EXHIBIT 10.9
NSHK
NSJ
AMENDED AND RESTATED
WHOLESALE DISTRIBUTION AGREEMENT
TABLE OF CONTENTS
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PAGE
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ARTICLE I DEFINITIONS....................................................... 1
1.1 "Agreement"....................................................... 1
1.2 "NSI Independent Distributor"..................................... 1
1.3 "NSI"1
1.4 "Products"........................................................ 2
1.5 "Territory"....................................................... 2
1.6 "Sales Aids"...................................................... 2
1.7 "Trademarks"...................................................... 2
ARTICLE II APPOINTMENT AS EXCLUSIVE WHOLESALE DISTRIBUTOR.................... 2
2.1 Scope............................................................. 2
2.2 Sub-distributors.................................................. 2
2.3 Sales of Products and Sales Aids.................................. 2
2.4 NSHK Sales in the Territory....................................... 3
2.5 Sales Outside the Territory....................................... 3
2.6 Territory Orders and Inquiries.................................... 3
ARTICLE III GOVERNMENTAL APPROVALS AND REGISTRATIONS.......................... 4
ARTICLE IV OBLIGATIONS OF NSJ AS EXCLUSIVE WHOLESALE DISTRIBUTOR
IN THE TERRITORY.................................................. 4
4.1 Marketing and Distribution........................................ 4
4.2 NSJ Operations.................................................... 5
4.3 Pricing Information............................................... 5
4.4 NSJ Claims and Representations.................................... 6
4.5 Capitalization.................................................... 6
4.6 Customer Support.................................................. 6
4.7 Allocation of Expenses............................................ 6
ARTICLE V PURCHASE, SALE AND DELIVERY OF PRODUCTS AND SALES AIDS............ 7
5.1 Agreement to Purchase............................................. 7
5.2 Payment Due Date.................................................. 8
5.3 Passage of Title and Risk of Loss................................. 8
5.4 Inspection........................................................ 9
5.5 Inventory Obsolescence............................................ 9
ARTICLE VI
PRODUCT AND SALES AIDS PURCHASE PRICES AND TERMS OF PAYMENT.................. 10
6.1 Product Availability and Pricing.................................. 10
6.2 Payment Method.................................................... 10
ARTICLE VII OBLIGATIONS OF NSJ AS SUPPLIER OF PRODUCTS AND SALES AIDS......... 10
7.1 Product Formulation............................................... 10
7.2 Warranty.......................................................... 10
7.3 Delivery.......................................................... 11
7.4 Allocation of Expenses............................................ 11
ARTICLE VIII SALE AND MANUFACTURE OF PRODUCTS.................................. 12
8.1 Non-Competing Products............................................ 12
8.2 Competing Products................................................ 12
8.3 Discontinued Products............................................. 12
ARTICLE IX NATURE OF RELATIONSHIP............................................ 13
ARTICLE X TERM.............................................................. 13
ARTICLE XI TERMINATION....................................................... 13
ARTICLE XII EFFECT OF TERMINATION............................................. 15
ARTICLE XIII CONFIDENTIALITY................................................... 16
ARTICLE XIV INDEMNIFICATION AND INSURANCE..................................... 16
ARTICLE XV MISCELLANEOUS..................................................... 17
15.1 Assignment........................................................ 17
15.2 Notices........................................................... 18
15.3 Waiver and Delay.................................................. 18
15.4 Force Majeure..................................................... 19
15.5 Governing Law and Dispute Resolution.............................. 19
15.6 Applicability of Post-Effective Laws.............................. 20
15.7 Integrated Contract............................................... 20
15.8 Modifications and Amendments...................................... 20
15.9 Severability...................................................... 20
15.10 Counterparts and Headings......................................... 21
AMENDED AND RESTATED WHOLESALE DISTRIBUTION AGREEMENT
THIS AMENDED AND RESTATED WHOLESALE DISTRIBUTION AGREEMENT is made and
entered this ____ day of November, 1996, by and between Nu Skin Japan Company,
Limited, a corporation organized under the laws of Japan and the State of
Delaware, U.S.A., (hereinafter "NSJ") and Nu Skin Hong Kong, Inc., a corporation
organized under the laws the State of Utah, U.S.A., (hereinafter "NSHK").
