Document:

Confidential
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Exhibit 10.7

 

3-A-4

 

KNOW-HOW AND TRADEMARK

LICENSE AGREEMENT

 

THIS KNOW-HOW AND TRADEMARK LICENSE
AGREEMENT is entered into effective as of this 13th
day of September, 2002 (the “Effective Date”), between OMP, INC.,
a Delaware, U.S.A. corporation having its principal place of business at 310
Golden Shore, Long Beach, California 90802 (“OMP”), and ROHTO PHARMACEUTICAL CO, LTD., a Japanese
company having its principal place of business at 1-8-1, Tatsumi-nishi,
Ikuno-ku, Osaka 544-8666, Japan (“Rohto”).

 

WHEREAS, OMP has
rights in cosmetic products, formulas, processing techniques and other know-how
and trade secrets relating to the manufacture, processing, storage and
distribution of skin care products sold under various OMP trademarks;

 

WHEREAS, OMP is the
owner of the Obagi and Protocols trademarks and certain other trademarks used
in connection with the sale of skin care products; and

 

WHEREAS, OMP
desires to license to Rohto, and Rohto desires to obtain, the rights to use such
know-how and trademarks to manufacture such product for distribution and sale
solely in the Japanese mass market channel, all on the terms and conditions set
forth below.

 

NOW, THEREFORE, in
consideration of mutual promises contained herein, the parties hereto agree as
follows:

 

ARTICLE 1

DEFINITIONS

 

As used in this Agreement, the following terms shall
have the following meanings:

 

1.1                  “Affiliate” means a corporation, partnership, trust or
other entity that directly, or indirectly through one or more intermediates,
controls, is controlled by or is under common control with a party to this
Agreement. For such purposes, “control,” “controlled by” and “under common
control with” shall mean the possession of the power to direct or cause the
direction of the management and policies of an entity, whether through the
ownership of voting stock or partnership interest, by contract or otherwise. In
the case of a corporation, the direct or indirect ownership of more than fifty
percent (50%) of its outstanding voting shares or the ability otherwise to
elect a majority of the board of directors or other managing authority of the
entity shall in any event be deemed to confer control, it being understood that
the direct or indirect ownership of a lesser percentage of such shares shall
not necessarily preclude the existence of control.

 

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

 

 

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1.2                “Facility” means Rohto’s manufacturing facility located
within Japan, or such other facilities Rohto determines to use at any time with
prior notification to OMP in writing.

 

1.3                “Know-How” means the concept for the Licensed Products,
confidential formulae, active ingredient, delivery systems, and clinical
efficacy and safety test data, processing techniques, product positioning and
other know how, trade-secrets and the improvement of them, Product and
marketing information including any product similar to the Product (including
but not limited to Protocols in Europe) outside of the Territory which is owned
or controlled by OMP while this Agreement is in effect.

 

1.4                “Licensed Products” means those certain premium-priced skin care
products listed on Exhibit A that conform to the Specifications, and such other
products as the parties may hereafter mutually agree in writing.

 

1.5                “Specifications” means those specifications for formulae and
processing techniques for Licensed Products set forth on Exhibit A, as may be
revised and amended from time to time by OMP.

 

1.6                “Territory” means the country of Japan. The parties may
expand the Territory by mutual written agreement.

 

1.7                “OMP Trademarks” means those trademarks and tradenames set
forth on Exhibit B hereto, and such other trademarks developed by OMP and
supplied to Rohto as the parties may hereafter mutually agree in writing. The
parties agree that OMP Trademarks shall include any trademarks or tradenames
including the name “Obagi,” “Protocols” or “Skin Health Restoration,” even if
such trademarks or tradenames are developed collaboratively between the parties
during the term of this Agreement.

 

1.8                “Joint Trademarks” means those trademarks set forth on Exhibit B
hereto, and such other trademarks jointly developed and/or obtained by Rohto
and OMP as a result of collaboration between the two parties, other than those
trademarks and tradenames described in Section 1.7.

 

1.9                “Rohto Trademarks” means those trademarks developed primarily by
Rohto in relation to the marketing and promotion of the Products in the
Territory. The OMP, Joint and Rohto Trademarks are referred to collectively in
this Agreement as the “Trademarks.”

 

1.10         “Net Sales” means the value of Products sold by Rohto
calculated on the price invoiced by Rohto to its purchaser less:

 

(a)              Transportation
charges or allowances if any, included in such amount:

 

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

 

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(b)                   Trade, quantity
or cash discounts, and broker’s or agent’s commissions if any, allowed or paid;

(c)                    Credits or
allowance, including but not limited to rebate, discount, and refund, if any,
given or made on account of rejection or return of Products previously
delivered: and

(d)                   Any tax, excise
or other governmental charge included in such amount, on the production, sale,
transportation, use or delivery of the Products.

 

1.11           “Channel” means the
sales and distribution channels in which Rohto is currently engaged:
specifically Drug Stores and Variety Stores, including their mail-order and
Internet sales activities. It also may include by mutual agreement,
dispensaries attached to doctor’s offices for the sale of over-the-counter
drugs. To be considered in the Territory, mail order and internet sales must be
made to “ship to” and billing addresses in the Territory.

 

1.12           “Drug Stores” are
defined as stores specifically licensed to sell the over-the-counter drug as a
significant portion of their revenue.

 

1.13           “Variety Stores”
are defined as stores that are not licensed to sell prescription medicines or
over-the-counter drugs but are otherwise similar to drug stores in term of the
type of products they carry and consumer demographics that they target for
appeal. Variety Stores sell many kinds of goods including cosmetics,
accessories and other small household or personal items. Examples of Variety
Stores include Loft and Sony Plaza. Variety stores do not include or encompass
upscale “department” stores such as those operated by Matsuzakaya Co., The
Daimaru, Inc., Isetan Co. or Hankyu Department Stores Inc.

 

ARTICLE 2

LICENSE GRANT AND EFFECTIVE DATE

 

2.1                  License to
Know-How. Subject to the terms and conditions of this Agreement, OMP
hereby grants to Rohto the exclusive, royalty-bearing license to use the Know-How
to manufacture Licensed Products at the Facility and to market, sell and
distribute such Licensed Products in the Channel in the Territory. OMP shall
not itself use, nor grant to any other person the right to use, the Know-How in
the Channel in the Territory to manufacture, marketing, sale and distribution
of Licensed Products or similar products within the Channel of the Territory.
OMP shall not knowingly sell Licensed Products to persons (other than Rohto) in
the Channel in the Territory, nor shall OMP authorize any other licensee of the
Know-How to sell Licensed Products in the Channel in the Territory.

 

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

 

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2.2                  License to
Trademarks. Subject to the terms and conditions of this Agreement, OMP
hereby grants to Rohto the license to use the OMP Trademarks and Joint
Trademarks solely to market, advertise, sell and promote Licensed Products in
the Channel in the Territory. OMP will not license and has not licensed any
other party to apply such Trademarks to Licensed Products or similar product
within the Channel of the Territory during the term of this Agreement, and will
not itself export, or knowingly support a third party exporting, Licensed
Products bearing such Trademarks into the Channel in the Territory. OMP retains
the right to license third parties during the term of this Agreement to use
within the Territory any of OMP Trademarks or Joint Trademarks so long as they
are not marketed or sold within the Channel. OMP assumes no responsibility and
shall have no liability regarding exports by third parties into the Territory
of products, including Licensed Products bearing the OMP Trademarks or Joint
Trademarks.

 

2.3                  No Right of
Sublicense. Rohto may not sublicense or otherwise transfer to any third
party any of Rohto’s rights to use the Know-How or Trademarks, without the
prior written consent of OMP. Such consent shall not be unreasonably withheld.

 

2.4                  Limited
License. This license is limited to Licensed Products which meet or
exceed the Specifications, and Rohto shall not use the Know-How or OMP
Trademarks or Joint Trademarks for any other purpose. No other license, express
or implied, is granted with respect to the Know-How or OMP Trademarks or Joint
Trademarks. OMP reserves all rights not expressly granted hereunder.

 

ARTICLE 3

DISCLOSURE OF KNOW-HOW AND TECHNICAL ASSISTANCE

 

3.1                  Disclosure of
Know-How. Within sixty (60) days after the Effective Date, OMP shall
provide Rohto with any requested materials, including quality assurance
materials, documents and other tangible information, that embody the Know-How.
Rohto agrees not to copy such materials, without the prior written consent of
OMP, except as may be reasonably necessary to exercise its rights under this
Agreement. During the term of this Agreement, OMP shall continue to disclose
such Know-How as may be reasonably necessary for the manufacture of the
Licensed Products.

 

3.2                  Technical
Assistance. If Rohto requests, during the one (1) year period following
the Effective Date, OMP shall provide to Rohto the reasonable services of
appropriate personnel to assist in the transfer of the Know-How to Rohto, to
demonstrate the methods or processes of manufacturing and packaging the
Licensed Products and to assist Rohto in establishing manufacturing processes
for the Licensed Products. Such technical assistance shall be provided at such
times and in such locations as the parties may mutually

 

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

 

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agree. After such
one (1) year period, OMP may provide to Rohto additional technical assistance
upon such terms as the parties may mutually agree.

 

3.3                  Marketing
Assistance. OMP will provide reasonable assistance in terms of OMP
employee time and attention to assist in the promotion of the Products in
Japan. This assistance will include the cooperation of Dr. Obagi (or his
successor) in his capacity as the Chief Medical Officer of OMP.

 

ARTICLE 4

OWNERSHIP, IMPROVEMENTS AND INFRINGEMENT

 

4.1                  Ownership. Rohto acknowledges that OMP owns all right, title and
interest in and to the Know-How and the OMP Trademarks and Joint Trademarks,
and that Rohto will not acquire any ownership right or interest in the Know-How
or the OMP Trademarks or Joint Trademarks by virtue of the disclosure of
Know-How or license of such Trademarks to Rohto hereunder.

 

4.2                  Improvements
and New Products. If Rohto
discovers or devises any improvement to the Licensed Products, or in any
process or method of manufacturing the Licensed Products, it shall disclose to
OMP within thirty (30) days of filing for any protection by Rohto of its intellectual
property related to such discovery, including but not limited to a patent
application, the nature and means of making use of the improvement (or if Rohto
declines to file for protection for such intellectual property, at least thirty
(30) days prior to implementing use of such intellectual property in the
Licensed Products). Rohto shall not incorporate into the Licensed Products any
improvements except with the prior written consent of OMP. Upon written
approval from Rohto, not to be unreasonably withheld, OMP will also be granted
a license to use Rohto’s improvements with OMP’s products outside of the
Territory. Such grant-back license shall be non-exclusive and with no
sub-license right; provided, however, that OMP shall have the right to sublicense
to its distributors and contract manufacturers. Such license shall be
royalty-free for any minor or incremental improvements to the Licensed
Products, such as upgrades to the quality of ingredient(s), introduction of a
new ingredient that improves the product effectiveness or changes to a process
or method of manufacturing the Licensed Products that result in manufacturing
cost reductions of 20% or less. The parties shall negotiate separate terms in
good faith for royalty on any other significant improvements to the Licensed
Products other than the minor or incremental improvements as described in this
Section.

 

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

 

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4.3                  Third Party
Infringement.

 

(a) Rohto shall notify OMP in writing of any
infringement, misappropriation or imitation of the Trademarks, Know-How or the
Licensed Products by any third party, promptly after any of the foregoing comes
to Rohto’s attention. OMP shall have the right, but not the obligation, to
commence or prosecute any claims or suits in its own name or in the name of
Rohto or join Rohto as a party thereto to address such infringement,
misappropriation or imitation related to any OMP Trademarks or Joint
Trademarks. If OMP brings an action to discontinue such infringement,
misappropriation or imitation, such action shall be solely at OMP’s cost, with
Rohto providing such reasonable cooperation as OMP may request in writing. If
OMP declines to bring an action, Rohto may do so at Rohto’s sole cost. Rohto
shall not institute any suit or take any action on account of any such
infringement, misappropriation or imitation without the prior written consent
of OMP.

 

(b) Rohto shall have the right, but not the
obligation, to commence or prosecute any claims or suits in its own name or in
the name of OMP or join OMP as a party thereto to address such infringement,
misappropriation or imitation related to any Rohto Trademarks. If Rohto brings
an action to discontinue such infringement, misappropriation or imitation, such
action shall be solely at Rohto’s cost, with OMP providing such reasonable
cooperation as Rohto may request in writing. If Rohto declines to bring an
action, OMP may do so at OMP’s sole cost. OMP shall not institute any suit or
take any action on account of any such infringement, misappropriation or
imitation without the prior written consent of Rohto. Rohto shall also notify
OMP of any claims that Rohto’s use of any of the trademarks used with the
Products conflicts with the asserted rights of others.

 

4.4                  Cooperation.
For the purpose of maintaining the value of the Licensed Products in the
Territory, the parties agree to cooperate in good faith for the purpose of
securing and preserving OMP’s rights in and to the Know-How and OMP Trademarks
and Joint Trademarks, and Rohto’s rights in the improvements described in
Section 4.2 and Rohto Trademarks.

 

4.5                  Officer
Activities. OMP shall use commercially reasonable efforts to assure
that to the extent permitted by applicable law, OMP’s directors, officers, and
employees, including Dr. Zein Obagi, will neither promote, market,
distribute, and sell nor solicit any third party to promote, market,
distribute, and sell any products similar to or competing with the Licensed
Products in the Channel in the Territory.

 

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

 

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4.6                  Power and
Authority to Act. OMP represents and warrants that OMP is legal and
beneficial owner of all right and interest in and to (or has sufficient
licenses to) Know-How and OMP Trademarks and Joint Trademarks and has full
power and authority to grant licenses and perform its obligations under this
Agreement.

 

4.7                  Third Party
Intellectual Property. OMP represents and warrants that, to the best of
its knowledge, OMP has no knowledge of any infringement or of any pending or
threatened claim relating in any manner to Know-How and OMP Trademarks; and to
the best of OMP’s knowledge, the Know-How is valid and enforceable and that its
use as contemplated under this Agreement would not infringe any third party’s
intellectual property.

 

4.8                  Trademark
Reputation. OMP agrees to use commercially reasonable efforts to
maintain good-will and good reputation of OMP Trademarks and Joint Trademarks.
Both parties further covenant not to use door-to-door sales, or multi level
distribution channel as their distribution channel in the Territory.

