address” on the first page of this Agreement, which address is the residence or principal place of business of the Subscriber, or Disclosed Principal, as the case may be, and such address was not obtained or used solely for the purpose of acquiring the Subscriber’s Special Warrants;

the Subscriber is either:

purchasing the Subscriber’s Special Warrants as principal for its own account and not for the benefit of any other person or is deemed under applicable Securities Laws to be purchasing the Subscriber’s Special Warrants as principal,; or

purchasing the Subscriber’s Special Warrants as agent for beneficial principal(s) (each a “Disclosed Principal”), all of whom are disclosed on page 1 of this Agreement, and is not deemed under applicable Securities Laws to be purchasing the Subscriber’s Special Warrants as principal, and it is duly authorized to enter into this Agreement and to execute and deliver all documentation in connection with the purchase on behalf of each such Disclosed Principal, who is purchasing as principal for its own account and not for the benefit of any other person and the Subscriber in its capacity as agent is acting in compliance with all applicable securities and other laws; or

purchasing (if a resident of a Jurisdiction) for a principal or principals which is or are undisclosed or identified by account number only and is:

a person acting on behalf of a fully managed account managed by that person, if that person is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction, and in Ontario, is purchasing a security that is not a security of an investment fund; or

a trust corporation registered under the Trust and Loan Companies Act (Canada), or under comparable legislation in any other jurisdiction, and is purchasing the Subscriber’s Special Warrants as trustee or agent for one or more accounts that are fully managed by such trust corporation, which account or accounts are acquiring the Subscriber’s Special Warrants as principal;

if the Subscriber or the Disclosed Principal is resident in Canada, the Subscriber or, if the Subscriber is purchasing on behalf of a Disclosed Principal, that Disclosed Principal:

is an Accredited Investor, by virtue of the fact that the Subscriber or such Disclosed Principal, as the case may be, falls within one or more of the sub-paragraphs of the definition of Accredited Investor set out in Appendix III (the Subscriber having checked the sub-paragraph(s) applicable to the Subscriber or such Disclosed Principal, as the case may be) and neither the Subscriber nor such Disclosed Principal has been created or is being used primarily to permit the purchase of the Special Warrants without a prospectus; or

is purchasing sufficient Special Warrants so that the aggregate acquisition cost of the Subscriber’s Special Warrants is not less than $150,000 and the Subscriber or such Disclosed Principal, as the case may be, is not a corporation, syndicate, partnership or other form of incorporated or non-incorporated entity or organization created solely to permit the purchase of the Subscriber’s Special Warrants without a prospectus by a group of individuals whose individual share of the aggregate acquisition cost of the Subscriber’s Special Warrants is less than $150,000;

(i) The Subscriber, is not a U.S. Person and hereby represents and warrants to, and covenants with, the Issuer and the Agents, and acknowledges that the Issuer and the Agents are relying on such representations and warranties in connection with the transactions contemplated herein, as follows:

the Subscriber is not a U.S. Person nor subscribing for the Special Warrants for the account or benefit of a U.S. Person or a person in the United States or for resale in the United States and the Subscriber confirms that the Special Warrants have not been offered to the Subscriber in the United States and that this Subscription Agreement has not been executed or delivered in the United States.;

the offer to purchase the Subscriber’s Special Warrants was not made to the Subscriber or Disclosed Principal, if any, in the United States;

at the time the Subscriber’s subscription for Special Warrants was executed and delivered to the Issuer, the Subscriber (or the Subscriber’s authorized signatory, if it is not a natural person) was outside the United States; and

the current structure of this transaction and all transactions and activities contemplated hereunder is not a scheme to avoid the registration requirements of the 1933 Act;

if the Subscriber is resident in an International Jurisdiction, the subscription for Special Warrants by the Subscriber hereunder is being made pursuant to exemptions under and in accordance with, and does not contravene any of the, applicable securities legislation in the such jurisdiction in which the Subscriber resides and the Subscriber has completed and delivered the International Investor Certificate attached as Appendix IV hereto;

the Subscriber and each Disclosed Principal, as the case may be, acknowledges that no Regulatory Authority or governmental agency regulatory body or similar authority has reviewed or passed upon the merits of an investment in the Special Warrants or the Common Shares and that any representation to the contrary is a criminal offence and, if made, may not be relied upon; and

