Exhibit 10.2

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (this “Agreement”) dated the 7th day of June,
2004, by and between Mannatech, Incorporated, a Texas corporation (the
“Company”), and Bettina Simon, Stephen Fenstermacher, Ron Norman, and John
Crowley, as to each (“Indemnitee”).

 

RECITALS

 

A. Competent and experienced persons are reluctant to serve or to continue to
serve as directors and officers of corporations or in other capacities unless
they are provided with adequate protection through insurance or indemnification
(or both) against claims against them arising out of their service and
activities on behalf of the corporation.

 

B. The current uncertainties relating to the availability of adequate insurance
have increased the difficulty for corporations of attracting and retaining
competent and experienced persons to serve in such capacity.

 

C. The Board of Directors of the Company (the “Board of Directors”) has
determined that the continuation of present trends in litigation will make it
more difficult to attract and retain competent and experienced persons to serve
as directors and officers of the Company, that this situation is detrimental to
the best interests of the Company’s shareholders and that the Company should act
to assure such persons that there will be increased certainty of adequate
protection in the future.

 

D. As a supplement to and in the furtherance of the Company’s Articles of
Incorporation, as amended (the “Articles”), and Bylaws, as amended (the
“Bylaws”), it is reasonable, prudent, desirable and necessary for the Company
contractually to obligate itself to indemnify, and to pay in advance expenses on
behalf of, officers and directors to the fullest extent permitted by law so that
they will serve or continue to serve the Company free from concern that they
will not be so indemnified and that their expenses will not be so paid in
advance.

 

E. This Agreement is not a substitute for, nor does it diminish or abrogate any
rights of Indemnitee under, the Articles and the Bylaws or any resolutions
adopted pursuant thereto (including any contractual rights of Indemnitee that
may exist).

 

F. Indemnitee is an officer of the Company and a director of the Company’s
subsidiary, Mannatech Korea Limited (“MKL”) wherein Republic of Korea requires
registration with the Direct Selling Mutual Aid Cooperative (“DSMAC”)
administered by the MLM industry association, which provides additional consumer
protection for citizens of the Republic of Korea.

 

G. Registration with DSMAC requires mandatory personal guarantees of the members
of the Board of Directors of MKL and his willingness to continue to serve in
such capacity is predicated, in substantial part, upon the Company’s willingness
to indemnify his to the fullest extent permitted by the laws of the State of
Texas and upon the other undertakings set forth in this Agreement.

 

--------------------------------------------------------------------------------

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and covenants contained herein,
the Company and Indemnitee hereby agree as follows:

 

ARTICLE 1

CERTAIN DEFINITIONS

 

Capitalized terms used but not otherwise defined in this Agreement have the
meanings set forth below:

 

“Change of Control” means the occurrence of any of the following events:

 

(a) The acquisition after the date of this Agreement by any individual, entity
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or
more of either the then-outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that none of the following acquisitions will constitute a
Change of Control:

 

(i) Any acquisition directly from the Company or any Controlled Affiliate of the
Company;

 

(ii) Any acquisition by the Company or any Controlled Affiliate of the Company;

 

(iii) Any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any Controlled Affiliate of the Company; or

 

(iv) Any acquisition by any entity or its security holders pursuant to a
transaction that complies with clauses (i), (ii) and (iii) of paragraph (c) of
this definition.

 

(b) Individuals who, as of the date of this Agreement, constitute the Board of
Directors (the “Incumbent Directors”) cease for any reason to constitute at
least a majority of the Board of Directors; provided, however, that any
individual who becomes a director of the Company subsequent to the date of this
Agreement and whose election or appointment by the Board of Directors or
nomination for election by the Company’s shareholders was approved by a vote of
at least two-thirds (2/3) of the then Incumbent Directors will be considered as
an Incumbent Director, unless such individual’s initial assumption of office
occurs as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a person or entity other than the
Company;

 

2

--------------------------------------------------------------------------------

(c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving the Company or any of
its Subsidiaries, a sale or other disposition of all or substantially all of the
assets of the Company or an acquisition of assets or stock of another entity by
the Company or any of its Subsidiaries (each a “Business Combination”) unless,
in each case, following such Business Combination (i) all or substantially all
of the individuals and entities that were the beneficial owners of the
Outstanding Common Stock and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or indirectly,
more than 80% of the then-outstanding shares of common stock and the combined
voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including a corporation that, as a
result of such Business Combination, owns the Company or all or substantially
all of the Company’s assets either directly or through one or more Subsidiaries)
in substantially the same proportions as their ownership immediately prior to
such Business Combination of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities, as the case may be, (ii) no person or
entity (excluding (A) any entity resulting from such Business Combination or (B)
any employee benefit plan (or related trust) of the Company or corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly 20% or more of either the then outstanding shares of common stock of
the corporation resulting from such Business Combination or the combined voting
power of the then-outstanding voting securities of such corporation, except to
the extent that such ownership existed prior to such Business Combination, and
(iii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board of Directors, providing for such Business Combination; or

 

(d) Approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.

 

“Controlled Affiliate” means any corporation, limited liability company,
partnership, joint venture, trust or other entity, whether or not for profit,
that is directly or indirectly controlled by the Company. For purposes of this
definition, the term “control” means the possession, directly or indirectly, of
the power to direct, or cause the direction of, the management or policies of an
enterprise, whether through the ownership of voting securities, through other
voting rights, by contract or otherwise; provided, however, that direct or
indirect beneficial ownership of capital stock or other interests in an entity
entitling the holder to cast 30% or more of the total number of votes generally
entitled to be cast in the election of directors (or persons performing
comparable functions) of such entity will be deemed to constitute “control” for
purposes of this definition.

 

“Corporate Status” means the status of a person who is or was a director,
officer, employee, partner, member, manager, venturer, proprietor, trustee,
fiduciary or agent of the Company or of any other Enterprise which such person
is or was serving at the request of the Company. In addition to any service at
the actual request of the Company, Indemnitee will be deemed, for purposes of
this Agreement, to be serving or to have served at the request of the Company as
a director, officer, employee, partner, member, manager, venturer, proprietor,
trustee, fiduciary or agent of another Enterprise if Indemnitee is or was
serving as a director,

 

3

--------------------------------------------------------------------------------

officer, employee, partner, member, manager, venturer, proprietor, trustee,
fiduciary or agent of such Enterprise and (i) such Enterprise is or at the time
of such service was a Controlled Affiliate, (ii) such Enterprise is or at the
time of such service was an employee benefit plan (or related trust) sponsored
on maintained by the Company or a Controlled Affiliate or (iii) the Company or a
Controlled Affiliate directly or indirectly caused Indemnitee to be nominated,
elected, appointed, designated, employed, engaged or selected to serve in such
capacity.

