Exhibit 10.1

 

AMPIO PHARMACEUTICALS, INC.

 

$50,000,000

 

Common Stock

($0.0001 value per share)

 

Sales Agreement

February 20, 2020

 

ThinkEquity,

a division of Fordham Financial Management, Inc.

17 State Street, 22nd Floor

New York, NY 10004

 

Roth Capital Partners, LLC

888 San Clemente Drive, Suite 400

Newport Beach, CA 92660

 

Ladies and Gentlemen:

 

Ampio Pharmaceuticals, Inc., a Delaware corporation (the “Company”), confirms
its agreement (this “Agreement”) with ThinkEquity, a division of Fordham
Financial Management, Inc. (“ThinkEquity”) and Roth Capital Partners, LLC
(“Roth”); each of ThinkEquity and Roth, individually an “Agent” and
collectively, the “Agents”), as follows:

 

1.             Issuance and Sale of Shares. The Company agrees that, from time
to time during the term of this Agreement, on the terms and subject to the
conditions set forth herein, it may issue and sell through or to the Agents,
shares (the “Placement Shares”) of common stock of the Company, $0.0001 par
value per share (the “Common Stock”) having an aggregate offering price of up to
$50,000,000, provided, however, that in no event shall the Company issue or sell
through Agents such number of Placement Shares that (a) exceeds the number or
dollar amount of shares of Common Stock that may be sold pursuant to the
Registration Statement (as defined below), or (b) exceeds the number of
authorized but unissued shares of Common Stock of the Company (the “Maximum
Amount”). Notwithstanding anything to the contrary contained herein, the parties
hereto agree that compliance with the limitations set forth in this Section 1 on
the amount of Placement Shares issued and sold under this Agreement shall be the
sole responsibility of the Company and that Agents shall have no obligation in
connection with such compliance. The issuance and sale of Placement Shares
through or to Agents will be effected pursuant to the Registration Statement (as
defined below) filed by the Company and declared effective by the Securities and
Exchange Commission (the “Commission”), although nothing in this Agreement shall
be construed as requiring the Company to use the Registration Statement to issue
any Placement Shares.

 

 

 

 

The Company has filed, in accordance with the provisions of the Securities Act
of 1933, as amended, and the rules and regulations thereunder (the “Securities
Act”), with the Commission a registration statement on Form S-3 (File No.
333-217094), including a base prospectus, relating to certain securities,
including the Placement 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 (the “Exchange Act”). The
Company has prepared a prospectus supplement specifically relating to the
Placement Shares (the “Prospectus Supplement”) to the base prospectus included
as part of such registration statement. The Company will furnish to the Agents,
for use by the Agents, copies of the prospectus included as part of such
registration statement, as supplemented by the Prospectus Supplement, relating
to the Placement Shares. Except where the context otherwise requires, such
registration statement, and any post-effective amendment thereto, 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 of the Securities Act, or any subsequent registration statement on
Form S-3 filed pursuant to Rule 415(a)(6) under the Securities Act by the
Company to cover any Placement Shares, 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
then issued Issuer Free Writing Prospectus (defined below), 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 or deemed to be 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 (the “Incorporated
Documents”). 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 to its Electronic
Data Gathering Analysis and Retrieval System, or if applicable, the Interactive
Data Electronic Application system when used by the Commission (collectively,
“EDGAR”).

 

2.            Placements. Each time that the Company wishes to issue and sell
Placement Shares hereunder (each, a “Placement”), it will notify the Agents by
email notice (or other method mutually agreed to in writing by the Parties) of
the number or dollar value of Placement Shares, the time period during which
sales are requested to be made, any limitation on the number of Placement Shares
that may be sold in any one day and any minimum price below which sales may not
be made (a “Placement Notice”), the form of which is attached hereto as Schedule
1. The Placement Notice shall originate from any of the individuals from the
Company set forth on Schedule 3 (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 Agents set forth on Schedule 3, as such Schedule 3 may be
amended from time to time. The Placement Notice shall be effective unless and
until (i) each Agent declines to accept the terms contained therein for any
reason, in its sole discretion by promptly notifying the Company and the other
Agent of its decision to decline acceptance, (ii) the entire amount of the
Placement Shares thereunder have been sold, (iii) the Company suspends or
terminates the Placement Notice or (iv) the Agreement has been terminated under
the provisions of Section 12. The amount of any discount, commission or other
compensation to be paid by the Company to the Agents in connection with the sale
of the Placement Shares shall be calculated in accordance with the terms set
forth in Schedule 2. It is expressly acknowledged and agreed that neither the
Company nor either Agent will have any obligation whatsoever with respect to a
Placement or any Placement Shares unless and until the Company delivers a
Placement Notice to the Agents and both Agents do 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 a Placement Notice, the terms of the Placement
Notice will control. The Agent that shall execute sales of Placement Shares
hereunder from time to time (the “Designated Agent”) shall be identified in
accordance with the Designated Agent Agreement, dated the date hereof, among the
Company and each Agent (the “Designated Agent Agreement”). The amount of any
discount, commission or other compensation to be paid by the Company to the
Agent which is not the Designated Agent in connection with the sale of the
Placement Shares shall be calculated in accordance with the Designated Agent
Agreement.

 

 2 

 

 

3.            Sale of Placement Shares by Agents. Subject to the provisions of
Section 5(a), the Designated Agent, for the period specified in the Placement
Notice, will use its commercially reasonable efforts consistent with its normal
trading and sales practices and applicable state and federal laws, rules and
regulations and the rules of the NYSE American LLC (the “Exchange”), to sell the
Placement Shares up to the amount specified, and otherwise in accordance with
the terms of such Placement Notice. The Designated Agent will provide written
confirmation to the Company and the other Agent no later than the opening of the
Trading Day (as defined below) immediately following the Trading Day on which it
has made sales of Placement Shares hereunder setting forth the number of
Placement Shares sold on such day, the compensation payable by the Company to
the Agents pursuant to Section 2 with respect to such sales, and the Net
Proceeds (as defined below) payable to the Company, with an itemization of the
deductions made by the Designated Agent (as set forth in Section 5(b)) from the
gross proceeds that it receives from such sales. Subject to the terms of the
Placement Notice, the Designated Agent may sell Placement Shares by any method
permitted by law deemed to be an “at the market offering” as defined in Rule 415
of the Securities Act.

 

4.            Suspension of Sales.

 

(a)         The Company or the Designated Agent may, upon notice to the other
party in writing (including by email correspondence to each of the individuals
of the other party set forth on Schedule 3, if receipt of such correspondence is
actually acknowledged by any of the individuals to whom the notice is sent,
other than via auto-reply) or by telephone (confirmed immediately by verifiable
facsimile transmission or email correspondence to each of the individuals of the
other party set forth on Schedule 3), suspend any sale of Placement Shares;
provided, however, that such suspension shall not affect or impair any party’s
obligations with respect to any Placement Shares sold hereunder prior to the
receipt of such notice. Each party agrees that no such notice under this
Section 4 shall be effective against any other party unless it is made to one of
the individuals named on Schedule 3 hereto, as such Schedule may be amended from
time to time.

 

 3 

 

 

(b)         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 the Agents agree that (i) no sale of Placement Shares will take
place, (ii) the Company shall not request the sale of any Placement Shares, and
(iii) the Agents shall not be obligated to sell or offer to sell any Placement
Shares.

 

5.            Sale and Delivery to the Designated Agent; Settlement.

 

(a)         Sale of Placement Shares. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, upon the Designated Agent’s acceptance of the terms of a Placement
Notice, and unless the sale of the Placement Shares described therein has been
declined, suspended, or otherwise terminated in accordance with the terms of
this Agreement, the Designated Agent, for the period specified in the Placement
Notice, will use its commercially reasonable efforts consistent with its normal
trading and sales practices to sell such Placement Shares up to the amount
specified in such Placement Notice, and otherwise in accordance with the terms
of such Placement Notice. The Company acknowledges and agrees that (i) there can
be no assurance that the Designated Agent will be successful in selling
Placement Shares, (ii) the Designated Agent will incur no liability or
obligation to the Company or any other person or entity if it does not sell
Placement Shares for any reason other than a failure by the Designated Agent to
use its commercially reasonable efforts consistent with its normal trading and
sales practices and applicable law and regulations to sell such Placement Shares
as required under this Agreement and (iii) the Designated Agent shall be under
no obligation to purchase Placement Shares on a principal basis pursuant to this
Agreement, except as otherwise agreed by the Designated Agent and the Company.

 

(b)         Settlement of Placement Shares. Unless otherwise specified in the
applicable Placement Notice, settlement for sales of Placement Shares will occur
on the second (2nd) Trading Day (or such earlier day as is industry practice for
regular-way trading) following the date on which such sales are made (each, a
“Settlement Date”). The amount of proceeds to be delivered to the Company on a
Settlement Date against receipt of the Placement Shares sold (the “Net
Proceeds”) will be equal to the aggregate sales price received by the Designated
Agent, after deduction for (i) the Agents’ commission, discount or other
compensation for such sales payable by the Company pursuant to Section 2 hereof,
and (ii) any transaction fees imposed by any governmental or self-regulatory
organization in respect of such sales or execution charges of a clearing firm or
floor charges or delivery expenses incurred with the Deposit and Withdrawal
Custodian System of The Depository Trust Company as described below.

 

 4 

 

 

(c)         Delivery of Placement Shares. Upon the acceptance of a Placement
Notice by the Designated Agent, the Company may issue and deliver for deposit in
the Company’s brokerage account with the Designated Agent, a number of Placement
Shares equal or greater to the maximum number of Placement Shares referenced in
the Placement Notice. On each Settlement Date, against payment of the Net
Proceeds, the Company will, or will cause its transfer agent to, electronically
transfer the Placement Shares being sold not already delivered for deposit in
the Company’s brokerage account by crediting the Designated Agent’s or its
designee’s account (provided the Designated Agent shall have given the Company
written notice of such designee prior to the Settlement Date) at The Depository
Trust Company through its Deposit and Withdrawal at Custodian System or by such
other means of delivery as may be mutually agreed upon by the parties hereto
which in all cases shall be freely tradable, transferable, registered shares in
good deliverable form. On each Settlement Date, the Designated Agent will
deliver the related Net Proceeds in same day funds to an account designated by
the Company on, or prior to, the Settlement Date. The Company agrees that if the
Company, or its transfer agent (if applicable), defaults in its obligation to
deliver Placement 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 10(a) hereto, it will (i) hold the Designated 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 or
its transfer agent (if applicable) and (ii) pay to the Designated Agent any
commission, discount, or other compensation to which it would otherwise have
been entitled absent such default.

 

(d)         Limitations on Offering Size. Under no circumstances shall the
Company cause or request the offer or sale of any Placement Shares if, after
giving effect to the sale of such Placement Shares, the aggregate gross sales
proceeds of Placement Shares sold pursuant to this Agreement would exceed the
lesser of (A) together with all sales of Placement Shares under this Agreement,
the Maximum Amount, (B) the amount available for offer and sale under the
Registration Statement and (C) the amount authorized from time to time to be
issued and sold under this Agreement by the Company’s board of directors, a duly
authorized committee thereof or a duly authorized executive committee, and
notified to the Agents in writing. Under no circumstances shall the Company
cause or request the offer or sale of any Placement Shares pursuant to this
Agreement at a price lower than the minimum price authorized from time to time
by the Company’s board of directors, duly authorized committee thereof or a duly
authorized executive committee, and notified to the Agents in writing. Further,
under no circumstances shall the Company cause or permit the aggregate offering
amount of Placement Shares sold pursuant to this Agreement to exceed the Maximum
Amount.

