Amendment and Addendum to Know-How and Trademark License Agreement
Exhibit 10.48
The confidential portions of this exhibit have been
filed separately with the Securities and Exchange Commission pursuant to a
confidential treatment request in accordance with Rule 24b-2 of the Securities
and Exchange Act of 1934, as amended. REDACTED PORTIONS OF THIS EXHIBIT
ARE MARKED BY AN [##].
Amendment
and Addendum
to
This
Amendment and Addendum to know-how and trademark license Agreement (the
“Amendment”)
is entered into as of December 4, 2008 (the “Amendment
Date”) by and between, on the one hand, OMP,
Inc., a Delaware corporation (“OMP”);
and, on the other hand, Rohto
Pharmaceutical Co., LTD., a Japanese company having its principal place
of business at ▇-▇-▇, ▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇, ▇▇▇▇▇ (“Rohto”).
All capitalized terms used but not otherwise defined herein shall have the meanings assigned under the Know-How and Trademark License
Agreement between OMP and Rohto dated as of September 13, 2002 (the “Original
Agreement” and, collectively with, and as amended by, this Amendment, the
“Agreement”).
Whereas,
pursuant to Section 14.6 of the Original Agreement, OMP and
Rohto may amend or modify the Original Agreement by written instrument executed
by both parties;
Whereas,
OMP and Rohto wish to set forth the terms and conditions applicable to
additional licenses and joint development projects between the parties;
and
Whereas,
OMP and Rohto desire to amend the Original Agreement in certain other respects
as it relates to ongoing communications, expansion of the Territory, marketing
plans and to extension of the term of the Original Agreement.
Now,
Therefore, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. Amendment
To Defined Terms.
(a) “Term” as defined in Section
11.1 shall be amended to read: “…this Agreement shall continue for a term of [
1* ] years from the Amendment Date and end on December 4, 2017.”
(b) “Territory” means the country
of Japan; provided, however, that the Territory may be expanded to include other
countries subject to a separate written agreement to be developed between OMP
and Rohto at a future date.
(c) “Licensed Products” shall mean:
(a) with respect to products developed by Rohto prior to the date of this
Amendment, those skin care products listed on Exhibit A-1 that conform to the
Specifications (“Prior Licensed
Rohto Products”), (b) with respect to products developed by Rohto after
the date of this Amendment, those skin products listed on Exhibit A-2 from time
to time that conform to the Specifications to be developed from time
to time (“Future Rohto
Licensed Products”), (c) with respect to products developed by OMP after
the date of this Amendment, those skin care products to be listed on Exhibit A-3
from time to time (excluding Elastin based products covered by a separate
agreement) that conform to the Specifications to be developed from time to time
(“OMP
Developed Products”); and (d) with respect to products jointly developed
by the parties from time to time after the date of this Amendment, those
skin
* Subject
to confidential treatment request
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care
products listed on Exhibit A-4 that conform to the specifications jointly
developed from time to time (“Jointly Developed
Products”).
(d) “Specifications” shall be
amended to refer to the specifications for Licensed Products set forth on
Exhibits ▇-▇, ▇-▇, ▇-▇ or A-4, as applicable, and as may be revised and amended
from time to time.
(e) “Channel” shall mean consumer
sales and distribution channels in which Rohto is currently engaged:
specifically the Drug Stores and Variety Stores Channel, including mail-order
and internet sales activities that support such Drug Stores and Variety Stores
Channel, as well as the Department Stores Channel, including mail-order and
internet sales activities that support such Department Stores Channel.
Nothwithstanding the foregoing, extension into the Department Store Channel (and
any other channel) and retention of rights to sell and distribute into such
channels are conditioned up completion of a joint product/channel development
plan and the achievement of the goals and objectives set forth in such plan as
more fully described in Section 2(e) below. Unless agreed to in
writing by both parties separately, the Channel shall not include physician,
medical spas, aesthetic spas and salon, or such similar outlets wherein products
are sold in combination with or in addition to, aesthetic procedures or services
and/or medical procedures.
2. Section
Amendments.
(a) Section 2.1 - License to
Know-How. The term Licensed Products in Section 2.1 of the
Original Agreement shall be amended to say “the Prior Licensed Rohto Products,
the Future Rohto Licensed Products and the Jointly Developed
Products.”
(b) Section 2.5 – License for OMP
Developed Products and Jointly Developed Products. A new
Section 2.5 shall be added to the Original Agreement and read in full as
follows:
“Subject
to the terms and conditions of this Agreement, OMP herby grants to Rohto the
exclusive, royalty-bearing license to sell and/or manufacture the OMP Developed
Products and the Jointly Developed Products on terms to be mutually agreed upon
in writing, and thereafter to market, sell and distribute such OMP Developed
Products and/or Jointly Developed Products in the Territory.”
(c) Section 4.2 – Improvements and New
Products. The term “Licensed
Products” in Section 4.2 of the Original Agreement shall be amended to read the
“Prior Licensed Rohto Products and the Future Licensed Rohto Products.”
(d) Section 6.3 – Marketing Reports/Brand
Protection. Section 6.3 of the Original Agreement shall be
amended to read in full as follows:
“Rohto
agrees to share with OMP, to the extent available and at least once a year,
pertinent written information regarding the market for Licensed Products in the
Territory and each specific Channel. The parties also agree to meet
at least twice a year at times and locations to be mutually agreed upon to
discuss Rohto’s marketing efforts and additional OMP marketing assistance that
may be necessary. These meetings and
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information
shall include written information regarding consumer research, technical
research and clinical results, pricing, share of market, out-of-stock
experience, volumes, distribution efforts (excluding any Rohto trade secrets),
development plans for shared messaging, product promotion and co-marketing
efforts, and additional training opportunities all of which are designed to
position Obagi as the leading, premium, brand of scientifically-based, skin care
products.
