Document:

EX-10.38

                          ASSUMPTION OF LIABILITIES AND

                            INDEMNIFICATION AGREEMENT

         This  Assumption of  Liabilities  and  Indemnification  Agreement  (the
"Agreement")  is made and entered into effective as of the 31st day of December,
1997 (the "Effective Date"), by and between Nu Skin International,  Inc., a Utah
corporation ("NSI") and 252nd Shelf Corporation, a Delaware corporation which is
in the process of changing its name to Nu Skin USA, Inc. ("NUSA").

                                    Recitals

         A.  Immediately  prior to the Effective  Date,  NUSA was a wholly-owned
subsidiary of NSI.

         B.  NSI's  integrated  business  is being  divided  into  two  separate
businesses  and entities as of the  Effective  Date,  pursuant to the terms of a
Contribution and Distribution  Agreement entered into between NSI and NUSA as of
the  Effective  Date  (the  "Contribution  and  Distribution  Agreement").   The
separation and  reorganization is being  accomplished  through a contribution of
specified NSI assets to NUSA and a distribution of the outstanding capital stock
of NUSA to NSI's stockholders.

         C. As part of such  separation  and  reorganization,  NSI and NUSA have
agreed to an allocation of liabilities arising from the historical  operation of
NSI's  business.  The allocation is intended to generally  have the  liabilities
follow the entity  holding the assets and  continuing the business to which such
liabilities relate or from which they arise.

         D.  The  parties  hereto  have   determined   that  the  allocation  of
liabilities between NSI and NUSA is to be as provided in this Agreement.

                                    Agreement

         NOW  THEREFORE,  in  consideration  of the  foregoing  premises and the
mutual covenants of the parties  contained  herein,  the parties hereby agree as
follows:

         1.  DEFINITIONS.  Capitalized  terms  used  in this  Agreement  and not
otherwise  defined  herein  shall  have  the  meanings  ascribed  to them in the
Contribution  and  Distribution  Agreement.  As  used  in  this  Agreement,  the
following terms shall have the following meanings:

         "Benefits   Agreement"  shall  mean  that  certain  Employee   Benefits
Allocation Agreement entered into by NSI and NUSA as of the Effective Date.
<PAGE>
         "Claim"  shall mean:  (a) A suit,  proceeding  or  investigation  by or
before  any  court or  governmental  or  regulatory  agency or body or a written
demand for payment of a Liability or cause of action, asserted against NSI, NUSA
or both by a Claimant; or (b) a written demand or assertion by or on behalf of a
Claimant  that a cause of action  giving rise or relating to a Liability  exists
against NSI or NUSA.

         "Claimant" shall mean any person or entity asserting a Claim.

         "Effective Date" shall mean December 31, 1997.

         "Indemnified  Claim"  shall mean any  Liability or Claim as to which an
Indemnifying Party has agreed to indemnify an Indemnified Party.

         "Indemnified  Loss"  shall  mean a cost,  expense or loss  incurred  in
connection with an Indemnified Claim, for which an Indemnified Party receives or
is entitled to receive a payment from an Indemnifying Party.

         "Indemnified  Party"  shall  mean a party or  other  person  or  entity
entitled to be indemnified  from any Indemnified  Claims and Indemnified  Losses
pursuant to the terms of this Agreement.

         "Indemnifying Party" shall mean a party indemnifying another party from
any  Indemnified  Claims and  Indemnified  Losses  pursuant to the terms of this
Agreement.

         "Jointly Shared  Liabilities" shall mean Liabilities of NSI that are to
be  jointly  shared,  assumed  and  paid by NSI and  NUSA  as  provided  in this
Agreement,  as identified on the Listing of Liabilities or pursuant to the terms
of this Agreement.

         "Liabilities"  of any  party  hereto  shall  mean  all  losses,  debts,
liabilities,  damages, obligations, claims, demands, judgments or settlements of
any  nature or kind owed by such  party,  whether  accrued  or  contingent,  and
including all  penalties,  costs and expenses  (legal,  accounting or otherwise)
associated  therewith,  but excluding "Taxes" as such term is defined in the Tax
Sharing and Indemnification Agreement.

         "Listing of Liabilities" shall mean the listing of Liabilities attached
hereto as Exhibit A, which lists certain NUSA Assumed Liabilities,  NSI Retained
Liabilities and Jointly Shared Liabilities.

         "NSI  Continuing  Business"  shall mean the business to be conducted by
NSI  immediately  after giving effect to the  transactions  contemplated  by the
Contribution and Distribution Agreement,  utilizing the NSI Retained Assets, and
including:  the  business of marketing  and  distributing  of Nu Skin  products;
managing and licensing the Nu Skin Global  Compensation  Plan;  licensing of the
right to use the Nu Skin  trademarks and trade names,  products and  distributor
lists;  providing management services to local Nu Skin entities;  developing new
formulas  and  ingredients  for Nu  Skin  products;  and  all  other  businesses
conducted  by NSI prior to the  Effective  Date,  other  than the NUSA  Acquired
Business.
<PAGE>
         "NSI Employees" shall mean all individuals who immediately prior to the
Effective  Date  were  employed  by NSI and  who,  after  giving  effect  to the
transactions  contemplated by the Contribution and Distribution  Agreement,  are
intended to remain employed by NSI or in the NSI Continuing Business.

         "NSI  Retained  Assets"  shall mean,  collectively,  all assets of NSI,
other than the NUSA Acquired Assets.

         "NSI Retained  Liabilities"  shall mean each of the  Liabilities of NSI
other than the NUSA  Assumed  Liabilities  and the NUSA  portion of the  Jointly
Shared  Liabilities.  The NSI Retained  Liabilities  shall include each of those
Liabilities  identified as such on the Listing of Liabilities or pursuant to the
terms of this Agreement.

         "NUSA Acquired  Assets" shall mean,  collectively,  those assets of NSI
transferred  to and acquired by NUSA  pursuant to the terms of the  Contribution
and Distribution Agreement, as identified in Exhibit E attached thereto.

         "NUSA  Acquired  Business"  shall mean the  business to be conducted by
NUSA  immediately  after giving effect to the  transactions  contemplated by the
Contribution and Distribution Agreement, utilizing the NUSA Acquired Assets, and
including  the  marketing  and  distribution  of Nu Skin  products in the United
States  as  permitted  by  the  Intercompany   Agreements  (as  defined  in  the
Contribution and Distribution Agreement).

