Exhibit 1.2
APTINYX
Inc.
$50,000,000
Common stock
SALES AGREEMENT
September 16, 2021
Xxxxx and Company, LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Aptinyx Inc. (the “Company”),
confirms its agreement (this “Agreement”) with Xxxxx and Company, LLC (“Cowen”), 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 to or through Cowen, acting as agent and/or principal, shares (the
“Placement Shares”) of the Company’s common stock, par value $0.01 per share (the “Common
Stock”), having an aggregate offering price of up to $50,000,000. Notwithstanding anything to the contrary contained herein,
the parties hereto agree that compliance with the limitation set forth in this Section 1 on the number of shares of Common Stock
issued and sold under this Agreement shall be the sole responsibility of the Company, and Cowen shall have no obligation in connection
with such compliance. The issuance and sale of Common Stock to or through Cowen will be effected pursuant to the Registration Statement
(as defined below) filed by the Company and after such Registration Statement has been 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 (as defined below) to issue the Common Stock.
The Company has filed, in
accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations thereunder (collectively, the
“Securities Act”), with the Commission a registration statement on Form S-3, including a base prospectus, relating
to certain securities, including the Common Stock, to be issued from time to time by the Company, and which incorporates by reference
documents that the Company has filed or will file in accordance with the provisions of the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder (collectively, the “Exchange Act”). The Company has prepared a prospectus
included as part of such registration statement specifically relating to the Placement Shares (the “ATM Prospectus”).
The Company will, if necessary, prepare a prospectus supplement to such base prospectus included as part of such registration statement
specifically relating to the Placement Shares (the “Prospectus Supplement”). The Company has furnished to Cowen,
for use by Cowen, copies of the prospectus included as part of such registration statement, as supplemented by the ATM Prospectus and
any Prospectus Supplement, relating to the Placement Shares. Except where the context otherwise requires, such registration statement,
and any post-effective amendment thereto, as amended when it becomes effective, including all documents filed as part thereof or incorporated
by reference therein, and including any information contained in a Prospectus (as defined below) subsequently filed with the Commission
pursuant to Rule 424(b) under the Securities Act or deemed to be a part of such registration statement pursuant to Rule 430B or 462(b)
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 ATM
Prospectus and any Prospectus Supplement, in the form in which such prospectus, ATM Prospectus and/or any Prospectus Supplement have most
recently been filed by the Company with the Commission pursuant to Rule 424(b) under the Securities Act, together with any “issuer
free writing prospectus,” as defined in Rule 433 of the Securities Act regulations (“Rule 433”), relating
to the Placement Shares that (i) is required to be filed with the Commission by the Company or (ii) is exempt from filing pursuant to
Rule 433(d)(5)(i), in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the
form retained in the Company’s records pursuant to Rule 433(g), is herein called the “Prospectus.” Any
reference herein to the Registration Statement, the Prospectus or any amendment or supplement thereto shall be deemed to refer to and
include the documents incorporated by reference therein, and any reference herein to the terms “amend,” “amendment”
or “supplement” with respect to the Registration Statement or the Prospectus shall be deemed to refer to and include the filing
after the execution hereof of any document with the Commission deemed to be incorporated by reference therein. For purposes of this Agreement,
all references to the Registration Statement, the Prospectus or to any amendment or supplement thereto shall be deemed to include any
copy filed with the Commission pursuant to the Electronic Data Gathering Analysis and Retrieval System (“XXXXX”).
2.
Placements. Each time that the Company wishes to issue and sell the Placement Shares hereunder (each, a “Placement”),
it will notify Cowen by email notice (or other method mutually agreed to in writing by the parties) (a “Placement Notice”)
containing the parameters in accordance with which it desires the Placement Shares to be sold, which shall at a minimum include the number
of shares of Placement Shares to be issued, 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 Trading Day (as defined in Section 3) and any minimum price below which sales may
not be made, a form of which containing such minimum sales parameters necessary is attached hereto as Schedule 1. The Placement
Notice shall originate from any of the individuals from the Company set forth on Schedule 2 (with a copy to each of the
other individuals from the Company listed on such schedule), and shall be addressed to each of the individuals from Cowen set forth on
Schedule 2, as such Schedule 2 may be amended from time to time. The Placement Notice shall be effective upon
receipt by Cowen unless and until (i) in accordance with the notice requirements set forth in Section 4, Cowen declines to accept
the terms contained therein for any reason, in its sole discretion, (ii) the entire amount of the Placement Shares thereunder have been
sold, (iii) in accordance with the notice requirements set forth in Section 4, the Company suspends or terminates the Placement
Notice for any reason, in its sole discretion, (iv) the Company issues a subsequent Placement Notice with parameters superseding those
on the earlier dated Placement Notice, or (v) this Agreement has been terminated under the provisions of Section 11. The amount
of any discount, commission or other compensation to be paid by the Company to Cowen in connection with the sale of the Placement Shares
shall be calculated in accordance with the terms set forth in Schedule 3. It is expressly acknowledged and agreed that neither
the Company nor Cowen will have any obligation whatsoever with respect to a Placement or any Placement Shares unless and until the Company
delivers a Placement Notice to Cowen and Cowen does not decline such Placement Notice pursuant to the terms set forth above, and then
only upon the terms specified therein and herein. In the event of a conflict between the terms of this Agreement and the terms of a Placement
Notice, the terms of the Placement Notice will control.
3.
Sale of Placement Shares by Cowen. Subject to the terms and conditions herein set forth, upon the Company’s delivery
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, Cowen, 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 Nasdaq Stock Market LLC (“Nasdaq”) to sell such Placement Shares up to the amount specified, and otherwise
in accordance with the terms of such Placement Notice. Cowen will provide written confirmation to the Company (including by email correspondence
to each of the individuals of the Company set forth on Schedule 2, if receipt of such correspondence is actually acknowledged by any of
the individuals to whom the notice is sent, other than via auto-reply) 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 Trading Day, the volume-weighted average price of the Placement Shares sold, and the Net Proceeds (as defined below) payable
to the Company. Cowen 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. Cowen shall not purchase Placement Shares for its own account as principal unless expressly
authorized to do so by the Company in a Placement Notice. The Company acknowledges and agrees that (i) there can be no assurance that
Cowen will be successful in selling Placement Shares, and (ii) Cowen 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 Cowen to use its commercially reasonable
efforts consistent with its normal trading and sales practices to sell such Placement Shares as required under this Section 3.
For the purposes hereof, “Trading Day” means any day on which the Company’s Common Stock is purchased
and sold on the principal market on which the Common Stock is listed or quoted.
4.
Suspension of Sales.
(a) The
Company or Cowen 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 2, 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 promptly by verifiable facsimile transmission or email correspondence
to each of the individuals of the other party set forth on Schedule 2), suspend any sale of Placement Shares; provided,
however, that such suspension shall not affect or impair either party’s obligations with respect to any Placement Shares sold
hereunder prior to the receipt of such notice. Each of the parties agrees that no such notice under this Section 4 shall be effective
against the other unless it is made to one of the individuals named on Schedule 2 hereto, as such schedule may be amended
from time to time.
(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 Cowen 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) Cowen shall not be obligated to sell or offer to sell any Placement Shares.
(d) Notwithstanding
any other provision of this Agreement, during any period in which the Registration Statement is no longer effective under the Securities
Act, the Company shall promptly notify Cowen, the Company shall not request the sale of any Placement Shares, and Cowen shall not be obligated
to sell or offer to sell any Placement Shares.
5.
Settlement.
(a) 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” and the first such settlement date, the “First
Delivery 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 Cowen at which such
Placement Shares were sold, after deduction for (i) Xxxxx’x commission, discount or other compensation for such sales payable
by the Company pursuant to Section 2 hereof, (ii) any other amounts due and payable by the Company to Cowen hereunder pursuant
to Section 7(g) (Expenses) hereof, and (iii) any transaction fees imposed by any governmental or self-regulatory organization in
respect of such sales.
(b) Delivery
of Placement Shares. On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer
the Placement Shares being sold by crediting Xxxxx’x or its designee’s account (provided Cowen 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 tradeable,
transferable, registered shares in good deliverable form. On each Settlement Date, Cowen 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 duly authorized Placement Shares on a Settlement Date through no
fault of Cowen, the Company agrees that in addition to and in no way limiting the rights and obligations set forth in Section 9(a)
(Indemnification and Contribution) hereto, it will (i) hold Cowen harmless against any loss, claim, damage, or reasonable and documented
expense (including reasonable and documented legal fees and expenses), as incurred, arising out of or in connection with such default
by the Company and (ii) pay to Cowen (without duplication) any commission, discount, or other compensation to which it would otherwise
have been entitled absent such default.
