Exhibit 10.1

 

Execution Copy

 

COMMON SHARE PURCHASE AGREEMENT

 

COMMON SHARE PURCHASE AGREEMENT (the “Agreement”), dated as of May 7, 2019 by
and between APTOSE BIOSCIENCES INC., a corporation organized under the laws of
Canada (the “Company”), and ASPIRE CAPITAL FUND, LLC, an Illinois limited
liability company (the “Buyer”). Capitalized terms used herein and not otherwise
defined herein are defined in Section 10 hereof.

 

WHEREAS:

 

Subject to the terms and conditions set forth in this Agreement, the Company
wishes to sell to the Buyer, and the Buyer wishes to buy from the Company, up to
Twenty Million Dollars ($20,000,000) of common shares of the Company without par
value (the “Common Shares”). The Common Shares to be purchased hereunder are
referred to herein as the “Purchase Shares.”

 

NOW THEREFORE, the Company and the Buyer hereby agree as follows:

 

1.PURCHASE OF COMMON SHARES.

 

Subject to the terms and conditions set forth in this Agreement, the Company has
the right to sell to the Buyer, and the Buyer has the obligation to purchase
from the Company, Purchase Shares as follows:

 

(a)       Commencement of Purchases of Common Shares. Any time after
Commencement (as defined below), the purchase and sale of Purchase Shares
hereunder shall occur from time to time upon written notices by the Company to
the Buyer on the terms and conditions as set forth herein following the
satisfaction of the conditions (the “Commencement”) as set forth in Sections 6
and 7 below (the date of satisfaction of such conditions, the “Commencement
Date”).

 

(b)       The Company’s Right to Require Regular Purchases. Subject to the terms
and conditions of this Agreement, on any given Business Day after the
Commencement Date, the Company shall have the right but not the obligation to
direct the Buyer by its delivery to the Buyer of a Purchase Notice from time to
time, and the Buyer thereupon shall have the obligation, to buy the number of
Purchase Shares specified in such notice, up to 200,000 Purchase Shares, on such
Business Day (as long as such notice is delivered on or before 5:00 p.m. Eastern
time on such Business Day) (each such purchase, a “Regular Purchase”) at the
Purchase Price on the Purchase Date; however, in no event shall the Purchase
Amount of a Regular Purchase exceed Five Hundred Thousand Dollars ($500,000) per
Business Day, unless the Buyer and the Company mutually agree. The Company and
the Buyer may mutually agree to increase the number of Purchase Shares that may
be sold per Regular Purchase to as much as an additional 2,000,000 Purchase
Shares per Business Day. The Company may deliver additional Purchase Notices to
the Buyer from time to time The share amounts in this Section 1(b) shall be
appropriately adjusted for any reorganization, recapitalization, non-cash
dividend, stock split, reverse stock split or other similar transaction.

 

 

 

(c)       VWAP Purchases. Subject to the terms and conditions of this Agreement,
in addition to purchases of Purchase Shares as described in Section 1(b) above,
with prior written notice (as long as such notice is delivered on or before 5:00
p.m. Eastern time on the Business Day immediately preceding the VWAP Purchase
Date, the Company shall also have the right but not the obligation to direct the
Buyer by the Company’s delivery to the Buyer of a VWAP Purchase Notice from time
to time, and the Buyer thereupon shall have the obligation, to buy the VWAP
Purchase Share Percentage of the trading volume of the Common Shares on the VWAP
Purchase Date up to the VWAP Purchase Share Volume Maximum on the VWAP Purchase
Date (each such purchase, a “VWAP Purchase”) at the VWAP Purchase Price. The
Company may deliver a VWAP Purchase Notice to the Buyer on or before 5:00 p.m.
Eastern time on a date on which the Company also submitted a Purchase Notice for
a Regular Purchase of at least 200,000 Purchase Shares to the Buyer. The share
amount in the prior sentence shall be appropriately adjusted for any
reorganization, recapitalization, non-cash dividend, stock split, reverse stock
split, or other similar transaction. A VWAP Purchase shall automatically be
deemed completed at such time on the VWAP Purchase Date that the Sale Price
falls below the VWAP Minimum Price Threshold; in such circumstance, the VWAP
Purchase Amount shall be calculated using (i) the VWAP Purchase Share Percentage
of the aggregate shares traded on the U.S. Market for such portion of the VWAP
Purchase Date prior to the time that the Sale Price fell below the VWAP Minimum
Price Threshold and (ii) a VWAP Purchase Price calculated using the volume
weighted average price of Common Shares sold during such portion of the VWAP
Purchase Date prior to the time that the Sale Price fell below the VWAP Minimum
Price Threshold. Upon completion of each VWAP Purchase Date, the Buyer shall
submit to the Company a confirmation of the VWAP Purchase in form and substance
reasonably acceptable to the Company. As soon as reasonably practicable after
receiving payment from the Buyer for the Purchase Shares purchased under the
VWAP Purchase, the Company shall deliver to the Company’s Transfer Agent a
direction to immediately issue to the Buyer the number of Purchase Shares that
the Buyer has the obligation to buy pursuant to the VWAP Purchase Notice. The
Company may deliver additional VWAP Purchase Notices to the Buyer from time to
time so long as the most recent purchase has been completed.

 

(d)       Payment for Purchase Shares. For each Regular Purchase, the Buyer
shall pay to the Company an amount equal to the Purchase Amount as full payment
for such Purchase Shares via wire transfer of immediately available funds on the
same Business Day as the Regular Purchase and, as soon as reasonably practicable
after receiving payment from the Buyer for the Purchase Shares purchased under
such Regular Purchase, the Company shall deliver to the Company’s Transfer Agent
a direction to immediately issue to the Buyer the number of Purchase Shares that
the Buyer has the obligation to buy pursuant to the Purchase Notice. For each
VWAP Purchase, the Buyer shall pay to the Company an amount equal to the VWAP
Purchase Amount as full payment for such Purchase Shares via wire transfer of
immediately available funds on the second Business Day following the VWAP
Purchase Date. All payments made under this Agreement shall be made in lawful
money of the United States of America via wire transfer of immediately available
funds to such account as the Company may from time to time designate by written
notice in accordance with the provisions of this Agreement. Whenever any amount
expressed to be due by the terms of this Agreement is due on any day that is not
a Business Day, the same shall instead be due on the next succeeding day that is
a Business Day.

 

(e)       Purchase Price Floor. The Company and the Buyer shall not effect any
sales under this Agreement on any Purchase Date where the Closing Sale Price is
less than the Floor Price. “Floor Price” means $0.25 per Common Share, which
shall be appropriately adjusted for any reorganization, recapitalization,
non-cash dividend, stock split, reverse stock split or other similar
transaction.

 

(f)       Records of Purchases. The Buyer and the Company shall each maintain
records showing the remaining Available Amount at any given time and the dates
and Purchase Amounts for each purchase, or shall use such other method
reasonably satisfactory to the Buyer and the Company to reconcile the remaining
Available Amount.

 

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(g)       Taxes. The Company shall pay any and all transfer, stamp or similar
taxes that may be payable with respect to the issuance and delivery of any
Common Shares to the Buyer made under this Agreement.

 

(h)       Compliance with Exchanges Rules. Notwithstanding anything in this
Agreement to the contrary, and in addition to the limitations set forth in
Sections 1(e) and 1(i), the total number of Common Shares that may be issued
under this Agreement, including the Commitment Shares (as defined in Section
4(e) hereof), shall be limited to 8,748,525 Common Shares (the “Exchange Cap”),
which equals 19.99% of the Company’s outstanding Common Shares as of the date
hereof, unless disinterested shareholder approval is obtained to issue more than
such 19.99%. The Exchange Cap shall be appropriately adjusted for any
reorganization, recapitalization, non-cash dividend, stock split, reverse-stock
split or other similar transaction. The foregoing limitation shall not apply if
shareholder approval has not been obtained and at any time the Exchange Cap is
reached and at all times thereafter the average price paid for all shares issued
under this Agreement is equal to or greater than $2.10 (the “Minimum Price”), a
price equal to the lower of (a) the Closing Sale Price immediately preceding the
execution of this Agreement or (b) the arithmetic average of the five (5)
Closing Sale Prices for the Common Shares immediately preceding the execution of
this Agreement (in such circumstance, for purposes of the Exchanges, the
transaction contemplated hereby would not be “below market” and the Exchange Cap
would not apply). The Minimum Price shall be appropriately adjusted for any
reorganization, recapitalization, non-cash dividend, stock split, reverse stock
split or other similar transaction. Notwithstanding anything to the contrary in
this Agreement or otherwise, the Company shall not be required or permitted to
issue, and the Buyer shall not be required to purchase, any Common Shares under
this Agreement if such issuance would breach the Company's obligations under the
rules or regulations of the Exchanges. The Company may, in its sole discretion,
determine whether to obtain disinterested shareholder approval to issue more
than 19.99% of its outstanding Common Shares hereunder.

 

(i)       Beneficial Ownership Limitation. The Company shall not issue, and the
Buyer shall not purchase any Common Shares under this Agreement, if such shares
proposed to be issued and sold, when aggregated with all other Common Shares
then owned beneficially (as calculated pursuant to Section 13(d) of the
Securities Exchange Act of 1934, as amended (the “1934 Act”) and Rule 13d-3
promulgated thereunder) by the Buyer and its affiliates would result in the
beneficial ownership by the Buyer and its affiliates of more than 9.99% of the
then issued and outstanding Common Shares, or if such shares proposed to be
issued and sold would result in a change of control under the rules of the TSX.

