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Exhibit 10.38

STOCK PURCHASE AGREEMENT
 
ONCOCYTE CORPORATION
 
3,000,000 Common Shares
 
Price: $0.667 per Share

READ THIS AGREEMENT CAREFULLY BEFORE YOU INVEST

The common shares, no par value (“Shares”) have not been registered under the
Securities Act of 1933, as amended, or applicable state securities laws and may
not be offered for sale, sold, transferred, pledged or hypothecated to any
person in the absence of an effective registration statement covering such
Shares (or an exemption from such registration) and an opinion of counsel
satisfactory to OncoCyte Corporation to the effect that such transfer or
exercise complies with applicable securities laws.

 
 

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PURCHASE AGREEMENT

This Agreement is entered into by George Karfunkel (“Purchaser”) and OncoCyte
Corporation, a California corporation (the “Company).

1.              Purchase and Sale of Shares.

(a)            Purchaser hereby irrevocably agrees to purchase, and the Company
agrees to sell to Purchaser, Three Million (3,000,000) common shares, no par
value (“Shares”) at the price of $0.667 per Share.

(b)            This Agreement will become an irrevocable obligation of Purchaser
to purchase the number of Shares specified in paragraph (a) of this Section 1,
at the price of $0.667 per Share, when a copy of this Agreement, signed by
Purchaser, is countersigned by the Company.  Purchaser shall pay the purchase
price of the Shares by wire transfer to such account of the Company as the
Company may specify.  If this Agreement is rejected or not accepted for any
reason by the Company, all sums paid by the Purchaser will be promptly returned,
without interest or deduction.

(c)            If Purchaser purchases the 3,000,000 Shares as provided in
paragraph (a) of this Section, by paying the purchase price in full, Purchaser
shall have the right, but not the obligation, to purchase from the Company, on
or before April 15, 2010, an additional Three Million (3,000,000) Shares at the
price of $0.667 per Share (subject to pro rata adjustment in the event of any
stock split, stock dividend, combination of shares, or other recapitalization or
reclassification of the Company’s common shares).  Purchaser may exercise the
right to purchase such additional Shares by giving the Company written notice of
the exercise of such right (“Exercise Notice”), and by paying the purchase price
of such Shares in fully by wire transfer to an account specified by the Company,
which wire transfer shall be made not later than the first business day after
the Purchaser gives the Company the Exercise Notice and the Company provides
Purchaser with instructions for wire transfer of the purchase price.  By giving
the Exercise Notice specified in this paragraph, Purchaser shall irrevocably
agree to purchase 3,000,000 Shares at the price of $0.667 per Share.

2.              Registration Rights.  Concurrently with the execution and
delivery of this Agreement, Purchaser and the Company are entering into a
Registration Rights Agreement pursuant to which the Company is agreeing to
register the Shares for sale under the Securities Act of 1933, as amended (the
“Act”).

 
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3.              Investment Representations.  Purchaser represents and warrants
to the Company that:

(a)            Purchaser has made such investigation of the Company as Purchaser
deemed appropriate for determining to acquire (and thereby make an investment
in) the Shares.  In making such investigation, Purchaser has had access to such
financial and other information concerning the Company as Purchaser
requested.  Purchaser acknowledges and understands that the Company is a
start-up venture, without a history of operations, and has received only limited
capital from its controlling shareholder BioTime, Inc.  Purchaser acknowledges
receipt of the Articles of Incorporation and Bylaws of the Company, and copies
of the minutes of the proceedings of the Board of Directors of the
Company.  Purchaser has had a reasonable opportunity to ask questions of and
receive answers from the executive officers of the Company concerning the
Company, and to obtain such additional information concerning the Company as may
have been possessed or obtainable by the Company without unreasonable effort or
expense. All such questions have been answered to Purchaser’s satisfaction.

