SERVICE AGREEMENT

This service agreement (the “Agreement”) dated July 1, 2008 (the “Effective Date”) by and between VENTIV COMMERCIAL SERVICES, LLC, a New Jersey limited liability company (“Ventiv”) and OBAGI MEDICAL PRODUCTS INC. (OMP), a corporation formed pursuant to the laws of the state of California (“Client”).  Ventiv and Client may each be referred to herein as a “Party” and collectively as the “Parties”.

and state statutes, laws, ordinances, rules and regulations of any governmental or regulatory authority, including (but not limited to) the HHS Office of Inspector General (“OIG”) Compliance Program Guidance for Pharmaceutical Manufacturers, the PhRMA Code on Interactions with Healthcare Professionals, the Accreditation Council for Continuing Medical Education requirements for continuing medical education, the American Medical Association Ethical Guidelines on Gifts to Physicians from Industry, the Federal Food, Drug and Cosmetic Act (“FDCA”), the Medicare/Medicaid anti-kickback statute, the Prescription Drug Marketing Act (“PDMA”), the Health Insurance Portability and Accountability Act, and similar state laws, rules and regulations (collectively, “Applicable Law”).

action required or suggested by the Food and Drug Administration (“FDA”), including but not limited to: reporting of adverse events, confirming all returned samples and, where applicable, notifying the FDA, and all supplemental communications with respect to any of the above.

(i)           Ventiv shall further provide sample management and sample accountability services for certain of Client’s sales representatives (collectively, with the Ventiv Sales Representatives, the “Sales Representatives” and each Ventiv or Client sales representative individually, a “Sales Representative”).  The fees for such services are set forth on Exhibit A attached hereto.

2.     The Product; Right to Sell; Market - Client’s Product is SoluCLENZ Rx Gel   (Benzoyl Peroxide, 5%) (the “Product”).  As of the Effective Date, Client represents and warrants that the Product trademarks are owned by or licensed to Client, and that the Product is either owned by Client and/or that Client has all lawful authority necessary to market and sell the Product.  This Agreement does not constitute a grant to Ventiv of any property right or interest in the Products or the trademarks owned by or licensed to Client and/or any other intellectual property rights which Client owns now or in the future.  Ventiv recognizes the validity of and the title to all of Client’s owned or licensed trademarks, trade names and trade dress in any country in connection with the Products, whether registered or not.  Client represents to Ventiv that neither the trademarks, trade names or trade dress referenced above, nor the promotion of the Products by Ventiv, infringe on any intellectual property or product marketing rights of any other person.

(a)           Ventiv shall be responsible for training members of the Project Team concerning: compliance with Applicable Law, sales force automation training, expense management and training concerning fleet policies, Ventiv’s sample management policies and procedures , Ventiv human resource policies, procedures and administration and other applicable Ventiv internal human resource and general compliance policies and procedures.   Ventiv shall further provide Client’s sales representatives with PDMA and Office of Inspector General compliance training.

(b)           Client has responsibility for training  members of the Project Team concerning selling skills, all Product specific information including Product complaint handling procedures, applicable specific Client health care compliance policies and Client customer service policies and procedures, Client’s code of conduct, orientation to Client’s business, and adverse event reporting policies and procedures.

(c)           The Parties agree to work together to mutually determine if, when, and at what cost additional training shall be provided to members of the Project Team.

(a)           Client is responsible for:

(i)           Identification of Targets.  Client will identify a current list of licensed

practitioners.  Ventiv shall validate the list of licensed practitioners provided by Client.  If revalidation of Targets by Ventiv is required due to modifications or changes made or requested by Client, Ventiv shall provide such revalidation services.  Client shall pay Ventiv the fees set forth in Exhibit A, Section III (a) for its performance of validation services,

(ii)           Establishment and maintenance of a call plan for use by the Ventiv Sales Representatives in Detailing Client’s Product (the “Call Plan”),

(iii)           Providing Ventiv with a Territory Alignment,

(iv)           Production and shipment of Product samples and Product Literature to the Ventiv Sales Representatives in accordance with   Applicable Law,

(v)           Informing Ventiv promptly of any changes which Client believes are necessary or appropriate in the Product Literature or in information used by the Ventiv Sales Representatives concerning the Product in order to be in compliance with Applicable Law,

(vi)           Responding timely to any inquiry concerning a Product from any licensed practitioner,

(vii)           Providing all training as set forth in Section 3 (b) above,

(viii)                      Taking all action required by the Food and Drug Administration (“FDA”), (including but not limited to reporting of adverse events, confirming all returned Product samples and, where applicable, notifying the FDA), and for making all supplemental communications with respect to any of the above.

(b)           Notwithstanding anything to the contrary set forth herein, the Program pursuant to which Ventiv is performing the Services is Client’s Program and as such, Client is responsible for ensuring, and Client represents and warrants, that the Program complies with Applicable Law.  Ventiv is responsible for ensuring, and further, Ventiv represents and warrants, that its implementation of the Program pursuant to which the Ventiv Sales Representatives are performing the Services shall comply with Applicable Law.

          Confidential Information means any information, unknown to the general public, which is disclosed by the Disclosing Party to the Receiving Party under this Agreement.   Confidential Information includes, without limitation, technical, trade secret, commercial and financial

information about the Disclosing Party’s (i) research or development; (ii) marketing plans or techniques, contacts or customers; (iii) organization or operations; (iv) business development plans ( i.e. , licensing, supply, acquisitions, divestitures or combined marketing); (v) products (including but not limited to Rx Advantage and Rx Law Book), licenses, trademarks, patents, other types of intellectual property or any other contractual rights or interests (including without limitation processes, procedures and business practices involving trade secrets or special know-how) and (vi) in the case of Ventiv, the names, addresses, phone numbers, e-mail addresses and work assignments of Ventiv employees, and in the case of Client, the names, addresses, phone numbers, e-mail addresses and work assignments of Client employees.  The Receiving Party shall neither use nor disclose Confidential Information of the Disclosing Party for any purposes other than those specifically allowed by this Agreement.

          Upon the expiration or termination of this Agreement, the Receiving Party shall return to the Disclosing Party or destroy all tangible forms of Confidential Information, including any and all copies and/or derivatives of Confidential Information made by the Receiving Party or its employees, as well as any writings, drawings, specifications, manuals or other printed or electronically stored material that contains, Confidential Information.   In the event that any material or media is destroyed pursuant to the previous sentence, upon written request from the Disclosing Party, an officer of the Receiving Party shall certify to the Disclosing Party in writing such destruction.   The Receiving Party shall not disclose to third parties any Confidential Information or any reports, recommendations, conclusions or other results of work under this Agreement without prior consent of an officer of the Disclosing Party.   The obligations set forth in this Section 6, including the obligations of confidentiality and non-use shall be continuing and shall survive the expiration or termination of this Agreement and will continue for a period of two (2) years from the date of expiration or termination.

          The obligations of confidentiality and non-use set forth herein shall not apply to the following: (i) Confidential Information at or after such time that it is or becomes publicly available through no act or omission of the Receiving Party; (ii) Confidential Information that is already independently known to the Receiving Party as shown by prior written records; (iii) Confidential Information at or after such time that it is disclosed to the Receiving Party on a non-confidential basis by a third party with the legal right to do so; (iv) Confidential Information required to be disclosed pursuant to judicial process, court order or administrative request, provided that the Receiving Party shall so notify the Disclosing Party sufficiently prior to disclosing such Confidential Information as to permit the Disclosing Party to seek a protective order or to otherwise limit such disclosure.

           (b)           All property, materials and documents supplied to the Receiving Party during the Term of this Agreement, including but not limited to report designs and sales training materials, shall be and remain the sole and exclusive property of the Disclosing Party.  Each Receiving Party agrees to hold all such property, materials and documents confidential in accordance with this Section 6 of the Agreement.

7.     Independent Contractors - Ventiv and its directors, officers and employees (including the Ventiv Sales Representatives) are at all times independent contractors with respect to Client.  No Ventiv Sales Representative shall be deemed to be an employee or agent of Client.

           (a)           Ventiv is solely responsible for withholding federal, state, or local income tax or other payroll tax of any kind on behalf of its employees.  Ventiv employees are not eligible for, are not entitled to, and shall not participate in any of Client’s benefit plans or programs, including but not limited to, any pension plan, welfare plan, profit sharing plan or any other “employee pension benefit plan”, or insurance plan or any other “employee welfare benefit plan” or “employee benefit plan” (as those terms are defined by the Employee Retirement Income Security Act of 1974, as amended) or any other plan, program, fringe, award, bonus, perquisite or other benefit (such as, but not limited to, vacation and holiday pay) incident to employment offered from time to time by Client.  Ventiv is responsible for the payment of all required payroll taxes, whether federal, state, or local in nature, including, but not limited to income taxes, Social Security taxes, Federal Unemployment Compensation taxes, and any other fees, charges, licenses, or similar payments required by law.

(b)             Notwithstanding Section 7(a) above, Ventiv shall not be responsible for any cost to the extent attributable to: (i) actions by Client that caused Project Team member to be reclassified as an employee of Client, (ii) discriminatory acts of Client, and (iii) any benefits payable under any employee benefit plan (as such term is defined Section 3(3) of ERISA), and any other incentive compensation, stock option, stock purchase, incentive, deferred compensation, supplemental retirement, severance and other similar fringe or employee benefit plans, programs or arrangements that may be sponsored at any time by Client or any of its affiliated entities that cause any Ventiv employee to be reclassified as an employee of Client.

(b)           Client agrees during the Term of this Agreement and for one (1) year thereafter not: (i) to provide any contact information (including name, address, phone number or e-mail address) concerning any Ventiv Sales Representative to any third party which provides or proposes to provide contract sales services to Client, or (ii) to actively assist in any other way such a third party in soliciting for employment a Ventiv Sales Representative.  Client shall pay or cause the third party to pay Ventiv [ 3*] for each Ventiv employee so employed or retained as liquidated damages for breach of this Section.  Ventiv agrees during the Term of this Agreement and for one (1) year thereafter not: (i) to provide any contact information (including name, address, phone number or e-mail address) concerning any Client sales representative to any third party contract sales service entity, or (ii) to actively assist in any other way such a third party in soliciting for employment a Client sales representative.  Ventiv shall pay or cause the third party to pay Client [ 4* ] for each Client sales representative so employed or retained as liquidated damages for breach of this Section.

(c)           If Client believes in good faith that the performance of any Ventiv Sales