 

“Disinterested Director” means a director of the Company who is not and was not
a party to the Proceeding in respect of which indemnification is sought by
Indemnitee.

 

“Enterprise”means the Company and any other corporation, partnership, limited
liability company, joint venture, employee benefit plan, trust, other entity or
other enterprise of which Indemnitee is or was serving at the request of the
Company in a Corporate Status.

 

“Expenses” means all attorney’s fees, disbursements and retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, fax transmission
charges, secretarial services, delivery service fees and all other disbursements
or expenses paid or incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, being or preparing to be a
witness in, or otherwise participating in, a Proceeding, or in connection with
seeking indemnification under this Agreement. Expenses will also include
Expenses paid or incurred in connection with any appeal resulting from any
Proceeding, including the premium, security for and other costs relating to any
appeal bond or its equivalent. Expenses, however, will not include amounts paid
in settlement by Indemnitee or the amount of judgments or fines against
Indemnitee.

 

“Independent Counsel” means an attorney or firm of attorneys that is experienced
in matters of corporation law and neither currently is, nor in the past five (5)
years has been, retained to represent: (i) the Company or Indemnitee in any
matter material to either such party (other than with respect to matters
concerning the Indemnitee under this Agreement and/or the indemnification
provisions of the Articles or Bylaws, or of other indemnitees under similar
indemnification agreements), or (ii) any other party to the Proceeding giving
rise to a claim for indemnification hereunder. Notwithstanding the foregoing,
the term “Independent Counsel” does not include any person who, under the
applicable standards of professional conduct then prevailing, would have a
conflict of interest in representing either the Company or Indemnitee in an
action to determine Indemnitee’s rights under this Agreement.

 

“Losses” means any loss, liability, judgments, damages, amounts paid in
settlement, fines (including excise taxes and penalties assessed with respect to
employee benefit plans), penalties (whether civil, criminal or otherwise) and
all interest, assessments and other charges paid or payable in connection with
or in respect of any of the foregoing.

 

“Proceeding” means any threatened, pending or completed action, suit, claim,
demand, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or completed
proceeding, including any and all appeals, whether brought by or in the right of
the Company or otherwise, whether civil, criminal, administrative, arbitrative
or investigative, whether formal or informal, and in each case whether or not
commenced prior to the date of this Agreement, in which Indemnitee was, is or
will be involved

 

4

--------------------------------------------------------------------------------

as a party or otherwise, by reason of or relating to Indemnitee’s Corporate
Status and by reason of or relating to either (i) any action or alleged action
taken by Indemnitee (or failure or alleged failure to act) or of any action or
alleged action (or failure or alleged failure to act) on Indemnitee’s part,
while acting in his Corporate Status or (ii) the fact that Indemnitee is or was
serving at the request of the Company as director, officer, employee, partner,
member, manager, trustee, fiduciary or agent of another Enterprise, in each case
whether or not serving in such capacity at the time any Loss or Expense is paid
or incurred for which indemnification or advancement of Expenses can be provided
under this Agreement, except one initiated by Indemnitee to enforce his rights
under this Agreement. For purposes of this definition, the term “threatened”
will be deemed to include Indemnitee’s good faith belief that a claim or other
assertion may lead to institution of a Proceeding.

 

References to “serving at the request of the Company” include any service as a
director, officer, employee or agent of the Company which imposes duties on, or
involves services by, such director, officer, employee or agent with respect to
any employee benefit plan, its participants or beneficiaries; and a person who
acted in good faith and in a manner he reasonably believed to be in the best
interests of the participants and beneficiaries of an employee benefit plan will
be deemed to have acted in a manner “not opposed to the best interests of the
Company” as referred to under applicable law or in this Agreement.

 

ARTICLE 2

SERVICES TO THE COMPANY

 

2.1 Services to the Company. Indemnitee agrees to serve as a director of the
Enterprise. Indemnitee may at any time and for any reason resign from such
position (subject to any other contractual obligation or any obligation imposed
by operation of law), in which event the Company will have no obligation under
this Agreement to continue Indemnitee in such position. This Agreement will not
be construed as giving Indemnitee any right to be retained in the employ of the
Company (or any other Enterprise).

 

ARTICLE 3

INDEMNIFICATION

 

3.1 Company Indemnification. Except as otherwise provided in this Article 3, if
Indemnitee was, is or becomes a party to, or was or is threatened to be made a
party to, or was or is otherwise involved in, any Proceeding, the Company will
indemnify and hold harmless Indemnitee to the fullest extent permitted by the
Articles, Bylaws and applicable law, as the same exists or may hereafter be
amended, interpreted or replaced (but in the case of any such amendment,
interpretation or replacement, only to the extent that such amendment,
interpretation or replacement permits the Company to provide broader
indemnification rights than were permitted prior thereto), against any and all
Expenses and Losses, and any federal, state, local or foreign taxes imposed as a
result of the actual or deemed receipt of any payments under this Agreement,
that are actually and reasonably paid or incurred by Indemnitee in connection
with such Proceeding. For purposes of this Agreement, the meaning of the phrase
“to the fullest extent permitted by law” will include to the fullest extent
permitted by Article 2.02-1 of the

 

5

--------------------------------------------------------------------------------

Texas Business Corporation Act (“TBCA”) or any article that replaces or succeeds
Article 2.02-1 of the TBCA with respect to such matters.

 

3.2 Mandatory Indemnification if Indemnitee is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement (other than Section 6.9),
to the extent that Indemnitee has been successful, on the merits or otherwise,
in defense of any Proceeding or any part thereof, the Company will indemnify
Indemnitee against all Expenses that are actually and reasonably paid or
incurred by Indemnitee in connection therewith. If Indemnitee is not wholly
successful in such Proceeding, but is successful, on the merits or otherwise, as
to one or more but fewer than all claims, issues or matters in such Proceeding,
the Company will indemnify and hold harmless Indemnitee against all Expenses
paid or incurred by Indemnitee in connection with each successfully resolved
claim, issue or matter on which Indemnitee was successful. For purposes of this
Section 3.2, the termination of any Proceeding, or any claim, issue or matter in
such Proceeding, by dismissal with or without prejudice will be deemed to be a
successful result as to such Proceeding, claim, issue or matter.

 

3.3 Indemnification for Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his
Corporate Status, a witness in any Proceeding to which Indemnitee is not a
party, the Company will indemnify Indemnitee against all Expenses actually and
reasonably paid or incurred by Indemnitee on his behalf in connection therewith.

 

3.4 Exclusions. Notwithstanding any other provision of this Agreement, the
Company will not be obligated under this Agreement to provide indemnification in
connection with the following:

 

(a) Any Proceeding (or part of any Proceeding) initiated or brought voluntarily
by Indemnitee against the Company or its directors, officers, employees or other
indemnities, unless a majority of Disinterested Directors, even though less than
a quorum of the Board of Directors, has authorized or consented to the
initiation of the Proceeding (or such part of any Proceeding); provided,
however, that nothing in this Section 3.4(a) shall limit the right of Indemnitee
to be indemnified under Section 8.4.

 

(b) For an accounting of profits made from the purchase and sale (or sale and
purchase) by Indemnitee of securities of the Company within the meaning of
Section 16(b) of the Exchange Act or any similar successor statute.

 

ARTICLE 4

ADVANCEMENT OF EXPENSES

 

4.1 Expense Advances. Except as set forth in Section 4.2, the Company will, if
requested by Indemnitee, advance, to the fullest extent permitted by law, to
Indemnitee (hereinafter an “Expense Advance”) any and all Expenses actually and
reasonably paid or incurred by Indemnitee in connection with any Proceeding
(whether prior to or after its final disposition). Indemnitee’s right to each
Expense Advance will not be subject to the satisfaction of any standard of
conduct and will be made without regard to Indemnitee’s ultimate entitlement to
indemnification under the other provisions of this Agreement, or under
provisions of the

 

6

--------------------------------------------------------------------------------

Articles or Bylaws or otherwise. Each Expense Advance will be unsecured and
interest free and will be made by the Company without regard to Indemnitee’s
ability to repay the Expense Advance; provided, however, that, if applicable law
requires, an Expense Advance will be made only upon delivery to the Company of a
written affirmation by Indemnitee of such Indemnitee’s good faith belief that
Indemnitee has met the standard of conduct necessary for indemnification under
the TBCA and a written undertaking (hereinafter an “Undertaking”), by or on
behalf of Indemnitee, to repay such Expense Advance if it is ultimately
determined, by final decision by a court or arbitrator, as applicable, from
which there is no further right to appeal, that Indemnitee has not met the
standard of conduct necessary for indemnification under the TBCA or is not
entitled to be indemnified for such Expenses under the Articles, Bylaws, the
TBCA, this Agreement or otherwise. An Expense eligible for an Expense Advance
will include any and all reasonable Expenses incurred pursuing an action to
enforce the right of advancement provided for in this Article 4, including
Expenses incurred preparing and forwarding statements to the Company to support
the Expense Advances claimed.

 

4.2 Exclusions. Indemnitee will not be entitled to any Expense Advance in
connection with any of the matters for which indemnity is excluded pursuant to
Section 3.4.

 

4.3 Timing. An Expense Advance pursuant to Section 4.1 will be made within ten
business days after the receipt by the Company of a written statement or
statements from Indemnitee requesting such Expense Advance (which statement or
statements will include, if requested by the Company, reasonable detail
underlying the Expenses for which the Expense Advance is requested), whether
such request is made prior to or after final disposition of such Proceeding.
Such request must be accompanied by or preceded by the Undertaking, if then
required by the TBCA or any other applicable law.

 

ARTICLE 5

CONTRIBUTION IN THE EVENT OF JOINT LIABILITY

 

5.1 Contribution by Company. To the fullest extent permitted by law, if the
indemnification provided for in this Agreement is unavailable to Indemnitee for
any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, will
contribute to the amount of Expenses and Losses actually and reasonably incurred
or paid by Indemnitee in connection with any Proceeding in proportion to the
relative benefits received by the Company and all officers, directors and
employees of the Company other than Indemnitee who are jointly liable with
Indemnitee (or would be if joined in such Proceeding), on the one hand, and
Indemnitee, on the other hand, from the transaction from which such Proceeding
arose; provided, however, that the proportion determined on the basis of
relative benefit may, to the extent necessary to conform to law, be further
adjusted by reference to the relative fault of the Company and all officers,
directors and employees of the Company other than Indemnitee who are jointly
liable with Indemnitee (or would be if joined in such Proceeding), on the one
hand, and Indemnitee, on the other hand, in connection with the events that
resulted in such Expenses and Losses, as well as any other equitable
considerations which applicable law may require to be considered. The relative
fault of the Company and all officers, directors and employees of the Company
other than Indemnitee who are jointly liable with Indemnitee (or would be if
joined in such Proceeding), on the one hand, and Indemnitee, on the other hand,
will be determined by reference to, among other things, the degree to which
their actions were motivated by intent to

 

7

--------------------------------------------------------------------------------

gain personal profit or advantage, the degree to which their liability is
primary or secondary, and the degree to which their conduct was active or
passive.

 

5.2 Indemnification for Contribution Claims by Others. To the fullest extent
permitted by law, the Company will fully indemnify and hold Indemnitee harmless
from any claims of contribution which may be brought by other officers,
directors or employees of the Company who may be jointly liable with Indemnitee
for any Loss or Expense arising from a Proceeding.

 

ARTICLE 6

PROCEDURES AND PRESUMPTIONS FOR THE

DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION

 

6.1 Notification of Claims; Request for Indemnification. Indemnitee agrees to
notify promptly the Company in writing of any claim made against Indemnitee for
which indemnification will or could be sought under this Agreement; provided,
however, that a delay in giving such notice will not deprive Indemnitee of any
right to be indemnified under this Agreement unless, and then only to the extent
that, the Company did not otherwise learn of the Proceeding and such delay is
materially prejudicial to the Company’s ability to defend such Proceeding; and,
provided, further, that notice will be deemed to have been given without any
action on the part of Indemnitee in the event the Company is a party to the same
Proceeding. The omission to notify the Company will not relieve the Company from
any liability for indemnification that it may have to Indemnitee otherwise than
under this Agreement. Indemnitee may deliver to the Company a written request to
have the Company indemnify and hold harmless Indemnitee in accordance with this
Agreement. Following such a written request for indemnification, Indemnitee’s
entitlement to indemnification shall be determined according to Section 6.2. The
Secretary of the Company will, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that Indemnitee has
requested indemnification. The Company will be entitled to participate in any
Proceeding at its own expense.

