EX-10.54
INDEMNIFICATION LIMITATION AGREEMENT
BY AND AMONG
NU SKIN ENTERPRISES, INC.,
NU SKIN UNITED STATES, INC.,
NU SKIN INTERNATIONAL, INC.,
BIG PLANET HOLDINGS, INC.,
NU SKIN USA, INC.,
THE MANAGERS,
AND
THE STOCKHOLDERS WHO EXECUTE THE SIGNATURE PAGE HERETO
March 8, 1999
INDEMNIFICATION LIMITATION AGREEMENT
This Indemnification Limitation Agreement (this "Agreement") is made
and entered into effective as of March 8, 1999 by and among Nu Skin Enterprises,
Inc., a Delaware corporation ("Nu Skin Enterprises"), Nu Skin United States,
Inc., a Delaware corporation ("Nu Skin United States"), Nu Skin International,
Inc. a Utah corporation ("Nu Skin International"), Big Planet Holdings, Inc., a
Delaware corporation ("Big Planet Holdings"), Nu Skin USA, Inc., a Delaware
corporation ("Nu Skin USA"), Xxxxxx X. Xxxxx ("Xxxxx"), Xxxxx X. Xxxxx
("Xxxxx"), Xxxxxxx X. Xxxx ("Xxxx"), and each of the stockholders who elects to
become a party to this Agreement by executing the signature page hereto (each a
"Stockholder" and together the "Stockholders"). Ricks, Doman, and King are
collectively referred to as the "Managers" and, individually, a "Manager." Each
of Nu Skin Enterprises, Nu Skin United States, Big Planet Holdings, Nu Skin USA,
Big Planet, the Managers, and the Stockholders is individually referred to
herein as a "Party" and together as the "Parties."
RECITALS
A. WHEREAS, Nu Skin Enterprises, Nu Skin United States, and Nu Skin USA
have entered into that certain Asset Purchase Agreement of even date herewith
and attached hereto as Exhibit "A" (the "Asset Purchase Agreement") providing
for the purchase by Nu Skin Enterprises and Nu Skin United States of certain
assets of Nu Skin USA, with a portion of the purchase price for certain of such
assets to be deposited into an escrow account (the "Escrow") pursuant to the
terms of the Escrow Agreement dated of even date herewith and in the form
attached hereto as Exhibit "B" (the "Escrow Agreement"), which Asset Purchase
Agreement further provides for the indemnification of Nu Skin Enterprises and Nu
Skin United States in connection with the transactions described therein;
B. WHEREAS, Nu Skin International and Nu Skin USA have entered into
that certain Termination Agreement of even date herewith and attached hereto as
Exhibit "C" (the "Termination Agreement") providing for the termination of
certain licenses and agreements previously entered into by and between Nu Skin
USA and various other parties in consideration for the payment of a termination
fee;
C. WHEREAS, Nu Skin Enterprises and the Stockholders contemplate
entering into a stock purchase, merger, or similar agreement related to Nu Skin
Canada, Inc. (the "Canada Stock Purchase Agreement"), providing for the purchase
by Nu Skin Enterprises of the issued and outstanding shares of capital stock of
Nu Skin Canada, Inc. or for the merger of Nu Skin Canada, Inc. with Nu Skin
Enterprises (or a newly-organized subsidiary of Nu Skin Enterprises), and
further providing for the indemnification of Nu Skin Enterprises in connection
with the transactions contemplated in the Canada Stock Purchase Agreement;
D. WHEREAS, Nu Skin Enterprises and the Stockholders contemplate
entering into a stock purchase, merger, or similar agreement related to Nu Skin
Mexico S.A. de C.V., a Mexico corporation domesticated in Delaware under the
name Nu Skin Mexico, Inc. (the "Mexico Stock Purchase Agreement"), providing for
the purchase by Nu Skin Enterprises of the issued and outstanding shares of
capital stock of Nu Skin Mexico, Inc. or for the merger of Nu Skin Mexico, Inc.
