Document:

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

 

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(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 DetermaVuTM 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 DetermaVuTM.lxrp_ex101.htm

EXHIBIT 10.1
 
EMPLOYMENT AGREEMENT
 
THIS AGREEMENT made the 1st day of January, 2019.
 
BETWEEN:
 
Kelowna Management Services Corp.
100 – 740 McCurdy Road
Kelowna, BC 
V1X 2P7
 
(the “Employer” or the “Company”) 
 
AND:
 
John Docherty
[**]1
 
(the “Employee”)
 
WHEREAS:
 
A. The Employer is in the business of providing management services to its affiliates (the “Affiliates”) as that term is defined in National Instrument 45-106 – Prospectus Exemptions;
 
B. The Affiliates are in the business of research and development of patented technology;
 
C. The Employer and the Employee have verbally agreed to enter into an employment relationship for their mutual benefit, which agreement and relationship has been effected as at January 1, 2019;
 
D. As incentive for the Employee entering into this formal employment agreement, the Employer has agreed to provide the Employee with an additional two weeks of vacation per year for an aggregate six weeks of vacation annually throughout the term of this Agreement.
 
THIS AGREEMENT WITNESSES that the parties have agreed that the terms and conditions of the relationship shall be as follows:
 
1. Employment
 
1.1 The Employee will be employed by the Employer as the President of the Company commencing on January 1, 2019 (“Commencement Date”) for a fixed term of three (3) years with all terms in effect until the agreement automatically terminates at the expiry of three (3) years from the Commencement Date, unless either of the parties terminates the agreement prior to the expiry of three (3) years from the Commencement Date in accordance with this agreement (the “Expiration Date”). The parties agree to have this agreement apply retroactive to January 1, 2019, even though the agreement is signed after January 1, 2019, for the mutual benefit of both parties. 
_____________________
1 Certain information has been redacted: the omitted text sets forth the private residence of the employee
 
	 
	- 1 -
	
 
	 

 
1.2 The Employee agrees to be bound by the terms and conditions of this agreement. In carrying out the Employee’s duties, the Employee will comply with all reasonable instructions as may be given by the Employer.
 
1.3 The Employee acknowledges and agrees that the Employer’s policies and procedures form part of this agreement. The Employee agrees to comply with the terms of such policies and procedures so long as they are not inconsistent with any provisions of this agreement. If the terms of any policies and/or procedures conflict with the terms of this agreement, the terms of this agreement shall prevail.
 
1.4 The Employee acknowledges and agrees that effective performance of the Employee’s duties requires the highest level of integrity and the Employer’s complete confidence in the Employee’s relationship with other employees of the Employer and its Affiliates and with all other persons with whom the Employee deals in the course of employment.
 
1.5 The Employee will report directly to the board of directors of the Company in fulfilling the duties and responsibilities as set out in Schedule “A” to this agreement (the “Services”).
 
1.6 The Employee acknowledges and agrees that the Employee may be required to provide the Services to one or more of the Affiliates.
 
1.7 The Employee and Employer agree that the Services may be materially changed by the Employer upon providing the Employee with 9 months’ notice (the “Change of Services Notice”). The Employee agrees that if the Employer materially changes the Services pursuant to a Change of Services Notice, the employment relationship will not be terminated.
 
1.8 The Employee agrees to devote the majority of his working time exclusively to the business of the Employer and that, in the capacity of President, such working time will not be restricted to a 9 am to 5 pm Monday through Friday work schedule and the Employee will not receive any additional remuneration other than the remuneration set out in this agreement for all suck working time. The Employee also acknowledges that in the performance of the Services he will be expected to travel and represent the Company and its Affiliates which may include participation at trade shows, informational panels, presentations, media events and the like.
 
1.9 The Employee acknowledges and agrees that all services previously provided (a) to any of the Employee’s former employers, and/or (b) as a contractor or otherwise to the Employer, will not be recognized by the Employer for any purpose, except to the minimum extent (if any) required by applicable employment standards legislation.
 
