DISTRIBUTION AGREEMENT

BETWEEN

NU SKIN ENTERPRISES HONG KONG, INC.

(COMPANY NO. 1107053-0142)

AND

NU SKIN (MALAYSIA) SDN. BHD.

(COMPANY NO. 402787-V)

THIS DISTRIBUTION AGREEMENT (hereinafter, this “Agreement”) is entered into this
20th day of June 2002 to be effective as of September 28, 2001, between NU SKIN
ENTERPRISES HONG KONG, INC. (Company No. 1107053-0142), a company organized
under the laws of the State of Utah, United States of America and having its
principal place of business at 75, West Center Street, Provo, Utah 84601, United
States of America and a registered branch office at 26th Floor, Windsor House,
311 Gloucester Road, Causeway Bay, Hong Kong (“NSEHK”), and NU SKIN (MALAYSIA)
SDN. BHD. (Company No. 402787-V), a company incorporated in Malaysia and having
its registered office at 6th Floor, Menara Boustead, 69, Jalan Raja Chulan,
50200 Kuala Lumpur, Malaysia and a place of business at Office Lot 04-01, Level
4, PNB Darby Park Retail, No. 10, Jalan Binjai, 50450 Kuala Lumpur (“NSMY”).
Hereinafter NSMY and NSEHK shall be collectively referred to as the “Parties”
and each shall be individually referred to as a “Party”.

RECITALS

WHEREAS, Nu Skin International, Inc. ("NSI") and its Affiliates are engaged in
the development, marketing and distribution of various products through a
network of independent distributors;

WHEREAS, NSI has granted to NSEHK, exclusive rights to distribute products in
countries including the Federation of Malaysia, in South East Asia, developed by
or procured through NSI and its Affiliates;

WHEREAS, NSI has granted to NSMY a license to use NSI’s network of independent
distributors to market and distribute products in the Federation of Malaysia;

WHEREAS, NSMY desires, on the terms and conditions hereinafter set forth, to act
as the exclusive distributor in the Federation of Malaysia of products procured
from or through NSI and its Affiliates including NSEHK and subject to NSI’s
approval to such appointment, NSEHK is willing to appoint NSMY as the exclusive
distributor in the Federation of Malaysia of such products; and

WHEREAS, the Parties desire to enter into this Agreement to establish the terms
and conditions on which NSMY shall have the right to act as a distributor of
products procured from or through NSEHK and NSI.

AGREEMENT

NOW, THEREFORE, in consideration of the premises, the mutual covenants contained
in this Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I
DEFINITIONS

For the purposes of this Agreement, unless the context otherwise requires or the
parties otherwise agree within the terms of this Agreement, the following words,
terms and phrases shall have the meanings assigned to them respectively by this
Article I:

1.1  

“Affiliate” shall mean, with respect to any specified person, any other person
that directly or indirectly, through one or more intermediaries, controls, is
controlled by, or under common control with, such specified person.

1.2  

“Agreement” shall mean this Agreement (together with any exhibits and schedules
hereto), as the same may be modified, amended or supplemented from time to time.

1.3  

"Independent Distributor Network" shall mean the network of all NSI Independent
Distributors.

1.4  

"Intercompany Agreements" shall mean the License Agreement and the Trademark
Licensing Agreement between NSMY and NSI, the Management Services Agreement
between NSMY and Nu Skin International Management Group, Inc., and this
Agreement.

1.5  

“Intellectual Property” shall mean all of the patents, trademarks, trade names,
service marks, other marks and devices, formulas, technologies, and other
proprietary and confidential information relating to the design, specifications,
manufacture, use or services of, or otherwise associated with, the Products.

1.6  

“Nu Skin Confidential Information” shall mean any and all information that is
unique, proprietary or competitively sensitive to the business of NSEHK and/or
any Affiliate of NSEHK, including NSI, which NSMY may obtain knowledge of or
access to in connection with its relationship with NSEHK and its Affiliates,
including NSI, and the transactions contemplated by the Intercompany Agreements,
including, but not limited to, information relating to Products, the NSI
Independent Distributors, NSI’s compensation or commission systems or schemes,
pricing methods, historical, current and projected financial information,
marketing information, and any and all information, technical data or know-how
related to any aspect of NSEHK’s, or any of its Affiliates’, business or
technology including data, know-how, formulae, designs, drawings, proposals,
specifications, and the terms of this Agreement.

1.7  

“NSI Independent Distributor” shall mean a person authorized by contract with
NSI to distribute, as an independent contractor, the Products in accordance with
the terms of such distributor contract.

1.8  

“NSMY Confidential Information” shall mean any and all information that is
unique, proprietary or competitively sensitive to the business of NSMY which
NSEHK may gain knowledge of or access to in connection with the transactions
contemplated hereunder, but specifically excluding the Nu Skin Confidential
Information.

1.9  

“person” shall mean an individual, partnership, firm, joint venture,
corporation, limited liability company, association, trust, unincorporated
organization or other entity.

1.10  

“Products” shall mean those products identified on Schedule A to this Agreement,
as such Schedule A may be amended from time to time by NSEHK, in writing in its
sole discretion, by its addition to or deletion from such schedule of products
in the manner more fully described in Section 2.1 of Article II.

1.11  

"Territory" shall mean the Federation of Malaysia.

ARTICLE II
APPOINTMENT EXCLUSIVE WHOLESALE DISTRIBUTOR

2.1

Scope

 

Subject to all terms and conditions of this Agreement, NSEHK hereby appoints
NSMY as its exclusive wholesale distributor of the Products in the Territory
under the names, logos and trademarks of the Products and, subject to
availability, agrees to sell Products to NSMY for wholesale distribution within
the Territory during the term of this Agreement. NSEHK may, from time to time,
by thirty (30) days advance written notice to NSMY, add items to the list of
Products and delete or withdraw items from the list of Products, in its sole
discretion without any obligation to NSMY. NSMY accepts its appointment as the
exclusive wholesale distributor of Products in the Territory for the term of
this Agreement.

2.2

Sub-distributors

 

Except for the sale of Products to NSI Independent Distributors, NSMY shall not
appoint sub-distributors or agents to promote or distribute Products inside or
outside the Territory without the prior written consent of NSEHK, which consent
may be withheld or granted with or without conditions in the sole and absolute
discretion of NSEHK.

2.3

Sales by NSMY of Products

2.3(a)  

NSMY agrees that any distribution and sale of Products in the Territory shall be
made only by NSMY to NSI Independent Distributors, or, if NSEHK approves in
writing the method and manner of NSMY’s conduct of such sales, directly to the
retail customers of NSI Independent Distributors. NSEHK may, at its sole and
absolute discretion, withhold or grant, with or without conditions, an approval
pursuant to this Section 2.3(a).