 

ARTICLE 5

PRODUCT QUALITY AND MANUFACTURING PRACTICES

 

5.1                  Quality of
Licensed Products. Rohto acknowledges that, if the Licensed Products
fail to conform to the Specifications, or otherwise are not consistent with OMP’s
image and reputation for overall high quality products, then the substantial
goodwill which OMP has built up and now possesses in connection with the
Know-How and OMP Trademarks and Joint Trademarks will be impaired. Accordingly,
Rohto hereby agrees that:

 

(a) The Licensed Products (including all packaging,
labeling and advertising) shall conform to the Specifications therefor, and be
of high standards and of such quality, style and appearance as shall (in the
judgment of OMP) be reasonably adequate and suited to their exploitation to the
best advantage and to the protection of the Know-How, OMP Trademarks, Joint
Trademarks and goodwill pertaining thereto;

 

(b) The Licensed Products shall be manufactured,
processed, labeled, marketed, sold and distributed in accordance with all
applicable laws, rules and regulations, and shall not be adulterated,
contaminated or misbranded within the meanings of any applicable law or
regulation; and

 

(c) The policies for the marketing, distribution and
sale of the Licensed Products by Rohto shall be of high standards and to the
best advantage of the Know-How and Trademarks and that the same shall in no
manner reflect adversely upon the good name of OMP, or upon any of its
products, the Know-How or the Trademarks.

 

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

 

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Notwithstanding
the foregoing, in no event may OMP require Rohto to manufacture any Licensed
Product to Specifications that do not comply with applicable laws.

 

5.2                  Manufacturing
Practices. Without limiting the generality of any obligations of Rohto
hereunder, Rohto agrees to meet or exceed all its manufacturing practices and
standards (as of the Effective Date) with respect to all manufacturing
activities for the Product. Rohto shall provide OMP with written notice of any
material changes in such manufacturing practices. During the term of this
Agreement, Rohto agrees that OMP or its agent (reasonably acceptable to Rohto)
will be permitted to inspect the Facility annually to assure compliance with
such manufacturing practices; and, OMP shall provide Rohto with a copy of the
results of such inspection. If such inspection discloses deficiencies in the
Facility, OMP may request, and Rohto shall implement, corrective actions, at
Rohto’s expense and on a timetable mutually acceptable to the parties. In addition,
in such event, OMP shall have the right to conduct reasonably frequent
inspections of the Facility. OMP shall have the right to terminate this
Agreement if Rohto fails to implement commercially reasonable corrective
actions. OMP shall also be permitted, at its own expense, to place a
representative at the Facility to monitor Rohto’s performance hereunder for the
initial production of each new Licensed Product.

 

ARTICLE 6 

MARKETING AND SALES

 

6.1                  Submission
for Approval. Rohto shall submit a representative sample of its
proposed advertising and promotional materials (including, without limitation,
packaging, package inserts, labels, tags, advertising copy, advertising
layouts, radio and television presentations, publicity and promotional
materials, catalogues and other sales or trade literature, all of which shall
hereinafter be collectively referred to as the “Materials”) pertaining to the
Licensed Products to OMP for written approval before prior to the launch of
each new Licensed Product. OMP reserves the right to disapprove of any proposed
copy and in such case, shall provide appropriate changes or comments to Rohto.
OMP will notify Rohto of the approval status within ten (10) business days
after receipt of such materials. Failure to notify Rohto of such status within
ten (10) business days following the request for approval shall constitute
approval. Thereafter, Rohto will have no obligation to seek approval for minor
changes including but not limited to introducing a new size/SKU of an existing product
or formula, and adding or deleting a non-active ingredient by 2% or less or changing a non-active
ingredient by 2% or less. Rohto will, however, submit more significant changes
to OMP for its prior written approval. Examples of significant changes include
a new product launch, a line extension (introducing a unique new product not a
new size/SKU of an existing product or formula), a change in logo
dimensions/proportions, a significant change in formulations (adding/deleting
an active ingredient), or a change in product name, or trademark. All Materials
produced by or for Rohto shall comply with mutually-agreed guidelines for
product marketing and positioning, and with the Trademark Usage Guidelines set
forth in Exhibit B.

 

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

 

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6.2                  Export of
Licensed Products. In view of the variance of Specifications from those
specifications used in the United States, or which may be used by OMP in other
countries, Rohto covenants that Rohto will not (1) actively solicit orders for
Licensed Products from any third party in any country where OMP has granted a
third party a license with respect to the Trademarks or the Know-How; (2)
engage in advertising specifically aimed at any such countries or establish any
branch or maintain any distribution depot with respect to the Licensed Products
in any such countries, or (3) put the Licensed Products on the market in any
such countries in response to unsolicited orders. As provided in Section 2.2,
OMP assumes no responsibility and shall have no liability regarding exports by
third parties into the Territory of products, including Licensed Products,
bearing the Trademarks. OMP may from time to time, and on an individual basis,
permit Rohto to export to locations outside the Territory on such conditions as
OMP shall establish in such written permission, which OMP shall have the right
to revoke at any time.

 

6.3                  Marketing
Report. Rohto agrees to share with OMP, to the extent available, and at
least once a year, pertinent written information regarding the market for
Licensed Products in the Territory. This shall include written information
regarding consumer research, technical research and clinical results, pricing,
share of market, out-of-stock, volume, and distribution excluding any trade
secrets of Rohto. Rohto shall act in good faith to keep OMP informed regarding
Rohto’s activities in the market, including without limitation price changes,
demographic target segments, geographic target segments, and distribution
channels.

 

6.4                  Use of Rohto’s
Name. OMP Shall have the right, but not the obligation, to use the name
of Rohto in OMP’s programs, advertising and promotions, without any payment to
Rohto. Any and each use of any trademark or trade name of Rohto must have the
prior written approval of Rohto.

 

ARTICLE 7

TRADEMARKS

 

7.1                  Use of
Trademarks. Rohto shall use OMP Trademarks only in connection with
Licensed Products which are designated in writing by OMP to bear the particular
Trademark, and which are manufactured in accordance with the Specifications.
The Licensed Products shall be manufactured solely for sale under the
Trademarks. The Licensed Products may not be sold without bearing the
appropriate Trademark, unless OMP gives its prior written consent.

 

7.2                  Samples of
Licensed Products. In order to maintain goodwill of the Trademarks,
Rohto shall (i) manufacture the Product in accordance with the product concept
worked together with OMP, (ii) maintain adequate quality control procedures
regarding manufacture of the Product, and (iii) submit to Licensor upon request
for its inspection samples

 

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

 

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of the Product in sufficient quantity. If OMP considers that Rohto’s
quality control is not sufficient to maintain its goodwill of the OMP
Trademarks or Joint Trademarks, OMP will notify Rohto in writing and Rohto will
make a commercially reasonable effort to improve its quality control procedure.
If such Licensed Products have been sold containing defects that may pose a
threat to health or safety or bring any OMP Trademark or Joint Trademark into
disrepute with the public nonconforming, they shall be recalled by Rohto in
accordance with OMP’s usual policy. If agreement is not reached regarding
disposition of such Licensed Products, they shall be destroyed; provided
that, before such Licensed Products are destroyed, OMP shall examine as
many additional samples of Licensed Products as Rohto may reasonably request to
confirm the existence of the deficiency.

 

7.3                  Trademark
Notices. Whenever an OMP Trademark or Joint Trademark appears in
writing or on any media Rohto shall provide a notice, in form acceptable to
OMP, that such Trademark is registered or pending registration and that such
Trademark is used under license from OMP.

 

7.4                  Prohibitions.
For the term of this Agreement, and thereafter, unless OMP agrees in writing,
Rohto agrees not to use any mark, name or other identifying means:

 

(a) identical with or confusingly similar to any Trademark except as
permitted by this Agreement;

 

(b) in combination or association with any Trademark; or

 

(c) on any container or label bearing any Trademark.

 

7.5                  Acknowledgment
of Value. Rohto recognizes the great value of the goodwill associated
with the OMP Trademarks and Joint Trademarks and acknowledges that such
Trademarks and all rights therein and goodwill pertaining thereto belong
exclusively to OMP, and that such Trademarks have a secondary meaning in the
minds of the public. Rohto acknowledges that all use of the OMP Trademarks and
Joint Trademarks shall inure to the benefit of OMP. Upon expiration or
termination of the right to use such Trademarks pursuant to this Agreement,
except for Rohto’s rights to sell out its inventory pursuant to Section 11.4
below, Rohto shall cease all use of the OMP Trademarks promptly and will not
use any of such Trademarks thereafter. In case that Rohto is not granted a
royalty-free, exclusive, and perpetual license to use the Joint Trademark in
the Channel pursuant to Section 11.5 below, Rohto shall cease use of Joint
Trademarks as well as OMP Trademarks as provided in this Section.

 

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

 

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ARTICLE 8

COMPENSATION

 

8.1                  Royalty Rate. In consideration of the licenses and rights
granted hereunder, Rohto shall
pay to OMP a royalty equal to [***] of Net Sales of Licensed Products sold or
distributed by Rohto and its Affiliates for the three (3) year period following
the Effective Date. Thereafter, such royalty amount shall decrease by [***] per
year for eight (8) consecutive years, until the royalty payable to OMP reaches [***]
of Net Sales of the Licensed Products, at which time the royalty shall no longer decrease. [***]

 

8.2                  Determination of Compensation
and Payment. For each
calendar quarter, Rohto shall calculate the Net Sales for the Licensed Products
(not including net sales of products which Rohto purchased from OMP) in the
Channel in the Territory, and shall calculate the royalties thereon. Such
amount shall be payable to OMP within sixty (60) days following the end of each
calendar quarter. Rohto shall furnish to OMP a written report setting forth the
gross sales of the Licensed Products, the deductions taken on such gross sales
(as set forth in Section 1.10) and Net Sales for the Licensed Products during
the applicable calendar quarter. Such report shall be furnished to OMP whether
or not any Licensed Product was sold during the preceding quarter, and shall be
certified by the Chief Financial Officer of Rohto as being accurate and in
compliance with generally accepted accounting principles as consistently
applied by Rohto. All payments under this Agreement shall be made to OMP in
U.S. dollars, using the conversion rate as of the last business day end of the
payment period.

 

8.3                  Records and Audit Rights. Rohto agrees to keep accurate books and
records covering all transactions relating to the Licensed Products. OMP and
its authorized representatives shall have the right, once per calendar year,
during Rohto’s normal business hours and at Rohto’s usual place of business,
upon ten (10) days prior notice, to examine and copy such books and records and
all other documents and material in the possession or under the control of
Rohto insofar as they relate to the Licensed Products. If any such examination

 

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

 

11

 

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Treatment Requested

 

reveals a deficiency in amounts paid or payable
hereunder of more than Five percent (5%) for the period examined, then Rohto
shall bear all reasonable costs incurred by OMP in connection with such
examination. All of Rohto’s books and records with respect to the Licensed
Products shall be kept available for at least two (2) years after the
termination of this Agreement. OMP’s rights under this Section 8.3 shall
survive the termination of this Agreement for two (2) years.

 

8.4                  Taxes. Any royalties or fees under this Agreement do
not include any taxes, and if any withholding tax is imposed on the royalties
or fees, Rohto shall pay to OMP an amount equal to any taxes and levies paid or
payable by Rohto, exclusive, however, of any taxes that are based on the net
income of OMP itself.

 

ARTICLE 9 

INDEMNIFICATION AND INSURANCE

 

9.1                  Indemnification by Rohto. Rohto shall indemnify OMP, its Affiliates and
their respective directors, officers, agents and employees and hold each of
them harmless from and against any loss, liability, deficiency, damage, expense
or cost (including attorneys’ fees and expenses) (collectively, “Losses”)
arising out of any and all claims, demands, suits or causes of action of
whatever kind or nature (collectively, “Claims”) based on (i) the manufacture,
processing, labeling, marketing, advertising, promotion, distribution or sale
of the Licensed Products (including, without limitation, any defects or alleged
defects in the Licensed Products or any failure to comply with any laws, rules
and regulations applicable to the manufacture, processing, labelling,
marketing, advertising, promotion, distribution or sale of any of the Licensed
Products), (ii) the negligence or intentional misconduct of Rohto, its
Affiliates or permitted sublicensees, or their employees or agents, or (iii) a
material breach of this Agreement by Rohto, its Affiliates or permitted
sublicensees, or their employees or agents. OMP shall give Rohto prompt notice
of such Claim and, subject to the next sentence hereof,  Rohto shall have the right to contest,
defend, with OMP’s cooperation, and settle such Claim. OMP alone shall be
entitled to contest, defend and settle a particular Claim if (i) such Claim
seeks equitable relief or (ii) if the subject matter of any Claim relates to
the ongoing business of OMP or OMP’s ongoing ability to manufacture, market,
distribute or sell any Licensed Product in the Territory (or otherwise to
exploit its Know-How), which Claim, if decided against Rohto or OMP, would
adversely affect the ongoing business (including as described in clause (ii) hereof)
or reputation of OMP. Rohto’s obligations under this Section 9.1 shall survive
the termination or expiration of this Agreement.

 

9.2                  Indemnification by OMP. OMP shall indemnify Rohto, its Affiliates and
their respective directors, officers, agents and employees and hold each of
them harmless from and against any Losses arising out of Claims based on (i)
the alleged infringement of a third party’s intellectual property rights by
Rohto’s use of the OMP Trademarks or Joint Trademarks or

 

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

 

12

 

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Know-How in accordance with the terms of this Agreement, (ii) the
negligence or intentional misconduct of OMP, its Affiliates or permitted
sublicensees, or their employees or agents, or (iii) a material breach of this
Agreement by OMP, its Affiliates or permitted sublicensees, or their employees
or agents. Rohto shall give OMP prompt notice of such Claim and, subject to the
next sentence hereof, OMP shall have the right to contest, defend, with Rohto’s
cooperation, and settle such Claim. Rohto alone shall be entitled to contest,
defend and settle a particular Claim if (i) such Claim seeks equitable relief
or (ii) if the subject matter of any Claim relates to the ongoing business of
Rohto, which Claim, if decided against OMP or Rohto, would adversely affect the
ongoing business (including as described in clause (ii) hereof) or reputation
of Rohto. OMP’s obligations under this Section 9.2 shall survive the
termination or expiration of this Agreement.

 

9.3                  Insurance. Rohto shall maintain, throughout the term of
this Agreement, product liability insurance providing protection in the amount
of at least [***] yen per occurrence for any Claims or Losses arising out of
any defect or alleged defect in any of the Licensed Products. The product liability
insurance policy shall name OMP as an additional insured and Rohto agrees not
to remove OMP or cancel such insurance without thirty (30) days prior written
notice to OMP. As proof of insurance, Rohto shall furnish to OMP a Certificate
of Insurance at least ten (10) days before any Licensed Products are
distributed and/or sold, and thereafter prior to the expiration of any policy.
Compliance with this Section 9.3 shall in no way limit or restrict Rohto’s
indemnification obligations hereunder.

 

ARTICLE 10 

LIMITATION OF LIABILITY

 

10.1           Limitation on Liability. In no event shall OMP’s aggregate liability
hereunder exceed the total amount paid by Rohto to OMP pursuant to this
agreement.