	 
	- 2 -
	
 
	 

 
2. Remuneration and Benefits
 
2.1 In consideration of the Employee's performance of the obligations contained in this agreement, the Employer shall provide the Employee with the remuneration noted in the attached Schedule “B”.
 
3. Confidential Information
 
3.1 The Employee acknowledges that the Employee will acquire information (the "Confidential Information") about certain matters which are confidential to and exclusive property of the Employer or the Affiliates, including, but not limited to, trademarks, patents, trade dress, know how or trade secrets including lists of present and prospective customers, pricing and sales policies and concepts, business plans, forecasts and market strategies, discoveries, designs, methods or techniques, inventions, research and development, formulas and technology.
 
3.2 The Employee acknowledges that the Confidential Information could be used to the detriment of the Employer or the Affiliates and that its disclosure to third parties could cause irreparable harm. Accordingly, the Employee undertakes to treat the Confidential Information confidentially and not to disclose it to any third party or use it for any purpose either during the employment, except as may be necessary in the proper discharge of the Employee’s duties, or after termination of the employment for any reason, except with the written permission of the Employer.
 
3.3 The Employee acknowledges that the Employer owns all Confidential Information that may be developed in whole or in part by the Employee during the course of the employment with the Employer and the Employee agrees to waive all moral and legal rights to any such Confidential Information.
 
3.4 All files, notes, documents, data, tapes, reference items, sketches, drawings, memoranda, records, diskettes, discs and other materials in any way relating to any of the Confidential Information or to the Employer's business produced by the Employee or coming into possession by or through the employment, shall belong exclusively to the Employer and the Employee agrees to turn over to the Employer all of such materials in the Employee's possession or under the Employee’s control, forthwith, at the request of the Employer or, in the absence of a request, on the termination of employment with the Employer.
 
4. Discipline and Termination
 
4.1 The Employee may terminate the Employee’s employment by providing eight (8) weeks’ advance notice in writing to the Employer. The Employer may waive such notice, in whole or in part and if it does so, the Employee’s entitlement to remuneration and benefits pursuant to this agreement will continue to the expiration of the eight (8) weeks’ notice period and any such waiver shall not constitute termination of the Employee’s employment. 
 
	 
	- 3 -
	
 
	 

 
4.2 The Employer may terminate the Employee's employment without notice or payment in lieu thereof for just cause, subject to any minimum statutory entitlements required to be provided to the Employee under the Ontario Employment Standards Act, 2000, as amended from time to time (the “ESA”) (if any). For the purposes of this agreement, the parties agree that “cause” shall include, but is not limited to:
 
	 
	(a)	any material breach of the provisions of this agreement by the Employee;
	 
	 
	 

	 
	(b)	consistent poor performance on the Employee's part, after being advised as to the standard required;
	 
	 
	 

	 
	(c)	the Employee's violation of any local, provincial or federal statute, including, without limitation, an act of dishonesty such as embezzlement or theft; and
	 
	 
	 

	 
	(d)	conduct on the Employee's part that is materially detrimental to the business or the financial position of the Employer.

 
4.3 In response to instances of misconduct or other unacceptable performance by the Employee, the Employer may in its discretion impose disciplinary measures as may be deemed by the Employer to be appropriate when taking into account the nature of the misconduct or performance, the Employee's employment record, and the material surrounding circumstances. These disciplinary measures include, but are not limited to: verbal warning; written warning; loss of employment privileges and perquisites; unpaid suspension; removal from position or from certain duties associated with the position; dismissal. The Employer and the Employee agree that the Employer's imposition of any of these measures, with the exception of dismissal, shall not affect the other terms and conditions of this Agreement and, in particular, shall not be deemed or interpreted as constituting a constructive dismissal of the Employee by the Employer. The Employee agrees that this clause shall not mean that the Employer must proceed through any disciplinary measures before any termination of the Employee by the Employer without cause or with cause, and the Employer expressly reserves the right to terminate without cause without proceeding through any disciplinary measures.
 
