MANAGEMENT SERVICES AGREEMENT
between
NU SKIN INTERNATIONAL MANAGEMENT GROUP, INC.
and
NU SKIN PERSONAL CARE (THAILAND) LTD.
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS.................................................1
"Agreement".................................................1
"Consulting Personnel"......................................1
"Direct Expenses"...........................................2
"Expatriate Personnel"......................................2
"Allocable Expenses" .......................................2
"Management and Consulting Services" .......................2
"NSI" ......................................................2
ARTICLE 2 MANAGEMENT AND CONSULTING SERVICES..........................2
Services....................................................2
Performance of Services. ...................................2
Expatriate Employees........................................2
Approval of Services........................................3
ARTICLE 3 COMPENSATION OF SERVICE PROVIDER...........................3
3.1(a) Compensation for Services by Consulting Personnel....3
3.1(b) Reimbursement of Cost of Expatriate Personnel........3
Determination of Allocable Expenses. ......................3
Currency. .................................................3
Payment and Invoicing.......................................3
Due Date....................................................3
Delinquent Payments.........................................4
ARTICLE 4 PREPARATION AND SHARING OF REPORTS AND INFORMATION
Periodic Reports on Management and Consulting Services......4
Time Allocation Study.......................................4
Sharing of Information and Witnesses........................4
ARTICLE 5 NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.................5
ARTICLE 6 TERM........................................................5
ARTICLE 7 TERMINATION................................................6
ARTICLE 8 EFFECT OF TERMINATION......................................7
Cessation of Rights.........................................7
ARTICLE 9 COMPLIANCE WITH APPLICABLE LAWS.............................7
Compliance Generally........................................7
Authorizations..............................................8
Business Practices..........................................8
ARTICLE 10 GENERAL PROVISIONS..........................................8
Assignment..................................................8
Notices.....................................................8
Waiver and Delay............................................9
Force Majeure...............................................9
Governing Law and Dispute Resolution........................9
Applicability of Post-Effective Laws.......................10
Integrated Contract........................................10
Modifications and Amendments...............................10
Severability...............................................10
Counterparts and Headings..................................10
MANAGEMENT SERVICES AGREEMENT
THIS MANAGEMENT SERVICES AGREEMENT is made and entered into effective March
12, 1997 between Nu Skin International Management Group, Inc., a corporation
organized under the laws of the State of Delaware, U.S.A. (hereinafter referred
to as "NSIMG"), and Nu Skin Personal Care Ltd., a corporation organized under
the laws of Thailand and the State of Delaware, U.S.A. (hereinafter referred to
as "NSPCT"). NSIMG and NSPCT shall hereinafter be collectively referred to as
the "Parties" and each shall be individually referred to as a "Party."
W I T N E S S E T H
WHEREAS, NSIMG desires to provide Management and Consulting Services (as
hereinafter defined) to NSPCT, and NSPCT desires to obtain such Management and
Consulting Services from NSIMG;
NOW, THEREFORE, in consideration of the premises, the mutual promises and
covenants hereinafter set forth and for other good and valuable consideration,
the sufficiency of which is hereby acknowledged, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the following terms shall have the meaning
set out below:
1.1 "Agreement" shall mean this Management Services Agreement between
NSIMG and NSPCT, as the same may be modified, amended or supplemented
from time to time.
1.2 "Allocable Expenses" shall mean all expenses incurred by NSIMG in
providing Management and Consulting Services other than Direct
Expenses including without limitation, the following: rents,
utilities, telephone, equipment, recruitment, office supplies, and
other overhead expenses, certain salary costs and expenses related to
conventions, travel and accommodations at anniversary events, the
permitted use and appropriation of the names and likeness of
directors, and executive officials of NSPCT or NSIMG, telephone calls
and counseling and conferences and meetings with NSPCT managers and
NSI independent distributors. Allocable Expenses shall be calculated
in accordance with Sections 3.2 and 4.2.
1.3 "Consulting Personnel" shall mean employees of NSIMG or, with the
consent of NSPCT, such other persons or entities as NSIMG may retain,
hire, or otherwise contract with for the provision of Management and
Consulting Services on behalf of, or in conjunction with, NSIMG.
