Document:

Exhibit 10.11

 

June
29, 2006

 

OMP,
Inc.

310
Golden Shore, Suite
100

Long
Beach, California 90802

 

Obagi Medical Products, Inc.

310 Golden Shore, Suite 100

Long Beach, California  90802

 

	
  Re:

  	
   

  	
  Retail
  Lease Agreement (the “Lease”) Executed Contemporaneously Herewith By and
  Between Skin Health Properties, Inc., as Landlord, and OMP, Inc. (“OMP”), as
  Tenant

  

 

Gentlemen:

 

In
connection with the Lease, the undersigned expressly acknowledge and agree as
follows:

 

1)  that OMP has heretofore paid to the
undersigned (or some constituent party thereof) the sum of One Million Eight Hundred Seventeen
Thousand One Hundred Eleven and No/100 Dollars ($1,817,111) in respect of the
performance of Leasehold Improvements (as defined in the Lease), and that OMP’s
sole obligation and liability with respect to the performance of, and the
payment for, the Leasehold Improvements is the payment of such $1,817,111, and
that, regardless of the actual cost of the Leasehold Improvements or any costs
incurred in connection therewith, Tenant shall not owe or be required to pay to
any contractor performing any of the Leasehold Improvements, or to any of the
undersigned, any additional amounts or any amount in excess of said $1,817,111
heretofore paid (“Excess Leasehold Improvement Expenses”); it being agreed that
the undersigned do, jointly and severally, hereby indemnify and agree to hold
OMP harmless with respect to any Excess Leasehold Improvement Expenses;

 

2) 
that OMP desired management and control over the performance of the
Leasehold Improvements and for that reason OMP entered into a construction
contract with Legacy Construction (the “Construction Contract”) notwithstanding
the fact that OMP had no leasehold or other possessory interest in the Premises
at the time of its entering into the Construction Contract, and the undersigned
is not a party to, nor has the undersigned ever been given the opportunity to
review or approve prior to execution of, the Construction Contract and/or any
amendments thereto;

 

3)  that several change orders and other
deviations with respect to the Leasehold Improvements were approved by OMP
pursuant to the Construction Contract, but were not approved or signed by the
undersigned and in some cases were (and continue to be) disputed by the
undersigned (collectively, the “Questioned Change Orders”), including but not
limited to some of the change orders set forth in the Schedule of Costs
attached as Exhibit C to the Lease;

 

4)  that notwithstanding the foregoing or
anything to the contrary contained herein or in the Lease, OMP shall be
responsible for assisting the undersigned in disputing and resolving such
Questioned Change Orders and shall use commercially reasonable efforts and due
diligence

 

 

in furtherance of same, and OMP shall not resolve
such dispute(s) without the undersigned’s prior written consent;

 

5)  that OMP shall use commercially reasonable
efforts and due diligence to enforce any and all warranties and guarantees in
favor of OMP under the Construction Contract, for the benefit of the
undersigned, and shall assign such warranties and guarantees to the undersigned
if necessary and/or expedient; and

 

6)  that
OMP has heretofore paid to the undersigned (or some constituent party thereof)
the sum of Three Hundred
Seventy-Nine Thousand Eight Hundred Thirty-Two and No/100 Dollars ($379,832)
as prepaid rental under the Lease, and that such prepaid rental fully satisfies
all amounts owing or becoming payable under the Lease.

 

	
   

  	
  SKIN HEALTH
  PROPERTIES, INC.

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

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

  	
   

  	 

	
   

  	
   

  	
  Zein E. Obagi,
  M.D., President

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
  ZSO, LP

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Samar Obagi

  	
   

  	 

	
   

  	
   

  	
  Samar Obagi, General
  Partner

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
  ZEIN
  E. OBAGI, M.D., INC.

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

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

  	
   

  	 

	
   

  	
   

  	
  Zein E. Obagi, M.D.,
  President

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

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

  	
   

  
	
   

  	
  ZEIN E. OBAGI, M.D.

  	 

	
   

  	
   

  	 

	
   

  	
  ZEIN AND SAMAR OBAGI
  FAMILY TRUST 

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Samar Obagi

  	
   

  	 

	
   

  	
   

  	
  Samar Obagi, Trustee

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
  /s/ Samar Obagi

  	
   

  	 

	
   

  	
  SAMAR
  OBAGI

  	 

							

{Signatures continue on
following page}

 

 

AGREED TO
AND ACCEPTED BY:

 

The undersigned hereby
acknowledge their agreement with and acceptance of the foregoing terms and
conditions:

 

	
  OMP, INC.,

  	
   

  
	
  a Delaware corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Steve Carlson

  	
   

  	
  Dated:
  June 29, 2006

  
	
  Steve
  Carlson, CEO and President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  OBAGI MEDICAL PRODUCTS,
  INC.,

  	
   

  
	
  a
  Delaware corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Steve Carlson

  	
   

  	
  Dated:
  June 29, 2006

  
	
  Steve
  Carlson, CEO and PresidentExhibit 10.12

 

EMPLOYMENT
AGREEMENT

 

This EMPLOYMENT AGREEMENT (this “Agreement”) is
entered into as of this 1st day of September, 2001, by and between Austin T.
McNamara (“Executive”) and OMP, Inc., a Delaware corporation (the “Company”).
Capitalized terms not otherwise defined in the text of this Agreement have the
meanings set forth in Appendix A, which is incorporated into this
Agreement by reference.

 

Background

 

The Executive’s experience and demonstrated skills and
abilities and his unique qualifications are needed by the Company, and the
Company has determined that it is in the best interests of the Company and its
stockholders to engage Executive as the Company’s Chairman, President and Chief
Executive Officer; and

 

The Company recognizes the need to provide Executive
with a level of compensation and relative security that provides him the
necessary economic and performance incentives that will be of benefit to the
Company stockholders in the long term.

 

THEREFORE, the Company has offered Executive employment
for compensation and other benefits set forth in this Agreement, and Executive
is willing to accept employment on such terms. The parties agree as follows:

 

ARTICLE I

 

EMPLOYMENT

 

1.1       Employment
by the Company of Executive and Acceptance by Executive. The Company
employs Executive during the term of this Agreement in such capacities and upon
such conditions concerning rates of compensation, benefits and other matters as
are hereinafter stated. Executive accepts such employment and agrees to devote
a significant majority of his time, attention and energies exclusively to the
business interests of the Company, while employed by the Company except as
otherwise specifically approved in writing by or on behalf of the Company’s
Board of Directors (the “Board”).

 

1.2       Capacity.
Executive shall be employed during the term of this Agreement as Chairman,
President and Chief Executive Officer of the Company with such duties,
functions, responsibilities and authority that are commensurate with and
appropriate for such position and as are from time-to-time set forth in the
Bylaws of the Company and otherwise delegated to Executive by the Board.
Executive shall establish a residence in the Long Beach, California area on or
before August 1, 2002, and shall spend such time in Long Beach, California
as his responsibilities and duties require.

 

1.3       Term.
Subject to the other provisions of this Agreement, the term of this Agreement
and Executive’s employment shall be deemed to have commenced on September 1,
2001, and shall continue for a period of three years or until the
occurrence of an Event of Termination (as defined in Section 3.1)
(the “Initial Term”). Following the expiration of the

 

 

Initial Term, the Initial Term shall be automatically renewed for
successive one-year periods (collectively, the “Renewal Terms”;
individually, a “Renewal Term”) unless, at least ninety (90) days prior
to the expiration of the Initial Term or the then current Renewal Term, either
party provides the other with a notice of intention not to renew, in which case
Executive’s employment with the Company, and the Company’s obligations shall
terminate as of the end of the Initial Term or said Renewal Term, as
applicable. If the Initial Term is renewed, the terms of this Agreement during
such Renewal Term shall be the same as the terms in effect immediately prior to
such renewal, subject to any such changes or modifications as mutually may be
agreed between the parties as evidenced in a written instrument signed by both
the Company and Executive.

 

ARTICLE II

 

COMPENSATION, BENEFITS
AND EXPENSE REIMBURSEMENT

 

2.1       Compensation
and Benefits. For services rendered pursuant to this Agreement, Executive’s
compensation and benefits will consist of the following:

 

(a)    Base Salary. The
Company agrees to pay to Executive, and Executive agrees to accept, during the
term of this Agreement an annual base salary of not less than Five Hundred
Thousand Dollars ($500,000) per year, or such greater amount as the Board or
the compensation committee thereof (the “Compensation Committee”) may from
time-to-time determine (the “Base Salary”).