 

(e)         Sales Through Agents. The Company agrees that any offer to sell, any
solicitation of an offer to buy, or any sales of Placement Shares or any other
equity security of the Company shall only be effected by or through an Agent,
and only a single Agent, on any single given date, and in no event shall the
Company request that more than one Agent sell Shares on the same day; provided
however that (i) the foregoing limitation shall not apply to (A) exercise of any
option, warrant, right or any conversion privilege set forth in the instruction
governing such securities, (B) sales solely to employees, directors or security
holders of the Company or its subsidiaries, or to a trustee or other person
acquiring such securities for the accounts of such person and (ii) such
limitation shall not apply (A) on any day during which no sales are made
pursuant to this Agreement or (B) during a period in which the Company has
notified the Agents that it will not sell Common Stock under this Agreement and
(1) no Placement Notice is pending or (2) after a Placement Notice has been
withdrawn.

 

 5 

 

 

6.            Representations and Warranties of the Company. Except as disclosed
in the Registration Statement or Prospectus (including the Incorporated
Documents), the Company represents and warrants to, and agrees with each Agent
that as of the date of this Agreement and as of each Applicable Time (as defined
below), unless such representation, warranty or agreement specifies a different
date or time:

 

(a)         Registration Statement and Prospectus. The Company and the
transactions contemplated by this Agreement meet the requirements for and comply
with the conditions for the use of Form S-3 under the Securities Act. The
Registration Statement has been filed with the Commission and declared effective
under the Securities Act. The Prospectus Supplement will name ThinkEquity and
Roth as the agents in the section entitled “Plan of Distribution.” The Company
has not received, and has no notice of, any order of the Commission preventing
or suspending the use of the Registration Statement, or threatening or
instituting proceedings for that purpose. The Registration Statement and the
offer and sale of Placement Shares as contemplated hereby meet the requirements
of Rule 415 under the Securities Act and comply in all material respects with
said Rule. Any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement have been so described or
filed. Copies of the Registration Statement, the Prospectus, and any such
amendments or supplements and all documents incorporated by reference therein
that were filed with the Commission on or prior to the date of this Agreement
have been delivered, or are available through EDGAR, to each Agent and its
respective counsel. The Company has not distributed and, prior to the later to
occur of each Settlement Date and completion of the distribution of the
Placement Shares, will not distribute any offering material in connection with
the offering or sale of the Placement Shares other than the Registration
Statement and the Prospectus and any Issuer Free Writing Prospectus to which the
Agents have consented. The Company has not, in the 12 months preceding the date
hereof, received notice from the Exchange to the effect that the Company is not
in compliance with the listing or maintenance requirements. The Company has no
reason to believe that it will not in the foreseeable future continue to be in
compliance with all such listing and maintenance requirements.

 

(b)         No Misstatement or Omission. The Registration Statement, when it
became or becomes effective, and the Prospectus, and any amendment or supplement
thereto, on the date of such Prospectus or amendment or supplement, conformed
and will conform in all material respects with the requirements of the
Securities Act. At each Settlement Date, the Registration Statement and the
Prospectus, as of such date, will conform in all material respects with the
requirements of the Securities Act. The Registration Statement, when it became
or becomes effective, did not, and will not, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Prospectus and any
amendment or supplement thereto, on the date thereof and at each Applicable Time
(defined below), did not and will not include an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. The
Incorporated Documents did not, and any further documents filed and incorporated
by reference therein will not, when filed with the Commission, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated in such document or necessary to make the statements in such document, in
light of the circumstances under which they were made, not misleading. The
foregoing shall not apply to statements in, or omissions from, any such document
made in reliance upon, and in conformity with, information furnished to the
Company by the Agents specifically for use in the preparation thereof.

 

 6 

 

 

(c)         Conformity with Securities Act and Exchange Act. The Registration
Statement, the Prospectus, any Issuer Free Writing Prospectus or any amendment
or supplement thereto, and the Incorporated Documents, when such documents were
or are filed with the Commission under the Securities Act or the Exchange Act or
became or become effective under the Securities Act, as the case may be,
conformed and will conform in all material respects with the requirements of the
Securities Act and the Exchange Act, as applicable.

 

(d)         Financial Information. The financial statements of the Company
included or incorporated by reference in the Registration Statement, the
Prospectus and the Issuer Free Writing Prospectuses, if any, together with the
related notes and schedules, present fairly, in all material respects, the
financial position of the Company as of the dates indicated and the results of
operations, cash flows and changes in stockholders’ equity of the Company for
the periods specified and have been prepared in compliance with the requirements
of the Securities Act and Exchange Act and in conformity with generally accepted
accounting principles in the United States (“GAAP”) applied on a consistent
basis (except for (i) such adjustments to accounting standards and practices as
are noted therein, (ii) in the case of unaudited interim financial statements,
to the extent such financial statements may not include footnotes required by
GAAP or may be condensed or summary statements and (iii) such adjustments which
will not be material, either individually or in the aggregate) during the
periods involved; the other financial and statistical data with respect to the
Company contained or incorporated by reference in the Registration Statement,
the Prospectus and the Issuer Free Writing Prospectuses, if any, are accurately
and fairly presented and prepared on a basis consistent with the financial
statements and books and records of the Company; there are no financial
statements (historical or pro forma) that are required to be included or
incorporated by reference in the Registration Statement, or the Prospectus that
are not included or incorporated by reference as required; the Company does not
have any material liabilities or obligations, direct or contingent (including
any off-balance sheet obligations), not described in the Registration
Statement(excluding the exhibits thereto), and the Prospectus; and all
disclosures contained or incorporated by reference in the Registration
Statement, the Prospectus and the Issuer Free Writing Prospectuses, if any,
regarding “non-GAAP financial measures” (as such term is defined by the rules
and regulations of the Commission) comply in all material respects with
Regulation G of the Exchange Act and Item 10 of Regulation S-K under the
Securities Act, to the extent applicable.

 

 7 

 

 

(e)         Conformity with EDGAR Filing. The Prospectus delivered to the Agents
for use in connection with the sale of the Placement Shares pursuant to this
Agreement will be identical to the versions of the Prospectus created to be
transmitted to the Commission for filing via EDGAR, except to the extent
permitted by Regulation S-T.

 

(f)          Organization. The Company is duly organized, validly existing as a
corporation and in good standing under the laws of its jurisdiction of
organization. The Company is, 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 its ownership or lease of property or
the conduct of its business requires such license or qualification, and has all
corporate power and authority necessary to own or hold its properties and to
conduct its business 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 on or affecting the assets, business, operations,
earnings, properties, condition (financial or otherwise), prospects,
stockholders’ equity or results of operations of the Company or prevent or
materially interfere with consummation of the transactions contemplated hereby
(a “Material Adverse Effect”).

 

(g)         Subsidiaries. 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 most recently ended fiscal year The Company owns directly or indirectly,
all of the equity interests of its subsidiaries free and clear of any lien,
charge, security interest, encumbrance, right of first refusal or other
restriction, and all the equity interests of its subsidiaries are validly issued
and are fully paid, non-assessable and free of preemptive and similar rights.

 

(h)         No Violation or Default. The Company is not (i) in violation of its
charter or by-laws or similar organizational documents; (ii) 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 or
condition contained in any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the Company is
subject; or (iii) in violation of any law or statute or any judgment, order,
rule or regulation of any court or arbitrator or governmental or regulatory
authority, except, in the case of each of clauses (ii) and (iii) above, for any
such violation or default that would not, individually or in the aggregate, have
a Material Adverse Effect. To the Company’s knowledge, no other party under any
material contract or other agreement to which it is a party is in default in any
respect thereunder where such default would have a Material Adverse Effect.

 

(i)          No Material Adverse Effect. Subsequent to the respective dates as
of which information is given in the Registration Statement, the Prospectus and
the Issuer Free Writing Prospectuses, if any, (including any document deemed
incorporated by reference therein), there has not been (i) any Material Adverse
Effect, (ii) any transaction which is material to the Company, (iii) any
obligation or liability, direct or contingent (including any off-balance sheet
obligations), incurred by the Company which is material to the Company, (iv) any
material change in the capital stock or outstanding long-term indebtedness
(other than (A) the grant of additional awards under equity incentive plans,
(B) changes in the number of outstanding Common Stock due to the issuance of
shares upon exercise or conversion of securities exercisable for or convertible
into Common Stock outstanding on the date hereof, (C) any repurchase of capital
stock of the Company, (D) as a result of the sale of Placement Shares, or
(E) other than as publicly reported or announced, or (v) any dividend or
distribution of any kind declared, paid or made on the capital stock of the
Company other than in each case above in the ordinary course of business or as
otherwise disclosed in the Registration Statement or Prospectus (including any
document deemed incorporated by reference therein).

 

 8 

 

 

(j)          Capitalization. The issued and outstanding shares of capital stock
of the Company have been validly issued, are fully paid and non-assessable and,
other than as disclosed in the Registration Statement or the Prospectus, are not
subject to any preemptive rights, rights of first refusal or similar rights. The
Company has an authorized, issued and outstanding capitalization as set forth in
the Registration Statement and the Prospectus as of the dates referred to
therein (other than the grant of additional options and restricted stock units
under the Company’s existing stock option plans, or changes in the number of
outstanding shares of Common Stock of the Company due to the issuance of shares
upon the exercise or conversion of securities exercisable for, or convertible
into, Common Stock outstanding on the date hereof or due to issuances of shares
of Common Stock as otherwise publicly reported or announced, and such authorized
capital stock conforms to the description thereof set forth in the Registration
Statement and the Prospectus. The description of the securities of the Company
in the Registration Statement and the Prospectus is complete and accurate in all
material respects. As of the date referred to therein, the Company does not have
outstanding any options to purchase, or any rights or warrants to subscribe for,
or any securities or obligations convertible into, or exchangeable for, or any
contracts or commitments to issue or sell, any shares of capital stock or other
securities except for outstanding options under the Company’s existing stock
option plans, warrants to subscribe for shares of Common Stock as disclosed in
the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form
10-Q.

 

(k)         Authorization; Enforceability. The Company has full legal right,
power and authority to enter into this Agreement and perform the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement of the
Company enforceable in accordance with its terms, except (i) to the extent that
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally and by general
equitable principles and (ii) the indemnification and contribution provisions of
Section 10 hereof may be limited by federal or state securities laws and public
policy considered in respect thereof.

 

(l)          Authorization of Placement Shares. The Placement Shares, when
issued and delivered pursuant to the terms approved by the board of directors of
the Company or a duly authorized committee thereof, against payment therefor as
provided herein, will be duly and validly authorized and issued and fully paid
and non-assessable, free and clear of any pledge, lien, encumbrance, security
interest or other claim, including any statutory or contractual preemptive
rights, resale rights, rights of first refusal or other similar rights, and will
be registered pursuant to Section 12 of the Exchange Act. The Placement Shares,
when issued, will conform in all material respects to the description thereof
set forth in or incorporated into the Prospectus.

 

 9 

 

 

(m)        No Consents Required. No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or governmental
or regulatory authority is required for the execution, delivery and performance
by the Company this Agreement, the issuance and sale by the Company of the
Placement Shares, except for such consents, approvals, authorizations, orders
and registrations or qualifications as may be required under applicable state
securities laws or by the by-laws and rules of the Financial Industry Regulatory
Authority (“FINRA”) or the Exchange in connection with the sale of the Placement
Shares by the Agents.

 

(n)         No Preferential Rights. (i) No person, as such term is defined in
Rule 1-02 of Regulation S-X promulgated under the Securities Act (each, a
“Person”), has the right, contractual or otherwise, to cause the Company to
issue or sell to such Person any Common Stock or shares of any other capital
stock or other securities of the Company, (ii) no Person has any preemptive
rights, resale rights, rights of first refusal, or any other rights (whether
pursuant to a “poison pill” provision or otherwise) to purchase any Common Stock
or shares of any other capital stock or other securities of the Company,
(iii) no Person has the right to act as an underwriter or as a financial advisor
to the Company in connection with the offer and sale of Common Stock, and
(iv) no Person has the right, contractual or otherwise, to require the Company
to register under the Securities Act any Common Stock or shares of any other
capital stock or other securities of the Company, or to include any such shares
or other securities in the Registration Statement or the offering contemplated
thereby, whether as a result of the filing or effectiveness of the Registration
Statement or the sale of the Placement Shares as contemplated thereby or
otherwise.

 

(o)         Independent Public Accountant. The Company’s accountants (the
“Accountants”), whose report or reports on the financial statements of the
Company is filed with the Commission as part of the Company’s most recent Annual
Report on Form 10-K filed with the Commission and incorporated into the
Registration Statement and the Prospectus, each are and, during the periods
covered by their report, were an independent registered public accounting firm
with respect to the Company within the meaning of the Securities Act and the
Public Company Accounting Oversight Board (United States). To the Company’s
knowledge, the Accountants are not in violation of the auditor independence
requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) with
respect to the Company.

 

(p)         Enforceability of Agreements. All agreements between the Company and
third parties expressly referenced in the Prospectus are legal, valid and
binding obligations of the Company enforceable in accordance with their
respective terms, except to the extent that (i) enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally and by general equitable principles and (ii) the
indemnification provisions of certain agreements may be limited be federal or
state securities laws or public policy considerations in respect thereof, and
except for any unenforceability that, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect.

 

 10 

 

 

(q)         No Litigation. There are no legal, governmental or regulatory
actions, suits or proceedings pending, nor, to the Company’s knowledge, any
legal, governmental or regulatory investigations, to which the Company is a
party or to which any property of the Company is the subject that, individually
or in the aggregate, if determined adversely to the Company would have a
Material Adverse Effect or materially and adversely affect the ability of the
Company to perform its obligations under this Agreement; to the Company’s
knowledge, no such actions, suits or proceedings are threatened or contemplated
by any governmental or regulatory authority or threatened by others; and
(i) there are no current or pending legal, governmental or regulatory
investigations, actions, suits or proceedings that are required under the
Securities Act to be described in the Prospectus that are not so described; and
(ii) there are no contracts or other documents that are required under the
Securities Act to be filed as exhibits to the Registration Statement that are
not so filed.

 

(r)          Licenses and Permits. The Company possesses or has obtained, all
licenses, certificates, consents, orders, approvals, permits and other
authorizations issued by, and have made all declarations and filings with, the
appropriate federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of their respective
properties or the conduct of their respective businesses as described in the
Registration Statement and the Prospectus (the “Permits”), except where the
failure to possess, obtain or make the same would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has not received written notice of any proceeding relating to revocation or
modification of any such Permit or has any reason to believe that such Permit
will not be renewed in the ordinary course, except where the failure to obtain
any such renewal would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

(s)         No Material Defaults. The Company has not defaulted on any
installment on indebtedness for borrowed money or on any rental on one or more
long-term leases, which defaults, individually or in the aggregate, have a
Material Adverse Effect. The Company has not filed a report pursuant to Section
13(a) or 15(d) of the Exchange Act since the filing of its last Annual Report on
Form 10-K, indicating that it (i) has failed to pay any dividend or sinking fund
installment on preferred stock or (ii) has defaulted on any installment on
indebtedness for borrowed money or on any rental on one or more long-term
leases, which defaults, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect

 

(t)          S-3 Eligibility. (i) At the time of filing the Registration
Statement and (ii) at the time of the most recent amendment thereto for the
purposes of complying with Section 10(a)(3) of the Securities Act (whether such
amendment was by post-effective amendment, incorporated report filed pursuant to
Section 13 or 15(d) of the Exchange Act or form of prospectus), the Company met
the then applicable requirements for use of Form S-3 under the Securities Act,
including compliance with General Instruction I.B.1 of Form S-3.

 

 11 

 

 

(u)         Certain Market Activities. Neither the Company nor, to the Company’s
knowledge, any of its directors, officers or controlling persons has taken,
directly or indirectly, any action designed, or that has constituted or would
reasonably be expected to cause or result in, under the Exchange Act or
otherwise, the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Placement Shares.

 

(v)         Broker/Dealer Relationships. Neither the Company nor any related
entities (i) is required to register as a “broker” or “dealer” in accordance
with the provisions of the Exchange Act or (ii) directly or indirectly through
one or more intermediaries, controls or is a “person associated with a member”
or “associated person of a member” (within the meaning set forth in the FINRA
Manual).

 

(w)        No Reliance. The Company has not relied upon any Agent or any Agent’s
counsel for any legal, tax or accounting advice in connection with the offering
and sale of the Placement Shares.

 

(x)         Taxes. The Company has filed all federal, state, local and foreign
tax returns which have been required to be filed and paid all taxes shown
thereon through the date hereof, to the extent that such taxes have become due
and are not being contested in good faith. Except as otherwise disclosed in or
contemplated by the Registration Statement or the Prospectus, no tax deficiency
has been determined adversely to the Company which has had, or would reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect. The Company has no knowledge of any federal, state or other governmental
tax deficiency, penalty or assessment which has been or might be asserted or
threatened against it which reasonably would be expected to have a Material
Adverse Effect.

 

(y)         Title to Real and Personal Property. The Company has good and valid
title in fee simple to all items of real property and good and valid title to
all personal property described in the Registration Statement or Prospectus as
being owned by it that are material to the business of the Company, in each case
free and clear of all liens, encumbrances and claims, except those that (i) do
not materially interfere with the use made and proposed to be made of such
property by the Company or (ii) would not reasonably expected, individually or
in the aggregate, to have a Material Adverse Effect. Any real property described
in the Registration Statement or Prospectus as being leased by the Company is
held by it under valid, existing and enforceable leases, except those that
(A) do not materially interfere with the use made or proposed to be made of such
property by the Company or (B) would not be reasonably expected to have a
Material Adverse Effect.

 

(z)          Intellectual Property. The Company owns or possesses adequate
enforceable rights to use all patents, patent applications, trademarks (both
registered and unregistered), service marks, trade names, trademark
registrations, service mark registrations, copyrights, licenses and know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) (collectively, the
“Intellectual Property”), necessary for the conduct of its business as conducted
as of the date hereof, except to the extent that the failure to own or possess
adequate rights to use such Intellectual Property would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect; the
Company has not received any written notice of any claim of infringement or
conflict which asserted Intellectual Property rights of others, which
infringement or conflict, if the subject of an unfavorable decision, would
result in a Material Adverse Effect; there are no pending, or to the Company’s
knowledge, threatened judicial proceedings or interference proceedings against
the Company challenging the Company’s rights in or to or the validity of the
scope of any of the Company’s patents, patent applications or proprietary
information.

 

 12 

 

 

(aa)       Environmental Laws. The Company (i) is 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) has received and is in
compliance with all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its businesses as described in the
Registration Statement and the Prospectus; and (iii) has 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, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

(bb)       Disclosure Controls. The Company maintains systems of internal
controls designed to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. The Company is not aware of any
material weaknesses in its internal control over financial reporting (other than
as set forth in the Prospectus). Since the date of the latest audited financial
statements of the Company included in the Prospectus, there has been no change
in the Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting (other than as set forth in the Prospectus).
The Company has established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15 and 15d-15) for the Company and designed such
disclosure controls and procedures to ensure that material information relating
to the Company is made known to the certifying officers by others within those
entities, particularly during the period in which the Company’s Annual Report on
Form 10-K or Quarterly Report on Form 10-Q, as the case may be, is being
prepared. The Company’s certifying officers have evaluated the effectiveness of
the Company’s controls and procedures as of a date within 90 days prior to the
filing date of the Form 10-K for the fiscal year most recently ended (such date,
the “Evaluation Date”). The Company presented in its Form 10-K for the fiscal
year most recently ended the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, with the
exception of the material weakness identified in the Company’s 10-Q for the
quarter ended September 30, 2019 and the revised controls and procedures
implemented to remediate that material weakness, there have been no significant
changes in the Company’s internal controls (as such term is defined in
Item 307(b) of Regulation S-K under the Securities Act) or, to the Company’s
knowledge, in other factors that could significantly affect the Company’s
internal controls. To the knowledge of the Company, the Company’s “internal
controls over financial reporting” and “disclosure controls and procedures” are
effective.

 

 13 

 

 

(cc)       Sarbanes-Oxley. The Company is not aware of any failure on the part
of the Company or any of the Company’s directors or officers, in their
capacities as such, to comply with any applicable provisions of the
Sarbanes-Oxley Act and the applicable rules and regulations promulgated
thereunder in all material respects. Each of the principal executive officer and
the principal financial officer of the Company (or each former principal
executive officer of the Company and each former principal financial officer of
the Company as applicable) has made all certifications required by Sections 302
and 906 of the Sarbanes-Oxley Act with respect to all reports, schedules, forms,
statements and other documents required to be filed by it or furnished by it to
the Commission during the past 12 months. For purposes of the preceding
sentence, “principal executive officer” and “principal financial officer” shall
have the meanings given to such terms in the Sarbanes-Oxley Act.

 

(dd)       Finder’s Fees. The Company has not incurred any liability for any
finder’s fees, brokerage commissions or similar payments in connection with the
transactions herein contemplated, except as may otherwise exist with respect to
Agents pursuant to this Agreement.

 

(ee)       Labor Disputes. No labor disturbance by or dispute with employees of
the Company exists or, to the knowledge of the Company, is threatened which
would be reasonably likely to have a Material Adverse Effect

 

(ff)        Investment Company Act. The Company is not or after giving effect to
the offering and sale of the Placement Shares, will not be an “investment
company” or an entity “controlled” by an “investment company,” as such terms are
defined in the Investment Company Act of 1940, as amended (the “Investment
Company Act”).

 

(gg)       Operations. The operations of the Company are and have been conducted
at all times in compliance with applicable financial record keeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of all jurisdictions to which
the Company is subject, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by
any governmental agency (collectively, the “Money Laundering Laws”), except as
would not have a Material Adverse Effect; and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
involving the Company with respect to the Money Laundering Laws is pending or,
to the knowledge of the Company, threatened.

 

 14 

 

 

(hh)       Off-Balance Sheet Arrangements. 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), required to be described in
the Prospectus which have not been described as required.

 

(ii)         Underwriter Agreements. Other than with respect to this Agreement,
the Company is not a party to any agreement with an agent or underwriter for any
other “at the market” or continuous equity transaction.

 

(jj)         ERISA. To the knowledge of the Company, each material employee
benefit plan, within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), that is maintained,
administered or contributed to by the Company or any of its affiliates for
employees or former employees of the Company has been maintained in material
compliance with its terms and the requirements of any applicable statutes,
orders, rules and regulations, including but not limited to ERISA and the
Internal Revenue Code of 1986, as amended (the “Code”); no prohibited
transaction, within the meaning of Section 406 of ERISA or Section 4975 of the
Code, has occurred which would result in a material liability to the Company
with respect to any such plan excluding transactions effected pursuant to a
statutory or administrative exemption; and for each such plan that is subject to
the funding rules of Section 412 of the Code or Section 302 of ERISA, no
“accumulated funding deficiency” as defined in Section 412 of the Code has been
incurred, whether or not waived, and the fair market value of the assets of each
such plan (excluding for these purposes accrued but unpaid contributions)
exceeds the present value of all benefits accrued under such plan determined
using reasonable actuarial assumptions.

