Exhibit 10.19

AMENDMENT NUMBER 1

(the “Amendment”)

TO

Financial Advisory and Investor Relations Consulting Agreement

Dated 13th day of February, 2007

(the “Agreement”)

Between

NovaBay Pharmaceuticals, Inc. (“NovaBay”)

And

PM Holdings Ltd. (“PM”)

This Amendment is entered into between NovaBay and PM as of the latest date
indicated on the signature pages hereto.

WHEREAS, NovaBay and PM wish to modify the scope of the Agreement; and

WHEREAS, NovaBay and PM wish to modify the payments due under the Agreement;

NOW, THEREFORE, NovaBay and PM hereby agree to amend the Agreement as follows:

 

  1. In Exhibit A, replace Item a) with “a) Assist NovaBay in its investor
relations activities in Canada by identifying potential candidates for NovaBay
to employ, on an as needed basis, for the detailed preparation of investor road
shows in Canada and for the management of such road shows;”

 

  2. In Exhibit A, replace Item b) with “b) Advise NovaBay on obtaining value
from its listing on the Toronto Stock Exchange;”

 

  3. In Exhibit A, add Item “j) Assist NovaBay in the organization of two
investor road shows per year in Europe.”

 

  4. Replace Exhibit B in its entirety with Exhibit B attached hereto.

All other provisions of the Agreement remain in force.

--------------------------------------------------------------------------------

The parties have executed this Amendment to be effective as of the latest date
indicated below.

 

NOVABAY PHARMACEUTICALS, INC. A California corporation By:   /s/ Thomas Paulson
Name:   Thomas Paulson Its:   Chief Financial Officer Address:   5980 Horton
St., Suite 550     Emeryville, CA 94608 Date:   March 12, 2008 PM HOLDINGS LTD.,
A Turks and Caicos company By:   /s/ Patrick Churchill Name:   Patrick Churchill
Its:   Director Address:   3 Place du Folies     Monaco Date:   March 12, 2008

--------------------------------------------------------------------------------

EXHIBIT B

COMPENSATION

For Financial Advisory and Investor Relations Services for the period from
April 1, 2008 to February 12, 2010, PM is entitled to receive the following
fees:

 

  a) the sum of $264,000;

 

  b) a warrant agreement issued by NovaBay to PM entitling PM to acquire 150,000
shares of Common Stock of NovaBay exercisable at a price of $4.00 per share
expiring April 1, 2010; and

 

  c) a warrant agreement issued by NovaBay to PM entitling PM to acquire 150,000
shares of Common Stock of NovaBay exercisable at a price of $4.00 per share
expiring April 1, 2012.

The warrant agreements referenced above shall be substantially in the form
attached hereto as Appendix I and shall be issued on April 1, 2008. In
connection therewith, PM acknowledges and agrees that the representations and
warranties of PM contained in Section 10 of the warrant agreements (in the form
attached as Appendix I) are true and correct as of the date hereof and that the
obligation of NovaBay to execute and deliver the warrant agreements is
contingent upon the truth and accuracy of such representations and warranties on
the date of issuance of the warrant agreements.

No further or other payments shall be due, other than as indicated above, for
services to be provided under the Agreement. PM acknowledges that all fees and
other payments due for services provided prior to April 1, 2008 have been
received in full.

In the event that PM terminates the Agreement, then PM will immediately repay to
NovaBay the amount of $28,000 multiplied by the number of whole months remaining
from the date of termination to February 12, 2010.

--------------------------------------------------------------------------------

APPENDIX I

FORM OF WARRANT

NOVABAY PHARMACEUTICALS, INC.

COMMON STOCK PURCHASE WARRANT

THIS WARRANT AND THE SECURITIES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND ANY APPLICABLE
STATE SECURITIES LAWS, (II) COMPLIANCE WITH THE PROVISIONS OF REGULATION S
PROMULGATED PURSUANT TO THE ACT OR (III) THE AVAILABILITY OF AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS. IN
ADDITION, NO HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE ACT. ADDITIONAL RESTRICTIONS ON TRANSFER ARE
DESCRIBED BELOW AND IN SECTIONS 3 AND 10 HEREOF.

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS WARRANT OR THE
SECURITIES ISSUABLE HEREUNDER SHALL NOT TRADE SUCH SECURITIES BEFORE AUGUST 2,
2008.