6.
Representations and Warranties of the Company. Except as disclosed in the Registration Statement or the Prospectus, the
Company represents and warrants to, and agrees with, Cowen that, unless such representation, warranty or agreement specifies otherwise,
as of the date of this Agreement, each Representation Date (as defined in Section 7(m)), each date on which a Placement Notice
is given, and any date on which Placement Shares are sold hereunder:
(a) Compliance
with Registration Requirements. The Registration Statement and any Rule 462(b) Registration Statement have been declared effective
by the Commission under the Securities Act. The Company has complied to the Commission’s satisfaction with all requests of the Commission
for additional or supplemental information related to the Registration Statement and the Prospectus. No stop order suspending the effectiveness
of the Registration Statement or any Rule 462(b) Registration Statement is in effect and no proceedings for such purpose have been
instituted or are pending or, to the knowledge of the Company, contemplated or threatened by the Commission. The Company meets the requirements
for use of Form S-3 under the Securities Act. The sale of the Placement Shares hereunder meets the requirements of General Instruction
I.B.6. of Form S-3.
(b) No
Misstatement or Omission. The Prospectus when filed complied and, as amended or supplemented, if applicable, will comply in all material
respects with the Securities Act. Each of the Registration Statement, any Rule 462(b) Registration Statement, the Prospectus and
any post-effective amendments or supplements thereto, at the time it became effective or its date, as applicable, complied and as of
each of the Settlement Dates, if any, will comply or complied in all material respects with the Securities Act and did not and, as of
each Settlement Date, if any, did not and will not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading. The Prospectus, as amended or supplemented, as of its
date, did not and, as of each of the Settlement Dates, if any, will not contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not
misleading. The representations and warranties set forth in the two immediately preceding sentences do not apply to statements in or
omissions from the Registration Statement, any Rule 462(b) Registration Statement, or any post-effective amendment thereto, or the
Prospectus, or any amendments or supplements thereto, made in reliance upon and in conformity with information relating to Cowen furnished
to the Company in writing by Cowen expressly for use therein. There are no contracts or other documents required to be described in the
Prospectus or to be filed as exhibits to the Registration Statement which have not been described or filed as required.
(c) Offering
Materials Furnished to Cowen. The Company has delivered to Cowen one complete copy of the Registration Statement and a copy of each
consent and certificate of experts filed as a part thereof, and conformed copies of the Registration Statement (without exhibits) and
the Prospectus, as amended or supplemented, in such quantities and at such places as Cowen has reasonably requested.
(d) Emerging
Growth Company. The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act. The Company
agrees to notify Cowen promptly upon the Company ceasing to be an emerging growth company.
(e) Not
an Ineligible Issuer. The Company currently is not an “ineligible issuer,” as defined in Rule 405 of the rules and regulation
of the Commission. The Company agrees to notify Cowen promptly upon the Company becoming an “ineligible issuer.”
(f) Distribution
of Offering Material By the Company. The Company has not distributed and will not distribute, prior to the completion of Xxxxx’x
distribution of the Placement Shares, any offering material in connection with the offering and sale of the Placement Shares other than
the Prospectus or the Registration Statement.
(g) The
Sales Agreement. This Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the
Company, enforceable in accordance with its terms, except as rights to indemnification hereunder may be limited by applicable law and
except as the enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to
or affecting the rights and remedies of creditors or by general equitable principles.
(h) Authorization
of the Common Stock. The Placement Shares, when issued and delivered, will be duly authorized for issuance and sale pursuant to this
Agreement and, when issued and delivered by the Company against payment therefor pursuant to this Agreement, will be duly authorized,
validly issued, fully paid and nonassessable.
(i) No
Applicable Registration or Other Similar Rights. There are no persons with registration or other similar rights to have any equity
or debt securities registered for sale under the Registration Statement or included in the offering contemplated by this Agreement, except
for such rights as have been duly waived.
(j) No
Material Adverse Change. Except as otherwise disclosed in the Prospectus, subsequent to the respective dates as of which information
is given in the Prospectus: (i) there has been no material adverse change, or any development that could reasonably be expected to
result in a material adverse change, in the condition, financial or otherwise, or in the earnings, business, operations or prospects,
whether or not arising from transactions in the ordinary course of business, of the Company and its subsidiaries, considered as one entity
(any such change is called a “Material Adverse Change”); (ii) the Company and its subsidiaries, considered
as one entity, have not incurred any material liability or obligation, indirect, direct or contingent, not in the ordinary course of business
nor entered into any material transaction or agreement not in the ordinary course of business: and (iii) there has been no dividend
or distribution of any kind declared, paid or made by the Company or, except for regular quarterly dividends publicly announced by the
Company or dividends paid to the Company or other subsidiaries, by any of its subsidiaries on any class of capital stock or repurchase
or redemption by the Company or any of its subsidiaries of any class of capital stock.
(k) Independent
Accountants. The Company’s independent accountant, who has expressed its opinion with respect to the financial statements (which
term as used in this Agreement includes the related notes thereto) and supporting schedules filed with the Commission or incorporated
by reference as a part of the Registration Statement and included in the Prospectus, is an independent registered public accounting firm
as required by the Securities Act and the Exchange Act.
(l) Preparation
of the Financial Statements. The financial statements filed with the Commission as a part of or incorporated by reference in the Registration
Statement and included in the Prospectus present fairly, in all material respects, the consolidated financial position of the Company
and its subsidiaries as of and at the dates indicated and the results of their operations and cash flows for the periods specified. The
supporting schedules included in or incorporated in the Registration Statement present fairly, in all material respects, the information
required to be stated therein. Such financial statements and supporting schedules have been prepared in conformity with generally accepted
accounting principles as applied in the United States applied on a consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto or, in the case of unaudited interim financial statements, for normal year-end adjustments
and the omission of certain footnotes as permitted by the applicable rules of the Commission. No other financial statements or supporting
schedules are required to be included in or incorporated in the Registration Statement. The financial data set forth or incorporated in
the Prospectus under the caption “Selected Financial Data” fairly present, in all material respects, the information set forth
therein on a basis consistent with that of the audited financial statements contained, incorporated or deemed to be incorporated in the
Registration Statement.
(m) Extensible
Business Reporting Language. The interactive data in eXtensible Business Reporting Language included or incorporated by reference
in the each Registration Statement fairly presents the information called for in all material respects and has been prepared in accordance
with the Commission’s rules and guidelines applicable thereto.
(n) Incorporation
and Good Standing of the Company and its Subsidiaries. The Company has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the State of Delaware and has corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and to enter into and perform its obligations under this Agreement. The Company
does not have any significant subsidiary (as defined in Rule 1-02 (w) of Regulation S-X of the Exchange Act). The Company is
duly qualified as a foreign corporation or foreign partnership to transact business and is in good standing in the State of Illinois and
each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct
of business, except for such jurisdictions where the failure to so qualify or to be in good standing would not, individually or in the
aggregate, result in a Material Adverse Change. 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 and other than (i) those subsidiaries not required to be listed on Exhibit 21.1 by Item 601
of Regulation S-K under the Exchange Act and (ii) those subsidiaries formed since the last day of the most recently ended fiscal
year.
(o) Capital
Stock Matters. The Common Stock conforms in all material respects to the description thereof contained in the Prospectus. All of the
issued and outstanding shares of Common Stock have been duly authorized and validly issued, are fully paid and nonassessable and have
been issued in compliance with federal and state securities laws. None of the outstanding shares of Common Stock were issued in violation
of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company. There
are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity
or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company or any of its subsidiaries other
than those accurately described in all material respects in the Prospectus. The description of the Company’s stock option, stock
bonus and other stock plans or arrangements, and the options or other rights granted thereunder, set forth in the Prospectus accurately
and fairly presents in all material respects the information required to be shown with respect to such plans, arrangements, options and
rights.
(p) Non-Contravention
of Existing Instruments; No Further Authorizations or Approvals Required. Neither the Company nor any of its subsidiaries is in violation
of its charter or by-laws or is in default (or, with the giving of notice or lapse of time, would be in default) (“Default”)
under any indenture, mortgage, loan or credit agreement, note, contract, franchise, lease or other instrument to which the Company or
any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company
or any of its subsidiaries is subject (each, an “Existing Instrument”), except for such Defaults as would not,
individually or in the aggregate, result in a Material Adverse Change. The Company’s execution, delivery and performance of this
Agreement and consummation of the transactions contemplated hereby and by the Prospectus (i) have been duly authorized by all necessary
corporate action and will not result in any violation of the provisions of the charter or by-laws of the Company or any subsidiary, (ii) will
not conflict with or constitute a breach of, or Default under, or result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries pursuant to, or require the consent of any other party to, any Existing
Instrument, except for such conflicts, breaches, Defaults, liens, charges or encumbrances as would not, individually or in the aggregate,
result in a Material Adverse Change and (iii) will not result in any violation of any law, administrative regulation or administrative
or court decree applicable to the Company or any subsidiary. No consent, approval, authorization or other order of, or registration or
filing with, any court or other governmental or regulatory authority or agency, is required for the Company’s execution, delivery
and performance of this Agreement and consummation of the transactions contemplated hereby and by the Prospectus, except such as have
been obtained or made by the Company and are in full force and effect under the Securities Act, applicable state securities or blue sky
laws and from the Financial Industry Regulatory Authority (“FINRA”).
