Exclusive Manufacturing & Marketing Agreement

EXCLUSIVE MANUFACTURING & MARKETING AGREEMENT


The Parties, Thane International, Inc. ("THANE"), a Delaware corporation with offices located in La Quinta, California, USA, and Optimum Health Technologies, Inc., ("OWNER"), a California corporation, with offices located in Rocklin, CA, enter into this Agreement with an "EFFECTIVE DATE" of May 23, 2001, with reference to the following facts.


RECITALS


Rick Jones is the owner and developer of a patented (US 6,102,875) massage, acupressure and magnetic therapy device known as "Magnassager(R)" and Optimum Health Technologies, Inc. is the owner of the registered trademark Magnassager(R)("PRODUCT"). OWNER has produced an infomercial ("INFOMERCIAL") to better promote the product and desires to have THANE air the Infomercial and distribute and market the Product worldwide.


THANE is a leading international marketing firm, successful in production and product development and distribution and desires to air the Infomercial and exclusively market the Product worldwide.


THANE and OWNER agree to the following terms and conditions in exchange for the mutual promises and covenants set forth in this Agreement.


AGREEMENT


1. WARRANTIES & COVENANTS.


1.1 THANE. THANE warrants, promises, and covenants that it has the complete right, power and authority to enter into this Agreement.


1.2 OWNER. OWNER warrants, promises, and covenants that it: (i) has the present right, power and authority to enter into this Agreement; (ii) has the ability, power and authority to grant the rights to THANE as set forth in this Agreement; (iii) will take all steps necessary to perfect its pending patent application and will maintain and have the sole and exclusive right during the Term to defend all intellectual property rights in full force, including, but not limited to, copyrights, patents, trademarks, and any and all required governmental approvals that currently exist or may exist for the Product for the Term of this Agreement; (iv) has not and will not knowingly violate any third parties' intellectual property rights; and (v) has disclosed to THANE all agreements, arrangements and encumbrances affecting the Product and/or the Product's financial viability.


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1.3 CONFIDENTIALITY AND NON-COMPETITION. The Parties agree not to disclose confidential information regarding the other Party, their companies, their products, their operations, or the mechanical construction, technical information, design drawings, concept, ideas, sketches, wordings, media and marketing strategies, and chemical composition or formula related to the Product, or any other company information which may be deemed a trade secret, or is sensitive in nature and not otherwise known to the public (collectively "INFORMATION") or use such Information for commercial purpose or disclose such Information to any one outside of the relevant Party(s') organization without the prior written consent of the relevant Party and shall treat all such Information in strict confidence. This Agreement is exclusive and OWNER agrees not to manufacture, for itself or for third parties, the Product or any product substantially similar in competition with THANE's marketing efforts hereunder, during the Term of this Agreement.


2. THE MANUFACTURE AND COST OF THE PRODUCT


2.1 THE PRODUCT. The "PRODUCT"consists of a massage, acupressure and magnetic therapy device known as "Magnassager(R)", a 24 page illustrated manual, along with Product packaging ("BASIC UNIT"). The Product also consists of "ADDITIONAL PRODUCTS"as a defined below.


2.2 ADDITIONAL PRODUCTS. OWNER and THANE may also develop additional related products, and upon mutual agreement, THANE may market these additional product(s), individually or in varying product configurations in its sole discretion along with the Product pursuant to the terms herein. Should THANE determine not to market an OWNER developed product, OWNER is free to market its product without regard to this Agreement.


2.3 MANUFACTURE/PRODUCT QUALITY/PURCHASE. Upon "Roll-out" as defined herein, THANE will have the sole responsibility to control all manufacturing aspects of the Product and shall be responsible for determining and maintaining standards of product quality for the manufacture of the Product. OWNER shall have the right to review and approve the manufacturing quality of the Product from time to time. During the test period prior to "Roll-out", THANE shall purchase the Product from OWNER [******] .


2.4 PRODUCT LIABILITY INSURANCE. The Party responsible for manufacturing the Product, shall maintain, in full force, comprehensive and general liability insurance including product liability insurance customarily maintained by manufacturers with a policy limit of not less than one million dollars per occurrence and two million dollars in the aggregate, with the other Party named as an additional insured.


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******* Confidential Treatment Requested 3.0 PRODUCTION.


3.1 INFOMERCIAL. OWNER has produced an Infomercial. OWNER warrants that all claims made in the Infomercial shall have appropriate substantiation as required by governmental agencies. OWNER warrants that it has or shall pay all production and any other costs related to the production of the Infomercial, including any and all talent royalties unless agree in writing otherwise. Upon execution of this Agreement, OWNER shall provide THANE with a textless unmixed master and a mixed Beta master with graphics and text and all testimonial release forms or other licensing contracts, any and all existing claims substantiation as required by governmental agencies.


3.2 THANE MATERIALS. THANE will have the sole discretion to determine if it will produce print advertisements, collateral materials, and/or tweak the Infomercial ("THANE MATERIALS"). OWNER shall provide collaboration in the production of Thane Materials by providing upon request all existing Infomercial footage and all existing print, art work and studies that OWNER may own or control for the collateral support materials for the Product. OWNER will have the right, ability and responsibility to give its written app ...