Confidential Treatment Requested
Exhibit 10.20
CONSULTANT SERVICES AND
CONFIDENTIALITY AGREEMENT
This Consultant Services and
Confidentiality Agreement (the “Agreement”) is made and
entered into as of the 18 th day of July, 2005 (the
“Effective Date”) by and between Obagi Medical
Products, Inc., a Delaware corporation (“OMP” or
“Company”) and Jose Ramirez and JR Chem LLC
(“JR” or “Consultant”).
Recitals
WHEREAS, Consultant is being engaged
to perform certain services for Company as described in this
Agreement in exchange for the compensation set forth
herein.
WHEREAS, in performing the services,
Consultant will be involved with and have access to information and
materials of a highly sensitive nature which must be carefully
protected for Company’s success including, without
limitation, certain confidential information and trade secrets of
Company.
WHEREAS, Company and Consultant
desire to define the rights and obligations between the parties
with respect to the subject matter hereof.
NOW THEREFORE, in consideration of
the mutual covenants and agreements herein and for other good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Company and Consultant agree as
follows:
1.
Terms and Conditions of
Consultant Engagement .
(a) Term . Consultant
shall commence providing services on January 1, 2005, for a
period of five (5) years (the “Initial Term”). If
the parties mutually agree in writing, within sixty (60) days prior
to the expiration of the then-current term, the Initial Term
may be extended for up to two, one-year renewal terms (each a
“Renewal Term”).
(b) Service .
Consulting services (the “Services”) will include such
activities as product formulation, product development and
regulatory work and such other services as reasonably requested by
Company, as well as the provision of sound scientific support of
marketing claims, research related to publications or presentations
resulting from clinical studies, alternative manufacturing site
sourcing or rectification of manufacturing processes or practices
as they relate to quality and such other projects and activities as
reasonably requested by Company from time to time. The Services
may be more specifically defined in various Statements of Work
from time to time which shall become a part of this Agreement
and are hereby incorporated herein by this reference. In the event
of a conflict between the terms of this Agreement and the Statement
of Work, the Statement of Work shall control. The results of the
Services shall be referred to herein as “Work.”
Consultant agrees to do the following as part of the
Services:
(i) Consultant shall
participate in such meetings as are reasonably requested by Company
from time to time.
(ii) Consultant shall cooperate
in good faith toward the development of the requirements and
deliverables for various Company projects (“Projects”)
and related Company project plan timeline (“Projects
Plans”).
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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Confidential Treatment Requested
(iii) Consultant shall use its
commercially reasonable efforts to undertake and complete each
Project in accordance with, and substantially on the
schedule specified in, the applicable Project Plan and provide
tangible embodiments of the various deliverables as defined in the
Project Plans including, without limitation, progress reports,
formulations, methods, techniques, know-how, ideas or
inventions.
(iv) Unless otherwise provided
all deliverables under any Project are subject to acceptance by
Company using reasonable commercial judgment.
(v) Consultant shall provide
such technical support and training as Company may request
from time to time.
(c) Conflict of Interest
Prohibited . It is also understood that, during the Initial
Term and any Renewal Term(s) of this Agreement, Consultant
may not consult, work or serve in any capacity for
(1) another person or entity which intends to operate or does
operate in any business in competition with the Company
(“Competitor”)or (2) any past, current or future
customer of the Company (“Customer”) to work in a field
of work: (i) similar to the Services, Skin Healthcare, or
dermatology, aesthetic procedures, and/or plastic surgery;
(ii) related to technology similar to the Company’s
technology or (iii) that could result in disclosure of
Company’s Confidential Information. Notwithstanding the
foregoing, if OMP is offered the option to pursue an Other
Invention (as hereinafter defined) by Consultant but refuses to
obtain rights in such Other Invention in accordance with this
Agreement, then Consultant shall be free to pursue that specific
Other Invent (but not anything beyond) with such third party as it
chooses so long as: (i) such third party is not a Customer or
Competitor, and (ii) at all times Consultant strictly observes
all obligations hereunder including, without limitation,
obligations of confidentiality. Not withstanding the foregoing, it
will not be a conflict of interest for Consultant to continue to
work with any person or entity with which Consultant is currently
working.
(d) Means and Methods .
The Consultant agrees to furnish personal services as provided
herein as an independent contractor using Consultant’s own
means and methods.
(e) Compensation.
During the term of this Agreement and subject to the terms and
conditions hereof; the Company shall pay to Consultant for Services
[***]
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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(f) Consultant Responsible
for Taxes and Indemnification . Without limiting any of the
foregoing, Consultant agrees to accept exclusive liability for the
payment of taxes or contributions for unemployment insurance or old
age pensions or annuities or social security payments which are
measured by the wages, salaries or other remuneration paid to
Consultant, if any, and to reimburse and indemnify the Company for
such taxes or contributions or penalties which the Company
may be compelled to pay. The Consultant also agrees to comply
with all valid administrative regulations respecting the assumption
of liability for such taxes and contributions.