(q) No
Material Actions or Proceedings. Except as disclosed in the Prospectus, there are no legal or governmental actions, suits or proceedings
pending or, to the Company’s knowledge, threatened in writing (i) against or affecting the Company or any of its subsidiaries,
(ii) which has as the subject thereof any officer or director of, or property owned or leased by, the Company or any of its subsidiaries
or (iii) relating to environmental or discrimination matters, where in any such case (A) there is a reasonable possibility that
such action, suit or proceeding might be determined adversely to the Company or such subsidiary and (B) any such action, suit or
proceeding, if so determined adversely, would reasonably be expected to result in a Material Adverse Change or adversely affect the consummation
of the transactions contemplated by this Agreement. No material labor dispute with the employees of the Company or any of its subsidiaries
exists or, to the Company’s knowledge, is threatened or imminent.
(r) All
Necessary Permits, etc. The Company and each subsidiary possess such valid and current certificates, authorizations or permits issued
by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct their respective businesses, other than
those the failure to possess or own would not result in a Material Adverse Change, and neither the Company nor any subsidiary has received
any written notice of proceedings relating to the revocation or modification of, or non-compliance with, any such certificate, authorization
or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material
Adverse Change.
(s) Tax
Law Compliance. The Company and its consolidated subsidiaries have filed all necessary federal, state and foreign income, property
and franchise tax returns, or extensions thereof, which have been required to be filed and have paid all taxes required to be paid by
any of them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them except as may be being
contested in good faith and by appropriate proceedings or where the failure to do so would not reasonably be expected to result in a Material
Adverse Change. The Company has made adequate charges, accruals and reserves in the applicable financial statements referred to in Section 6(l)
above in respect of all federal, state and foreign income, property and franchise taxes for all periods as to which the tax liability
of the Company or any of its consolidated subsidiaries has not been finally determined.
(t) Company
Not an “Investment Company”. The Company has been advised of the rules and requirements under the Investment Company Act
of 1940, as amended (the “Investment Company Act”). The Company is not, and after receipt of payment for the
Common Stock will not be, an “investment company” within the meaning of the Investment Company Act.
(u) Insurance.
Except as otherwise described in the Prospectus, each of the Company and its subsidiaries are insured by insurers of recognized financial
responsibility with policies in such amounts and with such deductibles and covering such risks as the Company believes are generally deemed
prudent and customary for the business for which it is engaged. The Company has no reason to believe that it or any subsidiary will not
be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage
from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result
in a Material Adverse Change.
(v) No
Price Stabilization or Manipulation. The Company has not taken and will not take, directly or indirectly, any action designed to or
that would be reasonably expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Placement Shares.
(w) Related
Party Transactions. There are no business relationships or related-party transactions involving the Company or any subsidiary or any
other person required to be described in the Prospectus which have not been described as required.
(x) Exchange
Act Compliance. The documents incorporated or deemed to be incorporated by reference in the Prospectus, at the time they were or hereafter
are filed with the Commission, complied and will comply in all material respects with the requirements of the Exchange Act, and, when
read together with the other information in the Prospectus, at the Settlement Dates, 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 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.
(y) No
Unlawful Contributions or Other Payments. Neither the Company nor any of its subsidiaries nor, to the Company’s knowledge, any
director, officer, employee, agent, affiliate or other person acting on behalf of the Company or any subsidiary has (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government officials or employees, political parties or campaigns, political party
officials, or candidates for political office from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign
Corrupt Practices Act of 1977, as amended, or any applicable anti-corruption laws, rules, or regulations of any other jurisdiction in
which the Company or any subsidiary conducts business; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
(z) Compliance
with Money Laundering Laws. The operations of the Company and its subsidiaries are and have been conducted at all times in compliance
with all applicable financial recordkeeping and reporting requirements, including those of the U.S. Bank Secrecy Act, as amended by Title
III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA
PATRIOT Act), and the applicable anti-money laundering statutes of jurisdictions where the Company and its subsidiaries conduct business,
the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by
any governmental agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding
by or before any court or governmental agency, authority, body or any arbitrator involving the Company or any of its subsidiaries with
respect to Anti-Money Laundering Laws is pending, or to the knowledge of the Company, threatened.
(aa) Compliance
with OFAC.
| (A) | None of the Company or any of its subsidiaries, or any directors or officers thereof, nor to the Company’s
knowledge, any agent, employee, affiliate, representative, or other person acting on behalf of the Company or any of its subsidiaries,
is an individual or entity (“Person”) that is, or is owned or controlled by a Person that is: (i) the subject
of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”),
the United Nations Security Council (“UNSC”), the European Union (“EU”), Her Majesty’s
Treasury (“HMT”), or other relevant sanctions authority (collectively, “Sanctions”),
nor (ii) located, organized, or resident in a country or territory that is the subject of a U.S. government embargo (including, without
limitation, Cuba, Iran, North Korea, Sudan, Syria and the Crimea). |
| (B) | The Company will not, directly or indirectly, use the Net Proceeds, or lend, contribute or otherwise make
available such Net Proceeds to any subsidiary, joint venture partner or other Person: (i) to fund or facilitate any activities or business
of or with any Person that, at the time of such funding or facilitation, is the subject of Sanctions, or in any country or territory that,
at the time of such funding or facilitation, is the subject of a U.S. government embargo; or (ii) in any other manner that will result
in a violation of Sanctions by any Person (including Xxxxx). |
| (C) | For the past five (5) years, the Company and its subsidiaries have not knowingly engaged in, are not now
knowingly engaged in, and will not engage in, any direct or indirect dealings or transactions with any Person that at the time of the
dealing or transaction is or was the subject of Sanctions or any country or territory that, at the time of the dealing or transaction
is or was the subject of a U.S. government embargo. |
(bb) Company’s
Accounting System. The Company maintains a system of “internal control over financial reporting” (as such term is defined
in Rule 13a-15(f) of the General Rules and Regulations under the Exchange Act (the “Exchange Act Rules”)) that
is designed to comply with the requirements of the Exchange Act and has been designed by the Company’s principal executive and
principal financial officers, or under their supervision, to provide reasonable assurances 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 U.S. GAAP and to maintain accountability for assets; (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 existing
assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company’s internal control
over financial reporting is effective. Except as described in the Prospectus, since the end of the Company’s most recent audited
fiscal year, there has been (A) no material weakness in the Company’s internal control over financial reporting (whether or not
remediated) and (B) 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.
(cc) Disclosure
Controls. The Company maintains disclosure controls and procedures (as such is defined in Rule 13a-15(e) of the Exchange Act Rules)
that are designed to comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure
that information required to be disclosed by the Company in 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 controls and procedures
designed to ensure that such information is accumulated and communicated to the Company’s management to allow timely decisions regarding
disclosures. The Company has conducted evaluations of the effectiveness of its disclosure controls as required by Rule 13a-15 of the Exchange
Act.
(dd) Compliance
with Environmental Laws. Except as otherwise described in the Prospectus, and except as would not, individually or in the aggregate,
result in a Material Adverse Change (i) neither the Company nor any of its subsidiaries is in violation of any federal, state, local
or foreign law or regulation relating to pollution or protection of human health or the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or wildlife, including without limitation, laws and regulations relating
to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum and petroleum products (collectively, “Materials of Environmental Concern”), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environmental
Concern (collectively, “Environmental Laws”), which violation includes, but is not limited to, noncompliance
with any permits or other governmental authorizations required for the operation of the business of the Company or its subsidiaries under
applicable Environmental Laws, or noncompliance with the terms and conditions thereof, nor has the Company or any of its subsidiaries
received any written communication, whether from a governmental authority, citizens group, employee or otherwise, that alleges that the
Company or any of its subsidiaries is in violation of any Environmental Law; (ii) there is no claim, action or cause of action filed
with a court or governmental authority, no investigation with respect to which the Company has received written notice, and no written
notice by any person or entity alleging potential liability for investigatory costs, cleanup costs, governmental responses costs, natural
resources damages, property damages, personal injuries, attorneys’ fees or penalties arising out of, based on or resulting from
the presence, or release into the environment, of any Material of Environmental Concern at any location owned, leased or operated by the
Company or any of its subsidiaries, now or in the past (collectively, “Environmental Claims”), pending or, to
the Company’s knowledge, threatened against the Company or any of its subsidiaries or any person or entity whose liability for any
Environmental Claim the Company or any of its subsidiaries has retained or assumed either contractually or by operation of law; and (iii) to
the Company’s knowledge, there are no past or present actions, activities, circumstances, conditions, events or incidents, including,
without limitation, the release, emission, discharge, presence or disposal of any Material of Environmental Concern, that would reasonably
be expected to result in a violation of any Environmental Law or form the basis of a potential Environmental Claim against the Company
or any of its subsidiaries or against any person or entity whose liability for any Environmental Claim the Company or any of its subsidiaries
has retained or assumed either contractually or by operation of law.