         "NUSA Assumed  Liabilities"  shall mean each of the  Liabilities of NSI
that are to be  assumed by NUSA as of the  Effective  Date as  provided  in this
Agreement  and  identified  as  NUSA  Assumed  Liabilities  in  the  Listing  of
Liabilities or pursuant to the terms of this Agreement.

         "NUSA  Employees"  shall mean all individuals who immediately  prior to
the  Effective  Date were  employed by NSI and who,  after giving  effect to the
transactions  contemplated by the Contribution and Distribution  Agreement,  are
intended to be employed by NUSA, as identified in the Benefits Agreement.

         "Settlement Payment" shall mean a payment made by a party hereto to the
other party pursuant to and in exercise of its rights under Section 4.10 hereof.
<PAGE>
         "Tax Sharing and Indemnification Agreement" shall mean that certain Tax
Sharing and  Indemnification  Agreement  entered  into by NSI and NUSA as of the
Effective Date.

         2. ASSUMPTION AND ALLOCATION OF LIABILITIES.

                  2.1  NSI  Retained  Liabilities.  Except  as may be  otherwise
         specifically  provided herein, NSI shall retain,  assume,  pay, perform
         and discharge all of the NSI Retained Liabilities.

                  2.2 NUSA Assumed Liabilities. Except as otherwise specifically
         provided herein,  from and after the Effective Date, NUSA shall assume,
         pay, perform and discharge the NUSA Assumed Liabilities. In addition to
         those items specifically  referenced as NUSA Assumed Liabilities on the
         Listing of  Liabilities,  NUSA Assumed  Liabilities  shall  include the
         following:

                  (a)      Liabilities  that result from a Claim  arising out of
                           the operation of the NUSA Acquired Business,  whether
                           based on  events  occurring  prior  to or  after  the
                           Effective Date; and

                  (b)      Liabilities  that  arise  out  of or  relate  to  any
                           activity  undertaken  by, or any  failure  to act by,
                           NUSA after the Effective Date.

                  2.3 Jointly Shared  Liabilities.  From and after the Effective
         Date, NSI shall assume,  pay, perform and discharge 50%, and NUSA shall
         assume,   pay,   perform  and  discharge  50%  of  the  Jointly  Shared
         Liabilities,  unless a different  allocation of any particular  Jointly
         Assumed  Liabilities  is  specified in the Listing of  Liabilities.  In
         addition to those Liabilities  identified as Jointly Shared Liabilities
         in the Listing of Liabilities, Jointly Shared Liabilities shall include
         the following:

                  (a)      Liabilities  arising  from  Claims  based  on  events
                           occurring prior to the Effective Date and which:  (i)
                           are not  identified in the Listing of  Liabilities as
                           either NSI  Retained  Liabilities  or as NUSA Assumed
                           Liabilities,  and  (ii)  arise,  in  more  than  a de
                           minimis way,  from the  businesses  or  operations of
                           both  the  NSI  Continuing   Business  and  the  NUSA
                           Acquired Business.

                  (b)      Liabilities  not  identified  as either NSI  Retained
                           Liabilities  or  NUSA  Acquired  Liabilities  in  the
                           Listing of Liabilities,  which result from Claims for
                           indemnification  (and the  advancement of expenses in
                           connection with a proceeding as to which such a Claim
                           may  later  be  asserted)  arising  out of  facts  or
                           circumstances  existing on or events  occurring on or
                           prior  to  the  Effective   Date,  made  against  NSI
                           pursuant  to  any  law  or  any   provision   in  any
                           certificate of incorporation, bylaws or agreement, by
                           any director, officer, employee or agent of NSI whose
                           duties involved,  in more than a de minimis way, both
                           the NSI  Continuing  Business  and the NUSA  Acquired
                           Business.
<PAGE>
                  2.4 Intent of Assumption and Allocation.  In applying Sections
         2.1, 2.2 and 2.3, the parties intend that  Liabilities not specifically
         identified  in the Listing of  Liabilities  but  incurred  (or based on
         facts  existing)  prior to the Effective Date  ("Unidentified  Existing
         Liabilities") be allocated by a fair and reasonable  application of the
         principle  that: (i) NSI shall be solely  responsible  for  Liabilities
         arising from or relating to the NSI  Retained  Assets or the conduct of
         the NSI Continuing  Business and in which the NUSA Acquired  Assets and
         NUSA  Acquired  Business had no more than a de minimis  role;  and (ii)
         NUSA  shall be  solely  responsible  for  Liabilities  arising  from or
         relating  to the  NUSA  Acquired  Assets  or the  conduct  of the  NUSA
         Acquired  Business  and in  which  the  NSI  Retained  Assets  and  NSI
         Continuing  Business had no more than a de minimis  role.  Unidentified
         Existing  Liabilities in which both (i) the NSI Retained  Assets or NSI
         Continuing  Business and (ii) the NUSA Acquired Assets or NUSA Acquired
         Business  have more than a de  minimis  role shall be shared by NSI and
         NUSA in  accordance  with the  provisions  of Section  2.3,  as Jointly
         Shared Liabilities.

                  2.5 Liability Insurance Coverage.  If any Liabilities to which
         this Section 2 applies are covered by any liability  insurance  carried
         by NSI for periods prior to the Effective Date, NSI and NUSA shall each
         have access to such insurance within the aggregate  limits thereof,  in
         proportion to their respective  obligations pursuant to this Section 2.
         Any  insurance  recoveries  covering  Liabilities  to  be  assumed  and
         allocated pursuant to Section 2.3 shall be shared by the parties in the
         proportions provided in Section 2.3

                  2.6  Actions  to  Effect  Assignment  and  Assumption  of NUSA
         Assumed Liabilities.

                  (a)      NSI and NUSA shall use their  reasonable best efforts
                           to cause all rights and obligations of NSI in respect
                           of the NUSA Assumed Liabilities to be assigned to and
                           assumed by NUSA  effective as of the Effective  Date,
                           or as promptly thereafter as practicable.

                  (b)      From and after the Effective Date, NSI and NUSA shall
                           use their reasonable best efforts to obtain from each
                           obligee  to which the NUSA  Assumed  Liabilities  are
                           owed a full  release  of NSI  from any  liability  or
                           obligation   in   respect   of  such   NUSA   Assumed
                           Liabilities, effective as of the Effective Date or as
                           of the earliest possible date.