 

(b)    Bonus
Opportunity. The Board or the Compensation Committee shall award Executive
an annual target bonus (the “Bonus”) of one hundred percent (100%) of
the Base Salary based on achievement of the benchmark as set forth on Exhibit “A”
attached hereto. Executive shall receive a Minimum Bonus for 2001 equal to one
hundred percent (100%) of the Base Salary received for 2001 ($166,700) and a
Minimum Bonus for 2002 of fifty percent (50%) of the Base Salary received for
2002 ($250,000). The Compensation Committee may, at its discretion, award such
other bonus payments as it finds appropriate.

 

(c)    Benefit Plans.
Executive will be eligible to participate in the Company’s retirement plans
that are qualified under Section 401 (a) of the Internal Revenue Code
of 1986, as amended, and in the Company’s health, disability and other welfare
benefit plans that are generally applicable to all executive employees of the
Company, in accordance with the terms and conditions thereof.

 

(d)    Relocation
Allowance. The Company shall reimburse Executive for his moving expenses
and home closing costs up to a maximum amount of Fifty Thousand Dollars
($50,000).

 

(e)    Vacation.
Executive shall be awarded four weeks of vacation for the first full year of
his employment under this Agreement. For each full year of employment
thereafter, Employee shall be awarded four (4) weeks of vacation reduced
by the amount of vacation days that are unused and accrued from a prior year
such that the maximum amount of unused vacation that may accrue for any
given year is a total of four (4) weeks.

 

2

 

2.2       Expenses. The Company shall reimburse Executive for all reasonable expenses incurred
in the course of the performance of Executive’s duties and responsibilities
pursuant to this Agreement and consistent with the Company’s policies with
respect to travel, entertainment and miscellaneous expenses, and the reasonable
and customary requirements with respect to the reporting of such expenses.

 

2.3       Withholding. The Company shall be entitled to withhold from amounts to be paid to
Executive hereunder any federal, state or local withholding or other taxes or
charges that it is from time-to-time required to withhold. The Company shall be
entitled to rely on an opinion of counsel if any questions as to the amount or
requirement of any such withholding shall arise.

 

ARTICLE III

 

TERMINATION

 

Each of the following events shall be considered an “Event
of Termination”:

 

3.1       Termination
By the Company For Cause. The Company may terminate this Agreement and
Executive’s employment hereunder at any time for Cause by giving notice to
Executive stating the basis for such termination, effective immediately upon
giving such notice or at such other time thereafter as the Company may designate.
If the Executive’s employment is terminated for Cause pursuant to this Section 3.1,
notwithstanding the other terms of this Agreement, Executive shall have no
further rights against the Company hereunder, except the right to receive (i) any
unpaid Base Salary with respect to the period prior to the effective date of
termination, and (ii) reimbursement of expenses to which Executive is
entitled under Section 2.2 hereof. All unexercised options, vested
and unvested, shall immediately terminate.

 

3.2       Executive
Resigns or Voluntarily Terminates Employment. While Executive expects to
fulfill the obligations of his employment to the satisfaction of the Board, and
maintain his employment throughout the term of this Agreement, Executive may terminate
his employment under this Agreement if Executive provides the Company at least
sixty (60) days advance written notice. During this notice period, Executive may be
relieved of any responsibilities. The Company and the Executive will meet and
discuss a mutually satisfactory way to make any necessary transition. If
Executive’s employment is terminated by the Executive pursuant to this Section 3.2,
notwithstanding the other terms of this Agreement, Executive shall have no
further rights against the Company hereunder, except for the right to receive (i) any
unpaid Base Salary with respect to the period prior to the effective date of
termination, (ii) reimbursement of expenses to which Executive is entitled
under Section 2.2 hereof. All unexercised and unvested options
shall immediately terminate and all unexercised and vested options must be
exercised by the Executive within ninety (90) days of termination of employment
or they shall terminate.

 

3.3       Termination
by Death or Disability. Executive’s employment and the Company’s
obligations under this Agreement shall terminate as follows: (i) automatically,
effective immediately and without any notice being necessary, upon Executive’s
death; and (ii) in the event that Executive becomes Disabled, by the
Company giving notice of termination to Executive. If Executive’s employment is
terminated pursuant to this Section 3.3 because of the

 

3

 

Executive’s death or disability, notwithstanding the other terms of
this Agreement, Executive shall have no further rights against the Company
hereunder, except for the right to receive (i) any unpaid Base Salary with
respect to the period prior to the effective date of termination plus a
continuation of the Base Salary for a period of sixty (60) days after the
termination of employment and (ii) reimbursement of expenses to which
Executive is entitled under Section 2.2 hereof, plus the greater of
any accrued Bonus or Minimum Bonus prorated for the period through the
termination, that has been earned but not yet paid with respect to the period
prior to the effective date of termination. All unexercised and vested options
must be exercised by the Executive, or Executive’s estate, within ninety (90)
days of termination of employment or they shall terminate.

 

3.4       Termination
by the Company Without Cause. While Company expects to fulfill the
obligations of this Agreement to the satisfaction of Executive, and maintain a
satisfactory relationship throughout the term of this Agreement, the Company may terminate
Executive’s employment without Cause. If Executive’s employment is terminated
by the Company without Cause pursuant to this Section 3.4,
notwithstanding the other terms of this Agreement, Executive shall have the
right to receive (i) any unpaid Base Salary plus the greater of any
accrued Bonus or Minimum Bonus prorated for the period through termination that
has been earned but not yet paid with respect to the period prior to the
effective date of termination payable on the regularly payroll dates, (ii) an
amount equal to the greater of (A) twelve (12) months of Base Salary or (B) any
unpaid Base Salary through the remaining term of this Agreement, and (iii) reimbursement
of expenses to which Executive is entitled under Section 2.2
hereof. All unexercised and vested options must be exercised by the Executive
within ninety (90) days of termination of employment or they shall terminate.

 

3.5       Executive
Terminates Employment Due to a Change in Control. Executive shall be
entitled to terminate his employment within one (1) year upon a Change in
Control and for Good Reason. If the Company terminates Executive’s employment
within one (1) year of a Change in Control other than for Cause, or if
Executive terminates his employment pursuant to this Section 3.5,
notwithstanding the other terms of this Agreement, Executive shall have no
further rights against the Company hereunder, except for the right to receive (i) any
unpaid Base Salary plus any accrued Bonus or Minimum Bonus that has been earned
but not yet paid with respect to the period prior to the effective date of
termination, (ii) an amount equal to the greater of (A) twelve (12)
months of Base Salary or (B) any unpaid Base Salary through the remaining
term of this Agreement, (iii) (A) if the Change in Control occurs
prior to January 1, 2003, a one-time bonus of $750,000 or (B) if the
Change in Control occurs after January 1, 2003, the maximum Bonus that
Executive was eligible for during the remaining Initial Term, (iv) reimbursement
of expenses to which Executive is entitled under Section 2.2 hereof
and (v) any unvested options granted to Executive to purchase the Company’s
common stock which are owned by Executive will become fully vested.

 

3.6       Exclusive
Remedy. Executive agrees not to assert or pursue any remedies, other than
an action to enforce the payments due to Executive under this Agreement, at law
or in equity, with respect to any termination of employment, and will sign a full
and complete release, substantially in the form of Attachment A, at the
time of termination, but prior to receipt of any compensation or benefits in
excess of the compensation or benefits already earned and accrued.