 

10.2           Consequential Damages. In no event shall OMP be liable for any indirect,
incidental or consequential damages, even if OMP shall have been advised in
advance of the likelihood thereof.

 

ARTICLE 11 

TERM AND TERMINATION

 

11.1           Term. Unless terminated earlier as provided in Section 11.2 below, this
Agreement shall continue for a term of ten (10) years from the Effective Date.
Thereafter, this Agreement shall be renewable by OMP for additional one (1)
year periods, with written notice to Rohto at least three (3) months prior to
the expiration of the initial term or any renewal thereof.

 

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

 

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11.2           Termination. This Agreement may be terminated as follows:

 

(a) By either party,
effective immediately upon written notice to the other party, should the other
party file a petition of any type as to its bankruptcy, be declared bankrupt,
become insolvent, make an assignment for the benefit of creditors, go into
liquidation, have a receiver appointed over the whole or any part of its
assets, enters into a compound with its creditors, or have an order made or
resolution passed for it to be wound up (otherwise than in furtherance of a
scheme of amalgamation or reconstruction), or otherwise lose legal control of
its business; or

 

(b) By either party,
effective upon thirty (30) days written notice to the other party in the event
the other party is in material breach of this Agreement and shall have failed
to cure such breach within such thirty (30) day period.

 

(c) By either party,
effective upon twenty (20) days notice to the other party, if a party fails to
pay any sums owing hereunder and does not cure such failure within such twenty
(20) day period;

 

(d) By either party,
effective upon notice fifteen (15) days notice to the other party, if the party
providing such notice determines, in its sole discretion, that an act or
omission of the other party, its employees, officers or agents is likely to
cause or has caused harm or disrepute to, in the case of OMP, the Licensed
Products, the Know- How, the Trademarks, OMP’s trade name or the goodwill
attached thereto, or, in the case of Rohto, the improvements described in
Section 4.2, and the damage or disrepute caused by such act or omission is not
cured within such fifteen (15) day period;

 

(e) As provided in Section 5.2 or 14.12; or

 

(f) By OMP, effective upon fifteen
(15) days notice to Rohto, if, in the reasonable judgment of OMP, any
applicable law or government-enacted regulation or decree renders the
performance by either party of its respective obligations hereunder unduly
onerous or otherwise inexpedient or there is a material adverse change in the
nature of Rohto’s business or to the terms on which Rohto carries on business
such that there is a significant detrimental effect on the volume and/or
profitability of sales of the Licensed Products.

 

11.3           Cessation of Rights. Except as set forth in Section 11.5, upon
expiration or termination of this Agreement, all rights granted to Rohto
hereunder shall cease and Rohto will refrain from further use of the Know-How
and OMP Trademarks and Joint Trademarks in connection with the manufacture,
processing, marketing, sale or distribution of Licensed Products and will not
use the Specifications for any purpose whatsoever. Within thirty (30) days
after such termination, Rohto shall return to OMP all documentation reflecting
or

 

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

 

14

 

Confidential
Treatment Requested

 

containing the Know-How, including without
limitation, all plans, specifications, manuals or records and all materials
bearing the Trademarks, including without limitation, all packaging, labels and
advertising materials (whether in written, electronic, graphic or other form).

 

11.4           Sale of Remaining Inventory. Upon termination or expiration of this
Agreement, Rohto may distribute its remaining inventory of the Licensed
Products; provided  that such Licensed Products conform to the
Specifications and are in compliance with all applicable laws and regulations
in the Territory. Upon the earlier of (a) depletion of such inventory, or (b)
ninety (90) days after termination or expiration, Rohto shall comply with the terms
of Section 11.3.

 

11.5           License to Joint Trademarks. Upon termination of this Agreement for any
reason (other than material breach by Rohto), OMP shall not unreasonably
withhold its consent to granting Rohto a royalty-free, exclusive, and perpetual
license to use the Joint Trademarks in the Channel in the Territory. OMP
acknowledges and understands that it is unreasonable to withhold license of
Joint Trademarks to Rohto on the ground that Joint Trademarks are similar or
confusing to any trademark OMP uses in the Territory.

 

11.6           Survival. Expiration or termination of this Agreement
shall not affect Sections 4.1, 4.2, 7.4, 7.5 and 8.3, and Articles 9, 10, 11,
12, 13 and 14, which shall survive such expiration or termination. In addition,
no expiration or termination of this Agreement will relieve any party of any
obligations accruing prior to the date of such expiration or termination.

 

ARTICLE 12 

CONFIDENTIALITY

 

12.1           Confidential Relationship. The parties acknowledge that a confidential
relationship exists between them by virtue of the relationship contemplated by
this Agreement. Each party will use any Confidential Information (as defined
below) of the other party solely for purposes contemplated by this Agreement
and for no other purpose. The receiving party will treat all Confidential
Information disclosed to it as secret and confidential and shall strictly
protect and safeguard the Confidential Information from disclosure to third
parties. The receiving party shall comply with the disclosing party’s instructions
and requirements relating to the preservation of secrecy and confidentiality of
the Confidential Information; provided, however, that the
compliance with such instructions and requirements shall not in any way
diminish the receiving party’s obligations with respect to the Confidential
Information disclosed hereunder. The receiving party will not disclose any such
information to anyone other than its employees, agents, or representatives
having a need to know such information for purposes directly related to its
performance of its obligations under this Agreement and who have executed a
confidentiality agreement in a form that is acceptable to the disclosing party.

 

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

 

15

 

Confidential
Treatment Requested

 

12.2           Definition of
Confidential Information. As used in this Agreement, the term “Confidential
Information” shall mean any and all information disclosed by either party
relating to this Agreement even before execution of this Agreement, whether in
written, oral, graphic, electronic or other form, including without limitation,
the Know-How, the Specifications, Quality Assurance Manuals, any information to
be acquired by OMP through inspection of facilities of Rohto in accordance with
Section 5.2 herein, and any and all methods, processes, development, engineering,
manufacturing, marketing, business or financial matters relating to either
party, the Licensed Products, the improvements described in Section 4.2, or any
other present or future products, sales, development or business of the
parties.

 

12.3           Exclusions.
Confidential Information shall not include any information which:

 

(a) is or becomes generally available to the public in
the Territory through no default of the receiving party;

 

(b) is subsequently disclosed to the receiving party
by a third party lawfully entitled to such information and who is not itself in
breach of any obligation of confidence in so disclosing it; or

 

(c) prior to its disclosure by the disclosing party
was lawfully in the possession or knowledge of the receiving party.

 

12.4           Copies, Legends.
Neither party may copy any Confidential Information of the other party without
the other party’s prior written consent. The receiving party shall reproduce on
any permitted copies of Confidential Information any and all confidentiality legends
placed on such Confidential Information.

 

ARTICLE 13 

DISPUTE RESOLUTION

 

13.1           Governing Law.
This Agreement shall be governed by, and interpreted and construed in
accordance with, the laws of New York.

 

13.2           Injunctive Relief.
Rohto expressly recognizes that the Know-How possess a special, unique and
extraordinary nature which makes difficult the assessments of monetary damages
which OMP would sustain by an unauthorized use. Rohto expressly recognizes and
agrees that an irreparable injury would be caused to OMP by unauthorized or
improper use or any use in breach of this Agreement, and agrees that
preliminary or permanent injunctive or other equitable relief (including but
not limited to attorneys’ fees and expenses) would be appropriate, in any court
of competent jurisdiction, in the event of a breach of this Agreement by Rohto,
without necessity of OMP proving monetary damages or posting any bond; provided
that such remedy shall not be exclusive of any remedies otherwise
available to OMP.

 

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

 

16

 

Confidential
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13.3           Procedure for
Arbitration. Except as provided in Section 13.2 above, any dispute,
claim or controversy arising out of or in connection with this Agreement which
has not been settled through negotiation within a period of thirty (30) days
after the date on which either party shall first have notified the other party
in writing of the existence of a dispute shall be settled by final and binding
arbitration under the then applicable International Arbitration Rules of the
International Chamber of Commerce (“ICC”). Any such arbitration shall be
conducted by three (3) arbitrators appointed by mutual agreement of the parties
or, failing such agreement, in accordance with such Rules. At least one (1)
arbitrator shall be an experienced cosmetic industry professional, and at least
one (1) arbitrator shall be an experienced business attorney with background in
the licensing and distribution of cosmetic or consumer products. Any such
arbitration shall be conducted in Sidney, Australia in the English language. An
arbitral award may be enforced in any court of competent jurisdiction. Each
party shall bear its own costs and expenses of the arbitration and one-half
(1/2) of the fees and costs of the arbitrators, subject to the power of the arbitrators,
in their sole discretion, to award all such reasonable costs, expenses and fees
to the prevailing party.

 

ARTICLE 14

MISCELLANEOUS

 

14.1           Relationship.
This Agreement does not make either party the employee, agent or legal
representative of the other for any purpose whatsoever. Neither party is
granted any right or authority to assume or to create any obligation or
responsibility, express or implied, not otherwise set forth in this Agreement,
on behalf of or in the name of the other party. In fulfilling its obligations
pursuant to this Agreement, each party shall be acting as an independent
contractor.

 

14.2           Assignment.
Neither party may assign this Agreement to any third party without the other
party’s prior consent in writing; provided, however, that such consent shall
not be required in the event of a merger, acquisition or sale of substantially
all of the assets of a party, provided that the acquiring party assumes such
party’s rights and obligations under this Agreement. Any prohibited assignment
shall be null and void. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted assigns.

 

14.3           Compliance.
Both Parties represent and warrant to operate their business including
performance of this Agreement in compliance with applicable laws and
regulations.

 

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

 

17

 

Confidential
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14.4           Notices. All
notices and requests to be given hereunder shall be in writing and in English
(excluding samples and proposed advertising and promotional materials for OMP’s
approval stated in Article 6.1), and shall be given at the respective addresses
of OMP and Rohto set forth below, unless notification of a change of address is
given in writing.

 

As to OMP:

 

OMP, Inc.

310 Golden Shore, 1st Floor

Long Beach, California 90802

 

	
  Attn:

  	
  Curtis A. Cluff

  	
   

  
	
   

  	
  Chief Financial Officer

  

 

As to Rohto:

 

Rohto Pharmaceutical Co, Ltd.

1-8-1, Tatsumi-nishi, Ikuno-ku,

Osaka 544-8666, Japan

 

	
  Attn:

  	
  Toru Nishihara

  	
   

  
	
   

  	
  Division Manager, Development and Planning

  

 

All notices and
requests addressed as provided above shall be deemed to have been effectively
given (i) ten (10) days after mailing (postage prepaid) by first class or
certified mail, return receipt requested, (ii) two (2) business days after
mailing (postage prepaid) by Federal Express or another reputable,
international overnight delivery service, or (iii) upon receipt, if sent by
facsimile or other means of electronic transmission, if receipt has been
electronically acknowledged thereby.

 

14.5           Entire Agreement.
This Agreement, including the exhibits attached hereto and incorporated herein,
constitutes the entire agreement of the parties with respect to the subject
matter hereof and supersedes all previous agreements by and between the parties
hereto and all proposals, oral or written, and all negotiations, conversations
or discussions heretofore had between the parties hereto related to this
Agreement. Rohto acknowledges that it has not been induced to enter into this
Agreement by any representations or statements, oral or written, not expressly
contained herein.

 

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

 

18

 

Confidential
Treatment Requested

 

14.6           Amendment, Waiver.
This Agreement may not be modified, amended, rescinded, canceled or waived, in
whole or in part, except by written agreement of the parties. The failure of
either party to insist on compliance with any provision hereof shall not
constitute a waiver or modification of such provision.

 

14.7           Publicity.
No press releases, announcements or other disclosure related to this Agreement
or the transactions contemplated herein will be issued or made without the
written approval of each of OMP and Rohto, except for any public disclosure
which OMP (or any Affiliate of OMP) or Rohto in good faith believes is required
by law (in which case the disclosing party will consult with the other party
prior to making such disclosure).

 

14.8           Severability.
In the event that any of the terms of this Agreement are in conflict with any
rule of law or statutory provision or are otherwise unenforceable as finally
determined by a court of competent jurisdiction, such terms shall be deemed
modified or changed to a provision reflecting the parties’ intent to the extent
possible under the applicable laws and regulations. Such invalidity or
unenforceability shall not invalidate any of the other terms of this Agreement
and this Agreement shall continue in force.

 

14.9           Counterparts;
English Language. This Agreement may be executed in two or more
counterparts in the English language, and each such counterpart shall be deemed
an original hereof. In case of any conflict between the English version and any
translated version of this Agreement, the English version shall govern.

 

14.10    Titles and Headings;
Construction. The Article and Section headings are included for
convenience and reference only and should in no way define, limit, extend or
describe the scope of this Agreement.

 

14.11    Benefit. Except as
otherwise expressly set forth in Section 9.1, nothing in this Agreement or the
agreements referred to herein, expressed or implied, shall confer on any person
other than the parties hereto or thereto, or their respective permitted
successors or assigns, any rights, remedies, obligations or liabilities under
or by reason of this Agreement, the agreements referred to herein, or the
transactions contemplated herein or therein.

 

14.12    Force Majeure.
Neither party shall be in default hereunder by reason of any failure or delay
In the performance of any obligation under this Agreement where such failure or
delay arises out of any cause beyond the reasonable control and without the
fault or negligence of such party and where the party affected has been unable
by the exercise of reasonable efforts to overcome or mitigate the effects of
such act or event. Such causes shall include, without limitation, storms,
floods, other acts of nature, fires, explosions, riots, War or civil
disturbance, strikes or other labor unrest, embargoes and other governmental
actions or regulations that would prohibit either party from ordering or
furnishing Products or from

 

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

 

19

 

Confidential
Treatment Requested

 

performing any
other aspects of the obligations hereunder, delays In transportation, shortages
of supplies and sales of competitive products by OMP or an Affiliate of OMP in
the same retail outlets as the Product. The party invoking any event
constituting force majeure shall be excused from its inability to perform its
obligations hereunder only to the extent and for the duration of the event of
force majeure so invoked and shall be bound to resume such performance immediately
after the cessation of such event. If the period of delay or failure should
extend for sixty (60) days or more, consecutively or cumulatively, in any one
(1) year period commencing from the date hereof, then, notwithstanding the
terms of Article 11 hereof, the party not invoking such event constituting
force majeure to excuse its delay or failure to perform its obligations
hereunder shall in its discretion have the right to terminate this Agreement
forthwith upon written notice to the other party at any time after expiration
of said sixty (60) day period. Whichever party may -invoke any event
constituting force majeure to excuse its delay or failure to perform shall
promptly notify the other party of its occurrence with all available
information, as well as of the cessation of such event of force majeure.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the date first above written.

 

	
  OMP, INC.