2.3(b)  

To facilitate sales to NSI Independent Distributors, NSMY shall have the right
to access information regarding such NSI Independent Distributors resident in
the Territory as provided by NSI to NSEHK pursuant to the Regional Distribution
Agreement.

2.4

Sales by NSEHK in the Territory

 

Except to NSMY pursuant to this Agreement or as otherwise provided in this
Section 2.4 or with NSMY’s written consent, NSEHK shall not sell, and shall use
its commercially reasonable efforts to prohibit any other Party from selling
Products to any person within the Territory or to any person outside the
Territory for delivery to any person within the Territory. Notwithstanding the
foregoing, NSEHK, on behalf of itself and its Affiliates including NSI, retains
the right to enter into a distribution agreement for distribution of products
other than the Products included from time to time in Schedule A so long as the
products do not compete with the Products and the products are not distributed
through the Independent Distributor Network. In addition, NSEHK and its
Affiliates, including NSI, may sell Products to NSI Independent Distributors
resident in the Territory provided such Products are shipped only to an address
in a market outside the Territory and limited in quantity to such amounts as NSI
establishes from time to time as its personal consumption limitations in
accordance with the NSI International Order Policy as it may be amended from
time to time. None of NSI, NSEHK and their Affiliates, however, will actively
market to or solicit purchases of Products outside the Territory from NSI
Independent Distributors whose country of residence, as shown in NSI’s records,
is in the Territory.

2.5

Sales Outside the Territory

 

NSMY agrees that it will neither sell nor enable any person to sell Products to
persons outside the Territory or to any person within the Territory for resale
or delivery outside the Territory. Further, NSMY shall not promote or solicit
customers for Product sales outside the Territory. NSMY shall not establish any
facility outside the Territory through which orders are solicited or in which
inventories of Products are stored without NSEHK’s written consent, which
consent may be withheld or granted with or without conditions in the sole and
absolute discretion of NSEHK.

2.6

Territory Orders and Inquiries

 

If NSMY receives any order or inquiry concerning the sale of Products outside
the Territory, NSMY agrees to give NSEHK 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 NSEHK shall reasonably request.

ARTICLE III
GOVERNMENTAL APPROVALS AND REGISTRATIONS

NSMY 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 to be imported into the Territory (except as otherwise provided herein)
or to enable any payment pursuant to the provisions of this Agreement to be
made. NSMY agrees to keep NSEHK informed of the progress in obtaining all such
government approvals.

ARTICLE IV
OBLIGATIONS OF NSMY AS EXCLUSIVE WHOLESALE
DISTRIBUTOR IN THE TERRITORY

4.1

Marketing and Distribution

 

NSMY acknowledges that its strict performance of the obligations of this
Agreement is essential to the continuation of the privilege of acting as the
exclusive wholesale distributor of the Products in the Territory. NSMY shall
have the following obligations, to be discharged at its own cost and expense,
with respect to marketing and distribution of the Products:

4.1(a)  

To use its best efforts to sell and actively promote and market, in accordance
with all applicable laws and regulations and to the maximum extent possible, the
Products in the Territory.

4.1(b)  

To purchase from NSEHK such quantities of the Products as are required to
maintain a balanced supply of the Products necessary to promote, market, sell
and distribute the Products within the Territory in an efficient and timely
manner.

4.1(c)  

To ensure that all inquiries by NSI Independent Distributors and customers,
including complaints, are responded to promptly and in a professional and
courteous manner.

4.1(d)  

ensure that all orders are processed and all shipments of Products are made
within the Territory in a timely fashion.

4.1(e)  

To diligently investigate or cause to be investigated all leads with potential
customers referred to it by NSEHK or its Affiliates, including NSI.

4.1(f)  

To permit NSEHK or its representatives to visit NSMY’s place of business and
inspect its inventories, service records, financial records and other relevant
documents.

4.1(g)  

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
and to the extent required by all laws, ordinances and regulations applicable
within the Territory.

4.1(h)  

To provide, at the request of NSEHK, a business plan for the term specified by
NSEHK and in such form and detail as may be reasonably requested by NSEHK and to
update such business plan as reasonably requested by NSEHK.

4.1(i)  

To provide, at the request of NSEHK, reports of its activities and sales
respecting the Products in the Territory in a form and in such detail and for
such time period as NSEHK may reasonably require.

4.2

NSMY Operations

 

NSMY agrees to maintain, or cause to be maintained, such facilities and other
places of business within the Territory as may be necessary to effect the
purposes and intentions of this Agreement. NSMY further agrees to bear all fees
and expenses it incurs in connection with the maintenance of such facilities and
other places of business, including, without limitation, all leases, rentals,
equipment, salaries, taxes, licenses, insurance, permits, telephone, telegraph,
promotional, advertising, travel, accounting and legal expenses.

4.3 Pricing Information

 

NSMY shall, upon NSEHK’s request, advise NSEHK of the distribution or wholesale
prices at which the Products are to be sold from time to time by NSMY to NSI
Independent Distributors within the Territory.

4.4

Forecasts

 

To help NSEHK meet orders by NSMY for the Products, NSMY shall provide NSEHK, or
NSI if NSEHK requests the forecasts be sent directly to NSI, no less often than
quarterly, with a forecast of NSMY’s Product requirements, showing the
quantities of prospective orders by NSMY for Products, the estimated respective
dates of such orders and the estimated shipment dates for such orders.

4.5

NSMY Claims and Representations

 

NSMY shall not make any promises, representations, warranties or guarantees
respecting the Products, sales of Products by NSI Independent Distributors or
NSI’s sale compensation plan, except in accordance with those representations,
warranties or guarantees as provided by NSEHK or NSI with respect thereto and in
accordance and compliance with the applicable laws of the Territory. NSMY shall
not make any claims concerning the Products that have not been approved in
advance in writing by NSEHK.

4.6

Capitalization

 

NSMY 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 in the
Territory.

4.7

Compliance with Laws

 

NSMY shall at all times conduct its efforts hereunder and its business in strict
accordance with all applicable laws and regulations and with the highest
commercial standards.

4.8

Storage of Products

 

NSMY shall store all inventories of Products at proper temperatures and
environmental conditions to maintain the quality of the Products. In the event
of damage to any of the Products for any reason rendering the contents unfit for
use or consumption or otherwise unsaleable, NSMY shall promptly notify NSEHK of
the facts and shall not distribute or transfer such Products to any other person
or otherwise dispose of such Products except as instructed in writing by NSEHK.