 

4

 

ARTICLE IV

 

CONFIDENTIALITY

 

4.1       Confidential
Information. Executive acknowledges that he has been required to use his
personal intellectual skills on behalf of the Company, its subsidiaries and
affiliates (the term “Company” as used in this Article IV
shall include such subsidiaries and affiliates) and that it is reasonable and
fair that the fruits of such skills should inure to the sole benefit of the
Company. Executive further acknowledges that he has acquired information of a
confidential nature relating to the operation, finances, business relationships
and trade secrets of the Company (“Confidential Information”). During the
Initial Term and the Renewal Term, and for a period of five (5) years
following termination of employment, Executive will not, except in the course
of Executive’s regular authorized duties on behalf of the Company, or with the
prior written consent of the Company, use, publish, disclose or authorize
anyone else to use, publish or disclose, any Confidential Information of the
Company. Executive shall not remove or retain any Confidential Information of
the Company, except for use in the course of Executive’s regular authorized
duties on behalf of the Company. The foregoing notwithstanding, Executive has
no obligation to refrain from using, publishing or disclosing any such
Confidential Information that is or hereafter shall become available to the
public, other than by use, publication or disclosure by Executive. This
prohibition also does not prohibit Executive’s use of general skills and
know-how acquired during and prior to employment with the Company, as long as
such use does not involve the use, publication or disclosure of the Company’s
Confidential Information or trade secrets.

 

(b)       Agreement
to Transfer. Executive shall without further payment, assign, transfer and
set over, and does hereby assign, transfer and set over, to the Company, its
successors and assigns, all Executive’s right, title and interest in and to all
trade secrets, secret processes, inventions, improvements, patents, patent
applications, trademarks, trademark applications, copyrights and any and all
intellectual property rights which Executive solely or jointly with others has
conceived, made, acquired or suggested at any time during employment or within
a one-year period after termination of employment and which relate to the
existing or potential products, processes, work, research or other activities
of the Company.

 

4.2       Prohibited
Activity. Executive agrees that during the Initial Term, any Renewal Term
and for a period of one (1) year after termination of employment, without
the Company’s express written consent, Executive shall not, directly or
indirectly, (i) employ, solicit for employment, or recommend for
employment any person employed by the Company (or any Affiliate of the Company)
or (ii) engage in any activity that is or may be competitive with the
Company in any state or other jurisdiction where the Company conducts its
business.

 

4.3       Return of
Documents. Immediately upon termination of employment, Executive will
return to the Company, and so certify in writing to the Company, that the
Executive has returned to the Company all the Company’s papers, documents and
things, including information stored for use in or with computers and software
applicable to the Company’s business (and all copies thereof), which are in
Executive’s possession or under Executive’s control.

 

5

 

4.4       No
Conflicts. Executive Represents and warrants that Executive has not
previously assumed any obligations inconsistent with those of this Agreement
and that employment by the Company does not conflict with any prior obligations
to third parties.

 

4.5       Equitable
Relief. Executive agrees that any breach of Article IV of this Agreement
could cause substantial and irreparable harm to the Company for which money
damages would be an inadequate remedy. Accordingly, the Company shall in any
such event be entitled to obtain injunctive and other forms of equitable relief
to prevent such breach and to recover from Executive the Company’s costs
(including without limitation reasonable attorneys’ fees) incurred in
connection with enforcing Article IV this Agreement, in addition to any
other rights or remedies available at law, in equity or by statute.

 

ARTICLE V

 

GENERAL PROVISIONS

 

5.1       Notices.
While the parties enter this Agreement anticipating the communication among
them will be open and take place without resorting to unnecessary formalities,
in the event that a formal Notice under this Agreement is necessary, such
Notice provided for in this Agreement shall be given in writing and shall be
deemed given to a party at the earlier of (i) when actually delivered to
such party, or (ii) when received by such party after sending by registered
or certified mail (return receipt requested) or sent to such party by courier,
confirmed by receipt, and addressed to such party at the address designated
below for such party as follows (or to such other address for such party as
such party may have substituted by notice pursuant to this Section 5.1).
However, if the party to receive notice is unavailable or unwilling to make
himself available for receipt of such Notice, then Notice will be complete
after reasonable efforts to provide Notice have been made under this Section 5.1,
and more than five (5) days have passed since attempting to provide
Notice.

 

(a)        If to the
Company:

 

OMP, Inc.

310 Golden Shore

Long Beach, CA 90802

Attn:  Chairman of the Compensation Committee

 

with a copy to:

 

Michael Best & Friedrich LLP

One South Pinckney St., #700

Madison, WI 53703

Attn:  Tod B. Linstroth, Esq.

 

6

 

(b)       If to
Executive:

 

Austin McNamara

10202 Sycamore Circle

Villa Park, CA 92861

 

5.2       Entire
Agreement. This Agreement contains the entire understanding and the full
and complete agreement of the parties and supersedes and replaces any prior
understandings and agreements among the parties, with respect to the subject
matter hereof.

 

5.3       Amendment: Headings. This Agreement may be altered, amended
or modified only in a writing, signed by both of the parties hereto. Headings included in this Agreement
are for convenience only and are not intended to limit or expand the rights of
the parties hereto. References to Sections herein shall mean sections of the
text of this Agreement, unless otherwise indicated.

 

5.4       Assignability. This Agreement and the rights and duties set
forth herein may not be assigned by Executive, or by the Company, in whole or in part, except that the Company
may assign its rights and obligations to a successor of the Company’s
business which expressly assumes the Company’s obligations hereunder in
writing. This Agreement shall be binding on and inure to the benefit of each
party and such party’s respective heirs, legal representatives, successors and
permitted assigns.

 

5.5       Arbitration. Any controversy, dispute or claim arising out of or relating to this
Agreement, or the breach hereof, shall be settled by a single arbitrator in
binding arbitration conducted in Los Angeles, California, in accordance with
the Commercial Arbitration Rules of the American Arbitration Association (“AAA”),
and judgment upon the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof. The arbitrator’s decision shall be in
writing. In addition to the Commercial Arbitration Rules of the AAA and
unless otherwise agreed to by the parties, the following rules shall
apply:

 

(a)    Each party shall be entitled to discovery
exclusively by the following means: (i) requests for admission, (ii) requests
for production of documents, (iii) up to 15 written interrogatories (with
any subpart to be counted as a separate interrogatory), and (iv) depositions
of no more than six individuals.

 

(b)    Unless the arbitrator finds that delay is
reasonably justified or as otherwise agreed to by the parties, all discovery
shall be completed, and the arbitration hearing shall commence within five
months after the appointment of the arbitrator.

 

(c)    Unless the arbitrator finds that delay is
reasonably justified, the hearing will be completed, and an award rendered
within 30 days of commencement of
the hearing. The arbitrator’s authority shall include the ability to render
equitable types of relief and, in such event, any aforesaid court may enter
an order enjoining and/or compelling such actions or relief ordered or as found
by the arbitrator. The arbitrator also shall make a determination regarding
which party’s legal position in any such controversy or claim is the more
substantially correct (the “Prevailing Party”) and the arbitrator shall require
the other party to pay the legal and other professional fees

 

7

 

and costs incurred by the Prevailing Party in connection with such
arbitration proceeding and any necessary court action. However, notwithstanding
the foregoing, the parties expressly agree that a court of competent
jurisdiction may enter a temporary restraining order or an order enjoining
a breach of Article IV of this Agreement pending a final award or further
order by the arbitrator. Such remedy, however, shall be cumulative and
nonexclusive, and shall be in addition to any other remedy to which the parties
may be entitled.

 

5.6       Severability.
If any court of competent jurisdiction determines that any provision of this
Agreement is invalid or unenforceable, then such invalidity or unenforceability
shall have no effect on the other provisions hereof, which shall remain valid,
binding and enforceable and in full force and effect, and such invalid or
unenforceable provision shall be rewritten or construed in a manner so as to
give the maximum valid and enforceable effect to the intent of the parties
expressed herein.

 

5.7       Waiver of Breach. The waiver by either party of the breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent
breach by either party.

 

5.8       Governing Law; Construction. This Agreement and the obligations hereunder
shall be interpreted, construed and enforced in accordance with the laws of the
State of Delaware (without regard to its conflict of laws principles). Any
ambiguities in this Agreement shall not be strictly construed against the
drafter of the language, but rather shall be resolved by applying the most
reasonable interpretation under the circumstances, giving full consideration to
the intentions of the parties.

 

5.9       Counterparts. This Agreement may be executed in two
or more counterparts each of which shall be deemed an original but all of which
together shall constitute one and the same instrument, and all signatures need
not appear on any one counterpart.

