PURE BIOSCIENCE, INC.

 

AMENDMENT AND WAIVER

 

August 23, 2017

 

This Amendment and Waiver (this “Amendment and Waiver”) to that certain
Securities Purchase Agreement (the “Securities Purchase Agreement”) and
Registration Rights Agreement (the “Registration Rights Agreement”), each dated
as of December 1, 2016, entered into between Pure Bioscience, Inc. and the
Purchasers thereto (the “Purchasers”) is entered into by the Company and the
undersigned (“Purchaser”) as of the day written above.

 

WHEREAS, the Purchaser is an investor in that certain private placement
financing (the “Private Placement”) by Pure Bioscience, Inc. (the “Company”) of
1,572,941 shares of the Company’s common stock (the “Offer Shares”) and warrants
(the “Warrants”) to purchase 1,572,941 shares (the “Warrant Shares”, together
with the Offer Shares, the “Shares”) of the Company’s common stock, pursuant to
the terms and conditions of a Securities Purchase Agreement entered into between
the Company and the investors in the Private Placement (the “Securities Purchase
Agreement”). Any capitalized terms not defined herein shall have the meanings
ascribed to them in the Securities Purchase Agreement.

 

WHEREAS, the Purchaser currently holds 823,529 Shares and 823,529 Warrant
Shares, which constitutes at least a majority in interest of the Shares and
Warrants issued in the Private Placement.

 

WHEREAS, the Company intends to launch a tender offer pursuant to Schedule TO
and an Offer to Amend and Exercise, among other documents (the “Tender Offer
Documents”) to the holders of various of the Company’s warrants issued in 2014
and 2015 and the Warrants to induce such holders to exercise the warrants by
offering to reduce the exercise prices under such warrants in return for
shortening the expiration date of such warrants as described in the Tender Offer
Documents (the “Tender Offer”).

 

WHEREAS, Section 4.12(a) of the Securities Purchase Agreement provides that
until the earlier of (i) the six (6) month anniversary of the listing of the
Common Stock on a national securities exchange and (ii) the twelve (12) month
anniversary of the Effective Date, neither the Company nor any Subsidiary shall
issue, enter into any agreement to issue or announce the issuance or proposed
issuance of any shares of Common Stock or Common Stock Equivalents at an
effective price per share less than the Per Unit Purchase Price (as defined in
the Securities Purchase Agreement to be $0.85), unless the issuance is an Exempt
Issuance.

 

WHEREAS, the definition of “Exempt Issuance” excludes from the prohibitions in
Section 4 among other exclusions, the exercise of warrants then outstanding,
provided that such securities have not been amended (including, without
limitation, by any voluntary reduction by the Company of any exercise price,
exchange price or conversion price).

 

WHEREAS, the Company filed a registration statement (the “Registration
Statement”) pursuant to the Registration Rights Agreement entered into in the
Private Placement.

 

WHEREAS, the Company is required and intends to file with the Securities and
Exchange Commission a post-effective amendment to the Registration Statement on
the same date that it files the Tender Offer Documents with respect to the
proposed amendments to the Warrants (the “Post-Effective Amendment”).

 

WHEREAS, the Company is required to use its commercially reasonable best efforts
to have the Post-Effective Amendment declared effective by the Securities and
Exchange Commission as promptly as possible.

 

 

 

 

WHEREAS, the Purchasers have certain liquidated damages rights under Section
2(d) of the Registration Rights Agreement if the Registration Statement or
prospectus to the Registration Statement is not available for more than an
aggregate of 15 calendar days during any 12-month period.

 

WHEREAS, the Securities Purchase Agreement and Registration Rights Agreement
each provides that any provision may be amended or waived by the Purchasers
holding at least a majority in interest of the Shares and Registrable
Securities, respectively, then outstanding.

