exv10w2



 







AGREEMENT




dated December 21, 2005




made by and among




Natural Health Trends Corp., 2050 Diplomat Drive, Dallas Texas 75234, USA,

(“NHTC”)




and




KGC Networks Pte Ltd., Asiaciti Management Pte Ltd., 1 Raffles Place #21-01

OUB Center, Singapore 048616

(“KGC”)




 









 








PREAMBLE




WHEREAS, NHTC has by way of a stock purchase agreement of even date undertaken to sell all of its
51,000 shares it holds in KGC to Bannks Foundation;



WHEREAS, NHTC has in the past supplied KGC with a variety of products for sale to further parties;




WHEREAS, NHTC has ensured that Paymentech Inc. under an umbrella agreement also provided credit
card payment services to KGC;



WHEREAS, now that NHTC has sold its share holdings in KGC the parties wish to set out in writing
certain issues concerning their future business relationship.



NOW, THEREFORE the Parties agree as follows:



ARTICLE 1

Payment of all Ordered but Yet Unpaid Stock and Inventory





	1.1	 	Amount. The parties are in agreement that as of the date hereof KGC owes NHTC for all
inventories ordered and partially delivered a total amount of USD 3,957,937.18. Such amount
also includes the cost of freight for such part of the inventory which was already ordered but
not yet delivered by NHTC to KGC.






	1.2	 	Payments of Outstanding Amounts. KGC will settle the outstanding amount by paying 24
equal monthly instalments. The interest to be applied to any outstanding moneys is 2.5% per
annum. Each monthly payment is to be made no later than the 10th calendar day of
any month; the first instalment to be paid no later than January 10, 2006. Taking the
outstanding amount and the applicable interest rate into account the parties agree that the
monthly instalments shall in each case amount to USD 168,960. (Exhibit Payment Calculator).






	1.3	 	Prepayment. The company is entitled to pay off any portion of the outstanding
principal amount at any earlier date. In such case the applicable interest rate of 2.5% per
annum shall only apply for such period in which amounts are actually outstanding.




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ARTICLE 2:

Credit Card Services




NHTC herewith undertakes to ensure that Paymentech Inc, the present credit card provider of both
NHTC and KGC will continue at least until December 31, 2005 to provide its current services to KGC
at the current terms. NHTC shall be held harmless for the amount of chargeback and refund, incurred
by the KGC business, net of any reserve already held by Paymentech on behalf of NHTC. The cut-off
date for accounting purposes shall in any event be December 31, 2005.



ARTICLE 3:

Future Supply of Products




NHTC undertakes to continue to supply KGC at least for a period of 48 months from the date hereof
with Volupta and Essention products at the price no more than 10% above the price charged to NHTC
by its own suppliers.



The parties agree that, subject to any express agreement to the contrary, any stock ordered and
supplied after the date hereof shall be payable as follows:




	•	 	20% of the total purchase price at order;
	 
	•	 	30% of the total purchase price upon delivery by NHTC to common carrier;
	 
	•	 	the remaining 50% of the purchase price within 30 days of delivery at KGC.





ARTICLE 4:

Miscellaneous





	4.1	 	No Waiver. The failure of any party to enforce any of the provisions of this
Agreement or any rights with respect thereto shall in no way be considered as a waiver of such
provisions or rights or in any way to affect the validity of this Agreement. The waiver of any
breach of this Agreement by any party hereto shall not be construed as a waiver of any other
prior or subsequent breach.






	4.2	 	Modification. This Agreement may be amended only in writing through document signed
by the parties to be bound by such amendment.




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	4.3	 	Binding on Successors. All of the terms, provisions and conditions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their respective
legal successors.






	4.4	 	No Assignment. Neither party shall assign this Agreement or any rights or rights or
obligations hereunder to any third party without the written consent of the other party
hereto.





