TRANSITION AGREEMENT

 

This Transition Agreement (“Transition Agreement”) is entered into by and
between William Annett (“Executive”) and OncoCyte Corporation. (the “Company”)
on July 1, 2019 and confirms the agreement that has been reached with Executive
in connection with the end of Executive’s employment by the Company.

 

1. Termination of Employment. Effective as of the close of business on June 30,
2019 (the “Transition Date”), Executive ceased to hold the office of, and serve
as, President and Chief Executive Officer of the Company and his employment by
the Company ended.

 

(a) Executive agrees to execute promptly upon request by the Company any
additional documents necessary to effectuate the provisions of this Section 1.

 

(b) Executive and the Company agree that until the Transition Date, Executive
continued to be entitled to the salary and other benefits provided by his
Employment Agreement, dated June 15, 2015 (the “Employment Agreement”) subject
to the amendment of his Company stock options as provided in this Transition
Agreement. This Transition Agreement supersedes the Employment Agreement on and
after the Transition Date in all respects, including but not limited to Sections
6(a)(ii) and 6(a)(iii), except for those provisions of the Employment Agreement
that are expressly referenced as continuing to be in effect or that are
incorporated by reference into this Transition Agreement. Any capitalized terms
not defined in this Transition Agreement shall have the meaning ascribed to such
terms in the Employment Agreement. Accordingly, commencing on the Transition
Date, Executive shall be entitled to receive compensation and benefits,
including post-employment compensation and benefits, from the Company only as
provided in this Transition Agreement.

 

(c) The provisions of Section 5 of Executive’s Employment Agreement are
incorporated by reference into this Transition Agreement and a breach of any of
Executive’s obligations thereunder shall constitute a breach of this Transition
Agreement and a Default as defined in Section 13(c).

 

2. Post-Transition Date Benefits. Commencing on the Transition Date, the Company
will provide Executive with the post-employment benefits described in this
Section 2, but only if (i) Executive is not in Default as defined in Section
13(c), and (iii) Executive has not died or exercised the right of revocation set
forth in Section 14.

 

(a) The Company shall pay Executive $210,000, subject to such payroll
deductions, FICA, and other withholdings as are required by law. This payment is
in lieu of the payment contemplated by Section 6(a)(ii)(A) of the Employment
Agreement.

 

(b) The Company shall pay Executive a portion of the Target Bonus described in
the Employment Agreement, prorated for the period commencing January 1, 2019 and
ending June 30, 2019 (and Executive acknowledges that except for such prorated
Target Bonus he shall not be entitled to receive any bonus of any kind with
respect to his employment or his performance of consulting services pursuant to
this Transition Agreement);

 

   

 

 

(c) Subject to Executive’s execution and delivery of the Consent to Amendment of
Incentive Stock Options set forth herein in Exhibit A hereto, and
notwithstanding the expiration and vesting provisions of the stock option
agreements (“Option Agreements”) governing Executive’s unvested outstanding
Company stock options granted under the Company’s Employee Stock Option Plan or
granted under the 2018 Equity Incentive Plan (collectively, “Options”), the
Options shall vest as of the last day of the Consulting Period (as defined in
Section 4(a), including any monthly extensions) with respect to the number of
unvested Options that would otherwise have vested during the six month period
following the last day of the Consulting Period. For the purpose of this Section
2(b), Options granted during May 2018, as to which vesting is conditioned upon
the attainment of certain milestones, shall vest only if and to the extent that
such vesting milestones are met during the six month period referenced in the
immediately preceding sentence. Certain information with respect to stock
options granted to Executive is shown on Exhibit B hereto.

 

(d) Subject to Executive’s execution and delivery of the Consent to Amendment of
Incentive Stock Options set forth herein in Exhibit A hereto, the
post-termination of employment exercise period of all vested Options shall be
extended until the close of business at the Company’s principal office on the
date one year after the expiration of the Consulting Period (including any
monthly extensions) as provided in Section 4.

 

(e) Executive acknowledges and agrees that any Options that were originally
intended to constitute “incentive stock options” under Section 422 of the
Internal Revenue Code of 1986, as amended (the “Code”) shall cease to be
“incentive stock options” three (3) months after the Transition Date pursuant to
the Code; provided, however, that any such Options may cease to be “incentive
stock options” sooner as more fully set forth in Exhibit A.

 

(f) Provided that Executive is eligible for and timely elects continuation of
group health benefits (and, if applicable, eligible dependents) under Section
4980B of the Internal Revenue Code, or any other comparable federal, state or
local law (“COBRA”), the Company will directly pay (or provide Executive with a
monthly sum equal to) the monthly premium associated with such continuation of
benefits on behalf of Executive for a period of six (6) months after the
Transition Date, but shall terminate prior to such six (6) month period on the
date on which Executive receives substantially equivalent health insurance
coverage in connection with new employment. Such payments shall not apply to the
COBRA coverage of any of Executive’s dependents who incur a second qualifying
event during the period of Executive’s coverage.