 

(j)       Material Non-Public Information Restriction. Notwithstanding anything
in this Agreement to the contrary, during any period in which the Company is in
possession of material non-public information, the Company and the Buyer agree
that (i) no purchase of Purchase Shares will take place, (ii) the Company shall
not request the purchase of any Purchase Shares, and (iii) the Buyer shall not
be obligated to purchase any Purchase Shares.

 

(k)       TSX Personal Information Form. The Company shall not issue and the
Buyer shall not purchase any Common Shares under this Agreement if such shares
proposed to be issued and sold, when aggregated with all other Common Shares
then owned beneficially by the Buyer and its affiliates would result in the
beneficial ownership by the Buyer and its affiliates of more than 9.99% of the
then issued and outstanding Common Shares unless and until a personal
information form is filed and precleared by the TSX in accordance with its
rules. Accordingly, this Agreement may not result in the Buyer or any of its
affiliates becoming an insider of the Company (as such term is defined under the
rules of the TSX) unless and until a personal information form is filed and
precleared by the TSX in accordance with its rules.

 

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2.       BUYER’S REPRESENTATIONS AND WARRANTIES.

 

The Buyer represents and warrants to the Company that as of the date hereof and
as of the Commencement Date:

 

(a)       Investment Purpose. The Buyer is entering into this Agreement and
acquiring the Commitment Shares and the Purchase Shares (the Purchase Shares and
the Commitment Shares are collectively referred to herein as the “Securities”),
for its own account for investment only and not with a view towards, or for
resale in connection with, the public sale or distribution thereof; provided
however, by making the representations herein, the Buyer does not agree to hold
any of the Securities for any minimum or other specific term. Notwithstanding
anything to the contrary in this Agreement, the Company and the Buyer each
acknowledge and agree that any resale or solicitation for resale of Purchase
Shares by the Buyer pursuant to this Agreement shall be made solely in the
United States and no resale of Purchase Shares will be carried out by the Buyer
in Canada or on the TSX.

 

(b)       Accredited Investor Status. The Buyer is an “accredited investor” as
that term is defined in Rule 501(a)(3) of Regulation D under the 1933 Act.

 

(c)       [Intentionally Omitted.]

 

(d)       Information. The Buyer has been furnished with all materials relating
to the business, finances and operations of the Company and materials relating
to the offer and sale of the Securities that have been reasonably requested by
the Buyer, including, without limitation, the SEC Documents (as defined in
Section 3(f) hereof). The Buyer understands that its investment in the
Securities involves a high degree of risk. The Buyer (i) is able to bear the
economic risk of an investment in the Securities including a total loss, (ii)
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of the proposed investment in the
Securities and (iii) has had an opportunity to ask questions of and receive
answers from the officers of the Company concerning the financial condition and
business of the Company, the terms and conditions of the offering of the
Securities and other matters related to an investment in the Securities. Neither
such inquiries nor any other due diligence investigations conducted by the Buyer
or its representatives shall modify, amend or affect the Buyer’s right to rely
on the Company’s representations and warranties contained in Section 3 below.
The Buyer has sought such accounting, legal and tax advice as it has considered
necessary to make an informed investment decision with respect to its
acquisition of the Securities. The Buyer acknowledges that there may be material
United States and Canadian tax consequences to it of the acquisition, holding
and disposition of the Securities, it is the Buyer’s sole responsibility to
determine such tax consequences for the Buyer, and the Company has not made any
representation or warranty to the Buyer with respect to such tax consequences.

 

(e)       No Governmental Review. The Buyer understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.

 

 -4- 

 

(f)       [Intentionally Omitted.]

 

(g)       Organization. The Buyer is a limited liability company duly organized
and validly existing in good standing under the laws of the jurisdiction in
which it is organized, and has the requisite organizational power and authority
to own its properties and to carry on its business as now being conducted.

 

(h)       Validity; Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Buyer and is a valid and
binding agreement of the Buyer enforceable against the Buyer in accordance with
its terms, subject as to enforceability to (i) general principles of equity and
to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
and other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies and (ii) public policy underlying any
law, rule or regulation (including any federal or state securities law, rule or
regulation) with regards to indemnification, contribution or exculpation. The
execution and delivery of the Transaction Documents (as defined in Section 3(b)
hereof) by the Buyer and the consummation by it of the transactions contemplated
hereby and thereby do not conflict with the Buyer’s certificate of organization
or operating agreement or similar documents, and do not require further consent
or authorization by the Buyer, its managers or its members.

 

(i)       Residency. The Buyer is of the State of Illinois.

 

(j)       No Prior Short Selling. The Buyer represents and warrants to the
Company that at no time prior to the date of this Agreement has any of the
Buyer, its agents, representatives or affiliates engaged in or effected, in any
manner whatsoever, directly or indirectly, any (i) “short sale” (as such term is
defined in Section 242.200 of Regulation SHO of the 1934 Act) of the Common
Shares or (ii) hedging transaction, which establishes a net short position with
respect to the Common Shares.

 

3.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

The Company represents and warrants to the Buyer that as of the date hereof and
as of the Commencement Date:

 

(a)       Organization and Qualification. The Company and its “Subsidiaries”
(which for purposes of this Agreement means any entity in which the Company,
directly or indirectly, owns more than 50% of the voting stock or capital stock
or other similar equity interests) are corporations or limited liability
companies duly organized and validly existing in good standing under the laws of
the jurisdiction in which they are incorporated or organized, and have the
requisite corporate or organizational power and authority to own their
properties and to carry on their business as now being conducted. Each of the
Company and its Subsidiaries is duly qualified as a foreign corporation or
limited liability company to do business and is in good standing in every
jurisdiction in which its ownership of property or the nature of the business
conducted by it makes such qualification necessary, except to the extent that
the failure to be so qualified or be in good standing would not reasonably be
expected to have a Material Adverse Effect. As used in this Agreement, “Material
Adverse Effect” means any material adverse effect on any of: (i) the business,
properties, assets, operations, results of operations or financial condition of
the Company and its Subsidiaries, if any, taken as a whole, or (ii) the
authority or ability of the Company to perform its obligations under the
Transaction Documents. The Company has no material Subsidiaries except as set
forth on Schedule 3(a).

 

 -5- 

 

(b)       Authorization; Enforcement; Validity. (i) The Company has the
requisite corporate power and authority to enter into and perform its
obligations under this Agreement, the Registration Rights Agreement and each of
the other agreements entered into by the parties on the Commencement Date and
attached hereto as exhibits to this Agreement (collectively, the “Transaction
Documents”), and to issue the Securities in accordance with the terms hereof and
thereof, (ii) the execution and delivery of the Transaction Documents by the
Company and the consummation by it of the transactions contemplated hereby and
thereby, including without limitation, the issuance of the Commitment Shares and
the reservation for issuance and the issuance of the Purchase Shares issuable
under this Agreement, have been duly authorized by the Company’s Board of
Directors or duly authorized committee thereof, do not conflict with the
Company’s Certificate of Incorporation or Bylaws (as defined below), and do not
require further consent or authorization by the Company, its Board of Directors,
except as set forth in this Agreement, or its shareholders, (iii) this Agreement
has been, and each other Transaction Document shall be on the Commencement Date,
duly executed and delivered by the Company and (iv) this Agreement constitutes,
and each other Transaction Document upon its execution on behalf of the Company,
shall constitute, the valid and binding obligations of the Company enforceable
against the Company in accordance with their terms, except as such
enforceability may be limited by (y) general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of creditors' rights and
remedies and (z) public policy underlying any law, rule or regulation (including
any federal or state securities law, rule or regulation) with regards to
indemnification, contribution or exculpation. The Board of Directors of the
Company or duly authorized committee thereof has approved the resolutions (the
“Signing Resolutions”) substantially in the form as set forth as Exhibit B
attached hereto to authorize this Agreement and the transactions contemplated
hereby. The Signing Resolutions are valid, in full force and effect and have not
been modified or supplemented in any material respect. The Company has delivered
to the Buyer a true and correct copy of the Signing Resolutions as approved by
the Board of Directors of the Company.

 

(c)       Capitalization. As of the date hereof, the authorized capital of the
Company consists of an unlimited number of Common Shares without par value, of
which as of the date hereof, 43,764,509 shares are issued and outstanding, zero
shares are held as treasury shares, 7,658,789 shares are reserved for future
issuance pursuant to the Company’s equity incentive plans, of which
approximately 1,880,301 shares remain available for future option grants or
stock awards. All of such outstanding shares have been, or upon issuance will
be, validly issued and are fully paid and non-assessable. Except as disclosed in
Schedule 3(c), (i) no shares of the Company’s authorized capital are subject to
preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company, (ii) there are no outstanding debt
securities of the Company or any of its Subsidiaries, (iii) there are no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any common shares of the Company or any of its Subsidiaries,
or contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to issue additional shares of
the Company or any of its Subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of the Company or any of its
Subsidiaries, (iv) there are no material agreements or arrangements under which
the Company or any of its Subsidiaries is obligated to register the sale of any
of their securities under the 1933 Act (except the Registration Rights
Agreement), (v) there are no outstanding securities or instruments of the
Company or any of its Subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries, (vi) there
are no securities or instruments containing anti-dilution or similar provisions
that will be triggered by the issuance of the Securities as described in this
Agreement and (vii) the Company does not have any stock appreciation rights or
“phantom stock” plans or agreements or any similar plan or agreement. The
Company has furnished or made available to the Buyer true and correct copies of
the Company’s Certificate of Incorporation, as amended and as in effect on the
date hereof (the “Certificate of Incorporation”), and the Company’s Bylaws, as
amended and as in effect on the date hereof (the “Bylaws”).