 

(kk)       Forward Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) (a “Forward Looking Statement”) contained in the Registration Statement and
the Prospectus has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith. The Forward Looking Statements
incorporated by reference in the Registration Statement and the Prospectus from
the Company’s Annual Report on Form 10-K for the fiscal year most recently ended
(i) are within the coverage of the safe harbor for forward looking statements
set forth in Section 27A of the Securities Act, Rule 175(b) under the Securities
Act or Rule 3b-6 under the Exchange Act, as applicable, (ii) were made by the
Company with a reasonable basis and in good faith and reflect the Company’s good
faith commercially reasonable best estimate of the matters described therein,
and (iii) have been prepared in accordance with Item 10 of Regulation S-K under
the Securities Act.

 

 15 

 

 

(ll)         Agent Purchases. The Company acknowledges and agrees that Agents
have informed the Company that each Agent may, to the extent permitted under the
Securities Act and the Exchange Act, purchase and sell Common Stock for its own
account while this Agreement is in effect, provided, that (i) no such purchase
or sales shall take place while a Placement Notice is in effect (except to the
extent each Agent may engage in sales of Placement 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 such Agent.

 

(mm)     Margin Rules. Neither the issuance, sale and delivery of the Placement
Shares nor the application of the proceeds thereof by the Company as described
in the Registration Statement and the Prospectus will violate Regulation T, U or
X of the Board of Governors of the Federal Reserve System or any other
regulation of such Board of Governors.

 

(nn)       Insurance. The Company carries, or is covered by, insurance in such
amounts and covering such risks as the Company reasonably believes is adequate
for the conduct of its business and as is customary for companies engaged in
similar businesses in similar industries.

 

(oo)       No Improper Practices. (i) Neither the Company, nor to the Company’s
knowledge, any of its executive officers has, in the past five years, made any
unlawful contributions to any candidate for any political office (or failed
fully to disclose any contribution in violation of law) or made any contribution
or other payment to any official of, or candidate for, any federal, state,
municipal, or foreign office or other person charged with similar public or
quasi-public duty in violation of any law or of the character required to be
disclosed in the Prospectus; (ii) no relationship, direct or indirect, exists
between or among the Company or, to the Company’s knowledge, any affiliate of
the Company, on the one hand, and the directors, officers and stockholders of
the Company, that is required by the Securities Act to be described in the
Registration Statement and the Prospectus that is not so described; (iii) no
relationship, direct or indirect, exists between or among the Company, or any
affiliate of the Company, on the one hand, and the directors, officers,
stockholders or directors of the Company that is required by the rules of FINRA
to be described in the Registration Statement and the Prospectus that is not so
described; (iv) there are no material outstanding loans or advances or material
guarantees of indebtedness by the Company to or for the benefit of any of its
officers or directors or any of the members of the families of any of them; (v)
the Company has not offered, or caused any placement agent to offer, Common
Stock to any person with the intent to influence unlawfully (A) a customer or
supplier of the Company to alter the customer’s or supplier’s level or type of
business with the Company or (B) a trade journalist or publication to write or
publish favorable information about the Company or any of its products or
services, and, (vi) neither the Company nor, to the Company’s knowledge, any
employee or agent of the Company has made any payment of funds of the Company or
received or retained any funds in violation of any law, rule or regulation
(including, without limitation, the Foreign Corrupt Practices Act of 1977, which
payment, receipt or retention of funds is of a character required to be
disclosed in the Registration Statement or the Prospectus).

 

 16 

 

 

(pp)      Compliance with Applicable Laws. The Company (A) to its knowledge, is
and at all times has been in material compliance with all statutes, rules and
regulations applicable to the ownership, testing, development, manufacture,
packaging, processing, use, distribution, marketing, labeling, promotion, sale,
offer for sale, storage, import, export or disposal of any product under
development, manufactured or distributed by the Company (“Applicable Laws”),
(B) has not received any Form 483 from the FDA, notice of adverse finding,
warning letter, or other written correspondence or notice from the FDA or any
other federal, state, local or foreign governmental or regulatory authority
alleging or asserting material noncompliance with any Applicable Laws or any
licenses, certificates, approvals, clearances, authorizations, permits and
supplements or amendments thereto required by any such Applicable Laws
(“Authorizations”), which would, individually or in the aggregate, result in a
Material Adverse Effect; (C) possesses all material Authorizations and such
Authorizations are valid and in full force and effect and the Company is not in
material violation of any term of any such Authorizations; (D) has not received
written notice of any claim, action, suit, proceeding, hearing, enforcement,
investigation, arbitration or other action from the FDA or any other federal,
state, local or foreign governmental or regulatory authority or third party
alleging that any Company product, operation or activity is in material
violation of any Applicable Laws or Authorizations and has no knowledge that the
FDA or any other federal, state, local or foreign governmental or regulatory
authority or third party is considering any such claim, litigation, arbitration,
action, suit, investigation or proceeding against the Company; (E) has not
received notice that the FDA or any other federal, state, local or foreign
governmental or regulatory authority has taken, is taking or intends to take
action to limit, suspend, modify or revoke any material Authorizations and has
no knowledge that the FDA or any other federal, state, local or foreign
governmental or regulatory authority is considering such action; and (F) to its
knowledge, has filed, obtained, maintained or submitted all reports, documents,
forms, notices, applications, records, claims, submissions and supplements or
amendments as required by any Applicable Laws or Authorizations except where the
failure to file such reports, documents, forms, notices, applications, records,
claims, submissions and supplements or amendments would not result in a Material
Adverse Effect, and that all such reports, documents, forms, notices,
applications, records, claims, submissions and supplements or amendments were
materially complete and correct on the date filed (or were corrected or
supplemented by a subsequent submission).

 

(qq)       Clinical Studies. All clinical trials conducted by the Company or on
behalf of the Company were, and, if still pending are, to the Company’s
knowledge, being conducted in all material respects in compliance with all
Applicable Laws and in accordance with experimental protocols, procedures and
controls generally used by qualified experts in the clinical trials of new drugs
and biologics as applied to comparable products to those being developed by the
Company; the descriptions of the results of such clinical trials contained in
the Registration Statement and the Prospectus are accurate in all material
respects, and the Company has no knowledge of any other clinical trials, the
results of which reasonably call into question the clinical 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 Company has
not received any written notices or correspondence from the FDA or any other
domestic or foreign governmental agency requiring the termination or suspension
of any clinical trials conducted by or on behalf of the Company that are
described in the Registration Statement and the Prospectus or the results of
which are referred to in the Registration Statement and the Prospectus.

 

 17 

 

 

(rr)        Status Under the Securities Act. The Company was not and is not an
ineligible issuer as defined in Rule 405 under the Securities Act at the times
specified in Rules 164 and 433 under the Securities Act in connection with the
offering of the Placement Shares.

 

(ss)       No Misstatement or Omission in an Issuer Free Writing Prospectus.
Each Issuer Free Writing Prospectus, as of its issue date and as of each
Applicable Time (as defined in Section 24 below), did not, does not and will not
include any information that conflicted, conflicts or will conflict with the
information contained in the Registration Statement or the Prospectus, including
any incorporated document deemed to be a part thereof that has not been
superseded or modified. The foregoing sentence does not apply to statements in
or omissions from any Issuer Free Writing Prospectus based upon and in
conformity with written information furnished to the Company by the Agents
specifically for use therein.

 

(tt)        No Conflicts. Neither the execution of this Agreement, nor the
issuance, offering or sale of the Placement Shares, nor the consummation of any
of the transactions contemplated herein and therein, nor the compliance by the
Company with the terms and provisions hereof and thereof will conflict with, or
will result in a breach of, any of the terms and provisions of, or has
constituted or will constitute a default under, or has resulted in or will
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to the terms of any contract or other
agreement to which the Company may be bound or to which any of the property or
assets of the Company is subject, except (i) such conflicts, breaches or
defaults as may have been waived and (ii) such conflicts, breaches and defaults
that would not have a Material Adverse Effect; nor will such action result
(x) in any violation of the provisions of the organizational or governing
documents of the Company, or (y) in any material violation of the provisions of
any statute or any order, rule or regulation applicable to the Company or of any
court or of any federal, state or other regulatory authority or other government
body having jurisdiction over the Company.

 

(uu)       OFAC. Neither the Company or any director, officer, agent, employee,
affiliate or representative of the Company is a government, individual or entity
(in this paragraph (uu), “Person”) that is, or is owned or controlled by a
Person that is, currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Department of the Treasury
(“OFAC”), the United Nations Security Council (“UNSC”), the European Union
(“EU”), Her Majesty’s Treasury (“HMT”), or other relevant sanctions authority
(collectively, “Sanctions”), nor located, organized or resident in a country or
territory that is the subject of Sanctions; provided however, that for the
purposes of this paragraph (uu), no person shall be an affiliate of the Company
solely by reason of owning less than a majority of any class of voting
securities of the Company. The Company will not directly or indirectly use the
proceeds of the offering of the Securities hereunder, 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. The Company
represents and covenants that, except as detailed in the Prospectus, for the
past 5 years, the Company has not knowingly engaged in, is not now knowingly
engaged in, and will not engage in, any dealings or transactions with any
Person, or in any country or territory, that at the time of the dealing or
transaction is or was the subject of Sanctions.

 

 18 

 

 

(vv)       Stock Transfer Taxes. On each Settlement Date, all stock transfer or
other taxes (other than income taxes) which are required to be paid in
connection with the sale and transfer of the Placement Shares to be sold
hereunder will be, or will have been, fully paid or provided for by the Company
and all laws imposing such taxes will be or will have been fully complied with.

 

(ww)     [Intentionally omitted.]

 

(xx)        IT Systems. (i)(x) To the knowledge of Company, there has been no
security breach or other compromise of any Company’s information technology and
computer systems, networks, hardware, software, data (including the data of
their respective customers, employees, suppliers, vendors and any third party
data maintained by or on behalf of them), equipment or technology (collectively,
“IT Systems and Data”) and (y) the Company has not been notified of, and have no
knowledge of any event or condition that would reasonably be expected to result
in, any security breach or other compromise to their IT Systems and Data; (ii)
the Company is presently in material compliance with all applicable laws or
statutes and all judgments, orders, rules and regulations of any court or
arbitrator or governmental or regulatory authority, internal policies and
contractual obligations relating to the privacy and security of IT Systems and
Data and to the protection of such IT Systems and Data from unauthorized use,
access, misappropriation or modification, except as would not, in the case of
this clause (ii), individually or in the aggregate, have a Material Adverse
Effect; and (iii) the Company has implemented backup and disaster recovery
technology consistent with industry standards and practices.

 

Any certificate signed by an officer of the Company and delivered to each Agent
or its respective counsel pursuant to or in connection with this Agreement shall
be deemed to be a representation and warranty by the Company, as applicable, to
the Agents as to the matters set forth therein.