4.9

Customer Support

 

NSMY shall be responsible for dealing with any NSI Independent Distributor or
customer questions or complaints concerning the Products and to take prompt
action to solve such questions or complaints. In fulfilling its customer service
responsibilities, NSMY shall maintain sufficient staff and resources in order to
provide a high level of customer service promptly and in a professional manner.
NSMY shall report regularly to NSEHK concerning its customer service activities
and shall take such commercially reasonable corrective measures as may be
recommended by NSEHK to correct any deficiencies. In the event of any product
liability claim that could result in liability to NSEHK or NSI, NSMY shall
notify NSEHK and NSI and shall cooperate with NSEHK and NSI in dealing with such
claim. No such claim shall be settled without the consent of NSEHK and NSI if
either of them has potential liability.

4.10

Allocation of Expenses

 

4.10(a)

Import Licenses

   

To the extent import licenses are required for the importation of the Products
into the Territory, NSMY hereby agrees that it will be responsible for securing
and maintaining such import licenses and payment of all fees and expenses
associated therewith.

 

4.10(b)

Import Expenses

   

NSMY 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 imported into the Territory.

 

4.10(c)

Other Expenses

   

In addition to the fees and expenses described in Articles 4.10 (a) and (b)
above of Article 4 hereof, NSMY shall be responsible for the payment of all fees
and expenses related to the development and maintenance of its business in the
Territory, including, without limitation, the following:

  (a)

fees and expenses to incorporate operating entities;

  (b)

fees and expenses for obtaining business licenses and permits;

  (c)

fees and expenses incurred in drafting and producing required promotional
documentation and other literature such as product catalogues as well as
contracts such as local product purchase agreements;

  (d)

fees and expenses incurred in determining the requirements for registering
Products, including ascertaining and complying with labelling and custom\import
requirements;

  (e)

fees and expenses 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 fees and expenses related to hiring a general manager and staff, and
compliance with local labor laws and requirements; and

  (g)

all other fees and expenses associated with the business other than those fees
and expenses expressly allocated to NSI or NSEHK pursuant to the terms of any of
the Intercompany Agreements. To the extent NSEHK incurs any of the foregoing
fees or expenses on behalf of NSMY, NSMY shall promptly reimburse NSEHK the
amount of such fees and expenses upon the receipt of an invoice from NSEHK.

4.11

Endorsement by NSI

 

At NSMY’s request, NSEHK shall procure NSI’s confirmation on the Endorsement to
this Agreement of NSI’s approval of the appointment under this Agreement by
NSEHK of NSMY as NSEHK’s exclusive wholesale distributor of the Products in the
Territory upon the terms and subject to the conditions set forth in this
Agreement and upon terms that NSI shall be entitled to exercise and enforce in
its own name, all rights reserved to NSI and conferred upon NSI by this
Agreement and in the same manner as if NSI were joined as a party to this
Agreement. The Parties shall countersign the Endorsement to this Agreement.

ARTICLE V
PURCHASE OF PRODUCTS

5.1

Purchase of Products

 

NSMY agrees to purchase from NSEHK such quantities of Products as shall be
necessary to meet the sales demands within the Territory and to maintain an
adequate supply of inventory in order to avoid and minimize any Product
shortages.

5.2

Exclusive Supplier

     NSMY shall source the Products exclusively from or through NSEHK.

5.3

Pricing

 

The prices payable by NSMY for the Products shall be as determined by NSEHK from
time to time and stipulated on a Pricing List for Malaysia to be established by
NSEHK. NSEHK shall be free to change and modify the pricing for the Products at
any time for any reason without any obligation to NSMY. Such revised pricing
shall become effective thirty (30) days from the date written notice of such
price changes is delivered to NSMY. The revised pricing shall apply to any
purchase order received prior to the effective date if the Products are to be
delivered more than 30 days after acceptance of the purchase order. All prices
are exclusive of freight, packaging costs, taxes, import duty and fees, and
insurance charges, all of which are the responsibility of NSMY.

5.4

Ordering

 

All orders for Products submitted by NSMY shall be initiated by written purchase
orders sent to NSEHK (or NSI if so directed by NSEHK) or via electronic
submissions or other means approved by NSEHK; provided, however, that an order
may initially be placed orally or by e-mail if a confirmation written or
electronic purchase order is received by NSEHK within ten (10) days after said
oral or e-mail order. Each purchase order shall identify the Products to be
purchased, the country to which such Products shall be distributed to ensure
shipment and receipt of Products which comply with such country’s laws and
regulations, the quantities thereof, and the requested shipment dates thereof.
All purchase orders for the Products received by NSEHK are subject to its
acceptance in its sole and absolute discretion and NSEHK shall have no liability
if it elects not to supply the Products for any reason. NSEHK, however, shall
use its good faith efforts to fill the order of NSMY for any non-discontinued
Products with due regard to availability, demand of other distributors of NSI in
other Territories, inventory on hand at NSEHK and NSI, and capacity of
manufacturers. NSMY understands that NSEHK sources most of the Products from or
through NSI who in turn sources most of the Products from contract
manufacturers. As a result, availability shall similarly be conditioned upon the
ability of NSI and such contract manufacturers to fulfil their manufacturing
requirements and NSEHK shall have no liability for any failure of NSI or the
contract manufacturer to fulfil their obligations in a timely and accurate
manner. Following receipt of a purchase order, NSEHK shall promptly notify NSMY
whether it accepts such purchase order and an estimate as to when the Products
are to be delivered. NSEHK shall use its good faith efforts to fulfill the order
by the estimated shipping date. NSEHK, however, shall have no liability of any
kind for any delay in fulfillment of an order for any reason. The terms and
conditions for the sale of any Products shall be governed by the terms of this
Agreement and the standard terms and conditions of sale established by NSEHK
from time to time as provided to NSMY in written form. NSEHK shall not be
subject to any terms or conditions set forth in a purchase order from NSMY.
Nothing contained in any such purchase order shall in anyway modify the terms of
this Agreement or NSEHK’s then existing standard terms and conditions of sale or
any additional terms or conditions thereto agreed to by NSEHK in writing. In the
event of a conflict between the terms of this Agreement and NSEHK’s standard
terms and conditions of sale from time to time and/or additional terms or
conditions thereto agreed to by NSEHK, the terms of this Agreement shall
prevail.

5.5

Shipping Terms

 

Title to and risk of loss for any Product(s) ordered and shipped pursuant to the
terms of this Article shall remain with NSEHK until their actual delivery to
NSMY or its designated agent at the port designated in the Purchase Order or at
such other time as the parties may agree to in writing, for title and risk of
loss to pass to NSMY. Shipment shall be made in a commercially reasonable manner
in accordance with standards applicable in the trade and industry. Unless NSEHK
notifies NSMY to the contrary, NSEHK shall ship all Products CIP to the shipping
destinations designated by NSMY. In the event shipments of products are made to
a bonded facility in Malaysia for the benefit of NSEHK, the title to and risk of
loss for any Product(s) ordered and shipped to such bonded facility shall remain
with NSEHK until their actual delivery to NSMY or its designated agent or
shipper at or near the bonded facility in Malaysia.

5.6

Payment Due Date

 

NSMY shall pay for each delivery of Products within thirty (30) days after the
date of arrival of the Products at the destination specified in the Purchase
Order or the date of dispatch of a commercial shipping invoice, whichever is
later.

5.7

Payment Terms

 

Invoices and prices shall be denominated in Ringgit, and payments made by NSMY
to NSEHK under this Agreement shall be payable in U.S. Dollars. For the purposes
of such payment, amounts stated in Ringgit shall be converted on the date
payment is initiated at the selling rate for U.S. Dollars published on such date
by such financial institution as is approved by NSEHK in writing from time to
time. Payments shall be made either directly to NSEHK in immediately available
funds by wire transfer to an account designated by NSEHK, or by such other means
of payment acceptable to NSEHK from time to time.

5.8

Exchange Regulations

 

If NSMY shall be prevented by exchange regulation or restraint from making
payment of any sum due to NSEHK in U.S. Dollars, then NSMY shall make payment in
such other currency as may be selected by NSEHK and be permitted by exchange
regulations.

5.9

Default Rate

 

 

    Without limiting or prejudice to any of NSEHK’s other rights and remedies
under this Agreement:

5.9(a)  

An amount due and outstanding under the terms of this Agreement and not paid
within sixty (60) days from the date on which such amount is due ands payable in
accordance with the payment provisions herein, shall bear interest (both before
and after judgment) at the rate of ten percent (10%) from the due date and until
the date of actual payment; and

5.9(b)  

NSEHK may (but shall not be obligated to) waive, whether with conditions or
otherwise, its right to the payment of interest payable pursuant to Section
5.9(a) of Article V hereof, whether in respect of all or some of the monies due
and payable from time-to-time by NSMY to NSEHK and for such period as NSEHK
deems appropriate in its sole and absolute discretion.

5.9(c)  

Interest shall accrue daily and be calculated on the basis of a three hundred
sixty (360) day year and the actual number of days elapsed in any partial
calendar month.

5.10

No Set-Off

 

All sums payable by NSMY to NSEHK under this Agreement shall be paid without any
set-off, counter-claim, qualification or condition whatsoever.

5.11

Product Returns/Exchanges Inspection

 

NSMY shall thoroughly inspect all Products within fifteen (15) days of the
arrival of the Products at the destination designated by NSMY in the Purchase
Order. NSMY shall promptly notify NSEHK of any defect in the Products or any
non-conformance with the specifications agreed upon by the Parties with respect
to such Products and the order. If any Products are to be returned by NSMY
because of defect or non-conformity, NSMY shall within forty-five (45) days
following actual receipt, return such Products to NSEHK or to NSI if so
designated by NSEHK. In the event of such a return, NSEHK shall make appropriate
arrangements, acceptable to NSMY, to replace any such defective Products at
NSEHK’s sole cost and expense. Failing such replacement, NSEHK shall, at the
option of NSEHK, either credit the purchase price of the defective Products plus
any customs or duties paid with respect to such defective Products to NSMY’s
account or promptly grant NSMY a cash refund for the purchase price paid by NSMY
for such Products. If NSEHK is not notified in writing of any defective Products
within forty-five (45) days after the arrival of the Products at the shipping
destination designated by NSMY, then NSMY shall be deemed to have accepted the
Products concerned and waived its right to return any such Products. After this
forty-five (45) day period, NSMY may not return a Product for any reason without
NSEHK’s prior written consent, which may be withheld or granted with or without
conditions in the sole and absolute discretion of NSEHK. NSMY shall be
responsible for all shipping charges for Products returned after the forty-five
(45) day period.

5.12

Creation of Security Interest

 

Simultaneously with the execution of this Agreement (or such later date as may
be acceptable to NSEHK), NSMY shall execute a Deed of Debenture in terms
reasonably required by NSEHK and thereby create a fixed charge over NSMY’s fixed
assets and a floating charge in favour of NSEHK, NSI and Nu Skin International
Management Group, Inc. over NSMY’s undertaking, current and future inventory of
Products purchased pursuant to this Agreement, NSMY’s receivables and other
properties and assets to secure full and prompt payment by NSMY of all amounts
which NSMY is obligated to pay to NSI, NSEHK and their Affiliates under the
terms of this Agreement and the other Intercompany Agreements. NSMY shall take
such actions, and execute such documents, as may be necessary to establish and
perfect such security interest under applicable law.

ARTICLE VI
OBLIGATIONS OF NSEHK AS SUPPLIER OF PRODUCTS

6.1

Product Formulation

 

NSEHK and NSMY agree to cooperate and work with NSI to mutually determine the
formulae or ingredients to be used for Products in the Territory based on local
market regulations and consumer preferences. NSI shall own all right, title and
interest to any formula, technology or other intangible property developed for
Products and shall compensate NSMY for any services provided by NSMY.

6.2

Warranty

 

With respect to Products procured by NSEHK from manufacturers who are not
Affiliates of NSEHK or NSI, NSEHK, to the extent possible, shall pass on and
assign to NSMY the warranty provided by such manufacturers and NSEHK shall
assist NSMY in making any claims against such manufacturers. NEITHER NSI NOR
NSEHK MAKES ANY WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO PRODUCTS
PROCURED FROM MANUFACTURERS WHO ARE NOT AFFILIATES OF NSEHK OR NSI. Subject to
the provisions of Section 5.11 of Article V hereof, NSEHK shall be responsible
for any shipping charges associated with the return of Products that do not meet
the manufacturer’s warranty. With respect to any Products that are manufactured
by NSI, NSEHK or their Affiliates, NSEHK warrants that such Products shall
conform to the specifications established by NSI, NSEHK and NSMY and that such
Products shall be merchantable and free from defects. Provided that the Products
manufactured by NSI, NSEHK or their Affiliates are stored in appropriate
conditions, NSEHK warrants that such Products shall have the shelf life
specified in the specifications agreed to by the Parties. NSMY assumes
responsibility for ensuring that the specifications agreed upon by the Parties
comply with all applicable laws and regulations of the Territory and neither
NSEHK nor NSI assumes any obligation with respect to such compliance. NSEHK
further warrants that it will deliver good title to the Products and that the
Products will be delivered free from any lawful security interest or other lien
or encumbrance except as provided by this Agreement.