In
addition, the parties agree that it is in their best interest to avoid brand
confusion in the Japanese marketplace. Consequently, OMP and Rohto
agree to coordinate and protect the “Obagi” brand image to avoid market
confusion. In this regard, OMP will meet with all Japanese OMP
partners on at least a quarterly basis to collaborate on branding, messaging and
imaging.”
(e) Section 6.5 – Joint Product and
Channel Development Opportunities. A new Section 6.5 shall be
added to the Original Agreement and read in full as follows:
“The
parties agree to expeditiously work together to develop and target to produce a
mutually agreeable initial strategic plan within one hundred and eighty (180)
days following execution of this Agreement. The plan will focus on
the successful positioning of the Obagi brand to become the leading, premium,
scientifically-based, skin care products in Japan. The key elements
the plan should include timelines related to one or more of the following, not
all of which may be pursued: (i) new product schedule, (ii) joint product
development opportunities and (iii) new channel penetration strategies. Such
plan will include, among other things, comprehensive product development and
marketing plans, including sales volume expectations, pricing strategies,
image/brand enhancement up-market and a reasonable time frame for achieving and
evaluating success. The plan will also identify additional resources
necessary to effectively market and sell the Obagi brand products into new
domestic market segments.”
(f) Article 8. Article
8 of the Original Agreement shall be retitled “Compensation for use of
Trademarks, Licensed Products and Jointly Developed Products.”
(g) Section 8.1 – Royalty
Rates. Section 8.1 of the Original Agreement shall be retitled
“Royalty Rates” and shall be amended to read in full as follows:
“In
consideration for the licenses and rights granted hereunder:
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(a)
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Rohto
shall pay to OMP a royalty equal to [ 2* ] of Net Sales of Prior Licensed
Rohto Products manufactured, sold or distributed by Rohto and its
Affiliates for the three (3) year period from September 13. 2002 through
September 12, 2005. Thereafter, such royalty amount shall
decrease by [ 3* ] per year for nine consecutive years, until the royalty
payable to OMP reaches [ 4* ] of Net Sales of the Prior Licensed Rohto
Products, at which time the royalty shall no longer
decrease;
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(b)
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Rohto
shall pay to OMP a royalty equal to the then applicable royalty rate
subject to Section (g) (a) above of Net Sales of Future Rohto
Licensed Products manufactured, sold or distributed by Rohto
and its Affiliates.
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* Subject to confidential treatment request
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(c)
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Rohto
shall pay to OMP a royalty equal to a minimum of [ 5* ] of Net Sales of
OMP Developed Products manufactured, and/or sold or distributed by Rohto
and its Affiliates for the first year, (12 month period) from the date
Rohto begins the sale or distribution of such
products. Thereafter, such royalty amount shall decrease by [
6* ] per year until the royalty payable to OMP reaches [ 7* ] of Net Sales
of the OMP Developed Products, at which time the royalty shall no longer
decrease;
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(d)
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Rohto
shall pay to OMP a royalty equal to an amount negotiated in good faith
between the parties for all Jointly Developed
Products;
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(e)
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OMP
shall pay to Rohto a royalty equal to a minimum of [ 8* ] of Net Sales of
Rohto Licensed Products manufactured, and/or sold or distributed by OMP
and its Affiliates for the first year, (12 month period) from the date OMP
begins the sale or distribution of such products. Thereafter,
such royalty amount shall decrease by [ 9* ] per year until the royalty
payable to Rohto reaches [ 10* ] of Net Sales of the Rohto Developed
Products, at which time the royalty shall no longer decrease;
and
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(f)
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The
remainder of Section 8.1 shall be deleted in its
entirety.
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(h) Section 14.4 –
Notices. The notice provision as it applies to OMP shall be
amended to delete “▇▇▇▇▇▇ ▇▇▇▇▇.”
3. Miscellaneous. Except as specifically
amended by this Amendment, the terms and conditions of the Original Agreement
shall remain in full force and effect without amendment or
alteration. Notwithstanding the foregoing, to the extent the terms of
this Amendment shall make the plain language of the meaning of other Sections in
the Original Agreement illogical, such sections shall be amended to incorporate
and/or replace the definitions in the Original Agreement with the appropriate
definitions in this Amendment . This Amendment may be executed in
counterparts, each of which shall be deemed an original document, and all of
which, together with this writing, shall be deemed one instrument.
* Subject to confidential treatment request
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In Witness
Whereof, the parties hereto have executed this Amendment in duplicate
originals by their duly authorized officers or representatives.
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OMP,
Inc.
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Rohto
Pharmaceutical Co., LTD.
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By:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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By:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇
▇▇▇▇▇▇▇,
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▇▇▇▇▇
▇▇▇▇▇▇,
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President
& Chief Executive Officer
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President
& Chief Executive Officer
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EXHIBIT
A-1
Prior Licensed Rohto
Products and Specifications
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6
EXHIBIT
A-2
Future Licensed Rohto
Products and Specifications
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7
EXHIBIT
A-3
OMP Developed Products and
Specifications
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8
EXHIBIT
A-4
Jointly Developed Products
and Specifications
9