Hereinafter, NSJ and NSHK collectively shall be referred to as the
"Parties."
W I T N E S S E T H
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WHEREAS, NSI (as hereinafter defined) is engaged in the design, production
and marketing of Products and Sales Aids (as hereinafter defined) for
distribution in international markets through a network of independent
distributors; and,
WHEREAS, NSI has authorized and appointed NSHK as its exclusive regional
distributor of Products and Sales Aids in certain countries in the Asia/Pacific
region (including the Territory (as hereinafter defined)) and desires to appoint
subdistributors in certain of such countries pursuant to Section 2.2 of its
Regional Distribution Agreement with NSI, dated as of the date hereof (the
"Regional Distribution Agreement"); and,
WHEREAS, NSJ desires, on the terms and conditions hereinafter set forth, to
act as the exclusive distributor of NSHK of Products and Sales Aids in the
Territory; and,
WHEREAS, NSHK is willing, on the terms and conditions hereinafter set
forth, to grant to NSJ the exclusive right to so distribute Products and Sales
Aids; and,
WHEREAS, the Parties entered into a Wholesale Distribution Agreement on
November 11, 1993 and an Amendment to said agreement on July 12, 1993 (the
"Prior Distribution Agreement"); and,
WHEREAS, the Parties wish to amend and restate the Prior Wholesale
Distribution Agreement as set forth herein;
NOW, THEREFORE, in consideration of the premises, the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
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For the purposes of this Agreement the following words, terms, and phrases
shall have the meaning assigned to them in this Article I, unless the context
otherwise requires or the parties otherwise agree within the terms of this
Agreement:
1.1 "AGREEMENT" shall mean this Amended and Restated Wholesale
Distribution Agreement between NSHK and NSJ (together with any exhibits and
schedules hereto), as the same may be modified, amended or supplemented from
time to time).
1.2 "NSI INDEPENDENT DISTRIBUTOR" shall mean a person or business entity
authorized by contract with NSI to distribute, as an independent contractor, the
Products and Sales Aids in accordance with the terms of such distribution
contract.
1.3 "NSI" shall mean Nu Skin International, Inc., a U.S. corporation,
duly organized and existing under the laws of the State of Utah, U.S.A.
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1.4 "PRODUCTS" shall mean those products, including without limitation,
cosmetics, nutritional products, dietary supplements, vitamins, over-the-counter
drugs, quasi-drugs, drugs and pharmaceutical products that are produced,
manufactured or purchased by NSI for sale or resale, subject to unavailability
due to local regulatory requirements in the Territory.
1.5 "TERRITORY" shall mean the country of Japan.
1.6 "SALES AIDS" shall mean materials, in whatever form, designed,
approved and produced by NSJ to assist in the marketing of the Products in the
Territory.
1.7 "TRADEMARKS" shall mean those words, symbols, devices, logos, trade
names and company names or a combination thereof used in relation to all
Products and Sales Aids covered by the existing or eventual registrations
thereof in the Territory.
ARTICLE II
APPOINTMENT AS EXCLUSIVE WHOLESALE DISTRIBUTOR
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2.1 SCOPE. NSHK hereby appoints and authorizes NSJ as NSHK's exclusive
distributor, during the term of this Agreement, for the sale and distribution of
Products and Sales Aids in the Territory, under the Products' names, logos, and
Trademarks, subject to all terms and conditions of this Agreement, and NSJ
hereby accepts such appointment and authorization.
2.2 SUB-DISTRIBUTORS. NSJ shall not, without the prior written approval
of NSHK, appoint sub-distributors or agents to promote or distribute Products or
Sales Aids inside or outside the Territory.
2.3 SALES OF PRODUCTS AND SALES AIDS.
2.3(a) NSJ agrees that any distribution of Products or Sales Aids in the
Territory shall be made only to an NSI Independent Distributor.
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2.3(b) To facilitate sales to NSI Independent Distributors, NSJ shall
have the right to access information regarding such NSI Independent
Distributors in the Territory as provided by NSI to NSHK pursuant to the
Regional Distribution Agreement.
2.4 NSHK SALES IN THE TERRITORY. NSHK agrees not to sell Products or
Sales Aids to any party within the Territory or to any party outside the
Territory for delivery within the Territory, except to NSJ pursuant to the terms
and conditions of this Agreement, unless NSHK has received the written consent
of NSJ.