6.2(a)  

In no event shall NSEHK’s or NSI’s liability for any breach of such warranties
exceed in amount the price of the Products in respect of which any breach is
claimed. NSEHK’S AND NSI’S WARRANTY STATED HEREIN ARE EXPRESSLY IN LIEU OF ANY
OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

6.2(b)  

NSI and NSEHK neither assume nor authorize any person or entity to assume for it
any other liability in connection with the Products supplied hereunder, and
there are no oral contracts or warranties collateral to or affecting this
Agreement. Neither NSEHK nor NSI shall be liable to NSMY or any other persons
for consequential, special or incidental damages.

ARTICLE VII
SALE AND MANUFACTURE OF PRODUCTS

7.1

Non-Competing Products

 

Nothing contained herein, shall restrict or prohibit NSMY from selling,
distributing, manufacturing or causing to be manufactured products or materials
which do not compete directly or indirectly with the Products, provided that
such other products do not infringe upon any patent, name, trademark, emblem,
trade name, design right, model, formula, Nu Skin Confidential Information or
other commercial or industrial property rights of NSEHK or NSI or any of their
Affiliates. Notwithstanding the foregoing, in the event NSMY desires to sell or
distribute a product or service that is not currently available through NSEHK or
NSI, NSMY shall work with NSEHK and NSI and allow NSEHK the opportunity to
develop and manufacture, or cause to be developed or manufactured, such product
or service. In the event that NSMY and NSEHK are unable to agree upon terms
acting in good faith, NSMY may acquire from another person, such product or
service if it does not compete directly or indirectly with the Products or any
other products or services NSEHK or NSI sells outside the Territory and which
NSEHK has agreed to provide to NSMY on terms consistent with those upon which
NSEHK provides such products or services to its other Affiliates.

7.2

Competing Products

 

During the term of this Agreement, NSMY shall not, and shall not authorize
another party to, manufacture, cause to be manufactured, distribute or sell (i)
any products or materials which directly or indirectly compete with the Products
or (ii) copies of the Products or other products that might reasonably be deemed
under U.S. or foreign law to be confusingly similar to the Products, in each
case without the prior written consent of NSI and NSEHK, which may be withheld
or granted with or without conditions in the sole and absolute discretion of
NSEHK and NSI.

7.3

Discontinued Products

 

Notwithstanding the foregoing, in the event NSMY receives notice from NSEHK of
the discontinuance of the sale of any Product, NSMY may elect to manufacture or
cause to be manufactured such Product; provided that, if such discontinued
Product competes directly or indirectly with any other Product, the prior
written consent of NSEHK shall be required, which may be withheld or granted
with or without conditions in the sole and absolute discretion of NSEHK. If NSMY
elects to so manufacture or cause to be manufactured such discontinued Product,
NSEHK shall, to the extent NSEHK or NSI retains any rights to such formula,
license the formula or cause NSI to license the formula to such discontinued
Product to NSMY on substantially the same terms as set forth in the Trademark
Licensing Agreement, dated as of the date hereof, by and between NSI and NSMY.
In the event NSI and NSEHK no longer owns or has any further rights to such
Product or formula, NSMY shall not have the right to market such Product unless
it obtains the right to market such Product from the person holding the rights
to such Product or formula.

ARTICLE VIII
NATURE OF RELATIONSHIP

The relationship of NSMY and NSEHK 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 IX
TERM AND TERMINATION

9.1

Term

 

This Agreement shall commence and take effect on September 28, 2001 and the
initial term shall end on December 31, 2004, unless terminated earlier pursuant
to the provisions of this Article IX. This Agreement automatically shall renew
for successive one (1) year terms unless terminated by either Party by written
notice given not less than (90) days prior to the end of the current term of
this Agreement or in accordance with Sections 9.2, 9.3 or 9.4 of Article IX
hereof.

9.2

Termination for Insolvency/Receivership

 

This Agreement may be terminated by either Party immediately or at any time
after the occurrence of any of the following events:

9.2 (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

9.2(b)  

there shall be commenced against the other Party any case, proceeding or other
action of a nature referred to in Section 9.2(a) of Article IX hereof which
either results in the entry of an order for relief or any such adjudication or
appointment or remains undismissed, undischarged or unbonded for a period of 90
days.

9.2(c)  

if the other Party causes or allows a judgment in excess of ten percent (10%) of
its assets as reflected on its most recent balance sheet 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 ten percent (10%) of
its assets.

9.3

Termination for Breach of this Agreement

9.3(a)  

This Agreement may be terminated immediately by NSEHK if NSMY fails to pay on
the due date, any monies payable hereunder by NSMY to NSEHK and such failure
continues for a period of thirty (30) days from NSMY’s receipt of a written
notice given by NSEHK requiring such payment.

9.3(b)  

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
(other than NSMY’s obligation to pay monies referred to in Section 9.3(a) of
this Article IX) and such default has not been cured within thirty (30) days
after receipt of written notice of such default by the defaulting Party.

9.4

Termination for Breach of Shareholders Agreement/ Upon Termination of Other
Intercompany Agreements/ Unenforceability of Deed of Debenture

     This Agreement may be terminated by NSEHK if:

9.4(a)  

any of the parties (other than Nu Skin Enterprises, Inc.) to the Shareholders
Agreement by and between Nu Skin Enterprises, Inc. and the other shareholders of
Nu Skin Malaysia Holdings Sdn. Bhd. (Company No. 552189-P) ("NSMH"), the
parent/holding company of NSMY, breaches such party's obligations thereunder and
fails to cure such breach within thirty (30) days after its receipt of a written
notice of such breach given by Nu Skin Enterprises, Inc. requiring such cure;

9.4(b)  

the aforesaid Shareholders Agreement or any other(s) of the Intercompany
Agreements is/are terminated for any reason whatsoever or the Deed of Debenture
referred to in Section 5.12 of Article 5 hereof and/or either of the charges
created thereunder is/are void for any reason whatsoever;

9.4(c)  

by agreement between the parties to the aforesaid Shareholders Agreement, all of
the issued shares in NSMY are sold by NSMH to a third party or NSMY’s business
and assets are sold by NSMY to a third party;

9.4(d)  

Nu Skin Enterprises, Inc., NSI, NSEHK or other Affiliate of NSI ceases to hold,
directly or indirectly, an equity interest of at least thirty percent (30%) in
NSMY; or

9.4(d)  

persons representing from time to time such of Nu Skin Enterprises, Inc., NSI
and other Affiliate of NSI as is/are the holder(s) of an indirect thirty percent
(30%) equity interest in NSMY, cease (for any reason other than their removal by
such holder of an indirect thirty percent (30%) equity interest in NSMY) to hold
office as such number of directors of NSMY as constitute less than thirty
percent (30%) of the total number of NSMY’s Board of Directors.