 

(g) Executive will also be entitled to any rights to contribution, advancement
of expenses, defense or indemnification Executive may have under the Company’s
Articles of Incorporation or Bylaws, as applicable, or as provided under
applicable law; provided, however, that the foregoing shall not provide for any
right to indemnification or advancement for any expenses or liabilities incurred
by Executive, including, but not limited to any attorneys’ fees, amounts paid in
settlement and any related costs, arising out of or resulting from any
litigation matters settled or otherwise resolved by Executive without the
Company’s consent.

 

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3. Accrued Benefits. On the Transition Date, Executive received the following
Accrued Benefits as defined in Section 6(a)(i) of the Employment Agreement:

 

(i) Unpaid Base Salary accrued up to the Transition Date;

 

(ii) A lump-sum payment, less applicable withholdings and deductions, that
represents the value of Executive’s accrued unused vacation, if any, accrued up
to the Transition Date; and

 

(iii) Vested benefits under any Company retirement, deferred compensation plan
or equity plan.

 

4. Consulting Services.

 

(a) Executive agrees to provide consulting services to the Company during the
period commencing July 1, 2019 and ending August 31, 2019 (the “Consulting
Period”). At the election of the Company, the Company may extend the Consulting
Period on a monthly basis, but not beyond December 31, 2019, by giving Executive
written notice of each such monthly extension. The consulting services shall be
substantially the kind of services described on Schedule 1 (the “Services”),
provided, that (i) Executive shall not be required to provide the Company with
more than 75 hours of Services per month, (ii) Executive shall not be entitled
to receive additional compensation if he performs a greater number of hours of
Services, and (iii) the Consulting Fee payable pursuant to Section 4(b) shall be
paid even if the number of hours of Services that the Company requests Executive
to perform during any month entails fewer than 75 hours of Service

 

(b) During the initial two months of the Consulting Period, Executive shall
receive a consulting fee (the “Consulting Fee”) in the amount of Thirty Five
Thousand Dollars ($35,000) per month. If the Consulting Period is extended for
any monthly period(s) after August 31, 2019, the amount of the monthly
Consulting Fee and the number of hours of Services to be performed during any
month shall be determined by agreement between Executive and the Chief Executive
Officer of the Company, and extension of the Consulting Period shall be subject
to the condition that Executive and the Chief Executive Officer shall have
reached agreement on the amount of the Consulting Fee and hours of Services for
such extension period, and the failure of Executive and the Chief Executive
Officer to reach such agreement shall result in the termination of the
Consulting Period on the last day of the Consulting Period then in effect. The
Consulting Fee shall be paid within ten (10) days after the end of each calendar
month. Normal and customary payroll withholdings and deductions shall be made
from such payment, and the amount will be reported for tax purposes as required
by law. If the Consulting Period is terminated by the Company other than for
Default during any month during the Consulting Period (including any extension
month), the full Consulting Fee for the month in which termination occurred will
be paid. If Executive terminates the Consulting Period, or if the Company
terminates the Consulting Period for Default, the Consulting Fee for the month
in which termination occurs will be prorated based on a fraction, the numerator
of which shall be the number of hours of Services performed by Consultant during
that month and the denominator of which shall be 75.

 

(c) If (i) Executive is not in Default as defined in Section 13(c), (ii)
Executive has not terminated the consulting relationship, (iii) Executive has
not exercised the right of revocation set forth in Section 14, and (iv) if
Executive fully performs, in good faith and in a timely manner, all of the
Services requested by the Company, then Executive’s unvested Options shall
continue to vest in accordance with their vesting terms and schedules (other
than terms applicable to employment by the Company) during the Consulting
Period, including any monthly extensions.

 

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(d) Executive shall not be entitled to participate in any Company welfare,
retirement, perquisite, fringe benefit, insurance, equity, or other benefit
plans during the Consulting Period, other than under COBRA as provided in
Section 2.

 

(e) During the Consulting Period, Executive shall have no authority to bind the
Company to any contract, agreement, or obligation, and Executive shall not hold
himself out as the agent of the Company.

 

(f) The provisions of Section 5(a) and Section 5(b) of Executive’s Employment
Agreement, which are incorporated by reference into this Transition Agreement,
shall be applicable to Executive during the Consulting Period, and, subject to
the limitations set forth in such Sections 5(a) and 5(b), Executive shall
disclose and assigns to the Company any and all inventions, discoveries,
improvements or intellectual property which Executive may conceive or make
during the Consulting Period, and, to the extent permitted by applicable law,
all Moral Rights with respect thereto. Section 5(c) of Executive’s Employment
Agreement shall also apply with respect to Confidential Information that
Executive may learn, develop, or have access to during the Consulting Period. A
breach by Executive of any of his obligations under Section 5 of his Employment
Agreement shall also constitute a breach of this Transition Agreement and a
Default as defined in Section 13(c).

