NSI - NSPCT
LICENSING AND SALES AGREEMENT
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS........................................2
1.1 "Agreement"........................................2
1.2 "Bonus Payments"...................................2
1.3 "Commission Expense................................2
1.4 "Copyrights" ......................................2
1.5 "Distributor Contract".............................3
1.6 "Distributor Lists"................................3
1.7 "Fixed Commission Expense".........................3
1.8 "Independent Distributor Network"..................3
1.9 "Introductory Kit".................................3
1.10 "Know-How".........................................3
1.11 "Licensed Property"................................3
1.12 "Net Sales"........................................3
1.13 "NSI Independent Distributor"......................4
1.14 "Products".........................................4
1.15 "Proprietary Information"..........................4
1.16 "Resident NSI Independent Distributor".............5
1.17 "Sales Compensation Plan"..........................5
1.18 "Sales Aids".......................................5
1.19 "Territory".......................................5
ARTICLE II GRANT OF LICENSE AND PARTIAL ASSIGNMENT OF
OBLIGATIONS; LICENSE FEES..........................5
2.1 Grant of License...................................5
2.2 Assignment of Obligations..........................5
2.3 NSI's Interest in Licensed Property................5
2.4 Recitals of Value of Licensed Property.............6
2.5 Warranty of Title..................................6
2.6 Modifications......................................6
2.7 License Fee........................................6
ARTICLE III COMPUTATION AND PAYMENT TERMS......................6
3.1 Bonus Payments.....................................6
3.2 License Fee........................................8
3.3 Records............................................9
3.4 Payments to NSI....................................9
3.5 Payments to NSPCT..................................9
3.6 Default Rate.......................................9
ARTICLE IV CERTAIN OBLIGATIONS OF THE PARTIES UNDER
THE AGREEMENT......................................9
4.1 Certain Obligations, Rights and Duties of NSI......9
4.2 Certain Obligations, Rights and Duties of NSPCT...10
ARTICLE V INTRODUCTORY KIT SALES............................11
5.1 Agreement to Purchase Introductory Kits...........11
5.2 Pricing...........................................12
5.3 Payment Method....................................12
5.4 Quantities........................................12
5.5 Quality of Introductory Kits......................12
5.6 Merchantability...................................12
ARTICLE VI GOVERNMENTAL APPROVALS, LAWS AND REGULATIONS......12
6.1 Government Approvals..............................12
6.2 Compliance with Laws..............................13
6.3 Compliance of Licensed Property...................13
ARTICLE VII TERM AND TERMINATION...................................13
7.1 Term..................................................13
7.2 Termination...........................................14
7.3 Termination on Default................................15
7.4 Termination on Change of Control......................15
7.5 Survival of Obligations...............................15
7.6 Reversion of Rights...................................15
ARTICLE VIII INFRINGEMENT; INDEMNIFICATION...................15
ARTICLE IX NATURE OF RELATIONSHIP..........................16
ARTICLE X CONFIDENTIALITY.................................17
ARTICLE XI MAINTENANCE OF LICENSED PROPERTY; RECORDING.....18
ARTICLE XII MISCELLANEOUS...................................18
12.1 Assignment......................................18
12.2 Force Majeure...................................18
12.3 Governing Law and Dispute Resolution............19
12.4 Applicability of Post-Effective Law.............19
12.5 Waiver and Delay................................20
12.6 Notices.........................................20
12.7 Integrated Contract.............................21
12.8 Modifications and Amendments....................21
12.9 Severability....................................21
12.10 Counterparts and Headings.......................21
LICENSING AND SALES AGREEMENT
THIS LICENSING AND SALES AGREEMENT (hereinafter the "Agreement") is made
and entered into this 12th day of March, 1997, between Nu Skin International,
Inc., a corporation organized under the laws of the State of Utah, U.S.A.
(hereinafter referred to as "NSI"), and Nu Skin Personal Care (Thailand) Ltd., a
corporation organized under the laws of Thailand and the State of Delaware,
U.S.A. (hereinafter "NSPCT"). Hereinafter, NSI and NSPCT shall collectively be
referred to as the "Parties."