with Nu Skin Enterprises (or a newly-organized subsidiary of Nu Skin
Enterprises), and further providing for the indemnification of Nu Skin
Enterprises in connection with the transactions contemplated in the Mexico Stock
Purchase Agreement;
E. WHEREAS, Nu Skin Enterprises and the Stockholders contemplate
entering into a stock purchase, merger, or similar agreement related to Nu Skin
Guatemala S.A., a Guatemala corporation domesticated in Delaware under the name
Nu Skin Guatemala, Inc. (the "Guatemala Stock Purchase Agreement"), providing
for the purchase by Nu Skin Enterprises of the issued and outstanding shares of
capital stock of Nu Skin Guatemala, Inc. or for the merger of Nu Skin Guatemala,
Inc. with Nu Skin Enterprises (or a newly-organized subsidiary of Nu Skin
Enterprises), and further providing for the indemnification of Nu Skin
Enterprises in connection with the transactions contemplated in the Guatemala
Stock Purchase Agreement;
F. WHEREAS, Nu Skin Enterprises and a subsidiary to be formed by Nu
Skin Enterprises are currently negotiating and intend, following the date
hereof, to enter into an Agreement and Plan of Merger with Big Planet (the
"Merger Agreement") providing for the merger of Big Planet with and into Big
Planet Holdings, Inc., a subsidiary of Nu Skin Enterprises ("Big Planet
Holdings") in exchange for merger consideration that in part will consist of
cash in the amount of approximately $14,500,000 and a promissory note (the "Nu
Skin Enterprises Note") in the original principal amount of approximately
$14,500,000 payable to Nu Skin USA as the holder of the Preferred Stock of Big
Planet;
G. WHEREAS, the Asset Purchase Agreement, the Termination Agreement,
the Canada Stock Purchase Agreement, the Mexico Stock Purchase Agreement, and
the Guatemala Stock Purchase Agreement (collectively, the "Transaction
Agreements") each contain certain indemnification obligations in favor of Nu
Skin Enterprises, Nu Skin United States, or their respective affiliates who are
parties to the respective Transaction Agreements including Nu Skin International
(the "Affiliate Parties"), and the Parties now desire to agree to certain
restrictions and limitations on such indemnification obligations;
H. WHEREAS, Nu Skin International, Inc., a Utah corporation and
subsidiary of Nu Skin Enterprises ("Nu Skin International"), is liable for any
judgment that may be entered against the Nu Skin party defendants named in the
lawsuit captioned Xxxxxx v. Nu Skin Canada, Inc, et al., Civil No. 93-C-2855,
pending in the United States District Court, District of Utah, Central Division
(the "Xxxxxx Lawsuit"), but, pursuant to an Assumption of Liabilities and
Indemnification Agreement dated effective December 31, 1997, (the "Assumption
Agreement"), entered into by and between Nu Skin International, Inc. and 252nd
Shelf Corporation (now known as Nu Skin USA), Nu Skin USA has agreed to
indemnify and reimburse Nu Skin International for fifty percent (50%) of any
amount that Nu Skin International may become liable for in the Xxxxxx Lawsuit;
and
I. WHEREAS, Nu Skin Enterprises, Nu Skin International, and Nu Skin USA
intend that Nu Skin International can be reimbursed out of the Escrow pursuant
to the Escrow Agreement and may set off against the Nu Skin Enterprises Note and
seek indemnification from Nu Skin USA and the Stockholders to the extent Nu Skin
International is entitled to reimbursement pursuant to the Assumption Agreement,
for Nu Skin USA's fifty percent (50%) of any amount Nu Skin International may
become liable for in connection with the Xxxxxx Lawsuit.
NOW, THEREFORE, in consideration of the foregoing premises, and the
mutual covenants and obligations set forth below, and as an inducement for Nu
Skin Enterprises and the Affiliate Parties to enter into the Transaction
Agreements, the Parties agree as follows:
1. Limits on Indemnification Claims.
1.1 Limits on Indemnification Claims Brought Against Nu Skin USA Under
the Transaction Agreements and the Merger Agreement. Except for claims brought
by Nu Skin Enterprises, Nu Skin United States, Big Planet Holdings, or the
Affiliate Parties relating to (i) the Stockholders' title to and right to
transfer their respective shares of capital stock of Nu Skin Canada, Inc., Nu
Skin Mexico, Inc., Nu Skin Guatemala, Inc., and Big Planet, Inc. and Nu Skin
USA's title to and right to transfer the assets to be transferred to Nu Skin
Enterprises, Nu Skin United States, or their respective affiliates pursuant to
the Asset Purchase Agreement or Big Planet's title to its assets, (ii) claims
for indemnification based on fraud, or (iii) any indemnification claim for the
individual tax liabilities or obligations of any stockholder of Nu Skin USA, Nu
Skin Canada, Inc., Nu Skin Mexico S.A. de C.V., (Nu Skin Mexico, Inc.), or Nu
Skin Guatemala S.A., (Nu Skin Guatemala, Inc.), no claim for indemnification may
be made against the entities referred to in clause 1.1 (iii) above or the
Stockholders under the Transaction Agreements or the Merger Agreement by Nu Skin
Enterprises, Nu Skin International, Nu Skin United States, Big Planet Holdings,
or the Affiliate Parties with respect to an individual claim of liability or
damage, unless, and then only to the extent that, the aggregate of all amounts
claimed under the Transaction Agreements and the Merger Agreement exceeds the
greater of (a) $100,000 or (b) $1,000,000 minus Nu Skin USA's Net Liabilities
(as that term is defined in the Asset Purchase Agreement). The indemnification
obligations owing to Nu Skin Enterprises, Nu Skin International, Big Planet
Holdings, Nu Skin United States, and the Affiliate Parties under the Transaction
Agreements and the Merger Agreement (except for those specifically excluded
above in this Section 1.1) shall be effective only until the dollar amount paid
in respect of indemnification claims brought under and pursuant to any of the
Transaction Agreements and/or the Merger Agreement aggregates to an amount equal
to $17,500,000; provided, however, that notwithstanding the above provisions of
this Section 1.1, (a) all corporate tax liabilities or tax obligations of Nu
Skin USA, Big Planet, Inc., Nu Skin Canada, Inc., Nu Skin Mexico S.A. de C.V.
(Nu Skin Mexico, Inc.), or Nu Skin Guatemala S.A. (Nu Skin Guatemala, Inc.)
(each, a "Corporate Tax Liability") and (b) all liability of Nu Skin USA related
to the Xxxxxx Lawsuit, are excluded from said $17,500,000 cap; provided further,
however, that each Stockholder hereby agrees, in the event Nu Skin USA
distributes the Termination Fee (as such term is defined in the Termination
Agreement) and the Class A Purchase Price (as such term is defined in the Asset
Purchase Agreement), including any remaining portion of the Escrow Amount (as
that term is defined in the Escrow Agreement) to the Stockholders or makes any
other distributions to the Stockholders, including liquidating distributions,
that each Stockholder will severally indemnify Nu Skin Enterprises, Nu Skin
International, Nu Skin United States, Big Planet Holdings, and the Affiliate
Parties for all of Nu Skin USA's Corporate Tax Liability and liability related
to the Xxxxxx Lawsuit proportionately based on their relative share ownership of
Nu Skin USA. The liability of such Stockholders under the immediately preceding
sentence shall be limited to the amount of the distributions of cash and/or
property (including any merger consideration received by Nu Skin USA under the
Merger Agreement) received by or paid on behalf of such Stockholder from Nu Skin
USA following March 1, 1999. Notwithstanding the foregoing, neither Nu Skin
Enterprises, Nu Skin International, Nu Skin United States, Big Planet Holdings
nor the Affiliate Parties will pursue any claim against the Stockholders for any
Corporate Tax Liability or any liability related to the Xxxxxx Lawsuit until the
Nu Skin Enterprises Note shall have been set off in full and the Escrow Amount
shall have been disbursed in full to Nu Skin Enterprises, Nu Skin United States
or Nu Skin International. Nothing herein shall release or discharge the
Stockholders or Nu Skin USA for any Corporate Tax Liability or liability related
to the Xxxxxx Lawsuit. Any Corporate Tax Liability or any liability related to
the Xxxxxx Lawsuit may be paid by delivery of shares of Nu Skin Enterprises
Class A Common Stock or Class B Common Stock to Nu Skin Enterprises in an amount
equal to the Corporate Tax Liability or the aggregate liability under the Xxxxxx
Lawsuit, divided by the average closing price of Nu Skin Enterprise's Class A
Common Stock on the New York Stock Exchange for the twenty (20) trading days
immediately prior to the date on which Nu Skin Enterprises gives notice of such
Corporate Tax Liability or liability related to the Xxxxxx Lawsuit to the entity
responsible for the same. To the extent that indemnification obligations in
favor of Nu Skin Enterprises, Nu Skin United States, Nu Skin International, Big
Planet Holdings, or the Affiliate Parties under the Transaction Agreements or
the Merger Agreement may be unenforceable, Nu Skin USA and the Stockholders
shall contribute the maximum amount that they are permitted to contribute under
applicable law to the payment and satisfaction of all indemnification claims
brought under and pursuant to the Transaction Agreements or the Merger Agreement
by Nu Skin Enterprises, Nu Skin International, Big Planet Holdings, Nu Skin
United States, or the Affiliate Parties. Amounts owing to Nu Skin Enterprises,
Nu Skin International, Big Planet Holdings, Nu Skin United States, or the
Affiliate Parties under the Transaction Agreements or the Merger Agreement shall
not be reduced or off set by the value of any tax benefits accruing to Nu Skin
Enterprises, Nu Skin International, Big Planet Holdings, Nu Skin United States,
or the Affiliate Parties as a result of any claim for indemnification or by the
amount of any insurance proceeds received by Nu Skin Enterprises, Nu Skin
International, Big Planet Holdings, Nu Skin United States, or the Affiliate
Parties in connection with any claim for indemnification.