(g) Company Buy-Out
Option . Company may buy-out the Consultant’s
service obligation (the “Buy-Out Option”) for the
then-current term as follows: [***]
(h) Termination by
Death . This Agreement shall automatically terminate upon
Consultant’s death. In such event, the Company shall be
obligated to pay Consultant’s estate or beneficiaries only
the accrued but unpaid fees and expenses due as of the date of
death and any royalty obligations that continue after the
termination of the Agreement.
(i) Termination by
Notice . This Agreement is terminable by the Company, without
triggering the Buy-Out Option, effective upon thirty (30)
days’ notice to Consultant for any violation by Consultant of
any provision of this Agreement, unless Consultant is able to cure
such violation within the notice period. Subject to the Buy-Out
Option, this Agreement is terminable for convenience by the Company
at any time in its sole and absolute discretion, effective upon
thirty (30) days’ notice to Consultant. If the Company
exercises its right to terminate the Agreement, any obligation,
except for royalty obligations, it may otherwise have under
this Agreement shall cease immediately. The Consultant’s
obligations pursuant to Section 1(c) (conflict of
interest prohibition) of this Agreement shall continue, however,
beyond the termination of this Agreement for the duration of its
term. The Consultant’s obligation pursuant to Sections 2, 3,
4, 5, 9, 10, 12 and 13 of this Agreement shall continue in
perpetuity.
(j) Immediate Termination .
Company may immediately terminate this Agreement without
triggering the Buy-Out Option: (1) if Consultant is convicted
of a felony or another crime involving material harm to the
standing or reputation of the Company; (2) for
Consultant’s nonfeasance or willful misconduct in the
performance of Consultant’s duties for the Company;
(3) for conduct by Consultant which brings the Company into
public disgrace or disrepute, including, without limitation,
dishonesty and fraud; or (4) if Consultant shall have been
continuously inattentive to Consultant’s duties after written
notice of the same.
2.
Company Confidential
Information . Consultant agrees and acknowledges that
information and materials disclosed to or produced to Consultant by
Company in written, oral, magnetic, photographic, optical or other
form whether now existing or developed or created during the
period of Consultant’s employment or engagement with Company
are proprietary to Company and are highly sensitive in nature and
“Confidential Information” means any proprietary
information (including, without limit, patents, copyrights, trade
secrets, trademarks, service marks, and the like), technical data,
trade secrets, methods, techniques, know-how of Company or its
licensors and the Inventions (as hereinafter defined), including,
but not limited to, research, product
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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Confidential Treatment Requested
plans, products, services,
suppliers, employee lists and employees, customers lists and
customers, markets, software, developments, inventions, processes,
formulas, technology, designs, drawings, engineering, hardware
configuration information, manufacturing information and
procedures, marketing, finances, budgets or other business
information disclosed either directly or indirectly. All materials
or information provided by Company to Consultant that Company deems
to be confidential shall be clearly marked
“Confidential” in writing by Company. Confidential
Information does not include information which: (i) is known
to Consultant at the time of disclosure to Consultant by Company as
evidenced by Consultant’s written records, (ii) has
become publicly known and made generally available through no
wrongful act of Consultant, or (iii) has been rightfully
received by Consultant from a third party who is authorized to make
such disclosure.
3.
Consultant Obligations As To
Confidential Information . During Consultant’s engagement by Company,
Consultant will have access to the Confidential Information and
will occupy a position of trust and confidence regarding
Company’s affairs and business. Consultant agrees to take the
following steps to preserve the confidential and proprietary nature
of the Confidential Information:
(a) Non-Disclosure .
During and at all times after Consultant’s engagement with
Company, except to the extent specifically provided in this
Agreement, Consultant shall: (i) not use, disclose or
otherwise permit any person or entity access to any of the
Confidential Information or any notes, compilations, analyses,
studies, interpretations or any other documents or other embodiment
prepared by Consultant that is comprised of or includes any portion
of the Confidential Information (“Notes”);
(ii) only use the Confidential Information for the benefit of
the Company and not for any other person or entity whatsoever;
(iii) not copy or reproduce any Confidential Information
without the express prior written consent of the Company;
(iv) not use the Confidential Information to compete with or
cause detriment to the Company; (v) not, either directly or
indirectly, or through a third party, copy or use the Confidential
Information, or a derivative thereof, to create any product that is
functionally, visually, or otherwise substantially similar to a
work or product or products of the Company, or to create a
derivative thereof; (vi) not, either directly or indirectly,
or through a third party, reverse engineer, any of the Confidential
Information, (vii) not remove any copyright or proprietary
rights notice attached to or included in any Confidential
Information, and reproduce on each copy of the Confidential
Information, or part thereof, the same proprietary notices or
legends which appear on the original copy of the Confidential
Information provided hereunder; and (viii) not disclose the
existence of or any provisions of this Agreement Consultant
understands that the Confidential Information is and shall remain
the property of Company and that Consultant is not allowed to sell,
license or otherwise exploit any products or services which embody
in whole or in part any Confidential Information.
