Document:

ex_422224.htm

Exhibit 10.6

 

Form of Additional Voting Commitment

 

DATE: September 9, 2022

 

	
			TO:

				
			Holders who entered into Reprice Letter Agreements with NovaBay Pharmaceuticals, Inc.

			

 

To Whom It May Concern:

 

NovaBay Pharmaceuticals, Inc. (the “Company”) has entered into letter agreements, dated September 9, 2022 (the “Reprice Letter Agreements”), with certain warrant holders in connection with two separate warrant reprice transactions, which provide for, among other terms, amendments to outstanding Common Stock purchase warrants that are exercisable into shares of Company common stock, par value $0.01 per share (“Common Stock”). These Common Stock purchase warrants were originally issued by the Company in the following transactions:

 

	 	
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			July 2020 Warrant Reprice. The Company issued Common Stock purchase warrants to a limited number of accredited investors (the “July 2020 Investors”) in connection with the Company’s warrant reprice transaction that closed on July 23, 2020 (the “July 2020 Original Warrants”).

			

 

	 	
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			November 2021 Private Placement. The Company also issued Common Stock purchase warrants to a limited number of accredited investors (the “November 2021 Investors”) in connection with the Company’s private placement financing transaction that closed on November 2, 2021 (the “November 2021 Original Warrants” and, together with the July 2020 Original Warrants, collectively, the “Original Warrants”).

			

 

The amendments to the Original Warrants as contemplated by the Reprice Letter Agreements entered into with certain November 2021 Investors (the “2021 Participants”) and with certain July 2020 Investors (the “2020 Participants” and together with the 2021 Participants, collectively, the “Participants”) as well as the transactions and agreements provided in the Reprice Letter Agreements are collectively referred to as the “Warrant Reprice Transactions”. A summary of certain terms of the Warrant Reprice Transactions is included as Attachment A.

 

As part of the Warrant Reprice Transactions and pursuant to the terms of the Reprice Letter Agreements, the Company is required, among its other obligations, to call a special meeting of the Company’s stockholders (“Special Meeting”) at the earliest practical date, and in any event on or before the 75th day following the closing date of the Warrant Reprice Transactions, to seek stockholder approval of (i) an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to effect a reverse stock split of the outstanding shares of Common Stock, which reverse stock split shall have a ratio of not less than 1-for-10 and not more than 1-for-35 (each 10 to 35 shares, as the case may be, of Common Stock shall be combined to become 1 share of Common Stock) (the “Stockholder Approval”) and (ii) additional proposals that may be required by the rules of the NYSE American (the “Additional Stockholder Approvals”). In addition, pursuant to the Reprice Letter Agreements, the Company is required to secure voting commitments from all of its executive officers, directors and significant stockholders (including stockholders holding more than 10% of issued and outstanding shares of Common Stock, Pioneer Pharma (Hong Kong) Company Ltd. and Jian Ping Fu) to vote their shares of Common Stock in favor of the Stockholder Approval and any Additional Stockholder Approvals. The 2021 Participants and 2020 Participants will also execute such voting commitments. If the Company does not obtain Stockholder Approval (and, if applicable, any Additional Stockholder Approvals) at the Special Meeting, it must call additional meetings every four months thereafter until such Stockholder Approval is approved. Concurrently with the Warrant Reprice Transactions, the Company is also entering into definitive agreements providing for the issuance and sale of Units (consisting of the Company’s Series C Non-Voting Convertible Preferred Stock, Series A-1 Warrants to purchase Common Stock and Series A-2 Warrants to Purchase Common Stock) in a private offering to accredited investors (the “2022 Private Offering”). The Stockholder Approval is a condition to the closing of the 2022 Private Offering.