 

6.2 Determination of Right to Indemnification. Upon written request by
Indemnitee for indemnification pursuant to Section 6.1 hereof with respect to
any Proceeding, a determination, if, but only if, required by applicable law,
with respect to Indemnitee’s entitlement thereto will be made by one of the
following, at the election of Indemnitee: (1) so long as there are Disinterested
Directors with respect to such Proceeding, a majority vote of the Disinterested
Directors, even though less than a quorum of the Board of Directors, (2) so long
as there are Disinterested Directors with respect to such Proceeding, a
committee of such Disinterested Directors designated by a majority vote of such
Disinterested Directors, even though less than a quorum of the Board of
Directors or (3) Independent Counsel in a written opinion delivered to the Board
of Directors, a copy of which will also be delivered to Indemnitee. The election
by Indemnitee to use a particular person, persons or entity to make such
determination is to be included in the written request for indemnification
submitted by Indemnitee (and if no election is made in the request it will be
assumed that Indemnitee has elected the Independent Counsel to make such
determination). The person, persons or entity chosen to make a determination
under this Agreement of the Indemnitee’s entitlement to indemnification will act
reasonably and in good faith in making such determination.

 

8

--------------------------------------------------------------------------------

6.3 Selection of Independent Counsel. If the determination of entitlement to
indemnification pursuant to Section 6.2 will be made by an Independent Counsel,
the Independent Counsel will be selected as provided in this Section 6.3. The
Independent Counsel will be selected by Indemnitee (unless Indemnitee requests
that such selection be made by the Board of Directors, in which event the
immediately following sentence will apply) and Indemnitee will give written
notice to the Company advising it of the identity of the Independent Counsel so
selected. If the Independent Counsel is selected by the Board of Directors, the
Company will give written notice to Indemnitee advising him of the identity of
the Independent Counsel so selected. In either event, Indemnitee or the Company,
as the case may be, may, within ten days after such written notice of selection
is given, deliver to the Company or to Indemnitee, as the case may be, a written
objection to such selection; provided, however, that such objection may be
asserted only on the ground that the Independent Counsel so selected does not
meet the requirements of “Independent Counsel” as defined in this Agreement, and
the objection will set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so selected will act
as Independent Counsel. If a written objection is made and substantiated, the
Independent Counsel selected may not serve as Independent Counsel unless and
until such objection is withdrawn or a court has determined that such objection
is without merit. If, within 30 days after submission by Indemnitee of a written
request for indemnification pursuant to Section 6.1, no Independent Counsel is
selected, or an Independent Counsel for which an objection thereto has been
properly made remains unresolved, either the Company or Indemnitee may petition
a court of competent jurisdiction for resolution of any objection which has been
made by the Company or Indemnitee to the other’s selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by the court or by such other person as the court may designate, and the person
with respect to whom all objections are so resolved or the person so appointed
will act as Independent Counsel under Section 6.2. The Company will pay any and
all fees and expenses incurred by such Independent Counsel in connection with
acting pursuant to Section 6.2 hereof, and the Company will pay all fees and
expenses incident to the procedures of this Section 6.3, regardless of the
manner in which such Independent Counsel was selected or appointed.

 

6.4 Burden of Proof. In making a determination with respect to entitlement to
indemnification hereunder, the person, persons or entity making such
determination will presume that Indemnitee is entitled to indemnification under
this Agreement. Anyone seeking to overcome this presumption will have the burden
of proof and the burden of persuasion, by clear and convincing evidence. In
making a determination with respect to entitlement to indemnification hereunder
which under this Agreement, the Articles, Bylaws or applicable law requires a
determination of Indemnitee’s good faith and/or whether Indemnitee acted in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Company, the person, persons or entity making such
determination will presume that Indemnitee has at all times acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company. Anyone seeking to overcome this presumption will have
the burden of proof and the burden of persuasion, by clear and convincing
evidence. Indemnitee will be deemed to have acted in good faith if Indemnitee’s
action with respect to a particular Enterprise is based on the records or books
of account of such Enterprise, including financial statements, or on information
supplied to Indemnitee by the officers of such Enterprise in the course of their
duties, or on the advice of legal counsel for such Enterprise or on information
or records given or reports made to such Enterprise by an independent certified
public accountant or

 

9

--------------------------------------------------------------------------------

by an appraiser or other expert selected by such Enterprise; provided, however
this sentence will not be deemed to limit in any way the other circumstances in
which Indemnitee may be deemed to have met such standard of conduct. In
addition, the knowledge and/or actions, or failure to act, of any other
director, officer, agent or employee of such Enterprise will not be imputed to
Indemnitee for purposes of determining the right to indemnification under this
Agreement.

 

6.5 No Presumption in Absence of a Determination or As Result of an Adverse
Determination; Presumption Regarding Success. Neither the failure of any person,
persons or entity chosen to make a determination as to whether Indemnitee has
met any particular standard of conduct or had any particular belief to make such
determination, nor an actual determination by such person, persons or entity
that Indemnitee has not met such standard of conduct or did not have such
belief, prior to or after the commencement of legal proceedings by Indemnitee to
secure a judicial determination that Indemnitee should be indemnified under this
Agreement under applicable law, will be a defense to Indemnitee’s claim or
create a presumption that Indemnitee has not met any particular standard of
conduct or did not have any particular belief. In addition, the termination of
any Proceeding by judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere, or its equivalent,
will not create a presumption that Indemnitee did not meet any particular
standard of conduct or have any particular belief or that a court has determined
that indemnification is not permitted by this Agreement or applicable law. In
the event that any Proceeding to which Indemnitee is a party is resolved in any
manner other than by final adverse judgment (as to which all rights of appeal
therefrom have been exhausted or lapsed) against Indemnitee (including, without
limitation, settlement of such Proceeding with or without payment of money or
other consideration) it will be presumed that Indemnitee has been successful on
the merits or otherwise in such Proceeding. Anyone seeking to overcome this
presumption will have the burden of proof and the burden of persuasion, by clear
and convincing evidence.

 

6.6 Timing of Determination. The Company will use its reasonable best efforts to
cause any determination required to be made pursuant to Section 6.2 to be made
as promptly as practicable after Indemnitee has submitted a written request for
indemnification pursuant to Section 6.1. If the person, persons or entity chosen
to make a determination does not make such determination within 30 days after
the later of the date (a) the Company receives Indemnitee’s request for
indemnification pursuant to Section 6.1 and (b) on which an Independent Counsel
is selected pursuant to Section 6.3, if applicable (and all objections to such
person, if any, have been resolved), the requisite determination of entitlement
to indemnification will be deemed to have been made and Indemnitee will be
entitled to such indemnification, so long as (i) Indemnitee has fulfilled his
obligations pursuant to Section 6.8 and (ii) such indemnification is not
prohibited under applicable law; provided, however, that such 30 day period may
be extended for a reasonable time, not to exceed an additional 15 days, if the
person, persons or entity making the determination with respect to entitlement
to indemnification in good faith requires such additional time for the obtaining
of or evaluating of documentation and/or information relating thereto.

 

6.7 Timing of Payments. All payments of Expenses, including any Expense Advance,
and other amounts by the Company to the Indemnitee pursuant to this Agreement
will be made as soon as practicable after a written request or demand therefor
by Indemnitee is presented to the Company, but in no event later than thirty
(30) days after (i) such demand is

 

10

--------------------------------------------------------------------------------

presented or (ii) such later date as a determination of entitlement to
indemnification is made in accordance with Section 6.6, if applicable; provided,
however, that an Expense Advance will be made within the time provided in
Section 4.3 hereof.

 

6.8 Cooperation. Indemnitee will cooperate with the person, persons or entity
making a determination with respect to Indemnitee’s entitlement to
indemnification, including providing to such person, persons or entity, upon
reasonable advance request, any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
Expenses incurred by Indemnitee in so cooperating with the person, persons or
entity making such determination will be borne by the Company (irrespective of
the determination as to Indemnitee’s entitlement to indemnification) and the
Company will indemnify Indemnitee therefor and will hold Indemnitee harmless
therefrom.

 

6.9 Time for Submission of Request. Indemnitee will be required to submit any
request for indemnification pursuant to this Article 6 within a reasonable time,
not to exceed one year, after any judgment, order, settlement, dismissal,
arbitration award, conviction, acceptance of a plea of nolo contendere (or its
equivalent) or other full or partial final determination or disposition of the
Proceeding (with the latest date of the occurrence of any such event to be
considered the commencement of the one-year period).

 

ARTICLE 7

LIABILITY INSURANCE

 

7.1 Company Insurance. Subject to Section 7.3, the Company will obtain and
maintain a policy or policies of insurance with one or more reputable insurance
companies providing Indemnitee with coverage in such amount as will be
determined by the Board of Directors for Losses and Expenses paid or incurred by
Indemnitee as a result of acts or omissions of Indemnitee in his Corporate
Status, and to ensure the Company’s performance of its indemnification
obligations under this Agreement; provided, however, in all policies of director
and officer liability insurance obtained by the Company, Indemnitee will be
named as an insured party in such manner as to provide Indemnitee with the same
rights and benefits as are afforded to the most favorably insured directors or
officers, as applicable, of the Company under such policies; provided, however,
the Company may obtain additional insurance coverage for “independent directors”
(within the meaning of the corporate governance rules of the Nasdaq National
Market) without providing Indemnitee with the same rights and benefits afforded
to the independent directors under such policy unless, at the time the policy is
obtained, Indemnitee is insurable as an independent director. Any reductions to
the amount of director and officer liability insurance coverage maintained by
the Company as of the date hereof will be subject to the approval of a majority
of the Incumbent Directors.

 

7.2 Notice to Insurers. If, at the time of receipt by the Company of a notice
from any source of a Proceeding as to which Indemnitee is a party or
participant, the Company will give prompt notice of such Proceeding to the
insurers in accordance with the procedures set forth in the respective policies,
and the Company will provide Indemnitee with a copy of such notice and copies of
all subsequent correspondence between the Company and such insurers related
thereto. The Company will thereafter take all necessary or desirable actions to
cause such

 

11

--------------------------------------------------------------------------------

insurers to pay, on behalf of Indemnitee, all amounts payable as a result of
such Proceeding in accordance with the terms of such policies.

 

7.3 Insurance Not Required. Notwithstanding Section 7.1, the Company will have
no obligation to obtain or maintain the insurance contemplated by Section 7.1 if
a majority of the Incumbent Directors determines in good faith that such
insurance is not reasonably available, if the premium costs for such insurance
are disproportionately high compared to the amount of coverage provided, or if
the coverage provided by such insurance is limited by exclusions so as to
provide an insufficient benefit. The Company will promptly notify Indemnitee of
any such determination not to provide insurance coverage.

 

ARTICLE 8

REMEDIES OF INDEMNITEE

 

8.1 Action by Indemnitee. In the event that (i) a determination is made pursuant
to Article 6 of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) an Expense Advance is not timely made
pursuant to Section 4.3 of this Agreement, (iii) no determination of entitlement
to indemnification is made within the applicable time periods specified in
Section 6.6 or (iv) payment of indemnified amounts is not made within the
applicable time periods specified in Section 6.7, Indemnitee will be entitled to
an adjudication in an appropriate court of the State of Texas, or in any other
court of competent jurisdiction, of his entitlement to such indemnification or
payment of an Expense Advance. Alternatively, Indemnitee, at Indemnitee’s
option, may seek an award in arbitration to be conducted by a single arbitrator
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association. The provisions of Texas law (without regard to its conflict of laws
rules) will apply to any such arbitration. The Company will not oppose
Indemnitee’s right to seek any such adjudication or award in arbitration.

 

8.2 De Novo Review if Prior Adverse Determination. In the event that a
determination is made pursuant to Article 6 that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to
this Article 8 will be conducted in all respects as a de novo trial or
arbitration, as applicable, on the merits and Indemnitee will not be prejudiced
by reason of that adverse determination. In any judicial proceeding or
arbitration commenced pursuant to this Article 8, Indemnitee will be presumed to
be entitled to indemnification under this Agreement, the Company will have the
burden of proving Indemnitee is not entitled to indemnification and the Company
may not refer to or introduce evidence of any determination pursuant to Article
6 adverse to Indemnitee for any purpose. If Indemnitee commences a judicial
proceeding or arbitration pursuant to this Article 8, Indemnitee will not be
required to reimburse the Company for any Expense Advance made pursuant to
Article 4 until a final determination is made with respect to Indemnitee’s
entitlement to indemnification (as to which all rights of appeal have been
exhausted or lapsed).