1.2 Limits on Indemnification Claims Brought Against the Managers Under
the Merger Agreement.
1.2.1 Relevant Merger Agreement Provisions. As set forth in the
Merger Agreement, (a) certain options held by Xxxxx to acquire 3,806,147 shares
of the Big Planet Common will be converted into or exchanged for options to
purchase shares of Nu Skin Enterprises Class A Common (the "New Xxxxx Options"),
(b) a total of 815,604 unvested shares of Big Planet Common underlying King's
current restricted stock award will be exchanged or converted into restricted
stock awards of Nu Skin Enterprises Class A Common (the "New King Restricted
Stock Award"), and (c) a total of 305,910 unvested shares of Big Planet Common
underlying Xxxxx'x current restricted stock award will be exchanged or converted
into restricted stock awards of Nu Skin Enterprises Class A Common (the "New
Xxxxx Restricted Stock Award"). As set forth in the Merger Agreement and in
Section 1.2.2 below (subject to the limitations set forth in Section 1.2.2
below), each of the Managers is jointly and severally liable to Big Planet
Holdings and Nu Skin Enterprises and has agreed to indemnify Big Planet Holdings
and Nu Skin Enterprises for any such indemnification claims for which they may
become liable by forfeiting shares of Nu Skin Enterprises Class A Common
issuable pursuant to the New Xxxxx Options, the New King Restricted Stock Award,
and the New Xxxxx Restricted Stock Award, as applicable. The Parties hereby
acknowledge that, pursuant to the respective grant agreements for the New Xxxxx
Options, the New King Restricted Stock Award, and the New Xxxxx Stock Award to
be entered into by them and Nu Skin Enterprises following the date hereof,
shares of Nu Skin Enterprises Class A Common issuable thereunder can be
forfeited in satisfaction of indemnification obligations of the Managers, as
described in Section 1.2.2 below.
1.2.2 Indemnification; Calculation of Forfeited Shares. Except for
indemnification claims brought by Big Planet Holdings or Nu Skin Enterprises
relating to or based on (i) fraud, or (ii) the Managers' title to and right to
transfer their respective shares of capital stock or options of Big Planet, Inc.
pursuant to the Merger Agreement, no claim for indemnification may be made
against any Manager under the Merger Agreement by Big Planet Holdings or Nu Skin
Enterprises with respect to an individual claim of liability or damage, unless,
and then only to the extent that, the aggregate of all amounts claimed under the
Merger Agreement exceeds $100,000 (the "Big Planet Indemnification Amount");
provided, however, that in the event the Big Planet Indemnification Amount
exceeds $100,000, each of the Managers shall share in such excess pro rata in
accordance with their respective Member Allocation Percentage (set forth on
Exhibit "D" attached hereto). The number of shares of Nu Skin Enterprises Class
A Common that each Manager shall forfeit in the event the Big Planet
Indemnification Amount exceeds $100,000 shall be determined as follows: (i) such
Manager's Allocation Percentage shall be multiplied by the amount by which the
Big Planet Indemnification Amount exceeds $100,000, and that amount shall be
divided by (ii) the average closing price of Nu Skin Enterprise's Class A Common
Stock on the New York Stock Exchange for the twenty (20) trading days ending
February 3, 1999. The result of such calculation is the number of shares of Nu
Skin Enterprises Class A Common that each Manager shall forfeit in settlement of
the amount by which the Big Planet Indemnification Amount exceeds $100,000. The
remaining portion of the Big Planet Indemnification Amount shall be concurrently
allocated to and paid by Nu Skin USA pursuant to and in accordance with Section
1.2.1 above. The indemnification obligations of the Managers to Big Planet
Holdings and Nu Skin Enterprises under the Merger Agreement and this Section
1.2.2 shall be effective only until the first to occur of (A) the shares of Nu
Skin Enterprises Class A Common vest in each Manager (which, as stated in the
Merger Agreement, will be in a single installment one (1) year after the Closing
Date (as that term is defined in the Merger Agreement)) or (B)(I) in the case of
Xxxxx, fifty percent (50%) of the shares of Nu Skin Enterprises Class A Common
underlying the New Xxxxx Options, and (II) in the case of either King or Xxxxx,
one hundred percent (100%) of the shares of Nu Skin Enterprises Class A Common
underlying the New King Restricted Stock Award or the New Xxxxx Restricted Stock
Award, as applicable, have been forfeited pursuant to this Section 1.2.2. To the
extent that indemnification obligations in favor of Big Planet Holdings or Nu
Skin Enterprises under the Merger Agreement may be unenforceable, each of the
Managers shall contribute and forfeit the maximum number of shares of Nu Skin
Enterprises Class A Common (determined as set forth above) as they are permitted
to contribute and forfeit under applicable law to the payment and satisfaction
of all indemnification claims brought under and pursuant to the Merger Agreement
by Big Planet Holdings or Nu Skin Enterprise. Amounts owing to Big Planet
Holdings or Nu Skin Enterprises under the Merger Agreement shall not be reduced
or off-set by the value of any tax benefits accruing to Big Planet Holdings or
Nu Skin Enterprises as a result of any claim for indemnification or by the
amount of any insurance proceeds received by Big Planet Holdings or Nu Skin
Enterprises in connection with any claim for indemnification.
2. Pursuit of Indemnification Claims. Claims for indemnification brought by Nu
Skin Enterprises, Nu Skin United States, Big Planet Holdings or the Affiliate
Parties shall be brought in accordance with the terms and conditions of the
Transaction Agreements or the Merger Agreement, as applicable. Except as
expressly provided in Section 1 above, nothing in this Agreement is intended to
limit the scope of the indemnification claims that can be brought under the
Transaction Agreements or the Merger Agreement or the manner in which such
claims are to be brought under the Transaction Agreements or Merger Agreement by
Nu Skin Enterprises, Nu Skin United States, Big Planet Holdings or the Affiliate
Parties.
3. Indemnification Assets. To the extent permitted by Section 1 above, Nu Skin
Enterprises, Nu Skin United States, Big Planet Holdings and the Affiliate
Parties shall have the right to make a claim under the Escrow Agreement against
the Escrow Amount for any amounts owing to Nu Skin Enterprises, Big Planet
Holdings, Nu Skin United States, or the Affiliate Parties under the Transaction
Agreements or the Merger Agreement. Claims for indemnification hereunder that
are brought against the Escrow Amount under the Escrow Agreement shall be
brought in accordance with the terms and conditions of the Escrow Agreement. In
addition, Nu Skin Enterprises for itself or on behalf of Nu Skin United States,
Big Planet Holdings or the Affiliate Parties shall be entitled to set-off or
recover against any principal or interest payable by it under the Nu Skin
Enterprises Note, all amounts owing to Nu Skin Enterprises, Big Planet Holdings,
Nu Skin United States, or the Affiliate Parties under the Transaction Agreements
or the Merger Agreement. Amounts payable by Nu Skin Enterprises under the Nu
Skin Enterprises Note and all amounts (or shares of Nu Skin Enterprises Class A
Common Stock or Class B Common Stock substituted at any time for a Stockholder's
Allocation Amount (as that term is defined in the Escrow Agreement) held in the
Escrow and all interest and earnings on such amounts shall together constitute
the "Indemnification Assets." Except for the claims set forth in clauses (i),
(ii), and (iii) of Section 1.1 above and claims for Corporate Tax Liability or
liability related to the Xxxxxx Lawsuit (which claims are excluded from the
effects of the basket and cap provided in Section 1.1 above), the sole remedy of
Nu Skin Enterprises, Nu Skin United States, and the Affiliate Parties shall be
limited to claims for indemnification pursuant to the Transaction Agreements. In
addition, except for claims set forth in clauses (i), (ii), and (iii) of Section
1.1 above and claims for Corporate Tax Liability or liability related to the
Xxxxxx lawsuit, claims brought by Nu Skin Enterprises, Nu Skin United States, or
the Affiliate Parties pursuant to the Transaction Agreements shall be satisfied
only from the Indemnification Assets. Except for claims set forth above in
clauses (i) and (ii) of Section 1.2.2 (which claims are excluded from the
effects of the basket and cap provided in Section 1.2 above), the sole remedy of
Nu Skin Enterprises and Big Planet Holdings against the Managers shall be
limited to claims for indemnification pursuant to the Merger Agreement. In
addition, except for the claims excluded in Section 1.2.2 above, claims brought
by Nu Skin Enterprises and Big Planet Holdings against the Managers pursuant to
the Merger Agreement shall be satisfied only from those portions of the New
Xxxxx Options, the New King Restricted Stock Award and the New Xxxxx Restricted
Stock Award that are forfeitable as provided in Section 1.2.2 above.