1.4 "Direct Expenses" shall mean all expenses incurred in the
provision of Management and Consulting Services for NSPCT, which
expenses are measured solely for the benefit of NSPCT, including,
without limitation, certain salary costs, benefits and business
expenses, convention expenses and travel expenses.
1.5 "Expatriate Personnel" shall mean Consulting Personnel who reside
in Thailand and are used by NSPCT for a definite or indefinite period
of time to perform Management and Consulting Services.
1.6 "Management and Consulting Services" shall mean the following
services provided by Consulting Personnel: management, legal,
financial, marketing and distribution support/training, public
relations, international expansion, human resources, strategic
planning, product development and operations administration and such
other services as the Parties may agree to from time to time.
1.7 "NSI" shall mean Nu Skin International, Inc., a corporation duly
organized and existing under the laws of the state of Utah.
ARTICLE 2
MANAGEMENT AND CONSULTING SERVICES
2.1 Services. NSIMG hereby agrees to provide Management and Consulting
Services to NSPCT as NSPCT may request from time to time, until
termination of this Agreement. NSPCT agrees to reimburse and
compensate NSIMG for Management and Consulting Services rendered
pursuant to this Agreement in accordance with the applicable
compensation and invoicing provisions hereof.
2.2 Performance of Services. Unless otherwise agreed between the
Parties, the Management and Consulting Services shall be provided
through Consulting Personnel, as requested by NSPCT.
2.3 Expatriate Employees. The Parties shall agree to the terms and
circumstances pursuant to which a Consulting Employee may be assigned
as an Expatriate Employee to work with NSPCT; provided that nothing in
this Agreement shall be interpreted to mean that NSIMG must make
available any Consulting Employee to work at NSPCT as an Expatriate
Employee.
2.4 Approval of Services. NSPCT hereby agrees that, by accepting and
paying invoices as provided in Article 3 herein, NSPCT will be deemed
to have approved the nature and extent the Management and Consulting
Services so invoiced.
ARTICLE 3
COMPENSATION OF SERVICE PROVIDER
3.1 3.1(a) Compensation for Services by Consulting Personnel. NSPCT
agrees to compensate NSIMG for Management and Consulting Services that
it provides to NSPCT (other than Expatriate Personnel) in the form of
a fee equal to the Direct Expenses plus Allocable Expenses incurred by
NSIMG for Management and Consulting Services provided to NSPCT plus
three percent (3%) of such Direct Expenses and Allocable Expenses, as
such fee may be adjusted from time to time by mutual agreement of the
Parties; provided that, unless otherwise agreed between the Parties,
Allocable Expenses shall not, for any period, exceed one and one-half
percent (1 1/2%) of NSPCT's revenues for such period.
3.1(b) Reimbursement of Cost of Expatriate Personnel. NSPCT agrees to
reimburse NSIMG for any direct costs of Expatriate Personnel incurred
by NSIMG attributable to such Expatriate Personnel seconded to NSI.
3.2 Determination of Allocable Expenses. Allocable Expenses for any
period shall be equal to the total Allocable Expenses incurred by NSI
or NSIMG's internal departments for such period multiplied by the
percentage of such Allocable Expenses allocable to NSPCT pursuant to
the then applicable time allocation study prepared pursuant to Section
4.2 hereof.
3.3 Currency. Any compensation to be paid to NSIMG for Management and
Consulting Services rendered pursuant to this Agreement shall be paid
in United States Dollars.
3.4 Payment and Invoicing. Within thirty (30) days after the end of
each month, NSIMG shall prepare and deliver an invoice to NSPCT
setting forth the fees payable hereunder for Management and Consulting
Services rendered pursuant to this Agreement during such month.
3.5 Due Date. Payments due under this Agreement shall be due and
payable within sixty (60) days after the date of dispatch of the
invoice for such payments.
3.6 Delinquent Payments. Without limiting any of Parties' other rights
and remedies under this Agreement, amounts outstanding under the terms
of this Agreement not paid within sixty (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.
Whether or not interest charges are actually levied is at the
discretion of the Party to whom payment is due and payable.
ARTICLE 4
PREPARATION AND SHARING OF REPORTS AND INFORMATION
4.1 Periodic Reports on Management and Consulting Services. NSPCT may,
upon thirty (30) days' written notice, request operations reports of
NSIMG setting forth such information regarding the Management and
Consulting Services provided under this Agreement and for such time
periods as NSPCT shall reasonably request.