 

 

[SIGNATURE PAGE FOLLOWS]

 

8

 

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

 

 

	
   

  	
   

  	
  /s/ Austin McNamara

  	
   

  
	
   

  	
  Austin McNamara

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OMP, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert F. End

  	
   

  
	
   

  	
   

  	
  Robert F. End

  	
   

  
	
   

  	
   

  	
  Director and Chairman of
  the Compensation

  
	
   

  	
   

  	
  Committee

  	
   

  

 

9

 

APPENDIX A

 

DEFINITIONS

 

Affiliate shall mean a person,
corporation, partnership, limited liability company or other entity which,
directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, OMP, Inc. and shall
include Stonington Capital 1994 Fund, L.P.

 

“Cause” shall mean any of the following: (i) Executive
has committed gross negligence, willful misconduct or any violation of law in
the performance of Executive’s duties to the Company; (ii) Executive has
taken action likely to result in material discredit to or material loss of
business, reputation or goodwill of the Company; (iii) Executive has
willfully failed to follow reasonable instructions from the Board of Directors
of the Company and has failed to cure that conduct after receiving notice from
the Board of Directors; (iv) Executive has committed a felony deemed by
the Company to be adverse to its best interests or reputation; (v) Executive
has misappropriated funds or property of the Company; (vi) Executive has
attempted to obtain a personal profit from any transaction in which the Company
has an interest, and which represents the corporate opportunity of the Company
or is adverse to the interests of the Company, unless the transaction was
approved in writing by the Company after full disclosure relating to the
transaction; or (vii) Executive has breached a material provision of this
Agreement or any other Agreement to which Executive and Company are parties or
has breached any obligation or duty owed to the Company; however, for claimed
violations under (i), (iii) and (vii) above, the Executive shall have
a period of thirty (30) days in which to present exculpatory information
concerning a claimed violation to the Board, or to cure said violation,
provided that Executive shall have only one such right to cure for each of (i),
(iii) and (vii) during the term of this Agreement.

 

“Change in Control”
shall mean the occurrence any of the following:

 

(a)           Any
institution, other than Stonington Capital Appreciation 1994 Fund, L.P. or its
Affiliates (collectively, “Stonington”), acquires greater than fifty
percent (50%) of the Company’s outstanding voting stock; or

 

(b)           Any
institution, other than Stonington, acquires greater than thirty percent (30%)
of the Company’s outstanding voting stock and Stonington does not own at least
thirty percent (30%) of the Company’s outstanding voting stock.

 

“Confidential Information” shall mean
information that is possessed by or developed for the Company and that relates
to the Company’s existing or potential business or technology, which
information is generally not known to the public and which information the
Company seeks to protect from disclosure to its existing or potential
competitors or others, including, without limitation, the following: business
plans, strategies, existing or proposed bids, costs, technical developments,
existing or proposed research projects, financial or business projections,
investments, marketing plans, negotiation strategies, training information and
materials, information generated for client engagements and information stored
or developed for use in or with computers. Confidential Information also
includes information received by the

 

 

Company from others for which the Company has an obligation to treat as
confidential, including all information obtained in connection with client
engagements.

 

“Disabled” shall mean that Executive is unable
to perform his services under this Agreement for a continuous period of
six months by reason of his physical or mental illness or incapacity. If there
is any dispute as to whether Executive is or was physically or mentally unable
to perform his duties under this Agreement, such question shall be
submitted to a licensed physician agreed to by Executive (or any legal guardian
lawfully appointed) and the Company, or, if they are unable to so agree,
appointed by the senior judge of the Orange County Circuit Court at the request
of either Executive (or such legal guardian) or the Company. Executive shall
submit to such examinations and provide such information as such physician may reasonably
request and the determination of such physician as to Executive’s physical or
mental condition shall be binding and conclusive upon Executive and the
Company.

 

“Good Reason” shall mean the termination by Executive of
this Agreement as a result of: (i) without Executive’s written consent,
the assignment to Executive of duties which are substantially inconsistent with
Executive’s position, duties, responsibilities, and status hereunder, a change
in Executive’s reporting responsibilities, titles, or office as an employee, or
a reduction in Executive’s title, duties, responsibilities; or (ii) any
breach of this Agreement by the Company as a result of the material reduction
in the rate of Executive’s Base Salary, Bonus, or any material aggregate
benefits provided to executives of the Company from time to time; provided,
however, that for claimed violations under (i) and (ii) above, the
Company shall have a period of thirty (30) days in which to cure said
violation.

 

 

EXHIBIT A – BONUS
OPPORTUNITY

 

Annual bonus equal to 100% of salary based on a number
of criteria, including but not limited to, the achievement of the Company’s
forecasted EBITDA in the financial plan approved by the Board.

 

Notwithstanding the above, in 2001, the Minimum Bonus
shall be $166,700 and in 2002, the Minimum Bonus shall be $250,000.

 

 

EXHIBIT B

 

GENERAL RELEASE

 

I, Austin McNamara, in consideration of and subject to
the performance by OMP, Inc., a Delaware company (together with its
affiliates, the “Company”), of its material obligations under the
Employment Agreement, dated September 1, 2001 (the “Agreement”), do
hereby release and forever discharge as of the date hereof the Company and all
present and former directors, officers, agents, representatives, employees,
successors and assigns of the Company and its direct or indirect owners
(collectively, the “Released Parties”) to the extent provided below.

 

1.             I
understand that any payments or benefits paid or granted to me under Sections
3.4 and 3.5 of the Agreement represent, in part, consideration for signing
this General Release and are not salary, wages or benefits to which I was
already entitled. I understand and agree that I will not receive certain of the
payments and benefits specified in Sections 3.4 and 3.5 of the Agreement
unless I execute this General Release and do not revoke this General Release
within the time period permitted hereafter or breach this General Release.

 

2.             Except
as provided in paragraph 4 below, I knowingly and voluntarily release and
forever discharge the Company and the other Released Parties from any and all
claims, controversies, actions, causes of action, cross-claims, counter-claims,
demands, debts, compensatory damages, liquidated damages, punitive or exemplary
damages, other damages, claims for costs and attorneys’ fees, or liabilities or
any nature whatsoever in law and in equity, both past and present (through the
date of this General Release) and whether known or unknown, suspected, or
claimed against the administrators or assigns, may have, which arise out
of or are connected with my employment with, or my separation from, the Company
(including, but not limited to, any allegation, claim or violation, arising
under: Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights
Act of 1991; the Age Discrimination in Employment Act of 1967, as amended
(including the Older Workers Benefit Protection Act); the Equal Pay Act of
1963, as amended; the Americans with Disabilities Act of 1990; the Family and
Medical Leave Act of 1993; the Civil Rights Act of 1866, as amended; the Worker
Adjustment Retraining and Notification Act; the Employee Retirement Income
Security Act of 1974; any applicable Executive Order Programs; the Fair Labor
Standard Act; or their state or local counterparts; or under any other federal,
state or local civil or human rights law, or under any other local, state, or
federal law, regulation or ordinance; or under any public policy, contract or tort,
or under common law; or arising under any policies, practices or procedures of
the Company; or any claim for wrongful discharge, breach of contract,
infliction of emotional distress, defamation; or any claim for costs, fees, or
other expenses, including attorneys’ fees incurred in these matters) (all of
the foregoing collectively referred to herein as the “Claims”).

 

3.             I agree
that this General Release does not waive or release any rights or claims that I
may have under the Age Discrimination in Employment Act of 1967 which
arise after the date I execute this General Release. I acknowledge and agree
that my separation from employment with the Company in compliance with the
terms of this Agreement shall not serve

 

 

as the basis for any claim or action (including, without limitation,
any claim under the Age Discrimination in Employment Act of 1967).

 

4.             I agree
that neither this General Release, nor the furnishing of the consideration for
this General Release, shall be deemed or construed at any time to be an
admission by the Company, any Released Party or myself of any improper or
unlawful conduct.

 

5.             I agree
that this General Release is confidential and agree not to disclose any
information regarding the terms of this General Release, except to my immediate
family and any tax, legal or other counsel I have consulted regarding the
meaning or effect hereof or as required by law, and I will instruct each of the
foregoing not to disclose the same to anyone. Any non-disclosure provision in
this General Release does not prohibit or restrict me (or my attorney) from
responding to nay inquiry about this General Release or its underlying facts
and circumstances by any governmental entity.

 

6.             Whenever
possible, each provision of this General Release shall be interpreted in, such
manner as to be effective and valid under applicable law, but if any provision
of this General Release is held to be invalid, illegal or unenforceable in any
respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or any other jurisdiction, but this General Release shall be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.