 

8.3 Company Bound by Favorable Determination by Reviewing Party. If a
determination is made that Indemnitee is entitled to indemnification pursuant to
Article 6, the Company will be bound by such determination in any judicial
proceeding or arbitration commenced pursuant to this Article 8, absent (i) a
misstatement by Indemnitee of a material fact or an omission of a material fact
necessary to make Indemnitee’s statements in connection with

 

12

--------------------------------------------------------------------------------

the request for indemnification not materially misleading or (ii) a prohibition
of such indemnification under law.

 

8.4 Company Bears Expenses if Indemnitee Seeks Adjudication. In the event that
Indemnitee, pursuant to this Article 8, seeks a judicial adjudication or
arbitration of his rights under, or to recover damages for breach of, this
Agreement, any other agreement for indemnification, the indemnification or
advancement of expenses provisions in the Articles or Bylaws, payment of
Expenses in advance or contribution hereunder or to recover under any director
and officer liability insurance policies maintained by the Company, the Company
will, to the fullest extent permitted by law, indemnify and hold harmless
Indemnitee against any and all Expenses which are paid or incurred by Indemnitee
in connection with such judicial adjudication or arbitration, regardless of
whether Indemnitee ultimately is determined to be entitled to such
indemnification, payment of Expenses in advance or contribution or insurance
recovery. In addition, if requested by Indemnitee, the Company will (within ten
days after receipt by the Company of the written request therefor), pay as an
Expense Advance such Expenses, to the fullest extent permitted by law.

 

8.5 Company Bound by Provisions of this Agreement. The Company will be precluded
from asserting in any judicial or arbitration proceeding commenced pursuant to
this Article 8 that the procedures and presumptions of this Agreement are not
valid, binding and enforceable and will stipulate in any such judicial or
arbitration proceeding that the Company is bound by all the provisions of this
Agreement.

 

ARTICLE 9

NON-EXCLUSIVITY, SUBROGATION; NO DUPLICATIVE PAYMENTS;

MORE FAVORABLE TERMS

 

9.1 Non-Exclusivity. The rights of indemnification and to receive Expense
Advances as provided by this Agreement will not be deemed exclusive of any other
rights to which Indemnitee may at any time be entitled under applicable law, the
Articles, the Bylaws, any agreement, a vote of shareholders, a resolution of the
directors or otherwise. To the extent Indemnitee otherwise would have any
greater right to indemnification or payment of any advancement of Expenses under
any other provisions under applicable law, the Articles, Bylaws, any agreement,
vote of shareholders, a resolution of directors or otherwise, Indemnitee will be
entitled under this Agreement to such greater right. No amendment, alteration or
repeal of this Agreement or of any provision hereof limits or restricts any
right of Indemnitee under this Agreement in respect of any action taken or
omitted by such Indemnitee prior to such amendment, alteration or repeal. To the
extent that a change in the TBCA, whether by statute or judicial decision,
permits greater indemnification than would be afforded currently under the
Articles, Bylaws and this Agreement, it is the intent of the parties hereto that
Indemnitee enjoy by this Agreement the greater benefits so afforded by such
change. No right or remedy herein conferred is intended to be exclusive of any
other right or remedy, and every other right and remedy will be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, will not prevent the concurrent
assertion or employment of any other right or remedy.

 

13

--------------------------------------------------------------------------------

9.2 Subrogation. In the event of any payment by the Company under this
Agreement, the Company will be subrogated to the extent of such payment to all
of the rights of recovery of Indemnitee with respect thereto and Indemnitee will
execute all papers required and take all action necessary to secure such rights,
including execution of such documents as are necessary to enable the Company to
bring suit to enforce such rights (it being understood that all of Indemnitee’s
reasonable Expenses related thereto will be borne by the Company).

 

9.3 No Duplicative Payments. The Company will not be liable under this Agreement
to make any payment of amounts otherwise indemnifiable (or any Expense for which
advancement is provided) hereunder if and to the extent that Indemnitee has
otherwise actually received such payment under any insurance policy, contract,
agreement or otherwise. The Company’s obligation to indemnify or advance
Expenses hereunder to Indemnitee in respect of Proceedings relating to
Indemnitee’s service at the request of the Company as a director, officer,
employee, partner, member, manager, venturer, proprietor, trustee, fiduciary or
agent of any other Enterprise will be reduced by any amount Indemnitee has
actually received as indemnification or advancement of Expenses from such other
Enterprise.

 

9.4 More Favorable Terms. In the event the Company enters into an
indemnification agreement with another officer or director, as the case may be,
containing terms more favorable to the indemnitee thereof than the terms
contained herein (and absent special circumstances justifying such more
favorable terms), Indemnitee will be afforded the benefit of such more favorable
terms and such more favorable terms will be deemed incorporated by reference
herein as if set forth in full herein. As promptly as practicable following the
execution thereof, the Company will (a) send a copy of the agreement containing
more favorable terms to Indemnitee, and (b) prepare, execute and deliver to
Indemnitee an amendment to this Agreement containing such more favorable terms.

 

ARTICLE 10

DEFENSE OF PROCEEDINGS

 

10.1 Company Assuming the Defense. Subject to Section 10.3 below, in the event
the Company is obligated to pay in advance the Expenses of any Proceeding
pursuant to Article 4, the Company will be entitled, by written notice to
Indemnitee, to assume the defense of such Proceeding, with counsel approved by
Indemnitee, which approval will not be unreasonably withheld. The Company will
identify the counsel it proposes to employ in connection with such defense as
part of the written notice sent to Indemnitee notifying Indemnitee of the
Company’s election to assume such defense, and Indemnitee will be required,
within ten days following Indemnitee’s receipt of such notice, to inform the
Company of its approval of such counsel or, if it has objections, the reasons
therefor. If such objections cannot be resolved by the parties, the Company will
identify alternative counsel, which counsel will also be subject to approval by
Indemnitee in accordance with the procedure described in the prior sentence.

 

10.2 Right of Indemnitee to Employ Counsel. Following approval of counsel by
Indemnitee pursuant to Section 10.1 and retention of such counsel by the
Company, the Company will not be liable to Indemnitee under this Agreement for
any fees and expenses of counsel subsequently incurred by Indemnitee with
respect to the same Proceeding; provided, however, that (a) Indemnitee has the
right to employ counsel in any such Proceeding at

 

14

--------------------------------------------------------------------------------

Indemnitee’s expense and (b) the Company will be required to pay the fees and
expenses of Indemnitee’s counsel if (i) the employment of counsel by Indemnitee
has been previously authorized by the Company, (ii) Indemnitee reasonably
concludes that there is an actual or potential conflict between the Company (or
any other person or persons included in a joint defense) and Indemnitee in the
conduct of such defense or representation by such counsel retained by the
Company or (iii) the Company does not continue to retain the counsel approved by
Indemnitee.

 

10.3 Company Not Entitled to Assume Defense. Notwithstanding Section 10.1, the
Company will not be entitled to assume the defense of any Proceeding brought by
or on behalf of the Company or any Proceeding as to which Indemnitee has
reasonably made the conclusion provided for in Section 10.2(b)(ii).

 

ARTICLE 11

SETTLEMENT

 

11.1 Company’s Prior Consent Required. Notwithstanding anything in this
Agreement to the contrary, the Company will have no obligation to indemnify
Indemnitee under this Agreement for any amounts paid in settlement of any
Proceeding effected without the Company’s prior written consent.

 

11.2 When Indemnitee’s Prior Consent Required. The Company will not, without the
prior written consent of Indemnitee, consent to the entry of any judgment
against Indemnitee or enter into any settlement or compromise which (i) includes
an admission of fault of Indemnitee, any non-monetary remedy imposed on
Indemnitee or a Loss for which Indemnitee is not wholly indemnified hereunder or
(ii) with respect to any Proceeding with respect to which Indemnitee may be or
is made a party or a participant or may be or is otherwise entitled to seek
indemnification hereunder, does not include, as an unconditional term thereof,
the full release of Indemnitee from all liability in respect of such Proceeding,
which release will be in form and substance reasonably satisfactory to
Indemnitee. Neither the Company nor Indemnitee will unreasonably withhold its
consent to any proposed settlement; provided, however, Indemnitee may withhold
consent to any settlement that does not provide a full and unconditional release
of Indemnitee from all liability in respect of such Proceeding.

 

ARTICLE 12

ESTABLISHMENT OF TRUST

 

12.1 Request by Indemnitee. In the event a Change of Control occurs after the
date of this Agreement, the Company will be required, upon receipt of a written
request from Indemnitee following initiation of a Proceeding for which
Indemnitee reasonably believes that he may be entitled to indemnification by the
Company under this Agreement, the Articles, the Bylaws or otherwise, to create a
trust (the “Trust”) for the benefit of the Indemnitee. The trustee of the Trust
will be selected by the Indemnitee.

 

12.2 Funding Obligations. Following a request from Indemnitee pursuant to
Section 12.1 to establish the Trust with respect to a particular Proceeding, the
Company will, from time to time upon written request of Indemnitee, fund the
Trust in an amount sufficient to satisfy any

 

15

--------------------------------------------------------------------------------

and all Expenses and Losses reasonably anticipated at the time of such request
to be incurred by or on behalf of Indemnitee in connection with such Proceeding.
The amount or amounts to be deposited in the Trust pursuant to the foregoing
obligation will be determined by mutual agreement of Indemnitee and the Company,
and if they are unable to reach such agreement, then by Independent Counsel
(selected as provided in Section 6.3). The terms of the Trust will provide that
(i) except upon prior written consent of Indemnitee, the Trust will not be
revoked or the principal thereof invaded, (ii) the trustee will advance to
Indemnitee, within ten business days of a written request by Indemnitee, any and
all Expenses (and Indemnitee hereby agrees to execute the Undertaking
contemplated by Section 4.1, if required at the time any request for an Expense
Advance is submitted to the trustee), (iii) the Trust will continue to be funded
by the Company in accordance with the funding obligations set forth in this
Section 12.2, (iv) the trustee will promptly pay to Indemnitee any amounts to
which Indemnitee is entitled to indemnification pursuant to this Agreement or
otherwise and (v) all unexpended funds in the Trust will revert to the Company
upon a final determination by the person, persons or entity making a
determination of entitlement to indemnification pursuant to Article 6 or a court
or arbitrator presiding over an action commenced pursuant to Article 8, as the
case may be, that Indemnitee has been fully indemnified with respect to the
Proceeding giving rise to the establishment of the Trust.

 

ARTICLE 13

DURATION OF AGREEMENT

 

13.1 Duration of Agreement. This Agreement will continue until and terminate
upon the latest of (a) the statute of limitations applicable to any claim that
could be asserted against an Indemnitee with respect to which Indemnitee may be
entitled to indemnification and/or an Expense Advance under this Agreement, (b)
ten years after the date that Indemnitee has ceased to serve as a director or
officer of the Company or as a director, officer, employee, partner, member,
manager, fiduciary or agent of any other Enterprise which Indemnitee served at
the request of the Company, or (c) if, at the later of the dates referred to in
(a) and (b) above, there is pending a Proceeding in respect of which Indemnitee
is granted rights of indemnification or the right to an Expense Advance under
this Agreement or a Proceeding commenced by Indemnitee pursuant to Article 8 of
this Agreement, one year after the final termination of such Proceeding,
including any and all appeals.

 

ARTICLE 14

MISCELLANEOUS

 

14.1 Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties in respect of the subject matter hereof and
supersedes all prior understandings, agreements or representations by or among
the parties, written or oral, to the extent they relate in any way to the
subject matter hereof; provided, however, it is agreed that the provisions
contained in this Agreement are a supplement to, and not a substitute for, any
provisions regarding the same subject matter contained in the Articles, the
Bylaws and any employment or similar agreement between the parties.

 

14.2 Assignment; Binding Effect; Third Party Beneficiaries. No party may assign
either this Agreement or any of its rights, interests or obligations hereunder
without the prior

 

16

--------------------------------------------------------------------------------

written approval of the other party; provided, however, that the Company may
assign all (but not less than all) of its rights, obligations and interests
hereunder to any direct or indirect successor to all or substantially all of the
business or assets of the Company by purchase, merger, consolidation or
otherwise and will cause such successor to be bound by and expressly assume the
terms and provisions hereof. All of the terms, agreements, covenants,
representations, warranties and conditions of this Agreement are binding upon,
and inure to the benefit of and are enforceable by, the parties and their
respective successors, permitted assigns, heirs, executors and personal and
legal representatives. There are no third party beneficiaries having rights
under or with respect to this Agreement.

 

14.3 Notices. All notices, requests and other communications provided for or
permitted to be given under this Agreement must be in writing and be given by
personal delivery, by certified or registered United States mail (postage
prepaid, return receipt requested), by a nationally recognized overnight
delivery service for next day delivery, or by facsimile transmission, as follows
(or to such other address as any party may give in a notice given in accordance
with the provisions hereof):

 

If to the Company:

 

Mannatech, Incorporated

600 S. Royal Lane, Suite 200

Coppell, Texas 75019

Attention: Chief Executive Officer

Facsimile: (214) 265-1999

 

If to Indemnitee:

 

Stephen Fenstermacher

715 Aberdeen Way

Southlake, Texas 79062

 

All notices, requests or other communications will be effective and deemed given
only as follows: (i) if given by personal delivery, upon such personal delivery,
(ii) if sent by certified or registered mail, on the fifth business day after
being deposited in the United States mail, (iii) if sent for next day delivery
by overnight delivery service, on the date of delivery as confirmed by written
confirmation of delivery, (iv) if sent by facsimile, upon the transmitter’s
confirmation of receipt of such facsimile transmission, except that if such
confirmation is received after 5:00 p.m. (in the recipient’s time zone) on a
business day, or is received on a day that is not a business day, then such
notice, request or communication will not be deemed effective or given until the
next succeeding business day. Notices, requests and other communications sent in
any other manner, including by electronic mail, will not be effective.

 

14.4 Specific Performance; Remedies. Each party acknowledges and agrees that the
other party would be damaged irreparably if any provision of this Agreement were
not performed in accordance with its specific terms or were otherwise breached.
Accordingly, the parties will be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement

 

17

--------------------------------------------------------------------------------

and to enforce specifically this Agreement and its provisions, in addition to
any other remedy to which they may be entitled, at law or in equity. Except as
expressly provided herein, the rights, obligations and remedies created by this
Agreement are cumulative and in addition to any other rights, obligations or
remedies otherwise available at law or in equity. Except as expressly provided
herein, nothing herein will be considered an election of remedies.

 

14.5 Submission to Jurisdiction. Any Proceeding seeking to enforce any provision
of, or based on any matter arising out of or in connection with, this Agreement
may only be brought in a federal or state court sitting in Dallas County, Texas,
which will be the exclusive and only proper forum for adjudicating such
Proceeding, and each party consents to the exclusive jurisdiction and venue of
such court (and of the appropriate appellate courts therefrom) in any such
Proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such Proceeding in any such court or that any such Proceeding brought in any
such court has been brought in an inconvenient forum. Process in any such
action, suit or proceeding may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court.

 

14.6 Headings. The article and section headings contained in this Agreement are
inserted for convenience only and will not affect in any way the meaning or
interpretation of this Agreement.

 

14.7 Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Texas, without giving effect to any
choice of law principles.

 

14.8 Amendment. This Agreement may not be amended or modified except by a
writing signed by all of the parties.

 

14.9 Extensions; Waivers. Any party may, for itself only, (i) extend the time
for the performance of any of the obligations of any other party under this
Agreement, (ii) waive any inaccuracies in the representations and warranties of
any other party contained herein or in any document delivered pursuant hereto
and (iii) waive compliance with any of the agreements or conditions for the
benefit of such party contained herein. Any such extension or waiver will be
valid only if set forth in a writing signed by the party to be bound thereby. No
waiver by any party of any default, misrepresentation or breach of warranty or
covenant hereunder, whether intentional or not, may be deemed to extend to any
prior or subsequent default, misrepresentation or breach of warranty or covenant
hereunder or affect in any way any rights arising because of any prior or
subsequent such occurrence. Neither the failure nor any delay on the part of any
party to exercise any right or remedy under this Agreement will operate as a
waiver thereof, nor will any single or partial exercise of any right or remedy
preclude any other or further exercise of the same or of any other right or
remedy

 

14.10 Severability. The provisions of this Agreement will be deemed severable
and the invalidity or unenforceability of any provision will not affect the
validity or enforceability of the other provisions hereof; provided that if any
provision of this Agreement, as applied to any party or to any circumstance, is
judicially determined not to be enforceable in accordance with its terms, the
parties agree that the court judicially making such determination may modify the

 

18

--------------------------------------------------------------------------------

provision in a manner consistent with its objectives such that it is
enforceable, and/or to delete specific words or phrases, and in its modified
form, such provision will then be enforceable and will be enforced.

 

14.11 Counterparts; Effectiveness. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument. This Agreement will become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties, which delivery may be made by exchange of
copies of the signature page by facsimile transmission. For purposes of
determining whether a party has signed this Agreement or any document
contemplated hereby or any amendment or waiver hereof, only a handwritten
signature on a paper document or a facsimile transmission of a handwritten
original signature will constitute a signature, notwithstanding any law relating
to or enabling the creation, execution or delivery of any contract or signature
by electronic means.

 

14.12 Construction. This Agreement has been freely and fairly negotiated among
the parties. If an ambiguity or question of intent or interpretation arises,
this Agreement will be construed as if drafted jointly by the parties and no
presumption or burden of proof will arise favoring or disfavoring any party
because of the authorship of any provision of this Agreement. Any reference to
any law will be deemed also to refer to such law as amended and all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
words “include,” “includes,” and “including” will be deemed to be followed by
“without limitation.” Pronouns in masculine, feminine, and neuter genders will
be construed to include any other gender, and words in the singular form will be
construed to include the plural and vice versa, unless the context otherwise
requires. The words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder,”
and words of similar import refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited. The parties intend that each
representation, warranty, and covenant contained herein will have independent
significance. If any party has breached any representation, warranty, or
covenant contained herein in any respect, the fact that there exists another
representation, warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the party has not
breached will not detract from or mitigate the fact that the party is in breach
of the first representation, warranty, or covenant. Time is of the essence in
the performance of this Agreement.

 

[Signature page follows]

 

19

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

MANNATECH, INCORPORATED By:       /s/ Sam Caster    

Name: Sam Caster

Title: Chairman & CEO

 

 

Indemnitee

Bettina Simon

/s/ Bettina Simon

Signature

 

 

Indemnitee

Stephen Fenstermacher

/s/ Stephen Fenstermacher

Signature

 

 

Indemnitee

Ron Norman

/s/ Ron Norman

Signature

 

 

Indemnitee

John Crowley

/s/ John Crowley

Signature

 

20