ARTICLE 5:

Governing Law and Arbitration




5.1 Governing Law. This Agreement shall be subject to and governed by Swiss law.




	5.2	 	Arbitration. Any dispute arising out of or in connection with this Agreement,
including disputes on the conclusion, binding effect, amendment and termination, of this
Agreement in general and this provision in particular shall be solely and finally settled, to
the exclusion of the ordinary courts, in accordance with the Rules of International
Arbitration Rules of the Swiss Chambers of Commerce by an arbitral tribunal consisting of
three arbitrators appointed in accordance with said Rules. The place of arbitration shall be
Zurich. The arbitral proceedings shall be conducted in the English language.





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



	 	 	 	 
	 	 
	/s/ Chris T. Sharng
 	 
	Natural Health Trends Corp. 	 
	 	 
	 



	 	 	 	 
	 	 
	/s/ Angela Nicolson
 	 
	KGC Networks Pte Ltd. 	 
	 	 



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Exhibit: Payment Schedule




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal	 	3'957'937	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Interest	 	0.025	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	Principal	 	Interest	 	Total	 	Principal
	 	 	Payment	 	Payment	 	Payment	 	Balance
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	3'957'937	 
	01/10/2006
	 	 	166'244	 	 	 	2'716	 	 	 	168'960	 	 	 	3'791'693	 
	02/10/2006
	 	 	161'150	 	 	 	7'810	 	 	 	168'960	 	 	 	3'630'543	 
	03/10/2006
	 	 	161'482	 	 	 	7'478	 	 	 	168'960	 	 	 	3'469'061	 
	04/10/2006
	 	 	161'814	 	 	 	7'146	 	 	 	168'960	 	 	 	3'307'247	 
	05/10/2006
	 	 	162'148	 	 	 	6'812	 	 	 	168'960	 	 	 	3'145'100	 
	06/10/2006
	 	 	162'482	 	 	 	6'478	 	 	 	168'960	 	 	 	2'982'618	 
	07/10/2006
	 	 	162'816	 	 	 	6'144	 	 	 	168'960	 	 	 	2'819'802	 
	08/10/2006
	 	 	163'152	 	 	 	5'808	 	 	 	168'960	 	 	 	2'656'650	 
	09/10/2006
	 	 	163'488	 	 	 	5'472	 	 	 	168'960	 	 	 	2'493'162	 
	10/10/2006
	 	 	163'824	 	 	 	5'136	 	 	 	168'960	 	 	 	2'329'338	 
	11/10/2006
	 	 	164'162	 	 	 	4'798	 	 	 	168'960	 	 	 	2'165'176	 
	12/10/2006
	 	 	164'500	 	 	 	4'460	 	 	 	168'960	 	 	 	2'000'676	 
	01/10/2007
	 	 	164'839	 	 	 	4'121	 	 	 	168'960	 	 	 	1'835'837	 
	02/10/2007
	 	 	165'178	 	 	 	3'782	 	 	 	168'960	 	 	 	1'670'658	 
	03/10/2007
	 	 	165'519	 	 	 	3'441	 	 	 	168'960	 	 	 	1'505'140	 
	04/10/2007
	 	 	165'860	 	 	 	3'100	 	 	 	168'960	 	 	 	1'339'280	 
	05/10/2007
	 	 	166'201	 	 	 	2'759	 	 	 	168'960	 	 	 	1'173'079	 
	06/10/2007
	 	 	166'544	 	 	 	2'416	 	 	 	168'960	 	 	 	1'006'535	 
	07/10/2007
	 	 	166'887	 	 	 	2'073	 	 	 	168'960	 	 	 	839'648	 
	08/10/2007
	 	 	167'230	 	 	 	1'730	 	 	 	168'960	 	 	 	672'418	 
	09/10/2007
	 	 	167'575	 	 	 	1'385	 	 	 	168'960	 	 	 	504'843	 
	10/10/2007
	 	 	167'920	 	 	 	1'040	 	 	 	168'960	 	 	 	336'923	 
	11/10/2007
	 	 	168'266	 	 	 	694	 	 	 	168'960	 	 	 	168'657	 
	12/10/2007
	 	 	168'613	 	 	 	347	 	 	 	168'960	 	 	 	44	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	3'957'893	 	 	 	97'147	 	 	 	 	 	 	 	 	 







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