 

 -6- 

 

(d)       Issuance of Securities. The Commitment Shares have been duly
authorized and, upon issuance in accordance with the terms hereof, the
Commitment Shares shall be (i) validly issued, fully paid and non-assessable and
(ii) free from all taxes, liens and charges with respect to the issuance
thereof. Upon issuance and payment therefore in accordance with the terms and
conditions of this Agreement, the Purchase Shares shall be validly issued, fully
paid and non-assessable and free from all taxes, liens and charges with respect
to the issue thereof, with the holders being entitled to all rights accorded to
a holder of Common Shares.

 

(e)       No Conflicts. Except as disclosed in Schedule 3(e), the execution,
delivery and performance of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the reservation for issuance and issuance of the
Purchase Shares) will not (i) result in a violation of the Certificate of
Incorporation or the Bylaws or (ii)constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party, or result, to the Company’s knowledge, in a violation
of any law, rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations and the rules and regulations of the
Exchanges applicable to the Company or any of its Subsidiaries) or by which any
property or asset of the Company or any of its Subsidiaries is bound or
affected, except in the case of defaults, terminations, amendments,
accelerations, cancellations and violations under clause (ii), which would not
reasonably be expected to result in a Material Adverse Effect. Except as
disclosed in Schedule 3(e), neither the Company nor its Subsidiaries is in
violation of any term of or in default under its Certificate of Incorporation or
Bylaws or their organizational charter or bylaws, respectively. Except as
disclosed in Schedule 3(e), neither the Company nor any of its Subsidiaries is
in violation of any term of or is in default under any material contract,
agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or
order or any statute, rule or regulation applicable to the Company or its
Subsidiaries, except for possible violations, defaults, terminations or
amendments that would not reasonably be expected to have a Material Adverse
Effect. The business of the Company and its Subsidiaries is not being conducted,
and shall not be conducted, in violation of any law, ordinance, or regulation of
any governmental entity, except for possible violations, the sanctions for which
either individually or in the aggregate would not reasonably be expected to have
a Material Adverse Effect. Except as specifically contemplated by this
Agreement, reporting obligations under the 1934 Act, or as required under the
1933 Act or applicable state securities laws or the filing of a Listing of
Additional Shares Notification Form with the U.S. Exchange, the Company is not
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency or any regulatory or
self-regulatory agency in order for it to execute, deliver or perform any of its
obligations under or contemplated by the Transaction Documents in accordance
with the terms hereof or thereof. Except as disclosed in Schedule 3(e) and for
reporting obligations under the 1934 Act, all consents, authorizations, orders,
filings and registrations which the Company is required to obtain pursuant to
the preceding sentence shall be obtained or effected on or prior to the
Commencement Date. Except as disclosed in Schedule 3(e), the Company is not
subject to any notices or actions from or to the Exchanges other than routine
matters incident to listing on the Exchanges and not involving a violation of
the rules of the Exchanges. Except as disclosed in Schedule 3(e), to the
Company’s knowledge, the U.S. Exchange has not commenced any delisting
proceedings against the Company.

 

 -7- 

 

(f)       SEC Documents; Financial Statements. Except as disclosed in Schedule
3(f), since December 31, 2017, the Company has filed all reports, schedules,
forms, statements and other documents required to be filed by it with the SEC
pursuant to the reporting requirements of the 1934 Act (all of the foregoing
filed prior to the date hereof and all exhibits included therein and financial
statements and schedules thereto and documents incorporated by reference therein
being hereinafter referred to as the “SEC Documents”). As of their respective
dates (except as they have been correctly amended), the SEC Documents complied
in all material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC (except
as they may have been properly amended), contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. As of their respective
dates (except as they have been properly amended), the financial statements of
the Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board, consistently applied,
during the periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto or (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). Except as disclosed
in Schedule 3(f) or routine correspondence, such as comment letters and notices
of effectiveness in connection with previously filed registration statements or
periodic reports publicly available on EDGAR, to the Company’s knowledge, the
Company or any of its Subsidiaries are not on the date hereof the subject of any
inquiry, investigation or action by the SEC.

 

(g)       Absence of Certain Changes. Except as disclosed in Schedule 3(g),
since December 31, 2018, there has been no material adverse change in the
business, properties, operations, financial condition or results of operations
of the Company or its Subsidiaries taken as a whole. For purposes of this
Agreement, neither a decrease in cash or cash equivalents or in the market price
of the Common Shares nor losses incurred in the ordinary course of the Company’s
business shall be deemed or considered a material adverse change. The Company
has not taken any steps, and does not currently expect to take any steps, to
seek protection pursuant to any Bankruptcy Law nor does the Company or any of
its Subsidiaries have any knowledge or reason to believe that its creditors
intend to initiate involuntary bankruptcy or insolvency proceedings. The Company
is financially solvent and is generally able to pay its debts as they become
due.

 

(h)       Absence of Litigation. Except as disclosed in Schedule 3(h), to the
Company’s knowledge, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the Company
or any of its Subsidiaries, threatened against the Company, the Common Shares or
any of the Company’s Subsidiaries or any of the Company’s or the Company’s
Subsidiaries’ officers or directors in their capacities as such, which could
reasonably be expected to have a Material Adverse Effect (each, an “Action”). A
description of each such Action, if any, is set forth in Schedule 3(h).

 

 -8- 

 

(i)       Acknowledgment Regarding Buyer’s Status. The Company acknowledges and
agrees that the Buyer is acting solely in the capacity of arm’s length purchaser
with respect to the Transaction Documents and the transactions contemplated
hereby and thereby. The Company further acknowledges that the Buyer is not
acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to the Transaction Documents and the transactions
contemplated hereby and thereby and any advice given by the Buyer or any of its
representatives or agents in connection with the Transaction Documents and the
transactions contemplated hereby and thereby is merely incidental to the Buyer’s
purchase of the Securities. The Company further represents to the Buyer that the
Company’s decision to enter into the Transaction Documents has been based solely
on the independent evaluation by the Company and its representatives and
advisors.

 

(j)       Intellectual Property Rights. To the Company’s knowledge, the Company
and its Subsidiaries own or possess adequate rights or licenses to use all
material trademarks, trade names, service marks, service mark registrations,
service names, patents, patent rights, copyrights, inventions, licenses,
approvals, governmental authorizations, trade secrets and other intellectual
property rights (collectively, “Intellectual Property”) necessary to conduct
their respective businesses as now conducted, except as set forth in Schedule
3(j) or to the extent that the failure to own, possess, license or otherwise
hold adequate rights to use Intellectual Property would not, individually or in
the aggregate, have a Material Adverse Effect. Except as disclosed in Schedule
3(j), to the Company’s knowledge, none of the Company’s active and registered
Intellectual Property have expired or terminated, or, by the terms and
conditions thereof, will expire or terminate within two years from the date of
this Agreement, except as would not reasonably be expected to have a Material
Adverse Effect. The Company and its Subsidiaries do not have any knowledge of
any infringement by the Company or its Subsidiaries of any Intellectual Property
of others and, except as set forth on Schedule 3(j), there is no claim, action
or proceeding being made or brought against, or to the Company’s knowledge,
being threatened against, the Company or its Subsidiaries regarding Intellectual
Property, which could reasonably be expected to have a Material Adverse Effect.

 

(k)       Environmental Laws. To the Company’s knowledge, the Company and its
Subsidiaries (i) are in material compliance with any and all applicable foreign,
federal, state, provincial and local laws and regulations relating to the
protection of human health and safety or the environment with respect to
hazardous or toxic substances or wastes, pollutants or contaminants
(“Environmental Laws”), (ii) have received all material permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in material compliance with all terms
and conditions of any such permit, license or approval, except where, in each of
the three foregoing clauses, the failure to so comply or receive such approvals
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

 

(l)       Title. The Company and its Subsidiaries have good and marketable title
to all personal property owned by them that is material to the business of the
Company and its Subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as are described in Schedule 3(l) or such
as do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company and any of
its Subsidiaries or would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect. Any real property and facilities held
under lease by the Company and any of its Subsidiaries, to the Company’s
knowledge, are held by them under valid, subsisting and enforceable leases with
such exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company and its
Subsidiaries.

 

 -9- 

 

(m)       Insurance. The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be reasonable and
customary in the businesses in which the Company and its Subsidiaries are
engaged. To the Company’s knowledge, since December 31, 2016, neither the
Company nor any such Subsidiary has been refused any insurance coverage sought
or applied for and neither the Company nor any such Subsidiary, to the Company’s
knowledge, will be unable to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would reasonably be
expected to have a Material Adverse Effect.

 

(n)       Regulatory Permits. The Company and its Subsidiaries possess all
material certificates, authorizations and permits issued by the appropriate
federal, state, provincial, local or foreign regulatory authorities necessary to
conduct their respective businesses as currently conducted, except when the
failure to so possess such certificates, authorizations or permits could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, and neither the Company nor any such Subsidiary has received any
written notice of proceedings relating to the revocation or modification of any
such material certificate, authorization or permit.

 

(o)       Tax Status. The Company and each of its Subsidiaries has made or filed
all federal, provincial and state income and all other material tax returns,
reports and declarations required by any jurisdiction to which it is subject
(unless and only to the extent that the Company and each of its Subsidiaries has
set aside on its books reserves reasonably adequate for the payment of all
unpaid and unreported taxes or filed valid extensions) and has paid all taxes
and other governmental assessments and charges that are material in amount,
shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith and has set aside on its books reserves
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. To the Company’s
knowledge, there are no unpaid taxes in any material amount claimed to be due by
the taxing authority of any jurisdiction.

 

(p)       Transactions With Affiliates. Except as set forth on Schedule 3(p) and
other than the grant or exercise of stock options or any other equity securities
offered pursuant to duly adopted stock or incentive compensation plans as
disclosed on Schedule 3(c), none of the officers, directors or employees of the
Company is on the date hereof a party to any transaction with the Company or any
of its Subsidiaries (other than for services as employees, officers and
directors and reimbursement for expenses incurred on behalf of the Company),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a material interest or is an officer, director, trustee or general
partner.

 

 -10- 

 

(q)       Application of Takeover Protections. The Company and its board of
directors have taken or will take prior to the Commencement Date all necessary
action, if any, in order to render inapplicable any control share acquisition,
business combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Certificate of
Incorporation or the laws of the jurisdiction of its incorporation which is or
could become applicable to the Buyer as a result of the transactions
contemplated by this Agreement, including, without limitation, the Company’s
issuance of the Securities and the Buyer’s ownership of the Securities.

 

(r)       Registration Statement. The Shelf Registration Statement (as defined
in Section 4(a) hereof) has been declared effective by the SEC, and no stop
order has been issued or is pending or, to the knowledge of the Company,
threatened by the SEC with respect thereto. As of the date hereof, the Company
has a dollar amount of securities registered and unsold under the Shelf
Registration Statement, which is not less than the sum of (i) the Available
Amount and (ii) the market value of the Commitment Shares on the date hereof.

 

4.       COVENANTS.

 

(a)       Filing of Form 8-K and Prospectus Supplement. The Company agrees that
it shall, within the time required under the 1934 Act, file a Current Report on
Form 8-K disclosing this Agreement and the transaction contemplated hereby. The
Company shall file within two (2) Business Days from the Commencement Date a
prospectus supplement to the Company’s existing shelf registration statement on
Form S-3 (File No. 333-230218, the “Shelf Registration Statement”) covering the
sale of the Commitment Shares and Purchase Shares (the “Prospectus Supplement”)
in accordance with the terms of the Registration Rights Agreement between the
Company and the Buyer, dated as of the date hereof (the “Registration Rights
Agreement”). its reasonable best efforts to effective under the 1933 Act and
available for sales of all Securities to the Buyer no longer qualifies to make
sales under the Shelf Registration Statement (which shall be understood to
include the inability of the Company to immediately register sales of Securities
to the Buyer under the Shelf Registration Statement or any New Registration
Statement pursuant to General Instruction I.B.6 of Form S-3), (ii) the date on
which all the Securities have been sold under this Agreement and no Available
Amount remains thereunder, or (iii) Agreement has been terminated. The Shelf
Registration Statement (including any amendments or supplements thereto and
prospectuses or prospectus supplements, including the Prospectus Supplement,
contained therein) shall not contain any 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, in the light of the circumstances under which they
were made, not misleading.

 

(b)       Blue Sky. The Company shall take such action, if any, as is reasonably
necessary in order to obtain an exemption for or to qualify (i) the initial sale
of the Securities to the Buyer under this Agreement and (ii) any subsequent sale
of the Securities by the Buyer, in each case, under applicable securities or
“Blue Sky” laws of the states of the United States in such states as is
reasonably requested by the Buyer from time to time, and shall provide evidence
of any such action so taken to the Buyer at its written request; provided,
however, that the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to subject
itself to taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject.

 

 -11- 

 

(c)       Listing. The Company shall promptly secure the listing of all of the
Securities (subject to official notice of issuance) on the U.S. Exchange and
shall maintain such listing, so long as any other Common Shares shall be so
listed. The Company shall use its reasonable best efforts to maintain the Common
Shares’ listing on the U.S. Exchange. Neither the Company nor any of its
Subsidiaries shall take any action that would be reasonably expected to result
in the delisting or suspension of the Common Shares on the U.S. Exchange. The
Company shall pay all fees and expenses in connection with satisfying its
obligations under this Section.

 

(d)       Limitation on Short Sales and Hedging Transactions. The Buyer agrees
that beginning on the date of this Agreement and ending on the date of
termination of this Agreement as provided in Section 11(k), the Buyer and its
agents, representatives and affiliates shall not in any manner whatsoever enter
into or effect, directly or indirectly, any (i) “short sale” (as such term is
defined in Section 242.200 of Regulation SHO of the 1934 Act) of the Common
Shares or (ii) hedging transaction, which establishes a net short position with
respect to the Common Shares.

 

(e)       Issuance of Commitment Shares. In connection with the Commencement,
the Company shall issue to the Buyer as consideration for the Buyer entering
into this Agreement 171,428 Common Shares (the “Commitment Shares”). The
Commitment Shares shall be issued without any restrictive legend whatsoever or
prior sale requirement.

 

(f)       Due Diligence. The Buyer shall have the right, from time to time as
the Buyer may reasonably deem appropriate, to perform reasonable due diligence
on the Company during normal business hours and subject to reasonable prior
notice to the Company. The Company and its officers and employees shall provide
information and reasonably cooperate with the Buyer in connection with any
reasonable request by the Buyer related to the Buyer’s due diligence of the
Company, including, but not limited to, any such request made by the Buyer in
connection with (i) the filing of the prospectus supplement described in Section
4(a) hereof and (ii) the Commencement; provided, however, that at no time is the
Company required to disclose material nonpublic information to the Buyer or
breach any obligation of confidentiality or non-disclosure to a third party or
make any disclosure that could cause a waiver of attorney-client privilege.
Except as may be required by law, court order or governmental authority, each
party hereto agrees not to disclose any Confidential Information of the other
party to any third party and shall not use the Confidential Information of such
other party for any purpose other than in connection with, or in furtherance of,
the transactions contemplated hereby. Each party hereto acknowledges that the
Confidential Information shall remain the property of the disclosing party and
agrees that it shall take all reasonable measures to protect the secrecy of any
Confidential Information disclosed by the other party.

 

5.       TRANSFER AGENT INSTRUCTIONS.

 

All of the Purchase Shares to be issued under this Agreement shall be issued
without any restrictive legend unless the Buyer expressly consents otherwise.
The Company shall issue irrevocable instructions to the Transfer Agent, and any
subsequent transfer agent, to issue Common Shares in the name of the Buyer for
the Purchase Shares (the “Irrevocable Transfer Agent Instructions”). The Company
warrants to the Buyer that no instruction other than the Irrevocable Transfer
Agent Instructions referred to in this Section 5, will be given by the Company
to the Transfer Agent with respect to the Purchase Shares and that the
Commitment Shares and the Purchase Shares shall otherwise be freely transferable
on the books and records of the Company as and to the extent provided in this
Agreement and the Registration Rights Agreement.

 

 -12- 

 

6.CONDITIONS TO THE COMPANY’S RIGHT TO COMMENCE

SALES OF COMMON SHARES UNDER THIS AGREEMENT.

 

The right of the Company hereunder to commence sales of the Purchase Shares is
subject to the satisfaction of each of the following conditions on or before the
Commencement Date (the date that the Company may begin sales of Purchase
Shares):

 

(a)       The Buyer shall have executed each of the Transaction Documents and
delivered the same to the Company;

 

(b)       The representations and warranties of the Buyer shall be true and
correct as of the Commencement Date as though made at that time (except for
representations and warranties that speak as of a specific date, which shall be
true and correct in all material respects as of such specific date) and the
Buyer shall have performed, satisfied and complied in all material respects with
the covenants and agreements required by this Agreement to be performed,
satisfied or complied with by the Buyer at or prior to the Commencement Date;
and

 

(c)       The Prospectus Supplement shall have been delivered to the Buyer and
no stop order with respect to the registration statement covering the sale of
shares to the Buyer shall be pending or, to the knowledge of the Company,
threatened by the SEC.

 

7.CONDITIONS TO THE BUYER’S OBLIGATION TO MAKE PURCHASES OF SHARES OF COMMON
SHARES.

 

The obligation of the Buyer to buy Purchase Shares under this Agreement is
subject to the satisfaction of each of the following conditions on or before the
Commencement Date (the date that the Company may begin sales of Purchase Shares)
and once such conditions have been initially satisfied, there shall not be any
ongoing obligation to satisfy such conditions after the Commencement has
occurred:

 

(a)       The Company shall have executed each of the Transaction Documents and
delivered the same to the Buyer;

 

(b)       The Company shall have received all approvals and authorizations as
necessary and applicable by the TSX and the U.S. Exchange to issue the shares
hereunder;

 

(c)       The Common Shares shall be authorized for quotation on the U.S.
Exchange, trading in the Common Shares shall not have been within the last 365
days suspended by the SEC or the U.S. Exchange, other than a general halt in
trading in the Common Shares by the U.S. Exchange under halt codes indicating
pending or released material news, and the Securities shall be approved for
listing upon the U.S. Exchange;

 

(d)       The Buyer shall have received opinions of the Company’s Canadian and
United States legal counsel, each dated as of the Commencement Date and in
customary form and substance;

 

 -13- 

 

(e)       The representations and warranties of the Company shall be true and
correct in all material respects (except to the extent that any of such
representations and warranties is already qualified as to materiality in Section
3 above, in which case, such representations and warranties shall be true and
correct without further qualification) as of the date of this Agreement and as
of the Commencement Date as though made at that time (except for representations
and warranties that speak as of a specific date, which shall be true and correct
in all material respects as of such specific date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by the Company at or prior to the Commencement Date.
The Buyer shall have received a certificate, executed by the CEO, President or
CFO of the Company, dated as of the Commencement Date, to the foregoing effect
in the form attached hereto as Exhibit A;

 

(f)       The Board of Directors of the Company or a duly authorized committee
thereof shall have adopted resolutions substantially in the form attached hereto
as Exhibit B which shall be in full force and effect without any amendment or
supplement thereto as of the Commencement Date;

 

(g)       As of the Commencement Date, the Company shall have reserved out of
its authorized and unissued Common shares the Purchase Shares solely for the
purpose of effecting future purchases of Purchase Shares hereunder;