9.5

Termination for Loss of License

 

NSEHK shall have the right to terminate this Agreement if any license,
regulatory approval, or corporate authority necessary to conduct the business in
the manner contemplated by the Parties and the Intercompany Agreements, is
terminated, is not obtained or renewed, or expires.

9.6

Survival of Obligations

 

The termination or expiration of this Agreement shall be without prejudice to
the rights and remedies of a Party in respect of any antecedent breach of this
Agreement. The obligations of a Party to pay any sums that are due and payable
as of the expiration or termination of this Agreement shall survive the
expiration or termination of this Agreement.

ARTICLE X
EFFECT OF TERMINATION

10.1

Termination of Rights

 

Upon termination of this Agreement by NSEHK, all rights herein granted to NSMY
by or pursuant to this Agreement shall cease to be exercisable by NSMY and shall
revert to NSEHK, and NSMY shall immediately cease to hold itself out to the
public as NSEHK’s exclusive wholesale distributor in the Territory or otherwise
represent that it is associated in any manner with NSEHK or NSI. The provisions
of this Section 10.1 shall not apply to sales by NSMY of Products which NSEHK
does not repurchase pursuant to Section 10.3 of Article X hereof.

10.2

Ordered Products

 

Upon termination of this Agreement, NSEHK may either (a) deliver, and NSMY shall
pay for, all Products ordered by NSMY prior to such termination or (b) cancel,
without cost or liability, NSMY’s orders for such Products.

10.3

Inventory Repurchase

 

Upon the expiration or termination of this Agreement, NSEHK shall have the
option, but not the obligation, to repurchase for cash all or any portion of
NSMY’s inventory of Products at the original purchase price paid by NSMY to
NSEHK for such Products as determined by NSEHK’s sales records. NSEHK may
exercise this right by providing written notice of its election to exercise this
option to purchase all or a portion of the inventory. Following the termination
of this Agreement, NSEHK shall have the right to enter NSMY’s premises to
inspect NSMY’s inventory of Products. NSEHK shall be responsible for making
transportation arrangements for any Products repurchased after NSMY has prepared
them for shipping. NSMY agrees to promptly prepare the Products for shipping
upon receipt of written notice of NSEHK’s election to repurchase the inventory.
NSMY shall be responsible for the shipping charges. If the Products are not
repurchased by NSEHK, NSMY is solely responsible for their disposal, and NSMY
undertakes to dispose of such Products in such a manner as will not infringe the
intellectual property rights of NSEHK or NSI, or interfere with NSI’s or NSEHK’s
goodwill. NSMY will destroy or return all material that NSMY possesses on which
NSEHK’s or NSI’s Intellectual Property appears.

10.4

No Release of Payment obligations

 

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.

10.5

Limitation on Damages

 

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. NSMY
acknowledges and agrees that any amounts spent by NSMY in the performance of
this Agreement shall be spent and incurred with the knowledge that this
Agreement may be terminated as provided in this Agreement and NSMY shall make no
claim against NSEHK or NSI for, and NSEHK and NSI shall not be liable with
respect to, NSMY’s investment or expenditures incurred in anticipation of the
continuance of this Agreement.

10.6

Survival

 

The provisions of Article XI, Article XII and Article XIII, 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.

ARTICLE XI
CONFIDENTIALITY

11.1

NSMY Confidentiality

 

NSMY agrees that, during and after the term of this Agreement, NSMY shall
maintain in confidence all Nu Skin Confidential Information and shall not
disclose any Nu Skin Confidential Information to any third party or use any Nu
Skin Confidential Information for any purpose whatsoever except as contemplated
by this Agreement. In maintaining the confidentiality of Nu Skin Confidential
Information, NSMY shall exercise the same degree of care that it exercises with
its own confidential information, and in no event less than a reasonable degree
of care. NSMY shall , without limiting its obligation to maintain the Nu Skin
Confidential Information in confidence, use commercially reasonable efforts to
ensure that each of its employees and contractors holds in confidence and makes
no use of any Nu Skin Confidential Information for any purpose other than those
permitted by this Agreement. NSMY shall use its best efforts to ensure that no
person other than its employees shall have access to Nu Skin Confidential
Information without the prior written consent of Nu Skin, and shall restrict
access to Nu Skin Confidential Information to those having a need for access
thereto.

11.2

NSEHK Confidentiality

 

NSEHK agrees that, during and after the term of this Agreement, NSEHK shall
maintain in confidence all NSMY Confidential Information and shall not disclose
any NSMY Confidential Information to any third party or use any NSMY
Confidential Information for any purpose whatsoever except as contemplated by
this Agreement. In maintaining the confidentiality of NSMY Confidential
Information, NSEHK shall exercise the same degree of care that it exercises with
its own confidential information, and in no event less than a reasonable degree
of care. Without limiting its obligation to maintain the NSMY Confidential
Information in confidence, NSEHK shall use commercially reasonable efforts to
ensure that each of its employees and contractors holds in confidence and makes
no use of any NSMY Confidential Information for any purpose other than those
permitted by this Agreement. NSEHK shall use its best efforts to ensure that no
person other than its employees and contractors shall have access to NSMY
Confidential Information without the prior written consent of NSMY, and shall
restrict access to NSMY Confidential Information to those employees and
contractors having a need for access thereto.

11.3

Exceptions

 

The obligation of confidentiality contained in this Agreement shall not apply to
the extent that (i) either Party is required to disclose information by order or
regulation of a governmental agency or a court of competent jurisdiction,
provided, however, that such Party shall not, to the extent possible, make any
such disclosure without first notifying the disclosing Party and allowing the
disclosing Party a reasonable opportunity to seek injunctive relief from (or a
protective order with respect to) the obligation to make such disclosure, or
(ii) the Party receiving disclosed information can demonstrate that (A) the
disclosed information was at the time of such disclosure already in, or
subsequently becomes part of, the public domain other than as a result of
actions of the receiving Party, its affiliates, employees, consultants, agents
or subcontractors in violation hereof; (B) the disclosed information was
received by the receiving Party on an unrestricted basis from a source unrelated
to the disclosing Party provided the receiving Party has no knowledge or reason
to know that such Party is under a duty of confidentiality with respect to such
information.

11.4

Unauthorized Disclosure

 

Each Party acknowledges and confirms that the Confidential Information of the
other Party constitutes valuable proprietary information and trade secrets of
the other Party and that the unauthorized use, loss or outside disclosure of
such information shall cause irreparable injury to the other Party. Each Party
shall notify the other Party immediately upon discovery of any unauthorized use
or disclosure of Confidential Information of the other Party, and will cooperate
with the other Party in every reasonable way to help regain possession of such
information and to prevent its further unauthorized use. Each Party acknowledges
that monetary damages may not be a sufficient remedy for unauthorized disclosure
of the Confidential Information of the other Party and that the other Party
shall be entitled, without waiving other rights or remedies, to such injunctive
or equitable relief as may be deemed proper by a court of competent
jurisdiction, and shall be entitled to recover reasonable attorneys’ fees for
any action arising out of or relating to a disclosure of such Confidential
Information.

11.5

Return of Confidential Information

 

NSMY shall, upon the request of NSEHK, return to NSEHK all Nu Skin Confidential
Information, including any copies or reproductions thereof, in NSMY’s possession
or control.

11.6

Property Rights

 

NSMY agrees that NSI or NSEHK owns all right, title and interest in, or has a
valid license to use, the Intellectual Property. This Agreement confers no
rights with respect to the Intellectual Property except for the limited right to
resell the Products during the term of this Agreement as set forth herein, which
right shall terminate upon termination of this Agreement. This Agreement confers
no right or license to, expressly or by implication, and NSMY shall not,
manufacture, duplicate or otherwise copy or reproduce any of the Products or use
the Intellectual Property for any other purpose.

11. 7

Intellectual Property Covenants

 

NSMY shall not do any act that would or might invalidate or dilute NSI’s
registration of, or title to, the Intellectual Property. NSMY shall not attempt
to vary or cancel any registration of the Intellectual Property, shall not hold
itself out as or represent it is the owner of the Intellectual Property, or
assist any other person in any of the foregoing. NSMY shall not alter in any way
the Intellectual Property used in connection with the goods and shall not
combine Intellectual Property with any intellectual property of NSMY in a manner
that could create joint rights in the Intellectual Property.

11.8

Trademarks

 

During the term of this Agreement, NSMY shall have the right to indicate to the
public that it is the authorized distributor of the Products and to utilize the
trademarks associated with the Products or the packaging of the Products in all
respects in accordance with the terms and conditions of this Agreement. NSMY’s
use of trademarks other than on the packaging of the Products procured through
NSEHK, shall be governed by the Trademark Licensing Agreement entered into
simultaneously with this Agreement. Any use of trademarks on any packaging to be
produced by NSMY shall first be submitted to NSEHK for approval of the design,
color and other details of the use of the trademark, which approval may be
withheld or granted with or without conditions in the sole and absolute
discretion of NSEHK. Any use of the trademarks of NSI must state that NSI is the
owner of the trademark.

ARTICLE XII
INDEMNIFICATION AND INSURANCE

12.1

NSEHK Indemnity

 

NSEHK agrees during and after the term of this Agreement to indemnify and hold
harmless NSMY from liability, loss, cost or damage, (including reasonable
attorneys’ fees) which NSMY may incur as a result of claims, demands or
judgements, of any kind or nature, by anyone whomsoever, arising out of:

  (i)

any breach of the representations and warranties set forth in Article VI; or

  (ii) 

a claim that the Products or NSI’s Confidential Information infringes any
patent, copyright, trade secret or other intellectual property right of a third
party; provided that NSMY provides NSEHK with prompt notice in writing of any
such claim or demand, NSEHK is given the right to assume control of such defense
and NSMY shall cooperate with NSEHK in the defense or settlement of any such
claim or action. NSEHK shall not have any obligation to indemnify NSMY for any
claim if such claim is settled without the consent of NSEHK.

 

Notwithstanding the foregoing, NSEHK shall have no obligation to indemnify NSMY
for any liabilities arising out of NSMY’s failure or the failure of the NSI
Independent Distributors in the Territory to utilize, sell, market or promote
the Products:

  (i)

in the manner for which the Products are reasonably intended;

  (ii)

in compliance with NSEHK's or NSI's policies and procedures; or

(iii)  

as contemplated by the Intercompany Agreements, including, but not limited to,
liabilities arising out of false or misleading claims made by the NSI
Independent Distributors. In addition, neither NSEHK nor NSI shall have any
liability with respect to any alleged infringement to the extent such alleged
infringement relates to information or specifications provided by NSMY, or
alteration of the Product by NSMY.

12.2

NSMY Indemnity

 

NSMY agrees during and after the term of this Agreement to indemnify and hold
harmless NSEHK and NSI from liability, loss, cost or damage (including
reasonable attorney’s fees), which NSEHK or NSI may incur as a result of claims,
demands or judgements, of any kind or nature, by anyone whosoever, arising out
of or resulting from the possession, use or sale of the Products by NSMY or any
of the NSI Independent Distributors (except to the extent NSEHK has indemnified
NSMY against such claims, demands, or judgements pursuant to Section 14.1
hereof); By way of elaboration, but not limitation, NSMY shall indemnify NSEHK
and NSI for any liabilities arising out of NSMY’s failure or the failure of the
NSI Independent Distributors to utilize, sell, sell, market or promote the
Products;

  (i)

in the manner for which the Products are reasonably intended;

  (ii)

in compliance with Nu Skin policies and procedures; or

  (iii)

as contemplated by the Intercompany Agreements, including but not limited to,
liabilities arising out of false or misleading claims made by NSI Independent
Distributors. Notwithstanding the foregoing, in the event NSMY shall have
requested NSI to take disciplinary actions against an NSI Independent
Distributors operating in the Territory and NSI shall have, in breach of its
obligations under its License Agreement with NSMY, failed to take such actions
against such NSI Independent Distributor, NSMY shall not be obligated to
indemnify NSEHK or NSI for any loss that NSI NSEHK might incur as a reasonable
and proximate result of such failure.

12.3

Insurance

 

At all times during and following the terms of this Agreement, each of NSEHK and
NSMY shall maintain insurance (or cause the other Party to be added as an
additional insured to any policy not maintained by such Party) with one or more
reputable insurers reasonable in coverage and amount in direct proportion and
corresponding to the business to be conducted by such Party pursuant to this
Agreement.

12.4

Infringement Remedy

 

In the event a claim of infringement by a third party covered by the indemnity
set forth in Section 12.1 of this Article XII, NSEHK shall have the right to
elect, at its option and expense, to either replace or modify the Products so
that they become non-infringing, or accept return of the Products and refund to
NSMY an amount equal to the aggregate purchase price paid by NSMY for such
Products.

ARTICLE XIII
MISCELLANEOUS

13.1

Assignment

 

This Agreement shall be binding on and inure to the benefit of the respective
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, which consent may be withheld or granted with or without conditions at
the sole discretion of such other Party. Any attempted assignment without
requisite written consent shall be void and unenforceable. Notwithstanding the
forgoing, NSEHK may assign this Agreement to any of its Affiliates.

13.2

Notices

 

A notice, request and other communication hereunder shall be in writing and
shall be deemed to have been duly given, if delivered by hand, courier or
registered airmail, or communicated by facsimile, cable or similar electronic
means to the address, facsimile number or cable identification number provided
below (or as changed in accordance with this Section 13.2) of the Party to whom
it is addressed and shall be deemed to be given if delivered by hand or courier,
at the time of delivery or if communicated by facsimile, cable or similar
electronic means, 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:-

  If to NSEHK:

Nu Skin Enterprises Hong Kong, Inc
26th Floor, Windsor House, 311 Gloucester Road
Causeway Bay, Hong Kong
Attn: Regional Controller
Facsimile No.: 852-882-7809

  If to NSMY:

Nu Skin (Malaysia) Sdn. Bhd.
Office Lot 04-01, Level 4, PNB Darby Park Retail
No. 10, Jalan Binjai, 50450 Kuala Lumpur
Malaysia
Attn: Managing Director
Facsimile: 603-2170 7799

 

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.

13.3

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.

13.4

Force Majeure

 

A Party 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, terrorist activities 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.

13.5

Governing Law

 

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.

13.6

Dispute Resolution

 

Any dispute or difference which may arise between the Parties at any time
hereafter, whether during the continuance in force of this Agreement or upon or
after its termination, touching any matter or thing herein contained or the
operation or construction of this Agreement or any matter or thing in any way
connected with, arising from or in relation to this Agreement or the rights,
duties or liabilities of the Parties hereunder shall be finally settled by
arbitration in accordance with International Arbitration Rules of the American
Arbitration (“L/Authority”).

  13.6(a)

A reference to arbitration shall be to three (3) arbitrators.

  13.6(b)

The arbitration shall be held in Provo, State of Utah, United States of America,
at the Regional Center and the language to be used in the arbitral proceedings
shall be English.

  13.6(c)

Pending the commencement of the arbitral proceedings, either Party may apply, to
the courts in Utah and/or Malaysia (which shall have non-exclusive jurisdiction)
for the grant of interim injunctions and orders for the protection and
preservation of property subject of or relating to this Agreement. For the
purposes of this Section 13.4(c) and as provided in the Arbitration Rules of the
AAA, arbitral proceedings shall be deemed to commence on the date when the
administrator of the AAA receives notice of arbitration from the Party
initiating the arbitration.

13.7

Integrated Contract

 

This Agreement together with the document and agreements referred to herein
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.

13.8

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.

13.9

Severability

 

To the extent that any provision of this Agreement is (or, in the opinion of
counsel mutually acceptable to both parties, would be) prohibited, judicially
invalidated or otherwise rendered unenforceable in any jurisdiction, such
provision shall be deemed ineffective only to the extent of such prohibition,
invalidation or unenforceability in that jurisdiction, and only within that
jurisdiction. Any prohibited, judicially invalidated or unenforceable provision
of this Agreement will not invalidate or render unenforceable any other
provision of this Agreement, nor will such provision of this Agreement be
invalidated or rendered unenforceable in any other jurisdiction.

13.10

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 by their respective duly authorized
representatives executed this Agreement as of the day and the year first above
written.

NU SKIN ENTERPRISES HONG KONG, INC.

By:    /s/  Truman Hunt

Name: Truman Hunt

Its: Vice President

NU SKIN (MALAYSIA) SDN. BHD.

By:    /s/  Datuk Mohd Nadzmi Bin Mohd Bin Mohd Salleh

Name:    Datuk Mohd Nadzmi Bin Mohd Bin Mohd Salleh

Its:     Director

ENDORSEMENT

WE, NU SKIN INTERNATIONAL, INC. (Company No. 880564-0142), a corporation
organized under the laws of the State of Utah, United States of America and
having its principal place of business at 75, West Center Street, Provo, Utah
84601, United States of America confirm our approval of the appointment under
the Distribution Agreement (to which this Endorsement is attached) by NU SKIN
ENTERPRISES HONG KONG, INC. (Company No. 1107053-0142), a company organized
under the laws of the State of Utah, United States of America and having its
principal place of business at 75, West Center Street, Provo, Utah 84601, United
States of America and a registered branch office at 26th Floor, Windsor House,
311 Gloucester Road, Causeway Bay, Hong Kong (“NSEHK”) of NU SKIN (MALAYSIA)
SDN. BHD. (Company No. 402787-V), a company incorporated in Malaysia and having
its registered office at 6th Floor, Menara Boustead, 69, Jalan Raja Chulan,
50200 Kuala Lumpur, Malaysia and a place of business at Office Lot 04-01, Level
4, PNB Darby Park Retail, No. 10, Jalan Binjai, 50450 Kuala Lumpur (“NSMY”) as
NSEHK’s exclusive wholesale distributor of the Products in the Territory upon
the terms and subject to the conditions set forth in the Distribution Agreement
and upon terms that we shall be entitled to exercise and enforce in our name and
in the same manner as if we were joined as a party to the Distribution
Agreement, all rights reserved to us and conferred upon us by the Distribution
Agreement.

The expressions “Products” and “Territory” as used in this Endorsement shall
have the meanings given to them by the Distribution Agreement.

NU SKIN INTERNATIONAL, INC.

By:    /s/  Steven J. Lund

   Steven J. Lund

Its: President

Date:

ENDORSEMENT

WE, NU SKIN ENTERPRISES HONG KONG, INC. (Company No. 1107053-0142) and NU SKIN
(MALAYSIA) SDN. BHD. (Company No. 402787-V) confirm that NU SKIN INTERNATIONAL,
INC. (Company No. 880564-0142) ("NSI") is entitled to exercise and enforce in
its own name and as if NSI were joined as a party to the Distribution Agreement,
all rights reserved to NSI and conferred upon NSI by the Distribution Agreement.

NU SKIN ENTERPRISES   NU SKIN (MALAYSIA) SDN.       HONG KONG, INC  BHD. 
By:    /s/  Truman Hunt  By:    /s/  Datuk Mohd Nadzmi Bin Mohd Bin Mohd Salleh 
Truman Hunt  Its:  Vice President  Its:  DIrector     Date:  Date: