Exhibit 10.1

APTOSE BIOSCIENCES INC.

EQUITY DISTRIBUTION AGREEMENT

May 5, 2020

PIPER SANDLER & CO.

U.S. Bancorp Center

800 Nicollet Mall

Minneapolis, Minnesota 55402

CANACCORD GENUITY LLC

535 Madison Avenue, 2nd Floor

New York, New York 10022

Ladies and Gentlemen:

As further set forth in this agreement (this “Agreement”), Aptose Biosciences
Inc., a company incorporated under the Canada Business Corporations Act (the
“Company”), proposes to issue and sell from time to time through Piper Sandler &
Co. and Canaccord Genuity LLC (each an “Agent”, and together, the “Agents”), as
sales agents, the Company’s common shares, no par value per share (the “Common
Shares”) (such Common Shares to be sold pursuant to this Agreement, the
“Shares”) on terms set forth herein. Notwithstanding anything to the contrary
contained herein, the parties hereto agree that compliance with the limitation
set forth in Section 2 of this Agreement on the number of Shares issued and sold
under this Agreement shall be the sole responsibility of the Company, and the
Agents shall have no obligation in connection with such compliance.

The Company hereby confirms its agreement with the Agents with respect to the
sale of the Shares.

 

  1.

Representations and Warranties of the Company.

(a)    The Company represents and warrants to, and agrees with, the Agents that
as of the date of this Agreement, each Representation Date, each date on which a
Placement Notice (as defined in Section 2(a)(i) below) is given, and any date on
which Shares are sold hereunder as follows:

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(i)    Registration Statement and Prospectus. The Company has filed, in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations thereunder (collectively, the “Securities Act”), with
the Securities and Exchange Commission (the “Commission”) a registration
statement on Form S-3 (File No. 333-235730), including a base prospectus,
relating to certain securities, including the Common Shares, to be issued from
time to time by the Company, and which incorporates by reference documents that
the Company has filed or will file in accordance with the provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the “Exchange Act”). The Company has prepared a
prospectus supplement to the base prospectus included as part of such
registration statement specifically relating to the Shares (the “Prospectus
Supplement”). The Company has furnished to the Agents, for use by Agents, copies
of the prospectus included as part of such registration statement, as
supplemented by the Prospectus Supplement, relating to the Shares. Except where
the context otherwise requires, such registration statement, as amended when it
became effective, including all documents filed as part thereof or incorporated
by reference therein, and including any information contained in a Prospectus
(as defined below) subsequently filed with the Commission pursuant to Rule
424(b) under the Securities Act or deemed to be a part of such registration
statement pursuant to Rule 430B or 462(b) (a “Rule 462(b) Registration
Statement”) of the Securities Act, is herein called the “Registration
Statement.” The base prospectus, including all documents incorporated therein by
reference, included in the Registration Statement, as it may be supplemented by
the Prospectus Supplement, in the form in which such prospectus and/or
Prospectus Supplement have most recently been filed by the Company with the
Commission pursuant to Rule 424(b) under the Securities Act, together with any
“issuer free writing prospectus,” as defined in Rule 433 of the Securities Act
regulations (“Rule 433”), relating to the Shares, if any, that (i) is required
to be filed with the Commission by the Company or (ii) is exempt from filing
pursuant to Rule 433(d)(5)(i), in each case in the form filed or required to be
filed with the Commission or, if not required to be filed, in the form retained
in the Company’s records pursuant to Rule 433(g), is herein called the
“Prospectus.” Any reference herein to the Registration Statement, the Prospectus
or any amendment or supplement thereto shall be deemed to refer to and include
the documents incorporated by reference therein, and any reference herein to the
terms “amend,” “amendment” or “supplement” with respect to the Registration
Statement or the Prospectus shall be deemed to refer to and include the filing
after the execution hereof of any document with the Commission deemed to be
incorporated by reference therein. For purposes of this Agreement, all
references to the Registration Statement, the Prospectus or to any amendment or
supplement thereto shall be deemed to include any copy filed with the Commission
pursuant the Electronic Data Gathering Analysis and Retrieval System (“EDGAR”).

(ii)     Continuing Effectiveness of Registration Statement. The Registration
Statement and any Rule 462(b) Registration Statement have been declared
effective by the Commission under the Securities Act. The Company has complied,
to the Commission’s satisfaction, with all requests of the Commission for
additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement is in effect and no proceedings for such purpose have been instituted
or are pending or, to the knowledge of the Company, contemplated or threatened
by the Commission. The Company meets the requirements for use of Form S-3 under
the Securities Act. The sale of the Shares hereunder meets the requirements of
General Instruction I.B.1 of Form S-3.

(iii)     No Material Misstatements or Omissions.    The Prospectus when filed
complied, and as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act. Each of the Registration Statement,
any Rule 462(b) Registration Statement, the Prospectus and any post-effective
amendments or supplements thereto, at the time it became effective or its date,
as applicable, and as of each Settlement Date (as defined in Section 2(a)(vii)
below), complied in all material respects with the Securities Act, and as of
each effective date and each Settlement Date, did not and will 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 not misleading.
The Prospectus, as amended or supplemented, as of its date, did not and, as of
each of the Settlement Date, will not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The representations and warranties set forth in the two immediately
preceding sentences do not apply to statements in or omissions from the
Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment thereto, or the Prospectus, or any amendments or
supplements thereto, made in reliance upon and in conformity with information
relating to the Agents furnished to the Company in writing by the Agents
expressly for use therein. There are no contracts or other documents required to
be described in the Prospectus or to be filed as exhibits to the Registration
Statement which have not been described or filed as required.

 

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(iv)    Eligible Issuer. The Company is not an “ineligible issuer” (as defined
in Rule 405 under the Securities Act) as of the eligibility determination date
for purposes of Rules 164 and 433 under the Securities Act with respect to the
offering of the Shares contemplated by the Registration Statement; the parties
hereto agree and understand that the content of any and all “road shows” (as
defined in Rule 433 under the Securities Act) related to the offering of the
Shares contemplated hereby is solely the property of the Company.

(v)     Financial Statements. The historical financial statements (including the
related notes and supporting schedules) to be included or incorporated by
reference, in the Registration Statement, and the Prospectus comply as to form
in all material respects with the requirements of Regulation S-X under the
Securities Act (“Regulation S-X”) and present fairly the financial condition,
results of operations and cash flows of the entities purported to be shown
thereby at the dates and for the periods indicated and have been prepared in
conformity with generally accepted accounting principles in the United States
applied on a consistent basis throughout the periods involved. There are no
financial statements (historical or pro forma) that are required to be included
in the Registration Statement or the Prospectus that are not so included as
required. The interactive data in eXtensible Business Reporting Language
(“XBRL”) included or incorporated by reference in the Registration Statement and
the Prospectus fairly present the information called for in all material
respects and have been prepared in accordance with the Commission’s rules and
guidelines applicable thereto.

(vi)     No Off-Balance Sheet Transactions. There are no transactions,
arrangements and other relationships between and/or among the Company, and/or,
to the knowledge of the Company, any of its affiliates and any unconsolidated
entity, including, but not limited to, any structural finance, special purpose
or limited purpose entity (each, an “Off-Balance Sheet Transaction”) that could
reasonably be expected to affect materially the Company’s liquidity or the
availability of or requirements for its capital resources, including those Off
Balance Sheet Transactions described in the Commission’s Statement about
Management’s Discussion and Analysis of Financial Conditions and Results of
Operations (Release Nos. 33-8056; 34-45321; FR-61), and are required to be
described in the Prospectus, which have not been described as required.

 

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(vii)    Auditor Independence. KPMG LLP, who have audited certain financial
statements of the Company, whose report appears in the Registration Statement
and the Prospectus, are independent public accountants as required by the
Securities Act and the Public Accounting Oversight Board.

(viii)    No Material Adverse Effect. The Company and each of its consolidated
subsidiaries (the “Subsidiaries”) (a complete list of the Subsidiaries is
included as Schedule 4 hereto) has been duly organized, validly existing as a
corporation and in good standing under the laws of their respective
jurisdictions of organization. The Company and each of its Subsidiaries are, and
will be, duly licensed or qualified as a foreign corporation for transaction of
business and in good standing under the laws of each other jurisdiction in which
their respective ownership or lease of property or the conduct of their
respective businesses requires such license or qualification, and have all
corporate power and authority necessary to own or hold their respective
properties and to conduct their respective businesses as described in the
Registration Statement and the Prospectus, except where the failure to be so
qualified or in good standing or have such power or authority would not,
individually or in the aggregate, have a material adverse effect or would
reasonably be expected to have a material adverse effect on or affecting the
assets, business, operations, earnings, properties, condition (financial or
otherwise), prospects, stockholders’ equity or results of operations of the
Company and the Subsidiaries taken as a whole, or prevent or materially
interfere with consummation of the transactions contemplated hereby (a “Material
Adverse Effect”). The Company does not own or control, directly or indirectly,
any corporation, association or other entity other than the Subsidiaries listed
in Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2019, except for Subsidiaries that in the aggregate would not
constitute a “significant subsidiary” (as defined in Rule 405 under the
Securities Act). None of the Subsidiaries of the Company is a “significant
subsidiary” (as defined in Rule 405 under the Securities Act).

(ix)     Capitalization. The Company has an authorized capitalization as set
forth in each of the Registration Statement and the Prospectus, and all of the
issued shares of the Company have been duly authorized and validly issued, are
fully paid and non-assessable, conform in all material respects to the
description thereof contained in the Registration Statement and the Prospectus
and were not issued in violation of any preemptive right, resale right, right of
first refusal or similar right. All of the Company’s options, warrants and other
rights to purchase or exchange any securities for shares of the Company’s
capital stock have been duly authorized and validly issued, and conform in all
material respects to the description thereof contained in the Registration
Statement and the Prospectus. All of the issued shares of capital stock or other
ownership interest of each Subsidiary have been duly authorized and validly
issued, are fully paid and non-assessable and are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, equities or claims,
except for such liens, encumbrances, equities or claims as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

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(x)     Due Authorization, Valid Issuance and Non-Assessability of Shares. The
Shares to be issued and sold by the Company to the Agents hereunder have been
duly authorized, and upon payment and delivery in accordance with this
Agreement, will be validly issued, fully paid and non-assessable, will conform
in all material respects to the description thereof contained in the
Registration Statement and the Prospectus, will be issued in compliance with
federal and state securities laws and will be free of statutory and contractual
preemptive rights, rights of first refusal and similar rights.

(xi)     Authority to Enter into this Agreement. The Company has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement. This Agreement has been duly and validly authorized,
executed and delivered by the Company.

(xii)     Non-Contravention. The issue and sale of the Shares, the execution,
delivery and performance of this Agreement by the Company, the consummation of
the transactions contemplated hereby and the application of the proceeds from
the sale of the Shares as described under “Use of Proceeds” in the Registration
Statement and the Prospectus will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, impose any lien, charge or
encumbrance upon any property or assets of the Company and its Subsidiaries, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement, license, lease or other agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound or to which any of the property or assets of the Company
or any of its Subsidiaries is subject; (ii) result in any violation of the
provisions of the articles of association, charter or by-laws (or similar
organizational documents) of the Company or any of its Subsidiaries; or
(iii) result in any violation of any statute or any judgment, order, decree,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its Subsidiaries or any of their
properties or assets, except, with respect to clauses (i) and (iii), for such
conflicts, breaches, violations, liens, charges, encumbrances or defaults that
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The issuance and sale of the Shares hereunder does not
contravene the rules and regulations of the Exchange or the Toronto Stock
Exchange (the “TSX”).