 

BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:

 

(a)                     I
HAVE READ IT CAREFULLY;

 

(b)                    I
UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS,
INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT
ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED;
THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;

 

(c)                     I
VOLUNTARILY CONSENT TO EVERYTHING IN IT;

 

(d)                    I
HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE
DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION I HAVE CHOSEN NOT TO DO SO
OF MY OWN VOLITION; 

 

(e)                     I
HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE
SUBSTANTIALLY IN ITS FINAL FORM ON
                               ,
                
TO CONSIDER IT AND

 

 

THE CHANGES MADE SINCE THE
                               ,
                 
VERSION OF THE RELEASE ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21
-DAY PERIOD;

 

(f)                       THE
CHANGES TO THE AGREEMENT SINCE                                ,                 
EITHER ARE NOT MATERIAL OR WERE MADE AT MY REQUEST;

 

(g)                    I
UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE
IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE
REVOCATION PERIOD HAS EXPIRED;

 

(h)                    I
HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE
OF ANY COUNSEL RETAINED TO ADVICE ME WITH RESPECT TO IT; AND

 

(i)                        I
AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED,
WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN
AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME.

 

 

	
  DATE:

  	
                                  ,
  200

  	
   

  	
   

  

 

 

OMP, INC.

 

STOCK OPTION AWARD
AGREEMENT

(Superior Value Options)

 

THIS STOCK OPTION AWARD AGREEMENT (this
“Agreement”), dated as of the 1st day of September, 2001 (the “Option
Grant Date”), is entered into by and between OMP, INC., a Delaware
corporation (the “Company”) and the Austin T. McNamara (the “Executive”),
pursuant to the Company’s 2000 Stock Option Plan, as in effect and as amended
from time to time (the “2000 Stock Plan”).

 

RECITAL:

 

WHEREAS, the Compensation Committee, acting with the
authority of the Board of Directors, has determined that it would be to the
advantage and in the best interests of the Company to grant the Option provided
for herein to the Executive as an inducement to accept the position and provide
service to the Company as its Chairman, President and Chief Executive Officer.

 

NOW,
THEREFORE, in
consideration of the mutual promises and subject to the terms and conditions
set forth herein, the parties hereto hereby covenant and agree as follows:

 

1.                 Grant of Option. The Company hereby grants to the Executive,
subject to this Agreement, an option (this “Option”) to purchase from
the Company 750,000 shares of the Company’s Common Stock (the “Option Shares”)
with 250,000 shares having a price of $1.50 per share, 250,000 shares having a
price of $2.50 per share and 250,000 shares having a price of $3.50 per share
(the “Per Share Exercise Price”). This Option is intended to qualify as an
incentive stock option within the meaning of §422 of the Internal Revenue Code
of 1986, as amended (the “Code”) with respect to as many shares as may hereafter
be permitted to qualify as incentive stock options; provided, however, that
Option Shares under this Award Agreement shall not be treated as incentive
stock options to the extent that any options granted under the 2000 Stock Plan
which vest on the same date as the Options (or earlier in a calendar year) are
treated as incentive stock options.

 

2.                 Vesting.

 

(a)                The
Option Shares shall become vested with the right to exercise the Option with
respect to the vested Option Shares on September 1, 2004, except as
provided in Section 2(b) below.

 

(b)               Upon
the occurrence of a Change-in-Control (as defined in the certain Employment
Agreement, dated as of September 1, 2001 by and between the Executive and
the Company (the “Employment Agreement”)) all Option Shares shall immediately
become vested and all Option Shares shall thereupon be exercisable by
Executive. The Company shall provide Executive with prior notice of a
forthcoming Change-in-Control so the Executive may provide the Company
notice of his intention to exercise this Option in advance of the consummation
of the Change-in-Control Transaction.

 

 

(c)                In
the event Executive shall terminate his employment with the Company for “Good
Reason” (as that term is defined in the Employment Agreement), then this Option
shall immediately vest and all Option Shares shall thereupon be exercisable by
Executive.

 

3.                 Exercise
of the Option.

 

(a)                This
Option shall become exercisable on the vesting dates and upon the occurrence of
the conditions set forth in Section 2 hereof. The Options granted by this
Agreement shall remain exercisable at any time during the period set forth in Section 5 hereof (the “Option Period”).

 

(b)               Notwithstanding
anything herein to the contrary and pursuant to § 422(d) of the Code,
the aggregate number of Option Shares that shall be treated as an incentive
stock options (“ISO”) (under this Agreement or under the 2000 Stock Plan or
under any other plan of the Corporation) with the meaning of § 422 of the
Code that are first exercisable in any one calendar year shall not exceed those
shares having a fair market value (determined on the Option Grant Date) of
$100,000 per calendar year or such larger amount as may hereafter be permitted
by applicable law. Any Option Shares, including those which may have been
identified as an ISO but which exceed such annual limit or otherwise fail to
qualify for treatment as an ISO shall not be void but shall be treated as a
nonqualified stock option (“NQSO”).

 

(c)                In
the event Executive shall terminate or have his employment terminated with the
Company for any reason other than “For Cause” as provided for in § 3.1 of
the Employment Agreement, Executive or his legal representative shall have a period
of ninety (90) days to exercise this Option with respect to those Option Shares
that are or have become fully vested on the date of the termination of his
employment.

 

(d)               In the
event Executive’s employment is terminated “For Cause” as provided in § 3.1
of the Employment Agreement, all unexercised options, vested and unvested,
shall immediately terminate.

 

(e)                The
Committee shall have the right, exercising its reasonable discretion, to grant
Executive additional time to exercise of this Option by the Executive in whole
or in part for any reasonable period of time specified by the Committee,
but in no event beyond the end of the Option Period.

 

(f)                In no
event shall this Option be exercisable for a fractional share of Common Stock
of the Company.

 

4.                 Method
of Exercise and Payment. This Option shall be exercised by the Executive by
delivery to the Secretary of the Company on any business day (the “Exercise
Date”) during the Option Period of a written notice, in the form attached
hereto as Exhibit A, specifying the number of Option Shares the
Executive then desires to purchase and the exercise price (the “Notice”).
The Notice shall be accompanied by payment and any applicable withholding
(unless other arrangements have been made for such withholding). Within a
reasonable period of time after the Exercise Date, the Company shall deliver to
the Executive certificates for the number of fully-paid

 

2

 

and non-assessable Option Shares acquired by the Executive, registered
on the books and records of the Company in the name of the Executive.

 

5.                 Expiration
of Option Period.

 

(a)                Options.
An Option specified as an ISO under this Agreement, and the Executive’s rights
granted with respect thereto, shall in all events terminate ten (10) years
after the Option Grant Date, unless terminated earlier hereunder. An Option
specified as an NQSO under this Agreement, and the Executive’s rights granted
with respect thereto, shall in all events expire ten (10) years after the
Option Grant Date hereunder, unless the time for exercise has been extended by
the Committee.

 

(b)               ISOs
to Ten Percent Shareholders. Notwithstanding the foregoing, any Option
granted hereunder that is an ISO shall terminate five (5) years after the
Option Grant Date in the event the Executive owns more than ten percent (10%)
of the total combined voting power of all classes of outstanding stock of the
Company on the Option Grant Date.

 

6.                 Nontransferability.

 

This Option shall not be
sold, transferred, pledged, assigned or otherwise alienated or hypothecated,
other than by will or the laws of descent and distribution. During the
Executive’s lifetime, this Option shall be exercisable only by the Executive or
the Executive’s legal representative. Any attempted transfer or assignment by
Executive of this Option in contravention of these provisions shall constitute
valid grounds for cancellation of this Option as determined in the sole
discretion of the Committee.

 

7.                 Adjustments Relating to Corporate Transactions.

 

(a) Reorganization.
In the event of any merger, reorganization, consolidation, recapitalization, or
other change in the corporate structure of the Company affecting the Shares,
the number and class of Shares subject to this Agreement, as well as the
Option Price, shall be equitably adjusted by the Committee, in its sole
discretion, to prevent dilution or enlargement of rights.