(b) Prevent Disclosure
. Consultant will take all reasonable precautions to prevent
disclosure of the Confidential Information to unauthorized persons
or entities. Consultant shall immediately notify Company of any
information which comes to its attention which might indicate that
there has been a loss of confidentiality of the Confidential
Information. In such event, Consultant shall take all reasonable
steps within Consultant’s power to limit the scope of such
loss of confidentiality.
(c) Abide by
Company’s Restrictions . Consultant will treat as
confidential and proprietary any third party information in
accordance with Company’s reasonable instructions to
Consultant.
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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Confidential Treatment Requested
(d) Return All
Materials . Upon termination of Consultant’s engagement
with Company for any reason whatsoever, or at any time Company
may so request, Consultant will deliver to Company any and all
materials embodying any Confidential Information, including,
without limitation, any documentation, records, listings, designs,
Notes, notebooks, data, flowcharts, sketches, drawings, memoranda,
models, accounts, reference materials, samples, machine-readable
media and equipment and similar repositories of Confidential
Information which in any way relate to the Confidential Information
including, without limitation, all copies, summaries, records,
descriptions, modifications, drawings or adaptations of such
materials, which Consultant may then possess or have under its
control. Concurrently with the return of the aforementioned
proprietary materials to Company, Consultant shall deliver to
Company a certificate of Consultant certifying that all such
materials have been returned to Company. All covenants and
agreements of Consultant herein shall survive the return of such
materials. Consultant further agrees that upon termination of this
Agreement, Consultant shall not retain any document, data or other
material of any description containing any Confidential Information
or proprietary materials of Company.
(e) No Solicitation by
Consultant . During the period of Consultant’s engagement
and for twelve (12) months after such engagement is terminated,
Consultant will not directly or indirectly solicit any of
Company’s employees for employment or engagement with a
person or entity involved in marketing products or services
competitive with Company.
(f) Additional Restrictions
on the Use of Confidential Information.
(i) Restriction .
Except as specifically provided for in this Agreement, Consultant
agrees and covenants that because of the confidential and sensitive
nature of the Confidential Information and because the use of, or
even the appearance of the use of, the Confidential Information in
certain circumstances may cause irreparable damage to Company
and its reputation, or to customers of Company, Consultant shall
not at any time, directly or indirectly, through any corporation or
association in any business, enterprise or employment, develop,
apply, invent, or use the Confidential Information, or otherwise
derive from the Confidential Information a corresponding work,
technology or product of any kind, including, without limitation, a
corresponding work product or technology that is in any way similar
to or competitive in the marketplace.
(ii) Scope . The
parties agree that the marketplace for the Company’s products
and technology and the geographic scope of Company’s use of
the Confidential Information, products, and Services are and shall
be worldwide and therefore the covenants restricting
Consultant’s activities as provided in
Section 3(f)(i) shall apply to all cities, counties and
countries in which Company is doing business worldwide.
(iii) Judicial
Modification . The parties agree and stipulate that the
agreements and covenants contained in the preceding Sections
3(f)(i) and 3(f)(ii) are fair and reasonable in light of
all of the facts and circumstances of the relationship between the
parties; however, the parties are aware that in certain
circumstances courts have refused to enforce certain restrictions
of this type. Therefore, in furtherance of and not in derogation of
the provision of Sections 3(f)(i) and 3(f)(ii), the parties
agree that in the event a court should decline to enforce the
provision of Section 3(f)(ii) or 3(f)(ii), then that
Section or Sections shall be deemed to be modified to restrict
Consultant’s competition with Company to the maximum extent,
in both time and geography, which the court shall find enforceable;
however, in no event shall the provision of the
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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Confidential Treatment Requested
preceding Section be deemed to
be more restrictive to Consultant than those already contained in
this Section 3(f).
(iv) Equitable Relief .
Consultant’s obligations contained in this
Section 3(f) are of a special and unique character which
gives them a peculiar value to Company, and Company cannot be
reasonably or adequately compensated in damages in an action at law
in the event Consultant breaches such obligations. Consultant
therefore expressly agrees that, in addition to any other rights or
remedies Company may possess, Company shall be entitled to
injunction or other equitable relief in the form of
preliminary and permanent injunctions, without bond or other
security unless required by law, in the event of any actual or
threatened breach of such obligations by Consultant.
4.
Ideas And
Inventions . Consultant agrees to promptly disclo