4.4 The Employer may terminate the Employee's employment at any time without cause, upon providing the Employee with only the greater of:
 
	 
	(a)	the Employee’s statutory entitlements to accrued wages, vacation pay and minimum statutory benefits continuation as required by the ESA, plus [**]2 of notice or pay in lieu of notice (or a combination thereof), and although such notice or pay in lieu of notice is inclusive of any severance pay under the ESA (if applicable), such severance pay will be provided to the Employee in a lump sum and the Employer will not provide such severance pay to the Employee in the form of working notice; OR
	 
	 
	 

	 
	(b)	the minimum statutory notice of termination or statutory pay in lieu thereof, statutory severance pay (if applicable) and statutory benefits continuation (if applicable) as required by the ESA, as well as any other minimum entitlements required by the ESA including accrued wages and vacation pay.

__________________ 
2 Certain information has been redacted: the omitted text sets forth the severance payable for termination without cause.
  
	 
	- 4 -
	
 
	 

 
Except for any entitlements that the Employee may have under the ESA, these entitlements shall be subject to a duty to mitigate. Where the Employer provides the Employee with pay in lieu of notice pursuant to clause 4.4(a) or statutory pay in lieu of notice or statutory severance pay pursuant to clause 4.4(b), such payment shall be calculated solely by reference to the Employee’s annual base salary as defined in Schedule “B”, except and only to the extent as otherwise minimally required by the ESA. For clarity, if the ESA requires the Employee’s benefits to be continued during any statutory notice period, the Employee’s benefits will only be continued for the minimum statutory notice period required by the ESA.
 
The Employee understands and agrees that the entitlements set out in clause 4.4 will constitute the Employee’s full and final entitlements, in the event of a without cause termination, to notice or pay in lieu of notice, benefits continuation, and severance pay (if applicable), including in the event of a constructive dismissal of the Employee’s employment and including any entitlements to common law notice. If a greater entitlement is provided under the ESA, that greater entitlement shall prevail and the Employee’s entitlements shall be increased only to the extent necessary to satisfy such greater entitlement. In no event will the Employee be provided with less than the Employee’s minimum entitlements under the ESA. 
 
The Employee understands and agrees that clause 4.4 shall remain in force throughout the Employee’s employment, regardless of the Employee’s length of service or other changes to the Employee’s position that may occur over time, including without limitation after any promotion or salary increase, unless amended by mutual written agreement. 
 
5. Change of Control
 
	5.1 	Notwithstanding any compensation payable pursuant to clauses 4.1 and 4.4 of this agreement, should a change of control (“Change of Control”) occur in the Company during the Term of this Agreement or within 6 months after the earlier of the following: i) the Expiration Date; ii) the date on which the Employee terminates the agreement under section 4.1; or iii) the date of termination of the agreement under section 4.4, then the Employee shall be entitled to the greater of:

 
	 
	(a)	the Employee’s statutory entitlements to accrued wages, vacation pay and minimum statutory benefits continuation as required by the ESA, plus [**]3 months of pay in lieu of notice in a lump sum and such pay in lieu of notice is inclusive of any severance pay under the ESA (if applicable); OR
	 
	 
	 

	 
	(b)	the minimum statutory notice of termination or statutory pay in lieu thereof, statutory severance pay (if applicable) and statutory benefits continuation (if applicable) as required by the ESA, as well as any other minimum entitlements required by the ESA including accrued wages and vacation pay; and

 
any stock options or warrants to purchase common stock, as referred to in all existing and future agreements between the Company and the Employee, granted to the Employee (including any award that resulted from a substituted or replacement of equity awards upon Change of Control) shall become immediately vested and exercisable.
_____________________
3 Certain information has been redacted: the omitted text sets forth the amount of severance payable upon a change of control.
 