the Subscriber will not offer, sell or otherwise transfer any of the Special Warrants, Warrants or the Common Shares issuable on exercise of the Special Warrants or Warrants, as the case may be, in the United States except pursuant to registration under the 1933 Act and the securities laws of all applicable states or available exemptions or exceptions therefrom;

no person has made to the Subscriber or any Disclosed Principal, if applicable, any written or oral representations:

that any person will resell or repurchase any of the Special Warrants;

that any person will refund the purchase price of any of the Special Warrants;

as to the future price or value of any of the Special Warrants, or securities issuable on exercise of the Special Warrants or the Warrants, as the case may be; or

that any of the Issuer’s securities will be listed and posted for trading on a stock exchange or that application has been made to list and post any of the Issuer’s securities for trading on a stock exchange, other than the Common Shares on the TSX-V;

the Subscriber or, the Disclosed Principal, as the case may be, will not become a “control person” (as defined in the Ontario Act) by virtue of the purchase of the Subscriber’s Special Warrants (assuming the exercise thereof into Common Shares), and does not intend to act in concert with any other person to form a control group of the Issuer;

this subscription has not been solicited in any other manner contrary to applicable Securities Laws and the Subscriber acknowledges that the Subscriber will not receive an offering memorandum or other disclosure document in respect of the Issuer or the Special Warrants;

neither the Subscriber nor any Disclosed Principal, if applicable, has knowledge of a “material fact” or “material change” (as those terms are defined in the Ontario Act) in the affairs of the Issuer that has not been generally disclosed to the public;

the Subscriber’s decision to tender this offer and purchase the Subscriber’s Special Warrants has not been made as a result of any verbal or written representation as to fact or otherwise made by or on behalf of the Issuer, the Agents or any other person and is based entirely upon this Agreement and currently available public information concerning the Issuer;

the Agents and/or their directors, officers, employees, agents and representatives assume no responsibility or liability of any nature whatsoever for the accuracy or adequacy of any publicly available information concerning the Issuer, or as to whether or not all information concerning the Issuer required to be disclosed by it has been generally disclosed;

the Agents have not, in connection with the Private Placement, engaged in or conducted any independent investigation with respect to the Issuer, or any information made, or required to be made, publicly available by the Issuer;

the Issuer will have the right to accept this subscription offer in whole or in part and the acceptance of this subscription offer will be conditional upon the sale of the Subscriber’s Special Warrants to the Subscriber or the Disclosed Principal, as the case may be, being exempt from the prospectus and registration requirements under applicable Securities Laws;

the Subscriber has the legal capacity and competence to enter into and execute this Agreement and to take all actions required pursuant hereto and, if an individual is of full age of majority in the jurisdiction in which the Subscriber is resident, if the Subscriber is a corporation it is duly incorporated and validly subsisting under the laws of its jurisdiction of incorporation, and if the Subscriber is not an individual, the Subscriber has all necessary authority and approvals by its directors, shareholders, partners, trustees or others to authorize the execution and delivery of this Agreement on behalf of the Subscriber;

the entering into of this Agreement and the completion of the transactions contemplated hereby will not result in the material default of violation of any of the terms and provisions of any law applicable to, or the constating documents, by-laws or resolutions of, the Subscriber or any Disclosed Principal, if applicable, or of any agreement, written or oral, to which the Subscriber or the Disclosed Principal, if applicable, may be a party or by which it is or may be bound;

the Subscriber has obtained all necessary consents and authorities to enable it to agree to subscribe for the Special Warrants and to perform its obligations under this Agreement and the Subscriber has otherwise observed all applicable laws, obtained any requisite governmental or other consents, complied with all requisite formalities and paid any issue, transfer or other taxes due in any territory in connection with its acceptance and the Subscriber has not taken any action which will or may result in the Issuer or the Agents acting in breach of any regulatory or legal requirements of any territory in connection with the Private Placement or the Subscriber’s subscription;

this Agreement, along with Appendix II (if applicable) and one of either Appendix III or IV, as applicable, has been duly executed and delivered by the Subscriber and constitutes a legal, valid and binding obligation of the Subscriber enforceable against the Subscriber and, if applicable, the Disclosed Principal;