(xiii)     No Consent or Approval Required. No consent, approval, authorization
or order of, or filing, registration or qualification with, any court or
governmental agency or body having jurisdiction over the Company or any of its
Subsidiaries or any of their properties or assets is required for the issue and
sale of the Shares, the execution, delivery and performance of this Agreement by
the Company, the consummation of the transactions contemplated hereby, the
application of the proceeds from the sale of the Shares as described under “Use
of Proceeds” in the Registration Statement and the Prospectus, except for
(i) the registration of the Shares under the Securities Act; (ii) such consents,
approvals, authorizations, orders, filings, registrations or qualifications as
may be required under the Exchange Act, and applicable state or foreign
securities laws and/or the bylaws and rules of the Financial Industry Regulatory
Authority (the “FINRA”) and/or the TSX in connection with the sale of the Shares
by the Agents; and (iii) the inclusion of the Shares on the Nasdaq Capital
Market (the “Exchange”).

 

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(xiv)     Internal Accounting Controls. The Company and each of its Subsidiaries
maintain internal accounting controls designed to provide reasonable assurances
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles in the United States, including, but not limited to,
internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or
specific authorization, (ii) transactions are recorded as necessary to permit
preparation of the Company’s financial statements in conformity with generally
accepted accounting principles in the United States and to maintain
accountability for its assets, (iii) access to the Company’s assets is permitted
only in accordance with management’s general or specific authorization, (iv) the
recorded accountability for the Company’s assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect to
any differences, and (v) the interactive data in XBRL included or incorporated
by reference in the Registration Statement and the Prospectus fairly present the
information called for in all material respects and are prepared in accordance
with the Commission’s rules and guidelines applicable thereto. Except as
disclosed in the Registration Statement or the Prospectus, as of the date of the
most recent balance sheet of the Company and its consolidated Subsidiaries
audited by KPMG LLP, there were no material weaknesses in the Company’s internal
controls.

(xv)    Disclosure Controls. The Company and each of its Subsidiaries maintain
disclosure controls and procedures (as such term is defined in Rule 13a-15(e)
under the Exchange Act) designed to ensure that the information required to be
disclosed by the Company and its Subsidiaries in the reports they file or submit
under the Exchange Act is accumulated and communicated to management of the
Company and its Subsidiaries, including their respective principal executive
officers and principal financial officers, as appropriate, to allow timely
decisions regarding required disclosure to be made, and as of December 31, 2019,
such disclosure controls and procedures are effective in all material respects
to perform the functions for which they were established.

(xvi)      Critical Accounting Policies. The section entitled “Critical
Accounting Policies” incorporated by reference in the Registration Statement and
the Prospectus accurately describes in all material respects (i) the accounting
policies that the Company believes are the most important in the portrayal of
the Company’s financial condition and results of operations and that require
management’s most difficult, subjective or complex judgments (“Critical
Accounting Policies”); (ii) the judgments and uncertainties affecting the
application of Critical Accounting Policies; and (iii) the likelihood that
materially different amounts would be reported under different conditions or
using different assumptions, and an explanation thereof.

 

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(xvii)     Sarbanes-Oxley Compliance. There is and has been no failure on the
part of the Company or, to the knowledge of the Company, any of the Company’s
directors or officers, in their capacities as such, to comply with any provision
of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith that are applicable to the Company or its directors or
officers in their capacities as directors or officers of the Company.

(xviii)     Exceptions. Except as would not, in the aggregate, reasonably be
expected to have a Material Adverse Effect, since the date of the latest audited
financial statements included in the Registration Statement and the Prospectus,
and, except as disclosed in the Registration Statement and the Prospectus,
neither the Company nor any of its Subsidiaries has (i) sustained any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, (ii) issued or granted any securities
(other than pursuant to employee benefit plans, qualified stock option plans or
other equity compensation plans or arrangements existing on the date hereof and
disclosed in the Registration Statement and the Prospectus (the “Specified
Equity Plans”)), (iii) incurred any material liability or obligation, direct or
contingent, other than liabilities and obligations that were incurred in the
ordinary course of business, (iv) entered into any material transaction not in
the ordinary course of business, or (v) declared or paid any dividend on its
share capital; and since such date, except as disclosed in the Registration
Statement and the Prospectus, there has not been any change in the share
capital, long-term debt, net current assets or short-term debt of the Company or
any of its Subsidiaries or any adverse change, or any development involving a
prospective adverse change, in or affecting the condition (financial or
otherwise), results of operations, shareholders’ equity, properties, management,
business or prospects of the Company and its Subsidiaries taken as a whole.

(xix)    Valid Title. The Company and each of its Subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them, that are material to the business
of the Company, in each case free and clear of all liens, encumbrances and
defects, except such liens, encumbrances and defects as do not materially affect
the value of such property and do not materially interfere with the use made and
proposed to be made of such property by the Company and its Subsidiaries. All
assets held under lease by the Company and its Subsidiaries, that are material
to the business of the Company, are held by them under valid, subsisting and
enforceable leases, with such exceptions as do not materially interfere with the
use made and proposed to be made of such assets by the Company and its
Subsidiaries.

(xx)     Intellectual Property. The Company and each of its Subsidiaries owns,
possesses or has valid and enforceable licenses to use, or can acquire on
reasonable terms, all Intellectual Property (as defined below) necessary for the
conduct of the Company’s and it Subsidiaries’ business as now conducted or as
described in the Registration Statement and the Prospectus to be conducted,
except as such failure to own, possess, or acquire such rights would not
reasonably be expected to, individually or in the aggregate, result in a
Material Adverse Effect. Furthermore, (A) to the knowledge of the Company, there
is no infringement, misappropriation or violation by third parties of any such
Intellectual Property, the effect of which would have a Material Adverse Effect;
(B) there is no pending or, to the knowledge of the Company, threatened, action,
suit, proceeding or claim by others challenging the Company’s or any of its
Subsidiaries’ rights in or to any such Intellectual Property, the effect of
which would have a Material Adverse Effect; (C) the Intellectual Property owned
by the Company and its Subsidiaries, and to the knowledge of the Company, the
Intellectual Property licensed to the Company and its Subsidiaries, has not been
adjudged invalid or unenforceable, in whole or in part, and there is no pending
or, to the knowledge of the Company, threatened action, suit, proceeding or
claim by others challenging the validity or scope of any such Intellectual
Property, the effect of which would have a Material Adverse Effect; (D) there is
no pending or, to the knowledge of the Company, threatened action, suit,
proceeding or claim by others that the Company or any of its Subsidiaries
infringes, misappropriates or otherwise violates any Intellectual Property or
other proprietary rights of others, and neither the Company or any of its
Subsidiaries has received any written notice of such claim, the effect of which
would have a Material Adverse Effect; and (E) to the Company’s knowledge, no
employee of the Company or any of its Subsidiaries is in or has ever been in
violation of any term of any employment contract, patent disclosure agreement,
invention assignment agreement, non-competition agreement, non-solicitation
agreement, nondisclosure agreement or any restrictive covenant to or with a
former employer where the basis of such violation relates to such employee’s
employment with the Company or any of its Subsidiaries or actions undertaken by
the employee while employed with the Company or any of its Subsidiaries, the
effect of which would have a Material Adverse Effect. “Intellectual Property”
shall mean all patents, patent applications, trade and service marks, trade and
service mark registrations, trade names, copyrights, licenses, inventions, trade
secrets, domain names, technology, know-how and other intellectual property.

 

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(xxi)     Consents and Permits. Except as set forth in the Registration
Statement and the Prospectus, the Company and each of its Subsidiaries have such
permits, licenses, patents, franchises, certificates of need and other approvals
consents and other authorizations (the “Regulatory Permits”) issued by the
appropriate domestic or foreign regional, federal, state, or local regulatory
agencies or bodies necessary to conduct the business of the Company, including,
without limitation, any Investigational New Drug Application (an “IND”) and/or
New Drug Application (an “NDA”), as required by the U.S. Food and Drug
Administration (the “FDA”), any authorizations issued by the Drug Enforcement
Administration (the “DEA”), or any other authorizations issued by domestic or
foreign regional, federal, state, or local agencies or bodies engaged in the
regulation of pharmaceuticals such as those being developed by the Company and
its Subsidiaries, except for any of the foregoing that would not reasonably be
expected to, individually or in the aggregate, have a Material Adverse Effect;
the Company (i) is in compliance in all material respects with the requirements
of the Regulatory Permits, and (ii) all of the Regulatory Permits are valid and
in full force and effect, in each case, except for any of the foregoing that
would not reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect; the Company has not received any written notice of
proceedings relating to the revocation, termination, modification or impairment
of rights of any of the Regulatory Permits that, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
reasonably be expected to result in a Material Adverse Effect; the Company has
not failed to submit to the FDA any IND or NDA necessary to conduct the business
of the Company, any such filings that were required to be made were in material
compliance with applicable laws when filed, and no material deficiencies have
been asserted by the FDA with respect to any such filings or submissions that
were made.

(xxii)    Compliance with Applicable Laws and Regulations. Except as described
in the Registration Statement and the Prospectus, as applicable, the Company and
its Subsidiaries (i) are and at all times have been in compliance with all
statutes, rules and regulations applicable to the ownership, testing,
development, manufacture, packaging, processing, use, distribution, marketing,
advertising, labeling, promotion, sale, offer for sale, storage, import, export
or disposal of any product manufactured or distributed by the Issuer including,
without limitation the Federal Food, Drug and Cosmetic Act (21 U.S.C. §301 et
seq.), the federal Anti-Kickback Statute (42 U.S.C. §1320a-7b(b)), the Health
Insurance Portability and Accountability Act of 1996, as amended by the Health
Information Technology for Economic and Clinical Health Act of 2009, and the
Patient Protection and Affordable Care Act of 2010, as amended by the Health
Care and Education Affordability Reconciliation Act of 2010, the regulations
promulgated pursuant to such laws, and any successor government programs and
comparable state laws, regulations relating to Good Clinical Practices and Good
Laboratory Practices and all other local, state, federal, national,
supranational and foreign laws, manual provisions, policies and administrative
guidance relating to the regulation of the Company (collectively, the
“Applicable Laws”); (ii) have not received any notice from any court or
arbitrator or governmental or regulatory authority or third party alleging or
asserting noncompliance with any Applicable Laws or any licenses, exemptions,
certificates, approvals, clearances, authorizations, permits, registrations and
supplements or amendments thereto required by any such Applicable Laws
(“Authorizations”); (iii) possess all Authorizations and such Authorizations are
valid and in full force and effect and are not in violation of any term of any
such Authorizations; (iv) have not received written notice of any claim, action,
suit, proceeding, hearing, enforcement, investigation arbitration or other
action from any court or arbitrator or governmental or regulatory authority or
third party alleging that any product operation or activity is in violation of
any Applicable Laws or Authorizations nor is any such claim, action, suit,
proceeding, hearing, enforcement, investigation, arbitration or other action
threatened; (v) have received any written notice that any court or arbitrator or
governmental or regulatory authority has taken, is taking or intends to take,
action to limit, suspend, materially modify or revoke any Authorizations nor is
any such limitation, suspension, modification or revocation threatened;
(vi) have filed, obtained, maintained or submitted all material reports,
documents, forms, notices, applications, records, claims, submissions and
supplements or amendments as required by any Applicable Laws or Authorizations
and that all such reports, documents, forms, notices, applications, records,
claims, submissions and supplements or amendments were complete and accurate on
the date filed (or were corrected or supplemented by a subsequent submission);
and (vii) are not a party to any corporate integrity agreements, monitoring
agreements, consent decrees, settlement orders, or similar agreements with or
imposed by any governmental or regulatory authority.