  	
  ROHTO PHARMACEUTICAL CO,
  LTD

  
	
   

  	
   

  
	
  By:

  	
  /s/ Austin McNamara

  	
   

  	
  By:

  	
  /s/ Kunio Yamada

  
	
  Title: 

  	
  Chairman & CEO

  	
   

  	
  Title:

  	
  President & CEO

  	 

	
   

  	
  9/13/02

  	
   

  	
  9/13/02

  	 

							

 

Attachments:

 

Exhibit
A – Licensed Products and Specifications

Exhibit
B – Trademarks

Exhibit
C – Trademark Usage Guidelines

 

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

 

20Exhibit 10.8

 

AGREEMENT

 

This Agreement (the “Agreement”) is made and
entered into as of this 29th day of June, 2006, between OMP, Inc. (“OMP”)
a Delaware corporation with an address at 310 Golden Shore, Suite 100, Long
Beach, CA 90802 and OMP’s parent Obagi Medical Products, Inc. (“Obagi
Medical” and along with OMP the “OMP Entities”), a Delaware corporation with an address
at 310 Golden Shore, Suite 100, Long Beach, CA 90802, on the one hand, and Zein E. Obagi, MD Inc., (with Dr. Zein Obagi
as its principal, herein referred to as “Obagi Inc.”), Zein Obagi, (“Dr.
Obagi”), Samar Obagi, the Zein and Samar Obagi Family Trust (the “Trust”)
(collectively the “Obagi Entities”), and Skin Health Properties, Inc.
(the “Marketer”), a California Corporation with an address at 270 North
Canon Drive, Beverly Hills, CA 90210, on the other hand. The OMP Entities along with Dr. Obagi, Samar Obagi and the Trust
are collectively referred to herein as the “Parties”).

 

W I T N E S S E T H

 

Whereas OMP and Dr. Obagi have been party to an amended and restated employment agreement, dated
December 17, 2002, between OMP and Dr. Obagi (the “Employment
Agreement”); and

 

Whereas Dr. Obagi has agreed to voluntarily resign his
employment with OMP pursuant to a Separation Agreement between Dr. Obagi and
the OMP Entities, dated June 29, 2006 (the “Separation Agreement”); and

 

Whereas the OMP Entities and Obagi Entities have
agreed to enter into a Lease Agreement (the “Lease Agreement”) governing
the use of facilities located at 260-290 North Canon Drive, Beverly Hills,
California; and

 

Whereas the OMP Entities and Obagi Entities wish to
set forth the terms of their future relationships in this Agreement; and

 

Whereas OMP markets and distributes skin care and
other related products set forth on Exhibit A
hereto (the “OMP Products”) globally on a wholesale basis. OMP Products
shall also include all products that are designated Group A Products in the
future pursuant to Section 1(c)(1)a)iii of this Agreement; and

 

Whereas OMP desires to establish an initial marketing
center to support the development and marketing of current and new OMP
Products; and

 

Whereas upon the prior written approval of the OMP
Entities, which approval will not unreasonably be withheld, it is understood
that certain rights, duties and obligations that the Obagi Entities have under
this Agreement may in the future be transferred to another entity they control
(the “Marketer”, which will also be a member of the “Obagi Entities”
when and if such transfer occurs) and upon such transfer the Marketer shall be
required to become a party to this Agreement and shall have all of the rights,
duties and obligations of the Marketer under this Agreement; and

 

 

Whereas Obagi Inc. and/or the Marketer wishes to
provide marketing services to OMP as an independent contractor rendering the
services more fully described in the marketing program desired by OMP and
described in Exhibit B attached
hereto (the “Program”) and perform the duties associated with the
Program set forth in Exhibit B hereto (the “Services”);
and

 

Whereas the Parties desire to enter into this
Agreement whereby Obagi Inc. and/or the Marketer agrees to market the Program
as an independent contractor, and to perform the services set forth herein; and

 

Whereas some or all of the Parties are currently or
have in the past been parties to the agreements listed on Exhibit C attached hereto
(the “Prior Agreements”) and the Parties wish to have all monetary
obligations, percentage discounts or any other obligation that has not already been
performed by either the OMP Entities and/or the Obagi Entities which are still
due or to be granted under any of the Prior Agreements or any other agreements
or understandings between the Parties (the “Pre-Existing Nonperformed
Obligations”) terminated and going forward the only obligations similar to
or covering the same subject matter as the Pre-Existing Nonperformed
Obligations that the Parties will owe to each other are those obligations
described or specified in this Agreement and the accompanying Separation
Agreement and Lease Agreement.

 

NOW THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties
hereby agree as follows:

 

1.     OBLIGATIONS OF THE OBAGI ENTITIES.

 

(a)           Marketing
Obligations. During the Term (as defined in Section 10) of this Agreement,
Obagi Inc. and/or the Marketer shall actively and diligently use its
commercially reasonable efforts to promote the Program and Services, as defined
in Exhibit B hereto, and to support the marketing of the OMP Products
in accordance with the specifications set forth in the Program. As part of its
marketing duties, Obagi Inc. and/or the Marketer agrees during the Term hereof
to provide oversight and management of the 2063 square foot marketing space (the
“Space”) located at 260-290 North Canon Drive, Beverly Hills, California
(the “Premises”), to perform the Services and to provide maximum
exposure for the OMP Products. Obagi Inc. and/or Marketer also agrees to
perform Services and to market the products sold as part of the Program
throughout the Term hereof. In the performance of all of its obligations
hereunder, Obagi Inc. and/or the Marketer agrees to ensure that the Space and
all Services provided by Obagi Inc. and/or the Marketer will at all times
comply with any and all applicable laws and regulations promulgated by any
federal, state, municipal or other level of government from time to time,
including, without limitation, laws and regulations regarding zoning,
advertising, the practice of medicine, healthcare, privacy and consumer
protection laws as well as any and all standards and requirements specified by
OMP from time to time that, in OMP’s sole discretion, are necessary or
desirable to provide for and implement the Program.

 

(b)           Payment
Terms. Obagi Inc. and/or the Marketer agrees that if any amount due to OMP for
the purchase of OMP products remains unpaid 30 days after the earlier of (i)
the date of any invoice or (ii) any notice of the breach of the terms hereof
contemplated by Section 11(a)(1) hereof, then OMP may, in addition to any other
remedies it may have, offset any and all sums owed by Obagi Inc. and/or the
Marketer thereunder against any and all payment obligations 

 

2

 

OMP may have to Obagi Inc. and/or the Marketer,
including, but not limited to, all obligations owing under Section 2 of this
Agreement. Both Parties acknowledge, however, that any amounts so offset shall
not constitute an accord or satisfaction and OMP shall be entitled to all
remedies to recover payment for any additional amounts owed by Obagi Inc.
and/or the Marketer under this Agreement.

 

(c)           Services
to be Rendered. In addition to the services to be provided in Exhibit B, Obagi Inc. shall render the following marketing and other services
to OMP as an independent contractor (the “Obagi Inc. Services”) on a retainer
and/or fee basis as defined herein. Additional services beyond the retainer or
fees shall be billed and reimbursed as mutually agreed to between Obagi
Inc. and
OMP in writing, in advance. The services that Obagi Inc. initially
agrees to provide shall include, but not be limited to:(1)

 

(1)           The
services provided under the Retainer and ProDerm Development/Royalty Fee
provisions of this Agreement are as follows:

 

a)     Obagi
Inc. agrees to be available, and shall provide upon request, a minimum of 10
hours per week in advising and assisting OMP in the formulation and clinical
testing of new products. As part of the new product development services, OMP and
Obagi Inc. agree to the following:

 

i.      That
prior to the development of any new products by either OMP or Obagi Inc., both Parties
will consult with each other and, pursuant to the procedures described in this
Section 1(c)(1), shall determine whether OMP (the “Group A Products”), Obagi Inc.
(the “Group B Products”) or neither (the “Group C Products”) will develop such
product. All potential new products shall be deemed to be Group C Products
until it is determined that such product is either a Group A Product or a Group
B Product. Exhibit D attached hereto provides
a list of all Group A Products, Group B Products and Group C Products as of the
execution date of this Agreement.

 

ii.     In
order for a potential new product or a Group C Product to be designated as a
Group A or Group B Product, either Party shall present to the other Party a
detailed development timeline (the “Development Timeline”) setting forth the
new product’s active ingredients, anticipated efficacy, and cosmetic use in
relation to other existing OMP Products. (“System Concept”)

 

iii.    Within
thirty (30) calendar days after the submission of the Development Timeline, OMP
shall have the option to designate such product a Group A Product. For all
Group A Products, Obagi Inc. shall use its commercially reasonable efforts to
work with OMP and/or such third parties as OMP may from time to time designate,
in OMP’s 

 

(1)   It
being understood that at the beginning of each year the Parties will meet to
discuss and agree in writing as to whether any changes, both additions and
subtractions, need to be made to the list of additional services set forth in
Section 1(c).

 

3

 

sole discretion, to
develop and evaluate products that are clinically superior to existing
commercially available products. OMP agrees to fully fund the development of
such products and the determination as to the clinical superiority of said
developed products. All Group A Products shall be subject to the terms of the
Intellectual Property License-Ownership provisions discussed below in Section 3.
In the event that OMP’s Development Timeline is not met and no extensions have
been granted, or OMP abandons a Group A Product, it shall give notification to Obagi
Inc., and Obagi Inc. may, but is not required to, designate such product as a
Group B Product pursuant to the procedures described in subparagraph (iv)
below.

 

iv.    Upon
Obagi Inc.’s submission of a new Group B Product Development Timeline, if OMP
makes a determination that it does not desire to designate such product as a
Group A Product, then it shall be required to provide Obagi Inc. with written
notification of such determination. OMP shall have thirty (30) calendar days from
the submission of the Development Timeline to make a determination of whether
to fund the development or have Obagi Inc. fund and pursue the development of
said Group B product. For all Group B Products (which do not compete with OMP
current products at the time of such designation), Obagi Inc. may pursue the
development and clinical evaluation. All Group B Products shall be subject to
the terms of the Intellectual Property License-Ownership provisions discussed
below in Section 3. All development costs and/or intellectual property costs
associated with the Group B Products shall be the sole and exclusive
responsibility of Obagi Inc. In the event that Obagi Inc.’s Development
Timeline is not met and no extensions have been granted, or Obagi Inc. abandons
a Group B Product, such product shall be designated as a Group C Product upon
the expiration of the Development Timeline.

 

v.     In
the event that the Development Timeline for a particular product is not met, an
extension of time, if requested, shall be mutually agreed upon as long as the Party
in charge of product development (either OMP or Obagi Inc.) is using
commercially reasonable efforts to continue development.

 

vi.    The
Parties shall only pursue the commercial development and manufacture of
products which have been demonstrated to be safe for their intended use. Clinical
testing is not required on those products where efficacy claims are not made,
needed or appropriate for that type of product. Clinical testing will be
required, however, for products which make efficacy claims or are positioned as
superior to a competitive brand or product(s).

 

4

 

b)    Obagi
Inc. and/or the Marketer shall, either directly or through third parties (such
third parties being engaged at the Marketer’s expense), provide a minimum of
forty (40) hours per week managing the Space and supporting the Spa Program as
described more fully in Exhibit B;

 

c)     Obagi
Inc. shall meet and present a report to OMP on a quarterly basis describing the
development status of all Group B Product and the clinical/development status
of Group A Products to the extent Obagi Inc. is engaged in such activities;

 

d)    Other
services as OMP may reasonably request to assist the OMP Entities in the
operations of their business, including assistance in marketing the OMP
Products, dealing with customers, suppliers, employees, distributors and others
currently having business relationships with the OMP Entities.

 

e)     For
the avoidance of doubt, in the event Obagi Inc. presents a Group B Product
Development Timeline for a fully-developed product or System Concept that
includes Obagi Inc.-developed proprietary and/or patentable invention(s), and
OMP wishes to pursue and fund the development of such Group B Product rather
than have Obagi Inc. fund and control the development process, Obagi Inc. will
still be entitled to such royalty payments as may be required on the
commercialization of said products pursuant to Section 2(b). It is hereby
understood that OMP cannot elect to designate a Group B Product as a Group A
Product merely to avoid its obligations to make royalty payments to Obagi Inc.

 

(2)           Services
to be provided on a fee basis are as follows:

 

a)     Conduct
training/education seminars, including organizing and conducting Obagi Skin
Health “Alumni” Advanced Training Seminar and Clinical Advisory meetings. The
dates and locations of such training/education seminars shall be mutually
agreed upon by OMP and Obagi Inc., in writing, in advance. The exact number of training/education
seminars to be performed by Obagi Inc. shall be mutually agreed upon by OMP and
Obagi Inc., provided however,
that such number shall not be less than 1 and not more than 2 per year, unless
otherwise mutually agreed upon between the Parties;

 

b)    Participate in at
least one (1) clinical study per year. The dates, locations and subject matter of
such clinical studies shall be mutually agreed upon by OMP and Obagi Inc., in
writing, in advance;

 

Obagi Inc. hereby accepts
such engagement and agrees to perform the above services, in addition to those
described in Exhibit B, for the OMP Entities
upon the terms and conditions set forth in this Agreement. During the Term (as
defined in Section 10), Obagi Inc., and specifically Dr. Obagi, shall devote
such time, attention, skill and energy to the business of the OMP Entities as
may be reasonably required to perform the services required under this
Agreement. All fee-based services shall be performed by Obagi Inc. only after
receiving the prior written approval of 

 

5

 

the chief executive
officer of OMP. Obagi Inc. shall report to the chief executive officer of OMP,
and except for the Marketer and Dr. Obagi’s personal medical practice together
with those aspects of Dr. Obagi’s practice as described and set forth in Exhibit F attached hereto (collectively, “Dr.
Obagi’s Practice”), Obagi Inc. warrants that neither it nor its officers currently
render services for or have a direct or indirect relationship, ownership
interest in any other corporation, firm, entity or person that provides services
similar to those described above, the Program, the Services, or which would be
competitive to OMP. In consideration for performing the above-mentioned
services, Obagi Inc. shall be compensated and reimbursed for its reasonable expenses
in accordance with Sections 2(a), 2(b), 2(c)(2), 2(c)(3), and 2(c)(4) below.

 

(d)           Location
of Services. Obagi Inc. shall have discretion to determine the means and
manner in which it performs the services described in Section 1. However, both
Parties anticipate that Obagi Inc. will perform such services primarily at the
Premises or the business premises of the customers and suppliers of OMP and
other locations as mutually agreed. Obagi Inc. acknowledges that it shall only
be reimbursed for its actual expenses incurred in connection with its rendering
services at such other locations pursuant to Section 2(c)(3) below and shall
not receive any additional reimbursement for expenses incurred in connection
with the rendering of services at such other location. Obagi Inc. shall submit to
OMP an invoice and supporting receipts for expenses incurred for reimbursement.