W I T N E S S E T H
WHEREAS, NSI is engaged in the design, production and marketing of products
and related sales aids, for multi-national distribution through a network of
independent distributors; and
WHEREAS, NSPCT desires to act as the exclusive wholesale distributor of NSI
products in Thailand, having entered a separate written Wholesale Distribution
Agreement with Nu Skin Hong Kong, Inc., the exclusive regional distributor of
such products and sales aids in the Asia-Pacific region; and
WHEREAS, NSI and NSPCT desire to implement NSI's Independent Distributor
Network (as defined below) to promote sales of products and sales aids; and
WHEREAS, NSI desires to further develop and enlarge its Independent
Distributor Network in the country of Thailand with the assistance of NSPCT, for
their mutual benefit, in accordance with the terms and conditions hereinafter
provided; and
WHEREAS, NSPCT recognizes and agrees that NSI has expended considerable
time, effort and resources to develop and maintain the Licensed Property (as
hereafter defined) and NSPCT further agrees it will derive a considerable
benefit from its use of the Licensed Property in the Territory and from NSI's
efforts and expenditures respecting the Licensed Property; and
WHEREAS, the Parties wish to enter into a Licensing and Sales Agreement as
set forth herein;
NOW THEREFORE, in consideration of the premises, the mutual promises,
covenants, and warranties hereinafter set forth and for other valuable
consideration, the sufficiency of which is hereby acknowledged, the Parties
agree as follows:
ARTICLE I
DEFINITIONS
For the purposes of this Agreement, the following words and terms shall
have the meaning assigned to them in this Article I:
1.1 "Agreement" shall mean this Licensing and Sales Agreement (together
with any exhibits and schedules hereto), as the same may be modified, amended or
supplemented from time to time.
1.2 "Bonus Payments" shall mean, for any NSI Independent Distributor, all
monetary obligations due to such Distributor accrued under the terms of the
Sales Compensation Plan and such Distributor's Distributor Contract with NSI.
1.3 "Commission Expense" shall mean all direct expenses of NSI incurred in
operating, managing, and executing the Sales Compensation Plan. These expenses
include, but are not limited to amounts paid to NSI Independent Distributors as
Bonus Payments as well as NSI's operational costs associated with the
calculation of these monthly payments.
1.4 "Copyrights" shall mean any and all protectable software, programs,
databases, source codes and applications owned by NSI or which NSI has a right
to use, license or sub-license, relating directly or indirectly to the
Independent Distributor Network, Distribution Lists or the Sales Compensation
Plan.
1.5 "Distributor Contract" shall mean, for any NSI Independent Distributor,
its contract with NSI pursuant to which NSI authorizes it to distribute NSI's
Products and Sales Aids.
1.6 "Distributor Lists" shall mean any and all individual or accumulated
name, address, identification number, sponsor name and/or similar lists of all
present or future NSI Independent Distributors expressed in any medium.
1.7 "Fixed Commission Expense" shall mean, for any period, forty-two
percent (42%) of the aggregate amount (in Baht) of Net Sales of Products by
NSPCT during such period.
1.8 "Independent Distributor Network" shall mean the network of all NSI
Independent Distributors.
1.9 "Introductory Kit" shall mean those materials purchased by an NSI
Independent Distributor upon the execution of a Distributor Contract which
explains the Sales Compensation Plan and other NSI policies, procedures and
programs, the contractual relationship with NSI and the marketing support
programs for the Territory.
1.10 "Know-How" shall mean any information, including, without limitation,
any commercial or business information, lists, marketing methods, marketing
surveys, processes, specifications, quality control reports, drawings,
photographs, or any other information owned by NSI, whether or not considered
proprietary, relating to the Independent Distributor Network, the Distributor
Lists, and the Sales Compensation Plan.
1.11 "Licensed Property" shall mean the Independent Distributor Network,
the Distributor Lists, the Sales Compensation Plan, the Copyrights, and the
associated Know-How.
1.12 "Net Sales" shall mean, for any period, the number of Products and
Sales Aids sold by NSPCT to NSI Independent Distributors during such period,
multiplied by NSPCT's then current selling price to NSI Independent Distributors
for each such Product or Sales Aids less applicable value added taxes and
returns or refunds reasonably accepted and credited by NSPCT during such period.
1.13 "NSI Independent Distributor" shall mean a person or business entity
who has entered into a Distributor Contract.
1.14 "Products" shall mean those goods sold by NSI or NSPCT which carry a
point value within the Sales Compensation Plan.