 

NOW, THEREFORE, The COMPANY AND THE PURCHASER, on behalf of HIMSELF and his
affiliates AND ALL THE PURCHASERS, in consideration of the mutual covenants and
conditions contained herein hereby agree as follows:

 

  (1) That subsection (b) of definition of “Exempt Issuance” of the Securities
Purchase Agreement shall be amended and replaced in its entirety as follows
(with the amended language in underline):

 

“(b) securities upon the exercise or exchange of or conversion of any Securities
issued hereunder and/or other securities exercisable or exchangeable for or
convertible into shares of Common Stock issued and outstanding on the date of
this Agreement, provided that such securities have not been amended (including,
without limitation, by any voluntary reduction by the Company of any exercise
price, exchange price or conversion price) since the date of this Agreement to
increase the number of such securities or to decrease the exercise price,
exchange price or conversion price of such securities (other than in connection
with stock splits or combinations) or to extend the term of such securities,
provided, however, that solely the certain offer to amend and exercise by the
Company on Schedule TO to reduce the exercise prices of those certain warrants
issued in 2014, 2015 and 2017 and shorten the expiration date as described in
the Schedule TO filed in August 2017 (which offer amends (i) the warrants issued
in 2014 to reduce the exercise price from $0.75 per share to $0.60 per share,
(ii) the warrants issued in 2015 to reduce the exercise price from $0.45 per
share to $0.40 per share and (iii) the Warrants to reduce the exercise price
from $1.25 per share to $0.85 per share) shall be an Exempt Issuance.”

 

  (2) That Section 4.12(a) of the Securities Purchase Agreement shall be amended
and replaced in its entirety as follows (with the amended language in
underline):

 

“(a) From the date hereof until the date the initial Registration Statement is
declared effective by the Commission (the “Effective Date”), neither the Company
nor any Subsidiary shall issue, enter into any agreement to issue or announce
the issuance or proposed issuance of any shares of Common Stock or Common Stock
Equivalents. In addition, from the date hereof until the earlier of (i) the six
(6) month anniversary of the listing of the Common Stock on a national
securities exchange and (ii) the twelve (12) month anniversary of the Effective
Date (provided, however, that if at least 60% of the then outstanding Warrants
are exercised for cash in the tender offer by the Company described in the
Schedule TO filed in August 2017, such date shall be extended until June 1,
2018), neither the Company nor any Subsidiary shall issue, enter into any
agreement to issue or announce the issuance or proposed issuance of any shares
of Common Stock or Common Stock Equivalents at an effective price per share less
than the Per Unit Purchase Price.”

 

  (3) To otherwise waive any rights that the Purchasers have pursuant to Section
4.12(a) or otherwise in Section 4.12 of the Securities Purchase Agreement solely
in connection with the Tender Offer and the terms set forth in the Tender Offer
Documents.

 

 

 

 

  (4) That the first sentence of Section 2(d) of the Registration Rights
Agreement shall be amended and replaced in its entirety as follows (with the
amended language in underline):

 

“If: (i) the Initial Registration Statement is not filed on or prior to its
Filing Date (if the Company files the Initial Registration Statement without
affording the Holders the opportunity to review and comment on the same as
required by Section 3(a) herein, the Company shall be deemed to have not
satisfied this clause (i)), or (ii) the Company fails to file with the
Commission a request for acceleration of a Registration Statement in accordance
with Rule 461 promulgated by the Commission pursuant to the Securities Act,
within five Trading Days of the date that the Company is notified (orally or in
writing, whichever is earlier) by the Commission that such Registration
Statement will not be “reviewed” or will not be subject to further review, or
(iii) prior to the effective date of a Registration Statement, the Company fails
to file a pre-effective amendment and otherwise respond in writing to comments
made by the Commission in respect of such Registration Statement within ten (10)
Trading Days after the receipt of comments by or notice from the Commission that
such amendment is required in order for such Registration Statement to be
declared effective, or (iv) a Registration Statement registering for resale all
of the Registrable Securities is not declared effective by the Commission by the
Effectiveness Date of the Initial Registration Statement, or (v) after the
effective date of a Registration Statement, such Registration Statement ceases
for any reason to remain continuously effective as to all Registrable Securities
included in such Registration Statement, or the Holders are otherwise not
permitted to utilize the Prospectus therein to resell such Registrable
Securities, for more than an aggregate of fifteen (15) calendar days (or, solely
in connection with (A) a “full review” by the Commission of a post-effective
amendment to a Registration Statement in connection with the filing of the
Company’s Annual Report on Form 10-K or (B) review by the Commission of a
post-effective amendment to a Registration Statement in connection with that
certain offer to amend and exercise by the Company on Schedule TO to reduce the
exercise prices of those certain warrants issued in 2014, 2015 and 2017 and
shorten the expiration date as described in the Schedule TO filed in August 2017
and only once during the term of this Agreement, more than an aggregate of forty
five (45) consecutive calendar days) during any 12-month period (any such
failure or breach being referred to as an “Event”, and for purposes of clauses
(i) and (iv), the date on which such Event occurs, and for purpose of clause
(ii) the date on which such five (5) Trading Day period is exceeded, and for
purpose of clause (iii) the date which such ten (10) Trading Day period is
exceeded, and for purpose of clause (v) the date on which such fifteen (15) or
forty five (45) calendar day period, as applicable, is exceeded being referred
to as “Event Date”), then, in addition to any other rights the Holders may have
hereunder or under applicable law, on each such Event Date and on each monthly
anniversary of each such Event Date (if the applicable Event shall not have been
cured by such date) until the applicable Event is cured, the Company shall pay
to each Holder an amount in cash, as partial liquidated damages and not as a
penalty, equal to the product of 1.5% multiplied by the aggregate Subscription
Amount paid by such Holder pursuant to the Purchase Agreement.”

 

  (5) The Company hereby covenants and agrees that, within two business days
following the date hereof, it shall cause the counsel to the Company to deliver
to Transfer Agent such counsel’s unqualified opinion that Rule 144 is currently
available for the holders of Offer Shares and Warrant Shares issued in the
Private Placement to resell such Offer Shares and Warrant Shares without
restriction or Securities Act legend and covenants that its counsel shall
promptly update such opinion as needed for such opinion to remain effective and
shall provide copies of such opinion to such holder of Offer Shares and Warrant
Shares or such holder’s broker and such opinion or opinion(s) shall be without
any charge to the Purchaser or any holder of Offer Shares and Warrant Shares. In
addition, the Company hereby covenants and agrees to use commercially reasonable
best efforts to have the Post-Effective Amendment declared effective by
Securities and Exchange Commission as promptly as possible after filing.

 

 

 

 

  (6) The effectiveness of the amendments and the waivers of Purchaser set forth
in Sections 1, 2, 3 and 4 above are subject to the Company offering in the
Tender Offer to (i) amend the 2014 Warrants to reduce the exercise price from
$0.75 to $0.60 per share, (ii) amend the 2015 Warrants to reduce the exercise
price from $0.45 to $0.40 per share and (iii) amend the Warrants to reduce the
exercise price from $1.25 per share to $0.85 per share, in exchange for
shortening the expiration date (among other amendments) of such warrants as set
forth in the Tender Offer Documents previously provided to Purchaser via Garden
State Securities Inc.

 

  (7) Miscellaneous

 

  a. This Amendment and Waiver shall be governed in all respects by the internal
laws of the State of New York.         b. Except as otherwise expressly provided
herein, the Securities Purchase Agreement and Registration Rights Agreement
shall remain in full force and effect.         c. Each party to this Amendment
and Waiver hereby agrees to perform any further acts and to execute and deliver
any further documents that may be necessary or required to carry out the intent
and provisions of this Amendment and Waiver and the transactions contemplated
hereby.         d. This Amendment and Waiver may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

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IN WITNESS WHEREOF, the undersigned have executed this Amendment and Waiver
effective as of the first date written above.

 

  COMPANY       Pure Bioscience, Inc.       By:   Name: Hank Lambert   Title
Chief Executive Officer         PURCHASER