	 
	- 5 -
	
 
	 

 
5.2 For the purposes of clause 5.1, a Change of Control includes any of the following events:
 
	 
	(a)	If any individual, partnership, company, society, or other legal entity (a “Person”), alone or together with any other Persons with whom it is acting jointly or in concert, becomes the beneficial owner of, or acquires the power to exercise control or direction over, directly or indirectly, such securities (or securities convertible into, or exchangeable for, securities) entitled to more than fifty percent (50%) or more of the votes exercisable by holders of the then-outstanding securities generally entitled to vote for the election of directors (“Voting Stock”) of the Company or if any Persons that previously were not acting jointly or in concert commence acting jointly or in concert and together beneficially own, or have the power to exercise control or direction over, securities entitled to more than fifty percent (50%) or more of the votes exercisable by holders of voting stock, or have rights of conversion which, if exercised, would permit such Persons to own or control such a percentage of votes;
	 
	 
	 

	 
	(b)	The Company is merged, amalgamated or consolidated into or with another Person and, as a result of such business combination, a Person who previously held securities representing less than fifty percent (50%) of the votes exercisable by the holders of the Voting Stock of the Company, either alone or together with any other persons with whom it is acting jointly or in concert, is now, either alone or together with any other persons with whom it is acting jointly or in concert, entitled to hold more than fifty percent (50%) of the votes, exercisable by holders of the Voting Stock of the Company or of such Person into which the Voting Stock of the Company has been converted;
	 
	 
	 

	 
	(c)	The capital of the Company is reorganized and a Person, together with any other persons with whom it is acting jointly or in concert, which previously held securities representing less than fifty percent (50%) of the votes exercisable by the holders of the Voting Stock of the Company, now as a result of such reorganization, holds securities entitled to more than fifty percent (50%) of the votes exercisable by the holders of the Voting Stock of the Company;
	 
	 
	 

	 
	(d)	The Company sells or otherwise transfers all or substantially all of its assets to another Person and a Person, together with any other persons with whom it is acting jointly or in concert, which previously held securities representing less than fifty percent (50%) of the votes exercisable by the holders of the Voting Stock of the Company, now as a result of such sale or transfer, holds securities entitled to more than fifty percent (50%) of the votes exercisable by the holders of the Voting Stock of the Company; or

 
	 
	- 6 -
	
 
	 

 
	 
	(e)	During any period of two consecutive years, individuals (“Incumbent Directors”) who at the beginning of any such period constitute the directors of the Company or constitute the directors of the sole shareholder of the Company (the “Shareholder”), cease for any reason to constitute at least a majority thereof. For the purposes of this clause:

 
	 
	(i)	Each director who, during any such period, is elected or appointed as a director of the Company or the Shareholder, as applicable, with the approval of at least a majority of the voting shareholders of the Company or the Shareholder, as applicable, will be deemed to be an Incumbent Director;
	 
	 
	 

	 
	(ii)	An “Incumbent Director” does not include a director, elected or appointed pursuant to an agreement (in respect of such election or appointment) with another Person that deals with the Company or Shareholder, as applicable, at arm’s length, or as part of or related to an amalgamation, a merger or a consolidation of the Company or Shareholder, as applicable, into or with another person, a reorganization of the capital of the Company or Shareholder, as applicable, or the acquisition of the Company or Shareholder, as applicable, as a result of which securities entitled to less than fifty (50%) percent of the votes exercisable by holders of the then-outstanding securities entitled to Voting Stock of the Company or Shareholder, as applicable, is converted on or immediately after such transaction are held in the aggregate by Persons who were holders of Voting Stock of the Company or Shareholder, as applicable, immediately prior to such transaction; and
	 
	 
	 

	 
	(iii)	References to the Company shall include successors to the Company as a result of any amalgamation, merger, consolidation or reorganization of the Company into or with another body corporate or other legal Person.