(ee) Intellectual
Property. The Company and its subsidiaries own or possess the valid right to use all (i) patents, patent applications, trademarks,
trademark registrations, service marks, service xxxx registrations, Internet domain name registrations, copyrights, copyright registrations,
licenses, trade secret rights (“Intellectual Property Rights”) and (ii) inventions, software, works of authorships, trademarks,
service marks, trade names, databases, formulae, know how, Internet domain names and other intellectual property (including trade secrets
and other unpatented and/or unpatentable proprietary confidential information, systems, or procedures) (collectively, "Intellectual
Property Assets") necessary to conduct their respective businesses as currently conducted, and as proposed to be conducted and described
in the Prospectus. The Company and its subsidiaries have not received any opinion from their legal counsel concluding that any activities
of their respective businesses infringe, misappropriate, or otherwise violate, valid and enforceable Intellectual Property Rights of any
other person, and have not received written notice of any challenge, which is to their knowledge still pending, by any other person to
the rights of the Company and its subsidiaries with respect to any Intellectual Property Rights or Intellectual Property Assets owned
or used by the Company or its subsidiaries. To the knowledge of the Company, the Company and its subsidiaries’ respective businesses
as now conducted do not give rise to any infringement of, any misappropriation of, or other violation of, any valid and enforceable Intellectual
Property Rights of any other person. All licenses for the use of the Intellectual Property Rights described in the Prospectus are valid,
binding upon, and enforceable by or against the parties thereto in accordance with their terms. The Company has complied in all material
respects with, and is not in breach nor has received any written asserted or threatened claim of breach of any Intellectual Property license,
and the Company has no knowledge of any breach or anticipated breach by any other person to any Intellectual Property license. Except
as described in the Prospectus, no claim has been made against the Company alleging the infringement by the Company of any patent, trademark,
service xxxx, trade name, copyright, trade secret, license in or other intellectual property right or franchise right of any person. The
Company has taken reasonable steps to protect, maintain and safeguard its Intellectual Property Rights, including the execution of appropriate
nondisclosure and confidentiality agreements. The consummation of the transactions contemplated by this Agreement will not result in the
loss or impairment of or payment of any additional amounts with respect to, nor require the consent of any other person in respect of,
the Company’s right to own, use, or hold for use any of the Intellectual Property Rights as owned, used or held for use in the conduct
of the business as currently conducted.
(ff) Regulatory
Consents and Permits. Except as set forth in the Registration Statement and the Prospectus, the Company and each of its Subsidiaries
have such permits, licenses, patents, franchises, certificates of need and other approvals and other authorizations (the “Regulatory
Permits”) issued by the appropriate domestic or foreign regional, federal, state, or local regulatory agencies or bodies
necessary to conduct the business of the Company, including, without limitation, any Investigational New Drug Application (an “IND”),
as required by the U.S. Food and Drug Administration (the “FDA”), or any other authorizations issued by domestic
or foreign regional, federal, state, or local agencies or bodies engaged in the regulation of pharmaceuticals such as those being developed
by the Company and its Subsidiaries, except for any of the foregoing that would not reasonably be expected to, individually or in the
aggregate, have a Material Adverse Effect; the Company is in compliance in all material respects with the requirements of the Regulatory
Permits, and all of the Regulatory Permits are valid and in full force and effect, in each case in all material respects, except where
any invalidity, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; the Company has
not received any written notice of proceedings relating to the revocation, termination, modification or impairment of rights of any of
the Regulatory Permits that, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably
be expected to result in a Material Adverse Effect; the Company has not failed to submit to the FDA any IND necessary to conduct the business
of the Company, any such filings that were required to be made were in material compliance with applicable laws when filed, and no material
deficiencies have been asserted by the FDA with respect to any such filings or submissions that were made.
(gg) Regulatory
Filings. Except as disclosed in the Registration Statement and the Prospectus, neither the Company nor any of its Subsidiaries has
failed to file with the applicable regulatory authorities (including, without limitation, the FDA, or any foreign, federal, state, provincial
or local governmental or regulatory authority performing functions similar to those performed by the FDA) any required filing, declaration,
listing, registration, report or submission, except for such failures that, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect; except as disclosed in the Registration Statement and the Prospectus, all such filings, declarations,
listings, registrations, reports or submissions were in compliance with applicable laws when filed and no deficiencies have been asserted
by any applicable regulatory authority with respect to any such filings, declarations, listings, registrations, reports or submissions,
except for any deficiencies that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
The Company has operated and currently is, in all material respects, in compliance with the United States Federal Food, Drug, and Cosmetic
Act, all applicable rules and regulations of the FDA and other federal, state, local and foreign governmental bodies exercising comparable
authority.
(hh) Studies,
Tests and Preclinical and Clinical Investigations. To the Company’s knowledge, the studies, tests and preclinical and clinical
investigations conducted by or on behalf of the Company and described in the Prospectus were and, if still pending, are, in all material
respects, being conducted in accordance with established protocols, procedures and controls pursuant to, where applicable, accepted professional
scientific standards for products or product candidates comparable to those being developed by the Company, and all Applicable Laws and
Authorizations, including, without limitation, the Federal Food, Drug, and Cosmetic Act and implementing regulations including good laboratory
practice (“GLP”) regulations (21 C.F.R. Part 58) if any such studies, tests or preclinical and clinical investigations
are being conducted pursuant to GLP, and good clinical practice and IND requirements (21 C.F.R. Parts 50, 54, 56, and 312) if any such
studies, tests or preclinical and clinical investigations were or are subject to good clinical practice regulations or were or are being
conducted under an IND; the descriptions of the results of such studies, tests and trials contained in the Registration Statement and
the Prospectus are accurate in all material respects and fairly present the data derived from such studies, tests and trials; except to
the extent disclosed in the Registration Statement and the Prospectus, the Company is not aware of any studies, tests or trials the results
of which the Company believes reasonably call into question, in any material respect, the study, test, or trial results described or referred
to in the Registration Statement and the Prospectus when viewed in the context in which such results are described and the clinical state
of development; and neither the Company nor any of its Subsidiaries have received any written notices or correspondence from any Governmental
Authority requiring the termination, suspension or material modification of any studies, tests or preclinical or clinical investigations
conducted by or on behalf of the Company or any of its Subsidiaries.
(ii) Listing.
The Company is subject to and in compliance in all material respects with the reporting requirements of Section 13 or Section 15(d) of
the Exchange Act. The Common Stock is registered pursuant to Section 12(b) or Section 12(g) of the Exchange Act and is listed on the Nasdaq,
and the Company has taken no action designed to, or reasonably likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act or delisting the Common Stock from Nasdaq, nor has the Company received any written notification that the
Commission or Nasdaq is contemplating terminating such registration or listing.
(jj) Brokers.
Except for Xxxxx, there is no broker, finder or other party that is entitled to receive from the Company any brokerage or finder’s
fee or other fee or commission as a result of any transactions contemplated by this Agreement.
(kk) No
Outstanding Loans or Other Indebtedness. Except as described in the Prospectus, there are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or guarantees or indebtedness by the Company to or for the benefit
of any of the officers or directors of the Company or any of the immediate family members of any of them.
(ll) No Reliance.
The Company has not relied upon Xxxxx or legal counsel for Xxxxx for any legal, tax or accounting advice in connection with the offering
and sale of the Placement Shares.