 

(e)           Independent
Contractor. In rendering the services described in Section 1, Obagi Inc.,
furnishing the services of Dr. Obagi, shall be acting as an independent
contractor and not as an employee or agent of the OMP Entities. As an
independent contractor, Obagi Inc. shall have discretion to determine the means
and manner in which it performs the services described in this Agreement. As an
independent contractor, Obagi Inc. shall have no authority, express or implied,
to commit or obligate the OMP Entities in any manner whatsoever, except as
specifically authorized from time to time in writing by an authorized
representative of the OMP Entities. Nothing contained in this Agreement shall
be construed or applied to create a partnership, joint venture or employment
relationship. Obagi Inc. shall be responsible for the payment of all federal,
state or local taxes payable with respect to all amounts paid to Obagi Inc. under
this Agreement; provided, however,
that if the OMP Entities are determined to be liable for collection and/or
remittance of any such taxes, Obagi Inc. shall immediately reimburse such OMP
Entity for all such payments made by such OMP Entity. The Parties agree that
OMP shall advise Obagi Inc. of any audit, inquiry or investigation relating to
such tax liabilities and that Obagi Inc. may participate in the defense of any
such audit, inquiry or investigation. Both Parties also agree, however, that
OMP shall retain final decision-making authority regarding litigation strategy
and/or settlement authority with respect to any such audit, inquiry or
investigation, and such authority shall not relieve Obagi Inc. of its
obligation to indemnify OMP pursuant to this Section.

 

(f)            Injuries.

 

(1)           Injuries
to Obagi Inc. Principal and Employees. Obagi Inc. waives any rights to
recovery from the OMP Entities for any injuries that Dr. Obagi or its other
employees may sustain while rendering the services described in Section 1 and
that are a result of Obagi Inc.’s negligence, acts or omissions.

 

6

 

(2)           Injuries
to Others. Obagi Inc. agrees to take all necessary precautions to prevent
injury to any persons (including the OMP Entities’ employees) and damage to
property (including the OMP Entities’ property) during the rendering of the
services describe in Section 1; and

 

(3)           Insurance.
Obagi Inc. agrees maintain insurance coverage to cover any claims that may
arise out of rendering services described in Section 1.

 

(g)           Indemnification.
The Obagi Entities shall indemnify, defend and hold harmless the OMP Entities
and their officers, directors, agents and employees from and against all
claims, losses, expenses, fees (including attorneys’ and expert witnesses’
fees), costs and judgments that may be asserted against the OMP Entities that
either (a) result from the acts or omissions of any of the Obagi Entities; or
(b) result from or arise in any way out of any such claims by any third parties
which are based upon or are the result of any breach of this Agreement or of
the warranties given by the Obagi Entities contained in this Agreement.

 

2.     OBLIGATIONS OF OMP.

 

In exchange for Obagi Inc.’s and/or the Marketer’s
obligations under this Agreement, OMP shall pay and/or provide to Obagi Inc.
and/or the Marketer the following, subject to Section 11:

 

(a)           Retainer.
$570,000 per year on an annual retainer (subject to annual cost of living
increases under the Consumer Price Index) (the “Retainer”), to be
payable to Obagi Inc. in arrears at the end of each calendar month during the
Term ($47,500 per month installments). The Retainer shall be payable on a
prorated basis, where applicable, in the event that this Agreement is
terminated at any point during the Term of this Agreement pursuant to Section
11 of this Agreement. OMP shall pay Obagi Inc. the Retainer for, among other
things:

 

(1)           Advising,
formulating, developing and clinical testing of Group A Products;

 

(2)           Developing,
marketing and supporting the Spa Program and Services described in Exhibit B; and

 

(3)           Chairing
an Annual Obagi Skin Health Alumni Symposium(2) and up to two (2) Clinical
Advisory meetings. OMP agrees to organize and pay for the marketing and
execution of such annual symposia and advisory meetings.

 

(b)           ProDerm
Development/Royalty Fees. For the first two (2) years of this Agreement,
OMP shall pay Obagi Inc. an annual payment of two hundred thousand dollars
($200,000) per year (“ProDerm Fee”) for developing the ProDerm line of products
(the “ProDerm Product”), to be payable to Obagi Inc. in arrears at the end of
each calendar month ($16,667 per month installments). At the conclusion of the
second year of this Agreement’s term, OMP shall have the option, in its sole
discretion, of continuing to market and produce the ProDerm Product. If 

 

(2)   It
is understood that services that Samar Obagi may provide for Symposia, are to
be separately presented in terms of both scope and fee to arrange and
coordinate such Symposia.  If Samar Obagi
and OMP can agree upon the fee, OMP will retain Samar Obagi for her services in
connection with such Symposia.  In the
event that the two Parties cannot agree upon a reasonable fee, OMP will retain
these services elsewhere.

 

7

 

OMP exercises its option to continue the ProDerm
Product after the conclusion of the second full year of this Agreement, OMP
shall pay Obagi Inc. an annual royalty payment of $200,000 per year or
an annual royalty payment equal to five percent (5%) of OMP’s net revenues (net
amounts received by OMP as determined under generally accepted accounting
principles) from sales of the ProDerm Product (“ProDerm Royalties”), whichever
amount is greater, for as long as OMP elects to market and produce the ProDerm
Product. Such ProDerm Royalties shall be paid on a quarterly basis, within
thirty (30) calendar days of the close of OMP’s fiscal quarter. Obagi Inc.
shall be entitled to review, on a quarterly basis, OMP’s statements of sales
with respect to the ProDerm Product, and Obagi Inc. shall have the right to
conduct audits of such sales at its own cost. In the event that there is an
underpayment of ProDerm Royalty payments to Obagi Inc. pursuant to this Section
2(b) of greater than 5%, OMP shall compensate Obagi Inc. for the commercially
reasonable costs of the audit that determined such underpayment. Notwithstanding
anything in this Section to the contrary, if OMP elects not to market and/or
produce the ProDerm Product after the second full year of this Agreement, or
elects to stop marketing and/or producing the ProDerm Product at any time after
the second full year of this Agreement, OMP’s obligations to pay Obagi Inc. the
ProDerm Royalties shall cease immediately as of the date of OMP’s discontinuance
of such marketing and production. In the event that OMP elects to cease
marketing and producing the ProDerm Product, Obagi Inc. shall have the right to
produce, market, sell, license or distribute the ProDerm Product at its sole
discretion subject to the terms of Section 3 below regarding the use of Marks
without having to pay any consideration whatsoever to OMP.

 

In addition, OMP shall pay Obagi Inc. royalty fees for
developing Group B Products equal to five percent (5%) of OMP’s net revenues
(net amounts received by OMP as determined under generally accepted accounting
principles) from sales of the any and all Group B Products (“Group B Royalties”)
that OMP purchases from Obagi Inc. pursuant to Section 3(h)(4), below. Such
Group B Royalties shall be paid each year promptly after receipt by OMP of
final audited financial statements and reports for such year from its
independent auditors. Such Group B Royalties shall be paid for the life of the
product.

 

(c)           Services, Fees
and Expenses.

 

(1)           Training
and Consulting Fees. For the training/education seminars and other services
described in Section 1(c)(2), outside of Dr. Obagi’s Practice, Obagi Inc. will
be compensated at $5000 per day for each day of such services provided by Dr.
Obagi on behalf of Obagi Inc. For training/education seminars that are
conducted at the Premises or at other locations within Dr. Obagi’s Practice (as
defined below), Obagi Inc. will be compensated at a discount rate of $2500 per
day for such services provided by Dr. Obagi on behalf of Obagi Inc. The fees
paid pursuant to this Section shall be referred to as the “Training Fees”.

 

(2)           Clinical
Service Fees. For clinical testing of all products not included in Group A
or B, OMP agrees to compensate Obagi Inc. $2500 per patient completed, for
clinical studies in which Dr. Obagi agrees to and does participate.

 

(3)           Travel
Expenses. Travel days, when no training is conducted, will be reimbursed at
$5000 per weekday and $3000 per weekend day. For clarity, if Dr. Obagi 

 

8

 

travels to a location and conducts training on the
same day of his travel, he will not be paid pursuant to this paragraph and
shall only receive the $5000 Training Fee. All expenses, except First Class
Airfare and hotel accommodations, incurred by Dr. Obagi that are in excess of
the amounts payable pursuant to this Section 2(c)(3) will not be paid by OMP
and will remain Dr. Obagi’s responsibility. Dr. Obagi acknowledges that this
per diem rate shall cover all of the expenses that he shall incur in rendering
such services and that the OMP Entities shall not be obligated to pay him any
more than the amounts described in this Section 2(c).

 

(4)           Marketing
Expenses. OMP agrees to provide marketing support / advice and to pay 50%
of all invoiced commercially reasonable marketing design and development (not
production) expenses associated with opening of the Space and launching the
Program through the earlier of the opening of the Spa or December 31, 2006, provided however, such reimbursement shall
not exceed one hundred thousand dollars ($100,000.00), unless otherwise
approved in writing by the CEO of OMP, unless otherwise required to be approved
by the OMP Board of Directors.

 

(d)           Indemnification.
The OMP Entities shall indemnify, defend and hold harmless the Obagi Entities
and any of their officers, directors, agents and employees from and against all
claims, losses, expenses, fees (including attorneys’ and expert witnesses’
fees), costs and judgments that may be asserted against the Obagi Entities that
either (a) result from the acts or omissions of either of the OMP Entities; or
(b) result or arise in any way out of any such third party claims against OMP
products; or (c) result from or arise in any way out of any such claims by any
third parties which are based upon or are the result of any breach of the
warranties given by the OMP Entities contained in this Agreement.

 

(e)           Right
of First Refusal. Obagi Medical, subject to Board approval, hereby grants
Dr. Obagi a right of first offer (“Right of First Offer”) to purchase
his Pro Rata Share (as defined in the following sentence) of any equity
securities of Obagi Medical, which Obagi Medical may, from time to time,
propose to issue and sell to a third party investor. “Pro Rata Share” shall
mean an amount equal to the fraction obtained by dividing (a) the sum of the
total number of shares of Obagi Medical common stock then held by the Obagi Entities
by (b) the sum of the total number of shares of Obagi Medical common stock then
issued and outstanding. This Right of First Offer shall terminate upon any
initial public offering of Obagi Medical’s common stock.

 

(f)            Quarter
Reporting. OMP shall meet and present a report to Obagi Inc. on a quarterly
basis describing the development status of all Group A Products.

 

3.     INTELLECTUAL PROPERTY LICENSE-OWNERSHIP.

 

(a)           Program
Data. Subject to existing Federal and State privacy laws regarding Obagi
Inc.’s patients (including compliance with HIPAA), as between Obagi Inc. and/or
the Marketer on one hand and OMP on the other, and subject to Section 11, Obagi
Inc. and/or the Marketer shall be the owner of all accounts, customer lists and
other customer information and data (the “Program Data”) developed in
connection with the Program; provided,
however, that OMP shall have a perpetual, royalty-free,
non-exclusive license to have access to and to utilize the Program Data.

 

9

 

(b)           Trademark
License. Subject to Section 3(c), OMP hereby grants to Obagi Inc. and/or
the Marketer a limited, non-exclusive, irrevocable license to use, reproduce
and display OMP’s trademarks and trade names and logos attached hereto as Exhibit E, which exhibit may be amended
from time to time by OMP (the “Marks”), solely for the purposes of
identifying, advertising, marketing and promoting OMP Products in connection
with (x) the Program and the Space as described in Section 1(a) herein; (y)
subject to OMP’s approval (which shall not be unreasonably withheld), such
additional office locations at which Dr. Obagi may practice, provided however, that such additional office locations
shall be subject to the terms of this Agreement; and (z) Dr. Obagi’s Practice,
in all media, and strictly in accordance with Obagi Inc.’s, the Marketer’s (the
“Licensees”) obligations as set forth in the rest of this Section 3. The
Licensees cannot and shall not sublicense the rights granted to the Licensees
under this 3(b). To be clear, the licenses granted pursuant to this Section 3
are the only licenses granted by the OMP Entities to the Licensees and
supersede and replace any prior licenses that have been previously granted by
the OMP Entities to the Licensees, including but not limited to those license
granted pursuant to the Termination, License and Obligation Agreement dated
December 17, 2002 between OMP, Dr. Obagi and the Zein and Samar Obagi Family
Trust. The Licensees shall not use any Mark in any way whatsoever in connection
with any Group B Products unless they first obtain the advance written approval
of OMP. However, the Licensees shall be allowed to develop a new trademark or
trade name for the Group B Products which may include Skin Health, Skin Health
Institute and the by-line, “Formulated By, or Developed By, Dr. Zein Obagi,
M.D.”, or something similar, provided
however, that any such new trademark or trade name shall be
sufficiently different from any Mark as to be able to achieve registration with
the United States Patent and Trademark Office on an arms-length basis. All
licenses granted under this Section 3(b) shall survive the term of this
Agreement.

 

(c)           Trademark
Use. The Licensees may not alter the form or format of any of the Marks
provided to the Licensees for use in accordance with this Agreement without the
prior written approval of OMP. All goodwill arising out of the use of any of
the Marks as provided for hereunder shall inure solely to the benefit of, and
automatically vest in, OMP. The Licensees agree to cooperate with OMP in
facilitating OMP’s control of the nature and quality of services rendered by
the Licensees in connection with the Marks, to permit reasonable inspection of
the Licensees’ operations, and to supply OMP with specimens of all uses of the
Marks upon request. The Licensees shall comply with all applicable laws and
regulations and obtain all appropriate government approvals pertaining to the
use of the Marks. OMP may terminate the license granted in Section 3(b) herein
if, in OMP’s reasonable discretion, the Licensees’ use of any of the Marks
tarnishes, blurs or dilutes the quality associated with such Marks or the
associated goodwill and such problem is not cured within thirty (30) days of
notice of such breach. Title to and ownership of the Marks shall remain at all
times with OMP. There are no implied licenses under this Agreement. The
Licensees shall not exceed the scope of the rights granted hereunder. The
Licensees shall use the Marks in conformance with all OMP trademark usage
policies. The Licensees shall not take any action inconsistent with OMP’s
ownership of the Marks and the Licensees shall not form any combination marks
with the Marks.

 

(d)           OMP
Marketing Materials. OMP grants Obagi Inc. and/or the Marketer a
non-exclusive license to use and reproduce the marketing materials designated
by OMP to Obagi Inc. and/or the Marketer in writing from time to time, solely
for the purposes of promoting the Program described in Section 1 and in Exhibit B hereto (including the sale of the OMP Products 

 

10

 

in accordance with the terms hereof). All rights not
expressly granted to Obagi Inc. and/or the Marketer herein are reserved to OMP.
Obagi Inc. and/or the Marketer shall not exceed the scope of the rights granted
hereunder.