 
6. Affiliate Sale
 
6.1 Notwithstanding any compensation provided under the termination provisions of this Agreement, should there be a sale of any of the Affiliates (each such sale being an “Affiliate Sale”) either during the Term of this Agreement or within 6 months after the earlier of the following: i) the Expiration Date; ii) the date on which the Employee terminates the agreement under section 4.1; or iii) the date of termination of the agreement under section 4.4, then the Company shall be obligated to pay the Employee a one-time lump sum payment in the amount equal to 2% of the total value of such Affiliate Sale (the “Affiliate Sale Entitlement”). The Affiliate Sale Entitlement shall be paid to the Employee within 90 days of completion of the Affiliate Sale. 
 
6.2 For the purposes of clause 6.1, an Affiliate Sale means any of the following events:
 
	 
	(a)	If any individual, partnership, company, society, or other legal entity (a “Person”), alone or together with any other Persons with whom it is acting jointly or in concert, becomes the beneficial owner of, or acquires the power to exercise control or direction over, directly or indirectly, such securities (or securities convertible into, or exchangeable for, securities) entitled to more than fifty percent (50%) or more of the votes exercisable by holders of the then-outstanding securities generally entitled to vote for the election of directors (“Voting Stock”) of an Affiliate or if any Persons that previously were not acting jointly or in concert commence acting jointly or in concert and together beneficially own, or have the power to exercise control or direction over, securities entitled to more than fifty percent (50%) or more of the votes exercisable by holders of voting stock, or have rights of conversion which, if exercised, would permit such Persons to own or control such a percentage of votes;

 
	 
	- 7 -
	
 
	 

 
	 
	(b)	An Affiliate is merged, amalgamated or consolidated into or with another Person and, as a result of such business combination, a Person who previously held securities representing less than fifty percent (50%) of the votes exercisable by the holders of the Voting Stock of the Affiliate, either alone or together with any other persons with whom it is acting jointly or in concert, is now, either alone or together with any other persons with whom it is acting jointly or in concert, entitled to hold more than fifty percent (50%) of the votes, exercisable by holders of the Voting Stock of the Affiliate or of such Person into which the Voting Stock of the Affiliate has been converted;
	 
	 
	 

	 
	(c)	The capital of an Affiliate is reorganized and a Person, together with any other persons with whom it is acting jointly or in concert, which previously held securities representing less than fifty percent (50%) of the votes exercisable by the holders of the Voting Stock of the Affiliate, now as a result of such reorganization, holds securities entitled to more than fifty percent (50%) of the votes exercisable by the holders of the Voting Stock of the Affiliate;
	 
	 
	 

	 
	(d)	An Affiliate sells or otherwise transfers all or substantially all of its assets to another Person and a Person, together with any other persons with whom it is acting jointly or in concert, which previously held securities representing less than fifty percent (50%) of the votes exercisable by the holders of the Voting Stock of the Affiliate, now as a result of such sale or transfer, holds securities entitled to more than fifty percent (50%) of the votes exercisable by the holders of the Voting Stock of the Affiliate; or
	 
	 
	 

	 
	(e)	During any period of two consecutive years, individuals (“Incumbent Directors”) who at the beginning of any such period constitute the directors of an Affiliate cease for any reason to constitute at least a majority thereof. For the purposes of this clause:

 
	 
	(i)	Each director who, during any such period, is elected or appointed as a director of an Affiliate with the approval of at least a majority of the Incumbent Directors will be deemed to be an Incumbent Director;
	 
	 
	 

	 
	(ii)	An “Incumbent Director” does not include a director, elected or appointed pursuant to an agreement (in respect of such election or appointment) with another Person that deals with an Affiliate at arm’s length, or as part of or related to an amalgamation, a merger or a consolidation of an Affiliate into or with another person, a reorganization of the capital of an Affiliate or the acquisition of an Affiliate as a result of which securities entitled to less than fifty (50%) percent of the votes exercisable by holders of the then-outstanding securities entitled to Voting Stock of an Affiliate is converted on or immediately after such transaction are held in the aggregate by Persons who were holders of Voting Stock of an Affiliate immediately prior to such transaction; and
	 
	 
	 

	 
	(iii)	References to an Affiliate shall include successors to an Affiliate as a result of any amalgamation, merger, consolidation or reorganization of an Affiliate into or with another body corporate or other legal Person.

