Execution Version

 

CONSULTANT AGREEMENT

 

This CONSULTANT AGREEMENT (this “Agreement”) is entered into on July 8, 2019 by
and between Pure Bioscience, Inc., a Delaware corporation (the “Company”), and
Henry R. Lambert (the “Consultant”). The Company and the Consultant are
hereinafter collectively referred to as the “Parties,” and individually referred
to as a “Party.”

 

RECITALS

 

A. Consultant has been serving as the Chief Executive Officer of the Company and
a member of the Board of Directors of the Company (the “Board”). In connection
with Consultant’s retirement as the Chief Executive Officer of the Company and a
member of the Board and in order to retain Consultant’s experience, skills,
abilities, background and knowledge, the Parties have agreed that Consultant
will continue to provide consulting services to the Company on the terms and
conditions set forth in this Agreement.

 

B. The Parties desire to terminate that certain Employment Agreement, entered
into effective as of October 23, 2013 and amended effective as of January 19,
2017 and September 5, 2018 (as amended, the “Employment Agreement”), and agree
that this Agreement shall govern the terms and conditions under which Consultant
shall provide services, and Consultant’s compensation, from and after the
Effective Date.

 

AGREEMENT

 

In consideration of the foregoing recitals and the mutual promises and covenants
herein contained, and for other good and valuable consideration, the Parties,
intending to be legally bound, agree as follows:

 

1. TERM.

 

1.1 Term. Unless sooner terminated in accordance with this Section 1.1, the term
(the “Term”) of this Agreement shall begin on August 7, 2019 (the “Effective
Date”) and shall end on the four (4) month anniversary of the Effective Date;
provided, however, that in the event the Company achieves Cash Flow Breakeven
(as defined below) prior to the four (4) month anniversary of the Effective
Date, the Term shall end on the six (6) month anniversary of the Effective Date.

 

(a) Resignation by Consultant. The Consultant may terminate this Agreement and
resign from his position as a consultant at any time, for any reason or no
reason, with or without Cause (as defined below), by providing the Board thirty
(30) days’ advance written notice. Thereafter, all obligations of the Company
under this Agreement shall cease except that Consultant will be entitled to the
Consultant Compensation (as defined below) earned through the effective date of
resignation.

 

(b) Removal by the Board for Cause. The Board may terminate this Agreement and
Consultant’s service at any time for Cause, without prior notice (unless
specifically provided for to the contrary), without liability to the Consultant
except that Consultant will be entitled to the Consultant Compensation earned
through the effective date of such termination.

 

(c) Removal Due to Death or Complete Disability. If Consultant dies or suffers a
Complete Disability (as defined below) during the Term, Consultant’s service and
this Agreement shall automatically terminate upon such death or Complete
Disability. Thereafter, all obligations of the Company under this Agreement
shall cease except that Consultant or Consultant’s heirs will be entitled to the
Consultant Compensation earned through the effective date of such termination.

 

   

 

 

1.2 Services. The Consultant shall serve as a consultant to the Board,
performing services including, but not limited to, assisting the Company’s
management develop marketing and commercialization strategies that support the
Company’s products, supporting the Company’s financing activities, and providing
such other services reasonably requested by the Board (“Services”). Consultant
agrees to make himself available on an as-needed basis to perform Services.

 

1.3 Definitions. For purposes of this Agreement, the following terms shall have
the following meanings:

 

(a) Cash Flow Breakeven. “Cash Flow Breakeven” shall mean as that month in which
(x) the sum of the Company’s fixed and variable expenses equals (y) the
Company’s sales revenue.

 

(b) Cause. “Cause” shall mean that one or more of the following has occurred:
(i) the Consultant has been convicted of, or entered a plea of guilty or nolo
contendere to, a felony crime involving fraud, dishonesty or violence (under the
laws of the United States or any relevant state, in the circumstances, thereof);
(ii) the Consultant has intentionally or willfully engaged in material acts of
fraud, dishonesty or gross misconduct that have a material adverse effect on the
Company; (iii) the willful failure or refusal of Consultant to carry out the
lawful directions of the Board (determined by a majority of the then-current
members of the Board) or the duties assigned to Consultant by the Board; (iv)
any material violation by the Consultant of any written Company policy
applicable to the Consultant; or (v) any material breach by the Consultant of
any provision of this Agreement or any other Agreement between the Company and
Consultant. Notwithstanding the foregoing, the termination of Consultant’s
Services shall not constitute termination for Cause, unless the Company first
provides Consultant with written notice of the basis for the termination and,
with respect to a termination based on clauses (iii), (iv) and/or (v) above, a
fifteen (15) day period to correct the breach or failure or refusal. During this
fifteen (15) day notice period, the Consultant will be afforded the opportunity
to make a presentation to the Board regarding the matters referred to in the
notice.

 

(c) Complete Disability. “Complete Disability” shall mean the inability of the
Consultant to perform his duties under this Agreement because the Consultant has
become permanently disabled within the meaning of any policy of disability
income insurance covering employees of the Company then in force. In the event
the Company has no policy of disability income insurance covering employees of
the Company in force when the Consultant becomes disabled, the term Complete
Disability shall mean the inability of the Consultant to perform his duties
under this Agreement by reason of any incapacity, physical or mental, which the
Board (determined by a majority of the then-current members of the Board), based
upon medical advice or an opinion provided by a licensed physician acceptable to
the Board, determines to have incapacitated the Consultant from satisfactorily
performing the Consultant’s Services for a period of at least one hundred twenty
(120) consecutive days during any twelve (12) month period.

 

2. ABSENCE OF CONFLICTS.

 

During the Term, Consultant will not take any action that would directly or
indirectly promote any competitor or impair the Company’s interests. Subject to
the foregoing, the Consultant will be free to represent or perform services for
other persons while serving as a consultant to the Company. However, the
Consultant agrees that Consultant does not presently perform and will not
perform during the Term, consulting or other services for companies whose
businesses are or would be, in any material way, competitive with the Company,
without the Board’s prior approval.

 

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3. COMPENSATION.

 

3.1 Prior Compensation. Consultant agrees that he is not entitled to any further
compensation for services prior to the Effective Date, other than payment of any
Base Salary (as defined in the Employment Agreement), any bonus awarded under
Section 3.2 of the Employment Agreement, and any accrued and unused vacation
benefits, each as earned pursuant to the Employment Agreement through the
Effective Date at the rate then in effect, less standard deductions and
withholdings. The compensation described in the foregoing sentence shall be paid
no later than the Effective Date. In addition, subject to Consultant’s delivery
to the Company of an executed Release and Waiver of Claims in the form attached
as Exhibit A hereto no later than forty-five (45) days after the Effective Date
and the effectiveness of such Release and Waiver of Claims, the vesting of
Consultant’s outstanding stock options and other equity-based awards will
automatically accelerate notwithstanding any vesting terms of any stock option
or other equity-based award. Thereafter, Consultant’s stock options and other
equity-based awards shall continue to be exercisable for twelve (12) months
following the expiration or termination of this Agreement, provided that such
period is not after the expiration of such stock options or other equity- based
awards. Consultant agrees that he is not entitled to any other separation
compensation or benefits in connection with his retirement as Chief Executive
Officer of the Company and a member of the Board.

 

3.2 Compensation. Commencing as of the Effective Date, the Company shall pay the
Consultant $14,583.33 per month ($175,000.00 on an annualized basis) for
Services pursuant to this Agreement, payable on a monthly basis (collectively,
“Consultant Compensation”). Such Consultant Compensation shall be prorated for
any partial month of service.

 

3.3 Reductions to Compensation. The Consultant Compensation may be reduced only
by mutual agreement of the Consultant and the Company.

 

3.4 Withholding Taxes. Consultant understands and agrees that he is an
independent contractor and not an employee of the Company. As a result, the
Company will not make deductions for taxes from any amounts payable to
Consultant as a result of Services to the Company or as a result of the vesting
or settlement of any equity-based awards (except as otherwise required by
applicable law or regulation). Any taxes imposed on the Consultant due to
Services to the Company (including upon the issuance, vesting and settlement of
any equity-based awards) will be the sole responsibility of the Consultant.

 

3.5 Expenses.

 

(a) Ordinary Business Expenses. The Consultant is authorized to incur reasonable
expenses in the performance of Services to the Company, including expenses for
meals, travel, and other similar items. The Company shall prepay or reimburse
the Consultant for all such expenses.

 

(b) Expense Prepayment and Reimbursement Procedures. All prepayments and
reimbursements of the Consultant’s expenses pursuant to this Section 3.5 are
subject to the Consultant’s provision of invoices, an itemized accounting or
other appropriate documentation evidencing such expenses no later than three (3)
months following the date such expenses were incurred. Any reimbursement payment
shall be made by the Company as soon as practicable following its receipt of
such documentation, but in no event later than the end of the Consultant’s
taxable year following the year in which the Consultant incurred such expenses.

 

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4. APPLICATION OF INTERNAL REVENUE CODE SECTION 409A.

 

4.1 It is intended that all payments and benefits provided under this Agreement
or otherwise are exempt from, or comply with, the requirements of Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), and the
regulations and other guidance thereunder or any state law of similar effect
(collectively, “Section 409A”) so that none of the payments or benefits will be
subject to the additional tax imposed under Section 409A, and any ambiguities
herein will be interpreted in accordance with such intent. For purposes of
Section 409A, each payment, installment or benefit payable under this Agreement
is hereby designated as a separate payment.

 

4.2 Notwithstanding anything to the contrary set forth herein, any payments and
benefits provided under this Agreement (the “Severance Benefits”) that
constitute “deferred compensation” within the meaning of Section 409A and that
are not exempt from Section 409A shall not commence in connection with the
Consultant’s termination of service unless and until the Consultant has also
incurred a “separation from service” (as such term is defined in Treasury
Regulation Section 1.409A-1(h) (“Separation From Service”)).

 

4.3 If the Company (or, if applicable, the successor entity thereto) determines
that a Severance Benefit constitutes “deferred compensation” under Section 409A
and the Consultant is, on the Consultant’s Separation From Service, a “specified
employee” of the Company or any successor entity thereto, as such term is
defined in Section 409A(a)(2)(B)(i) of the Code and the Treasury regulations,
then, solely to the extent necessary to avoid the incurrence of the adverse
personal tax consequences under Section 409A, the timing of the Severance
Benefit payment shall be delayed until the earlier to occur of: (i) the date
that is six (6) months and one (1) day after the Consultant’s Separation From
Service or (ii) the date of the Consultant’s death (such applicable date, the
“Specified Employee Initial Payment Date”). On the Specified Employee Initial
Payment Date, the Company (or the successor entity thereto, as applicable) shall
pay to the Consultant a lump sum amount equal to the Severance Benefit payment
that the Consultant would otherwise have received through the Specified Employee
Initial Payment Date if the payment of the Severance Benefits had not been so
delayed pursuant to this Section.

 

5. CONFIDENTIAL AND PROPRIETARY INFORMATION; NON-SOLICITATION.

 

The Proprietary Information and Inventions Agreement between Consultant and the
Company and attached hereto as Exhibit B shall remain in full force and effect
and Consultant agrees to continue to abide by such Agreement.

 

6. ASSIGNMENT AND BINDING EFFECT.

 

This Agreement shall be binding upon and inure to the benefit of the Consultant
and the Consultant’s heirs, executors, personal representatives, assigns,
administrators and legal representatives. Because of the unique and personal
nature of the Consultant’s duties under this Agreement, neither this Agreement
nor any rights or obligations under this Agreement shall be assignable by the
Consultant. This Agreement shall be binding upon and inure to the benefit of the
Company and its successors, assigns and legal representatives.

 

7. CHOICE OF LAW.

 

This Agreement will be governed by the laws of the State of California, without
giving effect to the conflict of law principles thereof. For purposes of
litigating any dispute that arises under this Agreement, the parties hereby
submit to and consent to the jurisdiction of the State of California, and agree
that such litigation will be conducted in the courts of Los Angeles, California,
or the federal courts for the United States for the Central District of
California, and no other courts, where this Agreement is made and/or to be
performed.

 

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8. INTEGRATION.

 

This Agreement, including all Exhibits attached hereto, contains the complete,
final and exclusive agreement of the Parties relating to the terms and
conditions of the Consultant’s Services from and after the Effective Date and
the termination of the Employment Agreement, and supersedes all prior and
contemporaneous oral and written employment and/or consultant agreements or
arrangements between the Parties and between the Consultant and the Company.

 

9. AMENDMENT.

 

This Agreement cannot be amended or modified except by a written agreement
signed by the Consultant and the Board representative specifically authorized by
the Board to execute any such amendment or modification to this Agreement on
behalf of the Company.

 

10. SURVIVAL OF CERTAIN PROVISIONS.

 

Sections 1, 3.1, 3.4, and 4 through 18 shall survive the termination of this
Agreement.

 

11. WAIVER.

 

No term, covenant or condition of this Agreement or any breach thereof shall be
deemed waived, except with the written consent of the Party against whom the
waiver is claimed, and any waiver of any such term, covenant, condition or
breach shall not be deemed to be a waiver of any preceding or succeeding breach
of the same or any other term, covenant, condition or breach.

 

12. SEVERABILITY.

 

The finding by a court of competent jurisdiction of the unenforceability,
invalidity or illegality of any provision of this Agreement shall not render any
other provision of this Agreement unenforceable, invalid or illegal. Such court
shall have the authority to modify or replace the invalid or unenforceable term
or provision with a valid and enforceable term or provision which most
accurately represents the Parties’ intention with respect to the invalid or
unenforceable term or provision. Any such invalid or unenforceable term or
provision shall be revised to the minimum extent necessary to make any such term
or provision valid or enforceable in accordance with the Parties’ intentions
with respect to such term or provision.

 

13. INTERPRETATION; CONSTRUCTION.

 

The headings set forth in this Agreement are for convenience of reference only
and shall not be used in interpreting this Agreement. The Parties acknowledge
that each Party and its counsel has reviewed and revised, or had an opportunity
to review and revise, this Agreement, and the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Agreement.

 

14. REPRESENTATIONS AND WARRANTIES.

 

The Consultant represents and warrants that the Consultant is not restricted or
prohibited, contractually or otherwise, from entering into and performing each
of the terms and covenants contained in this Agreement, and that Consultant’s
execution and performance of this Agreement will not violate or breach any other
agreements between the Consultant and any other person or entity.

 

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15. COUNTERPARTS.

 

This Agreement may be executed in two counterparts, each of which shall be
deemed an original, both of which together shall constitute one and the same
instrument. In the event that any signature is delivered by fax or by e-mail
delivery of a “.pdf” format data file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.

 

16. ADVERTISING WAIVER.

 

During the Term, the Consultant agrees to permit the Company and/or its
affiliates, and persons or other organizations authorized by the Company and/or
its affiliates, to use, publish and distribute advertising or sales promotional
literature concerning the products and/or services of the Company and/or its
affiliates, or the machinery and equipment used in the provision thereof, in
which the Consultant’s name and/or pictures of the Consultant taken in the
course of the Consultant’s provision of Services to the Company and/or its
affiliates, appear. The Consultant hereby waives and releases any claim or right
the Consultant may otherwise have arising out of such use, publication or
distribution.

 

17. SPECIFIC ENFORCEMENT.

 

If necessary and where appropriate, the Company shall have the right to enforce
the provisions of the Proprietary Information and Inventions Agreement by
injunction, specific performance or other equitable relief without bond and
without prejudice to any other rights and remedies the Company may have for a
breach of such Exhibits to this Agreement.

 

18. NOTICE.

 

18.1 Method and Delivery. All notices, requests and demands hereunder shall be
in writing and delivered by hand, by Electronic Transmission (as defined below),
by mail, or by recognized commercial overnight delivery service (such as Federal
Express, UPS, or DHL), and shall be deemed given (a) if by hand delivery, upon
such delivery; (b) if by Electronic Transmission, upon confirmation of receipt
of same; (c) if by mail, forty-eight (48) hours after deposit in the United
States mail, first class, registered or certified mail, postage prepaid; or (d)
if by recognized commercial overnight delivery service, upon such delivery.

 

18.2 Consent to Electronic Transmissions. Each Party hereby expressly consents
to the use of Electronic Transmissions for communications and notices under this
Agreement. For purposes of this Agreement, “Electronic Transmissions” means a
communication (i) delivered by facsimile telecommunication or electronic mail
when directed to the facsimile number or electronic mail address, respectively,
for that recipient on record with the sending Party; and (ii) that creates a
record that is capable of retention, retrieval, and review, and that may
thereafter be rendered into clearly legible tangible form.

 

[Remainder of page intentionally left blank.]

 

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IN WITNESS WHEREOF, the Parties have entered into this Agreement on July 8,
2019.

 

CONSULTANT:   COMPANY:           Pure Bioscience, Inc.             By:   Henry
R. Lambert   Name: Tom Y. Lee     Title: Chairman of the Board of Directors

 

   

 

 

EXHIBIT A

 

RELEASE AND WAIVER OF CLAIMS

 

In consideration of the acceleration of vesting of my equity awards as set forth
in Section 3.1 of the Consultant Agreement, entered into on July 8, 2019 (the
“Agreement”), to which this form is attached, I, Henry R. Lambert, hereby
furnish Pure Bioscience, Inc., a Delaware corporation (the “Company”), with the
following release and waiver (“Release and Waiver”).

 

In exchange for the consideration provided to me by the Agreement that I am not
otherwise entitled to receive, I hereby generally and completely release the
Company and its directors, officers, employees, shareholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns from any and all claims, liabilities and obligations,
both known and unknown, that arise out of or are in any way related to events,
acts, conduct, or omissions occurring relating to my retirement as the Chief
Executive Officer of the Company and a member of the Board of Directors of the
Company prior to my signing this Release and Waiver. Notwithstanding the
foregoing, this Release and Waiver, shall not release or waive my rights: to
indemnification under the articles and bylaws of the Company or applicable law,
including, without limitation, California Labor Code Sections 2800 and 2802; to
payments under the Agreement to which this Release and Waiver is attached; under
the California Workers’ Compensation Act; under any option, restricted share or
other agreement concerning any equity interest in the Company; and as a
shareholder of the Company or any other right that is not waivable under
applicable law.

 

I also acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: “A general release does not extend
to claims which the creditor does not know or suspect to exist in his or her
favor at the time of executing the release, which if known by him or her must
have materially affected his or her settlement with the debtor.” I hereby
expressly waive and relinquish all rights and benefits under that section and
any law of any jurisdiction of similar effect with respect to any claims I may
have against the Company.

 

This Release and Waiver constitutes the complete, final and exclusive embodiment
of the entire agreement between the Company and me with regard to the subject
matter hereof. I am not relying on any promise or representation by the Company
that is not expressly stated herein. This Release and Waiver may only be
modified by a writing signed by both me and a duly authorized officer of the
Company.

 

Date:     By:           Henry R. Lambert

 

 Ex. A-1 

 

 

EXHIBIT B

 

PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

 

See attached.

 

 Ex. A-2