 

 19 

 

 

7.            Covenants of the Company. The Company covenants and agrees with
Agents that:

 

(a)         Registration Statement Amendments. After the date of this Agreement
and during any period in which a Prospectus relating to any Placement 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 “Prospectus Delivery Period”) (i) the Company will on
or prior to April 20, 2020 file a new registration statement on Form S-3
pursuant to Rule 415(a)(6) (the “Replacement S-3”) and notify the Agents
promptly of the time when the Replacement S-3 or any subsequent amendment to the
Registration Statement, other than documents incorporated by reference, has been
filed with the Commission and/or has become effective or any subsequent
supplement to the Prospectus has been filed and of any request by the Commission
for any amendment or supplement to the Registration Statement or Prospectus or
for additional information, (ii) the Company will prepare and file with the
Commission, promptly upon the Agents’ request, any amendments or supplements to
the Registration Statement or Prospectus that, in such Agents’ reasonable
opinion, may be necessary or advisable in connection with the distribution of
the Placement 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 and provided, further, that
the only remedy the Agents shall have with respect to the failure to make such
filing shall be to cease making sales under this Agreement until such amendment
or supplement is filed); (iii) the Company will not file any amendment or
supplement to the Registration Statement or Prospectus relating to the Placement
Shares or a security convertible into the Placement 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 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 and
(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 the transaction herein
provided; and provided, further, that the only remedy the Agents shall have with
respect to the failure to by the Company to obtain such consent shall be to
cease making sales under this Agreement) and the Company will 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) the Company
will cause each amendment or supplement to the Prospectus to be filed with the
Commission as required pursuant to the applicable paragraph of Rule 424(b) of
the Securities Act or, in the case of any document to be incorporated therein by
reference, to be filed with the Commission as required pursuant to the Exchange
Act, within the time period prescribed (the determination to file or not file
any amendment or supplement with the Commission under this Section 7(a), based
on the Company’s reasonable opinion or reasonable objections, shall be made
exclusively by the Company).

 

(b)         Notice of Commission Stop Orders. 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 Placement 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. The Company will advise the Agents promptly after it receives any
request by the Commission for any amendments to the Registration Statement or
any amendment or supplements to the Prospectus or any Issuer Free Writing
Prospectus or for additional information related to the offering of the
Placement Shares or for additional information related to the Registration
Statement, the Prospectus or any Issuer Free Writing Prospectus.

 

 20 

 

 

(c)         Delivery of Prospectus; Subsequent Changes. During the Prospectus
Delivery Period, 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 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 the Company has omitted any information from the Registration Statement
pursuant to Rule 430A under the Securities Act, it will use its best efforts to
comply with the provisions of and make all requisite filings with the Commission
pursuant to said Rule 430A and to notify the Agents promptly of all such
filings. If during the Prospectus Delivery 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 the Prospectus Delivery 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 Designated Agent to suspend
the offering of Placement 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; provided, however, that the Company may delay the filing of any
amendment or supplement, if in the judgment of the Company, it is in the best
interests of the Company.

 

(d)         Listing of Placement Shares. During the Prospectus Delivery Period,
the Company will use its commercially reasonable efforts to cause the Placement
Shares to be listed on the Exchange and to qualify the Placement Shares for sale
under the securities laws of such jurisdictions as the Agents reasonably
designates and to continue such qualifications in effect so long as required for
the distribution of the Placement Shares; provided, however, that the Company
shall not be required in connection therewith to qualify as a foreign
corporation or dealer in securities or file a general consent to service of
process in any jurisdiction.

 

(e)         Delivery of Registration Statement and Prospectus. The Company will
furnish to each Agent and its respective counsel (at the expense of the Company)
copies of the Registration Statement, the Prospectus (including all documents
incorporated by reference therein) and all amendments and supplements to the
Registration Statement or Prospectus that are filed with the Commission during
the Prospectus Delivery Period (including all documents filed with the
Commission during such period that are deemed to be incorporated by reference
therein), in each case as soon as reasonably practicable and in such quantities
as the Agents may from time to time reasonably request and, at Agents’ request,
will also furnish copies of the Prospectus to each exchange or market on which
sales of the Placement Shares may be made; provided, however, that the Company
shall not be required to furnish any document (other than the Prospectus) to the
Agents to the extent such document is available on EDGAR.

 

 21 

 

 

 

 

(f)           Earnings Statement. The Company will make generally available to
its security holders as soon as practicable, but in any event not later than 15
months after the end of the Company’s current fiscal quarter, an earnings
statement covering a 12-month period that satisfies the provisions of
Section 11(a) and Rule 158 of the Securities Act.

 

(g)          Use of Proceeds. The Company will use the Net Proceeds as described
in the Prospectus in the section entitled “Use of Proceeds.”

 

(h)          Notice of Other Sales. Without the prior written consent of the
Agents, the Company will not, directly or indirectly, offer to sell, sell,
contract to sell, grant any option to sell or otherwise dispose of any Common
Stock (other than the Placement Shares offered pursuant to this Agreement) or
securities convertible into or exchangeable for Common Stock, warrants or any
rights to purchase or acquire, Common Stock during the period beginning on the
date on which any Placement Notice is delivered to the Agents hereunder and
ending on the second (2nd) Trading Day immediately following the final
Settlement Date with respect to Placement Shares sold pursuant to such Placement
Notice (or, if the Placement Notice has been terminated or suspended prior to
the sale of all Placement Shares covered by a Placement Notice, the date of such
suspension or termination); and will not directly or indirectly in any other “at
the market” or continuous equity transaction offer to sell, sell, contract to
sell, grant any option to sell or otherwise dispose of any Common Stock (other
than the Placement Shares offered pursuant to this Agreement) or securities
convertible into or exchangeable for Common Stock, warrants or any rights to
purchase or acquire, Common Stock prior to the termination of this Agreement;
provided, however, that such restrictions will not be required in connection
with the Company’s issuance or sale of (i) Common Stock, restricted stock units,
options to purchase Common Stock or Common Stock issuable upon the exercise of
options, pursuant to any employee or director stock option or benefits plan,
stock ownership plan or dividend reinvestment plan (but not Common Stock subject
to a waiver to exceed plan limits in its dividend reinvestment plan) of the
Company whether now in effect or hereafter implemented, (ii) Common Stock
issuable upon conversion of securities or the exercise of warrants, options or
other rights in effect or outstanding, and disclosed in filings by the Company
available on EDGAR or otherwise in writing to the Agents, and (iii) Common
Stock, or securities convertible into or exercisable for Common Stock, offered
and sold in a negotiated transaction to vendors, customers, strategic partners
or potential strategic partners, acquisition candidates or other investors
conducted in a manner so as not to be integrated with the offering of Common
Stock hereby.

 

(i)           Change of Circumstances. The Company will, at any time during the
pendency of a Placement Notice advise the Agents promptly after it shall have
received notice or obtained knowledge thereof, of any information or fact that
would alter or affect in any material respect any opinion, certificate, letter
or other document required to be provided to the Agents pursuant to this
Agreement.

 

(j)           Due Diligence Cooperation. The Company will cooperate with any
reasonable due diligence review conducted by the Agents or their respective
representatives in connection with the transactions contemplated hereby,
including, without limitation, providing information and making available
documents and senior corporate officers, during regular business hours and at
the Company’s principal offices, as the Agents may reasonably request.

 

22

 

 

(k)          Required Filings Relating to Placement of Placement Shares. The
Company agrees that on such dates as the Securities Act shall require (including
upon the effectiveness of the Replacement S-3), the Company will (i) file a
prospectus supplement with the Commission under the applicable paragraph of Rule
424(b) under the Securities Act (each and every filing under Rule 424(b), a
“Filing Date”), which prospectus supplement will set forth, within the relevant
period, the amount of Placement Shares sold through the Agents, the Net Proceeds
to the Company and the compensation payable by the Company to the Agents with
respect to such Placement Shares, and (ii) deliver such number of copies of each
such prospectus supplement to each exchange or market on which such sales were
effected as may be required by the rules or regulations of such exchange or
market.

 

(l)           Representation Dates; Certificate. On the date of this Agreement
and within five (5) trading days of each time the Company:

 

(i)            files the Prospectus Supplement relating to the Placement Shares
or amends or supplements (other than a prospectus supplement relating solely to
an offering of securities other than the Placement Shares), the Registration
Statement or the Prospectus relating to the Placement Shares by means of a
post-effective amendment, sticker, or supplement or Form S-3 filed pursuant to
Rule 415(a)(6) but not by means of incorporation of documents by reference into
the Registration Statement or the Prospectus relating to the Placement Shares;

 

(ii)           files an annual report on Form 10-K under the Exchange Act
(including any Form 10-K/A containing amended financial information or a
material amendment to the previously filed Form 10-K);

 

(iii)          files a quarterly report on Form 10-Q under the Exchange Act; or

  

(iv)          files a current report on Form 8-K containing amended financial
information (other than information “furnished” pursuant to Items 2.02 or 7.01
of Form 8-K or to provide disclosure pursuant to Item 8.01 of Form 8-K relating
to the reclassification of certain properties as discontinued operations in
accordance with Statement of Financial Accounting Standards No. 144) under the
Exchange Act; (Each date of filing of one or more of the documents referred to
in clauses (i) through (iv) shall be a “Representation Date”)

 

the Company shall furnish the Agents (but in the case of clause (iv) above only
if any Agent reasonably determines that the information contained in such Form
8-K is material) with a certificate, in the form attached hereto as Exhibit 7(l)
(the “Representation Date Certificate”); provided however, if no Placement
Notice is pending at such Representation Date, then before the Company delivers
a Placement Notice or an Agent sells any Placement Shares, the Company shall
provide the Agents with a Representation Date Certificate. The requirement to
provide a Representation Date Certificate shall be waived for any Representation
Date occurring at a time at which no Placement Notice is pending, which waiver
shall continue until the earlier to occur of the date the Company delivers a
Placement Notice hereunder (which for such calendar quarter shall be considered
a Representation Date) and the next occurring Representation Date; provided,
however, that such waiver shall not apply for any Representation Date on which
the Company files its annual report on Form 10-K or a Form S-3 filed pursuant to
Rule 415(a)(6). Notwithstanding the foregoing, (i) in the case of the first
Placement Notice following the date of this Agreement but prior to the filing of
the Company’s annual report on Form 10-K for the year ended December 31, 2019
(the “First Placement Notice”), or (ii) if the Company subsequently decides to
sell Placement Shares following a Representation Date when the Company relied on
such waiver and did not provide the Agents with a Representation Date
Certificate, then before the Company delivers the Placement Notice or an Agent
sells any Placement Shares, the Company shall provide the Agents with a
Representation Date Certificate, dated the date of the Placement Notice.

 

23

 

 

(m)         Legal Opinion. On the date of this Agreement, the Company shall
cause to be furnished to the Agents a written opinion and negative assurance
letter of Squire Patton Boggs (US) LLP (“Company Counsel”), or other counsel
satisfactory to the Agents, in form and substance satisfactory to each Agent and
its respective counsel, and a written opinion of Sheridan Ross P.C. (“Company IP
Counsel”), or other counsel satisfactory to the Agents, in form and substance
satisfactory to each Agent and its respective counsel. Thereafter, within five
(5) Trading Days of each Representation Date with respect to which the Company
is obligated to deliver a Representation Date Certificate for which no waiver is
applicable, the Company shall cause to be furnished to the Agents a negative
assurance letter of Company Counsel in form and substance satisfactory to each
Agent and its respective counsel; provided however, in the case of the First
Placement Notice or if no placement notice is pending at such Representation
Date, then before the Company delivers a Placement Notice or an Agent sells any
Placement Shares, the Company shall provide the Agents with such negative
assurance letter; provided, further, that in lieu of such negative assurance
letter for subsequent periodic filings under the Exchange Act, counsel may
furnish the Agents with a letter (a “Reliance Letter”) to the effect that the
Agents may rely on a prior negative assurance letter delivered under this
Section 7(m) to the same extent as if it were dated the date of such letter
(except that statements in such prior negative assurance letter shall be deemed
to relate to the Registration Statement and the Prospectus as amended or
supplemented as of the date of the Reliance Letter).