 
	 
	- 8 -
	
 
	 

 
7. Non-Solicitation
 
7.1 The Employee will gain knowledge of the Employer and the Affiliate’s business and will form a close working relationship with their respective clients, suppliers, and employees which knowledge could be used to injure the Employer and/or the Affiliates if made available to a competitor or used for competitive purposes.
 
7.2 The Employee agrees that during employment and for a period of six (6) months after the termination of employment hereunder, howsoever brought about, the Employee will not solicit or attempt to solicit any of the Employer’s or Affiliates’ clients, provided that following the termination of the Employee’s employment, this clause shall only apply in respect of such clients with whom the Employee had serviced or solicited during the twelve (12) month period immediately preceding the termination of the Employee’s employment.
 
7.3 The Employee agrees that during employment and for a period of six (6) months following termination of employment hereunder, howsoever brought about, the Employee will not solicit or attempt to solicit any employee of the Employer that causes or is attempted to cause such employees to cease or reduce the employment provided to the Employer by such employees, provided that following the termination of the Employee’s employment, this provision shall only apply in respect of such employees with whom the Employee worked with during the twelve (12) month period immediately preceding the termination of the Employee’s employment.
 
7.4 The Employee acknowledges and agrees that all of the restrictions contained in clause 7 are necessary and fundamental to the protection of the business of the Employer and that all such restrictions are fair, reasonable and valid given the nature of the Employer’s business and the Employee’s position within that business. The Employee hereby waives all defences to the strict enforcement thereof. The Employee further confirms that these obligations will not unduly preclude Employee from becoming gainfully employed or from otherwise working following the termination of this Agreement.
 
8. Notices
 
8.1 Any notice required or permitted to be given to either party must be delivered by hand or personally to the party's address last known to the other party and will be deemed to be received on the date of hand delivery or personal delivery to such address. Personal delivery shall include delivery by a commercial courier.
 
	 
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9. Survival
 
9.1 The Employee's obligations contained in clauses 3, 7 and 8, shall survive the termination of this agreement.
 
9.2 The provisions of this Agreement shall survive changes in the employment relationship including, but not limited to:
  
	 
	(a)	Changes in the Employee's duties, responsibilities, and compensation and benefits;
	 
	 
	 

	 
	(b)	Changes in ownership of the Employer; and
	 
	 
	 

	 
	(c)	Passage of time.

  
10. Severability, Employment Standards and Accessibility
 
10.1 In the event that any provision of this agreement is found to be void, invalid, illegal or unenforceable by a court of competent jurisdiction, such finding will not affect any other provision of this agreement. If any provision of this agreement is so broad as to be unenforceable, to the maximum extent permissible by law, such provision shall be interpreted to be only so broad as is enforceable. All covenants, provisions and restrictions in this agreement shall be interpreted in accordance with the ESA, and if a greater entitlement is provided for under the ESA than as set out in any covenant, provision or restriction of this agreement, that greater entitlement shall prevail, the Employee’s entitlements shall be increased only to the extent necessary to satisfy such greater entitlement, and the Employer will provide the Employee with such greater entitlement.
 
Consistent with the Employer’s obligations under the Ontario Accessibility for Ontarians with Disabilities Act, 2005 and the Ontario Human Rights Code, the Company accommodates employees with disabilities in accordance with law. If the Employee requires any accommodations, the Employee agrees to promptly let the Employer know.
 