4. Joint and Several Obligations. Subject to the limitations set forth in
Section 1 above, the obligations of Nu Skin USA and the Stockholders shall be
joint and several. Nu Skin Enterprises, Nu Skin United States, Big Planet
Holdings and the Affiliate Parties shall be entitled to bring claims for
indemnification and assert rights against the Indemnification Assets regardless
of which Transaction Agreement or Merger Agreement allows for such claims and
regardless of the consideration received by either Nu Skin USA or the
Stockholders under such Transaction Agreement or Merger Agreement. Nu Skin
Enterprises, Nu Skin United States, Big Planet Holdings, and the Affiliate
Parties may pursue their rights against the Indemnification Assets by bringing
claims against the Escrow or by Nu Skin Enterprises setting-off amounts owing by
it under the Nu Skin Enterprises Note concurrently or sequentially, in any order
it desires.
5. Waiver of Subrogation. Nu Skin USA and the Stockholders each hereby waive any
right of subrogation they may have with respect to any amounts paid to Nu Skin
Enterprises, Nu Skin United States, Big Planet Holdings, or the Affiliate
Parties pursuant to the provisions of the Transaction Agreements or the Merger
Agreement.
6. Designated Representative of Nu Skin USA and the Stockholders. Each of Nu
Skin USA and the Stockholders hereby appoints Xxxxx X. Halls and Xxxxxx X. Xxxx
(each such person, whether acting singly or in concert, and any successor or
successors being referred to herein as a "Designated Representative") as their
legal representative and attorneys-in-fact to do any and all things and execute
all documents, instruments, and papers, in NSUSA's and each Stockholder's name,
place, and stead, and in any way Nu Skin USA or such Stockholder could do if
personally present, in connection with this Agreement and the transactions
contemplated hereby, including, without limitation, to (a) amend, cancel,
extend, or waive the terms of this Agreement, or any other ancillary documents,
instruments, or agreements prepared and entered into in connection with this
Agreement; (b) provide any notices required pursuant to this Agreement or any
ancillary documents, instruments, or agreements related hereto; (c) act for and
on behalf of Nu Skin USA and the Stockholders with respect to claims (including
the settlement thereof) arising under this Agreement or any ancillary documents,
instruments, or agreements related thereto); and (d) accept, for and on behalf
of the Nu Skin USA and the Stockholders, all notices required to be delivered to
Nu Skin USA and the Stockholders under this Agreement. In the event that one or
both of the Designated Representatives becomes unable or unwilling to continue
in his capacity as the Designated Representative Nu Skin USA and the
Stockholders, Nu Skin USA and the Stockholders shall appoint a successor
designated representative by written notice to Nu Skin Enterprises. Any such
successor designated representative shall become and be deemed to be a
Designated Representative for purposes of this Agreement. Nu Skin USA and the
Stockholders shall be bound by any action taken by either of the Designated
Representatives in their capacity thereof. Nu Skin Enterprises, Nu Skin United
States, and the Affiliate Parties shall be entitled to rely on, as being binding
upon each of Nu Skin USA and the Stockholders, any document, instrument,
agreement, or any other paper believed by him, her, or it to be genuine and
correct and to have been signed or sent by either of the Designated
Representatives. Nu Skin Enterprises, Nu Skin United States, and the Affiliate
Parties shall not be liable to Nu Skin USA and the Stockholders for any action
taken or omitted to be taken by him, her, or it in such reliance. Copies of any
notice given by Nu Skin Enterprises to the Designated Representatives shall be
provided to each of the Designated Representatives at the address specified in
Section 7.1 below.
7. Miscellaneous Provisions.
7.1 Notice. All notices, requests, demands, and other communications
required or permitted to be given or made under this Agreement shall be in
writing and shall be deemed to have been given (i) on the date of personal
delivery or, (ii) provided such notice, request, demand, or communication is
actually received by the Party to which it is addressed in the ordinary course
of delivery, on the date of (a) deposit in the United States mail, postage
prepaid, by registered or certified mail, return receipt requested, (b) delivery
by facsimile transmission, or (c) delivery to a nationally-recognized overnight
courier service, in each case, addressed as follows, or to such other person or
entity as any Party shall designate by written notice to the other in accordance
herewith:
If to Nu Skin Enterprises,
Nu Skin United States, or
the Affiliate Parties: With a copy to:
Nu Skin Enterprises, Inc. LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
One Nu Skin Plaza 1000 Xxxxxx Building
00 Xxxx Xxxxxx Xxxxxx 000 Xxxxx Xxxx Xxxxxx
Xxxxx, Xxxx 00000 Xxxx Xxxx Xxxx, Xxxx 00000
Attention: M. Xxxxxx Xxxx, Esq. Attention: Xxxxx X. Xxxxxx, Esq.
Fax No.: (000) 000-0000 Fax No.: (000) 000-0000
If to Nu Skin USA or the Stockholders: With a copy to:
Nu Skin USA, Inc. Holland & Xxxx, L.L.P.
c/o Nu Skin Enterprises, Inc. 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
00 Xxxx Xxxxxx Xxxxxx Xxxx Xxxx Xxxx, Xxxx 00000
Xxxxx, XX 00000 Attention: Xxxxx X. Xxxx, Esq.
Attention: Xxxxx X. Halls Fax No.: (000) 000-0000
Fax No.: (000) 000-0000
7.2 Governing Law; Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the State of Utah applicable to
contracts entered into and to be performed entirely within such State. With
respect to any dispute arising under this Agreement, the Parties consent to the
exclusive jurisdiction and venue of the federal and state courts residing in
Salt Lake City or Provo, Utah and waive any objection to such venue on the basis
of forum non conveniens.
7.3 Severability. The Parties agree that each provision to this
Agreement shall be construed independent of any other provision hereof. The
invalidity or unenforceability of any particular provision of this Agreement
shall not affect the other provisions hereof. This Agreement shall be construed
in all respects as if such invalid or unenforceable provision were omitted
herefrom.
7.4 Entire Agreement. This Agreement, together with the Transaction
Agreements and all Exhibits and Schedules thereto and hereto, constitutes the
entire agreement between the Parties with respect to the subject matter hereof.
This Agreement, together with the Transaction Agreements and all Exhibits and
Schedules thereto and hereto, supersedes all prior written or contemporaneous
oral agreements related to the subject matter hereof.
7.5 Amendment and Modifications. No amendment or other modification to
this Agreement shall be binding upon any Party unless executed in writing by all
of the Parties.
7.6 Waiver. No waiver by any Party of any of the provisions of this
Agreement will be deemed, or will constitute, a waiver of any other provision
hereof, whether similar, nor will any waiver constitute a continuing waiver
hereunder. No waiver will be binding unless executed in writing by the Party
making the waiver.
7.7 Assignment. Except as provided below, no Party may assign (by
operation of law, merger, or otherwise), license, sublicense, or otherwise
transfer any of his, her, or its rights or obligations under this Agreement to
any other person or entity without obtaining the prior written consent of the
other Parties; provided, however, that Nu Skin Enterprise and Nu Skin United
States shall each be allowed to assign this Agreement or its rights and
obligations hereunder without any prior consent of the other Parties.
7.8 Captions. All captions in this Agreement are intended solely for
the convenience of the Parties and none shall be deemed to affect the meaning
and construction of any provision hereof.
7.9 Cumulative Remedies. No right or remedy conferred upon or reserved
to any of the Parties under the terms of this Agreement is intended to be, nor
shall it be deemed, exclusive of any other right or remedy provided herein or by
law or equity, but each shall be cumulative of every other right or remedy.
7.10 Binding Effect of Agreement. Except as otherwise specifically
provided herein, this Agreement shall be binding upon, and shall inure to the
benefit of and be enforceable by, the Parties, and their respective affiliates,
successors, and assigns.
7.11 No Third-Party Beneficiaries. Nothing in this Agreement, express
or implied, shall confer on any person other than the Parties any rights or
remedies under or by virtue of this Agreement except that the Affiliate Parties
shall be entitled to the benefits of this Agreement.
7.12 Counterparts; Enforceability. This Agreement may be executed by
facsimile and in counterparts and each taken together shall constitute one and
all the same document. Provided that this Agreement has been executed by Nu Skin
Enterprises, Nu Skin United States, and Big Planet Holdings, Big Planet, each of
the Managers, and each Stockholder who has executed this Agreement is and will
be bound by the terms and conditions hereof, and Big Planet, each of the
Managers, and each such Stockholder specifically acknowledges and agrees that
the failure by Big Planet, any Manager, or any Stockholder to execute this
Agreement shall not invalidate or otherwise undermine the enforceability of this
Agreement as to each Party who has become a signatory hereto. The Parties also
acknowledge and agree that Big Planet and the Managers may not execute this
Agreement and become a Party hereto until sometime after the execution hereof by
all of the other Parties to this Agreement.
7.13 No Impact on Transaction Agreements. Except as specifically
provided in this Agreement, nothing herein undermines or detracts in any way
from any of the respective indemnification provisions contained in any of the
Transaction Agreements.
7.14 Set-Off Rights. Subject to Section 1 above, Nu Skin Enterprises
and its affiliates (excluding Nu Skin USA and Big Planet) shall be entitled to
set off any amounts due to it or them, as the case may be, under the Transaction
Agreements against amounts owing under the Nu skin Enterprises Note (as that
term is defined in the Merger Agreement) and against the then current Escrow
Amount (as that term is defined in the Escrow Agreement) .
7.15 Press Releases and Public Announcements. Either Nu Skin
Enterprises or Nu Skin United States may issue any press releases or make any
public announcements relating to the subject matter of this Agreement after the
effective date hereof without the prior written approval of the other Parties.
Neither Nu Skin USA nor Big Planet shall issue any press releases or make any
public announcements relating to the subject matter of this Agreement without
the prior written approval of the other Parties.
IN WITNESS WHEREOF, the Parties have executed and delivered this
Indemnification Limitation Agreement on the date first written above.
NU SKIN ENTERPRISES, INC. STOCKHOLDERS:
By: /s/ Xxxxx X Xxxxxxx /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxxxx Xxxxx X. Xxxxx
Its: Vice President
NU SKIN USA, INC. /s/ Xxxxx Xxx Xxxxx
Xxxxx Xxx Xxxxx
By: /s/ Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx /s/ Xxxxxx X. Xxxxxxxxx
Its: Xxxxxx X. Xxxxxxxxx
BIG PLANET HOLDINGS, INC.
/s/ R. Xxxxx Xxxxxx
R. Xxxxx Xxxxxx
By: /s/ Xxxxx X Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Its: Vice President /s/ Xxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxxxxxx
NU SKIN INTERNATIONAL, INC.
By: /s/ Xxxxx X Xxxxxxx /s/ Xxxxxx X. Xxxx
Name: Xxxxx X. Xxxxxxx Xxxxxx X. Xxxx
Its: Vice President
/s/ Xxxxx X. Halls
THE MANAGERS: Xxxxx X. Halls
/s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx /s/ Xxxx Xxxx Xxxxxxx Halls
Xxxx Xxxx Xxxxxxx Halls
/s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx ---------------------------
Xxxx X. Xxxxx
/s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
ATTACHED EXHIBITS:
EXHIBIT "A" -- ASSET PURCHASE AGREEMENT
EXHIBIT "B" -- FORM OF ESCROW AGREEMENT
EXHIBIT "C" -- TERMINATION AGREEMENT
EXHIBIT "D" -- MEMBER'S OWNERSHIP PERCENTAGES
--- Exhibits will be provide upon request ---