2.5 SALES OUTSIDE THE TERRITORY. NSJ agrees that it will not sell
Products or Sales Aids outside the Territory. Further, NSJ shall not promote or
solicit customers for Product or Sales Aids sales outside the Territory. NSJ
shall not establish any facility outside the Territory through which orders are
solicited or in which inventories of Products or Sales Aids are stored without
NSHK's written consent.
2.6 TERRITORY ORDERS AND INQUIRIES. The Parties acknowledge that from
time to time inquiries and orders concerning the Territory will arise. If NSHK
receives any order or inquiry concerning the sale of Products or Sales Aids in
the Territory, NSHK agrees to give prompt notice of such inquiry or order to
NSJ, such notice to include the name and address of the person making the order
or inquiry as well as any other relevant details regarding such order or inquiry
that NSJ shall reasonably request. If NSJ receives any order or inquiry
concerning the sale of Products or Sales Aids outside the Territory, NSJ agrees
to give NSHK prompt notice of such inquiry or order, such notice to include the
name and address of the person making the order or inquiry, as well as any other
relevant details regarding such order or inquiry that NSHK shall reasonably
request.
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ARTICLE III
GOVERNMENTAL APPROVALS AND REGISTRATIONS
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NSJ 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 of
the Territory to enable this Agreement to become effective, to enable the
Products or Sales Aids to be sold in the Territory (except as otherwise provided
herein) or to enable any payment pursuant to the provisions of this Agreement to
be made. NSJ agrees to keep NSHK informed of the progress in obtaining all such
government approvals.
ARTICLE IV
OBLIGATIONS OF NSJ AS EXCLUSIVE WHOLESALE DISTRIBUTOR IN THE
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TERRITORY
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4.1 MARKETING AND DISTRIBUTION. NSJ shall have the following
obligations with respect to marketing and distribution of the Products and Sales
Aids:
4.1(a) To use its best efforts to further the promotion, marketing, sales
and other distribution of the Products and Sales Aids in the Territory.
4.1(b) To maintain, or cause to be maintained, an adequate and balanced
inventory of Products, Sales Aids, supplies and necessary materials to
promote, market, sell and distribute the Products and Sales Aids in each
country within the Territory.
4.1(c) To ensure that all inquiries by sub-distributors, NSI Independent
Distributors and customers, including complaints are responded to promptly.
To ensure that all orders are processed and all shipments of Products and
Sales Aids are made within the Territory in a timely fashion.
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4.1(d) To diligently investigate or cause to be investigated all leads
with potential customers referred to it by NSHK.
4.1(e) To permit NSHK to visit NSJ and its sub-distributors and to visit
NSJ's place of business and inspect its inventories, service records,
financial records and other relevant documents.
4.1(f) To maintain, cause to be maintained, or contract to maintain,
adequate personnel, distribution and laboratory facilities dedicated on a
full-time or part-time basis to the quality control and sale of Products,
in compliance with all laws, ordinances and regulations applicable within
the Territory.
4.1(g) To provide, at the request of NSHK, a business plan for the term
and in the form and detail reasonably requested by NSHK and to update such
business plan as reasonably requested by NSHK.
4.1(h) To provide, at the request of NSHK, reports of its activities and
sales respecting the Products and Sales Aids in the Territory in a form and
in such detail and for such time period as NSHK may reasonably require.
4.2 NSJ OPERATIONS. NSJ agrees to maintain, or cause to be maintained,
such facilities and other places of business within the Territory necessary to
effect the purposes and intentions of this Agreement. NSJ further agrees 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 and legal expenses, relating to such facilities.
4.3 PRICING INFORMATION. At the request of NSHK, NSJ agrees to advise
NSHK of the distribution prices of the Products or Sales Aids to be sold to NSI
Independent Distributors within the Territory.
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4.4 NSJ CLAIMS AND REPRESENTATIONS. NSJ shall not make any promises,
representations, warranties or guarantees respecting the Products, Sales Aids or
the Sales and Compensation Plan, except in accordance with those
representations, warranties or guarantees as provided by NSI with respect
thereto and in accordance and compliance with the applicable laws of the
Territory.
4.5 CAPITALIZATION. NSJ agrees to capitalize itself adequately and
maintain its operations both on a financially sound basis and in compliance with
all applicable laws, regulations or ordinances covering the operations of such a
business entity within any country in which it may conduct business.
4.6 CUSTOMER SUPPORT. NSJ agrees to cooperate with NSHK in dealing with
any NSI Independent Distributor or customer complaints concerning the Products
and the Sales Aids and to take any action requested by NSHK to solve such
complaints. NSJ also agrees to assist NSHK in arranging for any customer
warranty service required by law or required pursuant to the judgment of NSHK.
4.7 ALLOCATION OF EXPENSES.
4.7(a) IMPORT LICENSES. To the extent import licenses are required for
the importation of the Products or Sales Aids into the Territory, NSJ
hereby agrees that it will be responsible for securing and maintaining such
import licenses and payment of all costs and expenses associated therewith.
4.7(b) IMPORT EXPENSES. NSJ agrees that it will be responsible for
payment of all customs duties, excise taxes, similar governmental charges
and levies, and any other charges or expenses related to any Products or
Sales Aids imported into the Territory.
4.7(c) FREIGHT. NSJ shall be liable for all freight charges not
allocated to NSHK pursuant to Section 7.4(c) hereof.
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4.7(d) OTHER EXPENSES. In addition to the costs and expenses described
in clauses (a), (b) and (c) above, NSJ agrees that it will be responsible
for payments of the following expenses, fees and costs, related to the
development and maintenance of the Nu Skin business in the Territory: (a)
fees and expenses to incorporate operating entities; (b) fees and expenses
for obtaining business licenses and permits; (c) fees, costs and expenses
incurred in drafting and producing required company documentation, Sales
Aids, and other literature such as product catalogs as well as contracts
such as local product purchase agreements; (d) fees and costs incurred in
determining the requirements for registering Products, including
ascertaining and complying with labeling and custom\import requirements;
(e) expenses and costs related to locating and establishing office,
warehouse and other physical facilities, including build out, furnishings
and equipment, as well as negotiation and securing of necessary leases and
permits; (f) all costs and expenses related to hiring a general manager and
staff, and compliance with local labor laws and requirements; provided that
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fees, costs or expenses are not allocated NSHK.
ARTICLE V
PURCHASE, SALE AND DELIVERY OF PRODUCTS AND SALES AIDS
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5.1 AGREEMENT TO PURCHASE. NSJ shall order such quantities of Products
and Sales Aids as it deems necessary to meet its sales requirements within the
Territory.
5.1(a) Each order shall be in the form of a written and signed Purchase
Order appearing on the official letterhead of NSJ. Each Purchase order
shall be forwarded directly to NSI with a copy to be forwarded
simultaneously therewith to NSHK. NSHK shall review such Purchase Order
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for compliance with the terms of the Regional Distribution Agreement and
for reasonableness of the quantities ordered with forecasted sales of
Products by NSJ. Unless earlier waived, NSHK shall have the right, within
ten (10) days after placement of such Purchase Order, to rescind such
Purchase Order and shall notify NSJ and NSI in writing of its decision to
exercise such rescission rights prior to the expiration of such ten-day
period.
5.1(b) Each Purchase Order shall identify the Product(s) or Sales Aids to
be purchased, the country to which such Products or Sales Aids shall be
distributed to ensure shipment and receipt of Products or Sales Aids which
comply with such country's laws and regulation, the quantities thereof, and
the shipment dates therefor.
5.1(c) NSHK shall use its best efforts to cause NSI to shall accept each
Purchase Order for Products or Sales Aids placed by NSJ pursuant to this
Article and subject to:
5.1.(c).(i) The availability in NSI's current inventory of the
Product(s) or Sales Aid(s) ordered by NSJ; and,
5.1.(c).(ii) The inability of NSI to perform by reason of force
majeure as defined in Section 15.4 hereof; and,
5.2 PAYMENT DUE DATE. NSJ shall pay for each shipment of Products and
Sales Aids within sixty (60) days after the date of arrival or the date of
dispatch of a commercial shipping invoice, whichever is later, and shall make
payment for such Products and Sales Aids as provided in Section 6.2 of this
Agreement.