11. Waiver
 
11.1 The waiver by either party of any breach or violation of any provision of this agreement shall not operate or be construed as a waiver of any subsequent breach or violation. Further, no such waiver shall be effective or binding unless made in writing by the party purporting to give it.
 
12. Entire Agreement
 
12.1 This agreement, in conjunction with the Schedules to the agreement and the Employer’s policies and procedures, constitutes the entire agreement between the parties with respect to the employment of the Employee and any and all previous agreements, written or oral, express or implied between the parties or on their behalf relating to the employment of the Employee by the Employer are terminated and cancelled and each of the parties releases and forever discharges the other of and from all manner of actions, causes of action, claim or demands whatsoever under or in respect of any agreement.
 
	 
	- 10 -
	
 
	 

 
13. Headings
 
13.1 The headings utilized in this agreement are for convenience only and are not to be construed in any way as additions or limitations of the covenants and agreements contained in this agreement.
 
14. Independent Legal Advice
 
14.1 The Employee agrees that the Employee has been afforded the opportunity to obtain independent legal advice with respect to this agreement and its terms, and the Employee fully understands the nature and effect of this agreement, and has entered it freely, voluntarily and without duress.
 
15. Governing Law
 
15.1 This agreement shall be governed by and construed in accordance with the laws of the Province of Ontario.
 
IN WITNESS WHEREOF the parties have duly executed this agreement as of the day and year first above written.
 
	Kelowna Management Services Corp.	 
	 
	
	 	 	 
	 
	 
	Per:	“Chris Bunka” 	 
	 
	
	 
	Chris Bunka	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	SIGNED, SEALED & DELIVERED
in the presence of: 
	)
	 
	 

	 
	 
	)
	 
	 

	“Vanessa Carle”
	)
	 
	 

	Signature
	)
	 
	 

	Vanessa Carle
	)
	“John Docherty”
	
	Print Name
	)
	John Docherty
	
	100 – 740 McCurdy Road, Kelowna, BC
	)
	 
	 

	Address
	)
	 
	 

	Head of Legal Dept.
	)
	 
	 

	Occupation
	)
	 
	 

 
	 
	- 11 -
	
 
	 

 
SCHEDULE “A”
 
SERVICES
 
The Employee shall provide the following services to the Employer and/or the Affiliates, as determined by the Employer:
 
	 
	(a)	Co-manage with the CEO, the development and expansion new and existing intellectual property and product pipeline based on its proprietary technologies; including proposing and developing new or novel methods or procedures related to human delivery methods, and the characterization thereof, for bioactive molecules of interest, such as cannabidiol and tetrahydrocannabinol; identifying potential technology and intellectual property acquisitions of interest; and implementing new technologies as they become available;
	 
	 
	 

	 
	(b)	Collaborate to maintain and develop corporate/investor outreach materials as needed, including, but not limited to, overall corporate messaging through direct creation and development of corporate presentations, PowerPoints, websites, shareholder and community communications, business plans, fact sheets, etc.;
	 
	 
	 

	 
	(c)	Develop and compile appropriate scientific validation/materials/studies supporting the technology, processes, production and testing merits as applicable and, when necessary, support clientele in the implementation of the technology;
	 
	 
	 

	 
	(d)	Identify and evaluate opportunities for capital raising and/or strategic collaboration with suitable third-parties at appropriate points in time, including researching, planning, proposing, executing and closing approved projects, acquisitions, mergers and partnerships, as well as locating and cultivating finance sources, creating overall value;
	 
	 
	 

	 
	(e)	Co-manage with the CEO, employees, junior executives and consultants in their regular duties and day-to-day operations;
	 
	 
	 

	 
	(f)	Serve in such capacity or capacities as may from time to time be determined by resolution of the Board of Directors or senior management of the Company and perform such duties and exercise such powers as may from time be determined by resolution of the Board of Directors.
	 
	 
	 

	 
	(g)	Work as needed with lawyers, partners, shareholders and other stakeholders as required and fulfill all duties expected of an executive officer of a corporation, including sourcing and/or negotiation of financial proposals and corporate financings; strategic corporate and financial planning; management of all the overall business operations; communications with shareholders; negotiation and management of agreements; and any other duties that should be reasonably expected by and at the pleasure of the Board of Directors.

 
	 
	- 12 -
	
 
	 

 
SCHEDULE “B”
 
REMUNERATION
 
	1.1. 	The Employee’s annual base salary will be $180,000.00 (“Base Salary”) payable semi-monthly.
	 
	 

	1.2. 	An annual increase equal to the Base Salary, equivalent to 1.25x the prior calendar rate of inflation as published by the Bank of Canada, beginning January 1, 2020 and on each subsequent anniversary thereafter until the end of the term;
	 
	 

	1.3. 	The Employee’s out of pocket expenses incurred on behalf of the Company shall be paid by the Company (the “Disbursements”). Examples include, but are not limited to: The Disbursements will be limited to the foregoing:

 
	 
	(a)	travelling and other costs actually and properly incurred by the Employee in connection with the Employee’s duties hereunder, up to a maximum of $40,000.00 per month, with such additional costs being subject to pre-approval by the management of the Company prior to any reimbursement. Both parties recognize that, as the financial condition of the Company improves or deteriorates, this amount may be increased or decreased without making changes to this document and without such changes constituting a termination of this Agreement, provided the Company makes the Employee aware of the changed amount;
	 
	 
	 

	 
	(b)	specialized training and/or educational costs as authorized by the Company for the enhancement of any Services, up to a maximum of $7,500.00 per year;
	 
	 
	 

	 
	(c)	stationery and printing costs;
	 
	 
	 

	 
	(d)	mileage allowance for personal vehicle use at $0.55/km when the Consultant is required to use own vehicle for business purposes.

 
	1.4. 	The Employee shall also be eligible to receive up to 50% of the total combined salary and any consulting fee compensation (“Performance Criteria Milestone Completion Payment”) Employee receives annually from the Company and any of the Affiliates as applicable based upon completion of performance criteria milestones to be approved by the Board of Directors. For greater certainty, the Employee will not be eligible for any Performance Criteria Milestone Completion Payments during the reasonable notice period, subject only to applicable ESA requirements.
	 
	 

	1.5. 	The Employee shall be entitled to receive six weeks’ (or 30 days) of paid vacation in each year of employment.
	 
	 

	1.6. 	The Employee shall be entitled to participate in any stock option plan of the Employer or an Affiliate, with such stock option amounts and exercise price to be determined by the Board of Directors of such Employer or Affiliate.
	 
	 

	1.7. 	The Employee is also eligible to participate in the as-yet uncreated profit sharing plan that will be extended as soon as possible to all employees and eligible consultants. Details of the profit sharing plan will be provided in a separate document. Notwithstanding anything to the contrary, in order to be eligible to receive any profit sharing payments, the Employee must be actively employed by the Employer on the date that the profit sharing payment is payable. For greater certainty, the Employee will not eligible for any profit sharing payments during the reasonable notice period, subject only to applicable ESA requirements.

 
If so requested by the Employee, through calculation with the Employee, and with the Employee’s approval: At the time of any equity award consideration that may be paid to the Employee hereunder, such equity award shall be subject to a reduction in the equity issued to the Employee per grant to be paid instead as cash proportional to the tax liability to be incurred by the Employee at the time of the award. The Company will withhold from payment to the Employee that fraction of the equity that corresponds to the federal and provincial income tax payments otherwise payable by the Employee, specifically with respect to each award only, and the Employee agrees that such a hybrid payment of cash and equity would fulfill the obligations of the Company with respect to each affected award. The intent of this partial cash payment is to provide cash compensation to the Employee in the proportionate amount of the equity award and it is expressly agreed that it remains the sole responsibility of the Employee to remit all amounts due to Provincial and Federal tax authorities.
 
	 
	- 13 -

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