(b)            Purchaser understands that the Shares are being offered and sold
without registration under the Act, or qualification under the California
Corporate Securities Law of 1968, or under the laws of any other states, in
reliance upon the exemptions from such registration and qualification
requirements for non-public offerings.  Purchaser acknowledges and understands
that the availability of the aforesaid exemptions depends in part upon the
accuracy of certain of the representations, declarations and warranties made by
Purchaser, and the information provided by Purchaser, in this
Agreement,  Purchaser is making such representations, declarations and
warranties, and is providing such information, with the intent that the same may
be relied upon by the Company and its officers and directors in determining
Purchaser’s suitability to acquire the Shares.  Purchaser understands and
acknowledges that no federal, state or other agency has reviewed or endorsed the
offering of the Shares or made any finding or determination as to the fairness
of the offering or completeness of the information provided to Purchaser by the
Company.

(c)            Purchaser understands that the Shares may not be offered, sold,
or transferred in any manner unless subsequently registered under the Act, or
unless there is an exemption from such registration available for such offer,
sale or transfer.

(d)            Purchaser has such knowledge and experience in financial and
business matters to enable Purchaser to utilize the information provided or
otherwise made available to Purchaser by the Company to evaluate the merits and
risks of an investment in the Shares and to make an informed investment
decision.

(e)            Purchaser is acquiring the Shares solely for Purchaser’s own
account and for investment purposes, and not with a view to, or for sale in
connection with, any distribution of the Shares other than pursuant to an
effective registration statement under the Act or unless there is an exemption
from such registration available for such offer, sale or transfer, such as SEC
Rule 144.

 
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(f)             Purchaser is an “accredited investor,” as such term is defined
in Regulation D promulgated under the Act.

(g)            Information provided to Purchaser by the Company include matters
that may be considered “forward looking” statements within the meaning of
Section 27(a) of the Act and Section 21(e) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), which statements Purchaser acknowledges
and agrees are not guarantees of future performance and involve a number of
risks and uncertainties, and with respect to which the Company makes no
representations or warranties.  Purchaser understands that the level of
disclosure provided by the Company is less than that which would be provided in
a securities offering registered under the Act in reliance on the sophistication
and investment experience of Purchaser.

(h)            Purchaser understands that this Agreement and other information
provided to Purchaser by the Company contains confidential financial information
about the Company and BioTime, Inc. that has not yet been publicly disclosed by
the Company or BioTime, and therefore may be deemed material non-public
information, (2) the Company is providing Purchaser the confidential information
solely to satisfy its disclosure obligations under the Act in connection with
the offer and sale of the Shares to Purchaser pursuant to this Agreement, and
(3) until such time as BioTime files a Form 8-K or other report under the
Exchange Act with the Securities and Exchange Commission, Purchaser shall not
(A) disclose to any other person any of the information contained in this
Agreement or otherwise provided to Purchaser concerning the Company that has not
previously been disclosed in a report filed by BioTime under the Exchange Act,
or (B) purchase or sell any common shares or warrants of BioTime other than
shares purchased through the exercise of BioTime warrants already held by
Purchaser.

4.              Accredited Investor Qualification.  Purchaser qualifies as an
“accredited investor” under Regulation D in the following manner.  (Please check
or initial all that apply to verify that you qualify as an “accredited
investor.”)

    _____ (a)
Purchaser is a natural person whose net worth, or joint net worth with spouse,
at the date of purchase exceeds $1,000,000 (including the value of home, home
furnishings, and automobiles).

    _____ (b)
Purchaser is a natural person whose individual gross income (excluding that of
spouse) exceeded $200,000 in each of the past two calendar years, and who
reasonably expects individual gross income exceeding $200,000 in the current
calendar year.

    _____ (c)
Purchaser is a natural person whose joint gross income with spouse exceeded
$300,000 in each of the past two calendar years, and who reasonably expects
joint gross income with spouse exceeding $300,000 in the current calendar year.

 
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    _____ (d)
Purchaser is a bank, savings and loan association, broker/dealer, insurance
company, investment company, pension plan or other entity defined in Rule
501(a)(1) of Regulation D as promulgated under the Securities Act of 1933 by the
Securities and Exchange Commission.

    _____ (e)
Purchaser is a trust, and the trustee is a bank, savings and loan association,
or other institutional investor as defined in Rule 501(a)(1) of Regulation D as
promulgated under the Securities Act of 1933 by the Securities and Exchange
Commission.

    _____ (f)
Purchaser is a private business development company as defined in section
202(a)(22) of the Investment Advisers Act of 1940.

