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Exhibit 10.33    
    

FORM OF RESTRICTED STOCK GRANT AGREEMENT  

[Date] 

[Grantee]

[Address] 

	Re:
	Physicians
Formula Holdings, Inc. Grant of Restricted Stock 

Dear
[Grantee]: 

        Physicians
Formula Holdings, Inc. (the "Company") is pleased to advise you that, pursuant to the Company's 2006 Equity Incentive Plan (the "Plan"), the Company's Compensation
Committee has approved the issuance of shares of the Company's Common Stock, par value $0.01 per share, to you as set forth below (the "Restricted Shares"), subject to the terms and conditions set
forth herein. Upon payment to the Company by you of the aggregate par value thereof, which payment shall be made within 10 days of the date hereof, the Restricted Shares shall be fully paid and
nonassessable. Capitalized terms used herein but not defined herein shall have the meanings ascribed to such terms in the Plan. 

	

Original Grant Date:	
 	

[Date]
	

Total Number of Restricted Shares:	
 	

[Number]
	

Vesting Dates and Number of Restricted Shares that shall vest:	
 	

[Date]                [Number]

	1.
	Conformity
with Plan. 

        The grant of Restricted Shares is intended to conform in all respects with, and is subject to all applicable provisions of, the Plan (which is incorporated herein
by reference). Inconsistencies between this Agreement and the Plan shall be resolved in accordance with the terms of the Plan. By executing and returning the enclosed copy of this Agreement, you
acknowledge your receipt of this Agreement and the Plan and agree to be bound by all of the terms of this Agreement and the Plan. 

	2.
	Rights
of Participants. 

        Nothing
in this Agreement shall interfere with or limit in any way the right of the Company or its stockholders to terminate your duties as a director at any time (with or without
Cause), nor confer upon you any right to continue as a director of the Company for any period of time, or to continue your present (or any other) rate of compensation. 

 
	3.
	Remedies. 

        The
parties hereto shall be entitled to enforce their rights under this Agreement specifically, to recover damages by reason of any breach of any provision of this Agreement and to
exercise all other rights existing in their favor. The parties hereto acknowledge and agree that money damages would not be an adequate remedy for any breach of the provisions of this Agreement and
that any party hereto may, in its sole discretion, apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive relief (without posting bond or other
security) in order to enforce or prevent any violation of the provisions of this Agreement. 

	4.
	Successors
and Assigns. 

        Except
as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit
of the respective successors and permitted assigns of the parties hereto whether so expressed or not. 

	5.
	Severability.

        Whenever
possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held
to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement. 

	6.
	Counterparts.

        This
Agreement may be executed simultaneously in two or more counterparts, each of which shall constitute an original, but all of which taken together shall constitute one and the same
Agreement. 

	7.
	Descriptive
Headings. 

        The
descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. 

	8.
	Governing
Law. 

        THE
VALIDITY, CONSTRUCTION, INTERPRETATION, ADMINISTRATION AND EFFECT OF THE PLAN, AND OF ITS RULES AND REGULATIONS, AND RIGHTS RELATING TO THE PLAN AND TO THIS AGREEMENT, SHALL BE
GOVERNED BY THE SUBSTANTIVE LAWS, BUT NOT THE CHOICE OF LAW RULES, OF THE STATE OF DELAWARE. 

	9.
	Notices. 

        All
notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been 

2

 

given
when delivered personally or mailed by certified or registered mail, return receipt requested and postage prepaid, to the recipient. Such notices, demands and other communications shall be sent
to you at the address appearing on the first page of this Agreement and to the Company at Physicians Formula Holdings, Inc., 1055 West 8th Street, Azusa, CA 91702, Attn: Chief Financial
Officer, or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. 

	10.
	Entire
Agreement. 

        This
Agreement and the terms of the Plan constitute the entire understanding between you and the Company, and supersede all other agreements, whether written or oral, with respect to
your Restricted Shares. 

*        *        *        *        * 

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SIGNATURE PAGE TO RESTRICTED STOCK GRANT AGREEMENT  

        Please execute the extra copy of this Agreement in the space below and return it to the Chief Financial Officer at Physicians Formula Holdings, Inc. to
confirm your understanding and acceptance of the agreements contained in this Agreement. 

	 	 	 	 	Very truly yours,
	

 	
 	

 	
 	

PHYSICIANS FORMULA HOLDINGS, INC.
	

 	
 	

 	
 	

By:	

 
	 	 	 	 	 	

	

 	
 	

 	
 	

Name:	

 
	 	 	 	 	 	

	

 	
 	

 	
 	

Title:	

 
	 	 	 	 	 	

	

Enclosures:	
 	

1.        Extra copy of this Agreement	
 	

 	

 
	

 	
 	

2.        Copy of the Plan	
 	

 	

 

        The
undersigned hereby acknowledges having read this Agreement and the Plan and hereby agrees to be bound by all provisions set forth herein and in the Plan. 

Dated
as of [Date] 

	 	 	
 [Grantee]

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Exhibit 10.33Exhibit
4.2

 

INVESTOR’S RIGHTS
AGREEMENT

 

THIS INVESTOR’S RIGHTS AGREEMENT (this “Agreement”)
dated as of the 1st day of April 2002, is entered into by and
between OMP, Inc., a Delaware corporation (the “Company”), and Austin T.
McNamara (the “Executive”).

 

RECITALS

 

WHEREAS, the Company has entered into an Employment Agreement dated as
of September 1, 2001, with Executive pursuant to which Executive was elected to
the Company’s Board of Directors and became employed as its Chairman, President
and Chief Executive Officer;

 

WHEREAS, the Company provided Executive the
opportunity to make an investment in the Company as evidenced by that certain
stock purchase and subscription agreement of even date herewith (the “Purchase
Agreement”), pursuant to which the Executive purchased 750,000 shares of
the Company’s Common Stock, for an aggregate consideration of $750,000;

 

WHEREAS, the Company has and may again in the
future grant Executive the option to acquire additional shares of the Company’s
Common Stock; and

 

WHEREAS, in order to induce the Executive to
invest funds in the Company pursuant to the Purchase Agreement, and to induce
the Company to grant and the Executive to accept the Company’s grant of options
to acquire Common Stock, the Executive and the Company hereby agree that this
Agreement shall govern the rights of the Executive with respect to the shares
of common stock now owned or hereafter acquired;

 

NOW, THEREFORE, in consideration of the mutual
premises and promises herein contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

 

1.             Definitions.
For purposes of this Agreement:

 

“1934 Act” shall mean the Securities
Exchange Act of 1934, as amended.

 

“Act” means the Securities Act of 1933,
as amended.

 

“Co-Sale Stock” means any shares of the Company’s capital stock
now owned or subsequently acquired by the Executive which Executive may sell
pursuant to Section 4.1 hereof.

 

“Common Stock” means the Company’s
authorized shares of Common Stock, par value of $0.001 per share.

 

 

“Form S-3” means such form under the
Act as in effect on the date hereof or any registration form under the Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.

 

“Holder” means the Executive and any
assignee thereof in accordance with Section 6.2 hereof.

 

“register,” “registered,” and “registration”
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Act, and the declaration
or ordering of effectiveness of such registration statement or document.

 

“Registrable Securities” means (i) any
Common Stock of the Company held or hereafter acquired by the Executive and
(ii) any capital stock held or hereafter acquired by the Executive which
capital stock is convertible into Common Stock, excluding to all cases,
however, any Registrable Securities sold by a person in a transaction in which
his rights under Section 2 are not assigned.

 

“Registrable Securities then outstanding”
shall be determined by the number of shares of Common Stock then outstanding
which are Registrable Securities.

 

“SEC” shall mean the Securities and
Exchange Commission.

 

“Stonington” shall mean Stonington
Capital Appreciation 1994 Fund, L.P.

 

2.             Registration
Rights. The Company covenants and agrees as follows:

 

2.1           Company Registration. If (but without any obligation to do so) the
Company proposes to register (including for this purpose a registration
effected by the Company for shareholders other than the Executive) any of its
stock or other securities under the Act in connection with the public offering
of such securities solely for cash (other than a registration relating solely
to the sale of securities to participants in a Company stock plan, a
registration on any form which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of the Registrable Securities, or a registration in which the
only Common Stock being registered is Common Stock issuable upon conversion of
debt securities which are also being registered), the Company shall, at such
time, promptly give the Executive written notice of such registration. Upon the
written request of the Executive given within twenty (20) days after mailing of
such notice by the Company in accordance with Section 6.8, the Company
shall, subject to the provisions of Section 2.5, cause to be registered
under the Act all of the Registrable Securities that the Executive has
requested to be registered.

 

2.2           Obligations of the
Company. Whenever required under this Section 2 to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as reasonably
possible:

 

2

 

(a)           Prepare and file with
the SEC a registration statement with respect to such Registrable Securities
and use its best efforts to cause such registration statement to become
effective.

 

(b)           Prepare and file with
the SEC such amendments and supplements to such registration statement and the
prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement.

 

(c)           Furnish to the
Executive such numbers of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Act, and such other
documents as they may reasonably request in order to facilitate the disposition
of Registrable Securities owned by them.

 

(d)           Use its best efforts to
register and qualify the securities covered by such registration statement
under such other securities or Blue Sky laws of such jurisdictions as shall be
reasonably requested by the Executive; provided that the Company shall
not be required in connection therewith or as a condition thereto to qualify to
do business or to file a general consent to service of process in any such
states or jurisdictions.

 

(e)           In the event of any
underwritten public offering, enter into and perform its obligations under an
underwriting agreement, in usual and customary form, with the managing
underwriter of such offering. The Executive shall also enter into and perform
its obligations under such underwriting agreement.

 

(f)            Notify the Executive
of Registrable Securities covered by such registration statement, at any time
when a prospectus relating thereto is required to be delivered under the Act,
of the happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing.

 

(g)           Cause all such
Registrable Securities registered pursuant hereunder to be listed on each
securities exchange on which similar securities issued by the Company are then
listed.

 

(h)           Provide a transfer
agent and registrar for all Registrable Securities registered pursuant
hereunder and a CUSIP number for all such Registrable Securities, in each case
not later than the effective date of such registration.

 

2.3           Furnish Information.
It shall be a condition precedent to the obligations of the Company to take any
action pursuant to this Section 2, with
respect to the Registrable Securities of the Executive, that the Executive
shall furnish to the Company such information regarding himself, the
Registrable Securities held by him, and the intended method of disposition of
such securities as shall be required to effect the registration of the
Executive’s Registrable Securities.

 

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2.4           Expenses of Company
Registration. The Company shall bear and pay all expenses incurred in
connection with any registration, filing or qualification of Registrable
Securities with respect to the registrations pursuant to Section 2.1 for
the Executive (which right may be assigned as provided in Section 6.2),
including (without limitation) all registration, filing, and qualification
fees, printers and accounting fees relating or apportionable thereto and the
fees and disbursements of counsel for the Company in its capacity as counsel to
the Executive hereunder; if Company counsel does not make itself available for
this purpose, the Company will pay the reasonable fees and disbursements of one
counsel for the Executive selected by them, but excluding underwriting
discounts and commissions relating to Registrable Securities.

 

2.5           Underwriting
Requirements. In connection with any offering involving an underwriting of
shares of the Company’s capital stock, the Company shall not be required under Section
2.1 to include the Executive’s securities in such underwriting unless they
accept the terms of the underwriting as agreed upon between the Company and the
underwriters selected by it (or by other persons entitled to select the underwriters),
and then only in such quantity as the underwriters determine in their sole
discretion will not jeopardize the success of the offering by the Company. If
the total amount of securities, including Registrable Securities, requested by
shareholders to be included in such offering exceeds the amount of securities
sold other than by the Company that the underwriters determine in their sole
discretion is compatible with the success of the offering, then the Company
shall be required to include in the offering only that number of such
securities, including Registrable Securities, which the underwriters determine
in their sole discretion will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the selling
shareholders according to the total amount of securities entitled to be
included therein owned by each selling shareholder or in such other proportions
as shall mutually be agreed to by such selling shareholders) but in no event
shall the amount of securities of the selling shareholders included in the
offering be reduced below twenty percent (20%) of the total amount of
securities included in such offering, unless such offering is the initial
public offering of the Company’s securities in which case the selling
shareholders may be excluded if the underwriters make the determination
described above. For purposes of the preceding parenthetical concerning
apportionment, for any selling shareholder which is a holder of Registrable
Securities and which is a partnership or corporation, the partners, retired
partners and shareholders of the Executive, or the estates and family members
of any such partners and retired partners and any trusts for the benefit of any
of the foregoing persons shall be deemed to be a single “selling shareholder”,
and any pro-rata reduction with respect to such “selling shareholder” shall be
based upon the aggregate amount of shares carrying registration rights owned by
all entities and individuals included in such “selling shareholder,” as defined
in this sentence.

 

2.6           Delay of
Registration. The Executive shall not have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the
result of any controversy that might arise with respect to the interpretation
or implementation of this Section 2.

 

2.7           Indemnification.
In the event any Registrable Securities are included in a registration
statement under this Section 2:

 

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(a)           To the extent permitted by law, the Company
will indemnify and hold harmless the Executive, any underwriter (as defined in
the Act) for the Executive and each person, if any, who controls the Executive
or underwriter within the meaning of the Act or the 1934 Act, against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the Act,
the 1934 Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are based
upon any of the following statements, omissions or violations (collectively a “Violation”):
(i) any untrue statement or alleged untrue statement of a material fact
contained in such registration statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto,
(ii) the omission or alleged omission to state herein a material fact required
to be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Company of the
Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the Act, the 1934 Act or any state securities law; and the
Company will pay to the Executive, underwriter or controlling person, as
incurred, any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained
in this Section 2.7(a) shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability, or action if such settlement is
effected without the consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable in any such case for
any such loss, claim, damage, liability, or action to the extent that it arises
out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by the Executive, underwriter or controlling person.

 

(b)           To the extent permitted by law, the Executive
will indemnify and hold harmless the Company, each of its directors, each of
its officers who has signed the registration statement, each person, if any,
who controls the Company within the meaning of the Act, any underwriter, the
Executive selling securities in such registration statement and any controlling
person of any such underwriter, against any losses, claims, damages, or
liabilities (joint or several) to which any of the foregoing persons may become
subject, under the Act, the 1934 Act or other federal or state law, insofar as
such losses, claims, damages, or liabilities (or actions in respect thereto)
arise out of or are based upon any Violation, in each case to the extent (and
only to the extent) that the Executive occurs in reliance upon and in
conformity with written information furnished by the Executive expressly for
use in connection with such registration; and the Executive will pay, as
incurred, any legal or other expenses reasonably incurred by any person
intended to be indemnified pursuant to this Section 2.7(b), in
connection with investigation or defending any such loss, claim, damage,
liability, or action; provided,  however, that the indemnity
agreement contained in this Section 2.7(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Executive, which consent
shall not be unreasonably withheld; provided, that, in no event shall
any indemnity under this Section 2.7(b) exceed the gross proceeds from the offering received by the Executive.

 

(c)           Promptly after receipt by an indemnified party
under this Section 2.7 of notice of the commencement of any action
(including any governmental action), such

 

5

 

indemnified party
will, if a claim in respect thereof is to be made against any indemnifying
party under this Section 2.7, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party (together with all other indemnified
parties which may be represented without conflict by one counsel) shall have
the right to retain one separate counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 2.7, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section
2.7.

 

(d)           If the indemnification provided for in this Section
2.7 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage, or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss, liability,
claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions that resulted in such loss, liability, claim,
damage, or expense as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties’ relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission. Notwithstanding
any provision to the contrary in this Section 2.7(d), in the event that
the indemnifying party is the Executive, in no event shall the Executive’s
obligation to contribute any amounts hereunder exceed the amount of gross
proceeds from the offering received by the Executive.

 

(e)           Notwithstanding the foregoing, to the extent
that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten public
offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control.

 

(f)            The obligations of the Company and the
Executive under this Section 2.7 shall survive the completion of any
offering of Registrable Securities in a registration statement under this Section
2, and otherwise.

 

2.8           Reports Under Securities Exchange Act of 1934. With a view to making available to the
Executive the benefits of Rule 144 promulgated under the Act and any other rule

 

6

 

or regulation of
the SEC that may at any time permit the Executive to sell securities of the
Company to the public without registration or pursuant to a registration on
Form S-3, the Company agrees to:

 

(a)           make and keep public
information available, as those terms are understood and defined in SEC Rule
144, at all times after ninety (90) days after the effective date of the first
registration statement filed by the Company for the offering of its securities
to the general public;

 

(b)           file with the SEC in a
timely manner all reports and other documents required of the Company under the
Act and the 1934 Act; and

 

(c)           furnish to the
Executive, so long as the Executive owns any Registrable Securities, forthwith
upon request (i) a written statement by the Company that it has complied with
the reporting requirements of SEC Rule 144 (at any time after ninety (90) days
after the effective date of the first registration statement filed by the
Company), the Act and the 1934 Act (at any time after it has become subject to
such reporting requirements), or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3 (at any time after it so
qualifies), (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and (iii)
such other information as may be reasonably requested in availing the Executive
of any rule or regulation of the SEC which permits the selling of any such
securities without registration or pursuant to such form.

 

2.9           “Market Stand-Off”
Agreement. The Executive
hereby agrees that, during the period of duration specified by the Company and an underwriter of common
stock or other securities of the Company, following the effective date of a
registration statement of the Company filed under the Act, it shall not, to the
extent requested by the Company and such underwriter, directly or indirectly
sell, offer to sell, contract to sell (including, without limitation, any short
sale), grant any option to purchase or otherwise transfer or dispose of (other
than to donees who agree to be similarly bound) any securities of the Company
held by it at any time during such period except common stock included in such
registration; provided,  however, that:

 

(a)           such agreement shall be
applicable only to the first two such registration statements of the Company
which covers common stock (or other securities) to be sold on its behalf to the
public in an underwritten offering;

 

(b)           all officers and directors
of the Company and all other persons with registration rights (whether or not
pursuant to this Agreement) enter into similar agreements; and

 

(c)           such market stand-off
time period shall not exceed one hundred eighty (180) days.

 

In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of the
Executive (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.

 

7

 

Notwithstanding the foregoing, the obligations described in this Section
2.9 shall not apply to a registration relating solely to employee benefit
plans on Form S-1 or Form S-8 or similar forms which may be promulgated in the
future, or a registration relating solely to a Commission Rule 145 transaction
on Form S-14 or Form S-15 or similar forms which may be promulgated in the
future.

 

2.10         Termination Of
Registration Rights.

 

(a)           The Executive shall not
be entitled to exercise any right provided for in this Section 2 after
five (5) years following the consummation of the sale of securities pursuant to
a registration statement filed by the Company under the Act in connection with
the initial firm commitment underwritten offering of its securities to the
general public.

 

(b)           In addition, the right
of the Executive to request registration or inclusion in any registration
pursuant to Section 2.1 shall terminate on the closing of the first
Company-initiated registered public offering of Common Stock of the Company if
all shares of Registrable Securities held or entitled to be held upon
conversion by the Executive may immediately be sold under Rule 144 during any
90-day period, or on such date after the closing of the first Company-initiated
registered public offering of Common Stock of the Company as all shares of
Registrable Securities held or entitled to be held upon conversion by the
Executive may immediately be sold under Rule 144 during any 90-day period; provided,
however, that the provisions of this Section 2.10(b) shall not
apply to the Executive who owns more than two percent (2%) of the Company’s
outstanding stock until such time as the Executive owns less than two percent
(2%) of the outstanding stock of the Company.

 

3.             Covenants
Of The Company.

 

3.1           Delivery
of Financial Statements. The Company shall deliver to the Executive:

 

(a)           as soon as practicable,
but in any event within ninety (90) days after the end of each fiscal year of
the Company, an income statement for such fiscal year, a balance sheet of the
Company and statement of shareholder’s equity as of the end of such year, and a
cash flow statement for such year, such year-end financial reports to be in
reasonable detail, prepared in accordance with generally accepted accounting
principles (“GAAP”), and audited and certified by independent public
accountants of nationally recognized standing selected by the Company;

 

(b)           as soon as practicable,
but in any event within forty-five (45) days after the end of each of the three
(3) quarters of each fiscal year of the Company, an unaudited income statement,
a cash flow statement for such fiscal quarter and an unaudited balance sheet as
of the end of such fiscal quarter;

 

(c)           as soon as practicable,
but in any event thirty (30) days prior to the end of each fiscal year, a
budget and business plan for the next fiscal year, prepared on a monthly basis,
including income statements, balance sheets, and cash flow statements for such
months and, as soon as prepared, any other budgets or revised budgets prepared
by the Company;

 

8

 

(d)           with respect to the financial statements
called for in subsection (b) of
this Section 3.1, an instrument executed by the Chief Financial Officer
or President of the Company and certifying that such financials were prepared
in accordance with GAAP consistently applied with prior practice for earlier
periods (with the exception of footnotes that may be required by GAAP) and
fairly present the financial condition of the Company and its results of
operation for the period specified, subject to year-end audit adjustment;

 

(e)           such other information relating to the
financial condition, business, prospects or corporate affairs of the Company as
the Executive or any assignee of the Executive may from time to time request; provided,
however, that the Company shall not be obligated under this subsection
(e) or any other subsection
of Section 3.1 to provide information which it deems in good faith to be
a trade secret or similar confidential information.

 

3.2           Inspection. The Company shall permit the Executive, at the Executive’s expense, to
visit and inspect the Company’s properties, to examine its books of account and
records and to discuss the Company’s affairs, finances and accounts with its
officers, all at such reasonable times as may be requested by the Executive; provided,
however, that the Company shall not be obligated pursuant to this Section
3.2 to provide access to any information which it reasonably considers to
be a trade secret or similar confidential information.

 

4.             Co-Sale Rights.

 

4.1           Sales by Stonington.

 

(a)           If Stonington proposes to sell or transfer any
shares of the Company’s Common Stock or Preferred Stock par value $0.001 per share
owned by it (collectively, “Stonington Stock”) in one or more related
transactions, then Stonington shall promptly give written notice (the “Notice”)
to the Company and the Executive at least twenty (20) days prior to the closing
of such sale or transfer. The Notice shall describe in reasonable detail the
proposed sale or transfer including, without limitation, the class, series and
number of shares of Stonington Stock to be sold or transferred, the nature of
such sale or transfer, the consideration to be paid, and the name and address
of each prospective purchaser or transferee. In the event that the sale or
transfer is being made pursuant to the provisions or Sections 4.1 or 4.2
hereof, the Notice shall state under which section of this Agreement the sale
or transfer is being made.

 

(b)           The Executive shall have the right,
exercisable upon written notice to Stonington within fifteen (15) days after
receipt of the Notice, to participate in such sale of Stonington Stock on the
same terms and conditions; provided, that the Executive owns shares of
the same class or classes as the Stonington Stock identified in the Notice (the
“Co-Sale Stock”).

 

(c)           The Executive may sell all or any part of that
number of shares of Co-Sale Stock, of the same class and/or series as that
identified in the Notice, equal to the product obtained by multiplying (i) the
aggregate number of shares of Stonington Stock covered by the Notice by (ii) a
fraction the numerator of which is the number of shares of Co-Sale Stock of the
same class and/or series identified in the Notice owned by the Executive at the
time of the sale or

 

9

 

transfer and the denominator of which is the total number of shares of
Stonington Stock of the same class and/or series identified in the Notice owned
by Stonington and all other persons having co-sale rights (including the
Executive) at the time of the sale or transfer.

 

(d)           The Executive shall effect his participation
in the sale by promptly delivering to Stonington for transfer to the
prospective purchaser one or more certificates, properly endorsed for transfer,
which represent the type and number of shares of Co-Sale Stock which the
Executive elects to sell.

 

(e)           The stock certificate or certificates that the
Executive delivers to Stonington pursuant to Section 4.1(d) shall be
transferred to the prospective purchaser in consummation of the sale of the
Co-Sale Stock pursuant to the terms and conditions specified in the Notice, and
Stonington shall concurrently therewith remit to the Executive that portion of
the sale proceeds to which the Executive is entitled by reason of his
participation in such sale. To the extent that any prospective purchaser or
purchasers prohibits such assignment or otherwise refuses to purchase shares or
other securities from the Executive, Stonington shall not sell to such
prospective purchaser or purchasers any Stonington Stock unless and until,
simultaneously with such sale, Stonington shall purchase such shares of Co-Sale
Stock from the Executive for the same consideration and on the same terms and
conditions as the proposed transfer described in the Notice.

 

(f)            The exercise or non-exercise of the rights of
the Executive to participate in one or more sales of Stonington Stock made by Stonington
shall not adversely affect the Executive’s rights to participate in subsequent
sales of Co-Sale Stock subject to Section 4.1(a).

 

(g)           If the Executive does not elect to participate
in the sale of the Stonington Stock subject to the Notice, Stonington may, not
later than ninety (90) days following delivery to the Company and the Executive
of the Notice, conclude a transfer of not less than all of the Stonington Stock
covered by the Notice on terms and conditions not more favorable to the transferor
than those described in the Notice. Any proposed transfer on terms and
conditions more favorable than those described in the Notice, as well as any
subsequent proposed transfer of any of the Stonington Stock by Stonington,
shall again be subject to the co-sale rights of the Executive and shall require
compliance by Stonington with the procedures described in this Section 4.1.

 

4.2           Exempt Transfers.

 

(a)           Notwithstanding the foregoing, the co-sale
rights of the Executive described in Section 4.1 shall not apply to (i)
any pledge of Stonington Stock made pursuant to a bona fide loan transaction
that creates a mere security interest, (ii) any bona fide gift or charitable
donation or (iii) any distribution to the partners of Stonington; provided,
that Stonington shall inform the Executive of such pledge, transfer, gift,
donation or distribution prior to effecting it.

 

10

 

(b)           Notwithstanding the
foregoing, the provisions of Section 4 shall not apply to the sale of any
Co-Sale Stock (i) to the public pursuant to a registration statement filed
with, and declared effective by, the SEC under the Act or (ii) to the Company.

 

5.             Repurchase Obligations.

 

5.1           Repurchase. In the event that the Executive’s employment with the Company is
terminated under that certain Employment Agreement dated as of September 1,
2001 by and between the Executive and the Company (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the “Employment
Agreement”), the Company shall repurchase all shares of Common Stock owned
by such Executive on the following terms:

 

(a)           if the Executive’s employment is terminated
pursuant to Section 3.1 of the Employment Agreement, or if the Executive
resigns or voluntarily terminates his employment with the Company at any time
prior to September 1, 2004, then the Company may, within one hundred and twenty
(120) days of the Executive’s termination of employment, provide written notice
to the Executive of its desire to repurchase all shares of Common Stock owned
by the Executive including these shares of Common Stock thereafter acquired by
Executive through the exercise of options at a price equal to the lesser of the
then Fair Market Value (as defined below) per share of such Common Stock or the
original purchase price paid by the Executive for all such shares of Common
Stock (the “Original Purchase Price”).

 

(b)           if the Executive’s employment is terminated
pursuant to Sections 3.3, 3.4 or 3.5 of the Employment Agreement, then (i) the
Executive (or the Executive’s estate as the case may be) may, within one
hundred twenty (120) days of the Executive’s termination of employment, demand
by written notice provided to the Company, that the Company repurchase all
shares of Common Stock owned by the Executive including those shares of Common
Stock thereafter acquired by Executive through the exercise of options at a
price equal to the then Fair Market Value (as defined below) per share of such
Common Stock; or (ii) in the event the Executive does not demand the repurchase
of his Common Stock and his Common Stock has not been sold and transferred as a
result of a Change in Control (as that term is defined in the Employment
Agreement), the Company may, within one hundred and twenty (120) days of the
Executive’s termination of employment, give written notice to the Executive (or
the Executive’s estate, as the case may be) of its election and right to
repurchase all shares of Common Stock owned by the Executive at a price equal
to the then Fair Market Value (as defined below) per share of such Common
Stock.

 

(c)           if the Executive resigns or voluntarily
terminates his employment with the Company at any time on or after September 1,
2004, then (i) the Executive may, within one hundred twenty (120) days of the
Executive’s termination of employment, demand by written notice provided to the
Company, that the Company repurchase all shares of Common Stock acquired by the
Executive prior to September 1, 2004, including those shares of Common Stock
thereafter acquired by Executive through the exercise of options that were
fully vested on or before September 1, 2004 but exercised prior to the
Executive giving notice to the Company under this Section 5.1(c) for a price
equal to the then Fair Market Value (as defined below) per

 

11

 

share of such
Common Stock; or (ii) in the event the Executive does not demand the repurchase
of such of his Common Stock and his Common Stock has not been sold and
transferred as a result of a Change in Control (as that term is defined in the
Employment Agreement), the Company may, within one hundred and twenty (120)
days of the Executive’s termination of employment, give written notice to the
Executive of its election and right to repurchase all shares of Common Stock
owned by the Executive at a price equal to the then Fair Market Value (as
defined below) per share of such Common Stock.

 

5.2           Determination
of Fair Market Value.

 

(a)           The
“Fair Market Value” shall be determined by one or more independent
appraisal firms of national standing. If the Company and the Executive are able
to agree on a mutually acceptable independent appraisal firm within thirty (30)
days of the date upon which either the Executive, or the Company, deliver written
notice to the other of the repurchase of the Executive’s shares of Common Stock
by the Company, pursuant to Sections 5.1(a) or 5.1(b) above, (the “Notice
Date”), such firm shall determine the Fair Market Value as provided in Section
5.2(b). In the event the Company and the Executive fail to select a
mutually acceptable independent appraisal firm, the Company and the Executive
shall each select an independent appraisal firm of national standing qualified
to undertake such appraisals within thirty (30) days of the Notice Date. Each
of the two appointed firms shall be instructed to determine, within no more
than sixty (60) days, the Fair Market Value as provided in Section 5.2(b),
and each such appraisal firm shall provide the Executive and the Company with a
written undertaking to complete the appraisal and deliver a written report to
the Executive and the Company within ninety (90) days of the Notice Date. If
the determinations of the two independent appraisal firms do not differ by more
than ten percent (10%) of the lower thereof, then the average of the two
determinations shall be conclusively deemed to be the Fair Market Value. If the
determinations of the two independent appraisal firms differ by more than ten
percent (10%) of the lower thereof, then the two independent appraisal firms
shall, on the earliest practicable date but in any event not more than one
hundred and twenty-five (125) days after the Notice Date, appoint a third
independent appraisal firm of national standing qualified to undertake such appraisals,
or if they cannot agree, such third independent appraisal firm shall be
appointed in accordance with the rules of the American Arbitration Association
as then in effect in Los Angeles, California, and such independent appraisal
firm shall make its determination of the Fair Market Value as provided in Section
5.2(b). Such third independent appraisal firm shall complete its appraisal
and deliver a written report thereof to the Executive and the Company not later
than one hundred eighty (180) days after the Notice Date. In which case, the
final and conclusive Fair Market Value shall then be the average of the two
closest valuations among the determinations thereof of the three independent
appraisal firms. All decisions of the independent appraiser(s) shall be
rendered in writing and shall be signed by the independent appraiser(s). The
Fair Market Value determined as provided in this Section 5.2 shall be
conclusive, final and binding on the Company and the Executive and shall be
enforceable in any court having jurisdiction over a proceeding brought to seek
enforcement.

 

(b)           In
determining Fair Market Value of the Company, the Company and the Executive
agree that each independent appraiser shall be instructed, among other things,
to consider appropriate discounts for minority interests and lack of liquidity.
The Executive and the

 

12

 

Company shall each
pay one-half of all costs for such appraisal(s). The Executive shall be solely
responsible for all legal fees and other expenses incurred by it.

 

5.3           Payment Terms.

 

(a)           Within
thirty (30) days after the determination of the Fair Market Value pursuant to Section
5.2, the Company shall close on its purchase of the Executive’s Common
Stock (the “Redemption”). At the closing of the Redemption, the Company
shall, against delivery of certificates duly endorsed and stock powers
representing the Executive’s Common Stock being purchased free and clear of all
liens and encumbrances, pay to the Executive, at the Company’s option, either
(x) cash in the full amount of the purchase price of all shares being
purchased, or (y) cash in an amount equal to the lesser of the full amount of
the purchase price for all shares being purchased or the aggregate amount of
the Original Purchase Price for such shares together with the issuance of an
unsecured promissory note in the aggregate principal amount equal to the amount
by which such full purchase price exceeds the amount paid in cash, provided
that, in the event of any insolvency of the Company and/or upon and during the
continuance of any default by the Company in the payment of any Senior
Indebtedness (as defined below) or any default or event of default under any
instrument or agreement representing or governing any Senior Indebtedness, the
Company may limit the amount paid in the form of cash to the amount, if any,
that will not result in insolvency or a default or event of default, under any
instrument or agreement representing or governing any Senior Indebtedness of
the Company.

 

(b)           Any
promissory note executed and delivered pursuant to this Section 5.3
shall be unsecured and provide, in the Company’s sole discretion, up to twenty
(20) equal, consecutive quarterly payments of principal, together with interest
computed upon the unpaid principal amount at an adjustable rate equal to two
and one half percent (2 1/2%) per annum
in excess of the Prime Rate of interest. The “Prime Rate” shall mean the
interest rate publicly quoted in the Wall Street Journal (or any
successor to it) as the prime rate for interest rate determinations for
commercial banks, which is solely a reference rate and may be at, above or
below the rate or rates at which it lends to other persons, from time to time.
The promissory note shall reserve the right of the maker to prepay the
indebtedness evidenced thereby, in whole or in part at any time, without
penalty. Indebtedness evidenced by a
promissory note executed by the Company shall be always junior and subordinate
in right of payment to all now outstanding indebtedness and obligations of the
Company, other than ordinary trade payables and accrued expenses, and such
other indebtedness and obligations which the Company at any time shall
determine and designate as being prior and senior to any promissory note executed
hereunder, including, without limitation, the Company’s present or future
obligations to secured lenders (collectively, “Senior Indebtedness”). In
the event of any insolvency of the Company or upon and during the continuance
of any default by the Company in the payment of any Senior Indebtedness or any
default or event of default under any instrument or agreement representing or
governing any Senior Indebtedness, no payments shall be made on or in respect
of any such promissory note, and no action may be taken by the holder of any
such promissory note to accelerate or otherwise obtain payment thereof, until
all the Senior Indebtedness has been paid in full or all such defaults or
events of default have ceased to exist or been waived and any amount received
by the holder of any such promissory note shall be immediately paid to the
holders of the Senior Indebtedness and until so paid, shall be held in trust
for their benefit. The holders of any promissory note issued by the Company
hereunder shall execute a debt subordination and

 

13

 

standstill
agreement and any and all other documents requested by the Company on such
terms and conditions as may be required by lenders providing the Senior
Indebtedness to the Company to confirm the above described subordination and
standstill agreement.

 

6.             Miscellaneous.

 

6.1           Legend.
In addition to any legends required by applicable federal and state securities
laws, certificates representing Registrable Securities and/or Co-Sale Stock
shall be endorsed with the following legend:

 

“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE SALE, PLEDGE, HYPOTHECATION
OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
THE TERMS AND CONDITIONS OF A CERTAIN EXECUTIVE’S RIGHTS AGREEMENT BY AND
BETWEEN THE STOCKHOLDER AND THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION.”

 

The Executive
agrees that the Company may instruct its transfer agent to impose transfer
restrictions on the shares represented by certificates bearing the legend
referred to in this Section 6.1 to enforce the provisions of this
Agreement and the Company agrees to promptly do so. The legend shall be removed
upon termination of this Agreement.

 

6.2           Assignment
of Rights. The rights provided by this Agreement may be assigned (but only
with all related obligations) by the Executive or other Holder to a transferee
or assignee of all or part of the Executive’s or Holder’s Registrable Securities
and/or Co-Sale Stock, provided: (a) the Company is, within a reasonable time
after such transfer, furnished with written notice of the name and address of
such transferee or assignee and the securities with respect to which such
rights are being assigned; (b) such transferee or assignee agrees in writing to
be bound by and subject to the terms and conditions of this Agreement,
including without limitation the provisions of Section 2.9 above; and
(c) such assignment shall be effective only if immediately following such
transfer the further disposition of such securities by the transferee or
assignee is restricted under the Act. For the purposes of determining the
number of shares of Registrable Securities and/or Co-Sale Stock held by a
transferee or assignee, the holdings of transferees and assignees of a
partnership who are partners or retired partners of such partnership (including
spouses and ancestors, lineal descendants and siblings of such partners or
spouses who acquire Registrable Securities and/or Co-Sale Stock by gift, will
or intestate succession) shall be aggregated together and with the partnership;
provided that all assignees and transferees who would not qualify individually
for assignment of rights pursuant to this Agreement shall have a single attorney-in-fact for the purpose
of exercising any rights, receiving notices or taking any action under this
Agreement.

 

14

 

6.3           Successors And
Assigns. Except as otherwise provided herein, the terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties (including transferees of any shares of
Registrable Securities). Nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.

 

6.4           Term. The provisions
set forth in Sections 3 through 6 of this Agreement shall
terminate upon the earlier of (i) the closing of a firm commitment underwritten
public offering pursuant to an effective registration statement under the Act
covering the offer and sale of the Company’s Common Stock at an aggregate
offering price of not less than $7,500,000 and (ii) the closing of the Company’s
sale of all or substantially all of its assets or the acquisition of the
Company by another entity by means of merger or consolidation resulting in the
exchange of the outstanding shares of the Company’s capital stock for
securities or consideration issued, or caused to be issued, by the acquiring
entity or its subsidiary. The provisions set forth in Section 2 of this
Agreement shall terminate in the manner set forth
in Section 2.10 above.

 

6.5           Governing Law.
This Agreement shall be governed by and construed under the internal laws of
the State of Delaware (without regard to conflicts of laws provisions thereof).

 

6.6           Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.

 

6.7           Titles And Subtitles.
The titles and subtitles used in this Agreement are used for convenience only
and are not to be considered in construing or interpreting this Agreement.

 

15

 

6.8           Notices. While
the parties enter this Agreement anticipating the communication among them will
be open and take place without resorting to unnecessary formalities, in the
event that a formal Notice under this Agreement is necessary, such Notice
provided for in this Agreement shall be given in writing and shall be deemed
given to a party at the earlier of (i) when actually delivered to such party,
or (ii) when received by such party after sending by registered or certified
mail (return receipt requested) or sent to such party by courier, confirmed by
receipt, and addressed to such party at the address designated below for such
party as follows (or to such other address for such party as such party may
have substituted by notice pursuant to this Section 12). However, if the
party to receive notice is unavailable
or unwilling to make himself available for receipt of such Notice, then Notice
will be complete after reasonable efforts to provide Notice have been made
under this Section 12, and more than five (5) days have passed since
attempting to provide Notice.

 

(a)           If to the Company:

OMP, Inc.

310 Golden Shore

Long Beach, CA 90802

Attn: Chairman of the Compensation Committee

 

(b)           If to Executive:

 

Austin McNamara 

10202 Sycamore Circle 

Villa Park, CA 92861

 

6.9           Expenses. If any
action at law or in equity is necessary to enforce or interpret the terms of
this Agreement, the prevailing party shall be entitled to reasonable attorneys’
fees, costs and necessary disbursements in addition to any other relief to
which such party may be entitled.

 

6.10         Amendments and Waivers.
Any term of this Agreement may be amended and the observance of any term of
this Agreement may be waived (either generally or in a particular instance and
either retroactively or prospectively), only with the written consent of the
Company and the holders of a majority of the Registrable Securities then
outstanding. Any amendment or waiver effected in accordance with this Section
shall be binding upon each holder of any Registrable Securities then
outstanding, each future holder of all such Registrable Securities, and the
Company.

 

6.11         Severability. If
one or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be excluded from this Agreement and the
balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.