 

8.                 Securities Law Requirements. No Option granted under this Agreement may be
exercised unless, at the time of exercise, the shares to be issued qualify for
exemption from, or are registered pursuant to applicable federal and state
securities laws. In the event there shall not then be on file with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
an effective registration statement, including a prospectus related to the
Shares subject to the Option, the Executive shall execute and deliver to the
Company prior to receipt of any Shares under this Agreement, an Investment
Representation Statement in the form attached hereto as Exhibit B.

 

9.                 Notice of Disqualifying Disposition of ISO
Shares. If the Option herein
is an ISO, and if the Executive sells or otherwise disposes of any of the
Shares acquired pursuant to the ISO on or before the later of (i) the date
two (2) years after the Date of Grant, or (ii) the date one (1) year

 

3

 

after the date of exercise, the Executive shall immediately notify the
Company in writing of such disposition.

 

10.               No Rights as Shareholder. Neither the Executive nor any transferee of
the Option granted to the Executive herein shall have any rights as a
stockholder as a result of this Agreement prior to the actual purchase of such
Shares and issuance of stock certificates for such Shares by the Company.

 

11.               Amendment. This Agreement may also be amended only by a writing signed by
both the Company and the Executive.

 

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

 

(a)                If to the Company:

 

OMP, Inc.

310 Golden Shore

Long Beach, CA 90802

Attn: Chairman of the Compensation Committee

 

(b)               If to Executive:

 

Austin McNamara

10202 Sycamore Circle

Villa Park, CA 92861

 

13.               Governing Law. This Agreement shall be governed by and
shall be construed in accordance with the laws of the State of Delaware.

 

14.               Waiver of Breach. The waiver by either party of the breach of
any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach by either party. Any waiver by either party must be in
writing and signed by a representative who has the authority to bind such
party.

 

15.               Binding Effect: Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and to their respective transferees,
successors and permitted assigns;

 

4

 

provided, however,
that the rights under this Agreement may not be assigned except as
expressly provided herein, it being understood that the Company’s rights
hereunder may be assigned by the Company to any surviving entity in a
Change-in-Control.

 

16.               Invalidity
of any Provision. The provisions of this Agreement are severable, it being
the intention of the parties hereto that should any provision hereof be invalid
or unenforceable, such invalidity or unenforceability of any provisions shall
not effect the remaining provisions hereof, but the same shall remain in full
force and effect as if such invalid or unenforceable provision or provisions
were omitted.

 

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

 

 

[Signature
Page Follows]

 

5

 

Executed as of the date first above written.

 

	
   

  	
  OMP, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert F. End

  	
   

  
	
   

  	
   

  	
  Robert F. End

  	
   

  
	
   

  	
   

  	
  Director and Chairman of
  the Compensation

  
	
   

  	
   

  	
  Committee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Austin T. McNamara

  	
   

  
	
   

  	
  Austin T. McNamara

  	
   

  

 

6

 

EXHIBIT A

OMP, INC.

 

EXERCISE NOTICE

 

OMP, Inc.

[Address]

 

Attn:       Chairman of the
Compensation Committee

 

1.                 Exercise
of Option. Effective as of today,
                    , 200      
the undersigned (“Executive”) hereby elects to exercise his option to
purchase
                          
shares
(            ) of
the Common Stock, no par value, (the “Shares”) of OMP, INC. (the “Company”)
at a price of
$                                    
under and pursuant to the Stock Option Award Agreement dated as of September 1,
2001, (the “Award Agreement”).                          
Options exercised are Incentive Stock Options.                            
Options exercised are Non-Qualified Stock Options.

 

2.                 Delivery
of Payment/Withholding. Executive herewith delivers to the Company the full
purchase price of the Shares and any applicable withholding (unless other
arrangements have been made for such withholding), as set forth in the Award
Agreement.

 

3.                 Rights
as Stockholder. Until the issuance of the Shares (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other
rights as a stockholder shall exist due to Executive’s exercise of the Option.
The certificate evidencing the Shares shall be issued to Executive as soon as
practicable after the Option is exercised.

 

4.                 Tax
Consultation. Executive understands that Executive may suffer adverse
tax consequences as a result of Executive’s purchase or disposition of the
Shares. Executive represents that Executive has consulted with any tax
consultants Executive deems advisable in connection with the purchase or
disposition of the Shares and that Executive is not relying on the Company for
any tax advice.

 

5.                 Entire
Agreement. This Exercise Notice, the Award Agreement and the Investment
Representation Statement constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Executive with respect to the
subject matter hereof, and may not be modified adversely to the Executive’s
interest except by means of a writing signed by the Company and Executive.

 

[Signature Page Follows]

 

A-1

 

	
   

  	
   

  	
  Submitted by:

   

  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
  

  	
   

  	
  

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Accepted by:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  OMP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date Received

  
						

 

A-2

 

EXHIBIT B

 

INVESTMENT REPRESENTATION
STATEMENT

 

	
  EXECUTIVE:

  	
   

  	
  Austin T. McNamara

  
	
   

  	
   

  	
  (“Executive”)

  
	
   

  	
   

  	
   

  
	
  COMPANY:

  	
   

  	
  OMP, Inc. 

  
	
   

  	
   

  	
  (the “Company”)

  
	
   

  	
   

  	
   

  
	
  SECURITY:

  	
   

  	
  The Company’s Common
  Stock, Par Value $0.001 (the “Securities”)

  
	
   

  	
   

  	
   

  
	
  AMOUNT:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DATE:

  	
   

  	
   

  

 

In connection with the purchase of the above-listed
Securities, the undersigned Executive represents to the Company the following:

 

(a)                Executive
is aware of the Company’s business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Securities. Executive is acquiring these
Securities for investment for Executive’s own account only and not with a view
to, or for resale in connection with, any “distribution” thereof within the
meaning of the Securities Act of 1933, as amended (the “Securities Act”).

 

(b)               Executive
acknowledges and understands that the Securities constitute “restricted
securities” under the Securities Act and have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of Executive’s
investment intent as expressed herein. In this connection, Executive
understands that, in the view of the Securities and Exchange Commission, the
statutory basis for such exemption may be unavailable if Executive’s
representation was predicated solely upon a present intention to hold these
Securities for the minimum capital gains period specified under tax statutes,
for a deferred sale, for or until an increase or decrease in the market price
of the Securities, or for a period of one year or any other fixed period in the
future. Executive further understands that the Securities must be held
indefinitely unless they are subsequently registered under the Securities Act
or an exemption from such registration is available. Executive further
acknowledges and understands that the Company is under no obligation to
register the Securities. Executive understands that the certificate evidencing
the Securities will be imprinted with a legend which prohibits the transfer of
the Securities unless they are registered or such registration is not required
in the opinion of counsel satisfactory to the Company, and any other legend
required under applicable state securities laws.

 

(c)                Executive
is familiar with the provisions of Rule 701 and Rule 144, each
promulgated under the Securities Act, which, in substance, permit limited
public resale of

 

B-1

 

“restricted securities” acquired, directly or indirectly from the
issuer thereof, in a non-public offering subject to the satisfaction of certain
conditions. Rule 701 provides that if the issuer qualifies under Rule 701
at the time of the grant of the Option to the Executive, the exercise will be
exempt from registration under the Securities Act. In the event the Company
becomes subject to the reporting requirements of §§ 13 or 15(d) of
the Securities Exchange Act of 1934, ninety (90) days thereafter (or such
longer period as any market stand-off agreement may require) the
Securities exempt under Rule 701 may be resold, subject to the
satisfaction of certain of the conditions specified by Rule 144,
including: (1) the resale being made through a broker in an unsolicited “broker’s
transaction” or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934); and, in the case of an affiliate,
(2) the availability of certain public information about the Company, (3) the
amount of Securities being sold during any three month period not exceeding the
limitations specified in Rule 144(e), and (4) the timely filing of a Form 144,
if applicable.

 

In the event that the Company does not qualify under Rule 701
at the time of grant of the Option, then the Securities may be resold in
certain limited circumstances subject to the provisions of Rule 144, which
requires the resale to occur not less than one year after the later of the date
the Securities were sold by the Company or the date the Securities were sold by
an affiliate of the Company, within the meaning of Rule 144; and, in the
case of acquisition of the Securities by an affiliate, or by a non-affiliate
who subsequently holds the Securities less than two years, the satisfaction of
the conditions set forth in sections (1), (2), (3) and (4) of the
paragraph immediately above.

 

(d)               Executive
further understands that in the event all of the applicable requirements of Rule 701
or 144 are not satisfied, registration under the Securities Act, compliance
with Regulation A, or some other registration exemption will be required; and
that, notwithstanding the fact that Rules 144 and 701 arc not exclusive,
the Staff of the Securities and Exchange Commission has expressed its opinion
that persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rules 144 or 701 will
have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their
own risk. Executive understands that no assurances can be given that any such
other registration exemption will be available in such event.

 

 

	
   

  	
  Signature of Executive:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  

 

B-2

 

OMP, INC.

 

STOCK OPTION AWARD AGREEMENT

(Incentive Stock Options/Nonqualified Stock Options)

 

THIS STOCK
OPTION AWARD AGREEMENT
(this “Agreement”), dated as of the 1st day of September, 2001 (the “Option
Grant Date”), is entered into by and between OMP, INC., a Delaware
corporation (the “Company”) and the Austin T. McNamara (the “Executive”),
pursuant to the Company’s 2000 Stock Option Plan, as in effect and as amended
from time to time (the “2000 Stock Plan”).

 

RECITAL:

 

WHEREAS, the Compensation Committee, acting with the
authority of the Board of Directors, has determined that it would be to the
advantage and in the best interests of the Company to grant the Option provided
for herein to the Executive as an inducement to accept the position and provide
service to the Company as its Chairman, President and Chief Executive Officer.

 

NOW,
THEREFORE, in
consideration of the mutual promises and subject to the terms and conditions
set forth herein, the parties hereto hereby covenant and agree as follows:

 

1.                 Grant of Option. The Company hereby grants to the Executive,
subject to this Agreement, an option (this “Option”) to purchase from
the Company at a price of $1.00 per share (the “Per Share Exercise Price”)
750,000 shares of the Company’s Common Stock (the “Option Shares”). This Option
is intended to qualify as an incentive stock option within the meaning of § 422
of the Internal Revenue Code of 1986, as amended (the “Code”) with
respect to 400,000 shares (or such greater number as may hereafter be
permitted to qualify as incentive stock options) and as a nonqualified stock
option with respect to the remaining 350,000 shares.

 

2.                 Vesting. The Option Shares shall become vested with the right to exercise the
Option with respect to the vested Option Shares as follows:

 

	
  (a)

  	
  Vesting Dates

  	
   

  	
  Cumulative
  Number of Option Shares Vested

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  September 1, 2001

  	
   

  	
  187,500

  	
   

  
	
   

  	
  September 1, 2002

  	
   

  	
  375,000

  	
   

  
	
   

  	
  September 1, 2003

  	
   

  	
  526,500

  	
   

  
	
   

  	
  September 1, 2004

  	
   

  	
  750,000

  	
   

  

 

(b)               Upon the occurrence of a Change-in-Control (as
defined in the certain Employment Agreement, dated as of September 1, 2001
by and between the Executive and the Company (the “Employment Agreement”)) all
Option Shares shall immediately become vested and all Option Shares shall
thereupon be exercisable by Executive. The Company shall provide Executive with
prior notice of a forthcoming Change-in-Control so the Executive may provide
the Company notice of his intention to exercise this Option in advance of the
consummation of the Change-in-Control Transaction.

 

 

(c)                In
the event Executive shall terminate his employment with the Company for “Good
Reason” (as that term is defined in the Employment Agreement), then this Option
shall immediately vest and all Option Shares shall thereupon be exercisable by
Executive.

 

3.                 Exercise of the Option.

 

(a)                This Option shall become exercisable on the
vesting dates and upon the occurrence of the conditions set forth in Section 2
hereof. The Options granted by this Agreement shall remain exercisable at any
time during the period set forth in Section 5 hereof (the “Option
Period”).

 

(b)               Notwithstanding anything herein to the
contrary and pursuant to § 422(d) of the Code, the aggregate number
of Option Shares that shall be treated as an incentive stock options (“ISO”)
with the meaning of § 422 of the Code that are first exercisable in any
one calendar year shall not exceed those shares having a fair market value
(determined on the Option Grant Date) of $100,000 per calendar year, or such
larger amount as may hereafter be permitted by applicable law. Any Option
Shares, including those which may have been identified as an ISO but which
exceed such annual limit or otherwise fail to qualify for treatment as an ISO
shall not be void but shall be treated as a nonqualified stock option (“NQSO”).

 

(c)                In the event Executive shall terminate or have
his employment terminated with the Company for any reason other than “For Cause”
as provided for in § 3.1 of the Employment Agreement, Executive or his
legal representative shall have a period of ninety (90) days to exercise this
Option with respect to those Option Shares that are or have become fully vested
on the date of the termination of his employment.

 

(d)               In the event Executive’s employment is
terminated “For Cause” as provided in § 3.1 of the Employment Agreement,
all unexercised options, vested and unvested, shall immediately terminate.

 

(e)                The Committee shall have the right, exercising
its reasonable discretion, to grant Executive additional time to exercise of
this Option by the Executive in whole or in part for any reasonable period
of time specified by the Committee, but in no event beyond the end of the
Option Period.

 

(f)                In no event shall this Option be exercisable
for a fractional share of Common Stock of the Company.

 

4.                 Method of Exercise and Payment. This Option shall be exercised by the Executive
by delivery to the Secretary of the Company on any business day (the “Exercise
Date”) during the Option Period of a written notice, in the form attached
hereto as Exhibit A, specifying the number of Option Shares the
Executive then desires to purchase (the “Notice”). The Notice shall be
accompanied by payment and any applicable withholding (unless other
arrangements have been made for such withholding). Within a reasonable period
of time after the Exercise Date, the Company shall deliver to the Executive
certificates for the number of fully-paid and non-assessable

 

2

 

Option Shares acquired by the Executive,
registered on the books and records of the Company in the name of the
Executive.

 

5.                 Expiration of Option Period.

 

(a)                Options. An Option specified as an ISO under this Agreement, and the Executive’s
rights granted with respect thereto, shall in all events terminate ten (10) years
after the Option Grant Date, unless terminate earlier hereunder. An Option
specified as an NQSO under this Agreement, and the Executive’s rights granted
with respect thereto, shall in all events expire ten (10) years after the
Option Grant Date hereunder, unless the time for exercise has been extended by
the Committee.

 

(b)               ISOs to Ten Percent Shareholders. Notwithstanding the foregoing, any Option
granted hereunder that is an ISO shall terminate five (5) years after the
Option Grant Date in the event the Executive owns more than ten percent (10%)
of the total combined voting power of all classes of outstanding stock of the
Company on the Option Grant Date.

 

6.                 Nontransferability.

 

This Option shall not be
sold, transferred, pledged, assigned or otherwise alienated or hypothecated,
other than by will or the laws of descent and distribution. During the
Executive’s lifetime, this Option shall be exercisable only by the Executive or
the Executive’s legal representative. Any attempted transfer or assignment by
Executive of this Option in contravention of these provisions shall constitute
valid grounds for cancellation of this Option as determined in the sole
discretion of the Committee.

 

7.                 Adjustments Relating to Corporate Transactions.

 

(a)                Reorganization. In the event of any merger, reorganization,
consolidation, recapitalization, or other change in the corporate structure of
the Company affecting the Shares, the number and class of Shares subject
to this Agreement, as well as the Option Price, shall be equitably adjusted by
the Committee, in its sole discretion, to prevent dilution or enlargement of
rights.

 

8.                 Securities Law Requirements. No Option granted under this Agreement may be
exercised unless, at the time of exercise, the shares to be issued qualify for
exemption from, or are registered pursuant to applicable federal and state
securities laws. In the event there shall not then be on file with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, an effective registration statement, including a prospectus related to
the Shares subject to the Option, the Executive shall execute and deliver to
the Company prior to receipt of any Shares under this Agreement, an Investment
Representation Statement in the form attached hereto as Exhibit B.

 

9.                 Notice of Disqualifying Disposition of ISO
Shares. If the Option herein
is an ISO, and if the Executive sells or otherwise disposes of any of the
Shares acquired pursuant to the ISO on or before the later of (i) the date
two (2) years after the Date of Grant, or (ii) the date one (1) year

 

3

 

after the date of exercise, the Executive shall immediately notify the
Company in writing of such disposition.

 

10.               No
Rights as Shareholder. Neither the Executive nor any transferee of the
Option granted to the Executive herein shall have any rights as a stockholder
as a result of this Agreement prior to the actual purchase of such Shares and
issuance of stock certificates for such Shares by the Company.

 

11.               Amendment.
This Agreement may also be amended only by a writing signed by both the
Company and the Executive.

 

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

 

(a)                If to
the Company:

 

OMP, Inc.

310 Golden Shore

Long Beach, CA 90802

Attn: Chairman of the Compensation Committee

 

(b)               If to
Executive:

 

Austin McNamara

10202 Sycamore Circle

Villa Park, CA 92861

 

13.               Governing
Law. This Agreement shall be governed by and shall be construed in
accordance with the laws of the State of Delaware.

 

14.               Waiver
of Breach. The waiver by either party of the breach of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach by either party. Any waiver by either party must be in writing and
signed by a representative who has the authority to bind such party.

 

15.               Binding
Effect; Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and to their respective transferees, successors
and permitted assigns;

 

4

 

provided, however, that the rights under this
Agreement may not be assigned except as expressly provided herein, it
being understood that the Company’s rights hereunder may be assigned by
the Company to any surviving entity in a Change-in-Control.

 

16.               Invalidity of any Provision. The provisions of this Agreement are
severable, it being the intention of the parties hereto that should any
provision hereof be invalid or unenforceable, such invalidity or
unenforceability of any provisions shall not effect the remaining provisions
hereof, but the same shall remain in full force and effect as if such invalid
or unenforceable provision or provisions were omitted.

 

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

 

 

[Signature Page Follows]

 

5

 

Executed as of the date first above written.

 

	
   

  	
  OMP, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert F. End

  	
   

  
	
   

  	
   

  	
  Robert F. End

  	
   

  
	
   

  	
   

  	
  Director and Chairman of
  the Compensation

  
	
   

  	
   

  	
  Committee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Austin T. McNamara

  	
   

  
	
   

  	
  Austin T. McNamara

  	
   

  

 

6

 

EXHIBIT A

OMP, INC.

 

EXERCISE NOTICE

 

OMP, Inc.

[Address]

 

Attn:       Chairman of the Compensation
Committee

 

1.                 Exercise
of Option. Effective as of today,
                  ,
200     the undersigned (“Executive”) hereby elects
to exercise his option to purchase
                
shares
(            ) of
the Common Stock, no par value, (the “Shares”) of OMP, INC. (the “Company”)
under and pursuant to the Stock Option Award Agreement dated as of September 1,
2001, (the “Award Agreement”).                        
Options exercised are Incentive Stock Options.                        
Options exercised are Non-Qualified Stock Options.

 

2.                 Delivery
of Payment/Withholding. Executive herewith delivers to the Company the full
purchase price of the Shares and any applicable withholding (unless other
arrangements have been made for such withholding), as set forth in the Award
Agreement.

 

3.                 Rights
as Stockholder. Until the issuance of the Shares (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other
rights as a stockholder shall exist due to Executive’s exercise of the Option.
The certificate evidencing the Shares shall be issued to Executive as soon as
practicable after the Option is exercised.

 

4.                 Tax
Consultation. Executive understands that Executive may suffer adverse
tax consequences as a result of Executive’s purchase or disposition of the
Shares. Executive represents that Executive has consulted with any tax
consultants Executive deems advisable in connection with the purchase or
disposition of the Shares and that Executive is not relying on the Company for
any tax advice.

 

5.                 Entire
Agreement. This Exercise Notice, the Award Agreement and the Investment
Representation Statement constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Executive with respect to the
subject matter hereof, and may not be modified adversely to the Executive’s
interest except by means of a writing signed by the Company and Executive.

 

[Signature Page Follows]

 

A-1

 

	
   

  	
   

  	
  Submitted by:

   

  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
  

  	
   

  	
  

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Accepted by:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  OMP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date Received

  
						

 

A-2

 

EXHIBIT B

 

INVESTMENT REPRESENTATION
STATEMENT

 

	
  EXECUTIVE:

  	
   

  	
  Austin T. McNamara

  
	
   

  	
   

  	
  (“Executive”)

  
	
   

  	
   

  	
   

  
	
  COMPANY:

  	
   

  	
  OMP, Inc.

  
	
   

  	
   

  	
  (the “Company”)

  
	
   

  	
   

  	
   

  
	
  SECURITY:

  	
   

  	
  The Company’s Common Stock, Par Value $0.001 (the “Securities”)

  

 

AMOUNT:

 

DATE:

 

In connection with the
purchase of the above-listed Securities, the undersigned Executive represents
to the Company the following:

 

(a)                Executive is aware of the Company’s business
affairs and financial condition and has acquired sufficient information about
the Company to reach an informed and knowledgeable decision to acquire the
Securities. Executive is acquiring these Securities for investment for
Executive’s own account only and not with a view to, or for resale in
connection with, any “distribution” thereof within the meaning of the
Securities Act of 1933, as amended (the “Securities Act”).

 

(b)               Executive acknowledges and understands that
the Securities constitute “restricted securities” under the Securities Act and
have not been registered under the Securities Act in reliance upon a specific
exemption therefrom, which exemption depends upon, among other things, the bona
fide nature of Executive’s investment intent as expressed herein. In this
connection, Executive understands that, in the view of the Securities and
Exchange Commission, the statutory basis for such exemption may be
unavailable if Executive’s representation was predicated solely upon a present
intention to hold these Securities for the minimum capital gains period
specified under tax statutes, for a deferred sale, for or until an increase or
decrease in the market price of the Securities, or for a period of one year or
any other fixed period in the future. Executive further understands that the
Securities must be held indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such registration is available.
Executive further acknowledges and understands that the Company is under no
obligation to register the Securities. Executive understands that the
certificate evidencing the Securities will be imprinted with a legend which
prohibits the transfer of the Securities unless they are registered or such
registration is not required in the opinion of counsel satisfactory to the
Company, and any other legend required under applicable state securities laws.

 

(c)                Executive is familiar with the provisions of Rule 701
and Rule 144, each promulgated under the Securities Act, which, in
substance, permit limited public resale of

 

B-1

 

“restricted securities” acquired, directly or indirectly from the
issuer thereof, in a non-public offering subject to the satisfaction of certain
conditions. Rule 701 provides that if the issuer qualifies under Rule 701
at the time of the grant of the Option to the Executive, the exercise will be
exempt from registration under the Securities Act. In the event the Company
becomes subject to the reporting requirements of §§ 13 or 15(d) of
the Securities Exchange Act of 1934, ninety (90) days thereafter (or such
longer period as any market stand-off agreement may require) the
Securities exempt under Rule 701 may be resold, subject to the
satisfaction of certain of the conditions specified by Rule 144,
including: (1) the resale being made through a broker in an unsolicited “broker’s
transaction” or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934); and, in the case of an
affiliate, (2) the availability of certain public information about the
Company, (3) the amount of Securities being sold during any three month
period not exceeding the limitations specified in Rule 144(e), and (4) the
timely filing of a Form 144, if applicable.

 

In the event that the Company does not qualify under Rule 701
at the time of grant of the Option, then the Securities may be resold in
certain limited circumstances subject to the provisions of Rule 144, which
requires the resale to occur not less than one year after the later of the date
the Securities were sold by the Company or the date the Securities were sold by
an affiliate of the Company, within the meaning of Rule 144; and, in the
case of acquisition of the Securities by an affiliate, or by a non-affiliate
who subsequently holds the Securities less than two years, the satisfaction of
the conditions set forth in sections (1), (2), (3) and (4) of the
paragraph immediately above.

 

(d)               Executive
further understands that in the event all of the applicable requirements of Rule 701
or 144 are not satisfied, registration under the Securities Act, compliance
with Regulation A, or some other registration exemption will be required; and
that, notwithstanding the fact that Rules 144 and 701 are not exclusive,
the Staff of the Securities and Exchange Commission has expressed its opinion
that persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rules 144 or 701 will
have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their
own risk. Executive understands that no assurances can be given that any such
other registration exemption will be available in such event.

 

 

	
   

  	
  Signature of Executive:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  

 

B-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}]]