 

 

 

 

In connection with the Warrant Reprice Transactions, the undersigned confirms and agrees that the undersigned will vote all shares of Common Stock, or other Company voting stock, over which the undersigned has voting control, in favor of the Stockholder Approval and any Additional Stockholder Approvals at the Special Meeting (or any subsequently called meeting of Company’s stockholders called for this purpose), as provided in the Reprice Letter Agreements. The Board of Directors of the Company has established the record date for this Special Meeting to be September 13, 2022.

 

This commitment and agreement is being given by the undersigned in furtherance of the Warrant Reprice Transactions and to support the Company’s compliance with its covenants under the Reprice Letter Agreements, and is not revocable by the undersigned. Until such time as the Stockholder Proposal (and, if applicable, any Additional Stockholder Approvals) is approved by Company stockholders, the amended 2020 Original Warrants and the amended 2021 Original Warrants that have not been exercised will not be further exercisable until after such approvals are obtained.

 

This letter is intended for the benefit of the Participants and the Company (to satisfy its obligation under the Reprice Letter Agreements with the Participants) and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

	 	By:	 
	 	 	Name of Stockholder:	 
	 	 	 
	 	 	Number of shares of Common Stock (and other voting shares) over which I have voting control as of the date hereof (which number may increase or decrease after the date hereof and prior to the record date of any such stockholder meeting): _________________

 

 

 

 

ATTACHMENT A

 

The following is a brief overview of certain material financial terms of the Warrant Reprice Transactions. You are encouraged to contact the Company for any additional information that you may require relating to the Warrant Reprice Transactions or otherwise.

 

Amendments to the Original Warrants

 

Pursuant to the terms of the Reprice Letter Agreements entered into with certain November 2021 Investors (the “2021 Participants”) and certain July 2020 Investors (the “2020 Participants” and together with the 2021 Participants, collectively, the “Participants”), the July 2020 Original Warrants and the November 2021 Original Warrants of each Participant are being amended to provide for the following terms summarized below.

 

	 	
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			Reducing the Exercise Price: The exercise price for the July 2020 Original Warrants and the November 2021 Original Warrants will each be reduced to $0.18 (the “Reduced Exercise Price”).

			

 

	 	
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			Limitation on Future Exercise: The amended July 2020 Original Warrants include a new restriction (the “Exercise Restriction”) on the holder’s ability to exercise their unexercised shares of Common Stock, until the later to occur of (i) six months or (ii) the date on which the Stockholder Approval (as defined and discussed below) has been obtained at a meeting of Company stockholders and such approval becomes effective under the laws of the State of Delaware (the “Stockholder Approval Date”). The amended 2021 Original Warrants and the amended 2021 Original Warrant will permit the Initial Warrant Exercise by the 2021 Participants and by any 2020 Participants, respectively, as discussed below, however, after such Initial Warrant Exercise, such warrants will be subject to the same Exercise Restriction.

			

 

	 	
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			Extending the Termination Date: The Termination Date of the November 2021 Original Warrants being extended by approximately seven months to September 11, 2028. No such extension was made to the July 2020 Original Warrants.

			

 

Warrant Exercise and New Warrant for Certain Participants

 

In addition to amendment to the 2021 Original Warrant and 2020 Original Warrant, the Letter Agreements with the 2021 Participants also provided for the 2021 Participants to exercise 25% of the shares of Common Stock underlying their 2021 Original Warrants (the “2021 Initial Warrant Exercise”) and the Letter Agreements with the 2020 Participants also provided each 2020 Participant with the option to exercise all or a portion of its amended 2020 Original Warrants (the “2020 Initial Warrant Exercise”, and together with the 2021 Initial Warrant Exercise, the “Initial Warrant Exercise”). Related to this Initial Warrant Exercise, the 2021 Participants and such 2020 Participants that elected to make a cash exercise of its amended 2020 Original Warrants received a new Common Stock Purchase Warrant to purchase up to a number of shares of Common Stock equal to 100% of the number of shares of Common Stock that were received as part of the Initial Warrant Exercise (such warrants, the “New Warrants”). Such New Warrants are in substantially the same form and terms (as updated by the reprice transaction) as the November 2021 Original Warrants and July 2020 Original Warrants and have an exercise price equal to the Reduced Exercise Price and have a term of six years form the date of issuance.ex_422225.htm

Exhibit 10.7

 

LEAK-OUT AGREEMENT

 

September 9, 2022

 

This agreement (the “Leak-Out Agreement”) is being delivered to you in connection with an understanding by and between NovaBay Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and the person or persons named on the signature pages hereto (collectively, the “Holder”).

 

Reference is hereby made to the letter agreements, dated September 9, 2022 (the “Letter Agreements”), by and between the Company and the Holder and certain of the Other Holders (defined below) that provide for, among other terms, (a) certain amendments to the common stock, par value $0.01 per share (“Common Stock”) warrants issued to the Holder and such Other Holders (as defined below) (the “Original Warrants”) that reduces the exercise price (“Reduced Exercise Price”), extends the termination date, and restricts the further exercise of the remaining unexercised shares of Common Stock after the Initial Warrant Exercise until the later of (i) six months and (ii) the Company receiving certain stockholder approvals described in the Letter Agreements (the “Amended Warrants”), (b) the exercise by the Holder and such Other Holders of a portion of their Amended Warrant at the Reduced Exercise Price (the “Initial Warrant Exercise”), and (c) the issuance to the Holder of a new Common Stock Purchase Warrant to purchase up to a number of shares of Common Stock equal to 100% of the number of shares of Common Stock received by such Holder in the Initial Warrant Exercise or other warrant exercise that occurs from and after the date of such Holder’s Letter Agreement and prior to 5:00 p.m. on September 9, 2022 (such warrants, the “New Warrants”). Capitalized terms not defined herein shall have the meaning as set forth in the Letter Agreement, unless otherwise set forth herein.

 

The Holder agrees solely with the Company that from the date that the Letter Agreement is entered into by and between the Company and the Holder and ending at the end of the Trading Day (as defined in the Securities Purchase Agreement, dated October 29, 2021, that was entered into in connection with the Company’s 2021 financing transaction (the “Purchase Agreement”)) on September 13, 2022 (such period, the “Restricted Period”), neither the Holder, nor any affiliate of such Holder which (x) had or has knowledge of the transactions contemplated by the Letter Agreement, (y) has or shares discretion relating to such Holder’s investments or trading or information concerning such Holder’s investments, including in respect of the Amended Warrants and the New Warrants, or (z) is subject to such Holder’s review or input concerning such affiliate’s investments or trading (together, the “Holder’s Trading Affiliates”), collectively, shall sell, dispose or otherwise transfer, directly or indirectly (including, without limitation, any sales, short sales, swaps or any derivative transactions that would be equivalent to any sales or short positions), on any Trading Day (as defined in the Purchase Agreement) during the Restricted Period (any such date, a “Date of Determination”), shares of Common Stock, or shares of Common Stock underlying any Common Stock Equivalents (as defined in the Purchase Agreement), including, but not limited to, the shares of Common Stock issuable upon conversion of the Company’s Series B Non-Voting Convertible Preferred Stock and upon exercise of the Amended Warrants and the New Warrants.

 

 

 

 

Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Leak-Out Agreement must be in writing and shall be given in accordance with the terms of the Purchase Agreement.

 

This Leak-Out Agreement, together with the Letter Agreement and Voting Letter, constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior negotiations, letters and understandings relating to the subject matter hereof and are fully binding on the parties hereto.

 

The Leak-Out Agreement shall be effective upon the execution and delivery by the Holder of this Agreement, together with its Letter Agreement and the Voting Letter. This Leak-Out Agreement may be executed simultaneously in any number of counterparts. Each counterpart shall be deemed to be an original, and all such counterparts shall constitute one and the same instrument. This Leak-Out Agreement may be executed and accepted by electronic communication or PDF signature and any such signature shall be of the same force and effect as an original signature.

 

The terms of this Leak-Out Agreement shall be binding upon and shall inure to the benefit of each of the parties hereto and their respective successors and assigns.

 

This Leak-Out Agreement may not be amended or modified except in writing signed by each of the parties hereto.

 

All questions concerning the construction, validity, enforcement and interpretation of this Leak-Out Agreement shall be governed by Sections 5.9 and Section 5.20 of the Purchase Agreement.

 

Each party hereto acknowledges that, in view of the uniqueness of the transactions contemplated by this Leak-Out Agreement, the other party or parties hereto may not have an adequate remedy at law for money damages in the event that this Leak-Out Agreement has not been performed in accordance with its terms, and therefore agrees that such other party or parties shall be entitled to seek specific enforcement of the terms hereof in addition to any other remedy it may seek, at law or in equity.

 

The obligations of the Holder under this Leak-Out Agreement are several and not joint with the obligations of any other holder of an Original Warrant that entered into a Letter Agreement or any other holder as listed in the Letter Agreements (each, an “Other Holder”) pursuant to any other agreement, and the Holder shall not be responsible in any way for the performance of the obligations of any Other Holder under any such other agreement. Nothing contained in this Leak-Out Agreement, and no action taken by the Holder pursuant hereto, shall be deemed to constitute the Holder and Other Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holder and the Other Holders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Leak-Out Agreement and the Company acknowledges that the Holder and the Other Holders are not acting in concert or as a group with respect to such obligations or the transactions contemplated by this Leak-Out Agreement or any other agreement. The Company and the Holder confirm that the Holder has independently participated in the negotiation of the transactions contemplated hereby with the advice of its own counsel and advisors. The Holder shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Leak-Out Agreement, and it shall not be necessary for any Other Holder to be joined as an additional party in any proceeding for such purpose.

 

 

 

 

The Company hereby represents and warrants as of the date hereof and covenants and agrees from and after the date hereof that none of the terms offered to any Other Holder with respect to any restrictions on the sale of shares underlying the Amended Warrants, the New Warrants, and the Company’s Series B Non-Voting Convertible Preferred Stock substantially in the form of this Leak-Out Agreement (or any amendment, modification, waiver or release thereof) (each a “Settlement Document”), is or will be more favorable to such Other Holder than those of the Holder and this Leak-Out Agreement. If, and whenever on or after the date hereof, the Company enters into a Settlement Document with terms that are materially different from this Leak-Out Agreement, then (i) the Company shall provide notice thereof to the Holder promptly following the occurrence thereof (“Notice of Transaction”) and (ii) the terms and conditions of this Leak-Out Agreement shall be, without any further action by the Holder or the Company, automatically amended and modified in an economically and legally equivalent manner such that the Holder shall receive the benefit of the more favorable terms and the obligation of the conditions (as the case may be) set forth in such Settlement Document, provided that upon written notice to the Company within five (5) days after receiving a Notice of Transaction, the Holder may provide written notice to the Company electing not to accept all of the benefit of any such amended or modified term and the related conditions, in which event the terms and conditions contained in this Leak-Out Agreement shall apply to the Holder as it was in effect immediately prior to such amendment or modification as if such amendment or modification never occurred with respect to the Holder. The provisions of this paragraph shall apply similarly and equally to each Settlement Document.

 

[The remainder of the page is intentionally left blank]

 

 

 

 

The parties hereto have executed this Leak-Out Agreement as of the date first set forth above.

 

	
			 

				
			Sincerely,

				
			 

			
	 	 	 
	 	NOVABAY PHARMACEUTICALS, INC.	 
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By:

				
			 

				
			 

			
	
			 

				
			 

				
			Name:

				
			 

			
	
			 

				
			 

				
			Title:

				
			 

			

 

 

Agreed to and Accepted:

 

“HOLDER”

 

 

 

By:                                                                    

Name:

Title:

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