5.3 PASSAGE OF TITLE AND RISK OF LOSS. Title to and risk of loss for
any Product(s) or Sales Aids ordered and shipped pursuant to the terms of this
Article shall remain with NSHK until their actual delivery to NSJ or its
designed
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agent at the port designated in the Purchase Order or at some point in transit
as the parties may agree to in writing, at which time title and risk of loss
passes to NSJ. Shipment shall be made in a commercially reasonable manner in
accordance with standards applicable in the trade and industry.
5.4 INSPECTION. Within forty-five (45) days following actual receipt of
a shipment of Products or Sales Aids by NSJ, NSJ shall inspect, or cause to be
inspected, the Products and Sales Aids and shall notify NSHK and NSI in writing,
in accordance with Section 15.2, of any defects in such shipment of Products or
Sales Aids. In the event of such notification, NSHK shall make appropriate
arrangements, acceptable to NSJ, to replace any such defective Products or Sales
Aids at NSHK's sole cost and expense or, failing such replacement, shall, at the
option of NSHK, either credit the purchase price of the defective Products or
Sales Aids to NSJ's account or promptly grant NSJ a cash refund for such
purchase price. If NSHK is not notified of any defect in a shipment of Products
or Sales Aids within forty-five (45) days after actual receipt thereof by NSJ,
then NSJ shall be deemed to have waived its right to claim any defect in the
Products or Sales Aids contained in such shipment; provided that for any latent
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or other defect not reasonably discernable upon inspection of the Products or
Sales Aids under the prevailing circumstances NSJ shall have until forty-five
(45) days after discovery of such defect to exercise its rights under this
Section 5.5.
5.5 INVENTORY OBSOLESCENCE. In the event and to the extent that
Products or Sales Aids in the possession of NSJ shall, due to the expiration,
change in market conditions, or other reasons not within the control of NSJ,
become nonsaleable, NSHK agreed to credit the original purchase price of such
Products or Sales Aids to NSJ. The ultimate cost and method of disposal of any
such Products and Sales Aids shall be the reseponsibility of NSHK.
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ARTICLE VI
PRODUCT AND SALES AIDS PURCHASE PRICES AND TERMS OF PAYMENT
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6.1 PRODUCT AVAILABILITY AND PRICING. Prices to be paid by NSJ to NSHK
for Products and Sales Aids purchased hereunder shall be negotiated and
determined on an arm's length basis and be adjusted from time to time as agreed
by the Parties in writing.
6.2 PAYMENT METHOD. NSJ shall pay the commercial invoices for Products
and Sales Aids shipped under this Agreement in immediately available funds by
wire transfer to a bank or banks designated by NSHK, or by such other means of
payment agreed to by NSHK from time to time. All purchases of Products and
Sales Aids will be payable in Japanese Yen with any exchange rate risk to be
borne by NSHK. Without limiting any of NSHK's other rights and remedies
pursuant to this Agreement, amounts not paid within the time period 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
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outstanding.
ARTICLE VII
OBLIGATIONS OF NSJ AS SUPPLIER OF PRODUCTS AND SALES AIDS
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7.1 PRODUCT FORMULATION. In consultation with NSI, NSHK and NSJ agree
to cooperate to mutually determine the formulae or ingredients to be used for
Products in the Territory based on local market regulations and consumer
preferences.
7.2 WARRANTY. NSHK warrants that the Products and Sales Aids supplied
hereunder shall be merchantable under (and will comply with) the laws and
regulations of the jurisdiction in which distribution of such Product or Sales
Aid is intended; that it will deliver good title thereto and that Products and
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Sales Aids will be delivered free from any lawful security interest or other
lien or encumbrance.
7.2(a) NSHK's liability for any breach of such warranties shall not
exceed in amount the price of the Products or Sales Aids in respect of
which any breach is claimed. NSHK'S WARRANTY STATED HEREIN IS EXPRESSLY IN
LIEU OF ANY OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.
7.2(b) NSHK neither assumes nor authorizes any person or entity to assume
for it any other liability in connection with the Products or Sales Aids
supplied hereunder, and there are no oral contracts or warranties
collateral to or affecting this Agreement. NSHK shall not be liable to NSJ
or any third parties for consequential, special or incidental damages.