 

(h)       The Irrevocable Transfer Agent Instructions, in form acceptable to the
Buyer shall have been delivered to and acknowledged in writing by the Company
and the Buyer and have been delivered to the Transfer Agent;

 

(i)       The Company shall have delivered to the Buyer a certificate evidencing
the incorporation and good standing of the Company under the laws of Canada
issued by Industry Canada as of a date within ten (10) Business Days of the
Commencement Date;

 

(j)       [Intentionally Omitted.];

 

(k)       The Company shall have delivered to the Buyer a secretary’s
certificate executed by the Secretary of the Company, dated as of the
Commencement Date, in the form attached hereto as Exhibit C;

 

(l)       The Shelf Registration Statement shall have been declared effective
under the 1933 Act by the SEC and no stop order with respect thereto shall be
pending or, to the knowledge of the Company, threatened by the SEC. The Company
shall have prepared and delivered to the Buyer a final and complete form of
Prospectus Supplement, dated and current as of the Commencement Date, to be used
in connection with any issuances of any Commitment Shares or any Purchase Shares
to the Buyer, and to be filed by the Company within two (2) Business Days after
the Commencement Date pursuant to Rule 424(b) under the 1933 Act. The Company
shall have made all filings under all applicable federal and state securities
laws necessary to consummate the issuance of the Commitment Shares and the
Purchase Shares pursuant to this Agreement in compliance with such laws;

 

(m)       No Event of Default has occurred and is continuing, or any event
which, after notice and/or lapse of time, would become an Event of Default has
occurred;

 

(n)       On or prior to the Commencement Date, the Company shall take all
necessary action, if any, and such actions as reasonably requested by the Buyer,
in order to render inapplicable any control share acquisition, business
combination, stockholder rights plan or poison pill (including any distribution
under a rights agreement) or other similar anti-takeover provision under the
Certificate of Incorporation or the laws of the jurisdiction of its
incorporation that is or could become applicable to the Buyer as a result of the
transactions contemplated by this Agreement, including, without limitation, the
Company's issuance of the Securities and the Buyer's ownership of the
Securities; and

 

 -14- 

 

(o)       The Company shall have provided the Buyer with the information
reasonably requested by the Buyer in connection with its due diligence requests
made prior to, or in connection with, the Commencement, in accordance with the
terms of Section 4(f) hereof.

 

8.INDEMNIFICATION.

 

In consideration of the Buyer’s execution and delivery of the Transaction
Documents and acquiring the Securities hereunder and in addition to all of the
Company’s other obligations under the Transaction Documents, the Company shall
defend, protect, indemnify and hold harmless the Buyer and all of its
affiliates, members, officers, directors, and employees, and any of the
foregoing person’s agents or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by
this Agreement) (collectively, the “Indemnitees”) from and against any and all
third party actions, causes of action, suits, claims, losses, costs, penalties,
fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys’ fees
and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as
a result of, or arising out of, or relating to (a) any misrepresentation or
breach of any representation or warranty made by the Company in the Transaction
Documents or any other certificate, instrument or document contemplated hereby
or thereby, (b) any breach of any covenant, agreement or obligation of the
Company contained in the Transaction Documents or any other certificate,
instrument or document contemplated hereby or thereby, or (c) any cause of
action, suit or claim brought or made against such Indemnitee and arising out of
or resulting from the execution, delivery, performance or enforcement of the
Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, other than with respect to Indemnified
Liabilities which directly and primarily result from (A) a breach of any of the
Buyer’s representations and warranties, covenants or agreements contained in
this Agreement, or (B) the gross negligence, bad faith or willful misconduct of
the Buyer or any other Indemnitee. To the extent that the foregoing undertaking
by the Company may be unenforceable for any reason, the Company shall make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.

 

9.       EVENTS OF DEFAULT.

 

An “Event of Default” shall be deemed to have occurred at any time as any of the
following events occurs:

 

(a)       during any period in which the effectiveness of any registration
statement is required to be maintained pursuant to the terms of the Registration
Rights Agreement, the effectiveness of such registration statement lapses for
any reason (including, without limitation, the issuance of a stop order) or is
unavailable to the Company for sale of all of the Registrable Securities (as
defined in the Registration Rights Agreement) to the Buyer in accordance with
the terms of the Registration Rights Agreement, and such lapse or unavailability
continues for a period of ten (10) consecutive Business Days or for more than an
aggregate of sixty (60) Business Days in any 365-day period, which is not in
connection with a post-effective amendment to any such registration statement or
the filing of a new registration statement; provided, however, that in
connection with any post-effective amendment to such registration statement or
filing of a new registration statement that is required to be declared effective
by the SEC, such lapse or unavailability may continue for a period of no more
than sixty (60) consecutive Business Days, which such period shall be extended
for an additional thirty (30) Business Days if the Company receives a comment
letter from the SEC in connection therewith;

 

 -15- 

 

(b)       the suspension from trading or failure of the Common Shares to be
listed on the U.S. Exchange for a period of three (3) consecutive Business Days;

 

(c)       the delisting of the Common Shares from the Nasdaq Capital Market, if
the Common Shares are not immediately thereafter trading on the New York Stock
Exchange, the NYSE American, the Nasdaq Global Select Market, or the Nasdaq
Global Market;

 

(d)       the failure for any reason by the Transfer Agent to issue Purchase
Shares to the Buyer within five (5) Business Days after the applicable payment
has been made by the Buyer to the Company;

 

(e)       the Company’s breach of any representation or warranty (as of the
dates made), covenant or other term or condition under any Transaction Document
if such breach would reasonably be expected to have a Material Adverse Effect
and except, in the case of a breach of a covenant which is reasonably curable,
only if such breach continues uncured for a period of at least five (5) Business
Days;

 

(f)       if any Person commences a proceeding against the Company pursuant to
or within the meaning of any Bankruptcy Law;

 

(g)       if the Company pursuant to or within the meaning of any Bankruptcy
Law; (A) commences a voluntary case, (B) consents to the entry of an order for
relief against it in an involuntary case, (C) consents to the appointment of a
Custodian of it or for all or substantially all of its property, (D) makes a
general assignment for the benefit of its creditors or (E) becomes insolvent;

 

(h)       a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that (A) is for relief against the Company in an involuntary
case, (B) appoints a Custodian of the Company or for all or substantially all of
its property, or (C) orders the liquidation of the Company or any Subsidiary; or

 

(i)       if at any time after the Commencement Date, the Exchange Cap is
reached unless and until shareholder approval is obtained pursuant to Section
1(h) hereof. The Exchange Cap shall be deemed to be reached at such time if,
upon submission of a Purchase Notice or VWAP Purchase Notice under this
Agreement, the issuance of such number of Common Shares would exceed the number
of Common Shares which the Company may issue under this Agreement without
breaching the Company’s obligations under the rules or regulations of the
Exchanges.

 

In addition to any other rights and remedies under applicable law and this
Agreement, including the Buyer termination rights under Section 11(k) hereof, so
long as an Event of Default has occurred and is continuing, or if any event
which, after notice and/or lapse of time, would become an Event of Default, has
occurred and is continuing, or so long as the Closing Sale Price is below the
Floor Price, the Company may not require and the Buyer shall not be obligated to
purchase any Common Shares under this Agreement. If pursuant to or within the
meaning of any Bankruptcy Law, the Company commences a voluntary case or any
Person commences a proceeding against the Company, a Custodian is appointed for
the Company or for all or substantially all of its property, or the Company
makes a general assignment for the benefit of its creditors, (any of which would
be an Event of Default as described in Sections 9(f), 9(g) and 9(h) hereof) this
Agreement shall automatically terminate without any liability or payment to the
Company without further action or notice by any Person. No such termination of
this Agreement under Section 11(k)(i) shall affect the Company’s or the Buyer’s
obligations under this Agreement with respect to pending purchases and the
Company and the Buyer shall complete their respective obligations with respect
to any pending purchases under this Agreement.

 

 -16- 

 

10.       CERTAIN DEFINED TERMS.

 

For purposes of this Agreement, the following terms shall have the following
meanings:

 

(a)       “1933 Act” means the Securities Act of 1933, as amended.

 

(b)       “Available Amount” means initially Twenty Million Dollars
($20,000,000) in the aggregate which amount shall be reduced by the Purchase
Amount each time the Buyer purchases Common Shares pursuant to Section 1 hereof.

 

(c)       “Bankruptcy Law” means Title 11, U.S. Code, or any similar Canadian,
U.S. federal or state or foreign law for the relief of debtors.

 

(d)       “Business Day” means any day on which the U.S. Exchange is open for
trading during normal trading hours (i.e., 9:30 a.m. to 4:00 p.m. Eastern Time),
including any day on which the U.S. Exchange is open for trading for a period of
time less than the customary time.

 

(e)       “Closing Sale Price” means the last closing trade price for the Common
Shares on the U.S. Exchange as reported by the U.S. Exchange.

 

(f)       “Confidential Information” means any information disclosed by either
party to the other party, either directly or indirectly, in writing, orally or
by inspection of tangible objects (including, without limitation, documents,
prototypes, samples, plant and equipment), which is designated as
"Confidential," "Proprietary" or some similar designation. Information
communicated orally shall be considered Confidential Information if such
information is expressly identified as Confidential Information at the time of
such initial disclosure and confirmed in writing as being Confidential
Information within ten (10) Business Days after the initial disclosure.
Confidential Information may also include information disclosed to a disclosing
party by third parties. Confidential Information shall not, however, include any
information which (i) was publicly known and made generally available in the
public domain prior to the time of disclosure by the disclosing party; (ii)
becomes publicly known and made generally available after disclosure by the
disclosing party to the receiving party through no action or inaction of the
receiving party; (iii) is already in the possession of the receiving party at
the time of disclosure by the disclosing party as shown by the receiving party’s
files and records immediately prior to the time of disclosure; (iv) is obtained
by the receiving party from a third party without a breach of such third party’s
obligations of confidentiality; (v) is independently developed by the receiving
party without use of or reference to the disclosing party’s Confidential
Information, as shown by documents and other competent evidence in the receiving
party’s possession; or (vi) is required by law to be disclosed by the receiving
party, provided that the receiving party gives the disclosing party prompt
written notice of such requirement prior to such disclosure and assistance in
obtaining an order protecting the information from public disclosure.