Issuance Date: April 1, 2008

THIS COMMON STOCK PURCHASE WARRANT certifies that, for value received, PM
Holdings Ltd. (the “Holder”) is entitled, subject to the prior approval of the
issuance and the listing of the Warrant Shares by the American Stock Exchange
(or other U.S. stock exchange on which the Warrant Shares are principally
traded), upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or prior to 5:00 p.m. (Eastern
Time) on April 1, [2010/ 2012] (the “Termination Date”) but not thereafter, to
subscribe for and purchase from NovaBay Pharmaceuticals, Inc., a corporation
incorporated in the State of California (the “Company”), up to One Hundred Fifty
Thousand (150,000) shares of the Company’s Common Stock, par value $0.01 per
share (the “Common Stock”). The purchase price of one share of Common Stock (the
“Exercise Price”) under this Warrant shall be U.S.$4.00, subject to adjustment
hereunder. “Warrant” as used herein shall include this Common Stock Purchase
Warrant and any warrants delivered in substitution or exchange therefor as
provided herein. “Warrant Shares” refers to the shares of Common Stock (or other
securities or property to which Holder is entitled pursuant to Section 6 or
Section 7 hereof) issuable upon the exercise of the purchase rights represented
by this Warrant.

1. Exercise of Warrant.

(a) Except as provided above or in Section 2 herein, the purchase rights
represented by this Warrant may be exercised in whole or in part, at any time,
or from time to time, on or before the Termination Date by delivering this
Warrant and the Notice of Exercise form annexed hereto (including the
confirmation of certain representations, warranties and covenants as set forth
on paragraph 3 of such Notice of

 

1

--------------------------------------------------------------------------------

Exercise) duly completed and executed to the principal executive office of the
Company (or such other office or agency of the Company as it may designate by
notice in writing to the registered Holder at the address of such Holder
appearing on the books of the Company) and by payment of the Exercise Price of
the Warrant Shares thereby purchased by wire transfer, cash or check. If
eligible, the Warrant Shares shall be delivered by the Company to the Holder via
the Depository Trust Company’s (“DTC”) Deposit Withdrawal Agent Commission
(“DWAC”) system via the DTC instructions provided to the Company in the Notice
of Exercise.

(b) If this Warrant shall have been exercised in part, the Company shall, at the
time of delivery of the certificate or certificates representing Warrant Shares,
deliver to the Holder a new Warrant evidencing the rights of the Holder to
purchase that number of Warrant Shares in respect of which the Holder has not
exercised the rights evidenced by this Warrant, which new Warrant shall in all
other respects be identical with this Warrant.

2. No Fractional Shares. This Warrant may not be exercised for fractional
shares; and no fractional share of any class or series of the Company’s capital
stock shall be issued upon exercise of the Warrant.

3. No Transfer of Warrants. This Warrant and the rights hereunder are not
transferable, in whole or in part.

4. No Rights as Shareholder until Exercise. This Warrant does not entitle the
Holder to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof. Upon the surrender of this Warrant and the payment
of the aggregate Exercise Price, the Warrant Shares so purchased shall be and be
deemed to be issued to such Holder as the record owner of such shares as of the
close of business on the later of the date of such surrender or payment.

5. Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that
upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant, and upon surrender and
cancellation of such Warrant, if mutilated, the Company will make and deliver a
new Warrant of like tenor and dated as of such cancellation, in lieu of such
Warrant.

6. Adjustments of Exercise Price and Number of Warrant Shares; Stock Splits,
Etc. The number and kind of securities purchasable upon the exercise of this
Warrant and the Exercise Price shall be subject to adjustment from time to time
upon the happening of any of the following. In case the Company shall (a) pay a
dividend in shares of Common Stock or make a distribution in shares of Common
Stock or other securities exchangeable for or convertible into shares of Common
Stock for no additional consideration to holders of its outstanding Common
Stock, (b) split or subdivide its outstanding shares of Common Stock into a
greater number of shares, (c) combine its outstanding shares of Common Stock
into a smaller number of shares of Common Stock, or (d) issue any shares of its
capital stock in a reclassification of the Common Stock (any of such events in
subsections (a), (b), (c) and (d) above, a “Share Reorganization”), then the
number (and, in the case of a Share Reorganization in

 

2

--------------------------------------------------------------------------------

(d) above, kind) of Warrant Shares purchasable upon exercise of this Warrant
shall be deemed to have been adjusted so that the Holder shall be entitled to
receive the number (and, in the case of a Share Reorganization in (d) above,
kind) of Warrant Shares equal to the amount of shares of Common Stock or, in the
case of a Share Reorganization in (d) above, other securities of the Company
which the Holder would have owned or have been entitled to receive had such
Warrant been exercised prior to the record date or effective date, as
applicable, of such Share Reorganization (which includes, in the case of a Share
Reorganization in (a) above involving a distribution of securities exchangeable
for or convertible into shares of Common Stock after the date of issuance of
this Warrant, the number of shares of Common Stock that would be outstanding had
all such securities been so exchanged or converted). Upon each such adjustment
of the number (and, in the case of a Share Reorganization in (d) above, kind) of
Warrant Shares which are purchasable hereunder, the Holder shall thereafter be
entitled to purchase the number of Warrant Shares resulting from such adjustment
at an Exercise Price per Warrant Share obtained by multiplying the Exercise
Price in effect immediately prior to the earlier of the record date for or the
effective date of such Share Reorganization by the number of Warrant Shares
purchasable pursuant hereto immediately prior to such date and dividing by the
number of Warrant Shares resulting from such adjustment.

7. Reorganization, Reclassification, Merger, Consolidation or Disposition of
Assets. In case the Company shall reorganize its capital, reclassify its capital
stock, consolidate or merge with or into another entity (where the Company is
not the surviving entity or where there is a change in or distribution with
respect to the Common Stock), or sell, transfer or otherwise dispose of all or
substantially all its property, assets or business to another entity (each, a
“Reorganization”) and, pursuant to the terms of such Reorganization, shares of
common stock of the successor or acquiring entity, or any cash, shares of stock
or other securities or property of any nature whatsoever (including warrants or
other subscription or purchase rights) in addition to or in lieu of common stock
of the successor or acquiring entity (“Other Property”), are to be received by
or distributed to the holders of Common Stock, then this Warrant shall
thereafter represent the right to receive, upon exercise of this Warrant, the
number of shares of common stock and/or Other Property as would have been
issuable upon or as a result of such Reorganization with respect to the
securities which were subject to the purchase rights under this Warrant
immediately prior to the record date or, if there is no record date, the
effective date of such Reorganization and the Exercise Price therefor shall be
adjusted to be the amount determined by multiplying the Exercise Price in effect
immediately prior to the Reorganization by the number of Warrant Shares
purchasable pursuant hereto immediately prior to the Reorganization, and
dividing the product thereof by the number of shares of common stock and/or
Other Property to which the holder of that number of Warrant Shares purchasable
pursuant hereto would have been entitled to by reason of such Reorganization. In
case of any such Reorganization, the successor or acquiring entity (if other
than the Company) shall expressly assume the observance and performance of each
and every covenant and condition of this Warrant to be performed and observed by
the Company and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined in good faith by
resolution of the Board of Directors of the Company) in order to provide for
adjustments of Warrant Shares for which this Warrant is exercisable which shall
be as nearly equivalent as practicable to the adjustments provided for in this
Section 7. For purposes of this Section 7, “common stock” of a corporation shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation and

 

3

--------------------------------------------------------------------------------

which is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 7 shall similarly apply to successive Reorganizations.

8. Notice of Adjustment. Whenever the number of Warrant Shares or number or kind
of securities or other property purchasable upon the exercise of this Warrant or
the Exercise Price is adjusted, as herein provided, the Company shall give
notice thereof to the Holder, which notice shall state the number of Warrant
Shares (and/or other securities or Other Property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and/or other
securities or Other Property) after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made.

9. Authorized Shares. The Company covenants that during the period the Warrant
is outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares
upon the exercise of any purchase rights under this Warrant.

10. Holder Representations and Warranties. Holder represents, warrants and
covenants as follows:

(a) Own Account. This Warrant and the Warrant Shares to be issued upon exercise
hereof are being acquired by Holder solely for the Holder’s own account and not
as a nominee for any other party, and for investment, and the Holder will not
offer, sell, or otherwise dispose of this Warrant or Warrant Shares to be issued
upon exercise hereof except under circumstances that will not result in a
violation of the Securities Act of 1933, as amended (the “Act”), or any state
securities laws. Upon exercise of this Warrant, the Holder shall, if reasonably
requested by the Company, confirm in writing, in a form reasonably satisfactory
to the Company, that the Warrant Shares so purchased are being acquired for
investment, solely for the Holder’s own account and not as a nominee for any
other party.

(b) Accredited Investor. Holder acknowledges that it is familiar with the
definition of “accredited investor” in Rule 501 of Regulation D promulgated
under the Act and certifies that Holder is an accredited investor as defined in
such rule.

(c) Unregistered Securities. Holder understands that neither this Warrant nor
the Warrant Shares have been registered under the Act, and neither this Warrant
nor the Warrant Shares may be sold, assigned or transferred unless (i) a
registration statement under the Act is in effect with respect thereto or
(ii) an exemption from registration is found to be available to the satisfaction
of the Company.

(d) Regulation S.

(i) Holder is: (A) a resident of, or organized under the laws of, a country
other than the United States, and (B) located, or with its principal place

 

4

--------------------------------------------------------------------------------

of business, outside the United States. For purposes of this Warrant, the
“United States” means the United States of America, its territories and
possessions, any State of the United States, and the District of Columbia.

(ii) Holder hereby certifies that it is not a “U.S. person,” as such term is
defined in Rule 902(k), promulgated pursuant to the Act, and is not acquiring
the Warrant or the Warrant Shares for the account or benefit of any U.S. person.

(iii) Holder is not aware of, and has not engaged in or participated in, by or
on behalf of the Company, any “directed selling efforts” (as such term is
defined in Rule 902 of Regulation S promulgated under the Act).

(e) Transfers. Holder will not sell, transfer, pledge or otherwise dispose of or
encumber the Warrant or the Warrant Shares unless and until (i) such securities
are subsequently registered under the Act and each applicable state securities
law; or (ii) (A) an exemption from such registration is available thereunder
(including pursuant to Regulation S under the Act), and (B) Holder has notified
the Company of the proposed transfer and has furnished the Company with
assurances (which may include an opinion of counsel), satisfactory to the
Company, that such transfer will not require registration of such shares under
the Act. Holder further agrees not to engage in hedging transactions with regard
to the Warrant or the Warrant Shares unless in compliance with the Act. Holder
understands that the Company is not obligated, and does not intend, to register
any such shares under the Act or any state securities laws.

(f) Stop Orders, Etc. Holder acknowledges and agrees that the Company shall
refuse to register any transfer of the Warrant or Warrant Shares not made in
accordance with: (i) the provisions of Regulation S; (ii) pursuant to
registration under the Act; or (iii) pursuant to an available exemption under
the Act. To the extent that foreign law prevents the Company from refusing to
register securities transfers, the Company shall be entitled to adopt other
reasonable procedures to prevent any transfer of the Warrant or the Warrant
Shares not made in accordance with the above. The Company shall be entitled to
issue any and all stop transfer orders, or issue any other orders that are
necessary to enforce the terms of this Warrant.

(g) U.S. Legends. Holder acknowledges and agrees that the Warrant Shares
acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws and that
certificates evidencing the Warrant Shares shall bear a restrictive legend,
substantially in the following form (in addition to such other restrictive
legends as are required or deemed advisable under the provisions of this
Warrant, any applicable law or regulation or any other agreement to which Holder
is a party):

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE

 

5

--------------------------------------------------------------------------------

TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT COVERING SUCH SECURITIES OR (B) SUCH TRANSFER MAY OTHERWISE BE MADE IN
COMPLIANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED PURSUANT TO THE ACT
AND, IF REQUESTED BY THE COMPANY, SUCH COMPLIANCE IS CONFIRMED BY AN OPINION OF
COUNSEL OR OTHER ASSURANCES, IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY,
OR (C) THE COMPANY RECEIVES AN OPINION OF COUNSEL OR OTHER ASSURANCES,
SATISFACTORY IN FORM AND CONTENT TO THE COMPANY OR ITS COUNSEL, INDICATING THAT
SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF THE ACT. IN ADDITION, NO HEDGING TRANSACTIONS INVOLVING THESE
SECURITIES MAY BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.”

(h) Canadian Legends. Any certificate representing shares of Common Stock issued
upon the exercise of the Warrants prior to the date which is four months and one
day after the date hereof will bear the following legends:

“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES
SHALL NOT TRADE THE SECURITIES BEFORE AUGUST 2, 2008.”

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK
EXCHANGE (“TSX”); HOWEVER, THE SAID SECURITIES CANNOT BE TRADED THROUGH THE
FACILITIES OF THE TSX SINCE THEY ARE NOT FREELY TRADEABLE AND CONSEQUENTLY ANY
CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT “GOOD DELIVERY” IN SETTLEMENT OF
TRANSACTIONS ON THE TSX.”

provided that at any time subsequent to the date which is four months and one
day after the date hereof any certificate representing such shares of Common
Stock may be exchanged for a certificate bearing no such legends.

11. Expiration Date. This Warrant shall expire and all rights to purchase
Warrant Shares hereunder shall cease and become null and void at 5:00 p.m.
(Eastern Time) on April 1, [2010/ 2012].

12. Miscellaneous.

(a) Governing Law. This Warrant shall be governed by and construed in accordance
with the laws of the state of California as applied to contracts among
California residents made and to be performed entirely within the state of
California, without regard to its conflict of law principles or rules.

 

6

--------------------------------------------------------------------------------

(b) Transfer Taxes. The issuance of the Warrant Shares upon the exercise of this
Warrant, and the delivery of certificates or other instruments representing such
Warrant Shares, shall be made without charge to the Holder for any transfer tax
or other charge in respect of such issuance.

(c) Notices. Except as otherwise provided herein, any notice or request required
or permitted to be given or delivered pursuant to this Warrant shall be given in
writing and shall be deemed effectively given (i) upon personal delivery,
(ii) when sent by electronic mail or confirmed facsimile if sent during normal
business hours of the recipient, and if not sent during normal business hours,
then on the next business day, (iii) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or
(iv) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All such
notices or requests shall be sent (A) if to the Company, to the attention of the
Company’s President at the Company’s principal executive offices and (B) if to
the Holder, to: ATTN:             , [address], Facsimile No.             ,
e-mail             .

(d) Successors. Subject to applicable securities laws, this Warrant and the
rights and obligations evidenced hereby shall inure to the benefit of and be
binding upon the successors of the Company and the successors of Holder.

(e) Amendment. This Warrant may be modified or amended or the provisions hereof
waived with the written consent of the Company and the Holder.

(f) Severability. Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant.

(g) Counterparts. This Warrant may be executed in two or more counterparts and
via facsimile, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

(h) Headings. The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant.

[remainder of page intentionally left blank]

 

7

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed,
effective as of the Issuance Date set forth above, by its officer thereunto duly
authorized.

 

NOVABAY PHARMACEUTICALS, INC. By:       Ramin (“Ron”) Najafi, Ph.D.   Chief
Executive Officer and President

 

ACKNOWLEDGED AND AGREED: PM HOLDINGS LTD. By:     Name:     Title:    

--------------------------------------------------------------------------------

NOTICE OF EXERCISE

 

To: NovaBay Pharmaceuticals, Inc.

(1) The undersigned hereby elects to purchase              shares of the Common
Stock of NovaBay Pharmaceuticals, Inc. (the “Warrant Shares”) pursuant to the
terms of the Common Stock Purchase Warrant dated April 1, 2008 (which is
attached hereto), and tenders herewith payment of the exercise price in full.

(2) Please issue a certificate or certificates representing said Warrant Shares
in the name of the undersigned as specified below:

Special Instructions (if any): _________________________________________

_______________________________________________________________

Address: ________________________________________________________

_______________________________________________________________

Federal Tax ID / Social Security No.: ___________________________________

and deliver the Warrant Shares as follows (check one):

 

  ¨ by certified mail to the above address

 

  ¨ electronically (provide DWAC
Instructions:                                  )

 

  ¨ other (specify):                                      
                                           )

(3) The representations and warranties of the undersigned contained in
Section 10 of the Warrant are true and accurate as of the date hereof, and the
undersigned will comply with all obligations set forth therein.

(4) If the number of Warrant Shares specified above are not all the Warrant
Shares purchasable upon exercise of the Warrant, please issue a new Warrant for
the balance of the Warrant Shares purchasable upon exercise of this Warrant
registered in the name of the undersigned Holder and delivered to the address
indicated above.

 

Dated: __________________________                  (Print Name of Holder)

 

By:         Name:     Title: