Exhibit 10.2

 

July 26, 2018

 

PERSONAL AND CONFIDENTIAL

 

OncoCyte Corporation

1010 Atlantic Avenue, Suite 102

Alameda, CA 94501

 

Dear Sirs:

 

This letter will confirm the understanding and agreement (the “Agreement”)
between Chardan Capital Markets, LLC (“Broker”) and OncoCyte Corporation (the
“Company”) as follows:

 

1. Engagement: The Company hereby engages Broker as its exclusive agent in the
private or public placement(s) of one or more classes or series of registered or
unregistered securities of the Company to investors (the “Investors”). Such
securities (the “Securities”) may take the form of common stock or other
equity-linked securities or any combination thereof. Such placements shall be
referred to as the “Transactions”. Broker may retain other brokers or dealers to
act as sub-agents or selected-dealers on its behalf in connection with such
Transactions.     2. Broker’s Role: Broker hereby accepts the engagement
described herein and, in that connection, agrees to:

 

  (a) Review any offering documents used in connection with each Transaction
(the “Offering Documents”) describing the Company and the Securities;        
(b) review with the Company the Investors to whom the Offering Documents will be
provided;         (c) assist in the preparation of other communications to be
used in placing the Securities, whether in the form of letter, circular, notice
or otherwise; and         (d) assist and advise the Company with respect to the
negotiation of the sale of the Securities to the Investors.

 

Chardan Capital Markets, LLC

17 State Street, Suite 1600

New York, NY 10004

 

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3. Term; Exclusivity: This exclusive engagement will commence on the date hereof
and terminate five business days following the date on which the party receives
written notice from the other party of termination of this engagement; provided
that no such notice may be given by the Company for a period of three (3) months
after the date hereof. During Broker’s engagement hereunder: (i) the Company
will not, and will not permit its representatives to, other than in coordination
with Broker, contact or solicit institutions, corporations or other entities or
individuals as potential purchasers of the Securities and (ii) the Company will
not pursue any financing transaction which would be in lieu of a Transaction.
Furthermore, the Company agrees that during Broker’s engagement hereunder, all
inquiries, whether direct or indirect, from prospective Investors will be
referred to Broker and will be deemed to have been contacted by Broker in
connection with a Transaction. Upon termination of this Agreement the Company
shall pay to Broker all fees earned and reimburse Broker for all expenses
incurred, in accordance with Paragraphs 7 and 8 hereof, respectively. The
Company agrees to pay Broker any fees specified in Paragraph 7 during the time
limitations specified herein. The Company agrees that this section 3 and the
provisions relating to the payment of fees, reimbursement of expenses,
indemnification and contribution, confidentiality, conflicts, independent
contractor and waiver of the right to trial by jury will survive any termination
of this letter agreement.     4. Best Efforts: It is understood that Broker’s
involvement in a Transaction is strictly on a reasonable best efforts basis and
that the consummation of a Transaction will be subject to, among other things,
market conditions. It is understood that Broker’s assistance in a Transaction
will be subject to the satisfactory completion of such investigation and inquiry
into the affairs of the Company as Broker deems appropriate under the
circumstances (such investigation hereinafter to be referred to as “Due
Diligence”) and to the receipt of all internal approvals of Broker in connection
with the transaction. Broker shall have the right in its sole discretion to
terminate this Agreement if the outcome of the Due Diligence is not satisfactory
to Broker or if approval of its internal committees is not obtained.     5.
Information: The Company shall furnish, or cause to be furnished, to Broker all
information requested by Broker for the purpose of rendering services hereunder
(all such information being the “Information”). In addition, the Company agrees
to make available to Broker upon request from time to time the officers,
directors, accountants, counsel and other advisors of the Company. The Company
recognizes and confirms that Broker (a) will use and rely on the Information,
including the Offering Documents, and on information available from generally
recognized public sources in performing the services contemplated by this
Agreement without having independently verified the same; (b) does not assume
responsibility for the accuracy or completeness of the Offering Documents or the
Information and such other information; and (c) will not make an appraisal of
any of the assets or liabilities of the Company. Upon reasonable request, the
Company will meet with Broker or its representatives to discuss all information
relevant for disclosure in the Offering Documents and will cooperate in any
investigation undertaken by Broker thereof, including any document included or
incorporated by reference therein. Broker shall be a third party beneficiary of
any representations, warranties and covenants made by the Company to any
Investor in a Transaction.

 

Chardan Capital Markets, LLC

17 State Street, Suite 1600

New York, NY 10004

 

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6. Related Agreement:

 

  (a) If required by Broker, the Company shall enter into a Placement Agency
Agreement with Broker that is substantially consistent with Broker’s standard
form, modified as appropriate to reflect the terms of the applicable Transaction
and containing such terms, covenants, conditions, representations, warranties,
and providing for the delivery of legal opinions, comfort letters and officer’s
certificates, all in form and substance satisfactory to Broker and its counsel.
        (b) Unless the Transaction is an underwritten offering by Broker, in
which case the Company shall enter into an underwriting agreement with Broker
that is customary for such offerings, if required by the Investors, the sale of
Securities to any Investor will be evidenced by a purchase agreement (“Purchase
Agreement”) between the Company and such Investor in a form reasonably
satisfactory to the Company and Broker. Prior to the signing of any Purchase
Agreement, officers of the Company with responsibility for financial affairs
will be available to answer inquiries from prospective investors.         (c)
Notwithstanding anything herein to the contrary, in the event that Broker
determines that any of the terms provided for hereunder shall not comply with a
FINRA rule, including but not limited to FINRA Rule 5110, then the Company shall
agree to amend this Agreement (or include such revisions in the final
underwriting or placement agency agreement) in writing upon the request of
Broker to comply with any such rules; provided that any such amendments shall
not provide for terms that are less favorable to the Company.

