Document:

ex_186813.htm

 

 

Exhibit 4.1

 

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES OR BLUE SKY LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE COMPANY MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY PROPOSED TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT. THIS SECURITY IS SUBJECT TO THE TRANSFER RESTRICTIONS SET FORTH HEREIN. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

COMMON STOCK PURCHASE WARRANT

 

NOVabay pharmaceuticals, inc.   

 

	Warrant Shares: [______]  	Initial Exercise Date: [________]  
	 	Issue Date: [_________]

                       

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, TLF Bio Innovation Lab, LLC or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after [_______], 2020 (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on [_______], 2025 (the “Termination Date”) but not thereafter, to subscribe for and purchase from NovaBay Pharmaceuticals, Inc., a Delaware corporation (the “Company”), up to [_______] shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1.     Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Services Agreement (the “Agreement”), effective April 1, 2020, between the Company and the Holder.

 

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Section 2.     Exercise.

 

a)     Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(c)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

b)     Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $0.865, subject to adjustment hereunder (the “Exercise Price”).

 

	 	
			c)

				
			Mechanics of Exercise.

			

 

i.     Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.

 

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   ii.     Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

iii.     Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(c)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

iv.     No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

 

v.     Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder in the Notice of Exercise; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof. In the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company shall have the right to require, as a condition thereto, the prior or contemporaneous payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. Holder shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares, in each case, to the extent available.

 

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vi.     Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

 

d)     Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Attribution Parties.  Except as set forth in the preceding sentence, for purposes of this Section 2(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(d) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Attribution Parties) and of which portion of this Warrant is exercisable up to the Beneficial Ownership Limitation shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s good faith determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of the Warrant that are not in compliance with the Beneficial Ownership Limitation. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, and the Company shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of the Warrant that are not in compliance with the Beneficial Ownership Limitation. For purposes of this Section 2(d), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written request of a Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon prior written notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(d), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(d) shall continue to apply. Any such increase or decrease in the Beneficial Ownership Limitation will apply only to the Holder and not to any other holder of Warrants. Any such increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. Notwithstanding the foregoing, the provisions of this Section 2(d) shall not apply to any Holder (together with such Holder’s Attribution Parties and any other Persons acting as a group together) who beneficially owns in excess of the Maximum Percentage of the shares of Common Stock outstanding as of the Issue Date. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

 

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Section 3.     Certain Adjustments.

 

a)     Stock Dividends and Splits. If the Company, at any time on or after the date of the Services Agreement and while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the date such dividend or distribution occurs and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

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b)     Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(d) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(d) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction using the same type or form of consideration (and in the same proportion) that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction.  “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the greater of (x) the last VWAP immediately prior to the public announcement of such Fundamental Transaction and (y) the last VWAP immediately prior to the consummation of such Fundamental Transaction, (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date, and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds within five Business Days of the Holder’s election (or, if later, on the effective date of the Fundamental Transaction). The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(b) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for the Company (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and the Successor Entity may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

 

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c)     Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

d)     Notice to Holder.

 

i.     Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

ii.     Notice to Allow Exercise by Holder. If during the term in which the Warrant may be exercised (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

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Section 4.     Transfer of Warrant.

 

a)     Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof, this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant as provided herein, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form (in the form attached hereto) to the Company assigning this Warrant. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

b)     New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the original Issue Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c)     Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

d)     Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, provide to the Company an opinion of counsel, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that the transfer of this Warrant does not require registration under the Securities Act.

 

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e)     Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

 

Section 5.     Miscellaneous.

 

a)     No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(c)(i), except as expressly set forth in Section 3. In no event shall the Company be required to net cash settle an exercise of this Warrant.

 

b)     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 or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

c)     Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

 

d)     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. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

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Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will, so long as any of the Warrants are outstanding, (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

e)     Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Services Agreement.

 

f)     Restrictions. The Holder acknowledges 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.

 

g)     Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant or the Services Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

10

 

 

h)     Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered to the address for the Holder in the Warrant Register.

 

i)     Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

j)     Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

k)     Successors and Assigns. 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 and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

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

 

m)     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.

 

n)     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.

 

 

********************

 

 

(Signature Page Follows)

 

11

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

 

	 	
			novabay pharmaceuticals, inc.

			 

			
	 	
			By:__________________________________________

			     Name: Justin Hall

			     Title: President, Chief Executive Officer and General Counsel 

			

 

12

 

 

 

NOTICE OF EXERCISE

 

To:     novabay pharmaceuticals, inc.

 

(1)     The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2)     Payment shall take the form of lawful money of the United States.

 

(3)     Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

 

The Warrant Shares shall be delivered to the following DWAC Account Number:

 

	 	Broker Name:  	 	 
	 	 	 	 
	 	Broker DTC DWAC #: 	 	 
	 	 	 	 
	 	Broker Contact:  	 	 
	 	 	 	 
	 	Account #:	 	 

                          

(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

 

[SIGNATURE OF HOLDER]

 

	Name of Investing Entity:	 

	Signature of Authorized Signatory of Investing Entity:	 

	Name of Authorized Signatory:	 

	Title of Authorized Signatory:	 

	Date:	 

 

 

 

 

 

EXHIBIT B

 

ASSIGNMENT FORM

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	
			Name:

				 
	 	
			(Please Print)

			
	 	 
	
			Address:

				 
	
			 

				
			(Please Print)

			
	 	 
	Phone Number:	 
	 	 
	Email Address:	 

 

	
			Dated: _______________ __, ______

				 

 

	
			Holder’s Signature:

				 	 

 

	
			Holder’s Address:ex_186814.htm

 

Exhibit 10.1

 

SERVICES AGREEMENT

 

 

This Services Agreement (“Agreement”) is effective as of April 1, 2020 (“Effective Date”), by and between TLF Bio Innovation Lab LLC, a Delaware limited liability corporation whose principal place of business is at 44 Cypress Street, Brookline, MA 02445 (“Provider”), and NovaBay Pharmaceuticals, Inc. (“Company”), a Delaware corporation whose address is 2000 Powell St. Suite 1150, Emeryville, CA 94608, each separately referred as a “Party” and collectively the “Parties.”

 

Company desires to hire Provider to provide specified services for Company as outlined in, and pursuant to the terms of, this Agreement and Provider is willing to provide such services to Company, on the terms and conditions set forth herein.

 

	
			1.

				
			Services

			

 

1.1   Scope of Work. Provider shall serve as Company’s product manager for its product re-launch of CelleRx (the “Product”), repositioning the Product in the market as a lifestyle hygiene product. Generally, Provider’s scope of work shall include but not be limited to: (i) executing the launch of the Product in the marketplace; (ii) conducting thorough market and product research relating to the Product on an ongoing basis; (iii) developing Product positioning, marketing messaging and Product differentiation strategy; (iv) proposing and coordinating the distribution of Product marketing and advertising in appropriate digital and offline channels, and analysis of which Product marketing and advertising is best driving potential buyer traffic and resulting in Product purchase conversion; (v) creating a Product strategy and collateral for marketing, advertising, public relations, training/education and visual merchandising (including digital strategy); and (vi) assisting Company’s executive team in its development of Company’s new direct-to-consumer strategy for the Product.

 

1.2   Performance of Services. The Parties agree that Provider will undertake the services set forth in Exhibit A (the “Services”) in a timely and professional manner consistent with the time frames and terms set forth in Exhibit A. In performing the Services, Provider agrees to provide its own equipment, tools and other materials at its own expense. Under certain circumstances agreed to in advance by Company, Company will make its facilities available to Provider as is reasonably necessary for the provision of the Services. For any work performed on the premises of Company, Provider will comply with Company’s security, confidentiality, safety and health policies. Provider may not subcontract or otherwise delegate its obligations under this Agreement or use any members, employees, or representatives other than those individuals listed in Exhibit B to fulfill such Services without Company’s prior written consent, which consent shall not be unreasonably withheld.

 

1.3   No Conflict of Interest. Provider represents and warrants that entering into this Agreement and the performance of the Services under this Agreement do not conflict with or violate any duties or any agreement pursuant to which Provider is a Party or third party beneficiary. Provider agrees during the term of this Agreement not to accept work, enter into any agreement, or accept any obligation that is inconsistent or incompatible with its obligations under this Agreement, or the scope of Services rendered to Company. Provider further agrees not to provide any services that are the same or similar to those Services Provider is providing to the Company to any competitor of Company in the hypochlorous acid skin care market targeted during the term of this Agreement.

 

1.4   Business Development. Provider is encouraged to present to the Company executive team any strategic business development ideas Provider may have (including, but not limited to, identifying new products, possible M&A activity, strategic partnerships and fundraising). Should Provider wish to present a comprehensive proposal that includes a detailed term sheet and additional compensation, the executive team will review and, if appropriate, work with Provider to present the opportunity to the Board for consideration. Any Board communications by Provider, in relation to this or any topic, will properly be sent to the Company CEO and discussed first before sent to the Board, as is typical and appropriate corporate protocol. The Company executive team and/or Board will be responsible for evaluating the proposal and determining Provider’s compensation.

 

 

 

 

1.5    New Products. The Parties may mutually agree in writing that Provider will offer additional services for the Product besides those currently provided for in this Agreement, and/or similar services for other Company products. In the event that the Parties mutually agree to add such services for the Product and/or other product services (collectively, “New Services”), then the Parties will execute an addendum to this Agreement providing the specifics of such arrangement for New Services. Further, any additional revenue received by the Company directly resulting from any New Services would count toward the Revenue Metrics as outlined in Exhibit E hereto and the resulting Revenue Metrics Equity Award calculation outlined in Section 2.1(ii)(b) below, as appropriate.

 

	
			2.

				
			Compensation

			

 

2.1    Compensation for Services.

 

(i)     Monthly Cash Compensation. As cash compensation for the Services performed by Provider, Company will pay Provider a monthly fee of $37,500 due within ten (10) calendar days of each month end during the term of this Agreement.

 

(ii)     Milestone/Revenue Metrics Equity Awards. Subject to Section 2.2 and the Company receiving shareholder approval to increase its authorized shares of common stock at the Company’s 2020 annual meeting, in addition to the monthly cash compensation outlined in subpart (i) above for the Services rendered, upon Provider’s successful completion of the Milestones (both as defined and further described in Exhibit A attached hereto) and Revenue Metrics (as further described in Exhibit E attached hereto) within the applicable specified time periods, Provider will be issued Company equity awards, as per the below:

 

(a)     Milestone Equity Award. Provider shall provide a written report to Company no later than 10 calendar days after such applicable period end of April 30, 2020, May 31, 2020 and June 30, 2020, outlining how such deliverables as outlined in Exhibit A attached hereto for each period were accomplished and how such deliverables resulted in a tangible benefit to Company. Thereafter, upon Company’s receipt of each written report that conveys such Milestones have been met, Provider will be issued on July 15, 2020 warrants exercisable for 500,000 shares of Company common stock, to be immediately exercisable with a strike price of US$0.865, which is equal to the average closing price of Company’s common stock in April 2020, as reported by the NYSE American (the “Milestone Equity Award”).

 

(b)     Revenue Metrics Equity Awards. Provider will be issued warrants exercisable for 250,000 shares of Company common stock, to be immediately exercisable with a strike price of US$0.865, no later than 15 calendar days after the end of each month of July through December 2020 in which Company’s revenue for the Product equals or exceeds 80% of the revenue projections in Exhibit E attached hereto (for potential aggregate warrants exercisable for 1,500,000 shares of Company common stock, the “Revenue Metrics Equity Awards” and together with the Milestone Equity Award, the “Equity Awards”). Such revenue projections are those Provider has provided to Company’s Board of Directors for engagement of the Services outlined hereto and specifically reflect the following: US$281,025 in revenue for the month of July 2020; US$426,455 in revenue for the month of August 2020; US$773,225 in revenue for the month of September 2020; US$1,019,134 in revenue for the month of October 2020; US$1,253,271 in revenue for the month of November 2020; and US$1,325,183 in revenue for the month of December 2020. For the avoidance of doubt, Provider is only considered to meet such Revenue Metrics if its expenses and other costs are in line and do not exceed those also outlined in Exhibit E attached hereto.

 

 

 

 

Both the Milestone Equity Award and Revenue Metrics Equity Awards will be subject to the terms of the separate warrant agreements, if and when issued.

 

2.2    Accredited Investor Representation. To the extent that any consideration given to Provider by Company is in the form of Company equity, as of the Effective Date and any date that Provider is granted equity awards, Provider represents and warrants to Company that it is an “accredited investor” under Rule 501(a) under the Securities Act of 1933, as amended, pursuant to such definition laid out in Exhibit C attached hereto. Further, Provider agrees to notify Company if it no longer meets the requirements of an “accredited investor” and furnish any information upon request by Company to assure compliance with applicable U.S. federal and state securities laws in connection with such equity award.

 

2.3    Pre-Approved Expenses. Provider will seek Company pre-approval of all third party and any other expenses (including, but not limited to, expenses in connection with Operation Activity and Variable Advertising Activity, both as defined below) incurred in performing Services under this Agreement. If approved, Provider shall coordinate and help facilitate Company paying such expenses directly to such third party. For purposes of this section, “Operational Activity” includes, but is not limited to, expenses outsourced by Provider related to influencers, e-commerce platform design, configuration and management, brand architecture, style guide and package redesign and other operation expenses. For purposes of this section, “Variable Advertising Activity” includes expenses to agencies like Facebook, Google SEM and other social media platforms.

 

2.4    Travel Expenses. Travel expenses are not reimbursable except for pre-approved and reasonable travel expenses incurred by Provider in accordance with the Company’s Travel & Expense Policy, attached as Exhibit D hereto, for travels requested by Company, and solely and exclusively for the purpose of carrying on Company’s business at such travels. However, in no case shall travel time be reimbursed. Air fares shall be economy class.

 

	
			3.

				
			Independent Contractor

			

 

3.1    Relationship. Provider’s relationship with Company will be that of an independent contractor and nothing in this Agreement should be construed to create a partnership, joint venture, fiduciary, agency or employer-employee relationship between the Parties. Neither the Provider, nor its members, employees or representatives (including, but not limited to, those listed on Exhibit B) are agents of Company and are not authorized and will not have any authority to make any representation, contract or commitment on behalf of Company. Further, nothing in this Agreement will be construed to confer upon any third party other than the Parties hereto a right of action under this Agreement or in any manner whatsoever. Provider understands and agrees that none of Provider, its members, employees or representatives (including, but not limited to, those listed on Exhibit B) will be entitled to any of the employee benefits that Company may make available to its employees. Provider will not represent or promise to any of (i) its members, employees or representatives (including, but not limited to, those listed on Exhibit B), or (ii) any subcontractor or employee Provider hires or employs with Company’s consent as required by Section 1.2 to assist it in the performance of the Services, that they will be entitled to any of the employee benefits that Company may make available to its employees.

 

3.2    Taxes. Provider will be solely responsible for all taxes, penalties and the filing of tax returns, social security, disability and other contributions with respect to Provider’s income from the payments made by Company under this Agreement and the Equity Awards issued pursuant to Section 2.1 hereof. Company will not withhold or make payments for social security, unemployment insurance or disability insurance contributions, Internal Revenue Code Section 409A or obtain worker’s compensation insurance for Provider or any of its members, employees or representatives. Nor will Company have any obligation to indemnify Provider or any of its members, employees or representatives for such tax obligations.

 

 

 

 

	
			4.

				
			Intellectual Property

			

 

4.1    Prior Work. Company understands that the members and employees of Provider have experience and knowledge in the Services, and acknowledges that such prior experience is one of the factors for Company’s choice of Provider for the Services. Company agrees that all creations (including, without limitation, any technology, inventions, discoveries, works of authorship or other prior creations) that were conceived, created or reduced to practice by or for Provider (alone or with others) prior to commencement of Provider’s professional services work for Company (collectively, “Prior Work”) are owned by Provider and not assigned to Company under this Agreement.

 

4.2    Developments. Provider agrees that all worldwide rights, title and interest in any ideas, techniques, inventions, systems, feedback, formulae, business or marketing plans, projections or analyses, discoveries, technical information, programs, prototypes, improvements or creations that are related to Company’s business or products and that Provider or its members, employees or representatives (including, but not limited to, those listed on Exhibit B) acting on behalf of Provider creates, conceives, discovers, reduces to practice or makes, alone or with others, in the course of performing the Services (collectively, “Developments”) will belong exclusively to Company. In accordance with these obligations:

 

(i)     Provider hereby assigns in perpetuity to Company all rights, title and interest in any invention, improvement or discovery conceived of, or first reduced to practice, by Provider or its members, employees or representatives (including, but not limited to, those listed on Exhibit B) in the course of performing the Services.

 

(ii)     Provider hereby assigns in perpetuity to Company all rights, title and interest in the copyright to any copyrightable Development that is a work of authorship, whether in human readable or machine readable form, first created or composed by Provider or its members, employees or representatives (including, but not limited to, those listed on Exhibit B) in the course of performing the Services, including without limitation any and all literary works, musical works, dramatic works, pictorial works, graphic works, audiovisual works and sound recordings. Provider agrees to waive any moral rights it may have or acquire in the Developments, and to the extent any such moral rights cannot be waived, Provider hereby grants Company an exclusive, irrevocable, royalty free license to reproduce, distribute, sell, modify, make derivative works of, translate, publish, dispose of, and use any such moral rights and to authorize others to exercise the foregoing rights.

 

(iii)     Provider represents and warrants that if Provider or its members, employees or representatives (including, but not limited to, those listed on Exhibit B) furnishes to Company any patented or patentable inventions or any copyrighted or copyrightable material that were not first conceived of, reduced to practice, discovered, created or composed by Provider or its members, employees or representatives (including, but not limited to, those listed on Exhibit B) in performing the Services, Provider (1) will identify in writing such inventions or material before or at the time of delivering the Developments to Company and (2) hereby grants Company a royalty-free, nonexclusive, and irrevocable license to reproduce, distribute, sell, modify, make derivative works of, translate, publish, use and dispose of these inventions and material and to sub-licenses all of the foregoing rights. Notwithstanding the foregoing, Provider will not incorporate pre-existing material owned by any third party into any Development without Company’s prior written knowledge and consent.

 

(iv)     Provider agrees to execute (or has executed) all documents and to take all other action reasonably requested by Company to enable Company to secure, perfect, record or preserve the ownership, assignment and license rights in the Developments as set forth in this Section 4 anywhere in the world.

 

 

 

 

(v)     Provider agrees to take all legally necessary action to ensure that all members, employees or representatives (including, but not limited to, those listed on Exhibit B) engaged by Provider in the performance of this Agreement will be bound by the terms of this Section 4. Provider represents and warrants that it has or will have with its members, employees and representatives engaged in the Services written agreements sufficient to ensure that all rights, including moral rights, in the Developments will be assigned and licensed to Company as set forth under this Section 4, and Provider will furnish such executed agreements to Company upon request.

 

	
			5.

				
			CONFIDENTIAL INFORMATION AND HIPAA 

			

 

5.1  Confidential Information. Provider agrees and acknowledges that during the performance of the Services, Provider and its members, employees and representatives (including, but not limited to, those listed on Exhibit B), may receive and have access to confidential, proprietary, and trade secret information about Company and/or its clients (“Confidential Information”). For purposes of this Agreement, “Confidential Information” means and will include, but is not limited to: (i) any information, materials or knowledge regarding Company and its business, financial condition, products, programming techniques, customers, suppliers, technology or research and development that is disclosed to Provider and its members, employees or representatives (including, but not limited to, those listed on Exhibit B) or to which Provider and its members, employees or representatives (including, but not limited to, those listed on Exhibit B) have access to in connection with performing the Services; (ii) the Developments; and (iii) the existence and terms and conditions of this Agreement; provided however that Provider may reference Company as a client of Provider using a statement approved in advance by Company. Regardless of whether so marked or identified, however, any information that the recipient knew or should have known, under the circumstances, was considered confidential or proprietary by Company, will be considered Confidential Information of Company.

 

5.2  Protection of Confidential Information. Provider agrees to hold all Confidential Information in strict confidence, not to use it in any way, commercially or otherwise, except in performing the Services, and not to disclose it to others. Provider further agrees to take all action reasonably necessary to protect the confidentiality of all Confidential Information including, without limitation, implementing and enforcing procedures to minimize the possibility of unauthorized use or disclosure of Confidential Information. Provider will ensure that each of its members, employees, subcontractors (if any) or representatives (including, but not limited to, those listed on Exhibit B) who will have access to the Confidential Information executes an agreement, the form of which may be subject to the approval of Company in its sole discretion (the “Confidentiality Agreement”), obligating the member, employee, subcontractor or representative, as applicable, to keep all Confidential Information confidential and not to use the Confidential Information in any way, commercially or otherwise, except in performing the Services, and Provider will furnish such executed agreements to Company upon request.

 

5.3  Exceptions. Confidential Information excludes information that (i) Provider can establish through written records; (ii) is readily accessible to the public in a written publication prior to the date of this Agreement; (iii) becomes generally known, previously disclosed or available to the public through no improper action by Provider; (iv) was independently developed by Provider without use or reference to Company’s Confidential Information; (v) becomes known to Provider, without restriction, from a third party not bound by an obligation of confidentiality covering the Confidential Information; or (vi) as required by law or any regulatory or government authority, provided that Provider shall provide prompt prior written notice thereof to Company to enable Company to seek a protective order or otherwise prevent the disclosure.

 

5.4 Non-solicitation. The Parties covenant and agree that during the period expiring one (1) year after the date of this Agreement, neither Party will, directly or indirectly (through its representatives, professional search firms or otherwise), solicit, induce, encourage or attempt to solicit, induce or encourage any employee or contractor of the other Party to terminate such person’s employment or relationship with the other Party in order to become an employee or contractor to or for the soliciting Party; provided, however, that the foregoing provisions shall not preclude the soliciting Party from (i) the use of public general advertisements or search firms (in each case, not directed at, or targeted to the other Party or its employees) or the hiring of any person who responds thereto, or (ii) the solicitation or hiring of any such person who contacts the soliciting Party of his or her own initiative.

 

 

 

 

5.5 HIPAA. It is not intended that Provider or its members, employees or representatives (including, but not limited to, those listed on Exhibit B) will receive from Company, or create or receive on behalf of Company, patient healthcare, billing, or other confidential patient information(“Patient Information”) in performing the Services hereunder. Patient Information, as the term is used herein, includes all “Protected Health Information,” as that term is defined in 45 Code of Federal Register 164.501. To the extent that Provider or its members, employees or representatives (including, but not limited to, those listed on Exhibit B) receive Patient Information, Provider shall comply with all laws, rules and regulations relating to the confidentiality of Patient Information, including the applicable provisions of the privacy regulations promulgated pursuant to Health Insurance Portability and Accountability Act of 1996, Title XIII of the American Recovery and Reinvestment Act of 2009 (Public Law 111-005) (“HIPAA”) and the rules, guidance and regulations promulgated thereunder, as amended from time to time.

 

	
			6.

				
			Term and Termination

			

 

6.1   Term. The term of this Agreement shall be one (1) year from the Effective Date, unless terminated sooner as provided hereunder. The term may be modified or extended only by mutual written agreement of the Parties.

 

6.2   Termination. This Agreement may be terminated as follows:

 

(i)     Company may terminate this Agreement immediately upon written notice to Provider if (1) any Milestone outlined in Exhibit A, Periodic Deliverables, hereto is not met under the timeline provided in Exhibit A, as determined by Company, (2) any projection (including gross profit and net profit metrics) in the Profit and Loss Statement attached as Exhibit E hereto, is not within an 80% achievement level of the projection for any monthly period after July 31, 2020, or (3) Provider has otherwise breached this Agreement barring a failure to deliver an Ongoing Deliverable pursuant to subpart (ii) below;

 

(ii)     Company may terminate this Agreement immediately upon written notice to Provider if Provider has failed to deliver any of the Ongoing Deliverables outlined in Exhibit A, which has not been remedied within five (5) calendar days upon written notice by Company; or

 

(iii)     After June 30, 2020, either Party may terminate this Agreement at any time for any reason by providing the other Party with fifteen (15) calendar days’ prior written notice.

 

6.3  Effect of Termination. Upon the effective date of any termination of this Agreement, Provider will immediately cease performing Services under this Agreement. If this Agreement has been terminated by Company pursuant to Section 6.2(i) or Section 6.2(ii), Company will not owe Provider for any Services conducted during or after the month in which the Milestone or projection was not met (as relates to Section 6.2(i)(1) and Section 6.2(i)(2) as applicable), the breach occurred (as relates to Section 6.2(i)(3)) or repeated failure of the Ongoing Deliverable occurred (as relates to Section 6.2(ii). If this Agreement is terminated pursuant to Section 6.2(iii), Company agrees to pay Provider compensation due for Services actually rendered, in accordance with Section 2 (which, for the avoidance of doubt, may include the Milestone Equity Award and/or the Revenue Metrics Equity Awards, the latter of which will be due even if 80% of such revenue metrics are met post-termination, if such accomplishment is due entirely or predominately by the prior efforts of Provider), and such amounts will be in full satisfaction of any obligation or liability of Company to Provider for payments due to Provider under this Agreement. Sections 3, 4, 5, 6, 7, 8, and 9 will survive the expiration or termination of this Agreement. Termination of this Agreement by either Party will not act as a waiver of any breach of this Agreement and will not act as a release of either Party from any liability for breach of such Party’s obligations under this Agreement. Neither Party will be liable to the other for damages of any kind solely as a result of terminating this Agreement in accordance with its terms, and termination of this Agreement by a Party will be without prejudice to any other right or remedy of such Party under this Agreement or applicable law.

 

 

 

 

6.4  Delivery of Materials. Upon any termination of this Agreement or at any time upon Company’s request, Provider will promptly return to Company any and all Information of Company. Upon any termination and receipt of payment therefore, Provider will also promptly deliver all work product, including Developments then in progress for deliverables under this Agreement.

 

	
			7. 

				
			Indemnification

			

 

The Parties shall mutually indemnify, defend and hold harmless each other from and against any and all losses incurred by the other (and in the case of Provider, including its members, employees and representatives (including, but not limited to, those listed on Exhibit B)) (the “Indemnified Party”) which arise out of or result from misrepresentation, or breach or non-fulfillment of any covenant contained in this Agreement. Notwithstanding the foregoing, the Indemnifying Party shall not be responsible for any liability, loss or damage resulting from the negligence, intentional misconduct or willful malfeasance by the Indemnified Party.

 

	
			8.

				
			Limitation Of Liabilities and Damages

			

 

IN NO EVENT WILL COMPANY BE LIABLE FOR ANY EXEMPLARY, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY KIND IN CONNECTION WITH THIS AGREEMENT, EVEN IF COMPANY HAS BEEN INFORMED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES. FURTHER, THE LIABILITY OF COMPANY SHALL NOT EXCEED THE TOTAL CONSIDERATION PAID OR PAYABLE BY COMPANY TO PROVIDER PURSUANT TO THIS AGREEMENT IN THE 12 MONTHS PRIOR TO THE CLAIMED DAMAGE OR INJURY.

 

	
			9.

				
			General Provisions

			

 

9.1   Arbitration. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration in San Francisco, California in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Provider agrees that Company's damages arising from any breach of this Agreement by Provider would be difficult, if not impossible, and inadequate to measure and calculate.