 

 -17- 

 

(g)       “Custodian” means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.

 

(h)       “Exchanges” means the U.S. Exchange and the TSX;

 

(i)       “Maturity Date” means the date that is thirty (30) months from the
Commencement Date.

 

(j)       “Person” means an individual or entity including any limited liability
company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency
thereof.

 

(k)       “Purchase Amount” means, with respect to any particular purchase made
hereunder, the portion of the Available Amount to be purchased by the Buyer
pursuant to Section 1 hereof as set forth in a valid Purchase Notice or VWAP
Purchase Notice which the Company delivers to the Buyer.

 

(l)       “Purchase Date” means, with respect to any Regular Purchase made
hereunder, the Business Day of receipt by the Buyer of a valid Purchase Notice
that the Buyer is to buy Purchase Shares pursuant to Section 1(b) hereof.

 

(m)        “Purchase Notice” shall mean an irrevocable written notice from the
Company to the Buyer directing the Buyer to buy Purchase Shares pursuant to
Section 1(b) hereof as specified by the Company therein at the applicable
Purchase Price on the Purchase Date.

 

(n)        “Purchase Price” means the lesser of (i) the lowest Sale Price of the
Common Shares on the Purchase Date or (ii) the arithmetic average of the three
(3) lowest Closing Sale Prices for the Common Shares during the ten (10)
consecutive Business Days ending on the Business Day immediately preceding such
Purchase Date (to be appropriately adjusted for any reorganization,
recapitalization, non-cash dividend, stock split, reverse stock split or other
similar transaction).

 

(o)       “Sale Price” means any trade price for the Common Shares on the U.S.
Exchange during normal trading hours, as reported by the U.S. Exchange.

 

(p)       “SEC” means the United States Securities and Exchange Commission.

 

(q)       “Transfer Agent” means the transfer agent of the Company as set forth
in Section 11(f) hereof or such other person who is then serving as the transfer
agent for the Company in respect of the Common Shares.

 

(r)       “TSX” means the Toronto Stock Exchange.

 

(s)        “U.S. Exchange” means the NASDAQ Capital Market; provided however,
that in the event the Company’s Common Shares are ever listed or traded on the
New York Stock Exchange, the NYSE MKT, the Nasdaq Global Select Market, the
Nasdaq Global Market, the OTC Bulletin Board or either of the OTCQB marketplace
or the OTCQX marketplace of the OTC Markets Group, then the “U.S. Exchange”
shall mean such other market or exchange on which the Company’s Common Shares
are then listed or traded.

 

 -18- 

 

(t)       “VWAP Minimum Price Threshold” means, with respect to any particular
VWAP Purchase Notice, the Sale Price on the VWAP Purchase Date equal to the
greater of (i) 80% of the Closing Sale Price on the Business Day immediately
preceding the VWAP Purchase Date or (ii) such higher price as set forth by the
Company in the VWAP Purchase Notice.

 

(u)       “VWAP Purchase Amount” means, with respect to any particular VWAP
Purchase Notice, the portion of the Available Amount to be purchased by the
Buyer pursuant to Section 1(c) hereof pursuant to a valid VWAP Purchase Notice
which requires the Buyer to buy the VWAP Purchase Share Percentage of the
aggregate shares traded on the U.S. Exchange during normal trading hours on the
VWAP Purchase Date up to the VWAP Purchase Share Volume Maximum, subject to the
VWAP Minimum Price Threshold.

 

(v)       “VWAP Purchase Date” means, with respect to any VWAP Purchase made
hereunder, the Business Day following the receipt by the Buyer of a valid VWAP
Purchase Notice that the Buyer is to buy Purchase Shares pursuant to Section
1(c) hereof.

 

(w)       “VWAP Purchase Notice” shall mean an irrevocable written notice from
the Company to the Buyer directing the Buyer to buy Purchase Shares on the VWAP
Purchase Date pursuant to Section 1(c) hereof as specified by the Company
therein at the applicable VWAP Purchase Price with the applicable VWAP Purchase
Share Percentage specified therein.

 

(x)       “VWAP Purchase Share Percentage” means, with respect to any particular
VWAP Purchase Notice pursuant to Section 1(c) hereof, the percentage set forth
in the VWAP Purchase Notice which the Buyer will be required to buy as a
specified percentage of the aggregate shares traded on the U.S. Exchange during
normal trading hours up to the VWAP Purchase Share Volume Maximum on the VWAP
Purchase Date subject to Section 1(c) hereof but in no event shall this
percentage exceed thirty percent (30%) of such VWAP Purchase Date’s share
trading volume of the Common Shares on the U.S. Exchange during normal trading
hours.

 

(y)        “VWAP Purchase Price” means the lesser of (i) the Closing Sale Price
on the VWAP Purchase Date; or (ii) ninety-seven percent (97%) of volume weighted
average price for the Common Shares traded on the U.S. Exchange during normal
trading hours on (A) the VWAP Purchase Date if the aggregate shares traded on
the U.S. Exchange on the VWAP Purchase Date have not exceeded the VWAP Purchase
Share Volume Maximum and the Sale Price of Common Shares has not fallen below
the VWAP Minimum Price Threshold (to be appropriately adjusted for any
reorganization, recapitalization, non-cash dividend, stock split, reverse stock
split or other similar transaction), or (B) the portion of the VWAP Purchase
Date until such time as the sooner to occur of (1) the time at which the
aggregate shares traded on the U.S. Exchange has exceeded the VWAP Purchase
Share Volume Maximum, or (2) the time at which the Sale Price of Common Shares
falls below the VWAP Minimum Price Threshold (to be appropriately adjusted for
any reorganization, recapitalization, non-cash dividend, stock split, reverse
stock split or other similar transaction).

 

(z)        “VWAP Purchase Share Estimate” means the number of shares of Common
Shares that the Company has in its sole discretion estimated in connection with
a VWAP Purchase Notice pursuant to Section 1(c) hereof (to be appropriately
adjusted for any reorganization, recapitalization, non-cash dividend, stock
split, reverse stock split or other similar transaction).

 

 -19- 

 

(aa) “VWAP Purchase Share Volume Maximum” means a number of shares of Common
Shares traded on the U.S. Exchange during normal trading hours on the VWAP
Purchase Date equal to: (i) the VWAP Purchase Share Estimate, divided by (ii)
the VWAP Purchase Share Percentage (to be appropriately adjusted for any
reorganization, recapitalization, non-cash dividend, stock split, reverse stock
split or other similar transaction).

 

11.       MISCELLANEOUS.

 

(a)       Governing Law; Jurisdiction; Jury Trial. The laws of the Province of
Ontario shall governall issues concerning the relative rights of the Company and
its shareholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the other Transaction
Documents shall be governed by the internal laws of the State of Illinois,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Illinois or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of
Illinois. Each party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in the City of Chicago, for the
adjudication of any dispute hereunder or under the other Transaction Documents
or in connection herewith or therewith, or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR
ANY TRANSACTION CONTEMPLATED HEREBY.

 

(b)       Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party; provided that a facsimile or pdf (or other
electronic reproduction) signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the
signature were an original, not a facsimile or pdf (or other electronic
reproduction) signature.

 

(c)       Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.

 

(d)       Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

 

 -20- 

 

(e)       Entire Agreement. This Agreement and the Registration Rights Agreement
supersede all other prior oral or written agreements between the Buyer, the
Company, their affiliates and persons acting on their behalf with respect to the
matters discussed herein, and this Agreement, the other Transaction Documents
and the instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Buyer
makes any representation, warranty, covenant or undertaking with respect to such
matters. Each of the Company and the Buyer acknowledges and agrees that it has
not relied on, in any manner whatsoever, any representations or statements,
written or oral, other than as expressly set forth in this Agreement. The Buyer
and the Company agree the Common Share Purchase Agreement, dated as of May 30,
2018, by and between the Company and the Buyer, is hereby terminated in
accordance with its terms.

 

(f)       Notices. Any notices, consents or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); (iii) upon receipt, when sent by electronic message (provided
the recipient responds to the message and confirmation of both electronic
messages are kept on file by the sending party); or (iv) one (1) Business Day
after timely deposit with a nationally recognized overnight delivery service, in
each case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:

 

If to the Company:

 

Aptose Biosciences Inc.

251 Consumers Road, Suite 1105

Toronto, Ontario M2J 4R3

Telephone: 650-718-5028

Facsimile: 905-234-2120

Attention: Gregory K. Chow, CFO

Email: gchow@aptose.com

 

With a copy (which shall not constitute notice) to:

 

Dorsey & Whitney LLP

Suite 1070 – 1095 West Pender Street

Vancouver, B.C. V6E 2M6

Canada

Telephone: 604-630-5199

Facsimile: 604-687-8504

Attention: Daniel M. Miller

Email: miller.dan@dorsey.com

 

If to the Buyer:

 

Aspire Capital Fund, LLC

155 North Wacker Drive, Suite 1600

Chicago, IL 60606

Telephone: 312-658-0400

Facsimile: 312-658-4005

Attention: Steven G. Martin

Email: smartin@aspirecapital.com

 

 -21- 

 

With a copy to (which shall not constitute delivery to the Buyer):

 

Morrison & Foerster LLP

2000 Pennsylvania Avenue, NW, Suite 6000

Washington, DC 20006

Telephone: 202-778-1611

Facsimile: 202-887-0763

Attention: Martin P. Dunn, Esq.