(mm) Compliance
with Laws. The Company has not been advised, and has no reason to believe, that it and each of its subsidiaries are not conducting
business in compliance with all applicable laws, rules and regulations of the jurisdictions in which it is conducting business, except
where failure to be so in compliance would not result in a Material Adverse Change. Each of the Company and its Subsidiaries: (A) is
and at all times has been in compliance with all statutes, rules, or 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 manufactured or distributed by the Company or its Subsidiaries (“Applicable Laws”), except as would
not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect; (B) has not received any FDA Form
483, notice of adverse finding, warning letter, untitled letter or other correspondence or notice from the FDA or any other Governmental
Authority alleging or asserting noncompliance in any material respect with any Applicable Laws or any licenses, certificates, approvals,
clearances, authorizations, permits and supplements or amendments thereto required by any such Applicable Laws (“Authorizations”);
(C) possesses all material Authorizations and such Authorizations are valid and in full force and effect and are not in material violation
of any term of any such Authorizations; (D) has not received notice of any claim, action, suit, proceeding, hearing, enforcement, investigation,
arbitration or other action from any Governmental Authority or third party alleging that any product operation or activity is in violation
of any Applicable Laws or Authorizations and has no knowledge that any such Governmental Authority or third party is considering any
such claim, litigation, arbitration, action, suit, investigation or proceeding; (E) has not received notice that any Governmental Authority
has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations and has no knowledge that any such
Governmental Authority is considering such action; and (F) has filed, obtained, maintained or submitted all material reports, documents,
forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations
and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete
and correct in all material respects on the date filed (or were corrected or supplemented by a subsequent submission); and (G) has not,
either voluntarily or involuntarily, initiated, conducted, or issued or caused to be initiated, conducted or issued, any safety alert,
“dear healthcare provider” letter, or other notice or action relating to the alleged lack of safety or efficacy of any product
or any alleged product defect or violation and, to the Company’s knowledge, no third party has initiated, conducted or intends
to initiate any such notice or action.
(nn) Privacy
Laws. To the knowledge of the Company, the Company and its subsidiaries are in material compliance with all applicable data
privacy and security laws and regulations, including, without limitation, the Health Insurance Portability and Accountability Act (“HIPAA”),
as amended by the Health Information Technology for Economic and Clinical Health Act (the “HITECH Act”) (42 U.S.C.
Section 17921 et seq.); and the Company and its subsidiaries have taken reasonable actions to prepare to comply with the European Union
General Data Protection Regulation (“GDPR”) (EU 2016/679) (collectively, “Privacy Laws”).
To the extent required by applicable Privacy Laws, except as would not otherwise be expected to have a material adverse effect, the Company
and its subsidiaries have in place policies and procedures relating to data privacy and security and the collection, storage, use, disclosure,
handling, and analysis of Personal Data (the “Policies”) and take appropriate steps reasonably designed to ensure compliance
in all material respects with such Policies. At all times since inception, where required by applicable Privacy Laws and to the extent
such Policies are in written form, the Company has provided accurate notice of its Policies then in effect to its customers, employees,
third party vendors and representatives. The Policies provide accurate and sufficient notice of the Company’s then-current
privacy practices relating to its subject matter and such Policies do not contain any material omissions of the Company’s then-current
privacy practices. “Personal Data” means (i) a natural persons’ name, street address, telephone number,
email address, photograph, social security number, bank information, or customer or account number; (ii) any information which would qualify
as “personally identifying information” under the Federal Trade Commission Act, as amended; (iii) Protected Health Information
as defined by HIPAA; and (iv) any other piece of information that identifies such natural person, or his or her family, or identifies
a specific person’s health condition or sexual orientation. The execution, delivery and performance of this Agreement or any other
agreement referred to in this Agreement will not result in a breach of any Privacy Laws or Policies. The Company further certifies that
neither it nor any subsidiary: (i) has received written notice of any actual or alleged violation of any of the Privacy Laws, and has
no knowledge of any event or condition that would reasonably be expected to result in any such notice; or (ii) is a party to any order,
decree, or settlement agreement that imposes any obligation or liability under any applicable Privacy Law.
(oo) IT Systems.
(i)(x) To the knowledge of Company, there has been no security breach or other compromise of any Personal Data and/or any of the Company’s
information technology and computer systems, networks, hardware, software used to store and/or process any Personal Data (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.
(pp) FINRA.
To enable Xxxxx to rely on Rule 5110(h)(1)(C) of FINRA, the Company represents that the Company (i) has a non-affiliate, public common
equity float of at least $150 million or a non-affiliate, public common equity float of at least $100 million and annual trading volume
of at least three million shares as of September 16, 2021 and (ii) has been subject to the Exchange Act reporting requirements for a period
of at least 36 months.
Any certificate signed by an officer of the Company
and delivered to Xxxxx or to counsel for Xxxxx in connection with this Agreement shall be deemed to be a representation and warranty by
the Company to Xxxxx as to the matters set forth therein.
The Company acknowledges that Xxxxx and, for purposes
of the opinions to be delivered pursuant to Section 7 hereof, counsel to the Company and counsel to Xxxxx, will rely upon the accuracy
and truthfulness of the foregoing representations and hereby consents to such reliance.
7.
Covenants of the Company. The Company covenants and agrees with Xxxxx 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 Xxxxx under the Securities Act (including in circumstances where such requirement may be satisfied pursuant
to Rule 172 under the Securities Act), (i) the Company will notify Xxxxx promptly of the time when 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 (insofar as it relates to the transactions contemplated hereby);
(ii) the Company will prepare and file with the Commission, promptly upon Xxxxx’x reasonable request, any amendments or supplements
to the Registration Statement or Prospectus that, in Xxxxx’x reasonable opinion, may be necessary or advisable in connection with
the distribution of the Placement Shares by Xxxxx (provided, however, that the failure of Xxxxx to make such request shall not
relieve the Company of any obligation or liability hereunder, or affect Xxxxx’x right to rely on the representations and warranties
made by the Company in this Agreement); (iii) the Company will not file any amendment or supplement to the Registration Statement or Prospectus,
other than documents incorporated by reference, relating to the Placement Shares or a security convertible into the Placement Shares unless
a copy thereof has been submitted to Xxxxx within a reasonable period of time before the filing and Xxxxx has not reasonably objected
in writing thereto within two (2) Business Days (provided, however, that (A) the failure of Xxxxx to make such objection shall
not relieve the Company of any obligation or liability hereunder, or affect Xxxxx’x right to rely on the representations and warranties
made by the Company in this Agreement, (B) the Company has no obligation to provide Xxxxx any advance copy of such filing or to provide
Xxxxx an opportunity to object to such filing if the filing does not name Xxxxx and does not relate to the transaction herein provided,
and (C) the only remedy Xxxxx shall have with respect to the failure by the Company to provide Xxxxx with such copy or the filing of such
amendment or supplement despite Xxxxx’x objection shall be to cease making sales under this Agreement) and the Company will furnish
to Xxxxx 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 XXXXX; (iv) the Company will cause each amendment or supplement to the
Prospectus, other than documents incorporated by reference, to be filed with the Commission as required pursuant to the applicable paragraph
of Rule 424(b) of the Securities Act 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 to 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), and (v) prior to the termination of this Agreement, the Company will notify Xxxxx if at any time
the Registration Statement shall no longer be effective as a result of the passage of time pursuant to Rule 415 under the Securities Act
or otherwise. Prior to the initial sale of any Placement Shares, the Company shall file a final Prospectus Supplement pursuant to Rule
424(b) relating to the Placement Shares.
(b) Notice
of Commission Stop Orders. The Company will advise Xxxxx, 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.
(c) Delivery
of Prospectus; Subsequent Changes. During any period in which a Prospectus relating to the Placement Shares is required to be delivered
by Xxxxx under the Securities Act with respect to a pending sale of the Placement Shares, (including in circumstances where such requirement
may be satisfied pursuant to Rule 172 under the Securities Act), the Company will comply with all requirements imposed upon it by the
Securities Act, as from time to time in force, and will file on or before their respective due dates (taking into account any extensions
available under the Exchange Act) 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 during such
period any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary to amend or supplement the Registration Statement or Prospectus to comply with the
Securities Act, the Company will promptly notify Xxxxx 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 any such amendment or supplement if,
in the reasonable judgment of the Company, it is in the best interest of the Company to do so, provided that no Placement Notice is in
effect during such time.
(d) Listing
of Placement Shares. During any period in which the Prospectus relating to the Placement Shares is required to be delivered by Xxxxx
under the Securities Act with respect to a pending sale of the Placement Shares (including in circumstances where such requirement may
be satisfied pursuant to Rule 172 under the Securities Act), the Company will use its commercially reasonable efforts to cause the Placement
Shares to be listed on Nasdaq and to qualify the Placement Shares for sale under the securities laws of such jurisdictions as Xxxxx 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 Xxxxx and its counsel (at the reasonable 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 any period in which a Prospectus relating
to the Placement Shares is required to be delivered under the Securities Act (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 Xxxxx may from time to time reasonably request and, at Xxxxx’x 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 Xxxxx to the extent such document is available on XXXXX.