 

(g) During the Consulting Period, Executive shall be responsible for all of his
own business expenses and shall not be reimbursed by the Company for any costs
or expenses incurred by him in performing consulting services, except that if
the Company requests that Executive travel to any location other than the
Company’s offices or laboratory in the San Francisco Bay Area, the Company shall
either provide Executive with transportation and lodging or shall reimburse
Executive for reasonable travel and lodging expenses incurred by him, subject to
the Company’s policies for travel expenses and provided that he provides
invoices for such expenses.

 

(h) Subject to Section 13, the Company agrees that Executive may provide
consulting services or services as an employee or partner to other companies or
business organizations during the Consulting Period, provided that (i) so doing
does not unreasonably interfere with his ability to provide at least 75 hours of
Services per month to the Company at such times and place as the Company may
reasonably require; and (ii) he will provide services exclusively to the Company
in fields of (x) blood or urine tests for the diagnosis or detection of cancer,
and (y) immunology.

 

5. No Other Payments or Benefits. Executive acknowledges and agrees that, other
than post-termination benefits to be paid under Section 2, Executive has
received all compensation to which Executive is entitled from the Company. Other
than as set forth in this Transition Agreement, after the Transition Date,
Executive shall not be entitled to receive and shall not receive any base
salary, wages, annual or target bonus, director fees, short term or long-term
incentive award, stock options or other equity awards, welfare, retirement,
perquisite, fringe benefit or other benefit plan coverage, or coverage under any
other practice, policy or program as may be in effect from time to time,
applying to officers, employees, directors (whether employees or non-employees
and regardless of whether Executive continues to serve as a director until the
next annual meeting of Company shareholders), or consultants of the Company.

 

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6. Agreement Not To Solicit Employees. Executive hereby reaffirms that, pursuant
to the first sentence of Section 4 of the Employment Agreement, until June 30,
2020, Executive shall not, for Executive or any third party, directly or
indirectly, employ or solicit for employment or recommend for employment any
person employed by the Company or any Related Company. The first sentence of
Section 4 of the Employment Agreement is hereby incorporated into this
Transition Agreement by this reference, so that a breach by Executive of said
Section 4 shall also constitute a breach of this Transition Agreement and a
Default.

 

7. Non-Disparagement. Executive agrees that Executive will not, and will not
encourage or induce others to, make, publish or communicate to any person or
entity or in any public forum any defamatory or disparaging remarks, comments or
statements concerning any of the Company, its subsidiaries, affiliates or
shareholders or any of their respective past, present or future directors,
officers, employees, agents, shareholders or members or any of their respective
successors and assigns (collectively, the “Company Entities and Persons”). The
Company may, at its option, issue an internal and an external announcement
regarding termination of Executive’s employment stating that Executive’s
employment has ended on the Transition Date. If the Company receives any
external inquiry regarding Executive’s employment history at the Company, the
Company will respond to the inquiry by providing Executive’s dates of employment
and Executive’s job title. Nothing in this Transition Agreement is intended to
or shall prevent any person from providing, or limiting testimony in response to
a valid subpoena, court order, regulatory request or other judicial,
administrative or legal process or otherwise as required by law. Executive
agrees that Executive will notify the Company in writing as promptly as
practicable after receiving any request for testimony or information in response
to a subpoena, court order, regulatory request or other judicial, administrative
or legal process or otherwise as required by law, regarding the anticipated
testimony or information to be provided and at least ten (10) days prior to
providing such testimony or information (or, if such notice is not possible
under the circumstances, with as much prior notice as is possible).

 

8. Cooperation. For twelve (12) months after the Transition Date, Executive
agrees that Executive will reasonably cooperate with and assist the Company, its
subsidiaries and affiliates, and any of their respective officers, directors,
shareholders or employees: (A) concerning requests for information about the
business of the Company or its subsidiaries or affiliates or Executive’s
involvement and participation therein (including but not limited to requests and
subpoenas to provide information or testimony); (B) in connection with any
investigation or review by the Company or any federal, state or local
regulatory, quasi-regulatory or self-governing authority as any such
investigation or review relates to events or occurrences that transpired while
Executive were employed by the Company; (C) by promptly giving written notice,
to the Chief Executive Officer or Chief Operating Officer of the Company, of any
matter described in clause (B) of this paragraph as to which Executive has
received notice or become aware (other than notices or information received by
Executive from the Company); (D) with respect to transition and succession
matters. Executive’s cooperation shall include, but not be limited to (taking
into account Executive’s personal and professional obligations, including those
to any new employer or entity to which Executive provide services), being
available to meet and speak with officers or employees of the Company and/or the
Company’s counsel at reasonable times and locations, executing accurate and
truthful documents and taking such other actions as may reasonably be requested
by the Company and/or the Company’s counsel to effectuate the foregoing.
Executive shall be entitled to reimbursement from the Company, upon receipt by
the Company of suitable documentation, for reasonable and necessary travel and
other expenses which Executive may incur on such matters at the specific request
of the Company and as approved by the Company in advance and in accordance with
its policies and procedures established from time to time.