the Subscriber has been advised to consult its own legal advisors with respect to tax matters and the applicable hold periods imposed in respect of the Special Warrants by applicable securities legislation and regulatory policies and confirms that no representations by the Issuer or the Agents have been made, respecting tax matters or the hold periods applicable to the Special Warrants;

the Subscriber and, if applicable, each Disclosed Principal is aware of the risks and other characteristics of the Special Warrants, including the risk that the Subscriber may lose its entire investment, and of the fact that the Subscriber and, if applicable, each Disclosed Principal may not be able to resell the Special Warrants purchased by it except in accordance with the applicable securities legislation and regulatory policies and that the Special Warrants may be subject to resale restrictions and may bear a legend to this effect;

the Subscriber understands that the Special Warrants, the Common Shares and Warrants issuable on exercise of the Special Warrants and the Warrant Shares are “restricted securities” within the meaning of Rule 144 and agrees that if it decides to offer, sell, pledge or otherwise transfer any such security they may be offered, sold, pledged or otherwise transferred only: (A) to the Issuer; (B) outside the United States in accordance with Rule 904 of Regulation S under the 1933 Act; (C) within the United States in accordance with (i) Rule 144A to a person who the seller reasonably believes is a Qualified Institutional Buyer that is purchasing for its own account or for the account of a Qualified Institutional Buyer to whom notice is given that the offer, sale, or transfer is being made in reliance on Rule 144A, if available, or (ii) the exemption from registration under the 1933 Act provided by Rule 144 thereunder, if applicable; (D) in a transaction that does not require registration under the 1933 Act or any applicable United States Securities Laws and regulations governing the offer and sale of securities; or (E) pursuant to an effective registration statement under the 1933 Act, provided that with respect to sales or transfers under clauses (C)(ii) or (D), only if the holder has furnished to the Issuer an opinion of counsel, reasonably satisfactory to the Issuer, prior to such sale or transfer and in each case in accordance with any United States Securities Laws or securities laws of any other applicable jurisdiction;

the certificates representing the Special Warrants, the Common Shares and Warrants issuable on exercise of the Special Warrants or the Warrant Shares issuable upon exercise of the Warrants, as the case may be, if issued prior to the Clearance Date for the Prospectus or if issued prior to the day which is four months and one day following the Closing Date will bear the following legends as required by National Instrument 45-102 and the TSX-V substantially in the following form and with the necessary information inserted:

“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER [INSERT DISTRIBUTION DATE].”

“WITHOUT PRIOR WRITTEN APPROVAL OF THE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL [INSERT DATE].”

In addition to the legends above, until such time as the Special Warrants, the Common Shares, the Warrants underlying the Special Warrants and the Warrant Shares are either (i) no longer “restricted securities” within the meaning of Rule 144 or, (ii) a Registration Statement is declared effective by the SEC, the certificates representing the Special Warrants, the Common Shares, the Warrants underlying the Special Warrants and the Warrant Shares, as well as all certificates issued in exchange for or in substitution of the foregoing securities, until such time as the same is no longer required under applicable requirements of the U.S. Securities Act or applicable United States Securities Laws, shall bear the following legend:

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THESE SECURITIES, AGREES FOR THE BENEFIT OF INTELGENX TECHNOLOGIES CORP. (THE “COMPANY”) THAT THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH REGULATION S UNDER THE U.S. SECURITIES ACT, (C) WITHIN THE UNITED STATES IN COMPLIANCE WITH (i) THE EXEMPTION FROM REGISTRATION PROVIDED BY RUE 144A UNDER THE U.S. SECURITIES ACT, IF AVAILABLE OR (ii) THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE U.S. SECURITIES ACT, IF APPLICABLE, AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND, IN THE CASE OF (C)(II) AND (D), THE SELLER FURNISHES TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY TO SUCH EFFECT.

if required by applicable securities legislation, policy or order or by any securities commission, stock exchange or other regulatory authority, the Subscriber and, if applicable, each Disclosed Principal will execute, deliver, file and otherwise assist the Issuer in filing, such reports, undertakings and other documents with respect to the issue of the Special Warrants as may be required;

the funds which will be advanced by the Subscriber to the Issuer hereunder, as applicable, will not represent proceeds of crime for the purposes of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (the “PCMLTFA”) and the Subscriber acknowledges that the Issuer may in the future be required by law to disclose the Subscriber’s name and other information relating to this Agreement and the Subscriber’s subscription hereunder, on a confidential basis, pursuant to the PCMLTFA. To the best of the Subscriber’s knowledge (a) none of the subscription funds to be provided by the Subscriber (i) have been or will be derived from or related to any activity that is deemed criminal under the laws of Canada, the United States of America or any other jurisdiction, or (ii) are being tendered on behalf of a person or entity who has not been identified to the Subscriber, and (b) the Subscriber shall promptly notify the Issuer if the Subscriber discovers that any of such representations ceases to be true, and to provide the Issuer with appropriate information in connection therewith;

the Subscriber acknowledges that upon completion of the Private Placement, the Agents will receive a commission in cash from the Issuer equal to 8% of the gross proceeds from the sale of Special Warrants sold under the Private Placement to all subscribers, as well as, that number of Common Shares equal to 4% of the Aggregate Special Warrants and that number of Common Share purchase options as is equal to 8% of the Aggregate Special Warrants (“Compensation Options”). Each Compensation Option will entitle the holder thereof to acquire one Common Share of the Issuer at an exercise price equal to US$0.80 for a period of 36 months from the Closing Date;

the Subscriber is not entitled to be paid any commission in relation to its participation in the Private Placement;

other than the Agents, there is no person acting or purporting to act in connection with the transactions contemplated herein who is entitled to any brokerage or finder’s fee;

the Subscriber and, if applicable, each Disclosed Principal has not purchased the Special Warrants as a result of any form of General Solicitation or General Advertising, including advertisements, articles, notices or other communication published in any newspaper, magazine or similar media or on the internet or broadcast over radio, television or internet or any seminar or meeting whose attendees have been invited by General Solicitation or General Advertising;

the Subscriber has not received or been provided with, nor has it requested, nor does it have any need to receive, any offering memorandum, any prospectus, any sales or advertising literature, or any other document describing or purporting to describe the business and affairs of the Issuer which has been prepared for delivery to, and review by, prospective purchasers in order to assist in making an investment decision in respect of the Special Warrants (other than the Disclosure Record);

the Subscriber or, if applicable, each Disclosed Principal has such knowledge in financial and business affairs as to be capable of evaluating the merits and risks of its investment and is able to bear the economic risk of the loss of its entire investment in the Special Warrants;

the Subscriber or, if applicable, each Disclosed Principal, if a corporation or other non-individual entity, has previously filed within the preceding year with the TSX-V a duly completed Form 4C, Corporate Placee Registration Form, and represents and warrants that there has been no change to any of the information in the Corporate Placee Registration Form previously filed with the TSX-V up to the date of this Agreement, or will deliver a completed Form 4C, Corporate Placee Registration Form in the form attached hereto as Appendix II to the Issuer in accordance with 9.2(d) of this Agreement;

it understands and agrees that the financial statements of the Issuer have been prepared in accordance with United States generally accepted accounting principles, which differ in some respects from Canada generally accepted accounting principles, and thus may not be comparable to financial statements of Canadian companies;

the Subscriber agrees that the Issuer and the Agents may be required by law or otherwise to disclose to regulatory authorities the identity of the Subscriber and if applicable the beneficial purchaser for whom the Subscriber may be acting; and

the Subscriber agrees that the above representations, warranties, covenants and acknowledgements in this Agreement and the attached Appendices are and will be true and correct both as of the execution of this Agreement and as of the Closing.

CLOSING

the Issuer having accepted this Agreement;

payment by the Subscriber of the Aggregate Subscription Price by certified cheque, money order, bank draft or other acceptable means in Canadian dollars payable to the Agent through which the Subscriber has agreed to purchase the Special Warrants;

the Subscriber having properly completed, signed and delivered this Agreement (with the applicable Appendices), to one of the following, as applicable:

Attention:

Tony Pullen

Fax:

(416) 361-0679

Email:

***@***

Attention:

Martin Burian

Fax:

Vice-President, Corporate Finance

Attention:

Fax:

the Subscriber having properly completed, signed and delivered, as applicable, Appendix I, II, III, and/or IV and any further documentation as required under applicable Securities Laws or any stock exchange or other regulatory authority and the Subscriber covenants and agrees to do so upon request by the Issuer; and

the conditions of closing contained in the Agency Agreement being satisfied or waived by the relevant party.

RESALE RESTRICTIONS

USE OF PERSONAL INFORMATION

to conduct background checks;

to verify the Personal Information that has been provided about the Subscriber;

to consider the suitability of the Subscriber as a holder of securities of the Issuer;

to consider the eligibility of the Issuer to continue to list on the TSX-V;

to provide disclosure to market participants as to the security holdings of the Issuer’s shareholders, and their involvement with any other reporting issuers, issuers subject to a cease trade order or bankruptcy, and information respecting penalties, sanctions or personal bankruptcies, and possible conflicts of interest with the Issuer;

to detect and prevent fraud;

to conduct enforcement proceedings; and

to perform other investigations as required by and to ensure compliance with all applicable rules, policies, rulings and regulations of the TSX-V, securities legislation and other legal and regulatory requirements governing the conduct and protection of the public markets in Canada.

SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS

MISCELLANEOUS

in the case of the Issuer, to:

Attention:

Fax:

Attention:

Fax:

in the case of the Subscriber, at the address specified on the face page hereof, with a copy to Paradigm (on behalf of the Agents) at:

Attention:

Tony Pullen

Fax:

(416) 361-0679

the date (the “Clearance Date”) which is five business days following the later of:

the date a Decision Document is issued for the Prospectus by the last of the securities authorities in the Jurisdictions in which purchasers of the Special Warrants reside and Quebec; and

the date the Registration Statement is declared effective by the SEC; and

the date which is four months following the Closing Date,

Any Special Warrants which have not been exercised prior to the Expiry Time will be exercised on behalf of the holders thereof immediately prior to the Expiry Time

Each Unit will consist of one common share (a “Common Share”) and one Common Share purchase warrant (a “Warrant”). Each Warrant will entitle the holder to purchase one Common Share of the Company for 36 months following the closing of the Offering at an exercise price of U.S.$0.80 per share.

The Company shall use its best efforts to, as soon as practicable following the Closing and, in any event, within 30 days following the Closing Date, file and obtain a Decision Document for a preliminary short form prospectus, settle any comments of the Canadian Securities administrators as soon as possible thereafter and file and obtain a Decision Document for a final Prospectus, to qualify the distribution of the Units upon the exercise of the Special Warrants.

The Company shall use its best efforts to, as soon as practicable following the Closing and, in any event, within 30 days following the Closing Date, file a Registration Statement with the SEC, settle any comments of the SEC as soon as possible thereafter and file and have declared effective a final Registration Statement, to qualify the Common Shares and Warrants to be issued upon the exercise of the Special Warrants, the Compensation Options and the Broker’s Shares for distribution to, and trading by, the public in the United States of America.

Fully Marketed best efforts private placement. It shall be a condition of completion of the Offering that the Special Warrants not be subject to a hold period of longer than four months and one day after the Closing Date in the Jurisdictions.

The qualifying jurisdictions for the Offering will be each of the provinces of Canada except for Quebec (the “Jurisdictions”). The Special Warrants will not be offered or sold in the United States. The Special Warrants may also be sold in jurisdictions other than Canada on a private placement basis provided that the Company shall not become subject to any prospectus or continuous disclosure requirements in such jurisdictions.

The Company shall obtain the necessary approvals to list the Common Shares underlying the Special Warrants (including the Common Shares issuable upon the due exercise of the Warrants) on the TSX Venture Exchange.

On the Closing Date the Agents will: (a) be paid a cash commission of 8.0% of the gross proceeds raised; (b) receive that number of Compensation Options that is equal to 8% of the number of Special Warrants sold in the Offering (each Compensation Option entitling the holder thereof to acquire one Common Share at an exercise price of US$0.80 per share for a period of 36 months from the Closing Date); and (c) receive that number of Broker’s Shares that is equal to 4% of the number of Special Warrants sold in the Offering.

On or about June 30, 2009 or such other date or dates that might be determined by the Company and the Agents.

Paradigm Capital Inc., Bolder Investment Partners, Ltd. and Union Securities Ltd.