                  (c)      Each of NSI and NUSA shall  cooperate  with the other
                           and execute such  instruments and documents as may be
                           necessary or reasonably  requested by the other party
                           in connection  with the  assignment,  assumption  and
                           release   of  any   NUSA   Assumed   Liabilities   as
                           contemplated herein.
<PAGE>
                  (d)      If and to the extent  that NSI and NUSA are unable to
                           obtain the assignment,  assumption and release of any
                           NUSA Assumed  Liabilities as contemplated  herein, as
                           between NSI and NUSA,  effective as of the  Effective
                           Date,  NUSA agrees to pay and perform as and when due
                           all  Liabilities and obligations of NSI in respect of
                           such NUSA Assumed Liabilities,  whether arising prior
                           to, on or after the Effective Date, and, in the event
                           that  for any  reason  NUSA  does  not  make any such
                           payment or perform  any such  obligation  as and when
                           due or NSI makes any such  payment  or  performs  any
                           such  obligation,  NUSA shall promptly  reimburse NSI
                           for  all  costs  and  expenses  incurred  by  NSI  in
                           connection therewith.

         3. INDEMNIFICATION.

                  3.1 By NSI. NSI shall  indemnify and hold harmless  NUSA,  and
         each officer,  director,  employee and agent of NUSA,  from and against
         any and all Liabilities and Claims which NSI has agreed to assume, pay,
         perform  and  discharge   pursuant  to  the  terms  of  this  Agreement
         including:  (i) all NSI Retained Liabilities;  (ii) NSI's proportionate
         share of all Jointly Shared  Liabilities;  (iii) all Claims relating to
         or arising  from such  Liabilities;  and (iv) all costs,  expenses  and
         obligations  arising from,  relating to or incurred in connection  with
         such Liabilities and Claims.

                  3.2 By NUSA.  NUSA shall  indemnify and hold harmless NSI, and
         each officer, director, employee and agent of NSI, from and against any
         and all  Liabilities  and Claims which NUSA has agreed to assume,  pay,
         perform  and  discharge  pursuant  to  the  terms  of  this  Agreement,
         including: (i) all NUSA Assumed Liabilities;  (ii) NUSA's proportionate
         share of all Jointly Shared  Liabilities;  (iii) all Claims relating to
         or arising  from such  Liabilities;  and (iv) all costs,  expenses  and
         obligations  arising from,  relating to or incurred in connection  with
         such Liabilities and Claims.

                  3.3 Payment Terms.  All payments to be made by an Indemnifying
         Party  pursuant to its  obligations  under this Section 3 shall be made
         within ten (10) business days of receipt of notice from the Indemnified
         Party that an  Indemnified  Loss has been  incurred by the  Indemnified
         Party and stating the amount of such Indemnified Loss and the basis for
         the indemnification obligation,  unless the Indemnifying Party contests
         the  obligation  to indemnify the  Indemnified  Party with respect to a
         claimed Indemnified Loss, as set forth in Section 3.9 below.

                  3.4  Taxes  and  Employee  Benefits.   Concurrently  with  the
         execution of this Agreement,  the parties are executing the Tax Sharing
         and Indemnification  Agreement and the Benefits Agreement.  Obligations
         relating to allocations of Liabilities for taxes, as well as the effect
         of  taxes  on a party  in  respect  of an  Indemnified  Loss,  shall be
         governed by the Tax Sharing and Indemnification Agreement.  Obligations
         with  respect  to  accrued  and  ongoing  benefits  payable  to the NSI
         Employees  and NUSA  Employees  will be as set  forth  in the  Benefits
         Agreement.
<PAGE>
                  3.5  Insurance.   The   indemnification   provisions  of  this
         Agreement  are not to be construed to be insurance  coverage and do not
         amend or affect in any manner any insurance  policies  purchased by NSI
         prior to the Effective  Date.  Each party shall use its best efforts to
         collect  on  insurance  as to which it is the  insured  party,  without
         regard to whether it is the Indemnified Party or the Indemnifying Party
         hereunder with respect to the subject of the insurance claim. If either
         party receives insurance proceeds relating to an Indemnified Loss after
         the  receiving  party has  received a payment from the other party with
         respect to such  Indemnified  Loss, the receiving  party shall promptly
         remit to the paying party a portion of such insurance proceeds equal to
         the  paying  party's   proportion  of  the  Indemnified   Loss.  If  an
         Indemnified   Party  receives   insurance   proceeds   relating  to  an
         Indemnified  Loss prior to receipt  of  payment  from the  Indemnifying
         Party,  then  the  amount  of the  Indemnified  Loss  to be paid by the
         Indemnifying Party shall be appropriately reduced.

                  3.6 Effect of Other  Reductions  of  Indemnified  Loss. If the
         amount of any Indemnified Loss shall at any time prior or subsequent to
         indemnification  pursuant  to this  Agreement  be reduced by  recovery,
         settlement or otherwise,  the amount of the Indemnified Loss paid or to
         be paid by the Indemnifying  Party shall be adjusted by an amount equal
         to the Indemnifying Party's share of such reduction  (determined in the
         same   proportion  as  parties'   assumption  and  allocation  of  such
         Liabilities  as  provided  in  Section  2  hereof),  less any  expenses
         reasonably  incurred  in  connection  therewith,  and in the  event the
         Indemnifying Party has previously paid the Indemnified Loss, the amount
         of the  Indemnifying  Party's share of the reduction  shall promptly be
         repaid by the Indemnified Party to the Indemnifying Party.

                  3.7 Waiver of Subrogation.  Each party hereby waives any right
         of  subrogation  it may have  with  respect  to any  Indemnified  Loss.

                  3.8 In  Event  of  Unenforceability.  To the  extent  that any
         party's undertakings as an Indemnifying Party set forth in this Section
         3 may be unenforceable,  such party shall contribute the maximum amount
         it is permitted to contribute  under  applicable law to the payment and
         satisfaction of Indemnified Losses incurred by an Indemnified Party.

                  3.9 Disputes Relating to Claims for Indemnification.

                  (a)      If an  Indemnifying  Party contests its obligation to
                           indemnify  an  Indemnified  Party with respect to any
                           claimed  Indemnified  Losses,  the Indemnifying Party
                           may deliver a written  objection  to the claim within
                           ten  (10)  business  days  following  receipt  of the
                           notice provided by the Indemnified Party as described
                           in Section 3.3 above.
<PAGE>
                  (b)      In the event an Indemnifying  Party gives such notice
                           of objection  to an  Indemnified  Party,  the parties
                           shall  attempt in good faith to agree upon the rights
                           of  the  respective   parties  with  respect  to  the
                           disputed Indemnified Claim, consistent with the terms
                           of  this  Agreement.  If no  such  agreement  can  be
                           reached  after  good  faith  negotiation,  either the
                           claiming  Indemnified Party or the Indemnifying Party
                           may demand arbitration of the matter. The Indemnified
                           Party and the  Indemnifying  Party  shall each select
                           one  arbitrator,  and the two arbitrators so selected
                           shall select a third arbitrator.  The decision of the
                           arbitrators so selected as to the validity and amount
                           of  any  Indemnified   Claim  shall  be  binding  and
                           conclusive upon the parties to this Agreement.