 

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9. Company Property; Certain Transition Matters; Confidentiality.

 

(a) On or prior to the Transition Date, and again upon termination of the
Consulting Period, Executive will return to the Company and all Related
Companies all equipment and other property belonging to the Company and Related
Companies, and all originals and copies or Confidential Information (in any and
all media and formats, and including any document, recording, or other item
containing Confidential Information) in Executive’s possession or control, and
all of the following (in any and all media and formats, and whether or not
constituting or containing Confidential Information) in Executive’s possession
or control: (i) lists and sources of customers, (ii) lists of investors, banks,
and investment bankers with whom the Company has met or corresponded; (iii)
proposals or drafts of proposals for any research grant, research or development
project or program, marketing plan, licensing arrangement, or other arrangement
with any third party; (iv) reports, job or laboratory notes, specifications, and
drawings pertaining to the research, development, products, patents, and
technology of the Company and any Related Companies; (v) any and all inventions
or intellectual property developed by Executive during the course of employment,
(vi) all electronic mail, text messages, voice mails, and telephone messages to,
from, or received by Executive in his capacity as an officer or director of the
Company or otherwise concerning the business, operations or affairs of the
Company, whether on electronic mail, computer, telephone, or cell phone systems
and equipment belonging to the Company or belonging to or otherwise used by
Executive, and (vii) notes or writings of any kind prepared by or for Executive
containing any information described in clauses (i) through (vi) of this
sentence.

 

(b) After the Transition Date, Executive will not represent (or purport to
represent) the Company or any of its affiliates in any capacity to any person or
entity, or enter into (or purport to enter into) any transactions, agreements or
understandings on behalf of the Company or any of its affiliates with any person
or entity.

 

(c) Executive hereby reaffirms Executive’s obligations pursuant to Section 5(c)
of the Employment Agreement with respect to Confidential Information, as defined
therein. Section 5(c) of the Employment Agreement is hereby incorporated into
this Transition Agreement by this reference, so that a breach by Executive of
said Section 5(c) shall also constitute a breach of this Transition Agreement
and a Default.

 

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(d) Notwithstanding the foregoing, in accordance with the Defend Trade Secrets
Act of 2016, Executive is hereby notified that Executive will not be held
criminally or civilly liable under any federal or state trade secret law for the
disclosure of a trade secret that: (i) is made (A) in confidence to a federal,
state or local government official, either directly or indirectly, or to an
attorney; and (B) solely for the purpose of reporting or investigating a
suspected violation of law; or (ii) is made in a complaint or other document
that is filed under seal in a lawsuit or other proceeding. If Executive files a
lawsuit for retaliation by the Company for reporting a suspected violation of
law, Executive may disclose the Company’s trade secrets to Executive’s attorney
and use the trade secret information in the court proceeding if Executive (i)
files any document containing the trade secret under seal; and (ii) does not
disclose the trade secret, except pursuant to court order.

 

10. Taxes. The parties acknowledge and agree that: the form and timing of the
Transition Agreement Payments and Benefits to be provided pursuant to this
Transition Agreement are intended to be exempt from or to comply with
requirements of Section 409A of the Internal Revenue Code of 1986, as amended,
and applicable Treasury Regulations thereunder (“Section 409A”), including the
requirement for a six-month suspension on payments to “specified employees” as
defined in Section 409A that are not otherwise permitted to be paid within the
six-month suspension period. Notwithstanding the foregoing, it is also agreed
that Executive has had the opportunity to seek the advice of independent tax
counsel with respect to the potential application of Section 409A to the
Transition Agreement, and is not relying upon the advice of the Company or any
person affiliated with the Company with respect thereto. In no event shall the
Company or any person affiliated with the Company have any liability to
Executive with respect to any adverse tax consequences, under Section 409A or
otherwise, related to the payment of the Transition Agreement payments and
benefits.

