ex2-1.htm

This Agreement and Plan of Merger, dated as of June 25, 2010 (the “Agreement”), is between NovaBay Pharmaceuticals, Inc., a California corporation (“NovaBay CA”), and NovaBay Pharmaceuticals, Inc., a Delaware corporation and wholly-owned subsidiary of NovaBay (“NovaBay DE”). NovaBay CA and NovaBay DE are sometimes referred to herein as the “Constituent Corporations.”

A. NovaBay DE is a corporation duly organized and existing under the laws of the State of Delaware and has an authorized capital of 70,000,000 shares, 65,000,000 of which are designated common stock, par value $0.01 per share, and 5,000,000 of which are designated preferred stock, par value $0.01 per share. The preferred stock of NovaBay DE is undesignated as to series, rights, preferences, privileges or restrictions. As of June 23, 2010, 100 shares of common stock were issued and outstanding, all of which were held by NovaBay CA, and no shares of preferred stock were issued and outstanding.

B. NovaBay CA is a corporation duly organized and existing under the laws of the State of California and has an authorized capital of 70,000,000 shares, 65,000,000 of which are designated common stock, par value $0.01 per share, and 5,000,000 of which are designated preferred stock, par value $0.01 per share. The preferred stock of NovaBay CA is undesignated as to series, rights, preferences, privileges or restrictions. As of June 23, 2010, 23,334,188 shares of common stock and no shares of preferred stock were issued and outstanding.

C. The Board of Directors of NovaBay CA has determined that, for the purpose of effecting the reincorporation of NovaBay CA in the State of Delaware, it is advisable and in the best interests of NovaBay CA and its shareholders that NovaBay CA merge with and into NovaBay DE upon the terms and conditions herein provided.

D. The respective Boards of Directors of NovaBay DE and NovaBay CA have approved and declared the advisability of this Agreement, and have directed that this Agreement be submitted to a vote of their respective sole shareholder and shareholders and executed by the undersigned officers.

1.1 Merger. In accordance with the provisions of this Agreement, the Delaware General Corporation Law (“DGCL”) and the California General Corporation Law (“CGCL”), NovaBay CA shall be merged with and into NovaBay DE (the “Merger”), the separate existence of NovaBay CA shall cease and NovaBay DE shall survive the Merger and shall continue to be governed by the laws of the State of Delaware, and NovaBay DE shall be, and is herein sometimes referred to as, the “Surviving Corporation”. The name of the Surviving Corporation shall be “NovaBay Pharmaceuticals, Inc.”

(c) A certificate of merger meeting the requirements of the DGCL (the “Certificate of Merger”) shall have been filed with the Secretary of State of the State of Delaware and this Agreement, together with a Certificate of Ownership as provided in Section 1110 of the CGCL or the Certificate of Merger, shall have been filed with the Secretary of State of the State of California or, in the case of the applicable requirements of California law, as otherwise provided by the CGCL.

1.3 Effect of the Merger. Upon the Effective Date of the Merger, the separate existence of NovaBay CA shall cease and NovaBay DE, as the Surviving Corporation, (i) shall continue to possess all of its assets, rights, powers and property as constituted immediately prior to the Effective Date of the Merger, (ii) shall be subject to all actions previously taken by its and NovaBay CA’s Board of Directors, (iii) shall succeed, without other transfer, to all of the assets, rights, powers and property of NovaBay CA in the manner more fully set forth in Section 259 of the DGCL, (iv) shall continue to be subject to all of the debts, liabilities and obligations of NovaBay DE as constituted immediately prior to the Effective Date of the Merger, and (v) shall succeed, without other transfer, to all of the debts, liabilities and obligations of NovaBay CA in the same manner as if NovaBay DE had itself incurred them, all as more fully provided under the applicable provisions of the DGCL and the CGCL.

2.1 Certificate of Incorporation. The Certificate of Incorporation of NovaBay DE as in effect immediately prior to the Effective Date of the Merger shall continue in full force and effect as the Certificate of Incorporation of the Surviving Corporation until duly amended in accordance with the provisions thereof and applicable law.

2.2 Bylaws. The Bylaws of NovaBay DE as in effect immediately prior to the Effective Date of the Merger shall continue in full force and effect as the Bylaws of the Surviving Corporation until duly amended in accordance with the provisions thereof and applicable law.

2.3 Directors and Officers. The directors and officers of NovaBay CA immediately prior to the Effective Date of the Merger shall be the directors and officers of the Surviving Corporation serving in the same class of directors until their successors shall have been duly elected and qualified or until as otherwise provided by law or the Certificate of Incorporation of the Surviving Corporation or the Bylaws of the Surviving Corporation.

3.1 NovaBay CA Common Stock. Upon the Effective Date of the Merger, each share of NovaBay CA common stock, $0.01 par value, issued and outstanding immediately prior thereto shall, by virtue of the Merger and without any action by the Constituent Corporations, the holder of such shares or any other person, be converted into one (1) fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation.

(a) Upon the Effective Date of the Merger, the Surviving Corporation shall assume and continue the 2007 Omnibus Incentive Plan, 2002 Stock Option Plan (to the extent stock awards continue to remain outstanding and subject to the terms of such plan) and 2005 Stock Option Plan (to the extent stock awards continue to remain outstanding and subject to the terms of such plan), the Director Compensation Plan and all other employee benefit plans of NovaBay CA (collectively, the “Incentive Plans”). Each outstanding and unexercised option or other right to purchase or receive, or a security convertible into, NovaBay CA common stock shall become an option or right to purchase or receive, or a security convertible into, the Surviving Corporation’s common stock on the basis of one share of the Surviving Corporation’s common stock for each share of NovaBay CA common stock issuable pursuant to any such option, right to purchase or convertible security, on the same terms and conditions and at an exercise price per share equal to the exercise price applicable to any such NovaBay CA option, stock purchase right or convertible security at the Effective Date of the Merger. There are no options, purchase rights for or securities convertible into preferred stock of NovaBay CA under the Incentive Plans.

3.3 NovaBay DE Common Stock. Upon the Effective Date of the Merger, each share of common stock, par value $0.01 per share, of NovaBay DE issued and outstanding immediately prior thereto shall, by virtue of the Merger and without any action by NovaBay DE, the holder of such shares or any other person, be canceled and returned to the status of authorized but unissued shares, without any consideration being delivered in respect thereof.

3.4 Exchange of Certificates. After the Effective Date of the Merger, each holder of a certificate representing shares of NovaBay CA common stock outstanding immediately prior to the Effective Date of the Merger may, at such shareholder’s option, surrender the same for cancellation to an exchange agent designated by the Surviving Corporation (the “Exchange Agent”), and each such holder shall be entitled to receive in exchange therefor a certificate or certificates representing the number of shares of the Surviving Corporation’s common stock into which the shares formerly represented by the surrendered certificate were converted as herein provided. Unless and until so surrendered, each certificate representing shares of NovaBay CA common stock outstanding immediately prior to the Effective Date of the Merger shall be deemed for all purposes, from and after the Effective Date of the Merger, to represent the number of shares of the Surviving Corporation’s common stock into which such shares of NovaBay CA common stock were converted in the Merger.

The registered owner on the books and records of the Surviving Corporation or the Exchange Agent of any shares of stock represented by such certificate shall, until such certificate shall have been surrendered for transfer or conversion or otherwise accounted for to the Surviving Corporation or the Exchange Agent, have and be entitled to exercise any voting and other rights with respect to and to receive dividends and other distributions upon the shares of common stock of the Surviving Corporation represented by such certificate as provided above.

Each certificate representing common stock of the Surviving Corporation so issued in the Merger shall bear the same legends, if any, with respect to the restrictions on transferability as the certificates of NovaBay CA so converted and given in exchange therefor, unless otherwise determined by the Board of Directors of the Surviving Corporation in compliance with applicable laws, or other such additional legends as agreed upon by the holder and the Surviving Corporation.

(b) Consents, Approvals or Authorizations. Any consents, approvals or authorizations that NovaBay CA deems necessary or appropriate to be obtained in connection with the consummation of the Merger shall have been obtained, including, but not limited to, approvals with respect to federal and state securities laws; and

5.2 Further Assurances. From time to time, as and when required by NovaBay DE or by its successors or assigns, there shall be executed and delivered on behalf of NovaBay CA such deeds and other instruments, and there shall be taken or caused to be taken by NovaBay DE and NovaBay CA such further and other actions as shall be appropriate or necessary to vest or perfect in or conform of record or otherwise by NovaBay DE the title to and possession of all the property, interests, assets, rights, privileges, immunities, powers, franchises and authority of NovaBay CA and otherwise to carry out the purposes of this Agreement, and the officers and directors of NovaBay DE are fully authorized in the name and on behalf of NovaBay CA or otherwise to take any and all such action and to execute and deliver any and all such deeds and other instruments.

5.3 Abandonment. At any time before the Effective Date of the Merger, this Agreement may be terminated and the Merger may be abandoned for any reason whatsoever by the Board of Directors of either NovaBay CA or of NovaBay DE, or of both, notwithstanding the approval of the principal terms of this Agreement by the shareholders of NovaBay CA or the adoption of this Agreement by the sole shareholder of NovaBay DE, or by both.

5.4 Amendment. The Boards of Directors of the Constituent Corporations may amend this Agreement at any time prior to the Effective Date of the Merger, provided that an amendment made subsequent to applicable shareholder or shareholder approval shall not, unless approved by such shareholders or shareholders as required by law:

IN WITNESS WHEREOF, this Agreement having first been approved by the resolutions of the Board of Directors of NovaBay Pharmaceuticals, Inc., a California corporation, and NovaBay Pharmaceuticals, Inc., a Delaware corporation, is hereby executed on behalf of each of such two corporations and attested by their respective officers thereunto duly authorized.

NOVABAY PHARMACEUTICALS, INC., a California corporation

By:		/s/ Ramin Najafi
		Ramin Najafi President and Chief Executive Officer

By:		/s/ Thomas J. Paulson
		Thomas J. Paulson Chief Financial Officer and Secretary

NOVABAY PHARMACEUTICALS, INC., a Delaware corporation

By:		/s/ Ramin Najafi
		Ramin Najafi President and Chief Executive Officer