 

9.2   Governing Law; Venue. This Agreement and the rights and obligations of both Parties shall be governed and construed in accordance with the laws of the State of California, without giving effect to its choice of law or conflict of laws rules. Any legal action or proceeding arising under this Agreement will be brought exclusively in the federal or state courts located in the Northern District of California and the Parties hereby irrevocably consent to the personal jurisdiction and venue therein.

 

9.3  Equitable Remedies. Due to the personal and unique nature of the Services and Provider’s access to Confidential Information of Company, Company shall have the right to enforce this Agreement and any of its provisions by injunction, specific performance or other equitable relief without prejudice to any other rights and remedies that Company may have for a breach of this Agreement. Provider further agrees that no bond or other security shall be required in obtaining such equitable relief.

 

9.4   Severability. If any provision of this Agreement is determined to be invalid, illegal or unenforceable, that provision of the Agreement will be enforced to the maximum extent permissible so as to affect the intent of the Parties and the validity or enforceability of the other provisions will not be affected.

 

 

 

 

9.5  Waiver. The waiver of any breach of any provision of this Agreement will not constitute a waiver of any subsequent breach of the same or other provisions hereof.

 

9.6  Assignment. Provider will not, and will not have the right to, assign, transfer, delegate or otherwise dispose of, this Agreement or any of Provider’s rights or obligations under this Agreement without the prior written consent of Company. Subject to the foregoing, this Agreement will be binding upon and will inure to the benefit of the Parties and their respective successors and permitted assigns.

 

9.7  Notices. Any notice, request, demand, or other communication required or permitted hereunder will be in writing, will reference this Agreement and will be deemed to be properly given: (a) when delivered personally; (b) when sent by electronic transmission including e-mail; (c) five (5) business days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) two (2) business days after deposit with a private industry overnight courier, with written confirmation of receipt. All notices will be sent to the address set forth on the signature page of this Agreement and to the notice of the person executing this Agreement (or to such other address or person as may be designated by a Party by giving written notice to the other Party pursuant to this Section).

 

9.8  Entire Agreement; Amendment. This Agreement (including the Exhibits attached hereto, which are incorporated herein by reference) are the final, complete and exclusive agreement of the Parties with respect to the subject matter hereof and supersedes and merges all prior or contemporaneous representations, discussions, proposals, negotiations, conditions, communications and agreements, whether written or oral, between the Parties relating to the subject matter hereof and all past courses of dealing or industry custom. No modification of or amendment to this Agreement will be effective unless in writing and signed by each of the Parties.

 

9.9     Counterparts. This Agreement may be executed (including, without limitation, by electronic signature) in multiple counterparts, with the same effect as if the Parties had signed the same document. Each counterpart so executed will be deemed to be an original, and all such counterparts will be construed together and will constitute one Agreement.

 

 

 

 

IN WITNESS WHEREOF the Parties hereto have caused this Agreement to be duly executed as of May 13, 2020.

 

 

	
			NOVABAY PHARMACEUTICALS, INC. 

			 

			 

				
			TLF BIO INNOVATION LAB LLC 

			
	
			By:     /s/ Justin M. Hall                                     

				
			By:    /s/ Lena Xiao                                      

			
	
			Name: Justin M. Hall, Esq.

				
			Name: Lena Xiao

			
	
			Title: CEO and General Counsel

				
			Title: Manager

			
	
			Email: [Redacted.]

				
			Email: [Redacted.]

			
	
			Address: 2000 Powell Street, Suite 1150

				
			Address: [Redacted.]

			
	
			               Emeryville, CA 94608

				 

 

 

 

 

EXHIBIT A

SERVICES

 

[Redacted.]

 

 

 

 

EXHIBIT B

CELLERX PROJECT TEAM

 

[Redacted.]

 

 

 

 

EXHIBIT C

ACCREDITED INVESTOR

 

[Redacted.]

 

 

 

 

EXHIBIT D

TRAVEL & EXPENSE POLICY

 

[Redacted.]

 

 

 

 

EXHIBIT E

PROFIT AND LOSS STATEMENT

 

[Redacted.]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00309-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00309-of-00352.parquet"}]]