 

11. Release and Covenant Not to Sue.

 

(a) Executive agrees that, in consideration of this Transition Agreement,
Executive hereby waives, releases and forever discharges, to the extent
permitted by applicable law, any and all claims, complaints, promises,
agreements, controversies, liens, demands, actions, causes of action,
obligations, suits, disputes, judgments, rights, debts, bonds, bills, covenants,
contracts, variances, trespasses, executions, damages and liabilities of any
nature whatsoever (collectively “Claims”) which Executive ever had, now has or
may have against the (i) Company, (ii) the Company’s past, present and future
subsidiaries, affiliates and shareholders, and (iii) the past, present and
future shareholders, members, directors, officers, agents, employees, attorneys,
insurers, predecessors, various benefits committees, successors and assigns,
heirs, executors and personal and legal representatives of the Company and the
Company’s past, present and future subsidiaries, affiliates and shareholders
((i), (ii) and (iii), collectively, the “Released Parties”), based on or
relating to any act, event or omission occurring before or after Executive
executes this Transition Agreement and arising out of, during or relating to
Executive’s employment or services with the Company or the cessation of such
employment or services, except for claims relating to the enforcement of the
Company’s obligations under this Transition Agreement and Option Agreements or
as provided below. This waiver and release includes, but is not limited to, any
claims which could be asserted now or in the future, under: common law,
including, but not limited to, breach of express or implied duties, wrongful
termination, retaliation, defamation, or violation of public policy; any
policies, practices, or procedures of the Company; any federal or state statutes
or regulations including, but not limited to, Title VII of the Civil Rights Act
of 1964, as amended, 42 U.S.C. § 2000e et seq., the Civil Rights Act of 1866 and
1871, the Age Discrimination in Employment Act (“ADEA”), as amended, 29 U.S.C. §
621 et seq., the Americans With Disabilities Act, 42 U.S.C. §12101 et seq., the
Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 41001 et seq.
(excluding those rights relating exclusively to employee pension benefits as
governed by ERISA), the Family and Medical Leave Act, 29 U.S.C. §2601 et. seq.,
the California Fair Employment and Housing Act, the California Family Rights
Act, the California Labor Code; any contract of employment, express or implied;
and any provision of any other law, common or statutory, of the United States,
California, or any applicable state. For the purpose of implementing a full and
complete release, Executive understands and agrees that this Transition
Agreement is intended to waive and release all claims, if any, which Executive
may have and which Executive may not now know or suspect to exist in Executive’s
favor against any of the Released Parties and this Transition Agreement
extinguishes those claims.

 

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Without limiting the generality of the foregoing, Executive expressly waives any
and all rights under California Civil Code § 1542 which provides:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR OR RELEASING
PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, AND THAT IF KNOWN BY HIM OR HER WOULD HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

 

(b) By signing this Transition Agreement, Executive represents that Executive
has not and will not in the future commence any action or proceeding arising out
of the Claims described in Section 11(a), and that Executive will not seek or be
entitled to any award of legal or equitable relief in any such action or
proceeding that may be commenced on Executive’s behalf. The provisions of this
Section 11(b) constitute a “covenant not to sue.” A “covenant not to sue” is a
legal term which means Executive promises not to file a lawsuit in court. It is
different from the Release of Claims contained in Section 11(a) above. Besides
waiving and releasing Claims covered by Section 11(a), Executive further agrees
never to sue any Released Party in any forum for any reason covered by the
release of Claims. Notwithstanding this covenant not to sue, Executive may bring
a Claim against the Company to enforce this Transition Agreement or, to the
extent permitted under the law, to challenge the validity of this Transition
Agreement under the ADEA. If Executive sues a Released Party in violation of
this Transition Agreement, Executive shall be liable to the Released Party for
its reasonable attorneys’ fees and other litigation costs incurred in defending
against Executive’s suit. Alternatively, if Executive sues a Released Party in
violation of this Transition Agreement, the Company can require Executive to
return all but One Thousand Dollars ($1,000.00) of the payment described in
Section 2(a).

 

12. Release Exclusions/Additional Rights. Nothing in the Release above or any
other part of this Transition Agreement shall: (i) affect any rights of defense
or indemnification, or to be held harmless, or any coverage under directors and
officers liability insurance or any other insurance or rights or claims of
contribution or advancement of expenses that Executive has; (ii) waive any
rights or claims that Executive may have to the extent that such rights or
claims are based upon events occurring more than seven days after the date
Executive executed this Transition Agreement; (iii) waive, release or otherwise
discharge any other claim or cause of action that cannot legally be waived; or
(iv) interfere with Executive’s right to file a charge or cooperate with,
provide information to, or participate in an investigation or proceeding
conducted by, the Equal Employment Opportunity Commission, the California
Department of Fair Employment and Housing, or any other federal or state
regulatory or law enforcement agency. Executive nonetheless acknowledge and
agree that any Claims for personal relief in connection with such a charge or
investigation (such as reinstatement or monetary damages) would be and hereby
are barred. Executive may, however, receive money from the Securities & Exchange
Commission (“SEC”) as a reward for providing information to that agency.

 

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13. Termination.

 

(a) The employment of Executive prior to the Transition Date was, and the
consulting relationship of Executive during the Consulting Period is and will
be, an “at will” relationship and may be terminated by Executive or by Company
with or without cause or Default at any time by notice given orally or in
writing by Executive to the Company or by the Company to Executive. Any such
termination of the consulting relationship shall also terminate the Consulting
Period. The Consulting Period shall also automatically terminate upon the death
or Disability of Consultant.

 

(b) If the Company terminates the Consulting Period following a Default by
Executive, the obligations of the Company and the rights of Executive under
Section 2 and Section 4 shall terminate, other than the Company’s obligations
with respect to the payment of any amount of the Consulting Fee accrued as of
the date of termination. In the event of termination of the Consulting Period
following a Default by Executive, all unvested Options shall expire on the date
of such termination, and all vested Options shall expire ninety (90) days after
the date of such termination.

 

(c) Executive shall be in Default if: (i) Executive breaches or violates in any
materials respect any of Executive’s covenants, agreements, or obligations under
this Transition Agreement, including also any provisions of Executive’s
Employment Agreement incorporated into this Transition Agreement by reference;
or (ii) Executive, as an employee, director, partner, consultant, independent
contractor, advisor, shareholder or otherwise, provides any services, advice, or
assistance to, or make any investment in or loan to, any corporation, limited
liability company, partnership, or other business organization (other than the
Company or any subsidiary of the Company) engaged in or planning to engage in
the development, commercialization, or performance of blood or urine tests for
the diagnosis or detection of cancer.

 

14. Time to Consider, Consult With Counsel and Revoke.

 

(a) The Company is presenting Executive with this Transition Agreement on July
1, 2019 and Executive has until close of business on July 22, 2019 to consider
it. Executive acknowledge that Executive has been given at least twenty-one (21)
days to consider this Transition Agreement before signing it, and agrees that
any changes made to the terms of this Transition Agreement shall not restart the
twenty-one (21) day period.

 

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(b) Executive acknowledges that Executive has been advised by the Company, in
writing, to consult an attorney with respect to this Transition Agreement before
signing it.

 

(c) Executive has the right to revoke this Transition Agreement after signing it
by written notice to the Company sent by reputable overnight courier or email
not more than seven (7) days after the date of Executive’s execution of this
Transition Agreement. Notice of revocation should be addressed to OncoCyte
Corporation, 1010 Atlantic Avenue, Suite 102, Alameda, CA 94501, ATTN: Albert
Parker, Chief Operating Officer, or if by email, addressed to
aparker@oncocyte.com. If Executive chooses to revoke this Transition Agreement,
it shall be null and void and without limiting the generality of the foregoing,
Executive shall no longer be entitled to the pay and benefits under Section 2
and Section 4 of this Transition Agreement or any other Section of this
Transition Agreement other than the Accrued Benefits described in Section 3.
Executive expressly acknowledges that the payments and benefits described in
Section 2 and Section 4 of this Transition Agreement represent payments and
benefits to which Executive has no legal entitlement unless Executive executes,
and does not revoke, this Transition Agreement.

 

15. Enforcement. If any provision of this Transition Agreement is held by a
court of competent jurisdiction to be illegal, void or unenforceable, such
provision shall have no effect; however, the remaining provisions shall be
enforced to the maximum extent possible. Further, if a court should determine
that any portion of this Transition Agreement is overbroad or unreasonable, such
provision shall be given effect to the maximum extent possible by narrowing or
enforcing in part that aspect of the provision found overbroad or unreasonable.
In addition, Executive agrees that Executive’s knowing failure to return Company
property that relates to the maintenance of security of the Company Entities and
Persons shall entitle the Company to injunctive and other equitable relief.

 

16. No Admission. This Transition Agreement is not intended, and shall not be
construed, as an admission that either Executive or the Company Entities and
Persons have violated any federal, state or local law (statutory or decisional),
ordinance or regulation, breached any contract or committed any wrong
whatsoever.

 

17. Successors. This Transition Agreement is binding upon, and shall inure to
the benefit of, the parties and their respective heirs, executors,
administrators, successors and assigns.

 

18. Resolution of Disputes; Choice of Law.

 

(a) This Transition Agreement shall be construed and enforced in accordance with
the laws of the State of California without regard to the principles of
conflicts of law.