(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, which requirement may be satisfied by publicly filing the required
information on XXXXX.
(g) Expenses.
The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, in accordance with
the provisions of Section 11 hereunder, will pay the following expenses all incident to the performance of its obligations hereunder,
including, but not limited to, expenses relating to (i) the preparation, printing and filing of the Registration Statement and each amendment
and supplement thereto, of each Prospectus and of each amendment and supplement thereto, (ii) the preparation, issuance and delivery of
the Placement Shares, (iii) the qualification of the Placement Shares under securities laws in accordance with the provisions of Section
7(d) of this Agreement, including filing fees (provided, however, that any fees or disbursements of counsel for Xxxxx in connection
therewith shall be paid by Xxxxx except as set forth in (vii) below), (iv) the printing and delivery to Xxxxx of copies of the Prospectus
and any amendments or supplements thereto, and of this Agreement, (v) the fees and expenses incurred in connection with the listing or
qualification of the Placement Shares for trading on Nasdaq, (vi) the filing fees and expenses, if any, of the Commission, (vii) the filing
fees and associated legal expenses of Xxxxx’x outside counsel for filings with the FINRA Corporate Financing Department (including
with respect to any required review by FINRA), such legal expense reimbursement not to exceed $12,500, and (viii) the reasonable fees
and disbursements of Xxxxx’x counsel in an amount not to exceed $50,000, provided, however, in no event shall the total compensation
paid to Xxxxx exceed 8.0% of the gross proceeds to the Company from the sale of Placement Shares.
(h) Use of Proceeds.
The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”
(i) Notice
of Other Sales. During the pendency of any Placement Notice given hereunder, and for three (3) trading days following the termination
of any Placement Notice given hereunder, the Company shall provide Xxxxx notice as promptly as reasonably possible before it offers to
sell, contracts to sell, sells, grants any option to sell or otherwise disposes of any shares of Common Stock (other than Placement Shares
offered pursuant to the provisions of this Agreement) or securities convertible into or exchangeable for Common Stock, warrants or any
rights to purchase or acquire Common Stock; provided, that such notice shall not be required in connection with (i) the issuance,
grant or sale of Common Stock, options to purchase shares of Common Stock or Common Stock issuable upon the exercise of options or other
equity awards pursuant to any stock option, stock bonus or other stock plan or arrangement described in the Prospectus, (ii) the issuance
of securities in connection with an acquisition, merger or sale or purchase of assets, (iii) the issuance or sale of Common Stock pursuant
to any dividend reinvestment plan that the Company may adopt from time to time provided the implementation of such is disclosed to Xxxxx
in advance, (iv) any shares of Common Stock issuable upon the exchange, conversion or redemption of securities or the exercise of warrants,
options or other rights in effect or outstanding, or (v) the issuance or sale of shares of Common Stock, or securities convertible into
or exercisable for Common Stock, offered and sold in a privately negotiated transaction to vendors, customers, investors, strategic partners
or potential strategic partners, financial institutions or other lenders in connection with debt arrangements, and otherwise conducted
in a manner so as not to be integrated with the offering of Common Stock hereby and not for capital raising purposes. For avoidance of
doubt, nothing herein shall be construed to restrict the Company’s ability, or require the Company to provide notice to Xxxxx, to
file a registration statement with the Commission.
(j) Change
of Circumstances. The Company will, at any time during a fiscal quarter in which the Company intends to tender a Placement Notice
or sell Placement Shares, advise Xxxxx 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 provided to Xxxxx pursuant
to this Agreement.
(k) Due
Diligence Cooperation. The Company will cooperate with any reasonable due diligence review conducted by Xxxxx or its agents 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 Xxxxx may reasonably request.
(l) Required
Filings Relating to Placement of Placement Shares. The Company agrees that on such dates as the Securities Act shall require, 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 Xxxxx, the Net Proceeds to the Company and the compensation payable
by the Company to Xxxxx with respect to such Placement Shares (provided that the Company may satisfy its obligations under this
Section 7(l)(i) by effecting a filing in accordance with the Exchange Act with respect to such information), and (ii) at Xxxxx’x
request, 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.
(m) Representation
Dates; Certificate. On or prior to the First Delivery Date and each time the Company (i) files the Prospectus relating to the Placement
Shares or amends or supplements the Registration Statement or the Prospectus relating to the Placement Shares (other than a prospectus
supplement filed in accordance with Section 7(l) of this Agreement) by means of a post-effective amendment, sticker, or supplement
but not by means of incorporation of document(s) by reference to the Registration Statement or the Prospectus relating to the Placement
Shares; (ii) files an annual report on Form 10-K under the Exchange Act; (iii) files its quarterly reports on Form 10-Q under the Exchange
Act; or (iv) files a current report on Form 8-K containing amended financial information (other than an earnings release or other information
“furnished” pursuant to Items 2.02 or 7.01 of Form 8-K) 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
Xxxxx with a certificate, in the form attached hereto as Exhibit 7(m) within three (3) Trading Days of any Representation Date
if requested by Xxxxx. The requirement to provide a certificate under this Section 7(m) shall be automatically 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. Notwithstanding the foregoing, if the Company subsequently decides to sell Placement
Shares following a Representation Date when the Company relied on such waiver and did not provide Xxxxx with a certificate under this
Section 7(m), then before the Company delivers the Placement Notice or Xxxxx sells any Placement Shares, the Company shall provide
Xxxxx with a certificate, in the form attached hereto as Exhibit 7(m), dated the date of the Placement Notice.
(n) Legal
Opinion. On or prior to the First Delivery Date and within three (3) 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(m) for which no waiver is applicable,
the Company shall cause to be furnished to Xxxxx a written opinion of Xxxxxxx Procter LLP (“Company Counsel”),
or other counsel reasonably satisfactory to Xxxxx, in form and substance satisfactory to Xxxxx and its counsel, dated the date that the
opinion is required to be delivered, modified, as necessary, to relate to the Registration Statement and the Prospectus as then amended
or supplemented; provided, however, that in lieu of such opinions for subsequent Representation Dates, counsel may furnish
Xxxxx with a letter (a “Reliance Letter”) to the effect that Xxxxx may rely on a prior opinion delivered under
this Section 7(n) to the same extent as if it were dated the date of such letter (except that statements in such prior opinion
shall be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented at such Representation Date).
(o) Comfort
Letter. On or prior to the First Delivery Date and within three (3) 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(m) for which no waiver is applicable,
the Company shall cause its independent accountants to furnish Xxxxx letters (the “Comfort Letters”), dated
the date the Comfort Letter is delivered, in form and substance reasonably satisfactory to Xxxxx, (i) confirming that they are an independent
registered public accounting firm within the meaning of the Securities Act and 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 Xxxxx in connection with registered public offerings (the first such letter, the “Initial Comfort Letter”)
and (iii) updating the Initial Comfort Letter with any information that would have been included in the Initial Comfort Letter had it
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 letter.
(p) Market
Activities. The Company will not, directly or indirectly, (i) take any action designed to cause or result in, or that constitutes
or would 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 the Placement Shares or (ii) sell, bid for, or purchase the Common Stock to be issued and sold pursuant to this
Agreement, or pay anyone any compensation for soliciting purchases of the Placement Shares other than Xxxxx; provided, however, that the
Company may bid for and purchase shares of its Common Stock in accordance with Rule 10b-18 under the Exchange Act.
(q) Insurance.
The Company and its subsidiaries shall maintain, or cause to be maintained, insurance in such amounts and covering such risks as the
Company believes is reasonable and customary for the business for which it is engaged.
(r) Compliance
with Laws. The Company and each of its subsidiaries shall use commercially reasonable efforts to maintain, or cause to be maintained,
all material environmental permits, licenses and other authorizations required by federal, state and local law in order to conduct their
businesses as described in the Prospectus, and the Company and each of its subsidiaries shall conduct their businesses, or cause their
businesses to be conducted, in substantial compliance with such permits, licenses and authorizations and with applicable environmental
laws, except where the failure to maintain or be in compliance with such permits, licenses and authorizations could not reasonably be
expected to result in a Material Adverse Change.
(s) Investment
Company Act. The Company will conduct its affairs in such a manner so as to reasonably ensure that neither it nor its subsidiaries
will be or become, at any time prior to the termination of this Agreement, an “investment company,” as such term is defined
in the Investment Company Act, assuming no change in the Commission’s current interpretation as to entities that are not considered
an investment company.
(t) Securities
Act and Exchange Act. The Company will use its best efforts to comply with all requirements imposed upon it by the Securities Act
and the Exchange Act as from time to time in force, so far as necessary to permit the continuance of sales of, or dealings in, the Placement
Shares as contemplated by the provisions hereof and the Prospectus.
(u) No Offer
to Sell. Other than the Prospectus or a free writing prospectus (as defined in Rule 405 under the Securities Act) approved in advance
by the Company and Xxxxx in its capacity as principal or agent hereunder, neither Xxxxx nor the Company (including its agents and representatives,
other than Xxxxx in its 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 Common Stock hereunder.
(v) Xxxxxxxx-Xxxxx
Act. The Company and its subsidiaries will use their best efforts to comply with all effective applicable provisions of the Xxxxxxxx-Xxxxx
Act.
8.
Conditions to Xxxxx’x Obligations. The obligations of Xxxxx 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 Xxxxx of a due diligence review satisfactory to Xxxxx in its reasonable
judgment, and to the continuing satisfaction (or waiver by Xxxxx in its sole discretion) of the following additional conditions:
(a) Registration
Statement Effective. The Registration Statement shall be effective and shall be available for (i) all sales of Placement Shares issued
pursuant to all prior Placement Notices and (ii) 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 or any of its subsidiaries
of any request for additional information from the Commission or any other federal or state governmental authority during the period of
effectiveness of the Registration Statement, the response to which would require any post-effective amendments or supplements to the Registration
Statement or the Prospectus; (ii) the issuance by the Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt
by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the 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, related Prospectus or such documents so that, in the case of the Registration Statement, it will not contain any materially
untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein not misleading and, that in the case of the Prospectus, it will not contain any materially untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(c) No
Misstatement or Material Omission. Xxxxx 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 Xxxxx’x reasonable opinion is material, or omits to
state a fact that in Xxxxx’x 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
Change or any development that would reasonably be expected to result in a Material Adverse Change, or any 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 Xxxxx (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.
(e) Company
Counsel Legal Opinion. Xxxxx shall have received the opinions of Company Counsel required to be delivered pursuant to Section
7(n) on or before the date on which such delivery of such opinion is required pursuant to Section 7(n).
(f) Xxxxx
Counsel Legal Opinion. Xxxxx shall have received from Xxxxx Xxxxxx LLP, counsel for Xxxxx, such opinion or opinions, on or before
the date on which the delivery of the Company Counsel legal opinion is required pursuant to Section 7(n), with respect to such
matters as Xxxxx may reasonably require, and the Company shall have furnished to such counsel such documents as they request for enabling
them to pass upon such matters.
(g) Comfort
Letter. Xxxxx shall have received the Comfort Letter required to be delivered pursuant to Section 7(o) on or before the date
on which such delivery of such Comfort Letter is required pursuant to Section 7(o).
(h) Representation
Certificate. Xxxxx shall have received the certificate required to be delivered pursuant to Section 7(m) on or before
the date on which delivery of such certificate is required pursuant to Section 7(m).
(i) Secretary’s
Certificate. On or prior to the First Delivery Date, Xxxxx shall have received a certificate, signed on behalf of the Company by
its corporate Secretary, in form and substance reasonably satisfactory to Xxxxx and its counsel.
(j) No Suspension.
Trading in the Common Stock shall not have been suspended on Nasdaq.
(k) Other
Materials. On each date on which the Company is required to deliver a certificate pursuant to Section 7(m), the Company shall
have furnished to Xxxxx such appropriate further information, certificates and documents as Xxxxx may have reasonably requested. All
such information, certificates, and other documents shall have been in compliance with the provisions hereof. The Company will furnish
Xxxxx with such conformed copies of such information, certificates, and other documents as Xxxxx shall have reasonably requested.
(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 (i) approved for listing on Nasdaq, subject only to notice of issuance,
or (ii) the Company shall have filed an application for listing of the Placement Shares on Nasdaq at, or prior to, the issuance of any
Placement Notice.
(n) No Termination
Event. There shall not have occurred any event that would permit Xxxxx to terminate this Agreement pursuant to Section 11(a).
9.
Indemnification and Contribution.
(a) Company
Indemnification. The Company agrees to indemnify and hold harmless Xxxxx, the directors, officers, partners, employees and agents
of Xxxxx and each person, if any, who (i) controls Xxxxx 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 Xxxxx from and against any and all losses, claims, liabilities,
expenses and damages (including, but not limited to, any and all reasonable investigative, legal and other expenses incurred in connection
with, and any and all amounts paid in settlement (in accordance with Section 9(c)) of, any action, suit or proceeding between
any of the indemnified parties and any indemnifying parties or between any indemnified party and any third party, or otherwise, or any
claim asserted), as and when incurred, to which Xxxxx, or any such person, may become subject under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, liabilities, expenses
or damages arise out of or are based, directly or indirectly, on (x) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus or any amendment or supplement to the Registration Statement or the Prospectus
or in any free writing prospectus or in any application or other document executed by or on behalf of the Company in connection with
this Agreement or based on written information furnished by or on behalf of the Company filed in any jurisdiction in order to qualify
the Common Stock under the securities laws thereof or filed with the Commission, (y) the omission or alleged omission to state in any
such document a material fact required to be stated in it or necessary to make the statements in it not misleading or (z) any breach
by any of the indemnifying parties of any of their respective representations, warranties and agreements contained in this Agreement;
provided, however, that this indemnity agreement shall not apply to the extent that such loss, claim, liability, expense
or damage arises from the sale of the Placement Shares pursuant to this Agreement and is caused directly or indirectly by an untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in conformity with the Agent’s Information. This
indemnity agreement will be in addition to any liability that the Company might otherwise have.
(b) Xxxxx
Indemnification. Xxxxx agrees to indemnify and hold harmless the Company and its directors and each officer of the Company that 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 9(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) or in any free writing prospectus in reliance upon and in conformity with the Agent’s Information.
(c) Procedure.
Any party that proposes to assert the right to be indemnified under this Section 9 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 in writing or parties under
this Section 9, 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 9 and (ii) any liability that it may have to any indemnified party
under the foregoing provision of this Section 9 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 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 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 as they are incurred after the indemnifying
party receives a written invoice related to such fees, disbursements and other charges. 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 9 (whether or not any indemnified party is a
party thereto), unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability
arising or that may arise out of such claim, action or proceeding.
(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 9 is applicable in accordance with its terms but for any reason is held to be unavailable from the Company or Cowen,
the Company and Cowen 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 Cowen, 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 Cowen may be subject in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one hand and Cowen on the other. The relative benefits received by the
Company on the one hand and Cowen 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 Cowen from the
sale of Placement Shares on behalf of the Company (before deducting expenses). 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
Cowen, on the other, 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 Cowen, 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 Cowen agree that it
would not be just and equitable if contributions pursuant to this Section 9(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 9(d) shall be deemed to include, for the purpose of this Section 9(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 9(c) hereof. Notwithstanding the foregoing provisions of this Section 9(d), Cowen 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 9(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 Cowen, will have the same rights to contribution
as that party, and each officer of the Company who signed the Registration Statement and each director of the Company 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 written notice of commencement of any action against such party in respect of which a claim for contribution may be made under
this Section 9(d), will notify in writing 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 9(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
9(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 9(c) hereof.
10. Representations
and Agreements to Survive Delivery. The indemnity and contribution agreements contained in Section 9 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 Cowen, 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.
11. Termination.
(a) Cowen
shall have the right by giving notice as hereinafter specified at any time to terminate this Agreement if (i) any Material Adverse Change,
or any development that would reasonably be expected to result in a Material Adverse Change has occurred that, in the reasonable judgment
of Cowen, may materially impair the ability of Cowen to sell the Placement Shares hereunder, (ii) the Company shall have failed, refused
or been unable to perform any agreement on its part to be performed hereunder; provided, however, in the case of any failure of
the Company to deliver (or cause another person to deliver) any certification, opinion, or letter required under Sections 7(m),
7(n), or 7(o), Xxxxx’x right to terminate shall not arise unless such failure to deliver (or cause to be delivered)
continues for more than thirty (30) days from the date such delivery was required, (iii) any other condition of Xxxxx’x obligations
hereunder is not fulfilled, or (iv) any suspension or limitation of trading in the Placement Shares or in securities generally on Nasdaq
shall have occurred. Any such termination shall be without liability of any party to any other party except that the provisions of Section
7(g) (Expenses), Section 9 (Indemnification and Contribution), Section 10 (Representations and Agreements to Survive
Delivery), Section 16 (Applicable Law; Consent to Jurisdiction) and Section 17 (Waiver of Jury Trial) hereof shall remain
in full force and effect notwithstanding such termination. If Cowen elects to terminate this Agreement as provided in this Section
11(a), Cowen shall provide the required notice as specified in Section 12 (Notices).