Email:       mdunn@mofo.com

 

If to the Transfer Agent:

 

Computershare Investor Services Inc.

100 University Avenue, 8th Floor

Toronto, ON M5J 2Y1

Telephone: 416-263-9534

Facsimile: 888-453-0330

Attention: Paul Allen

Email: paul.allen@computershare.com

 

or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party at least one (1) Business Day prior to the effectiveness of
such change. Written confirmation of receipt (A) given by the recipient of such
notice, consent or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, and
recipient facsimile number, (C) electronically generated by the sender’s
electronic mail containing the time, date and recipient email address or (D)
provided by a nationally recognized overnight delivery service, shall be
rebuttable evidence of receipt in accordance with clause (i), (ii), (iii) or
(iv) above, respectively.

 

(g)       Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and assigns. The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Buyer, including by merger or
consolidation; provided, however, that any transaction, whether by merger,
reorganization, restructuring, consolidation, financing or otherwise, whereby
the Company remains the surviving entity immediately after such transaction
shall not be deemed a succession or assignment. The Buyer may not assign its
rights or obligations under this Agreement.

 

(h)       No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

 

(i)       Publicity. The Buyer shall have the right to approve before issuance
any press release, SEC filing or any other public disclosure made by or on
behalf of the Company whatsoever with respect to, in any manner, the Buyer, its
purchases hereunder or any aspect of this Agreement or the transactions
contemplated hereby; provided, however, that the Company shall be entitled,
without the prior approval of the Buyer, to make any press release or other
public disclosure (including any filings with the SEC or with Canadian
securities regulatory authorities) with respect to such transactions as is
required by applicable law and regulations so long as the Company and its
counsel consult with the Buyer in connection with any such press release or
other public disclosure at least one (1) Business Day prior to its release;
provided, however, that the Company’s obligations pursuant to this Section 11(i)
shall not apply if the material provisions of such press release, SEC filing, or
other public disclosure previously has been publicly disclosed by the Company in
accordance with this Section 11(i). The Buyer must be provided with a copy
thereof at least one (1) Business Day prior to any release or use by the Company
thereof.

 

 -22- 

 

(j)       Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

 

(k)       Termination. This Agreement may be terminated only as follows:

 

(i)       By the Buyer any time an Event of Default exists without any liability
or payment to the Company. However, if pursuant to or within the meaning of any
Bankruptcy Law, the Company commences a voluntary case or any Person commences a
proceeding against the Company, a Custodian is appointed for the Company or for
all or substantially all of its property, or the Company makes a general
assignment for the benefit of its creditors, (any of which would be an Event of
Default as described in Sections 9(f), 9(g) and 9(h) hereof) this Agreement
shall automatically terminate without any liability or payment to the Company
without further action or notice by any Person. No such termination of this
Agreement under this Section 11(k)(i) shall affect the Company’s or the Buyer’s
obligations under this Agreement with respect to pending purchases and the
Company and the Buyer shall complete their respective obligations with respect
to any pending purchases under this Agreement.

 

(ii)       In the event that the Commencement shall not have occurred the
Company shall have the option to terminate this Agreement for any reason or for
no reason without any liability whatsoever of either party to the other party
under this Agreement.

 

(iii)       In the event that the Commencement shall not have occurred within
ten (10) Business Days of the date of this Agreement, due to the failure to
satisfy any of the conditions set forth in Sections 6 and 7 above with respect
to the Commencement, either party shall have the option to terminate this
Agreement at the close of business on such date or thereafter without liability
of either party to any other party; provided, however, that the right to
terminate this Agreement under this Section 11(k)(iii) shall not be available to
either party if such failure to satisfy any of the conditions set forth in
Sections 6 and 7 is the result of a breach of this Agreement by such party or
the failure of any representation or warranty of such party included in this
Agreement to be true and correct in all material respects.

 

(iv)        At any time after the Commencement Date, the Company shall have the
option to terminate this Agreement for any reason or for no reason by delivering
notice (a “Company Termination Notice”) to the Buyer electing to terminate this
Agreement without any liability whatsoever of either party to the other party
under this Agreement. The Company Termination Notice shall not be effective
until one (1) Business Day after it has been received by the Buyer.

 

 -23- 

 

(v)       This Agreement shall automatically terminate on the date that the
Company sells and the Buyer purchases the full Available Amount as provided
herein, without any action or notice on the part of any party and without any
liability whatsoever of any party to any other party under this Agreement.

 

(vi)       If by the Maturity Date for any reason or for no reason the full
Available Amount under this Agreement has not been purchased as provided for in
Section 1 of this Agreement, this Agreement shall automatically terminate on the
Maturity Date, without any action or notice on the part of any party and without
any liability whatsoever of any party to any other party under this Agreement.

 

Except as set forth in Sections 11(k)(i) (in respect of an Event of Default
under Sections 9(f), 9(g) and 9(h)), 11(k)(v) and 11(k)(vi), any termination of
this Agreement pursuant to this Section 11(k) shall be effected by written
notice from the Company to the Buyer, or the Buyer to the Company, as the case
may be, setting forth the basis for the termination hereof. The representations
and warranties of the Company and the Buyer contained in Sections 2, 3 and 5
hereof, the indemnification provisions set forth in Section 8 hereof and the
agreements and covenants set forth in Sections 4(e) and 11, shall survive the
Commencement and any termination of this Agreement. No termination of this
Agreement shall affect the Company’s or the Buyer’s rights or obligations (i)
under the Registration Rights Agreement which shall survive any such termination
in accordance with its terms or (ii) under this Agreement with respect to
pending purchases and the Company and the Buyer shall complete their respective
obligations with respect to any pending purchases under this Agreement.

 

(l)       No Financial Advisor, Placement Agent, Broker or Finder. The Company
represents and warrants to the Buyer that it has not engaged any financial
advisor, placement agent, broker or finder in connection with the transactions
contemplated hereby. The Buyer represents and warrants to the Company that it
has not engaged any financial advisor, placement agent, broker or finder in
connection with the transactions contemplated hereby. Each party shall be
responsible for the payment of any fees or commissions, if any, of any financial
advisor, placement agent, broker or finder engaged by such party relating to or
arising out of the transactions contemplated hereby. Each party shall pay, and
hold the other party harmless against, any liability, loss or expense
(including, without limitation, attorneys' fees and out of pocket expenses)
arising in connection with any such claim.

 

(m)       No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.

 

(n)       Failure or Indulgence Not Waiver. No failure or delay in the exercise
of any power, right or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or
privilege.

 

 

 * * * * *

 

 -24- 

 

IN WITNESS WHEREOF, the Buyer and the Company have caused this Common Share
Purchase Agreement to be duly executed as of the date first written above.

 

 

 

THE COMPANY:

 

APTOSE BIOSCIENCES INC.

 

By:______________________

Name: Gregory K. Chow

Title: Chief Financial Officer

 

 

BUYER:

 

ASPIRE CAPITAL FUND, LLC

BY: ASPIRE CAPITAL PARTNERS, LLC

BY: SGM Holdings Corp.

 

By:_______________________

Name: Steven G. Martin

Title: President

 

 

 

 

 

 -25- 

 

Execution Copy

SCHEDULES

 

Schedule 3(a) Subsidiaries Schedule 3(c) Capitalization Schedule 3(e) Conflicts
Schedule 3(f) 1934 Act Filings Schedule 3(g) Material Changes Schedule 3(h)
Litigation Schedule 3(j) Intellectual Property Schedule 3(l) Title Schedule 3(p)
Transactions with Affiliates

 

EXHIBITS

 

Exhibit A Form of Officer’s Certificate Exhibit B Form of Resolutions of Board
of Directors of the Company Exhibit C Form of Secretary’s Certificate

 

 

 

 

 

 

 

DISCLOSURE SCHEDULES

 

 

Schedule 3(a) – Subsidiaries

 

None.

 

Schedule 3(c) – Capitalization

 

None.

 

Schedule 3(e) – Conflicts

 

None.

 

Schedule 3(f) – 1934 Act Filings

 

None.

 

Schedule 3(g) – Material Changes

 

None.

 

Schedule 3(h) – Litigation

 

None.

 

Schedule 3(j) – Intellectual Property

 

None.

 

Schedule 3(l) – Title

 

None.

 

Schedule 3(p) – Transactions with Affiliates

 

None.

 

 

 

 

EXHIBIT A

 

FORM OF OFFICER’S CERTIFICATE

 

This Officer’s Certificate (“Certificate”) is being delivered pursuant to
Section 7(e) of that certain Common Share Purchase Agreement dated as of May 7,
2019 (the “Common Share Purchase Agreement”), by and between APTOSE BIOSCIENCES
INC., a corporation organized under the laws of Canada (the “Company”), and
ASPIRE CAPITAL FUND, LLC, an Illinois limited liability company (the “Buyer”).
Terms used herein and not otherwise defined shall have the meanings ascribed to
them in the Common Share Purchase Agreement.

 

The undersigned, ___________, ____________ of the Company, hereby certifies as
follows:

 

1.       I am the ______________ of the Company and make the statements
contained in this Certificate in my capacity as such;

 

2.       The representations and warranties of the Company are true and correct
in all material respects (except to the extent that any of such representations
and warranties is already qualified as to materiality in Section 3 of the Common
Share Purchase Agreement, in which case, such representations and warranties are
true and correct without further qualification) as of the date when made and as
of the Commencement Date as though made at that time (except for representations
and warranties that speak as of a specific date);

 

3.       The Company has performed, satisfied and complied in all material
respects with covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by the Company at or prior
to the Commencement Date.