The proceeds from the Offering shall be used for commercialization and development of drugs to be delivered using Oral Film Technology and the Versatab Multi-Layer Tablet platform, repay outstanding convertible notes, working capital and capital expenditures, as well as strategic investments including business development and pharmaceutical research and development.

APPENDIX II

FORM 4C

Placee Information:

Name:
________________________________________________________________________

_______________________________________________________________________________
Complete Address:
______________________________________________________________

Jurisdiction of Incorporation or Creation:
____________________________________________________

(a) Is the Placee purchasing securities as a portfolio manager (Yes/No)?  _______

Is the Placee carrying on business as a portfolio manager outside of Canada (Yes/No)?  _______

If the answer to 2(b) above was “Yes”, the undersigned certifies that:

It is purchasing securities of an Issuer on behalf of managed accounts for which it is making the investment decision to purchase the securities and has full discretion to purchase or sell securities for such accounts without requiring the client’s express consent to a transaction;

it carries on the business of managing the investment portfolios of clients through discretionary authority granted by those clients (a “portfolio manager” business) in
____________________
[jurisdiction], and it is permitted by law to carry on a portfolio manager business in that jurisdiction;

it was not created solely or primarily for the purpose of purchasing securities of the Issuer;

the total asset value of the investment portfolios it manages on behalf of clients is not less than CDN$20,000,000; and

it has no reasonable grounds to believe, that any of the directors, senior officers and other insiders of the Issuer, and the persons that carry on investor relations activities for the Issuer has a beneficial interest in any of the managed accounts for which it is purchasing.

If the answer to 2(a). above was “No”, please provide the names and addresses of control persons of the Placee:
 

the disclosure of Personal Information by the undersigned to the TSX-V (as defined in Appendix 6B) pursuant to this Form; and

collection, use and disclosure of Personal Information by the TSX-V for the purposes described in Appendix 6B or as otherwise identified by the TSX-V, from time to time.

a person that is or was an accredited investor at the time of the distribution,

a person that acquires or acquired securities in the circumstances referred to in Sections 2.10 – Minimum Amount Investment and 2.19 – Additional Investment in Investment Funds of NI 45 106, or;

a person described in paragraph (i) or (ii) that acquires or acquired securities under Section 2.18 – Investment Fund Reinvestments of NI 45 106; an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator, or in Québec, the securities regulatory authority, has issued a receipt;

is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction, and

in Ontario, is purchasing a security that is not a security of an investment fund;

an accredited investor, or

an exempt purchaser in Alberta or British Columbia.

an individual,

a corporation,

a partnership, trust fund and an association, syndicate, organization or other organized group of persons, whether incorporated or not, and

an individual or other person in that person’s capacity as a trustee, executor, administrator or personal or other legal representative.

the Subscriber is knowledgeable of, or has been independently advised as to, the applicable securities laws of the securities regulators having application in the jurisdiction in which the Subscriber is resident which would apply to the acquisition of the Purchased Shares;

the Subscriber is purchasing the Purchased Shares pursuant to exemptions from prospectus or equivalent requirements under applicable securities laws or, if such is not applicable, the Subscriber is permitted to purchase the Purchased Shares under the applicable securities laws of the securities regulators in the International Jurisdiction without the need to rely on any exemptions;

the applicable securities laws of the authorities in the International Jurisdiction do not require the Issuer to make any filings or seek any approvals of any kind whatsoever from any securities regulator of any kind whatsoever in the International Jurisdiction in connection with the issue and sale or resale of the Purchased Shares;

the purchase of the Purchased Shares by the Subscriber does not trigger:

any obligation of the Corporation to prepare and file a prospectus, an offering memorandum or similar document, or any other report or notice with respect to such purchase in the International Jurisdiction;

any continuous disclosure reporting obligation of the Issuer in the International Jurisdiction; or

any registration or other obligation on the part of the Issuer or the Agents;

the distribution of the Purchased Shares to the Subscriber by the Issuer complies with the laws of the International Jurisdiction; and

the Subscriber will, if requested by the Issuer or the Agents, deliver to the Issuer and the Agents a certificate or opinion of local counsel from the International Jurisdiction which will confirm the matters referred to in paragraphs (b), (c), (d) and (e) above to the satisfaction of the Issuer, acting reasonably.