 

 

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(xxiii)     Clinical Trials. The clinical and pre-clinical trials conducted by
or on behalf of or sponsored by the Company, or in which the Company has
participated, that are described in the Prospectus or the results of which are
referred to in the Registration Statement and the Prospectus, as applicable, and
are intended to be submitted to Regulatory Authorities as a basis for product
approval, were and, if still pending, are being conducted in accordance with
standard medical and scientific research procedures and all applicable statutes,
rules and regulations of the FDA and comparable drug regulatory agencies outside
of the United States to which it is subject (collectively, the “Regulatory
Authorities”), including, without limitation, 21 C.F.R. Parts 50, 54, 56, 58,
and 312, and current Good Clinical Practices and Good Laboratory Practices; the
descriptions in the Registration Statement or the Prospectus of the results of
such studies and trials are accurate and complete and fairly present the data
derived from such trials; the Company has no knowledge of any other trials the
results of which are inconsistent with or otherwise call into question the
results described or referred to in the Registration Statement and the
Prospectus; the Company and its Subsidiaries have each operated and are
currently in compliance with all applicable statutes, rules and regulations of
the Regulatory Authorities; neither the Company, nor any of its Subsidiaries,
has not received any written notices, correspondence or other communication from
the Regulatory Authorities or any governmental authority which could lead to the
termination or suspension of any clinical or pre-clinical trials that are
described in the Prospectus or the results of which are referred to in the
Prospectus, and there are no reasonable grounds for same.

(xxiv)     Regulatory Filings. Except as disclosed in the Registration Statement
and the Prospectus, neither the Company nor any of its Subsidiaries has failed
to file with the applicable regulatory authorities (including, without
limitation, the FDA, or any foreign, federal, state, provincial or local
governmental or regulatory authority performing functions similar to those
performed by the FDA) any required filing, declaration, listing, registration,
report or submission, except for such failures that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect;
except as disclosed in the Registration Statement and the Prospectus, all such
filings, declarations, listings, registrations, reports or submissions were in
compliance with applicable laws when filed and no deficiencies have been
asserted by any applicable regulatory authority with respect to any such
filings, declarations, listings, registrations, reports or submissions, except
for any deficiencies that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. The Company has
operated and currently is in compliance with the United States Federal Food,
Drug, and Cosmetic Act, all applicable rules and regulations of the FDA and
other federal, state, local and foreign governmental bodies exercising
comparable authority, except where the failure to be so in compliance would not
reasonably be expected to have a Material Adverse Effect. The Company has no
knowledge of any studies, tests or trials not described in the Prospectus the
results of which reasonably call into question in any material respect the
results of the studies, tests and trials described in the Prospectus.

 

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(xxv)     Clinical Studies. The studies, tests and preclinical and clinical
investigations conducted by or on behalf of the Company and its Subsidiaries
were and, if still pending, are, in all material respects, being conducted in
accordance with established protocols, procedures and controls pursuant to
accepted professional scientific standards and all Applicable Laws and
Authorizations, including, without limitation, the Federal Food, Drug, and
Cosmetic Act and implementing regulations including good laboratory practice
(“GLP”) regulations (21 C.F.R. Part 58) if any such studies, tests or
preclinical and clinical investigations are being conducted pursuant to GLP, and
good clinical practice and IND requirements (21 C.F.R. Parts 50, 54, 56, and
312) if any such studies, tests or preclinical and clinical investigations were
or are subject to good clinical practice regulations or were or are being
conducted under an IND; the descriptions of the results of such studies, tests
and trials contained in the Registration Statement and the Prospectus are
accurate in all material respects and fairly present the data derived from such
studies, tests and trials; except to the extent disclosed in the Registration
Statement and the Prospectus, the Company is not aware of any studies, tests or
trials the results of which the Company believes reasonably call into question
the study, test, or trial results described or referred to in the Registration
Statement and the Prospectus when viewed in the context in which such results
are described and the clinical state of development; and neither the Company nor
any of its Subsidiaries have received any notices or correspondence from any
governmental authority requiring the termination, suspension or material
modification of any studies, tests or preclinical or clinical investigations
conducted by or on behalf of the Company or any of its Subsidiaries.

(xxvi)     Absence of Settlement Agreements or Undertakings. Except as disclosed
in the Registration Statement and the Prospectus, the Company is not a party to
any corporate integrity agreements, monitoring agreements, consent decrees,
settlement orders, or similar agreements with or imposed by any governmental
authority.

(xxvii)        Absence of Legal or Governmental Proceedings. Except as disclosed
in the Registration Statement and the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its Subsidiaries
is a party or of which any property or assets of the Company or any of its
Subsidiaries is the subject that, if determined adversely to the Company, would,
in the aggregate, reasonably be expected to have a Material Adverse Effect or
would, in the aggregate, reasonably be expected to have a Material Adverse
Effect on the performance of this Agreement or the consummation of the
transactions contemplated hereby; and to the Company’s knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
others.

(xxviii)     Material Contracts. There are no contracts or other documents
required to be described in the Registration Statement or filed as exhibits to
the Registration Statement that are not described and filed as required. The
statements made in the Registration Statement and Prospectus, insofar as they
purport to constitute summaries of the terms of the contracts and other
documents described and filed, constitute accurate summaries of the terms of
such contracts and documents in all material respects. Except as disclosed in
the Registration Statement and the Prospectus, neither the Company nor any of
its Subsidiaries has knowledge that any other party to any such contract or
other document has any intention not to render full performance as contemplated
by the terms thereof.

 

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(xxix)     Insurance. The Company and each of its Subsidiaries maintain
insurance from nationally recognized, in the applicable country, insurers in
such amounts and covering such risks as is commercially reasonable in accordance
with customary practices for companies engaged in similar businesses and similar
industries for the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in similar
businesses in similar industries. All policies of insurance of the Company and
its Subsidiaries are in full force and effect; the Company and each of its
Subsidiaries are in compliance with the terms of such policies in all material
respects; and neither the Company nor any of its Subsidiaries has received
notice from any insurer or agent of such insurer that capital improvements or
other expenditures are required or necessary to be made in order to continue
such insurance; there are no material claims by the Company or any of its
Subsidiaries under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of rights clause;
and neither the Company nor any such Subsidiary has any reason to believe that
it will not be able 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 not reasonably be
expected to have a Material Adverse Effect.

(xxx) Related Party Disclosure. No relationship, direct or indirect, exists
between or among the Company, on the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company, on the other hand, that is
required to be described in the Registration Statement or the Prospectus which
is not so described.

(xxxi)    No Labor Dispute. No labor disturbance by or dispute with the
employees of the Company or any of its Subsidiaries exists or, to the knowledge
of the Company, is imminent that could reasonably be expected to have a Material
Adverse Effect.

(xxxii)     No Default. Except as disclosed in the Registration Statement and
the Prospectus, neither the Company nor any of its Subsidiaries (i) is in
violation of its articles of association, charter or by-laws (or similar
organizational documents), (ii) is in default, and no event has occurred that,
with notice or lapse of time or both, would constitute such a default, in the
due performance or observance of any term, covenant, condition or other
obligation contained in any indenture, mortgage, deed of trust, loan agreement,
license or other agreement or instrument to which it is a party or by which it
is bound or to which any of its properties or assets is subject, or (iii) is in
violation of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over it or its property or
assets or has failed to obtain any license, permit, certificate, franchise or
other governmental authorization or permit necessary to the ownership of its
property or to the conduct of its business, except in the case of clauses
(ii) and (iii), to the extent any such conflict, breach, violation or default
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

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(xxxiii)    Environmental Laws. Except as set forth in the Registration
Statement or the Prospectus, the Company and its Subsidiaries (i) are in
compliance with any and all applicable federal, state, local and foreign laws,
rules, regulations, decisions and orders relating to the protection of human
health and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (collectively, “Environmental Laws”); (ii) have
received and are in compliance with all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their respective
businesses as described in the Registration Statement and the Prospectus; and
(iii) have not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or toxic
substances or wastes, pollutants or contaminants, except, in the case of any of
clauses (i), (ii) or (iii) above, for any such failure to comply or failure to
receive required permits, licenses, other approvals or liability as would not
reasonably be expected to, individually or in the aggregate, have a Material
Adverse Effect.

(xxxiv)    Taxes. The Company and each of its Subsidiaries have filed all
federal, state, local and foreign tax returns required to be filed through the
date hereof, subject to permitted extensions, and have paid all taxes due, and
no tax deficiency has been determined adversely to the Company or any of its
Subsidiaries, nor does the Company have any knowledge of any tax deficiencies
that have been, or would reasonably be expected to be asserted against the
Company, that would, in the aggregate, reasonably be expected to have a Material
Adverse Effect.

(xxxv)    ERISA Compliance. (i) Each “employee benefit plan” (within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”)) for which the Company or any member of its “Controlled Group”
(defined as any organization which is a member of a controlled group of
corporations within the meaning of Section 414 of the Internal Revenue Code of
1986, as amended (the “Code”)) would have any liability (each a “Plan”) has been
maintained in compliance in all material respects with its terms and with the
requirements of all applicable statutes, rules and regulations including ERISA
and the Code; (ii) no prohibited transaction, within the meaning of Section 406
of ERISA or Section 4975 of the Code, has occurred with respect to any Plan
excluding transactions effected pursuant to a statutory or administrative
exemption; (iii) with respect to each Plan subject to Title IV of ERISA (A) no
“reportable event” (within the meaning of Section 4043(c) of ERISA) has occurred
or is reasonably expected to occur that would result in a material loss to the
Company, (B) no “accumulated funding deficiency” (within the meaning of
Section 302 of ERISA or Section 412 of the Code), whether or not waived, has
occurred or is reasonably expected to occur, (C) the fair market value of the
assets under each Plan that is required to be funded exceeds the present value
of all benefits accrued under such Plan (determined based on those assumptions
used to fund such Plan), and (D) neither the Company or any member of its
Controlled Group has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA (other than contributions to the Plan or premiums to the
Pension Benefit Guaranty Corporation in the ordinary course and without default)
in respect of a Plan (including a “multiemployer plan”, within the meaning of
Section 4001(c)(3) of ERISA); and (iv) each Plan that is intended to be
qualified under Section 401(a) of the Code is so qualified and nothing has
occurred, to the Company’s knowledge, whether by action or by failure to act,
which would cause the loss of such qualification.