7.3 DELIVERY. NSHK shall promptly, in accordance with normal and
commercially reasonable delivery schedules in the trade, deliver to NSJ those
Products or Sales Aids for which NSJ places orders in accordance with Article V
hereof.
7.4 ALLOCATION OF EXPENSES.
7.4(a) EXPORT LICENSES. To the extent NSHK is required to obtain any
United States, Hong Kong or other export licenses to export the Products or
Sales Aids to the Territory, NSHK shall pay all costs and expenses
associated therewith.
7.4(b) EXPORT EXPENSES. NSHK agrees that it will be responsible for
payments of all customs duties, excise taxes and similar governmental
charges and levies related to the export of the Products or Sales Aids from
the United States of America, Hong Kong or any other jurisdiction.
7.4(c) FREIGHT. NSHK shall be liable for reasonable ocean freight and
insurance costs and expenses related to the export of the Products and
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Sales Aids from the United States, Hong Kong or any other jurisdiction and
delivery of the Products and Sales Aids to the Territory as designated in
the purchase order.
ARTICLE VIII
SALE AND MANUFACTURE OF PRODUCTS
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8.1 NON-COMPETING PRODUCTS. Nothing contained herein, however, shall
restrict or prohibit NSJ from selling, distributing, manufacturing or causing to
be manufactured products or materials which do not compete directly or
indirectly with the Products and Sales Aids, provided that such other products
do not infringe upon any patent, name, Trademark, emblem, trade name, design
right, model or other commercial or industrial property right of NSI.
8.2 COMPETING PRODUCTS. During the term of this Agreement, NSJ shall
not, and shall not authorize a third party to, manufacture, cause to be
manufactured, distribute or sell (i) any products or materials which directly or
indirectly compete with the Products or the Sales Aids or (ii) copies of the
Products, Sales Aids, or other products that might reasonably be deemed under
U.S. or foreign law to be confusingly similar to the Products or Sales Aids, in
each case without the prior written consent of NSHK.
8.3 DISCONTINUED PRODUCTS. Notwithstanding the foregoing, in the event
NSHK receives notice from NSI of the discontinuance of the sale of any Product,
NSHK shall promptly notify NSJ of such discontinuance and thereafter NSJ may
elect to manufacture or cause to be manufactured such Product; provided that, if
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such discontinued Product competes directly or indirectly with any Product, the
prior written consent of NSI shall be required. If NSJ elects to so manufacture
or cause to be manufactured such discontinued Product, NSHK shall, pursuant to
the terms of the Regional Distribution Agreement, request that NSI license the
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formula to such discontinued Product to NSJ on substantially the same terms as
set forth in the Trademark/Tradename License Agreement, dated as of the date
hereof, by and between NSI and NSJ.
ARTICLE IX
NATURE OF RELATIONSHIP
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The relationship of NSJ and NSHK shall be and at all times remain,
respectively, that of independent contractor and contracting party. 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
TERM
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Subject to Article XI hereof, this Agreement shall be for a term ending on
the earlier of December 31, 2016 or the termination of the Regional Distribution
Agreement in accordance with its terms.
ARTICLE XI
TERMINATION
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11.1 This Agreement may be terminated by either Party in the following
circumstances immediately or at any time after the occurrence of any of the
following events:
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(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 (i)
results in the entry of an order for relief or any such adjudication or
appointment or (ii) remains undismissed, undischarged or unbonded for a
period of 90 days. Events described in clauses (a) and (b) of this Section
11.1 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 voluntarily
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).
11.2 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.
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ARTICLE XII
EFFECT OF TERMINATION
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12.1 Upon termination of this Agreement, all rights and licenses herein
granted to NSJ shall cease and shall revert to NSHK and NSJ shall immediately
cease holding itself out to the public as NSHK's exclusive wholesale distributor
in the Territory or otherwise represent that it is associated in any manner with
NSHK.
12.2 Upon termination of this Agreement, NSHK may either (a) deliver, and
NSJ shall pay for, all Products and Sales Aids ordered by NSJ prior to such
termination or (b) cancel, without cost or liability, the order of such Products
or Sales Aids.
12.3 Upon termination of this Agreement, neither party shall be released
from its obligations to pay monies due or to become due to the other party or to
complete any unfulfilled obligations under this Agreement, and each party shall
immediately pay, perform and discharge all debts, obligations and liabilities
hereunder.