(b) The
Company shall have the right, by giving ten (10) days notice as hereinafter specified to terminate this Agreement 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 7(g), Section 9, Section 10, Section 16 and Section 17 hereof shall remain
in full force and effect notwithstanding such termination.
(c) Cowen
shall have the right, by giving ten (10) days notice as hereinafter specified to terminate this Agreement 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 7(g), Section 9, Section 10, Section 16 and Section 17 hereof shall remain in
full force and effect notwithstanding such termination.
(d) Unless
earlier terminated pursuant to this Section 11, this Agreement shall automatically terminate upon the issuance and sale of all
of the Placement Shares through Cowen on the terms and subject to the conditions set forth herein; provided that the provisions
of Section 7(g), Section 9, Section 10, Section 16 and Section 17 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 11(a), (b), (c), or (d) above
or otherwise by mutual agreement of the parties; provided, however, that any such termination by mutual agreement shall in all
cases be deemed to provide that Section 7(g), Section 9, Section 10, Section 16 and Section 17 shall
remain in full force and effect.
(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 Cowen 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 7 of this Agreement, in the event of termination of this Agreement by the Company
prior to the sale of any Placement Shares, Cowen shall be entitled only to reimbursement of its out of pocket expenses actually incurred.
12.
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 in this Agreement, and if sent to Cowen, shall be delivered
to Cowen at Xxxxx and Company, LLC, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, fax no. 000-000-0000, Attention: General Counsel, with a
copy to Xxxxx Xxxxxx LLP, 0000 Xxxxxxxx, Xxx Xxxx, XX 00000, attention: Xxxxx X. Xxxxx, Email: xxxxxxx@xxxxxxxxxxx.xxx; or if sent to
the Company, shall be delivered to Aptinyx Inc. 000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000, fax no. 000-000-0000, attention: Xxxxxx
Xxxxxx with a copy to Xxxxxxx Procter LLP, 000 Xxxxxxxx Xxxxxx, Xxxxxx, XX, 00000, attention: Xxxxxx XxXxxxxx, Email: xxxxxxxxx@xxxxxxxxxx.xxx.
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 (as defined below), 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, (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt
requested, postage prepaid), and (iv) when delivered by electronic communication (“Electronic Notice”), at the time the party
sending Electronic Notice receives verification of receipt by the receiving party, other than via auto-reply. For purposes of this Agreement,
“Business Day” shall mean any day on which the Nasdaq and commercial banks in the City of New York are open
for business.
13.
Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Company and Cowen and their
respective successors and the affiliates, controlling persons, officers and directors referred to in Section 9 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 party may assign its rights or obligations under this Agreement without the prior written consent of the other
party; provided, however, that Cowen may assign its rights and obligations hereunder to an affiliate of Cowen without obtaining
the Company’s consent.
14.
Adjustments for Share Splits. The parties acknowledge and agree that all share-related numbers contained in this Agreement
shall be adjusted to take into account any share split, share dividend or similar event effected with respect to the Common Stock.
15.
Entire Agreement; Amendment; Severability. This Agreement (including all schedules and exhibits attached hereto and Placement
Notices issued pursuant hereto) 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. Neither this Agreement nor any term hereof may
be amended except pursuant to a written instrument executed by the Company and Cowen. 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. In connection with this Agreement, the Company and
the Agent hereby agree that this Agreement supersedes and replaces that certain Sales Agreement by and between the Company and Xxxxx and
Company, LLC, dated as of July 1, 2019 (the “July 2019 Sales Agreement”), provided that Section 7(g), Section 9, Section
10, Section 16 and Section 17 of the July 2019 Sales Agreement shall remain in full force and effect.
16.
Applicable Law; Consent to Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York without regard to the principles of conflicts of laws. 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.
17.
Waiver of Jury Trial. The Company and Cowen each hereby irrevocably waives any right it may have to a trial by jury in respect
of any claim based upon or arising out of this Agreement or any transaction contemplated hereby.
18.
Absence of Fiduciary Relationship. The Company acknowledges and agrees that:
(a) Cowen
has been retained solely to act as sales agent in connection with the sale of the Common Stock and that no fiduciary, advisory or agency
relationship between the Company and Cowen has been created in respect of any of the transactions contemplated by this Agreement, irrespective
of whether Cowen has advised or is advising the Company on other matters;
(b) the
Company is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated
by this Agreement;
(c) the
Company has been advised that Cowen and its affiliates are engaged in a broad range of transactions which may involve interests that differ
from those of the Company and that Cowen has no obligation to disclose such interests and transactions to the Company by virtue of any
fiduciary, advisory or agency relationship; and
(d) the
Company waives, to the fullest extent permitted by law, any claims it may have against Cowen, for breach of fiduciary duty or alleged
breach of fiduciary duty in connection with the sale of the Placement Shares under this Agreement and agrees that Cowen shall have no
liability (whether direct or indirect) to the Company in respect of such a fiduciary claim or to any person asserting a fiduciary duty
claim on behalf of or in right of the Company, including stockholders, partners, employees or creditors of the Company.
19.
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.
20.
Definitions. As used in this Agreement, the following term has the meaning set forth below:
(a) “Agent’s
Information” means, solely the following information in the Prospectus: the third sentence of the eighth paragraph under the
caption “Plan of Distribution” in the Prospectus.
[Remainder of Page Intentionally Blank]
If the foregoing correctly
sets forth the understanding between the Company and Cowen, please so indicate in the space provided below for that purpose, whereupon
this letter shall constitute a binding agreement between the Company and Cowen.
| |
Very truly yours, |
| |
|
| |
XXXXX AND COMPANY, LLC |
| |
|
| |
By: |
/s/ Xxxxxxx X. Xxxxxx |
| |
|
Name: Xxxxxxx X. Xxxxxx |
| |
|
Title: Managing Director |
| |
|
| |
ACCEPTED as of the date |
| |
first-above written: |
| |
|
| |
APTINYX INC. |
| |
|
| |
By: |
/s/ Xxxxxxx X. Xxxxxx |
| |
|
Name: Xxxxxxx X. Xxxxxx |
| |
|
Title: Chief
Executive Officer |
SCHEDULE 1
form
of PLACEMENT NOTICE
| Subject: |
Cowen at the Market Offering—Placement Notice |
Gentlemen:
Pursuant to the terms and subject to the conditions
contained in the Sales Agreement between Aptinyx Inc. (the “Company”), and Xxxxx and Company, LLC (“Cowen”)
dated September 16, 2021 (the “Agreement”), I hereby request on behalf of the Company that Cowen sell up to
[ ] shares of the Company’s common stock, par value $0.01 per share, at a minimum market price of $_______ per share. Sales should
begin on the date of this Notice and shall continue until [DATE] [all shares are sold].
SCHEDULE 2
Notice Parties
The Company
| Xxxxxxx X. Xxxxxx |
Chief Executive Officer |
| Xxxxxx Xxxxxx |
Chief Financial Officer and Chief Business Officer |
| Xxxx Xxxx |
Chief Operating Officer |
Xxxxx
| Xxxxxxx X. Xxxxxx |
Managing Director |
| Xxxxxxx Xxxxxx |
Managing Director |
SCHEDULE 3
Compensation
Cowen shall be paid compensation equal to 3.0% of
the gross proceeds from the sales of Common Stock pursuant to the terms of this Agreement.
SCHEDULE 4
Schedule Of Subsidiaries
None.
Exhibit 7(m)
OFFICER CERTIFICATE
The undersigned, the duly qualified and elected
_______________________, of Aptinyx Inc. (“Company”), a Delaware corporation, does hereby certify in such capacity
and on behalf of the Company, pursuant to Section 7(m) of the Sales Agreement dated September 16, 2021 (the “Sales
Agreement”) between the Company and Xxxxx and Company, LLC, that to the knowledge of the undersigned.
(i) The
representations and warranties of the Company in Section 6 of the Sales Agreement (A) to the extent such representations and warranties
are subject to qualifications and exceptions contained therein relating to materiality or Material Adverse Change, are true and correct
on and as of the date hereof with the same force and effect as if expressly made on and as of the date hereof, except for those representations
and warranties that speak solely as of a specific date and which were true and correct as of such date, and (B) to the extent such representations
and warranties are not subject to any qualifications or exceptions, are true and correct in all material respects as of the date hereof
as if made on and as of the date hereof with the same force and effect as if expressly made on and as of the date hereof except for those
representations and warranties that speak solely as of a specific date and which were true and correct as of such date; and
(ii) The
Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied pursuant to the Sales Agreement
at or prior to the date hereof.
Capitalized terms used but
not defined herein shall have the meanings ascribed to them in the Sales Agreement.