 

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(xxxvi)    Accuracy of Statistical and Market Data. The statistical and
market-related data included in the Registration Statement and the Prospectus
and the consolidated financial statements of the Company and its Subsidiaries
included or incorporated by reference in the Registration Statement and the
Prospectus are based on or derived from sources that the Company believes to be
reliable in all material respects.

(xxxvii)    Not an Investment Company. Neither the Company nor any of its
Subsidiaries is, and as of the applicable Settlement Date and, after giving
effect to the offer and sale of the Shares and the application of the proceeds
therefrom as described under “Use of Proceeds” in the Registration Statement and
the Prospectus, none of them will be, (i) an “investment company” or a company
“controlled” by an “investment company” within the meaning of the Investment
Company Act of 1940, as amended (the “Investment Company Act”), and the rules
and regulations of the Commission thereunder, or (ii) a “business development
company” (as defined in Section 2(a)(48) of the Investment Company Act).

(xxxviii)    Accuracy of Certain Summaries and Statements. The statements set
forth or incorporated by reference, as applicable, in each of the Registration
Statement and the Prospectus under the captions “Description of Share Capital,
Warrant and Related Information,” and in the Company’s Annual Report on Form
10-K for the year ended December 31, 2019 under the captions “Legal Proceedings”
and “Certain Relationships and Related Transactions, and Director Independence”,
insofar as they purport to summarize the provisions of the laws and documents
referred to therein, are accurate summaries in all material respects.

(xxxix)     Registration Rights. Except as disclosed in the Registration
Statement and the Prospectus, there are no contracts, agreements or
understandings between the Company and any person granting such person the right
to require the Company to file a registration statement under the Securities Act
with respect to any securities of the Company owned or to be owned by such
person.    There are no contracts, agreements or understandings to require the
Company to include any such securities in the securities proposed to be offered
pursuant to this Agreement.

(xl)    No Other Brokers. Neither the Company nor any of its Subsidiaries is a
party to any contract, agreement or understanding with any person (other than
this Agreement) that would give rise to a valid claim against any of them or the
Agents for a brokerage commission, finder’s fee or like payment in connection
with the offering and sale of the Shares.

(xli)    No Integration. The Company has not sold or issued any securities that
would be integrated with the offering of the Shares contemplated by this
Agreement pursuant to the Securities Act or the interpretations thereof by the
Commission.

 

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(xlii)    Absence of Stabilization or Manipulation. The Company and its
affiliates have not taken, directly or indirectly, any action designed to or
that has constituted or that could reasonably be expected to cause or result in
the stabilization or manipulation of the price of any security of the Company in
connection with the offering of the Shares.

(xliii)    Exchange Act Registration and Listing of the Common Shares. The
Common Shares are registered pursuant to Section 12(b) of the Exchange Act and
listed on the Exchange; the Company has taken no action designed to, or
reasonably likely to have the effect of, terminating the registration of the
Common Shares under the Exchange Act or delisting the Common Shares from the
Exchange, nor has the Company received any notification that the Commission or
FINRA is contemplating terminating such registration or listing. The Common
Shares are currently listed on (i) the Exchange under the trading symbol “APTO”
and (ii) the TSX under the trading symbol “APS”. The Company has not, in the
twelve (12) months preceding the date hereof, received any notice from any
Person to the effect that the Company is not in compliance with the rules and
regulations of the Exchange or the TSX. The Company is, and has no reason to
believe that it will not in the foreseeable future continue to be, in material
compliance with the rules and regulations of the Exchange and the TSX.

(xliv)    Offering Material. The Company has not distributed and prior to any
Settlement Date, will not distribute any offering material in connection with
any Placement (as defined in Section 2(a)(i) below), other than the Prospectus,
and any Permitted Free Writing Prospectus to which the Agents have consented.

(xlv)     Compliance with Labor Laws. Neither the Company nor any Subsidiary is
in violation of or has received notice of any violation with respect to any
federal or state law relating to discrimination in the hiring, promotion or pay
of employees, nor any applicable federal or state wage and hour laws, nor any
state law precluding the denial of credit due to the neighborhood in which a
property is situated, the violation of any of which could reasonably be expected
to have a Material Adverse Effect.

(xlvi)    No Unlawful Payments. Neither the Company nor any of its Subsidiaries,
nor, to the knowledge of the Company, any director, officer, agent, employee or
other person associated with or acting on behalf of the Company or any of its
Subsidiaries, has (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity;
(ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977,
the Organization for Economic Co-operation and Development Convention on Bribery
of Foreign Public Officials in International Business Transactions, and the
rules and regulations thereunder and any other similar foreign or domestic law
or regulation; or (iv) made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment. The Company has instituted and maintains
policies and procedures designed to ensure continued compliance with the laws
and regulations referenced in clause (iii) of this paragraph.

 

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(xlvii)     Anti-Money Laundering Compliance. The operations of the Company and
its Subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all applicable jurisdictions, the rules and regulations thereunder
and any applicable related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any of its Subsidiaries with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company, threatened.

(xlviii)    OFAC Compliance. Neither the Company nor any of its Subsidiaries
nor, to the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its Subsidiaries is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”); and the Company will not directly or indirectly
use the proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any Subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.

(xlix)    Passive Foreign Investment Company. Subject to the qualifications and
assumptions set forth in the Registration Statement, the Company believes that
as of its most recently completed year-end it is, and as of the end of each
year-end during which sales of the Shares contemplated by this Agreement occur
the Company expects to be, a “passive foreign investment company” (as defined in
Section 1297 of the Code, and the regulations promulgated thereunder)

(l)    No Taxes or Fees Due Upon Issuance. No stamp, issue, registration,
documentary, transfer or other similar taxes and duties, including interest and
penalties, are payable on or in connection with the issuance and sale of the
Shares by the Company or the execution and delivery of this Agreement.

(li)    No Immunity. Neither the Company nor any Subsidiary, nor any of their
respective properties or assets, has any immunity from the jurisdiction of any
court or from any legal process (whether through service or notice, attachment
to prior judgment, attachment in aid of execution or otherwise) under the laws
of any jurisdiction in which it is organized, headquartered or doing business.

(lii)    No Legal, Accounting or Tax Advice. The Company has not relied upon the
Agents or legal counsel for the Agents for any legal, tax or accounting advice
in connection with the offering and sale of the Shares.

(liii)    Certificate as Representation and Warranty. Any certificate signed by
any officer of the Company and delivered to the Agents or the Agents’ counsel in
connection with the offering of the Shares shall be deemed a representation and
warranty by the Company to Agents as to the matters covered thereby.

 

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  2.

Purchase, Sale and Delivery of Shares.

(a)    At-the-Market Sales. On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to issue and sell through the Agents as sales agents,
and the Agents agree to use their commercially reasonable efforts to sell for
and on behalf of the Company, the Shares on the following terms and conditions;
provided, however, that any obligation of the Agents to use such commercially
reasonable efforts shall be subject to the continuing accuracy of the
representations and warranties of the Company herein, the performance by the
Company of its covenants and obligations hereunder and the continuing
satisfaction of the additional conditions specified in Section 4 of this
Agreement. The Company acknowledges and agrees that (i) there can be no
assurance that the Agents will be successful in selling Shares, and (ii) the
Agents will incur no liability or obligation to the Company or any other person
or entity if it does not sell Shares for any reason other than a failure by
either Agent to use its commercially reasonable efforts consistent with its
normal trading and sales practices to sell such Shares as required under this
Section 2.

(i)    Each time that the Company wishes to issue and sell the Shares hereunder
(each, a “Placement”), it will notify either Agent by email notice (or other
method mutually agreed to in writing by the parties) (a “Placement Notice”)
containing the parameters in accordance with which it desires the Shares to be
sold, which shall at a minimum include the number of Shares to be issued, the
time period during which sales are requested to be made, any limitation on the
number of Shares that may be sold in any one Trading Day (as defined below) and
any minimum price below which sales may not be made, a form of which containing
such minimum sales parameters necessary is attached hereto as Schedule 1. The
Placement Notice shall originate from any of the individuals from the Company
set forth on Schedule 2 (with a copy to each of the other individuals from the
Company listed on such schedule), and shall be addressed to each of the
individuals from the relevant Agent set forth on Schedule 2, as such Schedule 2
may be amended from time to time. The Placement Notice shall be effective upon
receipt by the relevant Agent unless and until (i) in accordance with the notice
requirements set forth in Section 2(a)(iii) of this Agreement, such Agent
declines to accept the terms contained therein for any reason, in its sole
discretion, (ii) the entire amount of the Shares have been sold, (iii) the
Company suspends or terminates the Placement Notice in accordance with the
notice requirements set forth in Section 2(a)(iii) below, (iv) the Company
issues a subsequent Placement Notice with parameters superseding those on the
earlier dated Placement Notice, or (v) this Agreement has been terminated under
the provisions of Section 7. The amount of any commission or other compensation
to be paid by the Company to the relevant Agent in connection with the sale of
the Shares shall be calculated in accordance with the terms set forth in
Section 2(a)(v) below. It is expressly acknowledged and agreed that neither the
Company nor the Agents will have any obligation whatsoever with respect to a
Placement or any Shares unless and until the Company delivers a Placement Notice
to an Agent and such Agent does not decline such Placement Notice pursuant to
the terms set forth above, and then only upon the terms specified therein and
herein. In the event of a conflict between the terms of this Agreement and the
terms of the Placement Notice, the terms of the Placement Notice will control.
For the purposes hereof, “Trading Day” means any day on which the Company’s
Common Shares is purchased and sold on the principal market on which the Common
Shares is listed or quoted.

 

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(ii)     The Shares are to be sold by an Agent on a daily basis or otherwise as
shall be agreed to by the Company and the Agents on any day that is a trading
day for the Exchange (other than a day on which the Exchange is scheduled to
close prior to its regular weekday closing time). The gross sales price of the
Shares sold under this Section 2(a) shall be the market price for the Company’s
Common Shares sold by the Agents under this Section 2(a) at the time of such
sale.

(iii)     Notwithstanding the foregoing, the Company may instruct the Agents by
telephone (confirmed promptly by email) not to sell the Shares if such sales
cannot be effected at or above the price designated by the Company in any such
instruction. Furthermore, the Company shall not authorize the issuance and sale
of, and the Agents shall not be obligated to use its commercially reasonable
efforts to sell, any Share at a price lower than the minimum price therefor
designated from time to time by the Company’s Board of Directors and notified to
the Agents in writing. In addition, the Company or either Agent may, upon notice
to the other party hereto by telephone (confirmed promptly by email), suspend
the offering of the Shares, whereupon such Agent shall so suspend the offering
of Shares until further notice is provided to the other party to the contrary;
provided, however, that such suspension or termination shall not affect or
impair the parties’ respective obligations with respect to the Shares sold
hereunder prior to the giving of such notice. Notwithstanding any other
provision of this Agreement, during any period in which the Company is in
possession of material non-public information, the Company and each Agent agree
that (i) no sale of Shares will take place, (ii) the Company shall not request
the sale of any Shares, and (iii) neither Agent shall be obligated to sell or
offer to sell any Shares.