    _____ (g)
Purchaser is a trust, and the grantor (i) has the power to revoke the trust at
any time and regain title to the trust assets; and (ii) meets the requirements
of items (a) (b), or (c) above.

    _____ (h)
Purchaser is a tax-exempt organization described in Section 501(c) (3) of the
Internal Revenue Code, or a corporation, Massachusetts or similar business
trust, or partnership, not formed for the specific purpose of acquiring Shares
with total assets in excess of $5,000,000.

    _____ (i)
The Purchaser is a trust with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring Shares, whose purchase is directed by a
person who has such knowledge and experience in financial and business matters
that he is capable of evaluating the merits and risks of an investment in the
Shares.

    _____ (j)
The Purchaser is an entity in which all of the equity owners meet the
requirements of at least one of items (a) through (i) above.

5.              Miscellaneous.

(a)            This Agreement shall be governed by, interpreted, construed and
enforced in accordance with the laws of the State of California, as such laws
are applied to contracts by and among residents of California, and which are to
be performed wholly within California.

(b)            The representations and warranties set forth herein shall survive
the sale of Shares to Purchaser.

(c)            Neither this Agreement nor any provisions hereof shall be
modified, discharged or terminated except by an instrument in writing signed by
the party against whom any waiver, change, discharge or termination is sought.

 
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(d)           Any notice, demand or other communication that any party hereto
may be required, or may elect, to give shall be sufficiently given if (i)
deposited, postage prepaid, in the United States mail addressed to such address
as may be specified under this Agreement, (ii) delivered personally at such
address, (iii) delivered to such address by air courier delivery service, or
(iv) delivered by electronic mail (email) to such electronic mail address as may
be specified under this Agreement.  The address for notice to the Company is:
OncoCyte Corporation, 1301 Harbor Bay Parkway, Suite 100, Alameda, California
94502; Attention: Steven Seinberg, Chief Financial Officer; email;
sseinberg@biotimemail.com.  The address for notice of Purchaser is shown in
Section 6.  Either party may change its address for notice by giving the other
party notice of a new address in the manner provided in this Agreement.  Any
notice sent by mail shall be deemed given three days after being deposited in
the United States mail, postage paid, and addressed as provided in this
Agreement.

(e)           This Agreement may be executed through the use of separate
signature pages or in any number of counterparts, and each of such counterparts
shall, for all purposes, constitute one agreement binding on all the parties,
notwithstanding that all parties are not signatories to the same counterpart.

(f)           Except as otherwise provided herein, the Agreement shall be
binding upon and inure to the benefit of the parties and their heirs, executors,
administrators, successors, legal representatives and assigns.  If the
undersigned is more than one person, the obligation of the undersigned shall be
joint and several and the agreements, representations, warranties and
acknowledgments herein contained shall be deemed to be made by and be binding
upon each such person and his heirs, executors, administrators and successors.

(g)           This instrument contains the entire agreement of the parties, and
there are no representations, covenants or other agreements except for those
stated or referred to herein.

(h)           This Agreement is not transferable or assignable by the
undersigned except as may be provided herein.

6.              Investor Information.

(a)
Name:
       
(b)
Address:
       
(c)
email:
 

(d)
Telephone:  (______)
 

 
(e)
Social Security Number:
 

 
or Taxpayer Identification Number:
 

 
(f)
State of Residence or Principal Place of Business:
 

 
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IN WITNESS WHEREOF, the undersigned has entered into this Agreement and hereby
agrees to purchase Shares for the price stated above and upon the terms and
conditions set forth herein.  The undersigned hereby agrees to all of the terms
of the Registration Rights Agreement and agrees to be bound by the terms and
conditions thereof.

Dated: October 15, 2009

 
/s/ George Karfunkel
   
George Karfunkel      
 

 
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ACCEPTANCE BY COMPANY

The Company hereby agrees to sell to the Purchaser the Shares referenced above
in reliance upon all the representations, warranties, terms and conditions
contained in this Agreement.

IN WITNESS WHEREOF, the undersigned, on behalf of the Company, has executed this
acceptance as of the date set forth below.

Dated:  October 15, 2009
ONCOCYTE CORPORATION
               
By:   /s/ Robert W. Peabody
         
Title: Chief Operating Officer

 
 
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