 

6.I2          Aggregation of Stock.
All shares of Registrable Securities and Co-Sale Stock held or acquired by
affiliated entities or persons shall be aggregated together for the purpose of
determining the availability of any rights under this Agreement.

 

16

 

6.13         Entire Agreement;
Amendment; Waiver. This Agreement (including the Exhibits hereto, if any)
constitutes the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof.

 

 

[signature page follows]

 

17

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.

 

 

	
   

  	
  OMP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
      /s/ Robert F. End

  	
   

  
	
   

  	
   

  	
      Robert F. End 

  
	
   

  	
   

  	
      Director and Chairman of the Compensation
  
    Committee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Austin
  T. McNamara

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Austin T. McNamara

  	
   

  
	
   

  	
  Austin T. McNamara

  
					

 

18

 

ASSIGNMENT
AND ASSUMPTION AGREEMENT

(Investors
Rights Agreement)

 

This Agreement is entered
into as of the 3rd day of January 2005 by and among OMP, Inc. (“OMP”),
Obagi Medical Products, Inc. (“Obagi”), Austin T. McNamara, for
themselves, and their respective successors and assigns.

 

WHEREAS, OMP and Obagi
have recently consummated a holding company reorganization (the “Reorganization”)
pursuant to Section 251(g) of the Delaware General Corporation Law
(the “DGCL”), pursuant to which Obagi became a parent company and the
sole stockholder of OMP, upon a merger of OMP, Inc. with and into Obagi’s
wholly-owned subsidiary, OMP Merger Corp., with OMP being the surviving entity
and becoming a wholly-owned subsidiary of the Company; and

 

WHEREAS, OMP is a party
to an Investors Rights Agreement with Austin T. McNamara dated April 1,
2002 (the “Investors Rights Agreement”);

 

NOW THEREFORE, in
consideration of the foregoing and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:

 

1.                          OMP
hereby assigns all of its rights and delegates all of its obligations under the
Investors Rights Agreement to Obagi and hereafter all references to OMP in the
Inventors Rights Agreement shall refer to Obagi, mutatis mutandis.

 

2.                          Obagi
hereby assumes all of OMP’s rights and obligations under the Investors Rights
Agreement and shall be solely liable to Mr. McNamara for all future
obligations of OMP pursuant to the Investor Rights Agreement Agreement.

 

3.                          This
Agreement may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument. Signatures of any party transmitted by facsimile shall
constitute effective execution and be deemed to be its original signature. The
internal law, without regard to conflicts of laws principles, of the State of
California will govern all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the obligations imposed
by this Agreement.

 

[Signature
Page to Follow]

 

 

IN WITNESS WHEREOF, each
party hereto has executed this Agreement as of the date first stated above.

 

 

	
  OMP, Inc.

  	
  Obagi Medical Products, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Curtis Cluff

  	
   

  	
  By:

  	
  /s/
  Curtis Cluff

  	
   

  
	
   

  	
  Name:
  Curtis Cluff

  	
   

  	
  Name:
  Curtis Cluff

  	
   

  
	
   

  	
  Title:
  Chief Financial Officer

  	
   

  	
  Title:
  Secretary

  	
   

  
						

 

	
  Austin T. McNamara

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Austin T. McNamara

  	
   

  	
   

  	
   

  
	
   

  	
  Name:
  Austin T. McNamara

  	
   

  	
   

  	
   

  

 

2

 

JOINDER
AGREEMENT TO

INVESTOR’S
RIGHTS AGREEMENT

 

This Joinder Agreement
(this “Joinder Agreement”) is entered into as of June       ,
2005, by and among the McNamara Family Irrevocable Trust Under Agreement Dated December 17,
2004 (the “Family Irrevocable Trust”), the McNamara Family Trust (the “Family Trust” and together with the Family Irrevocable Trust the “Joining Parties”), Obagi Medical Products, Inc., a Delaware corporation
(the “Company”) and Austin T. McNamara (the “Executive” and, together with the Joining Party and the Company, the “Parties”)
for the purposes of adding the Joining Parties as a parties to the
Investor’s Rights Agreement (the “Investor’s
Rights Agreement”) entered
into as of April 1, 2002 by and between OMP, Inc. and the Executive
and assumed by the Company pursuant to an Assignment and Assumption Agreement
dated as of January 28, 2005.

 

Accordingly, by executing
this Joinder Agreement, each of the Parties hereby acknowledges, agrees and
confirms that, effective as of the date of the first transfer of the Company’s
equity securities by the Executive to the Joining Parties, the Joining Parties
shall be deemed to be parties to the Investor’s Rights Agreement as of such
date and shall have all of the rights and obligations of the Executive
thereunder as if it had executed the Investor’s Rights Agreement. The Joining
Parties hereby ratify and agree to be bound by, all of the terms, provisions
and conditions contained in the Investor’s Rights Agreement as if they were the
Executive.

 

The Joining Parties
hereby confirm that, prior to or simultaneously with executing this Joinder
Agreement, the Joining Parties have executed that certain letter agreement as
of the date hereof subordinating certain rights of the Joining Parties provided
under the Investor’s Rights Agreement.

 

IN
WITNESS WHEREOF, each of the undersigned has executed this
Joinder Agreement as of the date first written above.

 

 

	
  McNamara Family Irrevocable Trust

  Under Agreement Dated December 17,

  2004

  	
  McNamara Family Trust

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/
  Wesley Fredericks

  	
   

  	
  /s/
  Lucy McNamara

  	
   

  
	
  By:  Wesley Fredericks

  	
   

  	
  By:  Lucy McNamara

  	
   

  
	
  Its:  Trustee

  	
   

  	
  Its:  Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Obagi Medical Products, Inc.

  	
   

  	
  Austin T. McNamara

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/
  Curtis Cluff

  	
   

  	
  /s/
  Austin T. McNamara

  	
   

  
	
  By:  Curtis Cluff

  	
   

  	
  Austin
  T. McNamara

  	
   

  
	
  Its:  Secretary

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