Exhibit 10.2

 

[g282001kl01i001.jpg]

 

December 3, 2017

 

STRICTLY CONFIDENTIAL

 

Cancer Genetics, Inc.

201 Route 17 North 2nd Floor

Rutherford, New Jersey 07070

 

Attn: Panna L. Sharma, President and Chief Executive Officer

 

Dear Mr. Sharma:

 

This letter agreement (this “Agreement”) constitutes the agreement between
Cancer Genetics, Inc. (the “Company”) and H.C. Wainwright & Co., LLC
(“Wainwright”), that Wainwright shall serve as the exclusive agent, advisor or
underwriter in any offering (each, an “Offering”) of securities of the Company
(“Securities”) during the Term (as defined below) of this Agreement.  The terms
of each Offering and the Securities issued in connection therewith shall be
mutually agreed upon by the Company and Wainwright and nothing herein implies
that Wainwright would have the power or authority to bind the Company and
nothing herein implies that the Company shall have an obligation to issue any
Securities.  It is understood that Wainwright’s assistance in an Offering will
be subject to the satisfactory completion of such investigation and inquiry into
the affairs of the Company as Wainwright deems appropriate under the
circumstances and to the receipt of all internal approvals of Wainwright in
connection with the transaction.  The Company expressly acknowledges and agrees
that Wainwright’s involvement in an Offering is strictly on a reasonable best
efforts basis and that the consummation of an Offering will be subject to, among
other things, market conditions.  The execution of this Agreement does not
constitute a commitment by Wainwright to purchase the Securities and does not
ensure a successful Offering of the Securities or the success of Wainwright with
respect to securing any other financing on behalf of the Company.  Wainwright
may retain other brokers, dealers, agents or underwriters on its behalf in
connection with an Offering. It is hereby acknowledged by the parties that the
Company will pay Benchmark an independent financial advisory fee in the amount
of $50,000, $25,000 of which will be deducted from the fees payable to
Wainwright by the Company at the first Closing of an Offering.

 

A.                                    Compensation; Reimbursement.  At the
closing of each Offering (each, a “Closing”), the Company shall compensate
Wainwright as follows:

 

1.              Cash Fee.  The Company shall pay to Wainwright a cash fee, or as
to an underwritten Offering an underwriter discount, equal to 7.0% of the
aggregate gross proceeds raised in each Offering.

 

2.              Warrant Coverage.  The Company shall issue to Wainwright or its
designees at each Closing, warrants (the “Wainwright Warrants”) to purchase that
number of shares of common stock of the Company equal to 5% of the aggregate
number of shares of

 

--------------------------------------------------------------------------------

 

Common Stock placed in each Offering (if the Securities include a “greenshoe” or
“additional investment” option component, such shares of Common Stock underlying
such options if exercised).  If the Securities included in an Offering are
non-convertible, the Wainwright Warrants shall be determined by dividing the
gross proceeds raised in such Offering divided by the then market price of the
Common Stock.  The Wainwright Warrants shall have the same terms as the warrants
issued to investors in the applicable Offering, except that such Wainwright
Warrants shall have an exercise price equal to 125% of the offering price per
share (or unit, if applicable) in the applicable Offering and if such offering
price is not available, the market price of the common stock on the date an
Offering is commenced.  If no warrants are issued to investors in an Offering,
the Wainwright Warrants shall be in a customary form reasonably acceptable to
Wainwright, have a term of 5 years and an exercise price equal to 110% of the
then market price of the Common Stock.

 

3.              Expense Allowance.  Out of the proceeds of each Closing, the
Company also agrees to pay Wainwright $50,000 for non-accountable expenses; plus
the additional reimbursable amount payable by the Company pursuant to Paragraph
D.3 hereunder; provided, however, that such reimbursement amount in no way
limits or impairs the indemnification and contribution provisions of this
Agreement.

 

4.              Tail Fee.  Wainwright shall be entitled to compensation under
clauses (1) and (2) hereunder, calculated in the manner set forth therein, with
respect to any public or private offering or other equity or equity-linked
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 Wainwright had contacted and brought over the wall during the Term, or who
purchased securities from the Company during the Term, if such Tail Financing is
consummated at any time within the 12-month period following the expiration or
termination of this Agreement other than with respect to investors listed on
Exhibit A hereto.

 

B.                                    Term and Termination of Engagement;
Exclusivity.  The term of Wainwright’s exclusive engagement will begin on the
date hereof and end sixty (60) days after the date hereof (the “Term”). 
Notwithstanding anything to the contrary contained herein, the Company agrees
that the provisions relating to the payment of fees, reimbursement of expenses,
tail, indemnification and contribution, confidentiality, conflicts, independent
contractor and waiver of the right to trial by jury will survive any termination
of this Agreement.  Notwithstanding anything to the contrary contained herein,
the Company has the right to terminate the Agreement for cause in compliance
with FINRA Rule 5110(f)(2)(D)(ii). The exercise of such right of termination for
cause eliminates the Company’s obligations with respect to the provisions
relating to the tail fees. Notwithstanding anything to the contrary contained in
this Agreement, in the event that an Offering pursuant to this Agreement shall
not be carried out for any reason whatsoever during the Term, the Company shall
be obligated to pay to Wainwright its actual and accountable out-of-pocket
expenses related to an Offering (including the fees and disbursements of
Wainwright’s legal counsel) up to a maximum amount of $25,000. During
Wainwright’s engagement hereunder: (i) the Company will not, and will not permit
its representatives to, other than in coordination with Wainwright, contact or
solicit institutions, corporations or other entities or individuals as potential
purchasers of

 

2

--------------------------------------------------------------------------------

 

the Securities but this shall not prohibit the Company from engaging in
discussions with respect to potential mergers and acquisitions or any strategic
transactions and (ii) the Company will not pursue any financing transaction
which would be in lieu of an Offering. Furthermore, the Company agrees that
during Wainwright’s engagement hereunder, all inquiries, whether direct or
indirect, from prospective investors (not otherwise carved out in the prior
sentence) will be referred to Wainwright and will be deemed to have been
contacted by Wainwright in connection with an Offering. Additionally, except as
set forth hereunder, the Company represents, warrants and covenants that no
brokerage or finder’s fees or commissions are or will be payable by the Company
or any subsidiary of the Company to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other third-party with
respect to any Offering.

 

C.                                    Information; Reliance.  The Company shall
furnish, or cause to be furnished, to Wainwright all information requested by
Wainwright for the purpose of rendering services hereunder and conducting due
diligence (all such information being the “Information”).  In addition, the
Company agrees to make available to Wainwright upon request from time to time
the officers, directors, accountants, counsel and other advisors of the
Company.  The Company recognizes and confirms that Wainwright (a) will use and
rely on the Information, including any documents provided to investors in each
Offering (the “Offering Documents”) which shall include any Purchase Agreements
(as defined below), 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 Wainwright or its representatives to discuss all information relevant for
disclosure in the Offering Documents and will cooperate in any investigation
undertaken by Wainwright thereof, including any document included or
incorporated by reference therein.  At each Offering, at the request of
Wainwright, the Company shall deliver such legal letters, opinions, comfort
letters, officers’ and secretary certificates and good standing certificates,
all in form and substance satisfactory to Wainwright and its counsel as is
customary for such Offering.  Wainwright shall be a third party beneficiary of
any representations, warranties, covenants and closing conditions made by the
Company in any Offering Documents, including representations, warranties,
covenants and closing conditions made to any investor in an Offering.

 

D.                                    Related Agreements.  At each Offering, the
Company shall enter into the following additional agreements:

 

1.              Underwritten Offering.  If an Offering is an underwritten
Offering, the Company and Wainwright shall enter into a customary underwriting
agreement in form and substance satisfactory to Wainwright and its counsel.

 

2.              Best Efforts Offering.  If an Offering is on a best efforts
basis, the sale of Securities to the investors in the Offering will be evidenced
by a purchase agreement (“Purchase Agreement”) between the Company and such
investors in a form reasonably satisfactory to the Company and Wainwright. 
Prior to

 

3

--------------------------------------------------------------------------------

 

the signing of any Purchase Agreement, officers of the Company with
responsibility for financial affairs will be available to answer inquiries from
prospective investors.

 

3.              Escrow and Settlement.  In respect of each Offering, the Company
and Wainwright shall enter into an escrow agreement with a third party escrow
agent, which may also be Wainwright’s clearing agent, pursuant to which
Wainwright’s compensation and expenses shall be paid from the gross proceeds of
the Securities sold.  If the Offering is settled in whole or in part via
delivery versus payment (“DVP”), Wainwright shall arrange for its clearing agent
to provide the funds to facilitate such settlement. The Company shall bear the
cost of the escrow agent and shall reimburse Wainwright for the actual
out-of-pocket cost up to $10,000 of such clearing agent settlement and
financing, if any.

 

4.              FINRA Amendments.  Notwithstanding anything herein to the
contrary, in the event that Wainwright 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) in writing upon the request of
Wainwright to comply with any such rules; provided that any such amendments
shall not provide for terms that are less favorable to the Company.

 

E.                                     Confidentiality.  In the event of the
consummation or public announcement of any Offering, Wainwright shall have the
right to disclose its participation in such Offering, including, without
limitation, the Offering at its cost of “tombstone” advertisements in financial
and other newspapers and journals.

 

F.                                      Indemnity.

 

1.              In connection with the Company’s engagement of Wainwright as
Offering agent, the Company hereby agrees to indemnify and hold harmless
Wainwright and its affiliates, and the respective controlling persons,
directors, officers, members, shareholders, agents and employees of any of the
foregoing (collectively the “Indemnified Persons”), from and against any and all
claims, actions, suits, proceedings (including those of shareholders), damages,
liabilities and expenses incurred by any of them (including the reasonable fees
and expenses of counsel), as incurred, (collectively a “Claim”), that are
(A) related to or arise out of (i) any actions taken or omitted to be taken
(including any untrue statements made or any statements omitted to be made) by
the Company, or (ii) any actions taken or omitted to be taken by any Indemnified
Person in connection with the Company’s engagement of Wainwright, or
(B) otherwise relate to or arise out of Wainwright’s activities on the Company’s
behalf under Wainwright’s engagement, and the Company shall reimburse any
Indemnified Person for all expenses (including the reasonable fees and expenses
of counsel) as incurred by such Indemnified

 

4

--------------------------------------------------------------------------------

 

Person in connection with investigating, preparing or defending any such claim,
action, suit or proceeding, whether or not in connection with pending or
threatened litigation in which any Indemnified Person is a party.  The Company
will not, however, be responsible for any Claim that is finally judicially
determined to have resulted from the gross negligence or willful misconduct of
any person seeking indemnification for such Claim.  The Company further agrees
that no Indemnified Person shall have any liability to the Company for or in
connection with the Company’s engagement of Wainwright except for any Claim
incurred by the Company as a result of such Indemnified Person’s gross
negligence or willful misconduct.

 

2.              The Company further agrees that it will not, without the prior
written consent of Wainwright, settle, compromise or consent to the entry of any
judgment in any pending or threatened Claim in respect of which indemnification
may be sought hereunder (whether or not any Indemnified Person is an actual or
potential party to such Claim), unless such settlement, compromise or consent
includes an unconditional, irrevocable release of each Indemnified Person from
any and all liability arising out of such Claim.

 

3.              Promptly upon receipt by an Indemnified Person of notice of any
complaint or the assertion or institution of any Claim with respect to which
indemnification is being sought hereunder, such Indemnified Person shall notify
the Company in writing of such complaint or of such assertion or institution but
failure to so notify the Company shall not relieve the Company from any
obligation it may have hereunder, except and only to the extent such failure
results in the forfeiture by the Company of substantial rights and defenses.  If
the Company is requested by such Indemnified Person, the Company will assume the
defense of such Claim, including the employment of counsel reasonably
satisfactory to such Indemnified Person and the payment of the fees and expenses
of such counsel.  In the event, however, that legal counsel to such Indemnified
Person reasonably determines that having common counsel would present such
counsel with a conflict of interest or if the defendant in, or target of, any
such Claim, includes an Indemnified Person and the Company, and legal counsel to
such Indemnified Person reasonably concludes that there may be legal defenses
available to it or other Indemnified Persons different from or in addition to
those available to the Company, then such Indemnified Person may employ its own
separate counsel to represent or defend him, her or it in any such Claim and the
Company shall pay the reasonable fees and expenses of such counsel. 
Notwithstanding anything herein to the contrary, if the Company fails timely or
diligently to defend, contest, or otherwise protect against any Claim, the
relevant Indemnified Person shall have the right, but not the obligation, to
defend, contest, compromise, settle, assert crossclaims, or counterclaims or
otherwise protect against the same, and shall be fully indemnified by the
Company therefor, including without limitation, for the reasonable fees and
expenses of its counsel and all amounts paid as a result of such Claim or the
compromise or settlement thereof.  In addition, with respect to any Claim in
which the Company assumes the defense, the Indemnified

 

5

--------------------------------------------------------------------------------

 

Person shall have the right to participate in such Claim and to retain his, her
or its own counsel therefor at his, her or its own expense.