(iv)     Subject to the terms of the Placement Notice, the Agents may sell the
Shares by any method permitted by law deemed to be an “at the market offering”
as defined in Rule 415(a)(4) under the Securities Act, including sales made
directly on or through the Exchange. Subject to the terms of any Placement
Notice, the Agents may also sell Shares in negotiated transactions at market
prices prevailing at the time of sale or at prices related to such prevailing
market prices and/or any other method permitted by law, subject to the prior
written consent of the Company.

(v)     The compensation to an Agent for sales of the Shares, as an agent of the
Company, shall be up to 3.0% of the gross sales price of the Shares sold by such
Agent pursuant to this Section 2(a), payable in cash (the “Commission”);
provided that the combined Commission and reimbursement of either Agent for the
out-of-pocket reasonable fees and disbursements of Agents’ counsel pursuant to
Section 3(g), shall not exceed 8.0% of the gross sales price of the Shares. The
remaining proceeds, after further deduction for any transaction fees imposed by
any governmental or self-regulatory organization in respect of such sales, and
reimbursement of expenses that the Agents may be entitled to pursuant to
Section 3(g), shall constitute the net proceeds to the Company for such Shares
(the “Net Proceeds”).

 

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(vi)    Each Agent will provide written confirmation to the Company (including
by email correspondence to each of the individuals of the Company set forth on
Schedule 2), no later than the opening of the Trading Day immediately following
the Trading Day on which it has made sales of Shares hereunder, setting forth
the number of Shares sold on such day, the volume-weighted average price of the
Shares sold, and the Net Proceeds payable to the Company.

(vii)    All Shares sold pursuant to this Section 2(a) will be delivered by the
Company to the relevant Agent for the account of such Agent, against payment of
the Net Proceeds therefor, by wire transfer of same-day funds payable to the
order of the Company at the offices of (i) Piper Sandler & Co., U.S. Bancorp
Center, 800 Nicollet Mall, Minneapolis, Minnesota, (ii) Canaccord Genuity LLC,
535 Madison Avenue 2nd Floor, New York, New York 10022, (iii) or such other
location as may be mutually acceptable, at 9:00 a.m. Central Time on the second
full business day following the date on which such Shares are sold, or at such
other time and date as such Agent and the Company determine pursuant to Rule
15c6-1(a) under the Exchange Act, each such time and date of delivery being
herein referred to as a “Settlement Date.” If an Agent so elects, delivery of
the Shares may be made by credit through full fast transfer to an account or
accounts at The Depository Trust Company designated by such Agent. On each
Settlement Date, such Agent will deliver the Net Proceeds in same day funds to
an account designated by the Company on, or prior to, such Settlement Date. The
Company agrees that if the Company, or its transfer agent (if applicable),
defaults in its obligation to timely deliver duly authorized Shares on a
Settlement Date, the Company agrees that in addition to and in no way limiting
the rights and obligations set forth in Section 5 hereto, it will (i) hold the
relevant Agent harmless against any loss, claim, damage, or expense (including
reasonable legal fees and expenses), as incurred, arising out of or in
connection with such default by the Company, (iii) reimburse such Agent for any
losses incurred by the Agent attributable, directly or indirectly, to such
default and (iii) pay to such Agent any commission or other compensation to
which such Agent would otherwise have been entitled absent such default.

(viii)    Each of the Company and each Agent hereby agrees and acknowledges that
all sales and solicitations of sales of the Shares by each Agent shall be made
solely in the United States and no sales or solicitations of sales of the Shares
by each Agent shall be done in Canada or through the facilities of the TSX.

(ix)     During the term of this Agreement, neither Agent nor any of their
respective affiliates or subsidiaries shall engage in (i) any short sale of any
security of the Company or (ii) any sale of any security of the Company that
such Agent does not own or any sale which is consummated by the delivery of a
security of the Company borrowed by, or for the account of, such Agent. Neither
Agent nor any of their respective affiliates or subsidiaries shall engage in any
proprietary trading or trading for such Agent (or its affiliates’ or
subsidiaries’) own account.

 

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(x)     During the term of this Agreement, and notwithstanding anything to the
contrary herein, each Agent agrees that in no event will it or any of its
affiliates engage in any market making, bidding, stabilization or other trading
activity with regard to the Common Shares if such activity would be prohibited
under Regulation M or other anti-manipulation rules under the Securities Act.

(b)     Maximum Amount. Under no circumstances shall the aggregate number or
aggregate value of the Shares sold pursuant to this Agreement exceed: (i) the
aggregate number and aggregate dollar amount of Common Shares available for
issuance under the currently effective Registration Statement, (ii) the
aggregate dollar amount of Common Shares permitted to be sold under the
Company’s effective Registration Statement (including any limit set forth in
General Instruction I.B.6 thereof, if applicable) or (iii) the aggregate number
of aggregate dollar amount of the Common Shares for which the Company has filed
any Prospectus Supplement in connection with the Shares (the lesser of (i), (ii)
and (iii) the “Maximum Amount”).

(c)     No Association or Partnership. Nothing herein contained shall constitute
the Agents an unincorporated association or partner with the Company.

(d)     Duration. Under no circumstances shall any Shares be sold pursuant to
this Agreement after the date which is three years after the Registration
Statement is first declared effective by the Commission.

(e)     Market Transactions by Agents. The Company acknowledges and agrees that
the Agents have informed the Company that the Agents may, to the extent
permitted under the Securities Act, the Exchange Act and this Agreement,
purchase and sell Common Shares for its own account while this Agreement is in
effect, provided, that (i) no sale for its own account shall take place while a
Placement Notice is in effect (except to the extent the Agents may engage in
sales of Shares purchased or deemed purchased from the Company as a “riskless
principal” or in a similar capacity) and (ii) the Company shall not be deemed to
have authorized or consented to any such purchases or sales by the Agents. The
Company consents to the Agents trading in the Common Shares for the account of
any of its clients at the same time as sales of the Shares occur pursuant to
this Agreement.

 

  3.

Covenants of the Company. The Company covenants and agrees with the Agents as
follows:

(a)     Amendments to Registration Statement and Prospectus.    After the date
of this Agreement and during any period in which a Prospectus relating to any
Shares is required to be delivered by the Agents under the Securities Act
(including in circumstances where such requirement may be satisfied pursuant to
Rule 172 under the Securities Act), the Company agrees that it will: (i) notify
the Agents promptly of the time when any subsequent amendment to the
Registration Statement, other than documents incorporated by reference or
amendments not related to the Shares, has been filed with the Commission and/or
has become effective or any subsequent supplement to the Prospectus related to
the Shares has been filed and of any request by the Commission for any amendment
or supplement to the Registration Statement (insofar as it relates to the
transactions contemplated hereby) or Prospectus or for additional information;
(ii) prepare and file with the Commission, promptly upon the Agents’ request,
any amendments or supplements to the Registration Statement or Prospectus that,
in the Agents’ reasonable opinion, may be necessary or advisable in connection
with the sale of the Shares by the Agents (provided, however, that the failure
of the Agents to make such request shall not relieve the Company of any
obligation or liability hereunder, or affect the Agents’ right to rely on the
representations and warranties made by the Company in this Agreement); (iii) not
file any amendment or supplement to the Registration Statement or Prospectus,
other than documents incorporated by reference, relating to the Shares or a
security convertible into the Shares unless a copy thereof has been submitted to
the Agents within a reasonable period of time before the filing and the Agents
have not reasonably objected thereto (provided, however, that (A) the failure of
the Agents to make such objection shall not relieve the Company of any
obligation or liability hereunder, or affect the Agents’ right to rely on the
representations and warranties made by the Company in this Agreement), (B) the
Company has no obligation to provide the Agents any advance copy of such filing
or to provide the Agents an opportunity to object to such filing if the filing
does not name the Agents or does not relate to a Placement or other transaction
contemplated hereunder, and (C) the only remedy that the Agents shall have with
respect to the failure by the Company to provide the Agents with such copy or
the filing of such amendment or supplement despite the Agents’ objection shall
be to cease making sales under this Agreement); (iv) furnish to the Agents at
the time of filing thereof a copy of any document that upon filing is deemed to
be incorporated by reference into the Registration Statement or Prospectus,
except for those documents available via EDGAR; and (iv) cause each amendment or
supplement to the Prospectus, other than documents incorporated by reference, to
be filed with the Commission as required pursuant to the applicable paragraph of
Rule 424(b) of the Securities Act.

 

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(b)    Stop Order. The Company will advise the Agents, promptly after it
receives notice or obtains knowledge thereof, of the issuance or threatened
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceeding for any such purpose, and it will promptly use its commercially
reasonable efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such a stop order should be issued.

(c)    Continuing Amendments. During any period in which a Prospectus relating
to the Shares is required to be delivered by the Agents under the Securities Act
with respect to any Placement or pending sale of the Shares, (including in
circumstances where such requirement may be satisfied pursuant to Rule 172 under
the Securities Act), the Company will comply with all requirements imposed upon
it by the Securities Act, as from time to time in force, and to file on or
before their respective due dates all reports (taking into account any
extensions available under the Exchange Act) and any definitive proxy or
information statements required to be filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14, 15(d) or any other provision of or under
the Exchange Act. If during such period any event occurs as a result of which
the Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary to amend or supplement the
Registration Statement or Prospectus to comply with the Securities Act, the
Company will promptly notify the Agents to suspend the offering of Shares during
such period and the Company will promptly amend or supplement the Registration
Statement or Prospectus (at the expense of the Company) so as to correct such
statement or omission or effect such compliance.

 

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(d)    Qualification of the Shares. The Company shall take or cause to be taken
all necessary action to qualify the Shares for sale under the securities laws of
such jurisdictions as the Agents reasonably designate and to continue such
qualifications in effect so long as required for the distribution of the Shares,
except that the Company shall not be required in connection therewith to qualify
as a foreign corporation or to execute a general consent to service of process
in any state. The Company shall promptly advise the Agents of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Shares for offer or sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose.

(e)    Copies of Registration Statement and Prospectus. The Company will furnish
to the Agents and counsel for the Agents copies of the Registration Statement
(which will include three complete manually signed copies of the Registration
Statement and all consents and exhibits filed therewith), the Prospectus and all
amendments and supplements to such documents, in each case as soon as available
and in such quantities as the Agents may from time to time reasonably request.

(f)    Section 11(a). The Company will make generally available to its security
holders as soon as practicable an earnings statement (which need not be audited)
covering a 12-month period that shall satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 promulgated thereunder.

(g)    Expenses. The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, will pay or cause to
be paid (i) all expenses (including stock or transfer taxes and stamp or similar
duties allocated to the respective transferees) incurred in connection with the
registration, issue, sale and delivery of the Shares, (ii) all expenses and fees
(including, without limitation, fees and expenses of the Company’s accountants
and counsel) in connection with the preparation, printing, filing, delivery, and
shipping of the Registration Statement (including the financial statements
therein and all amendments, schedules, and exhibits thereto), the Shares, the
Prospectus and any amendment thereof or supplement thereto, and the producing,
word-processing, printing, delivery, and shipping of this Agreement and other
underwriting documents or closing documents, including Blue Sky Memoranda
(covering the states and other applicable jurisdictions) and including the cost
to furnish copies of each thereof to the Agents, (iii) all filing fees, (iv) all
fees and disbursements of the Agents’ counsel incurred in connection with the
qualification of the Shares for offering and sale by the Agents or by dealers
under the securities or blue sky laws of the states and other jurisdictions
which Agents shall designate, (v) the fees and expenses of any transfer agent or
registrar, (vi) the filing fees and fees and disbursements of Agents’ counsel
incident to any required review and approval by FINRA of the terms of the sale
of the Shares, (vii) listing fees, if any, (viii) the cost and expenses of the
Company relating to investor presentations or any “roadshow” undertaken in
connection with marketing of the Shares, and (ix) all other costs and expenses
incident to the performance of its obligations hereunder that are not otherwise
specifically provided for herein. In addition to (iv) and (vi) above, the
Company shall reimburse the Agents for the out of pocket reasonable fees and
disbursements of the Agents’ counsel actually incurred in an amount which, taken
together with the fees and disbursements of Agents’ counsel in an amount not to
exceed $50,000.