 

4.        The Company has not taken any steps, and does not currently expect to
take any steps, to seek protection pursuant to any Bankruptcy Law nor does the
Company or any of its Subsidiaries have any knowledge or reason to believe that
its creditors intend to initiate involuntary bankruptcy or insolvency
proceedings. The Company is financially solvent and is generally able to pay its
debts as they become due.

  

IN WITNESS WHEREOF, I have hereunder signed my name on this ___ day of
___________.

 

______________________

Name:

Title:

 

The undersigned as Secretary of Aptose Biosciences Inc., a corporation organized
under the laws of Canada, hereby certifies that ___________ is the duly elected,
appointed, qualified and acting ________ of APTOSE BIOSCIENCES INC. and that the
signature appearing above is his/her genuine signature.

 

___________________________________
Secretary

 

 

EXHIBIT B

 

FORM OF COMPANY RESOLUTIONS

FOR SIGNING PURCHASE AGREEMENT

 

WHEREAS, management has reviewed with the Board of Directors the background,
terms and conditions of the transactions subject to the proposed Common Share
Purchase Agreement (the “Purchase Agreement”) by and between the Company and
Aspire Capital Fund, LLC (“Aspire Capital”), including all materials terms and
conditions of the transactions subject thereto, providing for the purchase by
Aspire Capital of up to Twenty Million Dollars ($20,000,000) of the Company’s
common shares, without par value (the “Common Shares”);

WHEREAS, after careful consideration of the Purchase Agreement, the documents
incident thereto and other factors deemed relevant by the Board of Directors,
the Board of Directors has determined that it is advisable and in the best
interests of the Company to engage in the transactions contemplated by the
Purchase Agreement (the “Offering”), including, but not limited to, the issuance
of $360,000 of Common Shares to Aspire Capital at a price per share based on the
five-day volume weighted average trading price of the Common Shares on the
NASDAQ Capital Market (“NASDAQ”) during the 5 days prior to the execution of the
Purchase Agreement as a commitment fee (the “Commitment Shares”) and the sale of
additional Common Shares to Aspire Capital up to the available amount under the
Purchase Agreement (the “Purchase Shares”, and together with the Commitment
Shares, the “Aspire Shares”);

WHEREAS on March 12, 2019, the Company filed a base shelf prospectus (the “Shelf
Prospectus”) with the United States Securities and Exchange Commission (the
“SEC”) for the offering of up to US$100,000,000 Common Shares, warrants or units
of the Company, and such registration statement was declared effective by the
SEC on April 25, 2019 (the “Registration Statement”);

WHEREAS the Company intends to file with the SEC a prospectus supplement
(the “Prospectus Supplement”) to the Shelf Prospectus qualifying the offer and
sale of Common Shares having an aggregate offering price of up to US$20,360,000
(including the Commitment Shares), a draft of which has been provided to the
board of directors of the Company (the “Board”);

WHEREAS the Company will be required to execute and deliver certain agreements
and documents to complete the transactions contemplated hereby;

WHEREAS the Company proposes to list the Common Shares on the Toronto Stock
Exchange and the NASDAQ Capital Market;

 

Transaction Documents

IT IS RESOLVED, that the Company be and it hereby is authorized to execute the
Purchase Agreement providing for the purchase of common shares of the Company
having an aggregate value of up to $20,000,000 and the issuance of the
Commitment Shares having an aggregate value of $360,000;

IT IS RESOLVED, that the terms and provisions of the Form of Transfer Agent
Instructions (the “Instructions”) are hereby approved and the President and
Chief Executive Officer and the Senior Vice President and Chief Financial
Officer (the “Authorized Officers”) are authorized to execute and deliver the
Instructions (pursuant to the terms of the Purchase Agreement), with such
amendments, changes, additions and deletions as the Authorized Officers may deem
appropriate and approve on behalf of, the Company, such approval to be
conclusively evidenced by the signature of an Authorized Officer thereon;

 

 

Issuance of Common Shares

IT IS RESOLVED, that the Company is hereby authorized to issue the Commitment
Shares to Aspire Capital and that upon issuance of the Commitment Shares
pursuant to the Purchase Agreement, the Commitment Shares shall be duly
authorized, validly issued, fully paid and non-assessable;

IT IS RESOLVED, that the Company is hereby authorized to issue Common Shares
upon the purchase of Purchase Shares up to the available amount under the
Purchase Agreement in accordance with the terms of the Purchase Agreement and
that, upon issuance of the Purchase Shares pursuant to the Purchase Agreement,
the Purchase Shares will be duly authorized, validly issued, fully paid and
non-assessable;

Listing of Shares on the Exchanges

IT IS RESOLVED, that the officers of the Company with the assistance of counsel
be, and each of them hereby is, authorized and directed to take all necessary
steps and do all other things necessary and appropriate to effect the listing of
the Aspire Shares on the NASDAQ and the Toronto Stock Exchange;

 

Prospectus Supplement

IT IS RESOLVED to authorize and approve the Prospectus Supplement, substantially
in the forms provided to the Board, subject to such amendments, changes,
additions and deletions as any director or officer of the Company may approve;

 

IT IS RESOLVED to authorize any director or officer of the Company to file or
cause to be filed the Prospectus Supplement with the SEC and to file all such
other documents and supporting material and to execute and deliver all such
documents and instruments and to do all such other acts and things as in the
opinion of any such director or officer may be necessary or desirable to give
full effect to this resolution;

 

Press Release

IT IS RESOLVED to authorize the Company to issue, when appropriate, a press
release announcing the Offering (the “Press Release”);

 

IT IS RESOLVED to authorize any officer or director to approve the Press
Release;

 

General

IT IS RESOLVED, that, without limiting the foregoing, the Authorized Officers
are, and each of them hereby is, authorized and directed to proceed on behalf of
the Company and to take all such steps as deemed necessary or appropriate, with
the advice and assistance of counsel, to cause the Company to consummate the
agreements referred to herein and to perform its obligations under such
agreements; and

 

 

 

IT IS RESOLVED, that the Authorized Officers be, and each of them hereby is,
authorized, empowered and directed on behalf of and in the name of the Company,
to take or cause to be taken all such further actions and to execute and deliver
or cause to be executed and delivered all such further agreements, amendments,
documents, certificates, reports, schedules, applications, notices, letters and
undertakings and to incur and pay all such fees and expenses as in their
judgment shall be necessary, proper or desirable to carry into effect the
purpose and intent of any and all of the foregoing resolutions, and that all
actions heretofore taken by any officer or director of the Company in connection
with the transactions contemplated by the agreements described herein are hereby
approved, ratified and confirmed in all respects;

 

IT IS RESOLVED, that any and all actions heretofore or hereinafter taken on
behalf of the Company by any of said persons or entities within the terms of the
foregoing resolutions are hereby approved, ratified and confirmed in all
respects as the acts and deeds of the Company; and

 

IT IS RESOLVED to approve and ratify any and all acts of any nature previously
performed by the directors and officers of the Company in connection with the
Offering.

 

 

 

 

 

EXHIBIT C

 

FORM OF SECRETARY’S CERTIFICATE

 

This Secretary’s Certificate (the “Certificate”) is being delivered pursuant to
Section 7(k) of that certain Common Share Purchase Agreement dated as of May 7,
2019 (the “Common Share Purchase Agreement”), by and between APTOSE BIOSCIENCES
INC., a corporation organized under the laws of Canada (the “Company”) and
ASPIRE CAPITAL FUND, LLC, an Illinois limited liability company (the “Buyer”),
pursuant to which the Company may sell to the Buyer up to Twenty Million Dollars
($20,000,000) of the Company’s common shares without par value (the “Common
Shares”). Terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Common Share Purchase Agreement.

 

The undersigned, _________________ Secretary of the Company, hereby certifies as
follows in his capacity as such:

 

1.       I am the Secretary of the Company and make the statements contained in
this Secretary’s Certificate.

 

2.       Attached hereto as Exhibit A and Exhibit B are true, correct and
complete copies of the Company’s bylaws (“Bylaws”) and Certificate of
Incorporation (“Certificate of Incorporation”), respectively, in each case, as
amended through the date hereof, and no action has been taken by the Company,
its directors, officers or shareholders, in contemplation of the filing of any
further amendment relating to or affecting the Bylaws or Articles.

 

3.       Attached hereto as Exhibit C are true, correct and complete copies of
the resolutions duly adopted by the Board of Directors of the Company on
____________, 201__. Such resolutions have not been amended, modified or
rescinded and remain in full force and effect and such resolutions are the only
resolutions adopted by the Company’s Board of Directors, or any committee
thereof, or the shareholders of the Company relating to or affecting (i) the
entering into and performance of the Common Share Purchase Agreement, or the
issuance, offering and sale of the Purchase Shares and the Commitment Shares and
(ii) and the performance of the Company of its obligation under the Transaction
Documents as contemplated therein.

 

4.       As of the date hereof, the authorized, issued and reserved capital of
the Company is as set forth on Exhibit D hereto.

 

IN WITNESS WHEREOF, I have hereunder signed my name on this ___ day of
____________.

 

_________________________

_________________, Secretary

 

The undersigned as ______________ of APTOSE BIOSCIENCES INC., a corporation
organized under the laws of Canada, hereby certifies that _______________ is the
duly elected, appointed, qualified and acting Secretary of APTOSE BIOSCIENCES
INC., and that the signature appearing above is his/her genuine signature.

 

_______________________________