ex10_39.htm


    

    Exhibit
10.39

    


    REGISTRATION
RIGHTS AGREEMENT

    


    This
Registration Rights Agreement (“Agreement”) is entered into as of October 15,
2009 by and between OncoCyte Corporation, a California corporation (the
“Company”) and the undersigned.

     
 

    NOW,
THEREFORE, the parties agree as follows:

    


    1.        
    Certain
Definitions.  As used in this Agreement the following terms
shall have the following respective meanings:

    


    (a)       
    “Act” shall mean the
Securities Act of 1933, as amended, or any similar federal statute and the rules
and regulations of the Commission thereunder, all as the same shall be in effect
at the time.

    


    (b)     
      “Commission” shall
mean the Securities and Exchange Commission or any other federal agency at the
time administering the Act.

    


    (c)     
      “Holder” shall mean
each person who originally purchased Registrable Securities from the Company
pursuant to a Stock Purchase Agreement and his/its transferees as permitted by
Section 6.

    


    (d)     
      The terms “register,” “registered” and
“registration”
refer to a registration effected by preparing and filing a registration
statement in compliance with the Act, and the declaration or ordering of the
effectiveness of such registration statement.

    


    (e)      
     “Registrable
Securities” means the Shares.  Any securities that are (i)
distributed as a dividend or otherwise with respect to Registrable Securities,
(ii) issuable upon the exercise or conversion of Registrable Securities, or
(iii) issued or issuable in exchange for or through conversion of Registrable
Securities pursuant to a recapitalization, reorganization, merger, consolidation
or other transaction shall also constitute Registrable Securities.

    


    (f)      
      “Shares” means up to
6,000,000 common shares, no par value, of the Company issued by the Company
pursuant to the Stock Purchase Agreement.

    


    (g)     
      “Stock Purchase
Agreement” means a Stock Purchase Agreement pursuant to which the Company
agreed to issue and sell up to an aggregate of 6,000,000 Shares to the
undersigned.

    


    2.         
   Registration
Rights.

    


    (a)     
      Filing of Registration
Statement With Respect to Shares.  The Company agrees, at its
expense, to file a registration statement with the Commission to register the
Shares under the Act, and to take such other actions as may be necessary to
allow the Shares to be freely tradable, without restrictions under the
Act.  Such registration statement shall be filed following a written
request for registration from any Holder(s) of not less than 25% of the Shares
not earlier than one year after the Company completes an initial public offering
of its common shares registered under the Act (an “IPO”).  The Company
will use commercially reasonable efforts to cause the registration statement to
become effective as promptly as practicable after filing.  The Company
will make all filings required under applicable state securities or “blue sky”
laws so that the Registrable Securities being registered shall be registered or
qualified for sale under the securities or blue sky laws of New York,
California, and such jurisdictions as shall be reasonably appropriate for
distribution of the Shares covered by the registration statement.  The
registration statement shall be a “shelf” registration pursuant to Rule 415 (or
similar rule that may be adopted by the Securities and Exchange Commission) and
shall provide that each Holder’s plan of distribution is to offer and sell
Shares from time to time at market prices or prices related to market prices;
provided, that a registration statement may be amended to provide for an
underwritten public offering of the Shares included in the registration
statement if the Holders submit to the Company a written notice to such effect
with a copy of the applicable underwriting documents and such other relevant
information concerning the offering as the Company may request.  The
Company shall use commercially reasonable efforts to keep each such registration
statement effective until the earlier of (i) completion of the distribution or
distributions being made pursuant thereto, and (ii) such time as the Holders are
eligible to sell their Shares under Rule 144 under the Act without application
of the manner of sale and volume limitations under Rule 144.  The
Company shall utilize Form S-3 if it qualifies for such use.  The
Company will furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act and such other related documents as the Holders may reasonably request in
order to effect the sale of their Shares.