1.15 "Proprietary Information" shall mean, without limitation, all
information other than information in published form or expressly designated by
either party in writing as non-confidential, which is directly or indirectly
disclosed to the other party, regardless of the form in which it is disclosed,
relating in any way to the following property owned by the Parties or which the
Parties have been licensed to use or sub-license: (1) proprietary technical
information related to the Licensed Property and the Introductory Kit; (2)
information respecting actual or potential customers or customer contacts and
customer sales strategies, names, addresses, phone numbers, identification
numbers, database information and its organization, unique business methods; (3)
market studies, penetration data, customers, products, contracts, copyrights,
computer programs, applications, technical data, licensed technology, patents,
inventions, procedures, methods, designs, strategies, plans, liabilities,
assets, cost revenues, sales costs, production costs, raw material sources and
other market information; (4) other sales and marketing plans, programs and
strategies; (5) trade secrets, Know-How, designs and proprietary commercial and
technical information, methods, practices, procedures, processes, formulae with
respect to manufacturing, assembly, design or processing products subject to
this Agreement and any component, part or manufacture thereof; (6) profits,
organization, employees, agents, distributors, suppliers, trade marks, trade
names and services; (7) other business and commercial practices in general
relating directly or indirectly to the foregoing; and, (8) computer disks or
other records or documents, originals or copies, containing in whole or in part
any of the foregoing.
1.16 "Resident NSI Independent Distributor" shall mean any NSI Independent
Distributor whose country of residence as shown on the records of NSI is in the
Territory.
1.17 "Sales Compensation Plan" shall mean the method employed by NSI to
calculate Bonus Payments paid to the Independent Distributor Network upon the
sale of Products.
1.18 "Sales Aids" shall mean materials, in whatever form and/or design
produced to assist in the marketing of Products.
1.19 "Territory" shall mean the country of Thailand.
ARTICLE II
GRANT OF LICENSE AND PARTIAL
ASSIGNMENT OF OBLIGATIONS; LICENSE FEES
2.1 Grant of License. Subject to the terms and conditions of this
Agreement, NSI hereby grants to NSPCT an exclusive license to use the Licensed
Property in the Territory; provided that all such uses shall comply in all
material respects with the terms of this Agreement and; provided further that
NSPCT shall not have the right to grant any right, title, use or sublicense for
the Licensed Property.
2.2 Assignment of Obligations. NSI hereby transfers and assigns to NSPCT
its obligations to make Bonus Payments to Resident Independent Distributors
under their Distributor Contracts and the Sales Compensation Plan and NSPCT
hereby accepts such transfer and assignment and assumes such obligations.
2.3 NSI's Interest in Licensed Property. NSI hereby retains legal title to
the Licensed Property for all purposes, including but not limited to, the
bringing or defending of any legal action in the Territory which it deems
reasonable to protect its rights therein. NSPCT agrees to assist NSI in any
manner to protect NSI's rights in the Licensed Property which NSI may reasonably
request. NSI shall reimburse NSPCT for any third party costs incurred by NSPCT
in providing such assistance.
2.4 Recitals of Value of Licensed Property. NSPCT recognizes and agrees
that NSI has expended considerable time, effort and resources to develop,
maintain and enhance the Licensed Property. NSPCT further agrees it will derive
a considerable benefit from its use of the Licensed Property in the Territory
and from NSI's efforts and expenditures respecting the Licensed Property.
2.5 Warranty of Title. NSI hereby warrants and represents that it is the
sole and exclusive owner of the Licensed Property and that to the best of its
knowledge and information no claim exists or has been made contesting the
ownership and title of said Licensed Property.
2.6 Modifications. NSPCT shall make no modification to the Licensed
Property without the express, prior written consent of NSI.
2.7 License Fee. As compensation for the exclusive licenses granted
pursuant to the terms of this Agreement, NSPCT shall pay to NSI a license fee
equal to four percent (4%) of its Net Sales of Products, Sales Aids and other
items (exclusive of Introductory Kits and goods sold on consignment) sold to NSI
Independent Distributors (the "License Fee").
ARTICLE III
COMPUTATION AND PAYMENT TERMS
3.1 Bonus Payments. Pursuant to Section 2.2 hereof, NSPCT agrees to make
Bonus Payments to Resident Independent Distributors to which they are entitled
pursuant to their Distributor Contracts. The Parties further agree to settle the
difference between the amount of such Bonus Payments paid by NSPCT in each month
and the Fixed Commission Expense in such month. The procedures for such payment
and settlement are as follows:
3.1(a) Within eight (8) days following the close of each month, NSPCT shall
deliver to NSI, by electronic transmission or such other medium as the
Parties shall agree to from time to time, a statement of NSPCT's Net Sales
during such month (including a detail of sales to each NSI Independent
Distributor to which sales were made during such month) and of such other
items as NSI shall reasonably request from time to time (the "Detailed
Sales Report").
3.1(b) By the later of twelve (12) days after receipt of the Detailed Sales
Report or twenty (20) days after the end of such month, NSI shall deliver
to NSPCT, by electronic transmission or such other medium as the parties
shall agree to from time to time, a calculation of the Bonus Payments due
to Resident Independent Distributors under their Distributor Contracts for
such month (the "Monthly Bonus Amount"), a calculation of the Fixed
Commission Expense for such month and such other items as NSPCT shall
reasonably request from time to time (the "Bonus Statement").
3.1(c) By the later of ten (10) days after receipt of the Bonus Statement
or thirty (30) days after the end of such month, NSPCT shall pay Bonus
Payments due to the Resident Independent Distributors. Concurrently with or
promptly after such payment NSPCT shall deliver to NSI (i) if the aggregate
Monthly Bonus Amounts paid to all Resident Independent Distributors is less
than the Fixed Commission Expense for such month, payment of the deficiency
in accordance with the procedures set forth in Section 3.4 hereof, or (ii)
if the aggregate Monthly Bonus Amounts paid to all Resident Independent
Distributors exceeds the Fixed Commission Expense for such month, an
invoice to NSI for reimbursement of such excess amount. In the event NSPCT
shall have given NSI an invoice for reimbursement of excess Bonus Payments
as set forth in clause (ii) above, NSI shall pay the amount so invoiced to
NSPCT pursuant to the procedures set forth in this Section 3.1 and Section
3.5 below within 10 days after receipt thereof.
3.1(d) The Parties acknowledge that the percentage used in calculating the
Fixed Commission Expense has been set on the basis of NSI's historical
experience. The Parties agree that the percentage used in calculating the
Fixed Commission Expense shall remain consistent with actual Commission
Expense as a percentage of sales of Products to NSI Independent
Distributors, shall be negotiated and determined on an arm's length basis,
and may be adjusted from time to time as agreed by the Parties in writing
based upon an annual review thereof.
3.2 License Fee. The procedures for payment of the License Fee payable
hereunder are as follows:
3.2(a) Within 30 days following the close of each month, NSPCT shall
deliver to NSI, by electronic transmission or such other medium as the
parties shall agree to from time to time, a statement of its Net Sales
during such month in the Territory and a computation of the License Fee
payable under Section 2.7 hereof. NSPCT shall make payment of such License
Fee in accordance with Section 3.4 hereof concurrently with delivery of
such statement.
3.2(b) For purposes of computing the License Fee, Products and Sales Aids
shall be considered sold when recognized for accounting purposes as a sale
by NSPCT as per U.S. GAAP.
3.2(c) The Parties agree that the License Fee shall remain competitive
within the market and shall be negotiated and determined on an arm's length
basis and may be adjusted from time to time as agreed by the Parties in
writing. 3.3 Records. Each Party shall keep complete and accurate records
of its compliance with its obligations under this Agreement which shall be
open to inspection by authorized representatives of the other Party at any
reasonable time.
3.4 Payments to NSI. Payments made by NSPCT to NSI under this Agreement
shall be payable in Thailand Baht. Payments shall be made either directly to NSI
in immediately available funds by wire transfer to an account designated by NSI
or by such other means of payment acceptable to NSI from time to time.
3.5 Payments to NSPCT. Payments made by NSI to NSPCT under this Agreement
shall be payable in Thailand Baht. Payments shall be made either directly to
NSPCT in immediately available funds by wire transfer to an account designated
by NSPCT or by such other means of payment acceptable to NSPCT from time to
time.
3.6 Default Rate. Without limiting any of NSI's other rights and remedies
under this Agreement, amounts outstanding under the terms of this Agreement not
paid within 60 days from the date due and payable, and as set forth in the
payment provisions herein, shall bear interest at the prime interest rate as
reported in the Wall Street Journal plus two percent (2%) for the full period
outstanding.
ARTICLE IV
CERTAIN OBLIGATIONS OF THE PARTIES UNDER THE AGREEMENT
4.1 Certain Obligations, Rights and Duties of NSI. NSI agrees that, in
addition to its other obligations under this Agreement, NSI will maintain and
provide support for the Sales Compensation Plan. NSI agrees, among other things:
(1) to maintain a computer system, including hardware, software, data links,
computer peripherals, printers, etc. to adequately fulfill NSI's obligations
under the Sales Compensation Plan; (2) to provide necessary training and support
to NSPCT relating to the Resident Independent Distributors, including
information relating to training methods, motivational strategies, convention
and event planning, technical policies and procedure knowledge, etc; (3) to
receive and use NSPCT's sales information to compute the correct and appropriate
payments to the Resident Independent Distributors as set forth in Section 3.1(b)
hereof; (4) in consultation with NSPCT, to discipline NSI Independent
Distributors as it deems necessary to help insure the reputation of NSI; (5) to
maintain a record of the Distributor Contracts and provide such information to
NSPCT, as reasonably requested; and (6) to perform any other function or provide
the necessary support to comply with the terms of this Agreement and to
otherwise support and maintain the Independent Distributor Network within the
Territory.
4.2 Certain Obligations, Rights and Duties of NSPCT. In addition to its
other obligations under this Agreement NSPCT agrees, among other things: (1) to
maintain, at its sole cost and expense, such facilities and other places of
business within the Territory necessary to effect the purposes and intentions of
this Agreement and to bear all costs and expenses it incurs in the negotiation,
memorialization, execution and performance of all leases, rentals, equipment,
salaries, taxes, licenses, insurance, permits, telephone, telegraph,
promotional, advertising, travel, accounting, legal and such similar expenses,
relating to the business of NSPCT under the terms and conditions of this
Agreement, unless otherwise agreed in writing by the Parties; (2) to manage its
business affairs in such a manner that the reputation of NSI is not damaged; (3)
to sell Introductory Kits to potential NSI Independent Distributors in
accordance with all applicable laws and industry standards; (4) to collect
requests for Distributor Contracts from potential NSI Independent Distributors
and forward these contracts to NSI in a timely fashion (provided that all such
requests for Distributor Contracts shall be reviewed for acceptance or rejection
by NSI in the United States and in no instance shall NSPCT accept such requests
for Distributor Contracts,); (5) to train and lend assistance to NSI Independent
Distributors in the Territory; (6) to transmit information regarding Net Sales
to NSI Independent Distributors and such other information as NSI may reasonably
request; (7) to pay Bonus Payments to Resident NSI Independent Distributors as
set forth in Section 3.1 hereof; (8) to use its best efforts to monitor and
supervise the activities of Resident NSI Distributors; (9) to use its best
efforts to cause the enforcement of the Distributor Contracts to ensure
compliance therewith and with NSI's policies and procedures and to any action
against Resident NSI Independent Distributors for violation of the terms and
conditions of a Distributor Contract, NSI's policies and procedures, or any
other rules and regulations of NSI or NSPCT as NSI shall reasonably request; and
(10) to perform any other function or provide support as NSI shall reasonably
request to enable NSI to fully perform its obligations to NSI Independent
Distributors under the Sales Compensation Plan and their Distributor Contracts.
ARTICLE V
INTRODUCTORY KIT SALES
5.1 Agreement to Purchase Introductory Kits. The Parties acknowledge that,
pursuant to this Agreement, NSPCT is being granted an exclusive license to use
the Licensed Property, including the Independent Distributor Network, in the
Territory. NSPCT agrees to use its best efforts in supporting the development of
the Independent Distributor Network in the Territory by selling to potential NSI
Independent Distributors in the Territory Introductory Kits which NSI has either
(i) purchased from NSI, or (ii) has sourced and priced locally, or any part
thereof, subject to review, approval and oversight of NSI and in accordance with
instructions and specifications given by NSI.
5.2 Pricing. The Parties agree that the price of Introductory Kits shall be
negotiated and determined on an arm's length basis and may be adjusted from time
to time as agreed by the Parties in writing.
5.3 Payment Method. NSPCT shall pay the commercial invoices for
Introductory Kits shipped under this Agreement in the manner set forth in
Section 3.4.
5.4 Quantities. NSPCT agrees to purchase sufficient quantities of the
Introductory Kits from NSI to fill orders, in a timely fashion, received from
potential NSI Independent Distributors in the Territory.
5.5 Quality of Introductory Kits. NSI shall use its best efforts to
maintain and augment the quality, image and value of the Introductory Kits such
that Introductory Kits sold in the Territory are consistent with the quality of
those sold in the United States of America.
5.6 Merchantability. NSI warrants that Introductory Kits sold to NSPCT
pursuant to this Agreement will be merchantable and of sufficient quality for
sales within the Territory. If NSPCT determines that certain Introductory Kits
supplied under this Agreement are not merchantable, a claim for a refund of the
price paid can be made within 45 days from the day the Introductory Kits are
received in the Territory. NSI agrees to refund, or credit the account of NSPCT,
for the purchase price of such non-merchantable Introductory Kits.
ARTICLE VI
GOVERNMENTAL APPROVALS, LAWS AND REGULATIONS
6.1 Government Approvals. NSPCT agrees to obtain, or cause to be obtained,
at its sole cost and expense, any governmental approval and make, or cause to be
made, any filings or notifications required under all applicable laws,
regulations and ordinances in the Territory to enable this Agreement to become
effective or to enable any payment pursuant to the provisions of this Agreement
to be made. NSPCT agrees to keep NSI informed of its progress in obtaining all
such government approvals.