 

Chardan Capital Markets, LLC

17 State Street, Suite 1600

New York, NY 10004

 

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7. Fees: As compensation for the services to be rendered by Broker hereunder,
the Company will pay Broker the following fee (“Transaction Fee”):

 

  (a) A cash fee payable immediately upon the closing of each Transaction and
equal to 6% of the aggregate gross proceeds raised in such Transaction by
investors whom Broker introduces to the Company pursuant to this Agreement
(which, for the sake of clarity, excludes directors, officers and prior
investors of the Company).         (b)  [Reserved]         (c) The Company also
agrees to reimburse Broker’s reasonable and documented legal fees and expenses
equal to $25,000 (provided, however, that such expense cap in no way limits or
impairs the indemnification and contribution provisions of this Agreement).    
    (d) Broker shall be entitled to a Transaction Fee under clause (a)
hereunder, calculated in the manner set forth therein, with respect to any
public or private offering or other financing or capital-raising transaction of
any kind (“Tail Financing”) to the extent that such financing or capital is
provided to the Company by investors whom Broker had introduced, directly or
indirectly, to the Company during the term of this Agreement, if such Tail
Financing is consummated at any time within the 6-month period following the
expiration or termination of this Agreement.

 

8. Indemnification:

 

  (a) To the extent permitted by law, the Company will indemnify Broker and its
affiliates, stockholders, directors, officers, employees and controlling persons
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) against all losses, claims, damages, expenses and liabilities, as
the same are incurred (including the reasonable fees and expenses of counsel),
relating to or arising out of its activities hereunder or pursuant to this
engagement letter, except to the extent that any losses, claims, damages,
expenses or liabilities (or actions in respect thereof) are found in a final
judgment (not subject to appeal) by a court of law to have resulted primarily
and directly from Broker’s willful misconduct or gross negligence in performing
the services described herein.         (b) Promptly after receipt by Broker of
notice of any claim or the commencement of any action or proceeding with respect
to which Broker is entitled to indemnity hereunder, Broker will notify the
Company in writing of such claim or of the commencement of such action or
proceeding, and the Company will assume the defense of such action or proceeding
and will employ counsel reasonably satisfactory to Broker and will pay the fees
and expenses of such counsel. Notwithstanding the preceding sentence, Broker
will be entitled to employ counsel separate from counsel for the Company and
from any other party in such action if counsel for Broker reasonably determines
that it would be inappropriate under the applicable rules of professional
responsibility for the same counsel to represent both the Company and Broker. In
such event, the reasonable fees and disbursements of no more than one such
separate counsel will be paid by the Company, in addition to local counsel. The
Company will have the exclusive right to settle the claim or proceeding provided
that the Company will not settle any such claim, action or proceeding without
the prior written consent of Broker, which will not be unreasonably withheld.

 

Chardan Capital Markets, LLC

17 State Street, Suite 1600

New York, NY 10004

 

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  (c) The Company agrees to notify Broker promptly of the assertion against it
or any other person of any claim or the commencement of any action or proceeding
relating to a transaction contemplated by this engagement letter.         (d) If
for any reason the foregoing indemnity is unavailable to Broker or insufficient
to hold Broker harmless, then the Company shall contribute to the amount paid or
payable by Broker as a result of such losses, claims, damages or liabilities in
such proportion as is appropriate to reflect not only the relative benefits
received by the Company on the one hand and Broker on the other, but also the
relative fault of the Company on the one hand and Broker on the other that
resulted in such losses, claims, damages or liabilities, as well as any relevant
equitable considerations. The amounts paid or payable by a party in respect of
losses, claims, damages and liabilities referred to above shall be deemed to
include any legal or other fees and expenses incurred in defending any
litigation, proceeding or other action or claim. Notwithstanding the provisions
hereof, Broker’s share of the liability hereunder shall not be in excess of the
amount of fees actually received, or to be received, by Broker under this
engagement letter (excluding any amounts received as reimbursement of expenses
incurred by Broker).         (e) These indemnification provisions shall remain
in full force and effect whether or not the transaction contemplated by this
engagement letter is completed and shall survive the termination of this
engagement letter, and shall be in addition to any liability that the Company
might otherwise have to any indemnified party under this engagement letter or
otherwise.