 

(b) All suits, actions or proceedings arising out of or relating to this
Transition Agreement shall be brought in a state or federal court located in San
Francisco County, California, which courts shall be the exclusive forum for all
such suits, actions or proceedings. Executive and the Company hereby waive any
objection which either of Executive may now or hereafter have to the laying of
venue in any such court, including any claim based on the doctrine of forum non
conveniens or any similar doctrine, for any such suit, action or proceeding.
Executive and the Company each hereby irrevocably consent and submit to the
jurisdiction of the federal and state courts located in San Francisco County,
California for the purposes of any suit, action or proceeding arising out of
relating to this Transition Agreement. If any action is necessary to enforce the
terms of this Transition Agreement, the substantially prevailing party will be
entitled to reasonable attorneys’ fees, costs and expenses in addition to any
other relief to which such prevailing party may be entitled

 

 10 

 

 

(c) EXECUTIVE AND THE COMPANY EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN
ANY SUIT, ACTION OR PROCEEDING ARISING UNDER THIS TRANSITION AGREEMENT or
related in any way to Executive’s employment and/or to the termination of
Executive’s employment AND AGREE THAT ANY SUCH SUIT, ACTION OR PROCEEDING SHALL
BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

(d) If the waiver of a trial by jury in paragraph (c) of this Section 16 is
ineffective or unenforceable, the Company and Executive agree that all suits,
actions or proceedings arising under this Transition Agreement or related in any
way to Executive’s employment and/or to the termination of Executive’s
employment brought or heard in a California state court shall be resolved
without a jury, pursuant to California Code of Civil Procedure Section 638 et
seq, before a mutually acceptable referee (who shall be a retired judge). The
Company and Executive shall not seek to appoint a referee that may be
disqualified pursuant to California Code of Civil Procedure Section 641 or 641.2
without the prior written consent of all parties. If the parties are unable to
agree upon a referee within ten (10) calendar days after one party serves a
written notice of intent for judicial reference upon the other party or parties,
then the referee will be selected by the court in accordance with California
Code of Civil Procedure Section 640(b). Such proceeding shall be conducted in
the City and County of San Francisco, California, in accordance with the
California Code of Civil Procedure, the Rules of Court, and California Evidence
Code, except as otherwise specifically agreed by the parties and approved by the
referee. In the event Claims are to be resolved by judicial reference, either
party may seek from the court any prejudgment order, writ or other relief and
have such prejudgment order, writ or other relief enforced to the fullest extent
permitted by law notwithstanding that all Claims are otherwise subject to
resolution by judicial reference.

 

(e) Entire Agreement. Executive acknowledges that this Transition Agreement,
including also all provisions of Executive’s Employment Agreement incorporated
by reference into this Transition Agreement, constitutes the complete
understanding between the Company and Executive regarding its subject matter and
supersedes any and all agreements, understandings, and discussions, whether
written or oral, between Executive and any of the Company Entities and Persons.
No other promises or agreements shall be binding on the Company unless in
writing and signed by both the Company and Executive after the date of this
Transition Agreement. This Transition Agreement shall be construed as though
both parties had participated equally in its drafting, and shall not be
construed against either party as the drafting party.

 

19. Effective Date. Executive may accept this Transition Agreement by signing it
and returning it to OncoCyte Corporation, 1010 Atlantic Avenue, Suite 102,
Alameda, CA 94501, ATTN: Albert Parker, Chief Operating Officer, or if by email,
addressed to aparker@oncocyte.com, not later than the twenty-first (21st) day
after the Transition Agreement is provided to Executive (which is close of
business on July 22, 2019 as described in Section 14(a) above). The Effective
Date of this Transition Agreement shall be the date after the 21-day revocation
period expires. In the event Executive does not accept this Transition Agreement
as set forth in this Section 19, this Transition Agreement, including but not
limited to, the obligation of the Company hereunder to provide the payments and
other benefits under this Transition Agreement, shall be deemed automatically
null and void.

 

20. Headings. The headings used herein are for the convenience of reference
only, do not constitute part of this Transition Agreement and shall not be
deemed to limit or otherwise affect any of the provisions of this Transition
Agreement.

 

21. Counterparts. This Transition Agreement may be executed in one or more
counterparts, including emailed or telecopied facsimiles, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

 

[Signature Page to the Transition Agreement Follows]

 

 11 

 

 

IN WITNESS WHEREOF, the parties have executed this Transition Agreement as of
the dates set forth below.

 

EXECUTIVE               /s/ William Annett   Date: July 1, 2019   William Annett
            OncoCyte Corporation             By:  /s/ Albert Parker   Date: July
1, 2019   Albert Parker       Chief Operating Officer    

 

[Signature Page to the Transition Agreement]

 

 12 

 

 

Exhibit A

 

CONSENT TO AMENDMENT OF INCENTIVE STOCK OPTIONS

 

To be signed and delivered to OncoCyte Corporation, on or before July 22, 2019

 

I am a holder of outstanding stock options (the “Options”) to purchase shares of
common stock of OncoCyte Corporation, (the “Company”) that were granted under
the Company’s Employee Stock Option Plan (the “Option Plan”) and/or 2018 Equity
Incentive Plan (the “Incentive Plan”). Pursuant to the terms of the Options,
without giving effect to the Transition Agreement between myself and the Company
dated July 1, 2019 (the “Transition Agreement”), the Options will cease to vest
as of the date of my termination of employment or Continuous Service (as defined
in the Incentive Plan) with the Company and will remain exercisable for three
(3) months thereafter. In connection with the Transition Agreement, the Company
has agreed that, subject to the terms and conditions of the Transition
Agreement: (i) certain of my unvested Options shall continue to vest during the
Consulting Period, (ii) certain of my unvested options shall vest as of the end
of the Consulting Period with respect to the number of unvested Options that
would otherwise have vested during the six month period following the last day
of the Consulting Period; (iii) certain of my Options may vest as of dates after
the Transition Date if applicable performance vesting milestones are attained;
and (iv) the post-employment exercise period will be extended to permit me to
exercise the vested portion of my Options until the close of business at the
Company’s principal office on dates later than three months after the Transition
Date (the “Options Amendment”). The Company may not amend the terms of my
Options in a manner that would adversely affect my rights under such Options
without my written consent. I understand that with respect to any of my Options
that are an “incentive stock option” (“ISO”) under Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”), the Options Amendment is
contingent upon my consent to such amendment.

 

Section 424(h) of the Code provides that if the terms of an ISO are modified,
then such modification shall be considered as the granting of a new option. An
extension of the post-termination exercise period of my Options would be deemed
a modification and, thus, the grant of new options. As a result, the Options
Amendment would require a new comparison of the exercise price and the current
fair market value of the Company’s common stock and would require my employment
status as of such date to determine if the Options, as amended by the Options
Amendment, retain ISO status. Therefore, because I will no longer be an employee
of the Company on the Transition Date, any ISOs would fail to be treated as an
ISO as a result of the Options Amendment, provided they are not exercised by me
within three (3) months after the Transition Date.

 

I understand that I am under no obligation to consent to the Options Amendment.
I have read this consent and have had sufficient time to review and discuss this
matter. I understand that in order for the Options Amendment to be effective, I
must properly execute and return my consent to the Options Amendment in
accordance with the “important instructions” below and I must become a party to
the Transition Agreement.

 

I further understand that this consent is intended as a brief summary of the
Options Amendment and, thus, if there is any inconsistency between the
information included in this consent and the terms of the Options (as amended by
the Transition Agreement), the terms of the Options shall govern. I acknowledge
that the Options Amendment shall not override any contrary provision in the
Option Plan or Incentive Plan under which the Options were granted or stock
option agreements governing the Options that would provide for earlier
termination of any unexercised Options regarding a corporate transaction, change
in control, or other similar transaction.

 

   

 

 

I acknowledge that neither the Company nor its agents have recommended or
influenced my decision to consent to the Options Amendment. I further
acknowledge that I have had the opportunity to seek independent advice regarding
this matter from my legal counsel and tax advisor.

 

After due consideration of the above, I hereby agree to the Options Amendment. I
acknowledge that, for any portion of the Options that are ISOs, the Options
Amendment will cause loss of ISO status if they are not exercised within three
(3) months after the Transition Date.

 

      William Annett           Date Signed

 

IMPORTANT INSTRUCTIONS: In order for this Options Amendments to be effective,
you must (1) sign and date this Consent to Amendment of Incentive Stock Options
on or before July 22, 2019 and return it to OncoCyte Corporation, and (2) become
a party to the Transition Agreement. This Consent to Amendment of Incentive
Stock Options may be returned by hard copy or by emailing as a PDF attachment to
Albert Parker, Chief Operating Officer, at aparker@oncocyte.com.

 

 2 

 

 

EXHIBIT B

 

STOCK OPTIONS

 

Name 

Number of

Shares

Underlying

Unexercised Options

  

Option

Exercise

Price

  

Original Option

Expiration

Date

  William Annett   5,000(1) $2.20    January 8, 2025      5,000(1) $2.20    June
15, 2025      600,000(1) $2.20    June 15, 2025      250,000(1) $3.06  
 February 15, 2026      225,000(1) $4.70    February 16, 2027      180,000(2)
$2.35    May 22, 2028      390,000(1) $3.52    March 13, 2029 

 

(1) One quarter of the options to vest upon completion of 12 full months of
continuous employment measured from the date of grant, and the balance of the
options to vest in 36 equal monthly installments commencing on the first
anniversary of the date of grant, based upon the completion of each month of
continuous employment.

 

(2) One quarter of the options to vest when a clinical validation study of
DetermaVu™ is complete and OncoCyte receives a publication date for an article
describing the results of the study, and the balance of the options to vest when
OncoCyte receives a Medicare local coverage determination for DetermaVu™.