 

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(h)    Use of Proceeds. The Company will apply the net proceeds from the sale of
the Shares in the manner the Prospectus.

(i)    Restrictions on Future Sales. During the term of this Agreement, without
giving the Agent at least two business days’ prior written notice specifying the
nature of the proposed sale and the date of such proposed sale so as to permit
the Agent to suspend activity under this Agreement for such period of time as
requested by the Company, the Company will not, offer for sale, sell, contract
to sell, pledge, grant any option for the sale of, enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition of Common Shares (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the Company or any
affiliate, or otherwise issue or dispose of, directly or indirectly (or publicly
disclose the intention to make any such offer, sale, pledge, grant, issuance or
other disposition), any Common Shares or any securities convertible into or
exchangeable for, or any options or rights to purchase or acquire, Common
Shares, or permit the registration under the Securities Act of any such Common
Shares, securities, options or rights, except for: (i) the registration of the
Shares and the sales through the Agent pursuant to this Agreement, (ii) the
registration, sales and issuance of shares through any dividend reinvestment and
stock purchase plan of the Company, (iii) the grant of restricted stock units
and options pursuant to employee or director benefit plans existing as of the
date hereof or hereafter implemented, and the issuance of Common Shares issuable
upon the exercise of such options or vesting of such restricted stock units and
(iv) the issuance of shares pursuant to the exercise of warrants.

(j)    No Stabilization or Manipulation. The Company has not taken and will not
take, directly or indirectly, any action designed to, or which might reasonably
be expected to cause or result in, or which constitutes: (i) the stabilization
or manipulation of the price of the Common Shares or any other security of the
Company to facilitate the sale or resale of the Shares, (ii) a violation of
Regulation M. The Company shall notify the Agents of any violation of Regulation
M by the Company or any of its Subsidiaries or any of their respective officers
or directors promptly after the Company has received notice or obtained
knowledge of any such violation. The Company shall not invest in futures
contracts, options on futures contracts or options on commodities, unless the
Company is exempt from the registration requirements of the Commodity Exchange
Act, as amended (the “Commodity Act”), or otherwise complies with the Commodity
Act. The Company will not engage in any activities bearing on the Commodity Act,
unless such activities are exempt from the Commodity Act or otherwise comply
with the Commodity Act.

(k)    No Other Broker. The Company will not incur any liability for any
finder’s or broker’s fee or agent’s commission in connection with the execution
and delivery of this Agreement, or the consummation of the transactions
contemplated hereby.

(l)    Timely Securities Act and Exchange Act Reports. During any prospectus
delivery period, the Company will use its commercially reasonable efforts to
file on a timely basis with the Commission such periodic and current reports as
required by the Securities Act and the Exchange Act.

 

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(m)    Internal Controls. The Company and its Subsidiaries will maintain such
controls and other procedures, including without limitation, those required by
Sections 302 and 906 of the Sarbanes-Oxley Act and the applicable regulations
thereunder, that are designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Commission’s rules and forms, including without
limitation, controls and procedures designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the Company’s management,
including its principal executive officer and its principal financial officer,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure, to ensure that material information
relating to Company, including its Subsidiaries, is made known to them by others
within those entities.

(n)    Permitted Free Writing Prospectus. The Company represents and agrees
that, unless it obtains the prior written consent of the Agents, and the Agents
severally represent and agree that, unless they obtain the prior written consent
of the Company, neither Agent has made and will not make any offer relating to
the Shares that would constitute an “issuer free writing prospectus,” as defined
in Rule 433 under the Securities Act, or that would otherwise constitute a “free
writing prospectus,” as defined in Rule 405 under the Securities Act, required
to be filed with the Commission. Any such free writing prospectus consented to
by the Company and the Agents is hereinafter referred to as a “Permitted Free
Writing Prospectus.” The Company represents that it has treated or agrees that
it will treat each Permitted Free Writing Prospectus as an “issuer free writing
prospectus,” as defined in Rule 433, and has complied and will comply with the
requirements of Rule 433 applicable to any Permitted Free Writing Prospectus,
including timely Commission filing where required, legending and record keeping.

(o)     Representation Date and Opinions of Counsel. Prior to the date of the
first Placement Notice, and thereafter during the term of this Agreement, each
time the Company (A) files an amendment to the Registration Statement or
Prospectus (other than relating solely to the offering of securities other than
the Shares), (B) files an annual report on Form 10-K under the Exchange Act or
files its quarterly reports on Form 10-Q under the Exchange Act; and (C) files a
report on Form 8-K containing amended financial statements (other than an
earnings release) under the Exchange Act, (each of the dates in (A), (B) and
(C) are referred to herein as a “Representation Date”), the Company shall cause:

(i)    McCarthy Tétrault LLP, Canadian counsel for the Company, to furnish to
the Agents the opinion of such counsel, dated as of such date and addressed to
Agents, in form and substance reasonably satisfactory to the Agents; provided,
however that the opinion of such counsel shall only be required for the first
Representation Date.

(ii)    Dorsey and Whitney, U.S. counsel for the Company, to furnish to the
Agents the opinion of such counsel, dated as of such date and addressed to
Agents, in form and substance reasonably satisfactory to the Agents.

(iii)    Cooley LLP, intellectual property and patent counsel for the Company,
to furnish to the Agents the opinion of such counsel, dated as of such date and
addressed to Agents, in form and substance reasonably satisfactory to the
Agents; provided however, the opinion of counsel shall only be required for the
first Representation Date.

 

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Notwithstanding the foregoing, the requirement to provide counsel opinions under
this Section 3(o) shall be waived for any Representation Date occurring at a
time at which no Placement Notice is pending, which waiver shall continue until
the date the Company delivers a Placement Notice to an Agent. Notwithstanding
the foregoing, if the Company subsequently decides to sell Shares following a
Representation Date when the Company relied on such waiver and did not provide
the Agents with opinions under this Section 3(o), then before an Agent sells any
Shares pursuant to Section 2(a), the Company shall cause the opinions (including
the opinion pursuant to Section 3(o) if not delivered on the date of the prior
Form 10-K), comfort letter, certificates and documents that would be delivered
on a Representation Date to be delivered.

(p)    Representation Date and Comfort Letter. Prior to the date of the first
Placement Notice and thereafter during the term of this Agreement, on each
Representation Date to which a waiver does not apply, the Company shall cause
KPMG LLP, or other independent accountants satisfactory to the Agents (the
“Accountants”), to deliver to the Agents a letter, dated as of such date and
addressed to Agents, confirming that they are independent public accountants
within the meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualifications of accountants under
Rule 2-01 of Regulation S-X of the Commission, and stating the conclusions and
findings of said firm with respect to the financial information and other
matters covered by its letter in form and substance satisfactory to the Agents
of the same tenor as the first such letter received hereunder.

(q)    Representation Date and Representation Certificate. Prior to the date of
the First Placement Notice and thereafter during the term of this Agreement, on
each Representation Date to which a waiver does not apply, the Company shall
furnish to the Agents a certificate (the “Representation Certificate”),
substantially in the form of Schedule 3 and dated as of such date, addressed to
the Agents and signed by the chief executive officer and by the chief financial
officer of the Company.

(r)    Disclosure of Shares Sold. The Company shall disclose in its quarterly
reports on Form 10-Q and in its annual report on Form 10-K the number of the
Shares sold through the Agents under this Agreement, the net proceeds to the
Company and the compensation paid by the Company with respect to sales of the
Shares pursuant to this Agreement during the relevant quarter.

(s)    Continued Listing of Shares. The Company shall use its commercially
reasonable efforts to maintain the listing of the Common Shares on the Exchange
and the TSX.

(t)    Canadian Securities Laws. The Company will use commercially reasonable
efforts to comply with all requirements imposed upon it by the Canadian
securities laws as from time to time in force, so far as necessary to permit the
continuance of sales of, or dealings in, the Shares as contemplated by the
provisions hereof and the Prospectus.

 

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(u)    Notice of Changes. At any time during the term of this Agreement, as
supplemented from time to time, the Company shall advise the Agents immediately
after it shall have received notice or obtain knowledge thereof, of any
information or fact that would alter or affect any opinion, certificate, letter
and other document provided to the Agents pursuant to this Section 3.

(v)     Maximum Amount. The Company will not instruct the Agents to sell or
otherwise attempt to sell Shares in excess of the Maximum Amount.

4.     Conditions of Agents’ Obligations. The obligations of the Agents
hereunder are subject to (i) the accuracy, as of the Effective Time, each
Representation Date, each Settlement Date (in each case, as if made at such
date) of and compliance with all representations, warranties and agreements of
the Company contained herein, (ii) the performance by the Company of its
obligations hereunder and (iii) the following additional conditions:

(a)    Continuing Amendments; No Stop Order. If filing of the Prospectus, or any
amendment or supplement thereto, or any Permitted Free Writing Prospectus, is
required under the Securities Act, the Company shall have filed the Prospectus
(or such amendment or supplement) or such Permitted Free Writing Prospectus with
the Commission in the manner and within the time period so required (without
reliance on Rule 424(b)(8) or Rule 164(b)); the Registration Statement shall be
effective; no stop order suspending the effectiveness of the Registration
Statement or any part thereof, any Rule 462(b) Registration Statement, or any
amendment thereof, nor suspending or preventing the use of the Prospectus shall
have been issued; no proceedings for the issuance of such an order shall have
been initiated or threatened; and any request of the Commission for additional
information (to be included in the Registration Statement, the Prospectus or
otherwise) shall have been complied with to the Agents’ satisfaction.

(b)    Absence of Certain Events. None of the following events shall have
occurred and be continuing: (i) receipt by the Company or any of its
Subsidiaries of any request for additional information from the Commission or
any other federal or state governmental authority during the period of
effectiveness of the Registration Statement, the response to which would require
any post-effective amendments or supplements to the Registration Statement or
the Prospectus; (ii) the issuance by the Commission or any other federal or
state governmental authority of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that
purpose; (iii) receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; or (iv) the occurrence of any event that makes any
material statement made in the Registration Statement or the Prospectus or any
material document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any changes in the
Registration Statement, related Prospectus or such documents so that, in the
case of the Registration Statement, it will not contain any materially untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading and,
that in the case of the Prospectus, it will not contain any materially untrue
statement of a material fact or omit to state any 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.