    
      
         


      

      
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    (b)        
   “Piggy-Back Registration” of
Shares.  If, at any time after the completion of an IPO, the
Company proposes to register any of its securities under the Act (otherwise than
pursuant to (i) this Agreement, (ii) a registration statement pertaining to
subscription rights distributed to Company shareholders, and (iii) a
registration on a Form S-8 or any other form if such form cannot be used for
registration of the Registrable Securities pursuant to its terms), and the
Shares shall not then be eligible for sale by the Holder(s) under Rule 144 under
the Act, the Company shall, as promptly as practicable, give written notice to
the Holders.  The Company shall include in such registration statement
the Shares proposed to be sold by the Holders.  Notwithstanding the
foregoing, if the offering of the Company’s securities is to be made through
underwriters, the Company shall not be required to include Shares if and to the
extent that the managing underwriter reasonably believes in good faith that such
inclusion would materially adversely affect such offering, unless the Holders
agree to postpone their sales until 10 days after the distribution is
completed.  The provisions of Section 2(e) shall apply to any such
registration statement if the offering is made through
underwriters.

    


    (c)       
    Costs of
Registration.  The Company shall pay the cost of the
registration statements filed pursuant to this Agreement, including without
limitation all registration and filing fees, fees and expenses of compliance
with securities or blue sky laws (including counsel’s fees and expenses in
connection therewith), printing expenses, messenger and delivery expenses,
internal expenses of the Company, listing fees and expenses, and fees and
expenses of the Company’s counsel, independent accountants and other persons
retained or employed by the Company.  Holders shall pay any
underwriters discounts applicable to the Registrable
Securities.


    
      
         


      

      
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    (d)        
   Other
Securities.  Any registration statement filed pursuant to this
Agreement may include other securities of the Company which are held by other
persons who, by virtue of agreements with the Company or permission given, are
entitled to include their securities in such registration.

    


    (e)       
    Underwriting.  If
Holders wish to include Shares in a registration under Section 2(b), or if
Holders holding not less than 50% of the Shares intend to distribute Shares by
means of an underwriting to be registered under Section 2(a), they shall so
advise the Company prior to the effective date of the registration statement
filed by the Company, and the Company shall include such information in a
written notice to all Holders.  All Holders shall be entitled to
participate in such underwriting, and the right of any Holder to registration
pursuant to this Agreement then shall be conditioned upon such Holder’s
participation in such underwriting and the inclusion of such Holder’s Shares in
the underwriting to the extent provided herein.

    


    The
Company shall (together with all Holders proposing to distribute their
securities through such underwriting) enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting by a
majority in interest of the Holders and reasonably acceptable to the Company, in
the case of a registration under Section 2(a), or selected by the Company is its
sole discretion, in the case of a registration under Section
2(b).  Notwithstanding any other provision of this Agreement, if the
managing underwriter advises the Holders and the Company in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then, the number of Registrable Securities that may be included in
the registration and underwriting shall be allocated among all Holders in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities held by such Holders and any other holders of securities having
rights to include their securities in the registration, at the time of filing
the registration statement.  No Registrable Securities excluded from
the underwriting by reason of the managing underwriter’s marketing limitation
shall be included in such registration.

    


    If any
Holder or any other holder of securities eligible for inclusion in the
registration disapproves of the terms of the underwriting, such person may elect
to withdraw from the underwriting and registration by written notice to the
Company and the managing underwriter.  The Registrable Securities
and/or other securities so withdrawn shall also be withdrawn from the
registration; provided, however, that, if by the withdrawal of such Registrable
Securities or other securities a greater number of Registrable Securities held
by other Holders or other securities held by persons having rights to
participate in such registration may be included in such registration (up to the
maximum of any limitation imposed by the underwriters), then the Company shall
offer to all Holders and other persons who have included Registrable Securities
or other securities in the registration the right to include additional
Registrable Securities or other securities in the same proportion used in
determining the underwriter limitation.


    
      
         


      

      
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    Notwithstanding
any other provision of this Agreement, if the registration is one under Section
2(b), and the managing underwriter determines that marketing factors require a
limitation of the amount of securities to be underwritten, the Company may
exclude Registrable Securities and other securities held by other holders of
registration rights without any exclusion of securities offered by
Company.  In the event of any exclusion of securities held by holders
of registration rights, the amount of securities that may be included in the
registration and underwriting shall be allocated among all Holders of
Registrable Securities and other holders of securities entitled to include
securities in such registration in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities and other securities that the
Company has agreed to register held by each such person.

    


    (f)        
    Waiver.  Notwithstanding
any other provision of this Agreement the rights of the Holders under Section
2(b) may be waived by a majority-in-interest of the Holders (based upon their
holdings of Registrable Securities, with or without notice to the Holders
generally).