                  (c)      Judgment upon any award  rendered by the  arbitrators
                           may be entered in any court having jurisdiction.  Any
                           such arbitration  shall be held in Utah County,  Utah
                           under  the  rules  then  in  effect  of the  American
                           Arbitration Association. In any arbitration hereunder
                           in which  the  amount  of any  Indemnified  Losses to
                           which an  Indemnified  Party is entitled is at issue,
                           the fees and expenses payable to the arbitrators,  to
                           the  American  Arbitration  Association  and  to  the
                           parties'  attorneys,  shall be allocated  between the
                           Indemnified  Party and the Indemnifying  Party in the
                           same  proportion  that the  aggregate  amount  of the
                           disputed  Indemnified Losses submitted to arbitration
                           which are unsuccessfully  disputed or claimed by each
                           party (as determined by the arbitrators) bears to the
                           total amount of the disputed Losses so submitted.

         4. CONTROL OF CLAIMS.

                  4.1 NSI Retained Liabilities.  Subject to the restrictions and
         provisions  set forth in this  Section 4, NSI shall  have full  control
         over any action taken with respect to NSI Retained  Liabilities and all
         related Claims and Indemnified Losses.

                  4.2 NUSA Assumed Liabilities.  Subject to the restrictions and
         provisions  set forth in this  Section 4, NUSA shall have full  control
         over any action taken with respect to NUSA Acquired Liabilities and all
         related Claims and Indemnified Losses.

                  4.3 Jointly Shared  Liabilities.  Subject to the  restrictions
         and provisions set forth in this Section 4, NSI shall have full control
         over any action taken with respect to Jointly  Shared  Liabilities  and
         related Claims.
<PAGE>
                  4.4  Specified  Claims.  Claims  identified  on the Listing of
         Liabilities  as being subject to control other than as provided  herein
         shall be controlled as provided in the Listing of Liabilities.

                  4.5 Rights Arising From Control of Claims.

                  (a)      A party  entitled  to control a Claim  shall have the
                           right,  without  limitation,  to select  counsel,  to
                           settle the Claim on any terms it deems  advisable and
                           in its discretion  (except as otherwise  specifically
                           provided herein, and except that an Indemnified Party
                           may not  settle a Claim  for  which  an  Indemnifying
                           Party shall be responsible without the consent of the
                           Indemnifying  Party,  except as  provided  in Section
                           4.10), to appeal any adverse decision rendered in any
                           court,  to discontinue  any action,  and otherwise to
                           make any decision  with respect  thereto as it in its
                           discretion deems advisable,  provided  however,  that
                           with  respect  to any such  Claim  with a  value,  or
                           potential  value,  of  $250,000  or more,  the  party
                           controlling  the claim shall obtain the prior written
                           consent of the other party hereto to the selection of
                           counsel,  which  consent  shall  not be  unreasonably
                           withheld.

                  (b)      Notwithstanding  anything to the contrary herein,  if
                           there  exists  or is  reasonably  likely  to  exist a
                           conflict of interest that would make it inappropriate
                           in the judgment of an Indemnified  Party for the same
                           counsel to represent both such Indemnified  Party and
                           the Indemnifying  Party,  then the Indemnified  Party
                           shall be entitled to retain its own counsel,  in each
                           jurisdiction   for   which  the   Indemnified   Party
                           determines counsel is required, at the expense of the
                           Indemnifying  Party.  In the  event  an  Indemnifying
                           Party exercises the right to undertake the defense of
                           a Claim as provided  herein,  the  Indemnified  Party
                           shall cooperate with the  Indemnifying  Party in such
                           defense and make available to the Indemnifying Party,
                           at the Indemnifying  Party's expense,  all witnesses,
                           pertinent  records,  materials and information in the
                           Indemnified   Party's   possession   or   under   the
                           Indemnified  Party's control  relating  thereto as is
                           reasonably   required  by  the  Indemnifying   Party.
                           Similarly,  in the  event the  Indemnified  Party is,
                           directly  or   indirectly,   conducting  the  defense
                           against  a  Claim,  the   Indemnifying   Party  shall
                           cooperate with the Indemnified  Party in such defense
                           and make available to the  Indemnified  Party, at the
                           Indemnifying  Party's  expense,  all such  witnesses,
                           records,    materials   and    information   in   the
                           Indemnifying   Party's   possession   or  under   the
                           Indemnifying  Party's control  relating thereto as is
                           reasonably required by the Indemnified Party.

                  4.6 Legal Action.  If either party is served with any judicial
         or  administrative  process  concerning any Claim, the defense of which
         such party believes should be conducted by the other party,  such party
         shall:  (a) take all steps  necessary or  appropriate  to preserve both
         parties'  legal rights and remedies;  (b) notify the other party of the
         pendency of the action;  and (c)  request  that the other party  assume
         conduct of the defense and that the other party use its reasonable best
         efforts to have itself substituted as a party to the action. Unless and
         until the  parties  agree to a  transfer  of  control  of a  particular
         action, the party originally notified or served shall have full control
         over, and responsibility for, the conduct of the proceedings, and shall
         be solely  liable for any  default.  If both  parties  are served  with
         judicial or administrative process concerning any Claim covered by this
         Agreement,  each party shall use its  reasonable  best efforts to reach
         agreement  with the other as to which party should  control the conduct
         of the proceedings.  Pending such agreement, each party shall have full
         control over, and responsibility  for,  preserving its legal rights and
         remedies,  and  shall be solely  responsible  for any  default  entered
         against it.
<PAGE>
                  4.7 Other  Actions.  If either party  receives from a Claimant
         any  demand,  not related to judicial  or  administrative  action,  for
         payment  against  which  such  party  believes  it  is  entitled  to be
         indemnified  pursuant to this Agreement,  the  Indemnified  Party shall
         promptly forward such demand to the  Indemnifying  Party with a request
         that the Indemnifying Party assume control of the Claim and acknowledge
         its obligation to indemnify the Indemnified  Party with respect to such
         Claim. The Indemnifying  Party shall respond to such a request from the
         Indemnified Party within 30 days.

                  4.8  Consultation  and  Cooperation.  NSI and  NUSA  agree  to
         cooperate  fully  with each other in  connection  with all Claims as to
         which either such party may claim a right to indemnification hereunder,
         in order to minimize  the effects of such Claims on the  businesses  of
         both  parties.  NUSA shall  consult and  cooperate  with NSI's  counsel
         concerning any action taken with respect to Claims  relating to Jointly
         Assumed Liabilities.

                  4.9 Costs of Defense.  Costs of defense of Claims  relating to
         Jointly Assumed Liabilities shall be by each party in proportion to its
         assumption  and agreement to pay and discharge  such Claims as provided
         in this  Agreement.  NSI shall provide to NUSA a monthly  accounting of
         expenses  (other than  counsel  fees  directly  billed to each party as
         provided  above) incurred in connection with defense of Claims relating
         to Jointly Assumed Liabilities,  and NUSA shall promptly pay to NSI its
         share of such  expenses,  determined  in the  proportion  that  Jointly
         Shared Liabilities are assumed and allocated as provided herein.

                  4.10 Settlement Rights. If either party hereto or any Claimant
         proposes   settlement   or  compromise  of  any  Claim  subject  to  an
         indemnification   obligation  hereunder,   each  party  shall  use  all
         reasonable   efforts   to   agree  on  such   settlement,   considering
         minimization of the Liability resulting from such Claim and the adverse
         effects on the businesses of both parties. If the parties cannot agree,
         the party  favoring  acceptance of the proposal shall have the right to
         pay to the other party a Settlement  Payment equal to its proportionate
         share of the dollar value of the proposal in full  satisfaction  of its
         assumption  and agreement to pay and discharge the Claim as provided in
         this  Agreement.  The party  receiving  the  Settlement  Payment  shall
         thereafter  solely control the further  defense and  disposition of the
         Claim,  shall be totally liable for all Liability  resulting  therefrom
         and shall  indemnify and hold harmless the party making the  Settlement
         Payment  from any and all  Liability  over and above the  amount of the
         Settlement  Payment.  The party receiving the Settlement  Payment shall
         have no  obligation  or duty to  reimburse  or  refund  any part of the
         Settlement Payment, regardless of the ultimate resolution of the Claim.
<PAGE>
                  4.11  Resolution of Disputes.  In the event of any controversy
         or dispute  between the parties  hereto arising out of or in connection
         with this  Agreement,  the parties shall attempt,  promptly and in good
         faith,  to  resolve  any such  dispute.  If the  parties  are unable to
         resolve any such  dispute  within a  reasonable  time (not to exceed 90
         days),  all unresolved  disputes  arising under this Agreement shall be
         submitted to mandatory  and binding  arbitration  in Utah County,  Utah
         under the then applicable rules of the America Arbitration  Association
         or any successor organization, consistent with the procedures set forth
         in Section 3.9 above.

         5. MISCELLANEOUS PROVISIONS.

                  5.1  Notice.   All  notices,   requests,   demands  and  other
         communications  required  or  permitted  to be given or made under this
         Agreement  shall be in  writing  and shall be deemed to have been given
         (i) on the date of personal  delivery  or (ii)  provided  such  notice,
         request,  demand or communication is actually  received by the party to
         which it is addressed in the ordinary  course of delivery,  on the date
         of  (A)  deposit  in  the  United  States  mail,  postage  prepaid,  by
         registered  or  certified   mail,   return   receipt   requested,   (B)
         transmission by telegram,  cable, telex or facsimile  transmission,  or
         (C) delivery to a  nationally-recognized  overnight courier service, in
         each case,  addressed as follows,  or to such other person or entity as
         either  party  shall  designate  by notice  to the other in  accordance
         herewith:

                                  If to NSI:

                                  Nu Skin International, Inc.
                                  One Nu Skin Plaza
                                  75 West Center Street
                                  Provo, UT  84601
                                  Attention: Mr. M. Truman Hunt
<PAGE>
                                  With a copy to:

                                  Holland & Hart, LLP
                                  215 South State Street, Suite 500
                                  Salt Lake City, UT 84111
                                  Attention: David R. Rudd

                                  If to NUSA:

                                  Nu Skin USA, Inc.
                                  One Nu Skin Plaza
                                  75 West Center Street
                                  Provo, UT  84601
                                  Attention: Mr. Richard M. Hartvigsen

                                  With a copy to:

                                  Holland & Hart, LLP
                                  215 South State Street, Suite 500
                                  Salt Lake City, UT 84111
                                  Attention: David R. Rudd

                  5.2 Governing  Law. This  Agreement  shall be governed by, and
         construed in accordance  with, the laws of the State of Utah applicable
         to  contracts  entered into and to be  performed  entirely  within such
         State.

                  5.3  Severability.  The parties  agree that each  provision to
         this Agreement shall be construed independent of any other provision of
         this Agreement.  The invalidity or  unenforceability  of any particular
         provision  of this  Agreement  shall not  affect  the other  provisions
         hereof.  This  Agreement  shall be construed in all respects as if such
         invalid or unenforceable provision were omitted.

                  5.4  Entire  Agreement.  This  Agreement,  together  with  the
         Contribution  and  Distribution   Agreement,   constitutes  the  entire
         agreement  between  the  parties  with  respect to the  subject  matter
         hereof. This Agreement  supersedes all prior written or contemporaneous
         oral  agreements  related to the subject matter hereof.  The Listing of
         Liabilities  constitutes a part of this  Agreement and is  incorporated
         herein by reference in its entirety.

                  5.5  Amendment  and  Modifications.   No  amendment  or  other
         modification  to this Agreement  shall be binding upon any party unless
         executed in writing by all of the parties hereto.
<PAGE>
                  5.6 Waiver. No waiver by any party of any of the provisions of
         this  Agreement  will be deemed,  or will  constitute,  a waiver of any
         other  provision,  whether  similar,  nor will any waiver  constitute a
         continuing waiver. No waiver will be binding unless executed in writing
         by the party making the waiver.

                  5.7 Assignment. Neither party may assign, by operation of law,
         merger or otherwise,  license,  sublicense or otherwise transfer any of
         its rights or  obligations  under this Agreement to any other person or
         entity without obtaining the prior written consent of the other party.

                  5.8  Captions.  All  captions in this  Agreement  are intended
         solely for the  convenience  of the parties and none shall be deemed to
         affect the meaning and construction of any provision hereof.

                  5.9 Cumulative Remedies.  No right or remedy conferred upon or
         reserved to any of the  parties  under the terms of this  Agreement  is
         intended to be, nor shall it be deemed, exclusive of any other right or
         remedy  provided  herein  or by  law  or  equity,  but  each  shall  be
         cumulative of every other right or remedy.

                  5.10  Binding   Effect  of  Agreement.   Except  as  otherwise
         specifically provided herein, this Agreement shall be binding upon, and
         shall  inure to the  benefit  of and be  enforceable  by,  the  parties
         hereto, and their respective affiliates, successors and assigns.

                  5.11 No Third Party Beneficiaries.  Nothing in this Agreement,
         express or implied,  shall  confer on any person other than the parties
         any rights or remedies under or by virtue of this Agreement.

                  5.12   Counterparts.   This   Agreement  may  be  executed  in
         counterparts  and each taken together shall  constitute one and all the
         same document.

         IN WITNESS WHEREOF, the parties by their duly authorized officers, have
executed and delivered this Agreement on the date first written above.

                                    NU SKIN INTERNATIONAL, INC.

                                    By: /s/ Steven J. Lund
                                    Name: Steven J. Lund
                                    Title: Executive Vice President & Secretary

                                    NU SKIN USA, INC.

                                    By: /s/ Keith Halls
                                    Name: Keith Halls
                                    Title: Vice President
<PAGE>
                                    EXHIBIT A

                             LISTING OF LIABILITIES

I.       NSI Retained  Liabilities.  The NSI Retained  Liabilities as defined in
         the attached Agreement shall include the following:

         A.       Those distribution  compensation exceptions listed on Schedule
                  A-1 attached hereto.

         B.       Legal  expenses,  losses  and  Liabilities  arising  from  the
                  following pending or threatened  litigation,  claims and legal
                  ations:

                  1.       Nu Skin v. Leviton Manufacturing Co., Inc., et al.
                  2.       Nu Skin v. Neways, Inc., et al.
                  3.       Lane v. Spector  Management  Group, Salt Lake County,
                           NSI
                  4.       Rebecca Smith, et al v. NSI

II.      NUSA  Acquired   Liabilities.   The  following   Liabilities  shall  be
         considered  NUSA  Acquired  Liabilities  for  purposes of the  attached
         Agreement:

         A.       The following Liabilities,  as referenced in the NSI financial
                  statements  (copies of which are  attached  hereto as Schedule
                  A-2):

                                                                  Estimated
                                                                    Amount
                                                                 ----------
1.   Accounts payable                                               542,720
2.   Related party payables                                         932,622
3.   Accrued commissions                                          5,799,511
4.   Other accrued liabilities
     (Gallery of Gifts, payroll and sales tax)                    4,170,961
5.   Other current liabilities (Deferred income,
     funds collected but orders not shipped)                      1,876,673
6.   Independent warehouse deposits                                 115,186
                                                                 ----------
        Total financial statement liabilities to be transferred  13,437,673
                                                                 ==========
<PAGE>
         B.       Contractual and other obligations:

1.   Canada office and warehouse lease agreement
2.   Obligation to fund and support Merasoft
3.   Obligation to fund and support Big Planet
4.   US Olympic Committee agreement
5.   Other than the exceptions listed in the Disclosure Schedule, or in Schedule
     A-1 attached  hereto,  the  obligation to fund any  distributor  commission
     exceptions  granted  by NUSA  is  transferred  to  NUSA if such  exceptions
     cumulatively  combined with all commissions paid on the sale of Products in
     the USA exceed 42%
6.   UPS Contract
7.   Convention Technology Services Agreement
8.   Free-Flow Packaging Contract
9.   Obligations under intercompany  agreements  applicable to U.S.  operations,
     including support services, license fees, distributor incentives, trademark
     royalties and distribution agreement
10.  Abravenel Hall contract
11.  Salt Lake Fine Arts Division Contract
12.  Pinnacle Group (Kurt Bestor - convention)
13.  Vertex Contract
14.  Fast Tax Contract
15.  Currently the State of Utah is auditing unclaimed  distributor  checks. If
     an obligation  results from this audit, it will be the  responsibility  of
     NUSA.
16.  Obligations  owed to Craig  Bryson  as  described  in  Section  3.08 of the
     Disclosure Schedule attached to the Stock Acquisition Agreement.
17.  All existing US convention related obligations (see item III B).

         C.       Pending or threatened litigation, claims or assessments

1.   Splash Product Liability Case
2.   Any liabilities relating to the Big Planet operations.

III.     Jointly Assumed Liabilities. The following Liabilities shall be treated
         as Jointly  Assumed  Liabilities,  for  purposes  of Section 2.3 of the
         attached Agreement:

         A.       Pending or threatened litigation, claims or assessments

1.  Cappone v. NSI, et al                   Obligation to be split 50/50 between
                                            NUSA and NSI

         B.       Convention Expenses - NSI has agreed to reimburse a portion of
                  the net loss  (total  convention  expenses  to a maximum of $5
                  million less convention registration fees). NUSA will bear the
                  portion of the loss which  corresponds  with the percentage of
                  the  attendees who are US  distributors  and NSI will bear the
                  portion of the loss that  corresponds  witch the percentage of
                  total attendees who are not US distributors
<PAGE>
                                  SCHEDULE A-1

                        LIST OF DISTRIBUTOR COMPENSATION
                        EXCEPTIONS TO BE RETAINED BY NSI

Lang Chou @@####
Betty Sung ###-##-####
Tim Sales ###-##-####
Lisa Fairbanks ###-##-####
Craig Bryson ###-##-####
Craig Tillotson ###-##-####
CJM - Claram McDermott ##-#######
World Network - Richard Kall ##-#######
MillerTime - Murray and Susan Miller  ##-#######
Janice Aruta - ###-##-####
Resource Marketing - Mark and Lana Barrett  ##-#######
International  Enterprises - Mike Chapman  ##-#######
Paul  Cook-Erlich  ###-##-####
Duel Forces - Kathleen Duel ##-#######
Samco Marketing - Seth Ferman  ##-#######
Karen Johnson  ###-##-####
Gloria  Miller  ###-######
Nancy  Rawle  ###-##-####
Planet  Network  --  Eric Sheranian  ##-#######
Career  Development - Kay Smith  ##-#######
Speaks/Ellis Group  -  Jerry  Speaks  ##-#######
Bryan  Stepanian   ###-##-####
Jerry  Sude ###-##-####
Dean Marchi ###-##-####
Deborah Lipner ###-##-####
Winwood Brokerage - Raymond Goodwin (or Bud Corkin)  ##-#######
Kathy Dennison - ###-##-####
Jerry Campisi ##-#######
Jack Pfeifer ###-##-####
Suzzane Brudge ### ## ####EX-10.39

                     EMPLOYEE BENEFITS ALLOCATION AGREEMENT

         This Employee  Benefits  Allocation  Agreement  (this  "Agreement")  is
effective  as of the date of  execution  by and  between Nu Skin  International,
Inc., a Utah corporation  ("NSI"), and Nu Skin USA, Inc., a Delaware corporation
("NUSA").