 

(e)           Marketing
Materials Prepared by the Marketer. Obagi Inc. and/or the Marketer grants
OMP, during the Term, a non-exclusive license to use and reproduce the
marketing materials created by Obagi Inc. and/or the Marketer under Section 1(a),
which marketing materials are subject to approval by OMP under Section 3(f)
herein.

 

(f)            Approval
by OMP. For the purposes of promoting the Program, the Space, Dr. Obagi’s
Practice and those office locations at which Dr. Obagi practices that are
operated by Cellogique, Inc., as described in Section 1 and Section 3(b), respectively,
the Licensees agree only to use: (i) the Marks, in accordance with the terms of
this Section 3; (ii) the OMP marketing materials referenced in Section 3(d) herein; and (iii) the
marketing materials created by the Licensees under the terms of Section 1(a),
which marketing materials are subject to approval under this Section 3(f). Prior
to displaying or otherwise using any marketing materials to promote the
Program, including any modifications to previously approved materials, the
Licensees shall furnish to OMP a copy of such marketing materials for approval.
Approval or disapproval of such marketing materials shall be in OMP’s sole
discretion. Approval of any marketing materials by OMP hereunder must be in
writing. OMP shall use commercially reasonable efforts to provide the Licensees
with such written approval in a timely manner. If any marketing material is
disapproved by OMP, such material shall not be displayed or otherwise used by
the Licensees for promoting the Space, Dr. Obagi’s Practice or such other
office locations described in Section 3(b).

 

(g)           Notification
and Disclosure. Obagi Inc. shall promptly notify the OMP Entities in
writing of the existence and nature of, and shall promptly and fully disclose
to the OMP Entities, any and all ideas, designs, practices, processes,
apparatus, improvements, new product developments and inventions, proposed to
be created or developed by Obagi Inc. pursuant to the new products development
services described in Section 1(c)(1) or otherwise that Obagi Inc. has
conceived or first actually reduced to practice and/or may conceive or first
actually reduce to practice during the Term, including but not limited to those
products listed in Exhibit D, or
which Obagi Inc. may conceive or reduce to practice (all of which are
hereinafter referred to as “Inventions”), within six months after the
Term, if such Inventions relate to a product or process upon which Obagi Inc.
worked during the Term or during the period of Dr. Obagi’s employment with OMP.

 

(h)           Ownership
of Inventions. The ownership of all Inventions shall be as follows.

 

(1)           All
Group A Products in development and any products that are developed and
commercialized as a Group A Product, shall be the sole and exclusive property
of OMP. OMP shall have the right to produce, market, sell, license or distribute
these developed Group A Products without having to pay any further
consideration, besides the Retainer, to Obagi Inc. Group A Products that are
transferred to Group B Products shall be subject to the terms and conditions of
Group B Products herein. The Obagi Entities shall have the right to purchase
any 

 

11

 

of these developed Group A Products from OMP pursuant
to the terms of Section 6 hereof.

 

(2)           All
Group B Products, both those in development and any products that are developed
that were a Group B Product, shall initially be the sole and exclusive property
of Obagi Inc. unless otherwise acquired by OMP under the option terms within
this Agreement under Section 3(h)(4).

 

(3)           Obagi
Inc. shall present to OMP all developed Group B Products and any product data
relating to such developed Group B Products, including but not limited to any
clinical support for product claims to the extent any such claims are made, to
OMP immediately upon the conclusion of the development of such Group B Product.
OMP shall have thirty (30) calendar days from the date after it receives a full
dossier on the formulation, validated manufacturing process, safety and
clinical data, or such longer period of time as is mutually agreed to in
writing between the Parties, which time extension shall not be unreasonably
withheld, to confirm any reported data and Obagi Inc.’s clinical results.

 

(4)           If
OMP decides to produce, market and distribute such developed Group B Product,
then OMP shall purchase such Group B Product from Obagi Inc. for an amount
which is equal to one hundred twenty five percent (125%) of all Obagi Inc.’s
supported direct expenses associated with the development of such product, provided however, if such expenses are
greater than five hundred thousand dollars ($500,000), then the Parties will
mutually agree on a lower percentage mark-up. In addition, OMP shall pay Obagi
Inc. a royalty fee subject to the terms of Section 2(b) above. Once OMP
purchases such developed Group B Product pursuant to the terms of this Section
3(h)(4) then such product shall immediately become the sole and exclusive
property of OMP and the Obagi Entities shall only have the right to purchase
such developed products pursuant to the terms of Section 6 hereof.

 

(5)           In
the event that OMP does not elect to purchase such developed Group B Product
from Obagi Inc. pursuant to the terms of Section 3(h)(4) above, Obagi Inc.
shall have the right to produce, market, sell, license or distribute such
developed Group B Product at its sole discretion subject to the terms of
Section 3 above regarding the use of Marks without having to pay any
consideration whatsoever to OMP.

 

(i)            Copyrightable
Material.

 

(1)           All
right, title, and interest in all copyrightable material which Dr. Obagi shall
conceive or originate, either individually or jointly with others, and which
arise out of the performance of this Agreement, in connection with a Group A
Product, and/or a Group B Product that OMP purchases pursuant to Section
3(h)(4), shall be the property of the OMP Entities and are hereby assigned to
the OMP Entities along with ownership of any and all copyrights in the
copyrightable material. Obagi Inc. agrees to execute all papers and perform all
other acts necessary to assist the OMP Entities to obtain and register
copyrights on such materials in any 

 

12

 

and all countries. Where applicable, works of
authorship created by Obagi Inc. for the OMP Entities in performing the
services hereunder, in connection with the Group A Products, shall be
considered “works made for hire” as defined in the U.S. Copyright Act.

 

(2)           All
right, title, and interest in all copyrightable material which Dr. Obagi shall
conceive or originate, either individually or jointly with others, and which
arise out of the performance of this Agreement, in connection with a Group B
Product that OMP does not purchase pursuant to Section 3(h)(4) shall be the
property of Obagi Inc. and are hereby assigned to Obagi Inc. along with
ownership of any and all copyrights in the copyrightable material unless OMP
exercises the right to purchase under the terms of this Agreement per Section
3(h)(4). The OMP Entities agree to execute all papers and perform all other
acts necessary to assist Obagi Inc. to obtain and register copyrights on such
materials in any and all countries. Where applicable, works of authorship
created by Obagi Inc. for the OMP Entities in performing the services hereunder,
in connection with the Group B Products, shall not be considered “works made for hire” as defined in the U.S.
Copyright Act.

 

(j)            Spa
Concept Franchise.

 

(1)           The
business conducted in the Space, or the Program, as referred to in Section 1(a)
and Exhibit B shall be the sole and
exclusive property of Obagi Inc., Dr. Obagi and/or its nominee and the
operations obligations shall solely be Dr. Obagi’s and/or Obagi Inc.’s (excluding
OMP’s commitment pursuant to the accompanying Lease Agreement);

 

(2)           During
the Term of this Agreement and six months thereafter, Obagi Inc. hereby grants
to OMP a first option to an exclusive worldwide right to open or cause a third
party to open any business similar to the business conducted in the Space for
the remainder of the Term, if any, and three years thereafter. OMP shall have
thirty (30) calendar days of being notified by Obagi Inc. of its intention of
opening such business and its proposed location, to notify Obagi Inc. in
writing that it desires to exercise such option. If OMP does not deliver such
notification to Obagi Inc., then Obagi Inc., if allowed to do so pursuant to
Section 4, and subject to the conditions of Sections 3(b) and 3(c), is hereby
permitted to (a) open such business itself or (b) grant a license to a third
party to open such business.

 

(k)           Survival.
Subsections 2(b), 2(d), 2(e), 3(b), 3(d), 3(g), 3(h), 3(i), 3(j) and Section 6 shall
survive the Term.

 

4.     NON-CIRCUMVENTION

 

The Parties shall not circumvent or evade any of their
respective obligations under this Agreement, nor induce or conspire with any
third party, including, but not limited to, any partner of a party, to
circumvent or evade any of its obligations to the other party hereunder. The Parties
understand that each is bound by a covenant of good faith and fair dealing
under which each 

 

13

 

Party shall not deny the
other Party the benefit of this Agreement and under which each Party has an
affirmative duty to cooperate to assist the other Party in achieving the
benefit of this Agreement.

 

5.     CONFIDENTIAL INFORMATION

 

(a)           The Parties
acknowledge and agree that, in order to perform the obligations pursuant to the
terms of this Agreement, each Party may disclose to the other Party (the “Recipient”)
certain proprietary and confidential information, including without limitation
any design, process, procedure, formula, improvement or systems information
that is commercially valuable to the OMP Entities or Obagi Entities and not
generally known in the industry (the “Information”). No Party shall
disclose, transfer, use, copy, or allow access to any Information, except to
such Party’s employees, attorneys and certified public accountants who have a
need to know such Information consistent with the requirements of this
Agreement and who have undertaken an obligation of confidentiality and
limitation of use in writing, acceptable to the disclosing Party in its
reasonable discretion, it being understood that notwithstanding the obtaining
of such obligation of confidentiality and limitation of use, the Party engaging
such persons shall also continue to be responsible for any unauthorized
disclosures of the Information by any of them.

 

(b)           A Recipient
will not be obliged to maintain the confidentiality of any such Information if
the Recipient can demonstrate that (i) the Information was known by the
Recipient before receiving such Information from the disclosing Party; (ii) the
Information is available or became available to the public through sources
independent of the Recipient, through no fault of the Recipient; (iii) the
Information is available or became available to the Recipient from a third
party who had a right to disclose such Information; or (iv) the Recipient is
legally required to disclose such Information. The obligations set forth in
this Section 5 shall survive the termination of this Agreement.

 

(c)           Each Party
agrees that the other Party shall suffer irreparable harm if it fails to comply
with its obligations set forth in this Section 5, and further agrees that
monetary damages shall be inadequate to compensate the other Party for any such
breach. Accordingly, each Party agrees that the disclosing Party shall, in
addition to any other remedies available to it at law or in equity, be entitled
to the issuance of injunctive relief to enforce the provisions hereof.

 

(d)           Upon the disclosing Party’s request, the
Recipient will promptly return to the disclosing Party all copies of the
Information, will destroy all notes, abstracts and other documents that contain
Information, and will provide to the disclosing Party a written certification
of an officer of the Recipient that it has done so. Nothing in this Agreement
will be construed as granting any rights to the Recipient, by license or
otherwise, to any of the disclosing Party’s Information, except as specifically
stated in this Agreement.

 

6.     DISTRIBUTION AGREEMENTS / DISCOUNTS

 

All products distributed by OMP which are supplied by
OMP to Obagi Inc. and/or Dr. Obagi’s Practice shall be pursuant to the terms
and conditions of applicable distribution agreements, including the
indemnification provisions provided therein. The maximum discount 

 

14

 

that OMP provides to
independent third party physicians in the U.S. shall apply to all products
distributed by OMP which are supplied by OMP to (x) Obagi Inc. and/or the
Marketer, as part of the Program for resale by Obagi Inc. and/or the Marketer
in connection with the rendering of its Services hereunder and (y) Obagi Inc.
in connection with Dr. Obagi’s Practice within the United States. Such discount
shall not affect any discount available to Dr. Obagi’s Practice as covered by
separate distribution agreements, or to any Affiliate (as defined herein) of
Dr. Obagi and/or the Marketer; provided
however, such maximum discount shall not be deemed to include any
one-time or introductory discounts or adjustments that may be provided to third
party physicians. For purposes of this Agreement, the term “Affiliate” of
anyone shall mean any person directly or indirectly controlling or controlled
by or under common control with such person as well as all family members of
any natural person irrespective of whether such family members reside together
or not.

 

7.     OBAGI ENTITIES’ REPRESENTATIONS AND WARRANTIES

 

The Obagi Entities represent and warrant to the OMP
Entities as follows:

 

(a)           Intellectual
Property. Obagi Inc. has and will have good and marketable title to all of
the inventions, information, material or work product made, created, conceived,
written, invented or provided by Obagi Inc. hereunder (“Work Product”), free
and clear of all liens, claims, encumbrances or demands of third parties,
including any claims by any such third parties of any right, title or interest
in or to the Work Product arising out of any trade secret, copyright or patent;

 

(b)           Compliance
with Laws. All services provided hereunder comply with and will comply with
all applicable laws and regulations;

 

(c)           Competing
Activities. Other than the obligations, arrangements, agreements or
interests identified on Exhibit F, the
Obagi Entities warrant that they are not now under any obligation of a
contractual or other nature to any person, firm, corporation or other entity
which is inconsistent or in conflict with this Agreement, or which would
prevent, limit or impair the execution of this Agreement or the performance by
the Obagi Entities of their obligations hereunder;

 

(d)           Duly
Organized. That the Obagi Entities that are entities, are corporations or
other applicable legal entities duly organized, validly existing and in good
standing under the laws of the State or other jurisdiction where they are
organized;

 

(e)           Authority.
That the Obagi Entities that are entities, have the lawful right, power,
authority and capacity to enter into this Agreement and upon the execution of
this Agreement it will be a valid and binding obligation to such entity;

 

(f)            Authorized.
That the persons signing this Agreement on the behalf of the Obagi Entities
that are entities are authorized to do so; and

 

(g)           No
Conflicts. That neither the execution nor the performance of this Agreement
shall constitute a violation of or interfere with any obligations of the Obagi
Entities to any other person or entity.

 

15

 

8.     OMP ENTITIES’ REPRESENTATIONS AND WARRANTIES.

 

The OMP Entities represent and warrant that:

 

(a)           Duly
Organized. They are corporations duly organized, validly existing and in
good standing under the laws of the State of Delaware;

 

(b)           Authority.
They have the lawful right, power, authority and capacity to enter into this
Agreement and upon execution of this Agreement it will be a valid and binding
obligation to such entity;

 

(c)           Authorized.
The persons signing this Agreement are authorized to do so; and

 

(d)           No
Conflicts. Neither the execution nor the performance of this Agreement
shall constitute a violation of or interfere with the OMP Entities’ obligations
to any third party.

 

9.     TERMINATION OF PRE-EXISTING NONPERFORMED
OBLIGATIONS.

 

(a)           The OMP
Entities and the Obagi Entities hereby agree and acknowledge that any and all
Pre-Existing Nonperformed Obligations are hereby terminated and such provisions
in any of the Prior Agreements are herby null and void and of no further force
or effect, except to the extent that any are specifically reserved hereunder.

 

(b)           The OMP
Entities and the Obagi Entities hereby
agree that all obligations under the Prior Agreements that have been performed
prior to entering into this Agreement and all rights that have been granted and
vested under the Prior Agreements prior to entering into this Agreement (the “Pre-Existing
Performed Obligations”) are not terminated or amended in any way by this
Agreement except as expressly provided for in this Agreement. For the avoidance
of doubt, all intellectual property rights assigned, granted and/or sold to the
OMP Entities, or their predecessors, under any of the Prior Agreements or
otherwise remain in effect and are not terminated or amended in any manner
whatsoever by this Agreement.

 

(c)           Nothing in
this Section shall affect the continuing validity of the Parties’ accompanying
Separation Agreement, the Intellectual
Property Assignment and Nondisclosure Agreement, dated November 26, 1997, between
OMP and Dr. Obagi (which is an exhibit to the Separation Agreement), the
Investor’s Rights Agreement between OMP, Mandarin Partners LLC and Obagi Family
Trust, dated December 2, 1997 and amended on November 15, 2000 and January 10,
2001, and/or the Lease Agreement. Those agreements shall remain in full force
and effect pursuant to their terms.

 

(d)           In
exchange for the valuable consideration provided to the Obagi Entities pursuant
to this Agreement, the Obagi Entities, their heirs, affiliates, parents and
subsidiary companies, and their respective officers, directors, employees,
agents, representatives, successors and assigns (the “Obagi Releasees”), hereby
voluntarily discharge and release the OMP Entities and their affiliates,
parents and subsidiary companies, and their respective officers, directors,
employees, agents, representatives, successors and assigns (the “OMP Releasees”)
from any and all claims or liabilities of any kind or description, known or
unknown, suspected or unsuspected, fixed or contingent, which the Obagi Releasees
ever had, now have or hereafter may have against each or 

 

16

 

any of the OMP Releasees
by reason of any matter or event whatsoever occurring prior to the date of this
Agreement, including but not limited to any claims arising out of or resulting
from the termination of any and all Pre-Existing Nonperformed Obligations. The
release of claims specifically includes, but is not limited to, claims arising
under or based upon, the Age Discrimination in Employment Act, the Older
Workers Benefit Protection Act, Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1991, the Family and Medical Leave Act of 1993, the
Employee Retirement Income Security Act, the Rehabilitation Act of 1973, the
Americans with Disabilities Act of 1990, the Fair Labor Standards Act, and/or
any other state, federal, or municipal employment discrimination statutes
(including but not limited to claims based on age, sex, attainment of benefit
plan rights, race, national origin, religion, handicap, sexual orientation,
sexual harassment, family or marital status, retaliation, and veteran status),
and/or any other federal, state, or local statute, law, ordinance, or
regulation and/or pursuant to any other theory whatsoever, including but not
limited to claims related to breach of implied or express employment contracts,
breach of the implied covenant of good faith and fair dealing, defamation,
wrongful discharge, constructive discharge, negligence of any kind, intentional
infliction of emotional distress, whistle-blowing, fraud, estoppel or
detrimental reliance, public policy, constitutional or tort claims, violation
of the penal statutes and common law claims, or pursuant to any other theory or
claim whatsoever, including claims for attorneys’ fees, arising out of or
related to the termination of any and all Pre-Existing Nonperformed
Obligations, and any other occurrence from the beginning of time to the date of
this Agreement. This release excludes claims arising after the date of this
Agreement and claims with respect to rights and obligations provided in this
Agreement and the Distribution Agreements. The OMP Entities, for themselves and
the OMP Releasees, hereby voluntarily discharge and release the Obagi Releasees
from any and all claims or liabilities of any kind or description, known or
unknown, suspected or unsuspected, fixed or contingent, which the OMP Entities
ever had, now have or hereafter may have against each or any of the Obagi
Releasees by reason of any matter whatsoever arising out of or resulting from
the termination of any and all Pre-Existing Nonperformed Obligations and any
other occurrence from the beginning of time to the date of this Agreement. This
release excludes claims arising after the date of this Agreement and claims
with respect to rights and obligations provided in this Agreement and the
Distribution Agreements.

 

(e)           The Obagi
Entities’ Acknowledgement. The Obagi Entities and specifically Dr. Obagi
acknowledge that (i) they fully understand this Agreement, are entering into
this Agreement knowingly, voluntarily and with full knowledge of its
significance and that the OMP Entities have not coerced, threatened or
intimidated them into signing this Agreement; (ii) they have been advised to
consult an attorney, they are represented by an attorney and their attorney(s)
has reviewed this Agreement; (iii) they have had a reasonable period of time
and at least twenty-one (21) days during which time they may consider whether
to accept this Agreement; (iv) they are not otherwise entitled to the
consideration described in this Agreement; and (v) they may repudiate this
Agreement within seven (7) calendar days of entering into this Agreement, by
sending OMP a written repudiation of this Agreement.

 

(f)            OMP
Entities’ Acknowledgement. Notwithstanding anything to the contrary herein, the
OMP Entities acknowledge that Dr. Obagi’s rights as a current or former officer
and/or director of the Company for indemnification under the Bylaws of OMP
Entities, the Certificates 

 

17

 

of Incorporation of the
OMP Entities, and the General Corporation Law of the State of Delaware shall
not be impaired in any way by the terms and conditions of this Agreement.

 

(g)           Section
1542 Waiver. As to matters released, the Parties expressly waive any and all
rights under Section 1542 of the Civil Code of California, and under any
statute of similar import or purpose of any other jurisdiction. Section 1542
provides as follows:

 

A GENERAL RELEASE DOES
NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN
HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

 

10.  TERM

 

Unless earlier terminated in accordance with the terms
of this Agreement, the term of this Agreement is five (5) years (the “Term”)
from June 29, 2006. This Agreement may also be renewed for additional annual
terms upon the mutual consent of both parties and/or their assigns or
successors upon 6 months’ written notice prior to the end of the initial 5-year
term.

 

11.  TERMINATION

 

(a)           Notwithstanding
any contrary provision contained elsewhere in this Agreement, this Agreement
and the rights and obligations of the OMP Entities, Obagi Inc. and/or the
Marketer hereunder (other than the rights and obligations of the Parties under
Sections 2(b), 2(d), 2(e), 3(a), 3(b), 3(c), 3(h), 3(i), 3(j), 4, 5, 7, 8, 9, 12,
13 and 14) shall be terminated immediately upon the occurrence of any of the
following events:

 

(1)           Any
Party may terminate this Agreement at any time upon thirty (30) days prior
written notice to the other in the event that (i) the other Party (the “Breaching
Party”) has materially breached the terms of this Agreement and failed to
cure such breach within such thirty (30) calendar day period. A “material
breach” shall include, but not be limited to, the failure of any Party to
perform its obligations under Sections 1 or 2;

 

(2)           Dr.
Obagi is convicted of any felony (excluding traffic violations or other minor
offenses);

 

(3)           Obagi
Inc. and/or the Marketer willfully refuses to comply with or implement
reasonable policies established by the Company and fail to cure such breach
within such thirty (30) calendar day period;

 

(4)           The
OMP Entities, the Obagi Entities and/or the Marketer goes into Chapter 7
liquidation or receivership; or

 

18

 

(5)           There
is a change in the control or management of the Marketer that has not been
approved by OMP. Both Parties agree that OMP’s approval of any such changes in
control shall not be unreasonably withheld.

 

(b)           Notwithstanding
any contrary provision contained elsewhere in this Agreement, this Agreement
and the rights and obligations of the OMP Entities, Obagi Inc. and/or the
Marketer hereunder (other than the rights and obligations of the Parties under
Sections 2(b), 2(d), 2(e), 3(a), 3(b), 3(c), 3(h), 3(i), 3(j), 4, 5, 7, 8, 9, 12,
13 and 14) may be terminated by OMP in its sole discretion upon the occurrence
of any of the following events:

 

(1)           At
any time, upon twelve (12) months prior notice, after the closing of an initial
public offering of either OMP Entities and the Obagis’ liquidating 75% of their
equity holding;

 

(2)           At
any time, upon twelve (12) months prior written notice to the Obagi Entities,
in the event of a sale of all or substantially all of the assets of either OMP
Entity;

 

(3)           At
any time, upon twelve (12) months prior written notice to the Obagi Entities,
in the event of change in control (defined as a change in voting equity
ownership of over 50%), or a consolidation or merger of either OMP Entity with
another entity other than mergers of any wholly-owned subsidiary with and into
an OMP Entity (with the OMP Entity as the surviving entity of such merger) or
with and into any other wholly owned subsidiary of either OMP Entity.

 

(c)           Notwithstanding
any contrary provision contained elsewhere in this Agreement, this Agreement
and the rights and obligations of the OMP Entities, Obagi Inc. and/or the
Marketer hereunder (other than the rights and obligations of the Parties under
Sections 1(a), those portions of 2(b) relating to the Annual Royalty, 2(d),
2(e), 3(a), 3(b), 3(c), 3(d), 3(e), 3(f), 3(g), 3(h), 3(i), 3(j), 4, 5, 7, 8,
9, 12, 13 and 14) shall be terminated immediately upon the occurrence of any of
the following events:

 

(1)           Dr.
Obagi’s death;

 

(2)           Dr.
Obagi becomes physically or mentally disabled such that he is unable to
adequately perform the services hereunder for a continuous period of one
hundred eighty (180) calendar days.

 

(d)           Notwithstanding
any contrary provision contained elsewhere in this Agreement, this Agreement
and the rights and obligations of the OMP Entities, Obagi Inc. and/or the
Marketer hereunder (other than the rights and obligations of the Parties under
Sections 2(a), 2(b), 2(d), 2(e), 3(a), 3(b), 3(c), 3(d), 3(h), 3(i), 3(j), 4, 5,
6, 7, 8, 9, 12, 13 and 14), OMP may also terminate this Agreement “without
cause” upon thirty (30) days written notice to the Obagi Entities. For the purposes
of this Agreement, “without cause” shall include any reason, or no reason, in
OMP’s sole discretion.

 

(e)           If this
Agreement is terminated pursuant to this Section 11(a), 11(b) or 11(c), Obagi
Inc. shall be entitled to receive only his pro rata payments pursuant to
Section 2(a) above, through the date of termination. All other rights to
receive such fees shall terminate on such 

 

19

 

date. If this Agreement is terminated without cause
pursuant to Section 11(d), however, OMP shall pay the Obagi Entities any and
all amounts due under this Agreement for the remainder of the Term. Moreover,
termination of this Agreement pursuant to this Section 11 shall not affect or
impair Dr. Obagi’s entitlement to the royalty payments described in Section 2.

 

12.  WARRANTY DISCLAIMER

 

OMP GRANTS NO WARRANTIES, EITHER EXPRESS OR IMPLIED,
WITH REGARD TO THE PRODUCTS OR THE MARKS, INCLUDING, WITHOUT LIMITATION, ANY
IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NON-INFRINGEMENT. OMP WILL ACCEPT RETURN OF ANY DEFECTIVE PRODUCT SOLD BY
MARKETER IN ACCORDANCE WITH THE TERMS HEREOF AND, AS MARKETER’S SOLE REMEDY FOR
SUCH DEFECTIVE PRODUCT, EITHER, AT OMP’S SOLE DISCRETION, REPLACE SUCH PRODUCT
OR ISSUE A CREDIT THEREFOR.

 

13.  LIMITATION OF LIABILITY

 

NOTWITHSTANDING ANY OTHER PROVISION HEREIN TO THE
CONTRARY, (A) OMP’S MAXIMUM LIABILITY UNDER THIS AGREEMENT WILL BE LIMITED TO
THE RECOVERY OF ACTUAL DAMAGES UP TO THE NET AMOUNT PAID TO THE OBAGI ENTITIES
UNDER THIS AGREEMENT AND (B) NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR
LOST PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES WHETHER
BASED IN CONTRACT OR TORT (INCLUDING NEGLIGENCE, STRICT LIABILITY OR
OTHERWISE), AND WHETHER OR NOT ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

14.  GENERAL TERMS AND CONDITIONS

 

(a)           Non-exclusive
Relationship. Sections 1(a), 3(a), and 3(b) of this Agreement do not
establish an exclusive arrangement between the Parties, and do not prohibit any
Party from establishing similar marketing arrangements with other Parties
consistent with their obligations set forth herein.

 

(b)           Notices.
All notices, requests, and other communications or approvals required by this
Agreement shall be in writing and addressed/directed to the other Party at the
address/facsimile number set forth in the preamble hereof or at such other
address of which the notifying Party hereafter receives notice in conformity
with this section with copies sent to the following persons:

 

In the case of OMP, to:

 

Wesley C. Fredericks, Jr.

Heller Ehrman LLP

Times Square Tower

7 Times Square

New York, New York 10036-6524

 

20

 

In the case of the Obagi Entities and/or the Marketer,
to:

 

Michael R. Morris, Esq.

Valensi, Rose, Magaram, Morris & Murphy, PLC

Century Plaza Towers

20th Floor

2029 Century Park East

Suite #2050

Los Angeles, California 90067-3031

 

All such notices,
requests, and approvals shall be deemed to have been duly given if delivered in
person or by facsimile transmission effective on the date of delivery, or by
registered or certified mail (postage prepaid, return receipt requested)
effective four days after postmark, to the respective parties at the address
listed in the preamble hereof.

 

(c)           Governing
Law. This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State of California, without giving effect to
that body of law concerning conflicts of law.

 

(d)           Cooperation.
Each Party agrees to execute and deliver such further documents and to
cooperate as may be necessary to implement and give effect to the provisions
contained herein.

 

(e)           Force
Majeure. Neither Party shall be liable to the other for any delay or
failure to perform which results from causes outside its reasonable control.

 

(f)            Attorneys’
Fees. In the event there is any dispute concerning the terms of this
Agreement or the performance of any Party hereto pursuant to the terms of this
Agreement, and any Party hereto retains counsel for the purpose of enforcing
any of the provisions of this Agreement or asserting the terms of this
Agreement in defense of any suit filed against said Party, the successful or
prevailing Party or Parties shall be entitled to recover reasonable attorneys’
fees and other costs incurred in that action or proceeding from the other Parties,
in addition to any other relief to which it may be entitled.

 

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

 

(h)           Section
Headings. Section headings in this Agreement are for convenience only, and
shall not be used in construing the Agreement.

 

(i)            Severability.
A judicial determination that any provision of this Agreement is invalid in
whole or in part shall not affect the enforceability of those provisions found
to be valid.

 

(j)            No
Implied Waivers. If either Party fails to require performance of any duty
hereunder by the other Party, such failure shall not affect its right to
require performance of that or any other duty thereafter. The waiver by either
Party of a breach of any provision of this Agreement shall not be a waiver of
the provision itself or a waiver of any breach thereafter, or a waiver of any
other provision herein.

 

21

 

(k)           Binding
Effect; Assignment, Amendments.

 

(1)           This
Agreement shall be binding upon and shall inure to the benefit of the Parties
hereto, and their respective representatives, successors and permitted assigns.