12.4 Upon termination of this Agreement for any reason, neither party
shall be liable for any special, indirect, incidental, punitive or consequential
damages, regarding such termination, irrespective of whether such obligations or
liabilities may be contemplated in any law applicable within the Territory and
or elsewhere, and, except as otherwise provided by applicable law, each party
hereby waives and relinquishes any rights, pursuant to law or otherwise, to any
such damages. The remedies contained herein shall be exclusive.
12.5 The provisions of Article XII, Article XIII and Article XIV, as well
as any other provisions that by their terms so provide, shall survive
termination of this Agreement and continue in full force and effect thereafter.
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ARTICLE XIII
CONFIDENTIALITY
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13.1 All trade secrets, proprietary technology, know-how or other
non-public or proprietary business or technical information owned or used by
NSHK or NSJ 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) was otherwise lawfully available to the receiving party,
or (iii) was generated independently
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by the receiving party. The provisions of this Article shall survive
termination of this Agreement.
ARTICLE XIV
INDEMNIFICATION AND INSURANCE
-----------------------------
14.1 NSHK agrees during and after the term of this Agreement to indemnify
and hold harmless NSJ from liability, loss, cost or damage, (including
reasonable attorney's fees) which NSJ may incur as a result of claims, demands
or judgments, of any kind or nature, by anyone whomsoever, arising out of (i) an
alleged or actual defect in the design, manufacture or content of, or any harm
caused by any Products or Sales Aids or the failure of any Product to comply
with all applicable regulatory requirements in the Territory; or (ii) a claim
that NSI's proprietary information infringes any patent, copyright, trade secret
or other intellectual property right of a third party; provided that NSJ
provides NSHK with prompt notice in writing of any such claim or demand and NSJ
cooperates with NSHK in the defense or settlement of any such claim or action.
14.2 At all times during and following the terms of this Agreement, NSHK
shall maintain insurance with one or more reputable insurers reasonable in
coverage and amount in direct proportion and corresponding to the business to be
conducted by NSJ pursuant to this Agreement.
14.3 NSJ shall at all times remain fully liable for the performance of
its sub-distributors and/or agents and NSJ hereby agrees to indemnify and hold
harmless NSHK from all damages, losses, cost or expenses arising in any manner
from any act or omission on the part of its sub-distributors or agents.
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ARTICLE XV
MISCELLANEOUS
-------------
15.1 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.
15.2 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 NSHK: Attn.: Regional Legal Counsel
NuSkin Hong Kong, Inc.
25th Xxxxx, Xxxxxxx Xxxxx
000 Xxxxxxxxxx Xxxx
Xxxxxxxx Xxx, Xxxx Xxxx
Facsimile No.: 000-000-0000
If to NSJ: Attn.: General Manager
Nu Skin Japan Company, Limited
Shinjuku I-Land Tower, 23rd Floor
6-5-1 Nishishinjuku, Shinjuku-ku
Tokyo, Japan, 163-13
Facsimile No.: 000-0000-0000
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.
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15.3 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.
15.4 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.
15.5 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
NSHK and NSJ within 30 days after written notice of such dispute is given by
NSHK or NSJ, as the case may be, shall be resolved through arbitration with the
Utah
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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 NSHK and NSJ. 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 NSHK and NSJ. The decision of the
arbitrator shall be final and binding upon NSHK and NSJ and may be enforced in
any court of competent jurisdiction. The expenses and costs of such arbitration
shall be divided and borne equally by NSHK and NSJ; provided, that each of NSHK
and NSJ shall pay all fees and expenses incurred by it in presenting or
defending against such claim, right or cause of action.
15.6 APPLICABILITY OF POST-EFFECTIVE LAWS. 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.
15.7 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.
15.8 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.
15.9 SEVERABILITY. To the extent that any provision of this Agreement is
(or, in the opinion of counsel mutually acceptable to both parties, would be)
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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.
15.10 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
by their respective duly authorized representatives in the United States of
America as of the day and the year first above written.
NU SKIN HONG KONG, INC. NU SKIN JAPAN COMPANY, LIMITED
BY:__________________________ BY:__________________________
XXXXX X. XXXXX XXXXXXX XXXXX
PRESIDENT AND CEO GENERAL MANAGER
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