    


    (g)       
    Limitation on Company
Liability.  The Company shall have no obligation to make any
cash settlement or payment to any Holder, or to issue any additional Shares or
other securities to any Holder, in the event that the Company is unable to
effect or maintain in effect the registration of any Registrable Securities
under the Act or any state securities law despite the Company’s commercially
reasonable efforts so to do.

    


    3.        
     Indemnification.

    


    (a)       
    The Company will indemnify, defend and hold harmless
each Holder, each of its officers, directors and partners, and each person who
controls such Holder within the meaning of the Act, and each underwriter, if
any, and each person who controls any underwriter within the meaning of the Act
from and against all expenses, claims, losses, damages and liabilities (or
actions commenced or threatened in respect thereof), including any of the
foregoing incurred in settlement of any litigation commenced or threatened
(other than a settlement effected without the consent of the Company, which
consent will not unreasonably be withheld), to the extent such expenses, claims,
losses, damages and liabilities (or actions commenced or threatened in respect
thereof) arise out of or are based on (i) any untrue statement (or alleged
untrue statement) of a material fact contained in any registration statement or
prospectus, or any amendment or supplement thereto, offering Registrable
Securities, or any omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or (ii) any violation, by
the Company, of any rule or regulation promulgated under the Act and applicable
to the Company and relating to any registration of Registrable Securities by the
Company under the Act.  The Company will reimburse each such Holder,
each of its officers, directors and partners, and each person controlling such
Holder, each such underwriter and each such person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action; provided that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission based upon written
information furnished to the Company by such Holder or underwriter or
controlling person specifically for use in connection with the registration or
offering of Registrable Securities.


    
      
         


      

      
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    (b)        
   Each Holder will, if Registrable Securities held by such
Holder are included in a registration under the Act or under any state
securities law, indemnify, defend and hold harmless the Company, each of its
directors and officers, and each independent accountant of the Company, each
underwriter, if any, of the Company’s securities covered by such a registration
statement, each person who controls the Company or such underwriter within the
meaning of the Act, and each other such Holder, and each of the officers,
directors and partners and each person who controls such other Holder within the
meaning of the Act, from and against all claims, losses, damages and liabilities
(or actions commenced or threatened in respect thereof) arising out of or based
on (i) any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement or prospectus, or any amendment or
supplement offering Registrable Securities, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, or (ii) any violation, by such Holder, of any
rule or regulation promulgated under the Act applicable to such Holder and
relating to action or inaction required of such Holder in connection with any
registration of Registrable Securities.  Such Holder will reimburse
the Company, such other Holders, such directors, officers, partners, persons,
accounting firms, underwriters, or control persons for any legal or any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability, or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement or
prospectus in reliance upon and in conformity with written information furnished
to the Company or any underwriter by such Holder specifically for use therein;
provided, however, that the obligations of such Holders under this Section 3(b)
shall be limited to an amount equal to the net proceeds to each such Holder from
the sale of Registrable Securities pursuant to such registration.

    


    (c)        
   Each party entitled to indemnification under this Section 3
(the “Indemnified Party”) shall give notice to the party required to provide
indemnification (the “Indemnifying Party”) promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld).  The Indemnified Party may participate in
such defense at the Indemnified Party’s own expense.  The failure of
any Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 3 except to the extent
such failure is prejudicial to the ability of the Indemnifying Party to defend
such action, but such failure shall not relieve the Indemnifying Party of any
liability that the Indemnifying Party may have to any Indemnified Party
otherwise than under this Section 3.  No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation.


    
      
         


      

      
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    4.        
     Information by
Holder.  Each Holder of Registrable Securities included in any
registration shall furnish to the Company and to each underwriter, upon the
Company’s request, such information regarding such Holder and the distribution
proposed by such Holder as shall be required in connection with any registration
of Registrable Securities.

    


    5.        
     Rule 144
Reporting.  With a view to making available the benefits of
certain rules and regulations of the Commission which may permit the sale of the
Registrable Securities to the public without registration, the Company agrees
to:

    


    (a)     
      Use commercially reasonable efforts to file
with the Commission in a timely manner all reports and other documents required
of the Company under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) at such times as the Company is subject to the reporting
requirements under Section 13 of the Exchange Act;


    
      
         


      

      
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    (b)     
      So long as a Holder owns any Registrable
Securities, furnish to the Holder forthwith upon request a written statement by
the Company as to its compliance with the reporting requirements of the Exchange
Act, a copy of the most recent annual or quarterly report of the Company, and
such other reports and documents so filed by the Company under the Exchange Act
as a Holder may reasonably request in availing itself of any rule or regulation
of the Commission allowing a Holder to sell any such securities without
registration.

    


    6.          
   Transfer of Registration
Rights.  The rights to cause the Company to register securities
under this Agreement may be assigned:  (a) to an “affiliate” (defined
as an entity that controls, is controlled by, or under common control with the
transferor); (b) to one or more of its general partners, limited partners, or
members if the transferor is a partnership or limited liability company; or (c)
to any other transferee or assignee of an aggregate of twenty-five percent (25%)
or more of the transferor’s Registrable Securities; provided, that as a
condition to any transfer of such rights the transferor must give the Company
written notice at the time or within a reasonable time after said transfer,
stating its desire to transfer such rights, the name and address of the
transferee or assignee, and identifying the securities with respect to which
such registration rights are being assigned; provided, that nothing in this
Section shall be construed in any way to limit any restriction or condition on
transfer of any Registrable Securities imposed by any other agreement between a
Holder and the Company, the Act, any rule or regulation promulgated under the
Act, or any state securities or blue sky law or any rule or regulation
thereunder.

    


    7.        
     Computation of Certain
Percentages.  Where any provision of this Agreement provides
for the exercise, waive, or amendment of any rights upon the action of Holders
of a specified percentage of Registrable Securities, such percentage shall be
determined based upon the aggregate number of Registrable Securities issued and
outstanding.

    


    8.        
     Miscellaneous.

    


    (a)       
    Governing
Law.  This Agreement shall be governed in all respects by the
laws of the State of California, as applied to contracts entered into in
California between California residents and to be performed entirely within
California.

    


    (b)        
   Successors and
Assigns.  Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties
hereto.

    


    (c)       
    Entire Agreement;
Amendment.  This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof.  Neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated orally, but only by a written
instrument signed by the Company and Holders of a majority of the Registrable
Securities which have not been resold to the public.


    
      
         


      

      
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    (d)     
      Notices,
etc.  All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first-class mail,
postage prepaid, or otherwise delivered by hand, by messenger or next business
day air freight services, addressed (i) if to a Holder at such Holder’s address
set forth on the signature page hereto, or at such other address as such Holder
shall have furnished to the Company in writing, or (ii) if to the Company, at
1301 Harbor Bay Parkway, Suite 100, Alameda, California 94502;
attention:  Chief Financial Officer, or at such other address as the
Company shall have furnished to the Holders in writing.

    


    (e)       
    Delays or
Omissions.  No delay or omission to exercise any right, power
or remedy accruing to any party, upon any breach or default of any other party
under this Agreement, shall impair any such right, power or remedy, nor shall it
be construed to be a waiver of or acquiescence in any such breach or default or
any similar breach or default thereafter occurring.  A waiver of any
single breach or default shall not be deemed a waiver of any other breach or
default theretofore or thereafter occurring.  Any waiver, permit,
consent or approval of any kind or character of any breach or default under this
Agreement, or any waiver of any provisions or conditions of this Agreement, must
be made in writing and shall be effective only to the extent specifically set
forth in such writing.  All remedies, either under this Agreement, or
by law or otherwise afforded to any party, shall be cumulative and not
alternative.

    


    (f)        
    Severability.  In
case any provision of this Agreement shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.

    


    (g)      
     Titles and
Subtitles.  The titles of the sections and subparagraphs of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.

    


    (h)       
    Counterparts.  This
Agreement may be executed in any number of counterparts (including by separate
counterpart signature pages), each of which shall be an original, but all of
which together shall constitute one instrument.  Any counterpart of
this Agreement may be signed by electronic or facsimile, and such electronic or
facsimile signature shall be deemed an original signature.


    
      
         


      

      
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    IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.

    


    


    
      THE
COMPANY:

      


      ONCOCYTE
CORPORATION

      


      


      By          
/s/ Robert
Peabody

          Robert
Peabody,

          Senior Vice
President and

          Chief
Operating Officer

      


      


      By          
/s/ Judith
Segall

       

          Judith
Segall, Secretary

      


      


      HOLDER:

      


      


              /s/
George Karfunkel

          George
Karfunkel

    

    


    
      Address
for Notice:   59 Maiden Lane

                  New York,
NY  10038

                  FAX: (718)
921-8340

       

       

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