 

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(c)    No Material Misstatement or Omission. The Agents shall not have advised
the Company that the Registration Statement or any the Prospectus, contains an
untrue statement of fact which, in the Agents’ opinion, is material, or omits to
state a fact which, in the Agents’ opinion, is material and is required to be
stated therein or necessary to make the statements therein not misleading.

(d)    No Adverse Changes. Except as contemplated in the Prospectus, subsequent
to the respective dates as of which information is given in the Prospectus,
neither the Company nor any of its Subsidiaries shall have incurred any material
liabilities or obligations, direct or contingent, or entered into any material
transactions, or declared or paid any dividends or made any distribution of any
kind with respect to its capital stock; and there shall not have been any change
in the capital stock (other than a change in the number of outstanding Common
Shares due to the issuance of shares upon the exercise of outstanding options or
warrants), or any material change in the short-term or long-term debt of the
Company, or any issuance of options, warrants, convertible securities or other
rights to purchase the capital stock of the Company or any of its Subsidiaries,
or any development involving a prospective Material Adverse Effect (whether or
not arising in the ordinary course of business), or any loss by strike, fire,
flood, earthquake, accident or other calamity, whether or not covered by
insurance, incurred by the Company or any Subsidiary, the effect of which, in
any such case described above, in the Agents’ judgment, makes it impractical or
inadvisable to offer or deliver the Shares on the terms and in the manner
contemplated in the Prospectus.

(e)    Compliance with Certain Obligations. The Company shall have performed
each of its obligations under Sections 3(o) – 3(q).

(f)     Opinion of Agents Counsel. On each Representation Date to which a waiver
does not apply, there shall have been furnished to the Agents the opinion and
negative assurance letter of Goodwin Procter LLP, counsel for the Agents, dated
as of such Representation Date and addressed to Agents, in a form reasonably
satisfactory to the Agents, and such counsel shall have received such papers and
information as they request to enable them to pass upon such matters; provided
however, the opinion of Goodwin Procter LLP shall only be required prior to the
first Placement Notice, and thereafter, only a negative assurance letter of such
counsel shall be required for each subsequent Representation Date.

(g)    Representation Certificate. On or prior to the first Placement Notice,
the Agents shall have received the Representation Certificate in form and
substance satisfactory to the Agents and their counsel.

(h)    No Objection by FINRA. The Financial Industry Regulatory Authority, Inc.
shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.

(i)    Timely Filing of Prospectus and Prospectus Supplement. All filings with
the Commission required by Rule 424 under the Securities Act to have been filed
by the Settlement Date, as the case may be, shall have been made within the
applicable time period prescribed for such filing by Rule 424.

 

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(j)    Additional Documents and Certificates. The Company shall have furnished
to Agents and the Agents’ counsel such additional documents, certificates and
evidence as they may have reasonably requested.

All opinions, certificates, letters and other documents described in this
Section 4 will be in compliance with the provisions hereof only if they are
satisfactory in form and substance to Agents and the Agents’ counsel. The
Company will furnish Agents with such conformed copies of such opinions,
certificates, letters and other documents as Agents shall reasonably request.

5.    Indemnification and Contribution.

(a)    Company Indemnification. The Company agrees to indemnify and hold
harmless the Agents, its affiliates, directors, officers and employees, and each
person, if any, who controls the either Agent within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which either Agent may
become subject, under the Securities Act or otherwise (including in settlement
of any litigation), insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon, in whole or in part:

(i)     an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, including the 430B Information and at
any subsequent time pursuant to Rules 430A and 430B promulgated under the
Securities Act, and any other information deemed to be part of the Registration
Statement at the time of effectiveness, and at any subsequent time pursuant to
the Securities Act or the Exchange Act, and the Prospectus, or any amendment or
supplement thereto (including any documents filed under the Exchange Act and
deemed to be incorporated by reference into the Prospectus), any Permitted Free
Writing Prospectus, or any roadshow as defined in Rule 433(h) under the
Securities Act (a “road show”), or an omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading,

(ii)     any inaccuracy in the representations and warranties of the Company
contained herein;

(i)        any investigation or proceeding by any governmental authority,
commenced or threatened (whether or not the Agents are a target of or party to
such investigation or proceeding);

(ii)     any failure of the Company to perform its respective obligations
hereunder or under law;

and will reimburse the Agents for any legal or other expenses reasonably
incurred by it in connection with investigating or defending against such loss,
claim, damage, liability or action; provided, however, that the Company shall
not be liable in any such case of (i) through (iv) to the extent that any such
loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, the Prospectus, or any such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by Agents specifically for use in the preparation
thereof. “Rule 430B Information,” as used herein, means information with respect
to the Shares and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430B.

 

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In addition to its other obligations under this Section 5(a), the Company agrees
that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, described in this
Section 5(a), it will reimburse the Agents on a monthly basis for all reasonable
legal fees or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company’s obligation to reimburse the Agents for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. Any such interim reimbursement
payments which are not made to the Agents within 30 days of a request for
reimbursement shall bear interest at the WSJ Prime Rate (as published from time
to time by the Wall Street Journal).

(b)    Agents Indemnification. The Agents, severally and not jointly, will
indemnify and hold harmless the Company against any losses, claims, damages or
liabilities to which the Company may become subject, under the Securities Act or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Agents), but only insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, the Prospectus, any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in conformity with
written information furnished to the Company by the Agents specifically for use
in the preparation thereof, it being understood and agreed that the only
information furnished by the Agents for use in the Registration Statement or the
Prospectus consists of the statements set forth in the fifth and sixth
paragraphs under the caption “Plan of Distribution” in the Prospectus, and will
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending against any such loss,
claim, damage, liability or action.

(c)    Notice and Procedures. Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
that it may have to any indemnified party except to the extent such indemnifying
party has been materially prejudiced by such failure. In case any such action
shall be brought against any indemnified party, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of the indemnifying
party’s election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation; provided,
however, that if, in the sole judgment of the Agents, it is advisable for the
Agents to be represented by separate counsel, the Agents shall have the right to
employ a single counsel to represent the Agents, in which event the reasonable
fees and expenses of such separate counsel shall be borne by the indemnifying
party or parties and reimbursed to the Agents as incurred (in accordance with
the provisions of the second paragraph in subsection (a) above).

 

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The indemnifying party under this Section 5 shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party against any loss,
claim, damage, liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by this Section 5, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into, and (iii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement, compromise or consent to the entry
of judgment in any pending or threatened action, suit or proceeding in respect
of which any indemnified party is or could have been a party and indemnity was
or could have been sought hereunder by such indemnified party, unless such
settlement, compromise or consent (a) includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such action, suit or proceeding and (b) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.

(d)    Contribution; Limitations on Liability; Non-Exclusive Remedy. If the
indemnification provided for in this Section 5 is unavailable or insufficient to
hold harmless an indemnified party under subsection (a) or (b) above, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (b) above, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Agents on the other from the offering of the Shares, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Agents on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Agents on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total commissions
received by the Agents (before deducting expenses) from the sale of the Shares.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Agents, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company and the Agents agree that it
would not be just and equitable if contributions pursuant to this subsection (d)
were to be determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in this subsection (d). The amount paid or payable by an indemnified party as
a result of the losses, claims, damages or liabilities referred to in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
against any action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), the Agents shall not be
required to contribute any amount in excess of the commissions received by it
under this Agreement. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.    

 

29

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6.    Representations and Agreements to Survive Delivery. All representations,
warranties, and agreements of the Company herein or in certificates delivered
pursuant hereto, including but not limited to the agreements of the Agents and
the Company contained in Section 5 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of the
Agents or any controlling person thereof, or the Company or any of its officers,
directors, or controlling persons, and shall survive delivery of, and payment
for, the Shares to and by the Agents hereunder.

7.    Termination of this Agreement.

(a)    The Company shall have the right, by giving prior written notice as
hereinafter specified, to terminate the provisions of this Agreement relating to
the solicitation of offers to purchase the Shares in its sole discretion at any
time. Any such termination shall be without liability of any party to any other
party except that (i) with respect to any pending sale, through the Agents for
the Company, the obligations of the Company, including in respect of
compensation of the Agents, shall remain in full force and effect
notwithstanding the termination and (ii) the provisions of Section 3.(g),
Section 5 and Section 6 of this Agreement shall remain in full force and effect
notwithstanding such termination.

(b)    Either Agent shall have the right, by giving written notice as
hereinafter specified, to terminate the provisions of this Agreement solely with
respect to such agent relating to the solicitation of offers to purchase the
Shares in its sole discretion at any time. Any such termination shall be without
liability of any party to any other party except that the provisions of
Section 3.(g), Section 5 and Section 6 of this Agreement shall remain in full
force and effect notwithstanding such termination.

(c)    Unless earlier terminated pursuant to this Section 7, this Agreement
shall automatically terminate upon the earlier to occur of the issuance and sale
of all of the Shares through the Agents on the terms and subject to the
conditions set forth herein, except that the provisions of Section 3.(g),
Section 5 and Section 6 of this Agreement shall remain in full force and effect
notwithstanding such termination.

 

30

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(d)     This Agreement shall remain in full force and effect unless terminated
pursuant to Sections 7(a), (b) or (c) above or otherwise by mutual agreement of
the parties; provided that any such termination by mutual agreement shall in all
cases be deemed to provide that Section 3.(g), Section 5 and Section 6 shall
remain in full force and effect.

(e)    Any termination of this Agreement shall be effective on the date
specified in such notice of termination; provided that such termination shall
not be effective until the close of business on the date of receipt of such
notice by the Agents or the Company, as the case may be. If such termination
shall occur prior to the Settlement Date for any sale of the Shares, such sale
shall settle in accordance with the provisions of Section 2(a)(vii) of this
Agreement.

8.    Default by the Company. If the Company shall fail at any Settlement Date
to sell and deliver the number of Shares which it is obligated to sell
hereunder, then this Agreement shall terminate without any liability on the part
of the Agents or, except as provided in Section 3.(g) hereof, any non-defaulting
party. No action taken pursuant to this Section shall relieve the Company from
liability, if any, in respect of such default, and the Company shall (A) hold
the Agents harmless against any loss, claim or damage arising from or as a
result of such default by the Company and (B) pay the Agents any commission to
which it would otherwise be entitled absent such default.

9.    Notices. Except as otherwise provided herein, all communications under
this Agreement shall be in writing and, if to the Agents, shall be delivered via
overnight delivery services to (i) Piper Sandler & Co., U.S. Bancorp Center, 800
Nicollet Mall, Minneapolis, Minnesota 55402, Attention: Equity Capital Markets,
with a copy to Piper Sandler General Counsel at 800 Nicollet Mall, Minneapolis,
MN 55402 and LegalCapMarkets@psc.com; and Canaccord Genuity LLC, 535 Madison
Avenue 2nd Floor, New York, New York 10022, Attention: General Counsel; and
(ii) the Company at 251 Consumers Road, Suite 1105, Toronto A6 M2J 4R3,
Attention: Chief Financial Officer; or in each case to such other address as the
person to be notified may have requested in writing. Any party to this Agreement
may change such address for notices by sending to the parties to this Agreement
written notice of a new address for such purpose.

10.    Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors
referred to in Section 5(d). Nothing in this Agreement is intended or shall be
construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term “successors and assigns” as herein used shall not
include any purchaser, as such purchaser, of any of the Shares from the Agents.

11.    Absence of Fiduciary Relationship. The Company, having been advised by
counsel, acknowledges and agrees that: (a) the Agents have been retained solely
to act as a sales agent in connection with the sale of the Shares and that no
fiduciary, advisory or agency relationship between the Company (including any of
the Company’s affiliates (including directors), equity holders, creditors,
employees or agents, hereafter, “Company Representatives”), on the one hand, and
the Agents on the other, has been created or will be created in respect of any
of the transactions contemplated by this Agreement, irrespective of whether the
Agents have advised or is advising the Company on other matters and irrespective
of the use of the defined term “Agent;” (b) neither of the Agents nor any of
their respective affiliates (including directors), equity holders, creditors,
employees or agents, hereafter, “Agent Representatives”) shall have any duty or
obligation to the Company or any Company Representative except as set forth in
this Agreement; (b) the price and other terms of any Placement executed pursuant
to this Agreement, as well as the terms of this Agreement, are deemed acceptable
to the Company and its counsel, following discussions and arms-length
negotiations with the Agents; (c) the Company is capable of evaluating and
understanding, and in fact has evaluated, understands and accepts the terms,
risks and conditions of any Placement to be executed pursuant to this Agreement,
and any other transactions contemplated by this Agreement; (c) the Company has
been advised that the Agents and the Agent Representatives are engaged in a
broad range of transactions which may involve interests that differ from those
of the Company and that the Agents and the Agent Representatives have no
obligation to disclose any such interests and transactions to the Company by
virtue of any fiduciary, advisory or agency relationship, or otherwise; (d) the
Company has been advised that the Agents are acting, in respect of any Placement
and the transactions contemplated by this Agreement, solely for the benefit of
the Agents, and not on behalf of the Company; and (e) the Company and the
Company Representatives waive, to the fullest extent permitted by law, any
claims that they may have against the Agents or any of the Agent Representatives
for breach of fiduciary duty or alleged breach of fiduciary duty in respect of
any Placement or any of the transactions contemplated by this Agreement and
agree that the Agents and the Agent Representatives shall have no liability
(whether direct or indirect, in contract, tort or otherwise) to the Company or
any of the Company Representatives in respect of any person asserting any claim
of breach of any fiduciary duty on behalf of or in right of the Company or any
of the Company Representatives.

 

31

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12.    Governing Law and Waiver of Jury Trial. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York. THE
COMPANY (ON ITS OWN BEHALF AND ON BEHALF OF ITS STOCKHOLDERS AND AFFILIATES)
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

13.     Submission to Jurisdiction, Etc. Each party hereby submits to the
exclusive jurisdiction of the U.S. federal and New York state courts sitting in
the Borough of Manhattan, City of New York, in any suit or proceeding arising
out of or relating to this Agreement or the transactions contemplated hereby.
The parties hereby irrevocably and unconditionally waive any objection to the
laying of venue of any lawsuit, action or other proceeding in such courts, and
hereby further irrevocably and unconditionally waive and agree not to plead or
claim in any such court that any such lawsuit, action or other proceeding
brought in any such court has been brought in an inconvenient forum. The Company
irrevocably designates and appoints Aptose Biosciences U.S. Inc. located at Unit
120, 12770 High Bluff Drive, San Diego, California 92130, as its authorized
agent in the United States upon which process may be served in any such suit or
proceeding, and agrees that service of process upon such authorized agent be
certified or registered mail, or by personal delivery by Federal Express, to
such authorized agent shall be deemed in every respect effective service of
process upon the Company in any such suit or proceeding. The Company further
agrees to take any and all actions as may be necessary to maintain such
designation and appointment of such agent in full force and effect for a period
of five years from the date of this Agreement.

 

32

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14.    Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, and all of which together shall
constitute one and the same instrument.

15.    Construction. The section and exhibit headings herein are for convenience
only and shall not affect the construction hereof. References herein to any law,
statute, ordinance, code, regulation, rule or other requirement of any
governmental authority shall be deemed to refer to such law, statute, ordinance,
code, regulation, rule or other requirement of any governmental authority as
amended, reenacted, supplemented or superseded in whole or in part and in effect
from time to time and also to all rules and regulations promulgated thereunder

[Signature Page Follows]

 

33

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Please sign and return to the Company the enclosed duplicates of this letter
whereupon this letter will become a binding agreement between the Company and
the Agents in accordance with its terms.

 

Very truly yours, APTOSE BIOSCIENCES INC. By:  

/s/ Gregory K. Chow

 

Name:  Gregory K. Chow

 

Title:   Executive Vice President & Chief Financial Officer

Confirmed as of the date first

above mentioned.

 

PIPER SANDLER & CO. By:   /s/ Chad Huber   Name: Chad Huber   Title: Managing
Director

 

CANACCORD GENUITY LLC By:   /s/ Eugene Rozelman   Name: Eugene Rozelman   Title:
Managing Director

 

 

 

Schedule A-1

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SCHEDULE 1

FORM OF PLACEMENT NOTICE

No Facsimile and No Voicemail

 

From:

  

Aptose Biosciences Inc.

To:

     

Attention:

Date:

  

[●], 20[●]

Subject:

  

Equity Distribution Agreement – Placement Notice

Gentlemen:

Pursuant to the terms and subject to the conditions contained in the Equity
Distribution Agreement between Aptose Biosciencs Inc. (“Company”), and Piper
Sandler & Co. and Canaccord Genuity LLC (each an “Agent”) dated May 5, 2020
[(the “Agreement”), the Company hereby requests that Agent sell up to [●] shares
of the Company’s common shares, no par value per share, at a minimum market
price of $[●] per share. Sales should begin on the date of this Placement Notice
and shall continue until [●] /[all shares are sold].

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SCHEDULE 2

NOTICE PARTIES

Aptose Biosciences Inc.

William G. Rice

wrice@aptose.com

Gregory K. Chow

gchow@aptose.com

Piper Sandler & Co.

Neil A. Riley

Neil.A.Riley@psc.com

Connor N. Anderson

Connor.N.Anderson@psc.com

Tom Wright

Thomas.E.Wright@psc.com

Jay A. Hershey

Jay.A.Hershey@psc.com

Canaccord Genuity LLC

Brian O’Connor

bonnor@cgr.com

Tara Hartigan

thartigan@cgf.com

Michael Wright

mmwright@cgf.com

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SCHEDULE 3

FORM OF REPRESENTATION CERTIFICATE

PURSUANT TO SECTION 3(Q) OF THE AGREEMENT

[Date]

Piper Sandler & Co.

800 Nicollet Mall

Minneapolis, MN 55402

Canaccord Genuity LLC

535 Madison Avenue, 2nd Floor

New York, New York 10022

Sir:

The undersigned, the duly qualified and elected [•], of Aptose Biosciences Inc.,
a company incorporated under the Canada Business Corporations Act (the
“Company”), does hereby certify in such capacity and on behalf of the Company,
pursuant to Section 3(q) of the Equity Distribution Agreement, dated May 5, 2020
(the “Equity Distribution Agreement”), among the Company and Piper Sandler & Co.
and Canaccord Genuity LLC, that to the best of the knowledge of the undersigned:

(i)    The representations and warranties of the Company in this Agreement are
true and correct, in all material respects, as if made at and as of the date of
the certificate, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or
prior to the date of the certificate;

(ii)    No stop order or other order suspending the effectiveness of the
Registration Statement or any part thereof or any amendment thereof or the
qualification of the Shares for Registration Statement, nor suspending or
preventing the use of the base prospectus, the Prospectus or any Permitted Free
Writing Prospectus, has been issued, and no proceeding for that purpose has been
instituted or, to the best of the Company’s knowledge, is contemplated by the
Commission or any state or regulatory body;

(iii)    The Shares have been duly and validly authorized by the Company and
that all corporate action required to be taken for the authorization, issuance
and sale of the Shares has been validly and sufficiently taken;

(iv)    The signers of this certificate have carefully examined the Registration
Statement, the base prospectus, the Prospectus and any Permitted Free Writing
Prospectus, and any amendments thereof or supplements thereto (including any
documents filed under the Exchange Act and deemed to be incorporated by
reference into the base prospectus, the Prospectus and any Permitted Free
Writing Prospectus),

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(A)    each part of the Registration Statement and the Prospectus, and any
amendments thereof or supplements thereto (including any documents filed under
the Exchange Act and deemed to be incorporated by reference into the Prospectus)
contain, and contained when such part of the Registration Statement (or such
amendment) became effective, all statements and information required to be
included therein, each part of the Registration Statement, or any amendment
thereof, does not contain, and did not contain, when such part of the
Registration Statement (or such amendment) became effective, any untrue
statement of a material fact or omit to state, and did not omit to state when
such part of the Registration Statement (or such amendment) became effective,
any material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus, as amended or
supplemented, does not include and did not include as of its date, or the time
of first use within the meaning of the Securities Act Regulations, any untrue
statement of a material fact or omit to state and did not omit to state as of
its date, or the time of first use within the meaning of the Securities Act
Regulations, a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading,

(B)    at no time during the period that begins on the earlier of the date of
such base prospectus, Prospectus, or Permitted Free Writing Prospectus and the
date such base prospectus, Prospectus, or Permitted Free Writing Prospectus was
filed with the Commission and ends on the date of this certificate did such base
prospectus, Prospectus, or Permitted Free Writing Prospectus, as then amended or
supplemented, include an untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading,

(C)    since the date of the Equity Distribution Agreement, there has occurred
no event required to be set forth in an amended or supplemented prospectus which
has not been so set forth, and there has been no document required to be filed
under the Exchange Act that upon such filing would be deemed to be incorporated
by reference into the base prospectus, the Prospectus or any Permitted Free
Writing Prospectus that has not been so filed,

(D)    except as stated in the Prospectus or any Permitted Free Writing
Prospectus, the Company has not incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions,
not in the ordinary course of business, or declared or paid any dividends or
made any distribution of any kind with respect to its capital stock, and except
as disclosed in the base prospectus, the Prospectus, and any Permitted Free
Writing Prospectus, there has not been any change in the capital stock (other
than a change in the number of outstanding Common Shares due to sales of Shares
pursuant to the Equity Distribution Agreement and the issuance of Common Shares
upon the exercise of equity awards or warrants), or any material change in the
short term or long term debt, or any Material Adverse Effect or any development
involving a prospective Material Adverse Effect (whether or not arising in the
ordinary course of business), or any loss by strike, fire, flood, earthquake,
accident or other calamity, whether or not covered by insurance, incurred by the
Company, and

(E)    except as stated in the base prospectus, the Prospectus, and any
Permitted Free Writing Prospectus, there is not pending, or, to the knowledge of
the Company, threatened or contemplated, any action, suit or proceeding to which
the Company is a party before or by any court or governmental agency, authority
or body, or any arbitrator, which might result in a Material Adverse Effect.

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Capitalized terms used herein without definition shall have the meanings given
to such terms in the Equity Distribution Agreement.

 

APTOSE BIOSCIENCES INC. By:     Name:     Title:    

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SCHEDULE 4

SUBSIDIARIES

 

Name

  

State/Jurisdiction of Incorporation

Aptose Biosciences U.S. Inc.

  

Delaware

NuChem Pharmaceuticals Inc.

  

Ontario, Canada