 

Chardan Capital Markets, LLC

17 State Street, Suite 1600

New York, NY 10004

 

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9. Governing Laws: This letter agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be fully performed therein. The Company irrevocably submits to the
jurisdiction of any court of the State of New York located in the City and
County of New York or in the United States District Court for the Southern
District of New York for the purpose of any suit, action or other proceeding
arising out of this letter agreement or our engagement hereunder.       Each of
the Company and Broker hereby waives any right it may have to a trial by jury in
respect of any claim brought by or on behalf of either party based upon, arising
out of or in connection with this letter agreement, our engagement hereunder or
the transaction contemplated hereby.       All fees and expenses payable
hereunder will be payable in U.S. dollars in cash. The Company hereby
irrevocably consents to the service of process in any proceeding by the mailing
of copies of such process to the Company at its address set forth above.     10.
Confidentiality: Except as required by law, this Agreement and the services and
advice to be provided by Broker hereunder, shall not be disclosed to third
parties without Broker’s prior written permission. Notwithstanding, Broker shall
be permitted to advertise the services it provided in connection with each
Transaction subsequent to the consummation of such Transaction. Such expense
shall not be reimbursable under paragraph 7 hereof.     11. No Brokers: The
Company represents and warrants to Broker that there are no brokers,
representatives or other persons which have an interest in compensation due to
Broker from any transaction contemplated herein or which would otherwise be due
any fee, commission or remuneration upon consummation of any Transaction.    
12. Authorization: The Company and Broker represent and warrant that each has
all requisite power and authority to enter into and carry out the terms and
provisions of this Agreement and the execution, delivery and performance of this
Agreement does not breach or conflict with any agreement, document or instrument
to which it is a party or bound.     13. Independent Contractor: The Company
acknowledges that in performing its services, Broker is acting as an independent
contractor, and not as a fiduciary, agent or otherwise, of the Company or any
other person. The Company acknowledges that in performing its services
hereunder, Broker shall act solely pursuant to a contractual relationship on an
arm’s length basis (including in connection with determining the terms of any
Transaction). Any review by Broker of the Company, the transaction contemplated
hereby or other matters relating to such transactions has been and shall be
performed solely for the benefit of Broker and shall not be on behalf of the
Company. The Company agrees that is shall not claim that Broker owes a fiduciary
duty to the Company in connection with such transaction or the process leading
thereto. No one other than the Company is authorized to rely upon engagement of
Broker hereunder or any statements, advice, opinions or conduct by Broker. The
Company further acknowledges that Broker may perform certain of the services
described herein through one or more of its affiliates and any such affiliates
shall be entitled to the benefit of this Agreement. This Paragraph 13 shall
survive the termination or expiration of this Agreement.

 

Chardan Capital Markets, LLC

17 State Street, Suite 1600

New York, NY 10004

 

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14. Conflicts: The Company acknowledges that Broker and its affiliates may have
and may continue to have investment banking and other relationships with parties
other than the Company pursuant to which Broker may acquire information of
interest to the Company. Broker shall have no obligation to disclose such
information to the Company or to use such information in connection with any
contemplated transaction.     15. Anti-Money Laundering: To help the United
States government fight the funding of terrorism and money laundering, the
federal laws of the United States requires all financial institutions to obtain,
verify and record information that identifies each person with whom they do
business. This means we must ask you for certain identifying information,
including a government-issued identification number (e.g., a U.S. taxpayer
identification number) and such other information or documents that we consider
appropriate to verify your identity, such as certified articles of
incorporation, a government-issued business license, a partnership agreement or
a trust instrument.     16. Miscellaneous: This Agreement constitutes the entire
understanding and agreement between the Company and Broker with respect to the
subject matter hereof and supersedes all prior understanding or agreements
between the parties with respect thereto, whether oral or written, express or
implied. Any amendments or modifications must be executed in writing by both
parties. It is understood and agreed that Broker’s services hereunder will not
include providing any tax, accounting, legal or regulatory advice or developing
any tax strategies for the Company. This Agreement and all rights, liabilities
and obligations hereunder shall be binding upon and inure to the benefit of each
party’s successors but may not be assigned without prior written approval of the
other party. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument. The descriptive headings of the
Paragraphs of this Agreement are inserted for convenience only, do not
constitute a part of this Agreement and shall not affect in anyway the meaning
or interpretation of this Agreement.

 

*********************

 

Chardan Capital Markets, LLC

17 State Street, Suite 1600

New York, NY 10004

 

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If all the foregoing is acceptable to you, please so indicate by signing in the
space provided below and returning a signed copy of this letter to us for our
records.

 

Broker is delighted to accept this engagement and looks forward to working with
you. Please confirm that the foregoing correctly set forth our agreement by
signing the enclosed duplicate of this letter in the space provided and
returning it, whereupon this letter shall constitute a binding agreement as of
the date first above written.

 

  Very truly yours,       CHARDAN CAPITAL MARKETS, LLC         By: /s/ Steven
Urbach   Name: Steven Urbach   Title: CEO

 

ACCEPTED AND AGREED TO   AS OF THE ABOVE DATE:         ONCOCYTE CORPORATION    
    BY: /s/ Mitchell Levine   Name:  Mitchell Levine   Title: CFO  

 

Chardan Capital Markets, LLC

17 State Street, Suite 1600

New York, NY 10004

 

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