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Exhibit 10.24
CONFIDENTIAL TREATMENT REQUESTED BY NOVABAY PHARMACEUTICALS, INC.
 
AMENDMENT N°2
 
TO THE COLLABORATION AND LICENSE AGREEMENT
 
THIS AMENDMENT N°2 (the “Amendment 2”) is entered into as of this 2nd day of
December, 2010 (the “Amendment 2 Effective Date”), by and between NovaBay
Pharmaceuticals, Inc., a Delaware corporation, having its principal place of
business at 5980 Horton Street, Suite 550, Emeryville, California 94608
(“NovaBay”), and Galderma S.A. a Swiss corporation, having its principal place
of business at World Trade Center – 2 avenue Gratte-Paille – CP 552 CH-1000
Lausanne, Switzerland (“Galderma”),
 
WHEREAS, Galderma and NovaBay Pharmaceuticals, Inc., a California Corporation
(“NovaBay California”) have entered into a COLLABORATION AND LICENSE AGREEMENT,
effective as of March 20, 2009, as subsequently amended on December 1, 2009
(collectively, the “Agreement”) under which they have agreed to collaborate to
develop and obtain regulatory approval for, and commercialize, pharmaceutical
products incorporating Collaboration Compounds in the Field;
 
WHEREAS, on June 29, 2010, NovaBay California merged into NovaBay
Pharmaceuticals, Inc., a Delaware Corporation and the former assigned all rights
and responsibilities to the latter pursuant to an Agreement and Plan of Merger
dated June 25, 2010—the certificate of merger attached hereto as Schedule A; and
 
WHEREAS, the Parties now wish to further amend the Agreement, all as set forth
in this Amendment 2 herein below.
 
NOW THEREFORE, in consideration of these premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by each Party, the Parties agree as follows:
 
1.
The Parties acknowledge and agree that pursuant to the Certificate of Merger
effective June 29, 2010, a copy of which is attached as Exhibit A, NovaBay
assumed and hereby assumes all rights and obligations of NovaBay California
under this Amendment No. 2 and the Agreement.

 
2.
Definitions.  Unless otherwise defined in this Amendment 2, all terms appearing
herein with a capital letter shall have the meaning set forth in the Agreement.

 
 
***Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

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CONFIDENTIAL TREATMENT REQUESTED BY NOVABAY PHARMACEUTICALS, INC.
 
(a)           Replaced Definitions.  The following definitions in Sections 1.15,
1.24, 1.32, 1.55 and 1.62 shall replace in their entirety the corresponding
sections in the Agreement:
1.15 “Continuation Period” shall mean the period beginning on October 1, 2010
and continuing through the remainder of the Agreement Term.
 
1.24 “Field” shall mean shall mean the prevention or treatment of any and all
dermatological diseases and disorders in humans (i.e., diseases or disorders of
the skin or nails including onychomycosis) but excluding diseases and disorders
of the hair and any and all Rare Diseases, but shall exclude all Excluded
Indications.  For clarity, the Field excludes the Excluded Field.
 
1.32 “Galderma Territory” shall mean (i) with respect to Impetigo Products, all
jurisdictions in the world including Asia-Pacific other than the NovaBay
Impetigo Territory and (ii) with respect to all Collaboration Products other
than the Impetigo Products, all jurisdictions in the world other than the
NovaBay Other Territory.
 
1.55 “NovaBay Territory” shall mean (i) with respect to Impetigo Products, the
countries listed on Exhibit 1.55A hereto (the “NovaBay Impetigo Territory”) and
(ii) with respect to all Collaboration Products other than the Impetigo
Products, the countries listed on Exhibit 1.55B (the “NovaBay Other Territory”).
 
1.62 “Primary Indications” shall mean, collectively and individually,
(i) onychomycosis and (ii) impetigo.
 
(b)           New Definitions.  The following definitions are hereby added to
Article 1 of the Agreement:
“Asia-Pacific” shall mean the countries listed on Schedule A to this
Amendment 2.
 
“Dermatology Field” shall mean (i) any and all applications in the Field, (ii)
the prevention and treatment of diseases and disorders of the hair (including
Rare Diseases thereof) and (iii) any Rare Disease comprising the prevention or
treatment of diseases and disorders of the skin or nails.
 
“Onychomycosis Product” shall mean an Anti-Fungal Product that is labeled for
(or Developed for) the treatment or prevention of onychomycosis in humans.
 
“Rare Disease” shall mean any disease or condition that meets the criteria for
an orphan or rare disease or condition in a Major Market, including, for example
in the United States, in §526(a)(2)(1) of the Federal Drug and Cosmetic Act
(U.S. Orphan Drug Act (1983)); in Europe, in the Orphan Drug Regulation
141/2000; and in Japan, in the Orphan Drug Amendment (1993).
 
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***Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

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CONFIDENTIAL TREATMENT REQUESTED BY NOVABAY PHARMACEUTICALS, INC.
 
3.
Continuation.  Galderma hereby elects to continue the Collaboration beyond the
Initial Period as provided in Section 8.2 of the Agreement.  Accordingly,
Galderma shall pay the Continuation Fee in the amount of $3,250,000 within eight
(8) business days of the Amendment 2 Effective Date.  For clarity and
notwithstanding anything in Section 8.2.1 to the contrary, NovaBay agrees the
Continuation Fee despite being paid after 1 October 2010 shall be $3,250,000.

 
4.
FTE Funding: Development Activities.

 
(a)           During the Continuation Period.  Further in connection with the
continuation, Galderma acknowledges its obligation to fund, effective as of
1 October 2010, NovaBay FTEs with respect to the research and non-clinical
development of Collaboration Products in the Field in accordance with the
provisions of Section 8.3.1 of the Agreement.  Accordingly, within eight (8)
business days of receipt of invoice therefor, Galderma shall fund such
activities for the period of 1 October — 31 December 2010 and thereafter fund
such activities monthly in advance in accordance with Section 8.3.1(a).  In
addition to the activities funded under the provisions of Section 8.3.1 of the
Agreement, Galderma agrees to pay NovaBay $[***] within eight (8) business days
of the Amendment 2 Effective Date, in consideration of other research and
non-clinical developments of Collaboration Products for the period running from
1 October 2010, until 31 March 2011.  The increase of the FTE rate as described
in Section 8.3.1 of the Agreement will be effective beginning with the calendar
year 2011.
 
(b)           Activities Prior to Continuation.  The Parties acknowledge that
NovaBay, at the request and for the benefit of Galderma, has performed at
NovaBay’s own expense certain research and non-clinical development of
Collaboration Products in the Field prior to 1 October 2010.  As partial
reimbursement for such research and development activities, Galderma agrees to
pay NovaBay $[***] within eight (8) business days of the Amendment 2 Effective
Date.
 
(c)           Development Activities.  The Parties acknowledge that as set forth
in Section 3.1 of the Agreement, Galderma shall have primary responsibility for
the Development of Collaboration Products in the Field for the Galderma
Territory.  Without limiting the foregoing, Galderma agrees that if it intends
to utilize a Third Party to perform any such Development activities in
accordance with Section 3.8 of the Agreement including for any Impetigo Product
or any Onychomycosis Product, Galderma shall first discuss in good faith with
NovaBay the possibility of NovaBay performing such activities, taking into
consideration NovaBay’s capabilities and the requirements of the particular
project(s).  If the Parties so agree that NovaBay will perform any such
activities, then the Parties shall establish a plan and budget pursuant to which
NovaBay shall perform such activities.  If after a period of thirty (30) days
following initiation of the discussions, the Parties fail to reach an agreement,
then Galderma shall be free to subcontract to any Third Party.
 
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***Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

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CONFIDENTIAL TREATMENT REQUESTED BY NOVABAY PHARMACEUTICALS, INC.
 
5.
Expansion of the Field.  The Parties acknowledge that the Field as defined in
this Amendment 2 has been expanded to include onychomycosis.  In consideration
of such expansion, Galderma agrees to pay to NovaBay the following:

 
(a)           Expansion Fee.  $[***] within eight (8) business days of receipt
of an invoice therefor, if Galderma decides to initiate a first POC study for an
Onchomycosis Product.  This decision will be taken no later than January 31st
2011 ; in the event that Galderma fails to notify NovaBay of such decision on or
before, January 31st 2011, then notwithstanding anything to the contrary the
Field shall exclude onychomycosis for all purposes of the Agreement and
accordingly Galderma shall have no rights with respect thereto.
 
(b)           Milestones for Onychomycosis Products.  Subject to Section 8.4.1
and Section 8.4.2 of the Agreement, Galderma shall pay to NovaBay the amounts
set forth in the following table (each, an “Onychomycosis Milestone Payment”)
upon the first achievement of the corresponding milestone event for the first
Onychomycosis Product (each, a “Milestone Event”):
 
Milestone Event
 
Onychomycosis
Product
1. Acceptance of an IND
    [ ***]
2. First successful completion of a Phase II Clinical Trial
  $ [ ***]
3. First initiation of any Phase III Clinical Trial
  $ [ ***]
4. First filing of an MAA in a Major Market
  $ [ ***]
5. First receipt of a Marketing Approval in a Major Market
  $ [ ***]

 
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***Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

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CONFIDENTIAL TREATMENT REQUESTED BY NOVABAY PHARMACEUTICALS, INC.
 
(c)           Royalties.  The royalty for the Onychomycosis Products are subject
to the provisions of Section 8.5 of the Agreement.  For the avoidance of doubt
the rate for the Onychomycosis Products is the same as in Section 8.5.1 of the
Agreement.
 
6.
Expansion of the Galderma Territory for Impetigo Products.  The Parties
acknowledge that Galderma is interested that the Galderma Territory with respect
to the Impetigo Products be expanded to include Asia-Pacific territory.  In
consideration of such expansion, Galderma agrees to pay to NovaBay the
following:

 
(a)           Expansion Fee.  $[***] within eight (8) business days of receipt
of an invoice therefor; if Galderma decides to include Asia — Pacific Territory
in the Galderma Territory.  This decision will not be later than January 31st,
2011; in the event that Galderma fails to notify NovaBay of such decision on or
before, January 31st, 2011, then notwithstanding anything to the contrary the
Galderma Territory for the Impetigo Products shall exclude Asia-Pacific for all
purposes of the Agreement and accordingly Galderma shall not have the right to
Develop or Commercialize Impetigo Product therein.
 
(b)           Milestone for Inclusion of Asia-Pacific.  $[***] within thirty
(30) of the first receipt of Marketing Approval in a country in the Asia-Pacific
territory.
 
7.
Payment of the Impetigo Reimbursement Amount.  Notwithstanding Section 8.2.2,
the payment of the Impetigo Reimbursement Amount shall become due and payable by
Galderma to NovaBay upon decision by Galderma to initiate a Phase III Clinical
Trial for an Impetigo Product, which decision shall occur no later than
30 September 2012.  The Parties hereby agree that the Impetigo Reimbursement
Amount shall be $[***].

 
8.
Payment of the Milestone Payment for Milestone Event 2 for an Impetigo
Product.  Notwithstanding Section 8.4, the payment of Milestone Event 2 for an
Impetigo Product shall be due and payable upon the successful completion of the
first Phase II Clinical Trial for an Impetigo Product initiated after the
Amendment 2 Effective Date.

 
9.
No Other Amendment.  Except as otherwise provided in this Amendment 2, all other
terms and conditions of the Agreement shall remain in full force and effect.

 
[The remainder of this page left blank intentionally; signature page follows.]
 
 
 
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***Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

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CONFIDENTIAL TREATMENT REQUESTED BY NOVABAY PHARMACEUTICALS, INC.
 
IN WITNESS WHEREOF, the Parties have caused this AMENDMENT N°2 TO THE
COLLABORATION AND LICENSE AGREEMENT to be duly executed, effective as of the
Effective Date, by their respective duly authorized officers.
 
 

  GALDERMA      NOVABAY                By:  /s/Humberto C Antunes    By:  /s/
Ramin Najafi                Name: Humberto C Antunes    Name:  Ramin "Ron"
Najafi, Ph.D.                Title: CEO    Title:  CEO & Chairman              

                                  
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***Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

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CONFIDENTIAL TREATMENT REQUESTED BY NOVABAY PHARMACEUTICALS, INC.

EXHIBIT 1.55
NOVABAY TERRITORY
EXHIBIT 1.55A
 
NOVABAY IMPETIGO TERRITORY
 
* indicates this country is subject to the provisions of Section 4.6
 
Afghanistan
Oman
Bahrain
Palestine*
Iran
Qatar
Iraq
Saudi Arabia*
Israel*
Syria*
Jordan*
Turkey*
Kuwait*
United Arab Emirates*
Lebanon*
Yemen
EXHIBIT 1.55B
 
NOVABAY OTHER TERRITORY
 
* indicates this country is subject to the provisions of Section 4.6
 
Afghanistan
Kiribati
Bahrain
Kuwait*
Bangladesh
Kyrgyz
Bhutan
Laos
Brunei
Lebanon*
Cambodia
Malaysia

 
 
***Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

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CONFIDENTIAL TREATMENT REQUESTED BY NOVABAY PHARMACEUTICALS, INC.
 
China, The People’s Republic
 
(including Hong Kong and Macao)
Maldives
Cook Islands
Marshall Islands
East Timor
Micronesia
Fiji
Mongolia
India
Myanmar
Indonesia
Nauru
Iran
Nepal
Iraq
Niue
Israel*
North Korea
Jordan*
Oman
Kazakhstan
Pakistan
Palau
Taiwan (Republic of China)
Palestine*
Tajikistan
Papua New Guinea
Thailand
Philippines
Tonga
Qatar
Turkey*
Samoa
Turkmenistan
Saudi Arabia*
Tuvalu
Singapore
United Arab Emirates*

 
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***Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

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CONFIDENTIAL TREATMENT REQUESTED BY NOVABAY PHARMACEUTICALS, INC.
 
Solomon Islands
Uzbekistan
South Korea
Vanuatu
Sri Lanka
Viet Nam
Syria*
Yemen

 
 
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***Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

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CONFIDENTIAL TREATMENT REQUESTED BY NOVABAY PHARMACEUTICALS, INC.
 
SCHEDULE A
ASIA - PACIFIC
 
Bangladesh
Tonga
Bhutan
Tuvalu
Brunei
Vanuatu
Cambodia
Viet Nam
China, The People’s Republic
 
(including Hong Kong and Macao)
 
Cook Islands
 
East Timor
 
Fiji
 
India
 
Indonesia
 
Kiribati
 
Laos
 
Malaysia
 
Maldives
 
Marshall Islands
 
Micronesia
 
Mongolia
 
Myanmar
 
Nauru
 

 
 
***Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

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CONFIDENTIAL TREATMENT REQUESTED BY NOVABAY PHARMACEUTICALS, INC.
 
Nepal
 
Niue
 
North Korea
 
Palau
 
Papua New Guinea
 
Philippines
 
Samoa
 
Singapore
 
Solomon Islands
 
South Korea
 
Sri Lanka
 
Taiwan (Republic of China)
 
Thailand
 

 
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***Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

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SCHEDULE A
 
[Attached behind]
 
 
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CONFIDENTIAL TREATMENT REQUESTED BY NOVABAY PHARMACEUTICALS, INC.
 
 
Image [doc5.jpg]
 
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***Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

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