 

(n)          Comfort Letter. (1) On the date of this Agreement and (2) within
five (5) Trading Days of each Representation Date, with respect to which the
Company is obligated to deliver a certificate in the form attached hereto as
Exhibit 7(l) for which no waiver is applicable, the Company shall cause its
Accountants to furnish the Agents letters (the “Comfort Letters”), dated the
date the Comfort Letter is delivered, which shall meet the requirements set
forth in this Section 7(n); provided however, in the case of the First Placement
Notice or if no placement notice is pending at such Representation Date, then
before the Company delivers a Placement Notice or an Agent sells any Placement
Shares, the Company shall provide the Agents with the Comfort Letters; provided,
further, that if requested by the Agents, the Company shall cause the Comfort
Letters to be furnished to the Agents within ten (10) Trading Days of the date
of occurrence of any material transaction or event, including the restatement of
the Company’s financial statements. The Comfort Letters from the Company’s
Accountants shall be in a form and substance satisfactory to the Agents,
(i) confirming that they are an independent public accounting firm within the
meaning of the Securities Act and the Public Company Accounting Oversight Board
(the “PCAOB”), (ii) stating, as of such date, the conclusions and findings of
such firm with respect to the financial information and other matters ordinarily
covered by accountants’ “comfort letters” to underwriters in connection with
registered public offerings (the first such letters, the “Initial Comfort
Letters”) and (iii) updating the Initial Comfort Letters with any information
that would have been included in the Initial Comfort Letters had they been given
on such date and modified as necessary to relate to the Registration Statement
and the Prospectus, as amended and supplemented to the date of such letters.

 

24

 

 

(o)          Market Activities. The Company will not, directly or indirectly,
(i) take any action designed to cause or result in, or that constitutes or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of Common
Stock or (ii) sell, bid for, or purchase Common Stock, or pay anyone any
compensation for soliciting purchases of the Placement Shares other than the
Agents.

 

(p)          Investment Company Act. The Company will conduct its affairs in
such a manner so as to reasonably ensure that it will not become, at any time
prior to the termination of this Agreement, an “investment company,” as such
term is defined in the Investment Company Act.

 

(q)          No Offer to Sell. Other than an Issuer Free Writing Prospectus
approved in advance by the Company and the Agents in their capacity as agents
hereunder, neither the Agents nor the Company (including its agents and
representatives, other than Agents in their capacity as such) will make, use,
prepare, authorize, approve or refer to any written communication (as defined in
Rule 405 under the Securities Act), required to be filed with the Commission,
that constitutes an offer to sell or solicitation of an offer to buy Placement
Shares hereunder.

 

(r)           Sarbanes-Oxley Act. The Company will maintain and keep accurate
books and records reflecting its assets and maintain internal accounting
controls in a manner designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with GAAP and including those policies and
procedures that (i) pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and dispositions of the
assets of the Company, (ii) provide reasonable assurance that transactions are
recorded as necessary to permit the preparation of the Company’s consolidated
financial statements in accordance with GAAP, (iii) that receipts and
expenditures of the Company are being made only in accordance with management’s
and the Company’s directors’ authorization, and (iv) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the Company’s assets that could have a material effect on
its financial statements. The Company will use commercially reasonable efforts
to 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 principal financial
officer, or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure and to ensure that material information
relating to the Company is made known to it by others within the Company,
particularly during the period in which such periodic reports are being
prepared.

 

25

 

 

8.            Payment of Expenses. The Company will pay all expenses incident to
the performance of its obligations under this Agreement upon the filing of the
Prospectus Supplement, including (i) the preparation, filing, including any fees
required by the Commission, and printing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment and supplement thereto, in such number as the Agents shall deem
necessary, (ii) the printing and delivery to the Agents of this Agreement and
such other documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Placement Shares, (iii) the
preparation, issuance and delivery of the certificates, if any, for the
Placement Shares to the Agents, including any stock or other transfer taxes and
any capital duties, stamp duties or other duties or taxes payable upon the sale,
issuance or delivery of the Placement Shares to the Agents, (iv) the fees and
disbursements of the counsel, accountants and other advisors to the Company,
(v) the reasonable out-of-pocket expenses of the Agents, including (i) fees and
disbursements of counsel to the ThinkEquity up to $50,000 and (ii) fees and
disbursements of counsel to Roth up to $50,000 (which amounts shall include all
fees and disbursements of each such counsel described in clause (ix) below),
(vi) the printing and delivery to the Agents of copies of any Permitted Issuer
Free Writing Prospectus (defined below) and the Prospectus and any amendments or
supplements thereto in such number as the Agents shall deem necessary, (vii) the
preparation, printing and delivery to the Agents of copies of the blue sky
survey and any Canadian “wrapper” and any supplements thereto, in such number as
the Agents shall deem necessary, (viii) the fees and expenses of the transfer
agent and registrar for the Common Stock, (ix) the fees and expenses incident to
any review by FINRA of the terms of the sale of the Placement Shares as
referenced in (v)(i) above, and (x) the fees and expenses incurred in connection
with the listing of the Placement Shares on the Exchange.

 

9.            Conditions to Agents’ Obligations. The obligations of the Agents
hereunder with respect to a Placement will be subject to the continuing accuracy
and completeness of the representations and warranties made by the Company
herein, to the due performance by the Company of its obligations hereunder, to
the completion by the Agents of a due diligence review satisfactory to each in
its reasonable judgment, and to the continuing satisfaction (or waiver by the
Agents in their sole discretion; provided that in the case of the First
Placement Notice, any such waiver shall be in the mutual agreement of both
Agents) of the following additional conditions:

 

26

 

 

(a)           Registration Statement Effective. The Registration Statement shall
have become effective and shall be available for the sale of all Placement
Shares contemplated to be issued by any Placement Notice.

 

(b)          No Material Notices. None of the following events shall have
occurred and be continuing: (i) receipt by the Company 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 Placement 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, the Prospectus or 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.

 

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

 

(d)          Material Changes. Except as contemplated in the Prospectus, or
disclosed in the Company’s reports filed with the Commission, there shall not
have been any material adverse change, on a consolidated basis, in the
authorized capital stock of the Company or any Material Adverse Effect, or any
development that could reasonably be expected to cause a Material Adverse
Effect, or a downgrading in or withdrawal of the rating assigned to any of the
Company’s securities (other than asset backed securities) by any rating
organization or a public announcement by any rating organization that it has
under surveillance or review its rating of any of the Company’s securities
(other than asset backed securities), the effect of which, in the case of any
such action by a rating organization described above, in the reasonable judgment
of the Agents (without relieving the Company of any obligation or liability it
may otherwise have), is so material as to make it impracticable or inadvisable
to proceed with the offering of the Placement Shares on the terms and in the
manner contemplated in the Prospectus.

 

27

 

 

(e)           Legal Opinion. The Agents shall have received the opinions of
Company Counsel required to be delivered pursuant Section 7(m) on or before the
date on which such delivery of such opinion is required pursuant to
Section 7(m).

 

(f)           IP Opinion. The Agents shall have received the opinions of Company
IP Counsel required to be delivered pursuant Section 7(m) on or before the date
on which such delivery of such opinion is required pursuant to Section 7(m).

 

(g)          Comfort Letter. The Agents shall have received the Comfort Letters
required to be delivered pursuant Section 7(n) on or before the date on which
such delivery of such Comfort Letters are required pursuant to Section 7(n).

 

(h)          Representation Certificate. The Agents shall have received the
certificate required to be delivered pursuant to Section 7(l) on or before the
date on which delivery of such certificate is required pursuant to Section 7(l).

 

(i)           Secretary’s Certificate. On the date of this Agreement, the Agents
shall have received a certificate, signed on behalf of the Company by its
corporate Secretary, in form and substance satisfactory to each Agent and their
respective counsel.

 

(j)           No Suspension. Trading in the Common Stock shall not have been
suspended on the Exchange, and the Common Stock shall not have been delisted
from the Exchange.

 

(k)          Other Materials. On each date on which the Company is required to
deliver a certificate pursuant to Section 7(l), the Company shall have furnished
to the Agents such appropriate further information, certificates and documents
as the Agents may reasonably request. All such opinions, certificates, letters
and other documents will be in compliance with the provisions hereof. The
Company will furnish the Agents with such conformed copies of such opinions,
certificates, letters and other documents as the Agents shall reasonably
request.

 

(l)           Securities Act Filings Made. All filings with the Commission
required by Rule 424 under the Securities Act to have been filed prior to the
issuance of any Placement Notice hereunder shall have been made within the
applicable time period prescribed for such filing by Rule 424.

 

(m)         Approval for Listing. The Placement Shares shall either have been
approved for listing quotation on the Exchange, subject only to notice of
issuance, or the Company shall have filed an application for listing quotation
of the Placement Shares on the Exchange at, or prior to, the issuance of any
Placement Notice.

 

(n)          No Termination Event. There shall not have occurred any event that
would permit the Agents to terminate this Agreement pursuant to Section 12(a).

  

28

 

 

10.          Indemnification and Contribution.

 

(a)          Company Indemnification. The Company agrees to indemnify and hold
harmless the Agents, their partners, members, directors, officers, employees and
agents and each person, if any, who controls either Agent within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act as follows:

 

(i)            against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, joint or several, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading, or arising out of any untrue
statement or alleged untrue statement of a material fact included in any related
Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;

 

(ii)           against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, joint or several, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 10(d) below) any such
settlement is effected with the written consent of the Agents, which consent
shall not unreasonably be delayed or withheld; and

 

(iii)          against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense is not
paid under (i) or (ii) above, provided, however, that this indemnity agreement
shall not apply to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or omission or alleged untrue statement or
omission made solely in reliance upon and in conformity with written information
furnished to the Company by either Agent expressly for use in the Registration
Statement (or any amendment thereto), or in any related Issuer Free Writing
Prospectus or the Prospectus (or any amendment or supplement thereto).

 

(b)          Indemnification by the Agents. Each Agent, severally and not
jointly, agrees to indemnify and hold harmless the Company and its directors and
each officer of the Company who signed the Registration Statement, and each
person, if any, who (i) controls the Company within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act or (ii) is controlled by or
is under common control with the Company against any and all loss, liability,
claim, damage and expense described in the indemnity contained in Section 10(a),
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendments thereto) or the Prospectus (or any amendment or supplement thereto)
in reliance upon and in conformity with information relating to such Agent and
furnished to the Company in writing by such Agent expressly for use therein.

 

29

 

 

(c)          Procedure. Any party that proposes to assert the right to be
indemnified under this Section 10 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 10, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve the indemnifying party from (i) any liability that it might
have to any indemnified party otherwise than under this Section 10 and (ii) any
liability that it may have to any indemnified party under the foregoing
provision of this Section 10 unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the indemnifying
party. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party will
be entitled to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the action, with
counsel reasonably satisfactory to the indemnified party, and after notice from
the indemnifying party to the indemnified party of its election to assume the
defense, the indemnifying party will not be liable to the indemnified party for
any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified party
in connection with the defense. The indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on written advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on written advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (4) the indemnifying party has not
in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly after the indemnifying
party receives a written invoice relating to fees, disbursements and other
charges in reasonable detail. An indemnifying party will not, in any event, be
liable for any settlement of any action or claim effected without its written
consent. No indemnifying party shall, without the prior written consent of each
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding relating to the matters
contemplated by this Section 10 (whether or not any indemnified party is a party
thereto), unless such settlement, compromise or consent (1) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (2) 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.

 

30

 

 

(d)          Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 10 is applicable in accordance with its
terms but for any reason is held to be unavailable from the Company or an Agent,
the Company and such Agent will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted, but after
deducting any contribution received by the Company from persons other than the
Agents, such as persons who control the Company within the meaning of the
Securities Act, officers of the Company who signed the Registration Statement
and directors of the Company, who also may be liable for contribution) to which
the Company and the Agents may be subject in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on the one
hand and the Agents on the other hand. The relative benefits received by the
Company on the one hand and the Agents on the other hand shall be deemed to be
in the same proportion as the total net proceeds from the sale of the Placement
Shares (before deducting expenses) received by the Company bear to the total
compensation received by the Agents (before deducting expenses) from the sale of
Placement Shares on behalf of the Company. If, but only if, the allocation
provided by the foregoing sentence is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is appropriate to
reflect not only the relative benefits referred to in the foregoing sentence but
also the relative fault of the Company, on the one hand, and such Agent, on the
other hand, with respect to the statements or omission that resulted in such
loss, claim, liability, expense or damage, or action in respect thereof, as well
as any other relevant equitable considerations with respect to such offering.
Such relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or such Agent, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and each Agent agree that it would not be just and
equitable if contributions pursuant to this Section 10(d) were to be determined
by pro rata allocation or by any other method of allocation that does not take
into account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, liability,
expense, or damage, or action in respect thereof, referred to above in this
Section 10(d) shall be deemed to include, for the purpose of this Section 10(d),
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim to the
extent consistent with Section 10(c) hereof. Notwithstanding the foregoing
provisions of this Section 10(d), an Agent shall not be required to contribute
any amount in excess of the commissions received by it under this Agreement and
no person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 10(d), any person who controls a party to this Agreement within the
meaning of the Securities Act, and any officers, directors, partners, employees
or agents of an Agent, will have the same rights to contribution as that party,
and each officer of the Company who signed the Registration Statement will have
the same rights to contribution as the Company, subject in each case to the
provisions hereof. Any party entitled to contribution, promptly after receipt of
notice of commencement of any action against such party in respect of which a
claim for contribution may be made under this Section 10(d), will notify any
such party or parties from whom contribution may be sought, but the omission to
so notify will not relieve that party or parties from whom contribution may be
sought from any other obligation it or they may have under this Section 10(d)
except to the extent that the failure to so notify such other party materially
prejudiced the substantive rights or defenses of the party from whom
contribution is sought. Except for a settlement entered into pursuant to the
last sentence of Section 10(c) hereof, no party will be liable for contribution
with respect to any action or claim settled without its written consent if such
consent is required pursuant to Section 10(c) hereof.

 

31

 

 

11.          Additional Covenants.

 

(a)           Representations and Covenants of each Agent. Each Agent represents
and warrants that it is duly registered as a broker-dealer under FINRA, the
Exchange Act and the applicable statutes and regulations of each state in which
the Placement Shares will be offered and sold, except such states in which such
Agent is exempt from registration or such registration is not otherwise
required. Each Agent shall continue, for the term of this Agreement, to be duly
registered as a broker-dealer under FINRA, the Exchange Act and the applicable
statutes and regulations of each state in which the Placement Shares will be
offered and sold, except such states in which such Agent is exempt from
registration or such registration is not otherwise required, during the term of
this Agreement. Each Agent shall comply with all applicable law and regulations
in connection with the transactions contemplated by this Agreement, including
the issuance and sale through such Agent of the Placement Shares.

 

(b)          Representations and Agreements to Survive Delivery. The indemnity
and contribution agreements contained in Section 10 of this Agreement and all
representations and warranties of the Company herein or in certificates
delivered pursuant hereto shall survive, as of their respective dates,
regardless of (i) any investigation made by or on behalf of the Agents, any
controlling persons, or the Company (or any of their respective officers,
directors or controlling persons), (ii) delivery and acceptance of the Placement
Shares and payment therefor or (iii) any termination of this Agreement.

 

(c)         No Public Announcements. None of the parties hereto shall, without
the approval of the other parties (which may not be unreasonably withheld,
conditioned, or delayed), make any press release or other public announcement
concerning the transactions contemplated by this Agreement, except as and to the
extent that such party shall be so obligated by applicable law or regulation, in
which case the other parties shall be advised and all parties shall use their
best efforts to cause a mutually agreeable release or announcement to be issued.

 

12.          Termination.

 

(a)          An Agent may terminate this Agreement with respective to itself, by
notice to the Company, as hereinafter specified at any time (1) if there has
been, since the time of execution of this Agreement or since the date as of
which information is given in the Prospectus, any Material Adverse Effect, or
any development that is reasonably likely to have a Material Adverse Effect or,
in the sole judgment of such Agent, is material and adverse and makes it
impractical or inadvisable to market the Placement Shares or to enforce
contracts for the sale of the Placement Shares, (2) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of such Agent, impracticable or inadvisable to market the Placement
Shares or to enforce contracts for the sale of the Placement Shares, (3) if
trading in the Common Stock has been suspended or limited by the Commission or
the Exchange, or if trading generally on the Exchange has been suspended or
limited, or minimum prices for trading have been fixed on the Exchange, (4) if
any suspension of trading of any securities of the Company on any exchange or in
the over-the-counter market shall have occurred and be continuing, (5) if a
major disruption of securities settlements or clearance services in the United
States shall have occurred and be continuing, or (6) if a banking moratorium has
been declared by either U.S. Federal or New York authorities. Any such
termination shall be without liability of any party to any other party except
that the provisions of Section 8 (Expenses), Section 10 (Indemnification),
Section 11 (Survival of Representations), Section 17 (Governing Law; Consent to
Jurisdiction) and Section 18 (Waiver of Jury Trial) hereof shall remain in full
force and effect notwithstanding such termination. If an Agent elects to
terminate this Agreement as provided in this Section 12(a), such Agent shall
provide the required notice as specified in Section 13 (Notices).

 

32

 

 

(b)          The Company shall have the right, by giving five (5) days’ written
notice as hereinafter specified, to terminate this Agreement as to both Agents
in its sole discretion at any time after the date of this Agreement. Any such
termination shall be without liability of any party to any other party except
that the provisions of Section 8, Section 10, Section 11, Section 17 and
Section 18 hereof shall remain in full force and effect notwithstanding such
termination.

 

(c)           Each Agent shall have the right, by giving five (5) days’ written
notice as hereinafter specified, to terminate this Agreement as to itself in its
sole discretion at any time after the date of this Agreement. Any such
termination shall be without liability of any party to any other party except
that the provisions of Section 8, Section 10, Section 11, Section 17 and
Section 18 hereof shall remain in full force and effect notwithstanding such
termination.

 

(d)          Unless earlier terminated pursuant to this Section 12, this
Agreement shall automatically terminate upon the issuance and sale of all of the
Placement Shares through the Agents on the terms and subject to the conditions
set forth herein; provided that the provisions of Section 8, Section 10,
Section 11, Section 17 and Section 18 hereof shall remain in full force and
effect notwithstanding such termination.

 

(e)          This Agreement shall remain in full force and effect unless
terminated pursuant to Sections 12(a), (b), (c), or (d) above or otherwise by
unanimous agreement of all of the parties; provided, however, that any such
termination by unanimous agreement shall in all cases be deemed to provide that
Section 8, Section 10, Section 11, Section 17 and Section 18 shall remain in
full force and effect.

 

33

 

 

 

  

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

 

(g)               Subject to the additional limitations set forth in Section 8
of this Agreement, in the event of termination of this Agreement prior to the
sale of any Placement Shares, the Agents shall be entitled only to reimbursement
of their respective out-of-pocket expenses actually incurred.

 

13.          Notices. All notices or other communications required or permitted
to be given by any party to any other party pursuant to the terms of this
Agreement shall be in writing, unless otherwise specified, and if sent to the
Agents, shall be delivered to:

 

If to ThinkEquity to:

 

ThinkEquity, a division of Fordham Financial Management, Inc.

17 State Street, 22nd Floor

New York, NY 10004

Attn: Eric Lord

Email: notices@think-equity.com

 

With a copy to:

 

Loeb & Loeb LLP

345 Park Avenue

New York, NY 10154

Attn: Mitchell S. Nussbaum

E-mail: mnussbaum@loeb.com

 

If to Roth, to:

Roth Capital Partners, LLC

888 San Clemente

Newport Beach, CA 92660

Fax No.: (949) 720-7227

Attention: Equity Capital Markets

E-mail: RothECM@roth.com

 

With a copy to:

 

Duane Morris LLP

1540 Broadway

New York, NY 10036

Attn: James T. Seery

E-mail: jtseery@duanemorris.com

 

 34 

 

 

and if to the Company, shall be delivered to:

 

Ampio Pharmaceuticals, Inc.

373 Inverness Parkway, Suite 200

Englewood, Colorado 80112

Attn: Daniel G Stokely, CPA

E-mail: dstokely@ampiopharma.com

 

with a copy to:

 

Squire Patton Boggs (US) LLP

4900 Key Tower, 127 Public Square

Cleveland, Ohio 44114-1304

Attn: Leah G. Brownlee

E-mail: leah.brownlee@squirepb.com

 

Each 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.
Each such notice or other communication shall be deemed given (i) when delivered
personally or by verifiable facsimile transmission (with an original to follow)
on or before 4:30 p.m., New York City time, on a Business Day or, if such day is
not a Business Day, on the next succeeding Business Day, (ii) on the next
Business Day after timely delivery to a nationally-recognized overnight courier
and (iii) on the Business Day actually received if deposited in the U.S. mail
(certified or registered mail, return receipt requested, postage prepaid).

 

An electronic communication (“Electronic Notice”) shall be deemed written notice
for purposes of this Section 13 if sent to the electronic mail address specified
by the receiving party under separate cover. Electronic Notice shall be deemed
received at the time the party sending Electronic Notice receives verification
of receipt by the receiving party. Any party receiving Electronic Notice may
request and shall be entitled to receive the notice on paper, in a nonelectronic
form (“Nonelectronic Notice”) which shall be sent to the requesting party within
ten (10) days of receipt of the written request for Nonelectronic Notice.

 

14.              Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the Company and each Agent and their respective
successors and the affiliates, controlling persons, officers and directors
referred to in Section 10 hereof. References to any of the parties contained in
this Agreement shall be deemed to include the successors and permitted assigns
of such party. Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement. Neither the Company nor the Agents may assign its rights or
obligations under this Agreement without the prior written consent of the other
party; provided, however, that the Agents may assign its rights and obligations
hereunder to an affiliate thereof without obtaining the Company’s consent.

 

 35 

 

 

15.              Adjustments for Stock Splits. The parties acknowledge and agree
that all share-related numbers contained in this Agreement shall be adjusted to
take into account any stock split, stock dividend or similar event effected with
respect to the Placement Shares.

 

16.              Entire Agreement; Amendment; Severability. This Agreement
(including all schedules and exhibits attached hereto and Placement Notices
issued pursuant hereto), together with the Designated Agent Agreement,
constitutes the entire agreement and supersedes all other prior and
contemporaneous agreements and undertakings, both written and oral, among the
parties hereto with regard to the subject matter hereof, except as set forth
below. Neither this Agreement nor any term hereof may be amended except pursuant
to a written instrument executed by the Company and each Agent. In the event
that any one or more of the provisions contained herein, or the application
thereof in any circumstance, is held invalid, illegal or unenforceable as
written by a court of competent jurisdiction, then such provision shall be given
full force and effect to the fullest possible extent that it is valid, legal and
enforceable, and the remainder of the terms and provisions herein shall be
construed as if such invalid, illegal or unenforceable term or provision was not
contained herein, but only to the extent that giving effect to such provision
and the remainder of the terms and provisions hereof shall be in accordance with
the intent of the parties as reflected in this Agreement. Notwithstanding this
Section 16 or any other provision contained herein or in the Designated Agent
Agreement, the provisions of (i) the Engagement Letter dated as of June 10,
2019, and (ii) the Placement Agency Agreement dated June 17, 2019, in each case
between the Company and ThinkEquity, shall not be modified or superseded, and
shall remain effective in all respects as originally agreed to by the parties
thereto, provided that the limitations set forth in Section 3.19 in the
Placement Agency Agreement shall not apply to this Agreement and the provisions
of Section 6 of the Placement Agency Agreement and Section 16 of the Engagement
Letter shall be deemed to have been complied with pursuant to this Agreement and
the Designated Agent Agreement.

 

17.              GOVERNING LAW AND TIME; WAIVER OF JURY TRIAL. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME. THE COMPANY 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.

 

18.             CONSENT TO JURISDICTION. EACH PARTY HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE
CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION WITH ANY TRANSACTION CONTEMPLATED HEREBY, AND HEREBY
IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING,
ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH
COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM
OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY
HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS
BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF
(CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED) TO SUCH PARTY AT THE
ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH
SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT
TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.

 

 36 

 

 

19.              Use of Information. The Agents may not use any information
gained in connection with this Agreement and the transactions contemplated by
this Agreement, including due diligence, to advise any party with respect to
transactions not expressly approved by the Company.

 

20.              Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery of an executed
Agreement by one party to the other may be made by facsimile transmission.

 

21.              Effect of Headings. The section and Exhibit headings herein are
for convenience only and shall not affect the construction hereof.

 

22.              Permitted Free Writing Prospectuses.

 

The Company represents, warrants and agrees that, unless it obtains the prior
consent of each Agent, and each Agent represents, warrants and agrees that,
unless it obtains the prior consent of the Company, it has not made and will not
make any offer relating to the Placement Shares that would constitute an Issuer
Free Writing Prospectus, or that would otherwise constitute a “free writing
prospectus,” as defined in Rule 405, required to be filed with the Commission.
Any such free writing prospectus consented to by the Agents or by the Company,
as the case may be, is hereinafter referred to as a “Permitted Free Writing
Prospectus.” The Company represents and warrants that it has treated and 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 filing with the Commission where required,
legending and record keeping.

 

23.              Absence of Fiduciary Relationship.

 

The Company acknowledges and agrees that:

 

(a)               Each Agent is acting solely as agent in connection with the
public offering of the Placement Shares and in connection with each transaction
contemplated by this Agreement and the process leading to such transactions, and
no fiduciary or advisory relationship between the Company or any of its
respective affiliates, stockholders (or other equity holders), creditors or
employees or any other party, on the one hand, and the Agents, on the other
hand, has been or will be created in respect of any of the transactions
contemplated by this Agreement, irrespective of whether or not any Agent has
advised or is advising the Company on other matters, and the Agents have no
obligation to the Company with respect to the transactions contemplated by this
Agreement except the obligations expressly set forth in this Agreement;

 

 37 

 

 

(b)               it is capable of evaluating and understanding, and understands
and accepts, the terms, risks and conditions of the transactions contemplated by
this Agreement;

 

(c)               the Agents have not provided any legal, accounting, regulatory
or tax advice with respect to the transactions contemplated by this Agreement
and it has consulted its own legal, accounting, regulatory and tax advisors to
the extent it has deemed appropriate;

 

(d)               it is aware that the Agents and their affiliates are engaged
in a broad range of transactions which may involve interests that differ from
those of the Company and the Agents have no obligation to disclose such
interests and transactions to the Company by virtue of any fiduciary, advisory
or agency relationship or otherwise; and

 

(e)               it waives, to the fullest extent permitted by law, any claims
it may have against the Agents for breach of fiduciary duty or alleged breach of
fiduciary duty in connection with the sale of Placement Shares under this
Agreement and agrees that the Agents shall not have any liability (whether
direct or indirect, in contract, tort or otherwise) to it in respect of such a
fiduciary duty claim or to any person asserting a fiduciary duty claim on its
behalf or in right of it or the Company, employees or creditors of Company,
other than in respect of the Agents’ obligations under this Agreement and to
keep information provided by the Company to each Agent and its respective
counsel confidential to the extent not otherwise publicly-available.

 

24.              Definitions.

 

As used in this Agreement, the following terms have the respective meanings set
forth below:

 

“Applicable Time” means (i) each Representation Date, (ii) the time of each sale
of any Placement Shares pursuant to this Agreement, and (iii) each Settlement
Date.

 

“Business Day” shall mean any day on which the Exchange and commercial banks in
the City of New York are open for business.

 

“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433, relating to the Placement Shares that (1) is required to be
filed with the Commission by the Company, (2) is a “road show” that is a
“written communication” within the meaning of Rule 433(d)(8)(i) whether or not
required to be filed with the Commission, or (3) is exempt from filing pursuant
to Rule 433(d)(5)(i) because it contains a description of the Placement Shares
or of the offering that does not reflect the final terms, 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)
under the Securities Act.

 

 38 

 

 

“Rule 172,” “Rule 405,” “Rule 415,” “Rule 424,” “Rule 424(b),” “Rule 430B,” and
“Rule 433” refer to such rules under the Securities Act.

 

“Trading Day” means any day on which shares of Common Stock are purchased and
sold on the Exchange.

 

All references in this Agreement to financial statements and schedules and other
information that is “contained,” “included” or “stated” in the Registration
Statement or the Prospectus (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules and other
information that is incorporated by reference in the Registration Statement or
the Prospectus, as the case may be.

 

All references in this Agreement to the Registration Statement, the Prospectus
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to EDGAR; all references in
this Agreement to any Issuer Free Writing Prospectus (other than any Issuer Free
Writing Prospectuses that, pursuant to Rule 433, are not required to be filed
with the Commission) shall be deemed to include the copy thereof filed with the
Commission pursuant to EDGAR; and all references in this Agreement to
“supplements” to the Prospectus shall include, without limitation, any
supplements, “wrappers” or similar materials prepared in connection with any
offering, sale or private placement of any Placement Shares by the Agents
outside of the United States.

 

 39 

 

  

If the foregoing correctly sets forth the understanding between the Company and
each Agent, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between the Company
and each Agent.

 

 

Very truly yours,         AMPIO PHARMACEUTICALS, INC.           By: 
                  Name:   Title:           ACCEPTED as of the date first-above
written:           THINKEQUITY, A DIVISION OF FORDHAM FINANCIAL MANAGEMENT, INC.
          By:   Name:   Title:           ROTH CAPITAL PARTNERS, LLC          
By:   Name:   Title:

 

 40 

 

  

SCHEDULE 1

  

 

  

FORM OF PLACEMENT NOTICE

 

 

 

From:                    AMPIO PHARMACEUTICALS, INC.

 

To:                        THINKEQUITY, A DIVISION OF FORDHAM FINANCIAL
MANAGEMENT, INC. AND ROTH CAPITAL PARTNERS, LLC]

 

Attention:              _____________________

 

 _____________________

 

Subject:                 Placement Notice

 

Date:

 

Gentlemen:

 

Pursuant to the terms and subject to the conditions contained in the Sales
Agreement among Ampio Pharmaceuticals, Inc. (the “Company”) ThinkEquity, a
division of Fordham Financial Management, Inc. (“ThinkEquity”) and Roth Capital
Partners, LLC (“Roth”), dated February [•], 2020, the Company hereby requests
that [Identify Designated Agent in accordance with the provisions of the
Designated Agent Agreement] sell up to ____________ of the Company’s Common
Stock, $0.0001 par value per share, at a minimum market price of $_______ per
share, during the time period beginning [month, day, time] and ending [month,
day, time].”

 

 41 

 

 

SCHEDULE 2

  

 

 

Compensation

  

 

 

The Company shall pay to the Designated Agent in cash, upon each sale of
Placement Shares pursuant to this Agreement, an amount equal to 2.0% of the
gross proceeds from each sale of Placement Shares through such Designated Agent.

 

The Company shall pay to the other Agent, in cash, within five (5) Trading Days
following the end of each month in which Placement Shares are sole, an amount
equal to 2.0% of the gross proceeds from each sale of Placement Shares made in
such month.

 

 42 

 

 

SCHEDULE 3

 

 

 

Notice Parties

  

 

 

The Company

 

Daniel G Stokelydstokely@ampiopharma.com

Michael Macaluso

mmacaluso@ampiopharma.com

With a copy to Notices@ampiopharma.com

 

ThinkEquity

 

William Baquetwbaquet@fordhamfinancial.com

 

With a copy to DealTeam@think-equity.com and Notices@think-equity.com

 

Roth

 

Eric Chengecheng@roth.com

Lou EllisLEllis@roth.com

Nazan AkdenizNAkdeniz@roth.com

Phil DiNapoli pdinapoli@roth.com

 

With a copy to RothECM@roth.com

 

 43 

 

 

EXHIBIT 7(m)

 

Form of Representation Date Certificate

 

____________________, 20__

 

This Representation Date Certificate (this “Certificate”) is executed and
delivered in connection with Section 7(l) of the Sales Agreement (the
“Agreement”), dated February [•], 2020, and entered into among Ampio
Pharmaceuticals, Inc. (the “Company”), ThinkEquity, a division of Fordham
Financial Management, Inc. and Roth Capital Partners, LLC. All capitalized terms
used but not defined herein shall have the meanings given to such terms in the
Agreement

 

The undersigned, a duly appointed and authorized officer of the Company, having
made all necessary inquiries to establish the accuracy of the statements below
and having been authorized by the Company to execute this certificate, hereby
certifies as follows:

 

1.As of the date of this Certificate, (i) the Registration Statement does not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading and (ii) neither the Registration Statement nor the
Prospectus contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading and (iii) no event has occurred as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein not untrue or misleading.    

2.Each of the representations and warranties of the Company contained in the
Agreement were, when originally made, and are, as of the date of this
Certificate, true and correct in all material respects.    

3.Each of the covenants required to be performed by the Company in the Agreement
on or prior to the date of the Agreement, this Representation Date, and each
such other date as set forth in the Agreement, has been duly, timely and fully
performed in all material respects and each condition required to be complied
with by the Company on or prior to the date of the Agreement, this
Representation Date, and each such other date as set forth in the Agreement or
in the Waivers has been duly, timely and fully complied with in all material
respects.    

4.Subsequent to the date of the most recent financial statements in the
Prospectus, there has been no Material Adverse Effect.    

5.No stop order suspending the effectiveness of the Registration Statement or of
any part thereof has been issued, and no proceedings for that purpose have been
instituted or are pending or threatened by any securities or other governmental
authority (including, without limitation, the Commission).

 

 44 

 

 

The undersigned has executed this Representation Date Certificate as of the date
first written above.

 

 

  AMPIO PHARMACEUTICALS, INC.           By:                 Name:   Title:

 

 45