 

4.              The Company agrees that if any indemnity sought by an
Indemnified Person hereunder is held by a court to be unavailable for any reason
then (whether or not Wainwright is the Indemnified Person), the Company and
Wainwright shall contribute to the Claim for which such indemnity is held
unavailable in such proportion as is appropriate to reflect the relative
benefits to the Company, on the one hand, and Wainwright on the other, in
connection with Wainwright’s engagement referred to above, subject to the
limitation that in no event shall the amount of Wainwright’s contribution to
such Claim exceed the amount of fees actually received by Wainwright from the
Company pursuant to Wainwright’s engagement.  The Company hereby agrees that the
relative benefits to the Company, on the one hand, and Wainwright on the other,
with respect to Wainwright’s engagement shall be deemed to be in the same
proportion as (a) the total value paid or proposed to be paid or received by the
Company pursuant to the applicable Offering (whether or not consummated) for
which Wainwright is engaged to render services bears to (b) the fee paid or
proposed to be paid to Wainwright in connection with such engagement.

 

5.              The Company’s indemnity, reimbursement and contribution
obligations under this Agreement (a) shall be in addition to, and shall in no
way limit or otherwise adversely affect any rights that any Indemnified Person
may have at law or at equity and (b) shall be effective whether or not the
Company is at fault in any way.

 

G.                                    Limitation of Engagement to the Company. 
The Company acknowledges that Wainwright has been retained only by the Company,
that Wainwright is providing services hereunder as an independent contractor
(and not in any fiduciary or agency capacity) and that the Company’s engagement
of Wainwright is not deemed to be on behalf of, and is not intended to confer
rights upon, any shareholder, owner or partner of the Company or any other
person not a party hereto as against Wainwright or any of its affiliates, or any
of its or their respective officers, directors, controlling persons (within the
meaning of Section 15 of the Securities Act or Section 20 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), employees or agents. 
Unless otherwise expressly agreed in writing by Wainwright, no one other than
the Company is authorized to rely upon this Agreement or any other statements or
conduct of Wainwright, and no one other than the Company is intended to be a
beneficiary of this Agreement.  The Company acknowledges that any recommendation
or advice, written or oral, given by Wainwright to the Company in connection
with Wainwright’s engagement is intended solely for the benefit and use of the
Company’s management and directors in considering a possible Offering, and any
such recommendation or advice is not on behalf of, and shall not confer any
rights or remedies upon, any other person or be used or relied upon for any
other purpose.  Wainwright shall not have the authority to make any commitment
binding on the Company.  The Company, in its sole discretion, shall have the
right to reject any investor introduced to it by Wainwright.

 

6

--------------------------------------------------------------------------------

 

H.                                   Limitation of Wainwright’s Liability to the
Company.  Wainwright and the Company further agree that neither Wainwright nor
any of its affiliates or any of its their respective officers, directors,
controlling persons (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act), employees or agents shall have any liability to
the Company, its security holders or creditors, or any person asserting claims
on behalf of or in the right of the Company (whether direct or indirect, in
contract, tort, for an act of negligence or otherwise) for any losses, fees,
damages, liabilities, costs, expenses or equitable relief arising out of or
relating to this Agreement or the services rendered hereunder, except for
losses, fees, damages, liabilities, costs or expenses that arise out of or are
based on any action of or failure to act by Wainwright and that are finally
judicially determined to have resulted solely from the gross negligence or
willful misconduct of Wainwright.

 

I.                                        Governing Law.  This Agreement shall
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.  Any
disputes that arise under this Agreement, even after the termination of this
Agreement, will be heard only in the state or federal courts located in the City
of New York, State of New York.  The parties hereto expressly agree to submit
themselves to the jurisdiction of the foregoing courts in the City of New York,
State of New York. The parties hereto expressly waive any rights they may have
to contest the jurisdiction, venue or authority of any court sitting in the City
and State of New York.  The prevailing party in such litigation shall be
entitled to have and recover from the other party the costs and expenses
incurred in connection therewith, including its reasonable attorneys’ fees.  Any
rights to trial by jury with respect to any such action, proceeding or suit are
hereby waived by Wainwright and the Company.

 

J.                                        Representations, Warranties and
Covenants of Placement Agent.  Wainwright hereby represents and warrants to the
Company that the following representations and warranties are true and correct
as of the date of this Agreement:

 

1.                                      The Placement Agent is a member in good
standing of FINRA and is registered as a broker-dealer under the Exchange Act. 
The Placement Agent is in compliance with all applicable rules and regulations
of the SEC and FINRA, except to the extent that such noncompliance would not
have a material adverse effect on the transactions contemplated hereby.  None of
the Placement Agent or its affiliates, or any person acting on behalf of the
foregoing (other than the Company or its affiliates or any person acting on its
or their behalf, in respect of which no representation is made) has or will
engage in general advertising or general solicitation or has taken nor will it
take any action that conflicts with the conditions and requirements of, or that
would make unavailable with respect to the Offering, the exemption(s) from
registration available pursuant to Rule 506 of Regulation D or
Section 4(a)(2) of the Act, or knows of any reason why any such exemption would
be otherwise unavailable to it.

 

2.                                      Neither Placement Agent nor any
Placement Agent Related Persons (as defined below) are subject to any
Disqualification Event.  Placement Agent has exercised reasonable care to
determine whether any Placement Agent Covered Person is subject to a
Disqualification Event.  The Prospectus will contain a true and complete

 

7

--------------------------------------------------------------------------------

 

description of the matters required to be disclosed with respect to Placement
Agent and Placement Agent Related Persons pursuant to the disclosure
requirements of Rule 506(e) of Regulation D, to the extent applicable. As used
herein, “Placement Agent Related Persons” means any predecessor of Placement
Agent, any affiliated company, any director, executive officer, other officer of
Placement Agent participating in the Offering, any general partner or managing
member of Placement Agent, any beneficial owner of 20% or more of Placement
Agent’s outstanding voting equity securities, calculated on the basis of voting
power, and any “promoter” (as defined in Rule 405 under the Act) connected with
Placement Agent in any capacity.  Placement Agent agrees to promptly notify the
Company in writing of (i) any Disqualification Event relating to any Placement
Agent Related Person and (ii) any event that would, with the passage of time,
become a Disqualification Event relating to any Placement Agent Related Person.

 

K.                                    Notices.  All notices hereunder will be in
writing and sent by certified mail, hand delivery, overnight delivery or fax, if
sent to Wainwright, at the address set forth on the first page hereof, e-mail:
notices@hcwco.com, Attention: Head of Investment Banking, and if sent to the
Company, to the address set forth on the first page hereof, e-mail: 
panna.sharma@cgix.com, Attention:  Chief Executive Officer.  Notices sent by
certified mail shall be deemed received five days thereafter, notices sent by
hand delivery or overnight delivery shall be deemed received on the date of the
relevant written record of receipt, notices delivered by fax shall be deemed
received as of the date and time printed thereon by the fax machine and notices
sent by e-mail shall be deemed received as of the date and time they were sent.

 

L.                                     Conflicts.  The Company acknowledges that
Wainwright and its affiliates may have and may continue to have investment
banking and other relationships with parties other than the Company pursuant to
which Wainwright may acquire information of interest to the Company.  Wainwright
shall have no obligation to disclose such information to the Company or to use
such information in connection with any contemplated transaction.

 

M.                                 Anti-Money Laundering.  To help the United
States government fight the funding of terrorism and money laundering, the
federal laws of the United States require all financial institutions to obtain,
verify and record information that identifies each person with whom they do
business.  This means Wainwright must ask the Company 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
Wainwright considers appropriate to verify the Company’s identity, such as
certified articles of incorporation, a government-issued business license, a
partnership agreement or a trust instrument.

 

N.                                    Miscellaneous.  The Company represents and
warrants that it 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.  This Agreement shall
not be modified or amended except in writing signed by Wainwright and the
Company.  This Agreement shall be binding upon and inure to the benefit of both
Wainwright and the

 

8

--------------------------------------------------------------------------------

 

Company and their respective assigns, successors, and legal representatives. 
This Agreement constitutes the entire agreement of Wainwright and the Company
with respect to the subject matter hereof and supersedes any prior agreements
with respect to the subject matter hereof.  If any provision of this Agreement
is determined to be invalid or unenforceable in any respect, such determination
will not affect such provision in any other respect, and the remainder of the
Agreement shall remain in full force and effect.  This Agreement may be executed
in counterparts (including facsimile or electronic counterparts), each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.

 

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

 

9

--------------------------------------------------------------------------------

 

In acknowledgment that the foregoing correctly sets forth the understanding
reached by Wainwright and the Company, please sign in the space provided below,
whereupon this letter shall constitute a binding Agreement as of the date
indicated above.

 

 

Very truly yours,

 

 

 

H.C. WAINWRIGHT & CO., LLC

 

 

 

By:

/s/ Edward D. Silvera

 

 

Name:

Edward D. Silvera

 

 

Title:

COO

 

Accepted and Agreed:

 

 

 

CANCER GENETICS, INC.

 

 

 

By:

/s/ John A. Roberts

 

 

Name:

John A. Roberts

 

 

Title:

COO

 

 

10

--------------------------------------------------------------------------------

 

EXHIBIT A

 

INVESTORS NOT COVERED BY TAIL FEE:

 

Aspire Capital Partners

Diker Management

Grandeur Peak Global Advisors

Granite Investment Partners

Jacob Asset Management

Officers and Directors of the Company and their affiliates

 

Ex. A-1

--------------------------------------------------------------------------------