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Exhibit 10.4
 
EMPLOYMENT TERMINATION AND RELEASE AGREEMENT

This Employment Termination and Release Agreement (the “Agreement”) is entered
into as of February 21, 2017 by and between Karen Chapman (“Employee”) OncoCyte
Corporation (“OncoCyte”) and BioTime, Inc. (“BioTime”).

Recitals

A.            Employee is resigning as an officer and employee of OncoCyte,
BioTime and any applicable BioTime subsidiaries for which she may have performed
services.

B.            OncoCyte, BioTime, and Employee wish to provide for a resolution
of any claim that Employee may have against OncoCyte, BioTime and BioTime
subsidiaries.

Based on these recitals, the parties agree as follows:

Agreement

1.             Employment Termination Arrangements.

(a)          Employee agrees that her employment with OncoCyte, BioTime, and
each of BioTime’s subsidiaries, if any, for which Employee performed services or
by which she was employed (each a “Related Company”) will terminate effective at
the close of business on March 22, 2017 (the “Termination Date”) as a result of
her resignation.  Employee agrees that (i) she has been paid in full for all
salary, wages, bonus payments (if any), accrued sick leave, accrued vacation,
paid time off, and other compensation (collectively, “Compensation”) owed by
OncoCyte, BioTime and any Related Company pursuant to her existing Employment
Agreement dated as of April 1, 2011 and any other agreement or arrangement
(written or oral) that may exist between Employee and OncoCyte, BioTime and any
Related Company (the “Employment Agreement”) through the date of this Agreement,
and (ii) BioTime and the Related Companies will not owe Employee any further or
additional Compensation of any kind after the date of this Agreement.  Employee
agrees that the only additional or further Compensation that OncoCyte will owe
Employee after the date of this Agreement will be regular installments of her
regular OncoCyte base salary through the Termination Date, any paid time off
from OncoCyte remaining unused or unpaid on the Termination Date, coverage by
any OncoCyte employee benefit plans available for all OncoCyte employees
generally through the Termination Date, and the bonus payment referenced in
Section 1(b) below.  Employee acknowledges and agrees that she is entitled to
receive no other payments, benefits, or Compensation of any kind from OncoCyte,
BioTime or any Related Company for services as an officer or employee of
OncoCyte, BioTime or any Related Company.

(b)          Employee agrees that she will be using paid time off days from
March 13 through March 22, 2017 and that she will receive payment for any
remaining unused paid time off days from OncoCyte in her final paycheck in
accordance with OncoCyte’s regular practices.

(b)          OncoCyte agrees that Employee shall receive from OncoCyte an annual
bonus in the amount of $69,000 based on her performance as an OncoCyte employee,
which shall be paid on or about March 10, 2017.  Employee agrees that she is not
entitled to receive a bonus from BioTime or any Related Company or a bonus in
excess of $69,000 from OncoCyte.

(c)          Employee, BioTime and OncoCyte agree that execution and delivery of
this Agreement by Employee shall constitute the 30 day notice of resignation
required by her Employment Agreement, and that she is resigning in all
capacities as an officer or employee of OncoCyte, BioTime and any Related
Company for which she may have been employed or performed services.

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(d)          Employee currently holds the following employee stock options that
were granted by OncoCyte, BioTime, or certain Related Companies:

OncoCyte Options
Grant Date
 
 Adjusted Strike Price for Reverse Stock Split
 
 O/S After Reverse Stock Split
 
Vesting
Start date
 
Vested
as of
DOT*
 
Unvested and forfeited
immediately at DOT*
 
Cancelled if not exercised by February 28, 2018
4/1/2011
 
$   1.50
 
200,000
 
4/1/2011
 
200,000
 
-
 
200,000
1/9/2015
 
$   2.20
 
100,000
 
1/9/2015
 
54,166
 
45,834
 
54,166
2/16/2016
 
$   3.06
 
60,000
 
2/16/2016
 
16,250
 
43,750
 
16,250
               
270,416
 
89,584
 
270,416

BioTime Options
Grant Date
 
 Exercise Price
 
Total Granted
 
Vesting
Start date
 
Vested
as of
DOT*
 
Unvested and forfeited
immediately at DOT*
 
Cancelled if not exercised in 90 days
9/1/2011
 
$     4.61
 
10,000
 
9/1/2011
 
10,000
 
-
 
10,000
2/202013
 
$     4.22
 
25,000
 
1/1/2013
 
25,000
 
-
 
25,000
3/20/2014
 
$     3.51
 
25,000
 
3/20/2014
 
18,750
 
6,250
 
18,750-
               
53,750
 
6,250
 
53,750

ReCyte Therapeutics, Inc. Options
Grant Date
 
 Exercise
Price
 
Total
Granted
 
Vesting
Start date
 
Vested
as of
DOT*
 
Unvested and forfeited
immediately at DOT*
 
Cancelled if not exercised in 90 days
7/1/2012
 
$      2.05
 
50,000
 
7/1/2012
 
50,000
 
-
 
50,000

OrthoCyte Corporation Options
Grant Date
 
 Exercise
Price
 
Total
Granted
 
Vesting
Start date
 
Vested
as of
DOT*
 
Unvested and forfeited
immediately at DOT*
 
Cancelled if not exercised in 90 days
7/1/2012
 
$      0.08
 
50,000
 
7/1/2012
 
50,000
 
-
 
50,000

*DOT means Termination Date

As a result of Employee ceasing to be an employee of OncoCyte and BioTime, and
any Related Companies, under the terms of the applicable stock option plans of
OncoCyte, BioTime, and Related Companies that have granted stock options to
Employee, and the stock option agreements governing those stock options,
Employee’s stock options that have not vested on or before the Termination Date
shall expire upon the termination of her employment on the Termination Date, and
except as otherwise provided in Section 3 of this Agreement with respect to
vested OncoCyte stock options, her vested stock options shall expire ninety (90)
days after the Termination Date unless exercised by Employee by that date.
 
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2.             Tax. Employee shall be responsible for the payment of all income
taxes arising from any exercise of her stock options and sale of the common
stock issued upon exercise.

3.             Special OncoCyte Stock Option Amendment; Lock-Up Agreements.

(a)          In consideration of Employee entering into this Agreement and
performing her obligations and covenants under this Agreement, including but not
limited to the provisions of paragraph (b) of this Section 3, OncoCyte agrees
that Employee’s OncoCyte stock options are amended as follows:

(i)          The expiration date of the OncoCyte stock options that are vested
on the date of this Agreement and any stock options that vest from the date of
this Agreement through the Termination Date is extended to 5:00 p.m. Pacific
Time on February 28, 2018, subject to Employee’s full and timely performance of
all of her obligations and covenants under this Agreement;

(b)          As an inducement for OncoCyte agreeing to extend the expiration
date of Employee’s OncoCyte vested stock options, Employee hereby acknowledges
and agrees that during the “Lock-Up Period” Employee will not, without the prior
written consent of OncoCyte (which consent may be granted or withheld in
OncoCyte’s sole discretion): (i) offer, sell, contract to sell (with the
exception that Employee may enter a 10b5-1 planned sale agreement during the
Lock-Up Period, so long as the sale of the Lock-up Shares does not occur during
the Lock-up Period and planned sale of Locked-up Shares commences after Lock-up
Period is over), pledge, grant any option to purchase or otherwise dispose of
(collectively, a “Disposition”) any “Lock-Up Shares;” and (ii) exercise or seek
to exercise or effectuate in any manner any rights of any nature that Employee
has or may have hereafter to require OncoCyte to register under the Securities
Act of 1933, as amended (the “Act”) Employee’s sale, transfer or other
disposition of any of the Lock-Up Shares. As used in this Agreement, “Lock-Up
Shares” means OncoCyte stock options held by Employee as defined by the table
below:

OncoCyte Options
Grant Date
 
 Adjusted Strike Price for Reverse Stock Split
 
 O/S After Reverse Stock Split
 
Vesting
Start date
 
Vested
as of
DOT*
 
Unvested and forfeited immediately at DOT*
 
Cancelled if not exercised by February 28, 2018
4/1/2011
 
 $   1.50
 
200,000
 
4/1/2011
 
200,000
 
-
 
200,000
1/9/2015
 
 $   2.20
 
100,000
 
1/9/2015
 
54,166
 
45,834
 
54,166
2/16/2016
 
 $   3.06
 
60,000
 
2/16/2016
 
16,250
 
43,750
 
16,250
               
270,416
 
89,584
 
270,416

“Lock-Up Shares” only applies to OncoCyte stock options held by Employee and
excludes any stock options or shares held by spouse.
 
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As used in this Agreement, “Lock-Up Period” means a period of time commencing on
the date of this Agreement and ending at 5:00 p.m. Pacific Time on May 31, 2017.
The foregoing restrictions under this paragraph are expressly agreed to preclude
Employee from engaging in any hedging, collar (whether or not for any
consideration) or other transaction that is designed to or reasonably expected
to lead or result in a Disposition of Lock-Up Shares during the Lock-Up Period,
even if such Lock-Up Shares would be disposed of by someone other than Employee.
Such prohibited hedging or other transactions would include any short sale or
any purchase, sale or grant of any right (including any put or call option or
reversal or cancellation thereof) with respect to any Lock-Up Shares or with
respect to any security (other than a broad-based market basket or index) that
includes, relates to or derives any significant part of its value from Lock-Up
Shares. Notwithstanding Employee’s agreement not to make any Disposition during
the Lock-Up Period, the foregoing restrictions under this paragraph shall not
apply to: (i) any transfers made by Employee by will or intestate succession
upon the death of Employee, or (ii) a transfer to OncoCyte in connection with
the exercise of any OncoCyte stock option, or (iii) any transfers made by the
spouse of the Employee of options or shares currently held in his name. Employee
may enter a 10b5-1 planned sale agreement during the Lock-Up Period, so long as
the sale of the Lock-up Shares does not occur during the Lock-up Period and
planned sale of Locked-up Shares commences after Lock-up Period is over.

(c)          Employee acknowledges and agrees that she will promptly comply in
all respects with Section 6 of her Employment Agreement by returning to
OncoCyte, BioTime and all Related Companies (i) all equipment and other property
belonging to OncoCyte, BioTime and the Related Companies, (ii) all originals and
copies of Confidential Information as defined in her Employment Agreement, and
(ii) any and all other documents, information, and other items referenced in
Section 6 of her Employment Agreement, to the extent any of the foregoing have
not been returned to OncoCyte, BioTime, and all Related Companies on or before
the Termination Date.

4.             Confidential and Proprietary Information.

(a)          During her employment with OncoCyte and BioTime, Employee had
access to trade secrets and confidential information of OncoCyte, BioTime and
certain Related Companies. Confidential Information means all information and
ideas, in any form, relating in any manner to matters such as: products;
formulas; technology and know-how; inventions; diagnostic test development and
trial plans and data; clinical trial development plans and data, business plans;
marketing plans; the identity, expertise, and compensation of employees and
contractors; systems, procedures, and manuals; customers; suppliers; joint
venture partners; research collaborators; licensees; and financial information.
Confidential Information also shall include any information of any kind, whether
belonging to OncoCyte, BioTime, a Related Company, or any third party, that
OncoCyte, BioTime, or a Related Company has agreed to keep secret or
confidential under the terms of any agreement with any third party. Confidential
Information does not include: (i) information that is or becomes publicly known
through lawful means other than unauthorized disclosure by Employee; (ii)
information that was rightfully in Employee’s possession prior to this
employment with OncoCyte or BioTime and was not assigned to OncoCyte, BioTime,
or a Related Company, or was not disclosed to Employee in Employee’s capacity as
an employee or other fiduciary of OncoCyte, BioTime; or a Related Company, or
(iii) information disclosed to Employee, after the Termination Date without a
confidential restriction by a third party who rightfully possesses the
information and did not obtain it, either directly or indirectly, from OncoCyte,
BioTime or a Related Company, and who is not subject to an obligation to keep
such information confidential for the benefit of OncoCyte, BioTime, a Related
Company, or any third party with whom OncoCyte, BioTime, or a Related Company
has a contractual relationship. Employee understands and agrees that all
Confidential Information shall be kept confidential by Employee on and after the
Termination Date notwithstanding that her employment by OncoCyte, BioTime, and
the Related Companies has terminated, and Employee further agrees that Employee
(i) will not, without the prior written approval by OncoCyte, BioTime, and the
respective Related Companies disclose any Confidential Information, or use any
Confidential Information in any way, and (ii) Employee shall return to OncoCyte,
BioTime, or a Related Company all originals and copies of Confidential
Information belonging to such companies.
 
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(b)          Employee agrees to keep the terms of this Agreement strictly
confidential and will not disclose such information, without the prior written
permission of OncoCyte and BioTime, to anyone except Employee’s attorneys or tax
advisors, if any, but only after informing those persons that they too must keep
the information confidential, unless and until (i) OncoCyte or BioTime discloses
the material terms of this Agreement in a report or registration statement filed
with the Securities and Exchange Commission under the Securities Exchange Act
1934, as amended, or under the Act, or (ii) Employee is required by court order
or other law to disclose the terms of this Agreement.

5.             Release. Employee, on behalf of herself and her heirs, executors,
administrators, and assigns, releases and discharges OncoCyte, BioTime, each
Related Company, and each of the former, current or future officers, directors,
employees, agents, fiduciaries, shareholders, insurers, and benefit plans of
OncoCyte, BioTime and each Related Company from any and all claims, liabilities,
causes of action, damages, losses, demands or obligations (“Claims”) of every
kind and nature, whether now known or unknown, suspected or unsuspected, which
Employee ever had, now has, or hereafter may have by reason of any act,
omission, transaction, practice, conduct, or matter of any kind whatsoever,
relating to or based upon, in whole or in part, Employee’s employment or
termination of employment with OncoCyte, BioTime or any Related Company, except
for “Excluded Claims.” As used in this Agreement, “Excluded Claims” mean
Employee’s right to receive from OncoCyte regular installments of her regular
base salary through the Termination Date, any paid time off remaining unused or
unpaid on the Termination Date, coverage by any OncoCyte employee benefit plans
available for all OncoCyte employees generally through the Termination Date, and
the bonus payment referenced in Section 1(b). This release and discharge
includes, but is not limited to, all Claims arising under federal, state and
local statutory or common law, including, but not limited to, the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the
California Fair Employment and Housing Act, Claims for wrongful discharge under
any public policy or any policy of OncoCyte, BioTime or any Related Company,
Claims for breach of fiduciary duty, and the laws of contract and tort, and any
Claim for attorney’s fees. Employee promises never to file a lawsuit or assist
in or commence any action asserting any Claims released hereunder. Not
withstanding the above, Employee does not release OrthoCyte Corporation or its
parent BioTime from claims related to employee’s rights as a shareholder of
OrthoCyte Corporation.

6.             Known or Unknown Claims. Employee understands and expressly
agrees that the provisions of Sections 5 and 6 of this Agreement extend to all
Claims of every nature and kind, known or unknown, suspected or unsuspected,
past, present, or future, other than Excluded Claims, arising from or
attributable to any conduct of OncoCyte, BioTime, any Related Company, and any
of their respective officers, directors, employees, agents, fiduciaries,
shareholders, insurers, and benefit plans, whether or not Employee knows or
believes she may have any Claims. Employee hereby WAIVES any and all rights
granted to Employee under Section 1542 of the California Civil Code or any
analogous state law or federal law or regulations. Section 1542 of the
California Civil Code reads as follows:
 
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A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

7.             No Disparagement. Employee agrees not to disparage OncoCyte,
BioTime or any Related Company or any of their respective officers, employees,
agents or representatives, and will not knowingly say or do anything that would
have an adverse impact on OncoCyte, BioTime, or any Related Company. .

8.             Dispute. It is the intention of Employee, OncoCyte, BioTime, and
the Related Companies that the Federal Arbitration Act and the California
Arbitration Act shall apply with respect to the arbitration of disputes, claims,
and controversies pursuant to, arising under, or in connection with this
Agreement. Should a dispute arise concerning this Agreement or its performance,
such dispute shall be resolved, at the election of the party seeking to enforce
the Agreement, either by court action, or by binding arbitration administered by
JAMS under its applicable dispute resolution rules. If arbitration is initiated,
the arbitration shall be held in San Francisco or Oakland, California. The
Company or BioTime shall pay the arbitrator’s fees and costs. Employee shall pay
for Employee’s own costs and attorneys' fees, if any and the Company and BioTime
shall pay for their own costs and attorneys' fees, if any, subject to the right
of the prevailing party to recover its reasonable attorneys’ fees and costs as
provided in Section 10.

EMPLOYEE UNDERSTANDS AND AGREES THAT THIS AGREEMENT TO ARBITRATE CONSTITUTES A
WAIVER OF EMPLOYEE’S RIGHT TO A TRIAL BY JURY OF ANY MATTERS COVERED BY THIS
AGREEMENT TO ARBITRATE

9.             Construction. This Agreement shall be construed and enforced in
accordance with the laws of the State of California.

10.           Attorneys’ Fees. Should any action be brought by any party to this
Agreement to enforce any provision of this Agreement, the prevailing party shall
be entitled to recover, in addition to any other relief, reasonable attorneys’
fees and costs and expenses of litigation or arbitration.

11.           The terms of this agreement apply individually to Employee and do
not affect the individual and separable rights of the Employee’s spouse.

12.           Integration. This Agreement constitutes an integration of the
entire understanding and agreement of the parties with respect to the matters
referred to in this Agreement. Any representation, warranty, promise or
condition, whether written or oral, between the parties with respect to the
matters referred to in this Agreement which is not specifically incorporated in
this Agreement shall not be binding upon any of the parties hereto and the
parties acknowledge that they have not relied, in entering into this Agreement,
upon any representations, warranties, promises or conditions not specifically
set forth in this Agreement. No prior or contemporaneous oral or written
understanding, covenant, or agreement between the parties, with respect to the
matters referred to in this Agreement, shall survive the execution of this
Agreement. This Agreement may be modified only by a written agreement executed
by both parties hereto.
 
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13.           Successors and Assigns. This Agreement shall be binding on, and
shall inure to the benefit of, Employee and OncoCyte, BioTime, each Related
Company, and their respective heirs, executors, successor and assigns. The
provisions of Sections 5, 6, and 7 shall also inure to the benefit of each of
the former, current and future officers, directors, employees, agents,
fiduciaries, shareholders, insurers, and benefit plans of OncoCyte, BioTime, and
each Related Company and their respective heirs, executors, successors, and
assigns.

14.           Construction. The language of this Agreement shall be construed as
to its fair meaning and not strictly for or against either party.

15.           Counterparts. This Agreement may be executed in counterparts and
when each party has signed and delivered at least one such counterpart, each
counterpart shall be deemed an original and all counterparts taken together
shall constitute one and the same Agreement, which shall be binding and
effective as to all parties.

16.           Headings. Headings in this Agreement are for convenience of
reference only and are not a part of the substance hereof.

17.           Severability. If any provision of this Agreement is held to be
invalid, void or unenforceable, the remaining provisions shall remain in full
force and effect, except that, should Section 5 or Section 6 be held invalid,
void or unenforceable, either jointly or separately, as a result of any action
by Employee, the Company shall be entitled to rescind the Agreement.

18.           Effective Date of Agreement

EMPLOYEE IS ADVISED THAT EMPLOYEE HAS UP TO TWENTY-ONE (21) CALENDAR DAYS TO
CONSIDER THIS AGREEMENT IN WHICH EMPLOYEE WAIVES IMPORTANT RIGHTS, INCLUDING
THOSE UNDER THE AGE DISCRIMINATION AND EMPLOYMENT ACT OF 1967. EMPLOYEE ALSO IS
ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO EMPLOYEE’S SIGNING OF THIS
AGREEMENT.

EMPLOYEE MAY REVOKE THIS AGREEMENT FOR A PERIOD OF SEVEN (7) CALENDAR DAYS
FOLLOWING THE DAY EMPLOYEE SIGNS THIS AGREEMENT. ANY REVOCATION WITHIN THIS
PERIOD MUST BE SUBMITTED, IN WRITING, TO WILLIAM ANNETT, CHIEF EXECUTIVE
OFFICER, ONCOCYTE CORPORATION, AND TO ADITYA MOHANTY, CO-CHIEF EXECUTIVE
OFFICER, BIOTIME, INC., 1010 ATLANTIC AVENUE, SUITE 102, ALAMEDA, CA 94501 AND
STATE, "I HEREBY REVOKE MY ACCEPTANCE OF OUR EMPLOYMENT TERMINATION AND RELEASE
AGREEMENT AND RELEASE OF ALL CLAIMS." THE REVOCATION MUST BE PERSONALLY
DELIVERED TO WILLIAM ANNETTT, CHIEF EXECUTIVE OFFICER ONCOCYTE CORPORATION, AND
TO ADITYA MOHANTY, CO-CHIEF EXECUTIVE OFFICER, BIOTIME, INC., 1010 ATLANTIC
AVENUE, SUITE 102, ALAMEDA, CA 94501AND POSTMARKED WITHIN SEVEN (7) CALENDAR
DAYS AFTER EMPLOYEE SIGNS THIS AGREEMENT.
 
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PROVIDED THAT EMPLOYEE HAS NOT REVOKED THIS AGREEMENT, PURSUANT TO THE PRECEDING
PARAGRAPH, THE EFFECTIVE DATE OF THIS AGREEMENT SHALL BE THE DAY AFTER THE
EMPLOYEE HAS DELIVERED A SIGNED COPY OF THE AGREEMENT TO WILLIAM ANNETT, CHIEF
EXECUTIVE OFFICER. ONCOCYTE CORPORATION, AND TO ADITYA MOHANTY, CO-CHIEF
EXECUTIVE OFFICER, BIOTIME, INC., 1010 ATLANTIC AVENUE, SUITE 102, ALAMEDA, CA
94501.

IN WITNESS WHEREOF the parties have entered into this Agreement as of the date
first above written.

/s/ Karen Chapman
 
Karen Chapman
       
Address:
     

 
BioTime, Inc.
       
By:
/s/ Editya P. Mohanty
       
Title:
Co-CEO
       
OncoCyte Corporation
       
By:
/s/ William Annett
       
Title:
CEO
 

 
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