                                    Recitals:

         Whereas,  pursuant to the terms of the  Contribution  and  Distribution
Agreement (the "C&D Agreement") effective as of December 31, 1997 by and between
NSI and NUSA,  NSI and NUSA have agreed to  determine  each  party's  rights and
obligations as applied to employee benefits.

         Whereas,  as a result of the events  contemplated in the C&D Agreement,
NSI will transfer certain employees to NUSA (the "NUSA Employees").

         Whereas,  following  the execution of the Stock  Acquisition  Agreement
between the  stockholders  of NSI and Nu Skin Asia  Pacific,  Inc.  ("NSAP"),  a
Delaware  Corporation,  it is reasonably likely that NSI and NUSA will no longer
be in the same "controlled  group" under Section 414(b),  (c), (m) or (o) of the
Internal  Revenue Code of 1986, as amended (the "Code"),  but  neverthless  will
continue to have substantial common ownership.

                                   Agreement:

         Now, therefore, the parties do agree as follows:

         1.       Nu Skin International, Inc. 401(k) Plan (the "401(k) Plan").

                  (a)      Employee   Participation;    Participating   Employer
                           Status.

                           Subject  to  compliance  with  applicable  law,  NUSA
                  Employees  shall continue to participate in the 401(k) Plan on
                  the same terms and  conditions  under which they  participated
                  prior to the execution of this Agreement.  NUSA shall become a
                  participating  employer in the 401(k) Plan as soon as possible
                  following  the  execution  of the  Agreement,  and in no event
                  later than the next following payroll date of NUSA. NUSA shall
                  execute  the  original  of the 401(k)  Plan or a  supplemental
                  participation  agreement  as  a  participating  employer  in a
                  multiple  employer  plan.  NSI shall continue to serve as plan
                  sponsor and plan  administrator  of the 401(k) Plan. The power
                  to amend the 401(k) Plan shall  remain  exclusively  with NSI,
                  subject to NUSA's right to withdraw from the 401(k) Plan.
<PAGE>
                  (b)      401(k) Plan Contributions/Expenses.

                           Contributions  made to the  401(k)  Plan by NUSA  and
                  administrative  expenses incurred by the 401(k) Plan on behalf
                  of NUSA Employee participants of the 401(k) Plan shall be paid
                  by NUSA in  accordance  with the terms of the 401(k)  Plan and
                  shall be paid  either  directly  to the  trustee  and  service
                  providers of the 401(k) Plan or through an internal accounting
                  charge from NSI to NUSA; provided, that in all cases, all NUSA
                  Employee  participant elective deferrals shall be forwarded to
                  the 401(k)  Plan  trustee  within the  legally  required  time
                  frame.

                  (c) Application of "Same Desk" Rule.

                           The "same  desk" rule of Code  section  401(k)  shall
                  apply to all NUSA  Employees for purposes of  restricting  the
                  ability of any NUSA  Employee to receive a  distribution  from
                  the 401(k) Plan following  their transfer from NSI to NUSA. No
                  "separation  from  service"  shall be deemed to have  occurred
                  with  respect  to the NUSA  Employees  transferred  under  the
                  Agreement.

          2. Nu Skin  International  Employee Medical Benefit Plan (the "Medical
Plan").

                  (a)      Employee   Participation;    Participating   Employer
                           Status.

                           NUSA  Employees  shall continue to participate in the
                  Medical Plan on the same terms and conditions under which they
                  participated  prior to the  execution of this  Agreement.  NSI
                  shall amend the Medical Plan to permit  participation  by NUSA
                  Employees in the Medical Plan.

                  (b)      Notification to Carriers; Additional Actions.

                           NSI  agrees to notify all of its  insurance  carriers
                  who provide welfare benefits under the Medical Plan as soon as
                  possible  following the execution of this  Agreement that NUSA
                  Employees are to be covered employees of the NSI insured group
                  pursuant   to   the   terms   of  the   respective   insurance
                  arrangements.  Such  notification  shall  be  provided  to the
                  following  insurance  carriers:   Blue  Cross/ValueCare;   FHP
                  Healthcare; Standard Insurance Company; and Sun Life Assurance
                  Company of Canada. NSI also agrees to provide  notification of
                  the  coverage  of NUSA  Employees  as part of the NSI  insured
                  group  to any  other  medical,  life or  disability  insurance
                  carrier  that may cover any of the NSI  employees  who  become
                  NUSA  Employees.  NSI and NUSA agree to take any actions  that
                  may be required by any insurance carrier to ensure coverage of
                  the NUSA Employees on an uninterrupted basis.
<PAGE>
                  (c)      Premiums/Plan Expenses.

                           Premiums, administrative expenses and claims incurred
                  or  paid  by the  Medical  Plan on  behalf  of  NUSA  Employee
                  participants of the Medical Plan shall be paid by NUSA, either
                  directly  by NUSA,  by NUSA to the  insurance  carriers of the
                  Medical  Plan, or through an internal  accounting  charge from
                  NSI to NUSA.

         3. Nu Skin USA, Inc. Cafeteria Plan (the "Cafeteria Plan").

                  (a)      Implementation of New Cafeteria Plan.

                           Effective as soon as possible following the execution
                  of the Agreement, but in no event later than the first payroll
                  date of NUSA, NUSA shall adopt the Cafeteria Plan, which shall
                  be identical to the Nu Skin International, Inc. Cafeteria Plan
                  (the   "NSI   Cafeteria   Plan")  in  which   NUSA   Employees
                  participated  while  employed  by NSI.  NUSA  Employees  shall
                  participate  in this  Cafeteria  Plan on the  same  terms  and
                  conditions under which they  participated in the NSI Cafeteria
                  Plan prior to the  execution of the  Agreement.  No "change in
                  family  status" under  Section 5.4 of the NSI  Cafeteria  Plan
                  shall be deemed to have  occurred as a result of the  transfer
                  of NUSA Employees from NSI to NUSA.

                  (b)      Transfer of Accounts.

                           NSI and NUSA shall  transfer  to the  Cafeteria  Plan
                  following  its  adoption  all  amounts  deferred  into the NSI
                  Cafeteria  Plan  medical  flexible  spending  account  by NUSA
                  Employees year-to-date.

         4. Nu Skin  International,  Inc. Deferred  Compensation Plans and Trust
         Plan (the "Deferred Compensation Plans").