 

(2)           This
Agreement shall not be assignable by the Obagi Entities, including to an entity
in which any of the Obagi Entities has merged or which has otherwise succeeded
to all or substantially all of such Obagi Entities’ business and assets to
which this Agreement pertains and which has assumed in writing or by operation
of law its obligations under this Agreement, without the express written
consent of the OMP Entities (which consent may be withheld in the OMP Entities’
sole discretion). Any attempted assignment in violation of this provision will
be void. Any modifications to this Agreement must be in writing and signed by
authorized representatives of all the Parties.

 

(3)           This
Agreement may be assigned by the
OMP Entities to its successor(s) or to an entity in which any of the OMP
Entities has merged or which has otherwise succeeded to all or substantially
all of such OMP Entities’ business and assets to which this Agreement pertains,
provided, however, that such assignees
agree to be bound by the terms of this Agreement.

 

(4)           Notwithstanding
anything in this Agreement to the contrary, Obagi Inc. shall have the right to
assign any and all royalties that may be payable pursuant to Section 2(b) of this
Agreement.

 

(l)            Preemption.
Any provisions of the Parties’ proposals, contracts, invoices, billing
statements, acknowledgment forms or any other documents, which are inconsistent
with the provisions of this Agreement, shall be of no force or effect.

 

(m)          Independent
Contractors. Each of the Parties is and at all times shall be an
independent contractor in its performance of the Agreement. Each of the Parties
shall exercise control over its own employees and agents and shall be solely
responsible for the determination of its employment eligibility, payment of any
wages, salaries or other remuneration of its employees and agents and for its
payment of any payroll taxes, contributions for unemployment insurance, social
security, pension or annuities, which are imposed as a result of the employment
of its employees and agents.

 

(n)           Arbitration.
Any and all disputes, claims or controversies arising out of or relating to
this Agreement or the breach, termination, enforcement, interpretation or
validity thereof, including the determination of the scope or applicability of
this arbitration provision, shall be determined and resolved by binding
arbitration before JAMS/Endispute (“JAMS”) in Los Angeles, California before
one (1) arbitrator. The arbitration shall be administered by JAMS Comprehensive
Arbitration Rules and Procedures. Judgment on the Award may be entered in any
court having jurisdiction. This clause shall not preclude Parties from seeking
provisional remedies in aid of arbitration from a court having appropriate
jurisdiction. The arbitrator shall, in the Award, allocate all or part of the
costs of arbitration, including the fees of the arbitrator, and shall award
reasonable attorneys’ fees to the prevailing party. The award in such
arbitration 

 

22

 

proceeding shall be final and binding, and may be
entered in any court of competent jurisdiction set forth in Section 14(c)
above. To the extent that there is any variance between the JAMS rules and this
Agreement, this Agreement shall control. The Parties hereto each agree to take
all steps, and execute all documents, necessary for the implementation of
arbitration proceedings. All statutes of limitations applicable to any dispute
apply to the arbitration. The provisions of this Section 14(n) shall survive
any expiration or termination of this Agreement. Either Party may require the
submission of the dispute to binding arbitration at any reasonable time,
notwithstanding that a lawsuit or other proceeding has been commenced. Should
any arbitration or other proceeding be commenced to enforce the provisions of
this Agreement or to resolve any dispute arising from this Agreement, the
arbitrator shall award that Party’s costs and attorneys’ fees, plus
disbursements actually made in the prosecution or defense of such arbitration
or proceeding.

 

[Signature Page to Follow]

 

23

 

IN WITNESS WHEREOF, the Parties hereunto have executed
this Agreement as of the day and year first above written. 

 

 

	
   

  	
  OMP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Steve Carlson

  	
   

  
	
   

  	
   

  	
  Name: Steve Carlson

  
	
   

  	
   

  	
  Title: President and
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  OBAGI MEDICAL PRODUCTS,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steve Carlson

  	
   

  
	
   

  	
   

  	
  Name: Steve Carlson

  
	
   

  	
   

  	
  Title: President and
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  DR. ZEIN E. OBAGI, M.D.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Zein E. Obagi, M.D.

  	
   

  
	
   

  	
   

  	
  Name: Zein Obagi, M.D.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SKIN HEALTH PROPERTIES,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Zein E. Obagi, M.D.

  	
   

  
	
   

  	
   

  	
  Name: Zein Obagi, M.D.

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
   

  	
  ZEIN AND SAMAR OBAGI
  FAMILY TRUST

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Samar Obagi,

  	
   

  
	
   

  	
   

  	
  Name: Samar Obai

  
	
   

  	
   

  	
  Title: Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  SAMAR OBAGI

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Samar Obagi

  	
   

  
	
   

  	
   

  	
  Ms. Samar Obagi

  

 

 

EXHIBIT A

 

OMP
PRODUCTS

 

	
  Obagi Nu-Derm Line

  	
  Obagi-C Rx Line

  	
   

  
	
  Toner

  	
  Cleansing Gel

  	
   

  
	
  Foaming Gel

  	
  Clarifying Serum

  	
   

  
	
  Gentle Cleanser

  	
  Exfoliating Day Lotion SPF 12

  	
   

  
	
  Clear

  	
  Exfoliating Day Lotion

  	
   

  
	
  Exfoderm

  	
  Therapy Night Cream

  	
   

  
	
  Exfoderm Forte

  	
  Sun Guard SPF 30

  	
   

  
	
  Blender

  	
   

  	
   

  
	
  Sunfader

  	
  Professional C Line

  	
   

  
	
  Sun Block

  	
  5% Serum

  	
   

  
	
  Healthy Skin Protection

  	
  10% Serum

  	
   

  
	
  Tolereen

  	
  15% Serum

  	
   

  
	
  Action

  	
  20% Serum

  	
   

  
	
  Eye Cream

  	
   

  	
   

  
	
  Travel Set (Normal to Oily)

  	
   

  	
   

  
	
  Travel Set (Normal to Dry)

  	
  Tretinoin 0.025%

  	
   

  
	
  Starter Set (Normal to Oily)

  	
  Tretinoin 0.05%

  	
   

  
	
  Starter Set (Normal to Dry)

  	
  Tretinoin 0.1%

  	
   

  
	
   

  	
   

  	
   

  
	
  Blue Peel Line

  	
  Cffectives Line

  	
   

  
	
  Blue Peel Kit

  	
  5% Serum

  	
   

  
	
  Cleanser

  	
  10% Serum

  	
   

  

 

 

EXHIBIT B

 

PROGRAM

 

The terms “Services” and “Program”
including the marketing services to be provided by the Marketer at 260-290
North Canon Drive, Beverly Hills are as follows:

 

1)     The Obagi Logo will be prominently displayed by
Obagi Inc. and/or the Marketer as
the primary signage on the face of the building in a manner approved by OMP.

 

2)     OMP skin care products will be prominently
displayed and highlighted by Obagi Inc. and/or the Marketer in window displays visible from both the Cannon and
Dayton Street fronts.

 

3)     OMP skin care products will be maintained by Obagi
Inc. and/or the Marketer as a prominently
featured core product offering within the retail space.

 

4)     Obagi
Inc. and/or the Marketer will provide or maintain
the minimum levels of general liability insurance for the Space as is customary
for the operation of a retail outlet.

 

5)     Obagi
Inc. and/or the Marketer will provide or
maintain a licensed physician within or contiguous to the Space with adequate training
on the use and dispensing of the OMP skin care products.

 

6)     Obagi
Inc. and/or the Marketer will provide or
maintain a retail sales staff adequate for the sale and marketing services to
be provided and Obagi Inc. and/or
the Marketer will provide training to all retail sales personnel engaged by Obagi
Inc. and/or the Marketer on the OMP skin
care products as to the use, positioning and application thereof for maximum
consumer exposure and sales.

 

7)     Although Obagi Inc. and/or the Marketer may sell complementary
products and services to the OMP skin care products, without the prior written
approval of OMP, Obagi Inc. and/or
the Marketer agrees it will not market, promote or sell competitive products
lines; including products that contain Hydroquinone, Tretinoin, and/or products
that are positioned to address hyper-pigmentation, fine lines and wrinkles. OMP
reserves the right, at any time, to review and approve the products being
offered. Any products not approved by OMP must no longer be displayed in the
Space. It is hereby understood and agreed that OMP has no rights to and Obagi
Inc. shall use, promote, display and sell its current products, including
Complex A, surgical blades, syringes and other such products that he has
previously developed.

 

8)     To the extent that OMP develops a product or
line of products that address new skin conditions which are added as OMP skin
care products, Obagi Inc. and/or
the Marketer agrees to replace competing product lines, except those products
which Obagi Inc. and/or the
Marketer have developed previously with the prior authorization of OMP, in the
Space with such new OMP skin care products, and give prominent display and
promotional support to the new OMP skin care products.

 

9)     OMP skin care products covered under the
Program are the following:

 

a.             The Entire Obagi Nu-Derm Line;

 

 

b.             The Entire Obagi-C Rx Line;

 

c.             Cffectives (5% and 10% vitamin C
concentrations) and Professional Vitamin C (5%, 10%, 15%, 20%);

 

d.             Triax Tretinoin, except Obagi Inc. and/or the Marketer may use at his/its
discretion, Complex A which he/it has the sole right to use exclusively in
his/its Practice, to the extent sold to Physicians by OMP and so long as Obagi
Inc. and/or the Marketer employs an
appropriately licensed physician who is capable of marketing such Product; and

 

e.             All newly developed product or line of products
that address new skin conditions which are added as OMP skin care products.

 

10)   Notwithstanding anything in this Agreement to
the contrary, it is hereby understood that Obagi Inc. shall display, promote
and sell Group B products in association with OMP products.

 

 

EXHIBIT C

 

Prior Agreements between OMP and Dr. Obagi

 

1.             Intellectual
Property Assignment and Nondisclosure Agreement, dated November 26, 1997, between
OMP and Dr. Obagi.

 

2.             Option
and Transfer Agreement, dated December 2, 1997, between OMP and Dr. Obagi.

 

3.             Investors’
Rights Agreement between OMP, Mandarin Partners LLC and Obagi Family Trust,
dated December 2, 1997

 

4.             Assignment
of Trademarks, dated January 31, 2000, between OMP and Dr. Obagi.

 

5.             First
Amendment to Investors’ Rights Agreement between OMP, Mandarin Partners LLC and
Obagi Family Trust, dated November 15, 2000

 

6.             Second
Amendment to Investors’ Rights Agreement between OMP, Mandarin Partners LLC and
Obagi Family Trust, dated January 10, 2001

 

7.             Amended
and Restated Employment Agreement, dated December 17, 2002, between OMP and Dr.
Obagi.

 

8.             Mutual
and General Release, dated December 17, 2002, between OMP, Dr. Obagi, Samar
Obagi and Zein and Samar Obagi Family Trust (the “Family Trust”).

 

9.            Termination,
License and Obligations Agreement, dated December 17, 2002, between OMP, Dr.
Obagi and the Family Trust.

 

10.           Amended
and Restated Noncompetition Agreement, dated December 17, 2002, between OMP and
Dr. Obagi.

 

11.           Exchange
Agreement, dated December 17, 2002, between OMP and Family Trust.

 

12.           Stock
Purchase and Subscription Agreement, dated December 17, 2002, between OMP and
Family Trust.

 

13.           Product
Distribution Agreement, dated May 21, 1994, between Worldwide Products
Distribution, Inc. (“Worldwide”) and Cellogique Corporation.

 

14.           License
Agreement, dated March 1, 1997, between Dr. Obagi and Derma Tech Corporation.

 

15.           Distribution
Agreement, dated September 23, 1997, between Worldwide and CNO Chinese Obagi
Corporation.

 

 

16.           Proprietary
Information and Invention Agreement, dated December 2, 1997, between OMP and
Dr. Obagi.

 

 

EXHIBIT D

 

NEW PRODUCT DESIGNATIONS

 

	
  Group A Products

  	
   

  	
  Group B
  Products

  	
   

  	
  Group C
  Products

  
	
  1.

  	
   

  	
  1. 

  	
  Skin Peel System

  	
   

  	
  1.

  
	
  2.

  	
   

  	
  2.

  	
   

  	
   

  	
  2.

  
	
  3.

  	
   

  	
  3.

  	
   

  	
   

  	
  3.

  
	
  4.

  	
   

  	
  4.

  	
   

  	
   

  	
  4.

  
	
  5.

  	
   

  	
  5.

  	
   

  	
   

  	
  5.

  
	
  6.

  	
   

  	
  6.

  	
   

  	
   

  	
  6.

  
	
  7.

  	
   

  	
  7.

  	
   

  	
   

  	
  7.

  
	
  8.

  	
   

  	
  8.

  	
   

  	
   

  	
  8.

  
	
  9.

  	
   

  	
  9.

  	
   

  	
   

  	
  9.

  
	
  10.

  	
   

  	
  10.

  	
   

  	
   

  	
  10.

  
	
  11.

  	
   

  	
  11.

  	
   

  	
   

  	
  11.

  
	
  12.

  	
   

  	
  12.

  	
   

  	
   

  	
  12.

  
	
  13.

  	
   

  	
  13.

  	
   

  	
   

  	
  13.

  
	
  14.

  	
   

  	
  14.

  	
   

  	
   

  	
  14.

  
	
  15.

  	
   

  	
  15.

  	
   

  	
   

  	
  15.

  
	
  16.

  	
   

  	
  16.

  	
   

  	
   

  	
  16.

  
	
  17.

  	
   

  	
  17.

  	
   

  	
   

  	
  17.

  
	
  18.

  	
   

  	
  18.

  	
   

  	
   

  	
  18.

  
	
  19.

  	
   

  	
  19.

  	
   

  	
   

  	
  19.

  
	
  20.

  	
   

  	
  20.

  	
   

  	
   

  	
  20.

  

 

 

EXHIBIT E

 

MARKS

 

[to be provided]

 

 

EXHIBIT F

 

Dr. Obagi’s
Practice

 

Obagi Entity practices
are listed below and may include future clinics/locations subject to OMP’s
reasonable approval for inclusion as a licensee practice for use of the Marks.

 

1)             Obagi
Skin Health Institute – Beverly Hills

 

2)             Chinese
Nu-Derm Obagi (“CNO”) – Medical Spa/Clinic located within the City of San
Gabriel, California.

 

3)             Vietnam
Nu-Derm Obagi (“VNO”) – Medical Spa/Clinic located within the City of
Westminster, California

 

4)             Cellogique
Corporation – Corporation located in the state of California, operating Medical
Spas and Clinics within the following countries of the Middle East:

 

a.             Syria,
Egypt, Lebanon, Jordan, Saudi Arabia, United Arab Emirates, Bahrain, Kuwait,
Iraq, Oman, Yemen, Libya, Tunisia, Morocco, Turkey, Cypress, Iran, Sudan,
Algeria, Qatar, and Israel

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