6.2 Compliance with Laws. Each party agrees to refrain from any action that
will cause the other party to be in violation of any applicable law, regulation,
or ordinance of any jurisdiction in the Territory or the United States or
elsewhere or any international convention or bilateral or multilateral treaty to
which any jurisdiction in the Territory or the United States is a signatory,
including, without limitation, the U.S. Foreign Corrupt Practices Act of 1977,
the U.S. Export Control Laws, and the U.S. Anti-Boycott laws.
6.3 Compliance of Licensed Property. NSI agrees to take, or cause to be
taken, at its sole cost and expense, all actions necessary to ensure the
compliance of the Licensed Property with applicable laws, regulations and
ordinances in the Territory (including, without limitation, direct selling
laws). NSI agrees to keep NSPCT informed of its progress in obtaining all such
government approvals.
ARTICLE VII
TERM AND TERMINATION
7.1 Term. Subject to Section 7.2 hereof, this Agreement shall be for a term
ending on December 31, 2016 provided, however, that this Agreement is subject to
renegotiation after December 31, 2001 in the event that (i) Blake M. Roney,
Nedra D. Roney, Sandie N. Tillotson, Craig Tillotson, Craig Bryson, Steven J.
Lund, Brooke B. Roney, Kirk V. Roney and Keith R. Halls (the "NSI
Stockholders"), or members of their families, or trusts or foundations
established by or for the benefit of the NSI Stockholders or members of their
families on a combined basis no longer beneficially own a majority of the voting
stock of Nu Skin Asia Pacific, Inc. ("Nu Skin Asia Pacific"), or (ii) the NSI
Stockholders, or members of their families, or trusts or foundations established
by or for the benefit of the NSI Stockholders or members of their families on a
combined basis no longer beneficially own a majority of the voting stock of NSI.
7.2 Termination. This Agreement may be terminated by either party
immediately or at any time after the occurrence of any of the following events:
(a) the other Party shall commence any case, proceeding or other action (i)
under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors,
seeking to have an order for relief entered with respect to it, or seeking
to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, compensation
or other relief with respect to it or its debts, or (ii) seeking
appointment of a receiver, trustee, custodian or other similar action; or
(b) there shall be commenced against the other Party any case, proceeding
or other action of a nature referred to in clause (a) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 90 days. Events described in clauses (a) and (b) of this Section
7.2 shall be referred to as a "Bankruptcy Event". If a Bankruptcy Event
occurs, all amounts owing under this Agreement shall become immediately due
and payable, without any notice thereof; or
(c) if the other Party causes or allows a judgment in excess of twenty-five
million dollars ($25,000,000) to be entered against it or involuntarily
allows a lien, security interest, or other encumbrance to attach to its
assets which secures an amount in excess of twenty-five million dollars
($25,000,000) to be placed upon its assets.
7.3 Termination on Default. This Agreement may be terminated by either
party, if the other party is in default in the performance of any material
obligation under this Agreement and such default has not been cured within sixty
(60) days after receipt of written notice of such default by the defaulting
party.
7.4 Termination on Change of Control. This Agreement may be terminated by
NSI if Nu Skin Asia Pacific shall no longer own or control a majority of the
voting interest in NSPCT with such termination to take effect thirty (30) days
after delivery of written notice by one party to the other of the occurrence of
a change in control and its intention to terminate this Agreement based thereon.
7.5 Survival of Obligations. The obligations of the Parties to pay any sums
which are due and payable as of the expiration or termination of this Agreement
and their obligation under Section 2.3, Article VIII and Article X hereof shall
survive the expiration or termination of this Agreement.
7.6 Reversion of Rights. Upon termination of this Agreement, all rights and
licenses herein granted to NSPCT shall immediately cease and shall revert to
NSI, and NSPCT shall cease representing to any third party that it has any right
to use, assign, convey or otherwise transfer the Licensed Property.
ARTICLE VIII
INFRINGEMENT; INDEMNIFICATION
NSI hereby represents and warrants that, as of the date hereof, there are
no infringement or misappropriation suits pending or filed or, to its knowledge,
threatened against NSI within the Territory that relate to the Licensed Property
and NSI is not presently aware of any such infringement or misappropriation. NSI
shall indemnify and hold NSPCT harmless from and against all claims, actions,
suits, proceedings, losses, liabilities, costs, damages and attorneys' fees in
respect of a third party claim alleging infringement or misappropriation by
NSPCT in respect of its use of the Licensed Property in the Territory; provided
that NSPCT shall give NSI prompt written notice of any claim, action, suit or
proceeding and without limiting the generality of Section 2.3 hereof, shall
cooperate with NSI in the defense of any such claim, action, suit or proceeding.
NSI shall have the right to select counsel in any such claim, action, suit or
proceeding. In the event that any such claim, action or proceeding is
successful, NSI shall use reasonable efforts to make such changes in the
Licensed Property to permit NSPCT to continue to make use of the Licensed
Property free and clear of all infringement and misappropriation. NSI shall give
NSI prompt written notice of any infringement or misappropriation of the
Licensed Property by any third party. NSI shall have the sole right to initiate
any and all legal proceedings against any such third party and, without limiting
the generality of Section 2.3 hereof, NSPCT shall cooperate with NSI in the
pursuit of any such proceeding. NSI shall retain any damage award obtained from
such third party. If NSI elects not to pursue any infringement, NSPCT shall have
the right to do so at its own expense and shall retain any damage award obtained
from any third party.
ARTICLE IX
NATURE OF RELATIONSHIP
The relationship of NSPCT and NSI shall be and at all times remain,
respectively, that of Licensee and Licensor. Nothing contained or implied in
this Agreement shall be construed to constitute either party as the legal
representative or agent of the other or to constitute or construe the Parties as
partners, joint venturers, co-owners or otherwise as participants in a joint or
common undertaking. Neither party is authorized to conclude any contract or
agreement or make any commitment, representation or warranty that binds the
other or otherwise act in the name of or on behalf of the other.
ARTICLE X
CONFIDENTIALITY
All Proprietary Information or other non-public or proprietary business or
technical information owned or used by NSI or NSPCT and supplied to or acquired
by the other whether in oral or documentary form (the "Confidential
Information") shall be supplied and acquired in confidence and shall be solely
for the use of the receiving party pursuant to this Agreement and such party
shall keep the Confidential Information confidential and shall not disclose the
same, at any time during the term of this Agreement or after its termination,
except to its employees, or its affiliates or its affiliates' employees for the
purposes of its business in accordance with this Agreement and except as may be
required by law; provided that if the receiving party determines that a
disclosure is required by law, the receiving party shall notify the disclosing
party in order to give the disclosing party an opportunity to seek an injunction
or otherwise attempt to keep the Confidential Information confidential. The
receiving party shall, at the request of the disclosing party, destroy or return
the Confidential Information without retaining copies if, as and when this
Agreement is terminated or expires. For purposes of this Agreement, the term
"Confidential Information" shall not include information or documents that (i)
become generally available to the public other than as a result of a disclosure
by the receiving party, (ii) were otherwise lawfully available to the receiving
party, or (iii) were generated independently by the receiving party. The
provisions of this Article shall survive termination of this Agreement.
ARTICLE XI
MAINTENANCE OF LICENSED PROPERTY; RECORDING
NSI shall use its best efforts and take all reasonable steps consistent
with its existing internal policies and procedures and with this Agreement to
maintain the Licensed Property in the Territory. In no event shall this clause
be construed to require NSI to establish or maintain a branch office, subsidiary
corporation or fixed place of business or similar permanent establishment in the
Territory. NSI, in its sole discretion, shall have the right to record this
Agreement or proof thereof, or to enter NSPCT as a registered user in the
Territory. NSPCT agrees to cooperate, as reasonably requested by NSI, in
arranging for such recordings or entries, or in bearing or canceling such
recordings or entries in the event of amendments to or termination of this
Agreement for any reason.
ARTICLE XII
MISCELLANEOUS
12.1 Assignment. This Agreement shall be binding on and inure to the
benefit of the heirs, successors, assigns and beneficiaries of the Parties;
provided that neither party may assign this Agreement or any rights or
obligations hereunder, whether by operation of law or otherwise, without the
prior written consent of the other party's authorized representative. Any such
attempted assignment, without the written consent provided herein, shall be void
and unenforceable.
12.2 Force Majeure. The Parties shall not be responsible for failure to
perform hereunder due to force majeure, which shall include, but not be limited
to: fires, floods, riots, strikes, labor disputes, freight embargoes or
transportation delays, shortage of labor, inability to secure fuel, material,
supplies, equipment or power at reasonable prices or on account of shortage
thereof, acts of God or of the public enemy, war or civil disturbances, any
existing or future laws, rules, regulations or acts of any government (including
any orders, rules or regulations issued by any official or agency or such
government) affecting a party that would delay or prohibit performance
hereunder, or any cause beyond the reasonable control of a party. If an event of
force majeure should occur, the affected party shall promptly give notice
thereof to the other party and such affected party shall use its reasonable best
efforts to cure or correct any such event of force majeure.
12.3 Governing Law and Dispute Resolution. This Agreement shall be governed
by and construed in accordance with the laws of the State of Utah, applicable to
contracts made and to be wholly performed within such State. Any dispute arising
out of this Agreement, if not resolved by mutual agreement of NSI and NSPCT
within 30 days after written notice of such dispute is given by NSPCT or NSI, as
the case may be, shall be resolved through arbitration with the Utah office and
division of the American Arbitration Association ("AAA"). If the dispute is not
resolved within such 30-day period, the Parties shall petition the AAA to
promptly appoint a competent, disinterested person to act as such arbitrator.
Within 30 days after the designation or appointment of such arbitrator, such
arbitrator shall be required to commence the arbitration proceeding in the state
of Utah at a time and place to be fixed by the arbitrator, who shall so notify
NSI and NSPCT. Such arbitration proceeding shall be conducted in accordance with
the applicable rules and procedures of the AAA, and/or as otherwise may be
agreed by NSI and NSPCT. The decision of the arbitrator shall be final and
binding upon NSI and NSPCT and may be enforced in any court of competent
jurisdiction. The expenses and costs of such arbitration shall be divided and
borne equally by NSI and NSPCT; provided, that each of NSI and NSPCT shall pay
all fees and expenses incurred by it in presenting or defending against such
claim, right or cause of action.
12.4 Applicability of Post-Effective Law. The parties agree that neither
the Vienna Convention on the International Sale of Goods nor any such similar
law, treaty or act that becomes effective during the term of this Agreement
shall be applicable to this Agreement or the transactions contemplated
hereunder.
12.5 Waiver and Delay. No waiver by either party of any breach or default
in performance by the other party, and no failure, refusal or neglect of either
party to exercise any right, power or option given to it hereunder or to insist
upon strict compliance with or performance of the other party's obligations
under this Agreement, shall constitute a waiver of the provisions of this
Agreement with respect to any subsequent breach thereof or a waiver by either
party of its right at any time thereafter to require exact and strict compliance
with the provisions thereof.
12.6 Notices. All notices, requests and other communications hereunder
shall be in writing and shall be deemed to have been duly given, if delivered by
hand, or if communicated by facsimile, cable or similar electronic means to the
facsimile number or cable identification number as previously provided by each
party to the other, at the time that receipt thereof has been confirmed by
return electronic communication or signal that the message has been received, or
if mailed, ten (10) days after dispatch by registered airmail, postage prepaid,
from any post office addressed as follows:
If to NSPCT: General Manager
Nu Skin Personal Care (Thailand) Ltd.
15th Floor Building III
SCB Park Plaza East
19 Ratchadapisek Road
Ladyao, Jatujak
Bangkok, Thailand 10900
Facsimile Number: 662-937-9939
If to NSI: General Manager
Nu Skin International, Inc.
75 West Center Street,
Provo, Utah 84601, U.S.A.
Facsimile No.: (801) 345-5999
Either party may change its facsimile number, cable identification number
or address by a notice given to the other party in the manner set forth above.
12.7 Integrated Contract. This Agreement constitutes the entire agreement
between the Parties relating to the subject matter hereof and supersedes all
prior or contemporaneous negotiations, representations, agreements and
understandings (both oral and written) of the Parties.
12.8 Modifications and Amendments. No supplement, modification or amendment
of this Agreement shall be binding unless it is in writing and executed by both
of the Parties.
12.9 Severability. To the extent that any provision of this Agreement is
(or in the opinion of counsel mutually acceptable to both Parties would be)
prohibited, judicially invalidated or otherwise rendered unenforceable in any
jurisdiction, such provision shall be deemed ineffective only to the extent of
such prohibition, invalidation or unenforceability in that jurisdiction, and
only within that jurisdiction. Any prohibited, judicially invalidated or
unenforceable provision of this Agreement will not invalidate or render
unenforceable any other provision of this Agreement, nor will such provision of
this Agreement be invalidated or rendered unenforceable in any other
jurisdiction.
12.10 Counterparts and Headings. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. All headings and captions
are inserted for convenience of reference only and shall not affect the meaning
or interpretation of any provision hereof.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
in the United States of America by their respective duly authorized
representatives as of the day and year first-above written.
NU SKIN INTERNATIONAL, INC. NU SKIN PERSONAL CARE (THAILAND) LTD.
BY: BY:
Blake M. Roney Truman Hunt
ITS: President ITS: Secretary