4.2 Time Allocation Study. NSIMG has prepared a study accurately
reflecting the allocation of time spent by NSI's or NSIMG's internal
department and consulting personnel on the services provided to NSPCT
under this Agreement. The study shall be updated on a quarterly basis.
NSPCT may request a copy of the then applicable time allocation study
from NSIMG upon thirty (30) days' written notice.
4.3 Sharing of Information and Witnesses. At all times during the term
of this Agreement and for a period of three years thereafter, each of
the Parties shall maintain at its principal place of business full,
complete and accurate books of account and records with regard to its
activities under this Agreement. In addition to books and records,
NSIMG and NSPCT may from time to time have in their possession or
under their control (or the control of persons or entities which have
rendered services) additional books, records, contracts, instruments,
data and other information (together with the books and records
referred to in the first sentence of this Section 4.3, the
"Information") which may prove necessary or desirable to the other in
connection with the other's business. Accordingly, (i) NSIMG shall
provide to NSPCT, and NSPCT shall provide to NSIMG upon the other's
request, at all reasonable times, full and complete access to
(including access to persons with respect to, and all Information as
the other may reasonably request and require in the conduct of its
business, and (ii) NSIMG shall make available to NSPCT and NSPCT shall
make available to NSIMG, upon the other's request, such persons as may
reasonably be required to assist with any legal, administrative or
other proceedings in which NSPCT or NSIMG, as the case may be, may
from time to time be involved. The Information shall include, without
limitation, information sought for audit, accounting, claims,
litigation and tax purposes as well as for, in the case of NSPCT,
purposes of fulfilling disclosure and reporting obligations under the
United States securities laws. The Party providing Information or
making available witnesses shall be entitled to receive from the other
Party, upon the presentation of invoices therefor, payment for its
reasonable out-of-pocket expenses incurred in connection therewith
(but not the labor costs thereof), but shall not be entitled to
receive any other payment with respect thereto. Nothing in this
Agreement shall require either Party to reveal to the other any
information if to do so would violate such Party's written and
enforceable duty of confidence to a third party from whom or which
such information was obtained; under such circumstances, however, the
parties shall work together to obtain a release of such information
without violation of such duty of confidence.
ARTICLE 5
NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
All trade secrets, proprietary technology, know-how or other non-public or
proprietary business or technical information owned or used by NSIMG 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 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 by the receiving party. The provisions of
this Article shall survive termination of this Agreement.
ARTICLE 6
TERM
Subject to Article VII 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) Xxxxx X. Xxxxx,
Xxxxx X. Xxxxx, Xxxxxx X. Xxxxxxxxx, Xxxxx Xxxxxxxxx, Xxxxx Xxxxxx, Xxxxxx X.
Xxxx, Xxxxxx X. Xxxxx, Xxxx X. Xxxxx and Xxxxx X. 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.
ARTICLE 7
TERMINATION
7.1 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 as
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 7.1(a) 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).
7.2 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; or
7.3 This Agreement may be terminated by NSIMG 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 NSI
gives written notice to NSPCT of the occurrence of a change in control
and its intention to terminate this Agreement based thereon.
7.4 NSPCT may terminate any specific Management and Consulting Service
provided pursuant to this Agreement by providing written notice
thereof to NSIMG not less than sixty (60) days prior to the desired
termination date. NSIMG may discontinue providing any specific
Management and Consulting Service provided pursuant to this Agreement
by providing written notice thereof to the NSPCT not less than sixty
(60) days prior to the desired termination date; provided, however,
that NSIMG shall not deliver any such notice in respect of any service
to the extent that NSIMG continues to provide such service to any
other international affiliate of NSIMG.
ARTICLE 8
EFFECT OF TERMINATION
8.1 Cessation of Rights. Upon expiration or termination (collectively,
the "Termination") of this Agreement for any reason whatsoever, all
rights and obligations of the Parties hereunder shall cease; provided,
however, that upon Termination of this Agreement, no
Party shall be released from its obligations to pay monies due or to
become due or to complete any unfulfilled obligations under this
Agreement, and the provisions of Article 5 shall service such
Termination.
8.2 Damages. Upon the Termination of this Agreement for any reason, no
Party shall be liable or obligated to the other Party with respect to
any payments, future profits, exemplary, special or consequential
damages, indemnifications or other compensation regarding such
Termination, and, except as otherwise required by applicable law, each
Party hereby waives and relinquishes any rights, pursuant to law or
otherwise, to any such payments, indemnifications or compensation.
ARTICLE 9
COMPLIANCE WITH APPLICABLE LAWS
9.1 Compliance Generally. In the performance of its obligations under
this Agreement, the Parties shall, at all times, strictly comply with
all applicable laws, regulations and orders of the countries and
jurisdictions in which they operate and such United States laws as
outlined in paragraph 9.3 of this Article.
9.2 Authorizations. Each Party shall, at its own expense, make, obtain
and maintain in force at all times during the term of this Agreement,
all filings, registrations, reports, licenses, permits and
authorizations required under applicable law, regulations or orders in
order for it to perform its obligations under this Agreement.
9.3 Business Practices. In conformity with the United States Foreign
Corrupt Practice Act and with the Parties' established corporate
policies regarding business practices, the Parties and their
respective employees shall not directly or indirectly make an offer,
payment, promise to pay, or authorize payment, or offer a gift,
promise to give, or authorize the giving of anything of value for the
purpose of influencing an act or decision (including a decision not to
act) of an official of any government or of an employee or any company
or including such a person to use his influence to effect any such act
or decision in order to assist any of the Parties in obtaining,
retaining or directing any business.
ARTICLE 10
GENERAL PROVISIONS
10.1 Assignment. This Agreement shall be binding on and inure to the
benefit of the heirs, successors, assigns and beneficiaries of the
Parties; provided that no Party may assign this Agreement or any
rights or obligations hereunder, whether by operation of law or
otherwise, without the prior written consent of all the other Party's
authorized representatives (which consent may be granted or withheld).
Any attempted assignment by any Party without the prior written
consent of the other Party shall be void and unenforceable.
10.2 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 to the facsimile
number as may be provided from time to time by each Party to the
other, at the time that receipt thereof has been confirmed by return
electronic communication signal that the message has been received, or
if sent by reputable international courier service three (3) days
after dispatch addressed to the Parties at the addresses outlined
hereafter. Either Party may change its facsimile number or address by
a notice given to the other Party in the manner set forth as follows:
If to NSIMG: Attn.: General Manager
00 Xxxx Xxxxxx, Xxxxx, Xxxx 00000 XXX
(000) 000-0000
(000) 000-0000 Fax
If to NSPCT: Attn.: General Manager
Nu Skin Personal Care (Thailand) Ltd.
00xx Xxxxx Xxxxxxxx XXX
XXX Xxxx Xxxxx Xxxx
00 Xxxxxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxx
Xxxxxxx, Xxxxxxxx 00000
000-000-0000
Facsimile No.: 000-000-0000
10.3 Waiver and Delay. No waiver by any Party of any breach or default
in performance by any other Party, and no failure, refusal or neglect
of any 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 any Party of its right at any
time thereafter to require exact and strict compliance with the
provisions thereof.
10.4 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.
10.5 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 NSIMG and NSPCT within 30 days after written
notice of such dispute is given by NSIMG or NSPCT, 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 NSIMG 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 NSIMG 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 NSIMG and NSPCT;
provided, that such of NSIMG and NSPCT shall pay all fees and expenses
incurred by it in presenting or defending against such claim, right or
cause of action.
10.6 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.
10.7 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 understanding (both oral and written)
of the Parties.
10.8 Modifications and Amendments. No supplement, modification or
amendment of this Agreement shall be binding unless it is in writing
and executed by all Parties.
10.9 Severability. To the extent that any provision of this Agreement
is (or, in the opinion of counsel mutually acceptable to all Parties,
would be) prohibited, judicially invalidated or otherwise rendered
unenforceable in any jurisdiction relevant to the Parties, 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.
10.10 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 authorized representatives.
NU SKIN INTERNATIONAL MANAGEMENT GROUP, INC.
By:
Name: Xxxxx X. Xxxxx
Title: President
NU SKIN PERSONAL CARE (THAILAND) LTD.
By:
Name: Xxxxxx Xxxx
Title: Secretary