                  (a)      Employee   Participation;    Participating   Employer
                           Status.

                           NUSA Employees who are currently participating in the
                  Deferred  Compensation  Plans shall continue to participate in
                  the  Deferred   Compensation  Plans  on  the  same  terms  and
                  conditions  under  which  they   participated   prior  to  the
                  execution  of this  Agreement.  NSI shall  amend the  Deferred
                  Compensation  Plans to permit  participation by NUSA Employees
                  in the Deferred Compensation Plans.

                  (b)      Crediting of Service.
<PAGE>
                           The transfer of the NUSA  Employees  from NSI to NUSA
                  shall  not be  deemed  to cause a  "Retirement  Date" to occur
                  under  section  10 of the  Deferred  Compensation  Plans.  All
                  service with NUSA shall be recognized  for purposes of vesting
                  pursuant to section 13.2 of the Deferred Compensation Plans.

         5. Nu Skin USA, Inc. 1998 Stock Incentive Plan (the "Stock Plan").

                  (a)      Implementation of New Stock Plan.

                           Effective as soon as possible following the execution
                  of this Agreement and, if required,  with appropriate approval
                  by the  stockholders of NSAP, NUSA shall adopt the Stock Plan,
                  which shall be identical in form and  substance to the Nu Skin
                  International,  Inc. 1996 Stock Incentive Plan (the "NSI Stock
                  Plan") in which NUSA Employees  participated while employed by
                  NSI. NUSA Employees shall participate in the Stock Plan on the
                  same terms and conditions under which they participated in the
                  NSI Stock Plan prior to the execution of this Agreement.

                  (b)      Transfer of Shares.

                           Following the adoption by NUSA of the Stock Plan, NSI
                  and NUSA shall take all actions  necessary to transfer to NUSA
                  shares of NSAP  Class A Common  Stock in  accordance  with the
                  terms of the C&D Agreement.  NUSA shall bear all costs of such
                  transfer and subsequent holding of such shares including,  but
                  not  limited  to:  (1)  any  filing  fees  in the  event  that
                  additional  registration  or other filing with the  Securities
                  and Exchange Commission or state securities regulatory body is
                  required;  and  (2)  NUSA's  allocable  portion  of any  costs
                  associated  with updating any  previously  filed  registration
                  statement covering such shares.

                  (c)      Assumption of Outstanding Awards.

                                    NUSA  shall  assume  all  award   agreements
                  governing  the terms of awards made  pursuant to the NSI Stock
                  Plan to NUSA  Employees.  The transfer of NUSA  Employees from
                  NSI to NUSA under the C&D  Agreement  shall not  constitute  a
                  termination of employment for purposes of awards granted under
                  the NSI Stock Plan. Prior service with NSI shall be recognized
                  for  purposes of the vesting of awards  granted  under the NSI
                  Stock Plan and assumed by NUSA.
<PAGE>
         6.       Vacation/Sick Leave and Severance Policies.

                  (a)      Adoption of Identical Policies.

                           Effective on the first day  following  the  execution
                  date of the Agreement,  NUSA shall adopt  vacation/sick  leave
                  and severance  policies  which are identical to those provided
                  by NSI immediately prior to the execution of the Agreement.

                  (b)      Crediting of Service; Accounting of  Leave Used .

                           Any  service  to  NSI  resulting  in the  accrual  of
                  vacation/sick  leave or severance by an NUSA Employee prior to
                  his or her transfer  from NSI shall be  recognized by NUSA for
                  purposes of accrual under the NUSA programs.  Correspondingly,
                  any vacation or sick leave used by an NUSA Employee during the
                  1998 calendar year prior to his or her transfer from NSI shall
                  be treated as if used while employed by NUSA

         7.       Family and Medical Leave Act ("FMLA").

         NUSA shall be a "successor in interest" to NSI under the terms of FMLA.
As such,  NUSA shall count for NUSA Employees  periods of employment with NSI to
determine  eligibility for FMLA leave, grant or continue leave to NUSA Employees
who had  previously  provided  notice to NSI,  and comply  with job  restoration
requirements for NUSA Employees at the conclusion of FMLA leave.

         8.       Other Non-Enumerated Benefits.

         It is the parties' intent that NUSA Employees be provided with the same
benefits  following the execution of this  Agreement as were provided to them by
NSI  prior to the  execution  of this  Agreement,  subject  to  compliance  with
applicable  law.  With  respect  to  benefit  plans  or  programs  that  are not
specifically  discussed  herein,  where legally  permissible and advisable,  the
parties  shall  construe  this  Agreement  liberally  so as to permit  continued
participation by NUSA employees in NSI benefit plans or programs.  Participation
shall be continued  without the imposition of new restrictions,  including,  but
<PAGE>
not limited to (where applicable) new eligibility  periods, new vesting periods,
new  deductibles,  new  out-of-pocket  maximums or new service accrual  periods.
Where  participation  by NUSA  Employees  in NSI  benefit  plans is not  legally
permissible,  administratively  practicable or finanically  feasible (for either
NSI or NUSA),  NUSA shall adopt  parallel  plans and policies to  replicate  the
benefits  previously  available  to NUSA  Employees  while  employed  by NSI.  A
termination  of  employment  shall not be deemed to have  occurred  for benefits
purposes with respect to the NUSA Employees transferred under the C&D Agreement.

         9.       Appropriate Action.

         As soon as possible  following  the  execution  of this  Agreement,  to
permit NUSA to become a  participating  employer in the 401(k) Plan, the Medical
Plan and the  Deferred  Compensation  Plans,  NSI and NUSA  shall:  (1)  execute
appropriate Board resolutions  approving NUSA's participation as a participating
employer  in such plans;  (2) adopt an  amendment  to each such plan  reflecting
NUSA's  participation;  and (3) take any other actions necessary or advisable to
permit such  participation.  With respect to all other employee benefit plans or
policies, NSI and NUSA agree to take all actions necessary or advisable to carry
out the parties' stated intent.

         10. Incorporation by Reference. To the extent not inconsistent with the
terms of this  Agreement,  Article V of the C&D Agreement  shall be incorporated
herein by reference.

         In Witness  Whereof,  the parties have caused this Agreement to be duly
executed as of this _______ day of _______, 199__.

                           Nu Skin International, Inc.

                                            By: /s/ Steven J. Lund
                                            Name: Steven J. Lund
                                            Title:

                                            Nu Skin USA, Inc.

                                            By: /s/ Keith Halls
                                            Name: Keith Halls
                                            Title:

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