EX-10.52
ASSET PURCHASE AGREEMENT
BY AND AMONG
NU SKIN ENTERPRISES, INC.,
NU SKIN UNITED STATES, INC.,
AND
NU SKIN USA, INC.
March 8, 1999
<PAGE>
TABLE OF CONTENTS
Page
1.
Definitions.........................................................
1
2.
Basic
Transaction...................................................
5
2.1 Purchase
of the Acquired Assets............................ 5
2.2 Purchase
Price Determination............................... 5
3. The
Escrow Amount; Purchase Price Adjustments; Net Liabilities .....
6
3.1 Draft
Closing Date Balance Sheet........................... 7
3.2 Objections
to Draft Closing Date Balance Sheet;
Appointment of "Big 5" Accounting Firm................ 7
3.3 Work
Papers................................................ 7
3.4 Adjustment
to Escrow Amount................................ 7
4.
Closing; Closing
Deliveries......................................... 8
4.1 Nu Skin
USA Deliveries..................................... 8
4.2 Nu Skin
Enterprises Deliveries............................. 8
4.3 Nu Skin
United States Deliveries........................... 9
5.
Representations and Warranties of Nu Skin
USA....................... 9
5.1
Organization of Nu Skin USA................................ 9
5.2
Authorization of
Transaction............................... 9
5.3
Non-contravention.......................................... 9
5.4 Brokers'
Fees.............................................. 9
5.5 Title to
Acquired Assets...................................10
5.6
Undisclosed Liabilities; Subsequent Events.................10
5.7 Legal
Compliance...........................................10
5.8
Intellectual Property......................................11
5.9 Tangible
Assets............................................12
5.10
Inventory..................................................12
5.11
Acquired Contracts.........................................12
5.12
Insurance..................................................12
5.13
Litigation.................................................13
5.14
Product Warranty...........................................13
5.15
Product Liability..........................................13
5.16
Employees..................................................13
5.17
Employee Benefits..........................................13
5.18
Environment,
Health, and Safety Matters....................14
5.19
Disclosure.................................................15
6.
Representations and Warranties of the Nu Skin
Entities..............15
6.1
Organization of the Nu Skin Entities.......................15
6.2
Authorization of Transaction...............................15
6.3
Non-contravention..........................................15
6.4 Brokers'
Fees..............................................15
6.5
Disclosure.................................................15
<PAGE>
TABLE OF CONTENTS cont'd
Page
7.
Indemnification.....................................................15
7.1 Nu Skin
USA's Indemnification Obligation;
Indemnification Limitation Agreement..............15
7.2 Nu Skin
Entities' Indemnification Obligation;..............16
7.3
Damages....................................................16
7.4 Notice of
Claim............................................16
8.
Miscellaneous.......................................................17
8.1 Survival
of Representations and Warranties.................17
8.2 Press
Releases and Public Announcements....................17
8.3 No
Third-Party Beneficiaries...............................17
8.4 Entire
Agreement...........................................17
8.5
Assignment.................................................17
8.6
Counterparts...............................................17
8.7
Headings...................................................17
8.8
Notices....................................................18
8.9 Governing
Law..............................................18
8.10
Amendments and Waivers.....................................18
8.11
Severability...............................................19
8.12
Expenses...................................................19
8.13
Construction...............................................19
8.14
Incorporation of Recitals, Exhibits, and Schedules.........19
8.15
Specific Performance.......................................19
8.16
Submission to Jurisdiction.................................19
8.17
Bulk Sales and Transfer Laws...............................20
ATTACHED EXHIBITS AND SCHEDULES:
EXHIBIT "A" --
EXCLUDED ASSETS
EXHIBIT "B" --
ACQUIRED CONTRACTS
EXHIBIT "C" --
ASSUMED
LIABILITIES
EXHIBIT "D" --
FORM OF BILL OF SALE
AND ASSIGNMENT EXHIBIT
EXHIBIT "E" --
FORM OF INSTRUMENT OF
ASSUMPTION OF LIABILITIES
EXHIBIT "F" --
FORM OF
INDEMNIFICATION LIMITATION AGREEMENT
EXHIBIT "G" --
FORM OF LEGAL OPINION
OF HOLLAND & HART, L.L.P.
EXHIBIT "H" --
ALLOCATION OF PURCHASE
PRICE
<PAGE>
DISCLOSURE SCHEDULE
ASSET PURCHASE AGREEMENT
This Asset
Purchase Agreement (the "Agreement") is entered into
effective as of March
8, 1999, by and among Nu Skin Enterprises, Inc., a
Delaware corporation
("Nu Skin
Enterprises"), Nu Skin
United States, Inc.,
a
Delaware corporation
("Nu Skin United States"), and Nu Skin USA, Inc., a
Delaware corporation
("Nu Skin USA").
Nu Skin Enterprises and Nu Skin United
States are
sometimes referred to herein, collectively, as the "Nu Skin
Entities." Nu Skin
Enterprises,
Nu Skin United States, and Nu Skin USA are
referred to herein,
collectively, as the
"Parties" and, individually, as a
"Party."
RECITALS
WHEREAS, this Agreement contemplates a transaction in which (i) Nu
Skin
United States will
purchase from Nu Skin USA certain of its assets (defined in
this Agreement
as the "Non-Securities Acquired Assets") in exchange for the
assumption by Nu Skin
United States of certain of Nu Skin USA's liabilities
(defined in this Agreement, collectively, as the "Assumed Liabilities," as
set
forth in Section 2.2.1 below), and (ii) Nu Skin Enterprises will purchase for
cash from Nu Skin USA
certain shares of Nu Skin Enterprises' Class A Common
Stock (defined
in this Agreement as the "Class A Shares," as set forth in
Section 2.1.2 below) owned by Nu Skin USA.
NOW THEREFORE, in
consideration of the
mutual premises and agreements
set forth herein, and for other good and valuable consideration,
the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as
follows.
1.
Definitions.
"Acquired Assets" has the meaning set forth in Section 2.1.3
below.
"Acquired Contracts" has the meaning set forth in Section 2.1.1
below.
"Affiliates" means (a)
Merasoft LLC, a Utah limited liability company;
(b) Scrub Oak Ltd., a Utah limited partnership; (c) Aspen Investments Ltd., a
Utah limited partnership, and (d) any other affiliated entity other
than Nu Skin
Enterprises and its subsidiaries.
"Affiliated Group"
means any affiliated group within the meaning of
Code Section 1504(a).
"Assumed Liabilities" has the meaning set forth in Section 2.2.1
below.
"Basis" means
any past or present fact, situation, circumstance,
status, condition,
activity, practice, plan, occurrence, event, incident,
action, failure to
act, or transaction
that forms or could
form the basis for
any specified consequence.
"Bill of Sale and Assignment" means the Bill of Sale and
Assignment in
the form attached hereto as Exhibit "D".
<PAGE>
"Cash" means cash and cash equivalents (including marketable
securities
and short -term
investments)
calculated in accordance with generally accepted
accounting principles applied on a consistent basis.
"Class A Common Stock"
has the meaning set forth in Section 2.1.2
below.
"Class A Purchase
Price" has the meaning
set forth in Section
2.2.2
below.
"Class A Shares" has the meaning set forth in Section 2.1.2
below.
"Closing" has the meaning set forth in Section 2.3 below.
"Closing Date Balance
Sheet" has the meaning
set forth in Section 3.2
below.
"COBRA" means the
requirements
of Part 6 of Subtitle
B of Title I of
ERISA and Code Section 4980B.
"Code"
means the Internal Revenue Code of 1986, as amended.
"Controlled Group" has the meaning set forth in Code Section
1563.
"Damages" has the meaning set forth in Section 5.1 below.
"Disclosure Schedule" has the meaning set forth in Section 3
below.
"Employee
Benefit Plan"
means any (a) non-qualified deferred
compensation or
retirement
plan or arrangement, (b) qualified defined
contribution
retirement plan or arrangement that is an Employee Pension
Benefit
Plan, (c) qualified
defined benefit
retirement plan or arrangement that is an
Employee Pension
Benefit Plan
(including
any Multi-employer Plan), or (d)
Employee Welfare
Benefit Plan or material fringe benefit or other
retirement,
bonus, or incentive plan or program.
"Employee Pension
Benefit Plan" has the meaning set forth in ERISA
Section 3(2).
"Employee Welfare
Benefit Plan" has the meaning set forth in ERISA
Section 3(1).
"Environmental,
Health, and
Safety Requirements" shall mean all
federal, state, local, and foreign statutes, regulations,
ordinances, and
other
provisions having the
force or effect of law, all judicial and administrative
orders and
determinations,
all contractual obligations and all common law
concerning public health and safety, worker health and safety, and
pollution or
protection of the environment, including, without limitation, all
those relating
to the presence, use, production, generation, handling, transportation,
treatment, storage,
disposal, distribution, labeling, testing, processing,
discharge, release,
threatened
release, control, or cleanup of any
hazardous
materials, substances
or wastes, chemical
substances or mixtures, pesticides,
pollutants,
contaminants, toxic
chemicals, petroleum
products or
byproducts,
asbestos, polychlorinated biphenyls, noise, or radiation, each as
amended and as
now or hereafter in effect.
<PAGE>
"ERISA" means the Employee Retirement Income Security Act of 1974,
as
amended.
"ERISA Affiliate"
means each entity that is treated as a single
employer with Nu Skin USA for purposes of Code Section 414.
"Escrow" has the meaning set forth in Section 3.2 below.
"Escrow Agent" means U.S. Bank National Association, a national
banking
association.
"Escrow Agreement"
means the Escrow Agreement dated of even date
herewith entered
into by an
among Nu Skin Enterprises, Nu Skin USA, the
stockholders who executed the signature page thereto, and the
Escrow Agent.
"Escrow Amount" has the meaning set forth in Section 3 below.
"Excluded Assets" has the meaning set forth in Section 2.1.1
below.
"Existing Agreements" has the meaning set forth in Section 2.2.1
below.
"Fiduciary" has the meaning set forth in ERISA Section 3(21).
"Indemnification
Limitation
Agreement" means
the Indemnification
Limitation Agreement
entered into by and among Nu Skin
Enterprises,
Nu Skin
United States,
Nu Skin USA,
Big Planet,
Inc., a Utah corporation, and the
individuals indicated
therein, the form of
which is attached hereto as Exhibit
"F".
"Indemnitees" has the meaning set forth in Section 5.1 below.
"Instrument of
Assumption"
means the Instrument
of Assumption in the
form attached hereto as Exhibit "E".
"Intellectual Property" means (a) all inventions (whether
patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures,
together with all
reissuances,
continuations,
continuations-in-part,
revisions, extensions, and
reexaminations
thereof, (b) all trademarks, service marks, trade dress,
logos,
trade names, and corporate names, together with all translations,
adaptations,
derivations, and
combinations
thereof and including
all goodwill
associated
therewith, and all
applications,
registrations,
and renewals in connection
therewith, (c) all
copyrightable works,
all copyrights, and
all applications,
registrations, and
renewals in connection therewith, (d) all trade secrets and
confidential business
information (including
ideas, research and
development,
know-how, formulas,
compositions,
manufacturing and
production processes
and
techniques, technical
data, designs,
drawings, specifications, customer and
supplier lists,
pricing and cost information, and business and marketing
plans
and proposals),
(e) all computer software (including data and related
documentation), (f)
all other proprietary rights, and (g) all copies and
tangible embodiments thereof (in whatever form or medium).
"Knowledge" means actual knowledge after reasonable
investigation.
<PAGE>
"Liability" means any
liability (whether known or unknown, whether
asserted or
unasserted, whether
absolute or
contingent,
whether accrued or
unaccrued, whether
liquidated
or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Multi-employer Plan" has the meaning set forth in ERISA Section
3(37).
"NSE Indemnitees" has the meaning set forth in Section 7.1
below.
"NSUSA Indemnitees" has the meaning set forth in Section 7.2
below.
"Net Liabilities" means the excess of the Assumed Liabilities over the
book value of the
Non-Securities
Acquired Assets,
as determined from Nu
Skin
USA's Closing Date Balance Sheet.
"Non-Securities
Acquired Assets" has
the meaning set forth in Section
2.1.1 below.
"Nu Skin Enterprises" has the meaning set forth in the preface
above.
"Nu Skin Entities" has the meaning set forth in the preface
above.
"Nu Skin USA Intellectual Property" has the meaning set forth in
Section 5.8.1 below.
"Nu Skin
International" means
Nu Skin International, Inc., a Utah
corporation.
"Nu Skin United States" has the meaning set forth in the preface
above.
"Nu Skin USA" has the meaning set forth in the preface above.
"Ordinary Course of
Business" means the
ordinary course of business
consistent with past custom and practice (including with respect to
quantity and
frequency).
"Parties" and "Party" have the meanings set forth in the preface
above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, a partnership, a corporation, a limited
liability company,
an association, a joint stock company, a trust, a joint
venture, an
unincorporated
organization,
or a governmental entity (or any
department, agency, or political subdivision thereof).
"Prohibited Transaction" has the meaning set forth in ERISA Section
406
and Code Section 4975.
"Purchase Price" has the meaning set forth in Section 2.2.3
below.
"Reportable Event" has the meaning set forth in ERISA Section
4043.
"Security Interest"
means any mortgage,
pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's,
materialmen's,
and similar liens, (b) liens for Taxes not yet due and payable or
for Taxes that
the taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens
and liens securing
rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of
Business and
not incurred in connection with the borrowing of money.
<PAGE>
"Tax" means any
federal, state, local, or foreign income, gross
receipts, license,
payroll, employment,
excise, severance,
stamp, occupation,
premium, windfall
profits, environmental (including taxes under Code
Section
59A), customs duties, capital stock, franchise, profits, withholding, social
security (or
similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added,
alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including
any interest,
penalty, or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
2.
Basic Transaction.
2.1 Purchase
of the Acquired Assets.
2.1.1 Purchase
of the Non-Securities Acquired Assets. In
exchange for the
assignment
and assumption by Nu Skin United States of the
Assumed Liabilities,
on and subject to the terms and conditions of this
Agreement, Nu Skin
United States
agrees to purchase
and acquire from Nu
Skin
USA, and Nu Skin USA agrees to sell, transfer, convey, assign, and
deliver to Nu
Skin United States,
all of its right,
title and interest in
and to all of the
assets of Nu Skin USA
(except for the
excluded assets listed on Exhibit "A"
attached hereto and
the contracts
not expressly
assumed (collectively, the
"Excluded Assets"
and except for the
Class A Shares, which
are addressed
in
Section 2.1.2 below), of whatever kind or nature whatsoever,
including, but not
limited to,
(a) all leasehold improvements, (b) all equipment, (c) all
inventory, (d) the
name "Nu Skin USA"
and all derivations thereof, (e) all
intellectual property
used by Nu Skin USA in
its business that is not licensed
to it by Nu Skin
International, (f) all
promotional
and marketing
materials
related to Nu
Skin USA's business, and (g) the contracts and agreements
specifically listed on
Exhibit "B" attached
hereto, each of which
is directly
related to Nu Skin USA's business of network marketing Nu Skin International's
personal care and nutritional products (collectively, the "Acquired
Contracts").
No other contracts
or agreements of Nu Skin USA other than the Acquired
Contracts are
being acquired by Nu Skin United States (nor is Nu Skin
Enterprises acquiring
any of Nu Skin USA's contracts or agreements pursuant to
this Agreement).
Furthermore, the
Parties understand and agree that neither Nu
Skin Enterprises nor Nu Skin United States is hereby acquiring any
liability to,
for, or in connection with Big Planet, Inc. The Parties
specifically
understand
and agree that all of Nu Skin USA's operating assets are being acquired by Nu
Skin United States pursuant to this Agreement, except for the Excluded
Assets.
The assets being purchased and acquired by Nu Skin United States,
as identified
in this Section 2.1.1, are referred to herein, collectively, as the
"Non-Securities Acquired Assets."
2.1.2 Purchase
of the Class A Shares.
On and subject to
the
terms and conditions of this Agreement, Nu Skin Enterprises agrees to purchase
at the Closing
from Nu Skin USA,
and Nu Skin USA
agrees to sell, transfer,
convey, assign, and deliver to Nu Skin Enterprises, in exchange for the Class A
Purchase Price (as that term is defined in Section 2.2.2 below),
all of Nu Skin
USA's right, title,
and interest in and to
the six hundred twenty thousand one
hundred fifty-eight
(620,158) shares of Nu Skin Enterprises Class A Common
Stock, $0.001 par value per share ("Class A Common Stock"), owned
by Nu Skin USA
(the "Class A Shares").
<PAGE>
2.1.3 Acquired Assets.
The Non-Securities Acquired Assets and
the Class A Shares are referred to herein, collectively, as the
"Acquired
Assets."
2.2 Purchase
Price Determination.
2.2.1 Purchase Price for the Non-Securities Acquired Assets.
On and subject to the terms and conditions of this Agreement and in
exchange for
the Non-Securities
Acquired Assets, at the Closing Nu Skin United States agrees
to assume and become solely responsible for the categories of liabilities
and
the contractual obligations of Nu Skin USA specifically set forth
on Exhibit "C"
attached hereto
(collectively, the
"Assumed
Liabilities"). Under
the heading
"Contractual
Obligations Assumed by
Nu Skin United
States" in Exhibit "C"
attached hereto,
the Parties have specifically listed each contract and
agreement that is
being assumed
by Nu Skin
United States pursuant to this
Agreement (which
contractual
obligations are deemed
to be part of the Assumed
Liabilities), and no
other contractual
obligation
of Nu Skin USA of any
type
whatsoever is being
assumed by Nu Skin
United States except as so listed in
Exhibit "C" attached hereto. Notwithstanding the provisions of this
Agreement,
the Parties
hereby
acknowledge
and reaffirm (a) the Tax Sharing and
Indemnification
Agreement dated December 31, 1997 and entered into by and among
Nu Skin International,
Nu Skin USA, and their respective shareholders, (b) the
Assumption of Liabilities and Indemnification Agreement dated effective as
of
December 31, 1997 and
entered into by and
between Nu Skin
International
and
252nd Shelf
Corporation,
a Delaware
corporation
(now known as "Nu Skin
USA,
Inc."), and (c) the
Employee Benefits
Allocation Agreement
(undated) entered
into by and between Nu Skin International and Nu Skin USA (collectively, the
"Existing Agreements"), and specifically acknowledge and agree that
the Existing
Agreements are not
included within the Assumed Liabilities. The Existing
Agreements shall remain in full force and effect as originally
executed and are
not being terminated,
modified, or amended by this Agreement. The Parties
understand and agree that, except for the Assumed Liabilities, neither Nu Skin
United States nor Nu Skin Enterprises (or any of their respective
affiliates) is
or will become liable or responsible for any other Liabilities or
obligations of
Nu Skin USA pursuant to this Agreement. As set forth above, the purchase price
for the Non-Securities Acquired Assets shall be the assumption by
Nu Skin United
States of the Assumed
Liabilities. The
aggregate purchase price for all of the
Non-Securities
Acquired Assets is
referred to herein as the "Non-Securities
Purchase Price."
2.2.2 Purchase
Price for the Class A
Shares. The purchase
price for the Class A
Shares shall be Eight
Million Six Hundred Eighty-Two
Thousand Two Hundred Twelve Dollars ($8,682,212) (the "Class A
Purchase Price").
The Class A Purchase Price will be paid by Nu Skin Enterprises by wire transfer
or delivery of other
immediately available
funds to Nu Skin USA at the Closing
as follows: (a) Five
Million Six Hundred Eighty-Two Thousand Two Hundred Twelve
($5,682,212) to Nu
Skin USA and (b) Three Million Dollars ($3,000,000) (which
amount is defined in Section 3 below as the "Escrow Amount") to the
Escrow Agent
pursuant to the Escrow Agreement.
2.2.3 Purchase Price.
The Non-Securities Purchase Price and
the Class A Purchase Price are referred to herein, collectively, as the
"Purchase Price."
<PAGE>
2.2.4 Allocation of
Purchase Price. The
Purchase Price shall
be allocated
among the Acquired Assets as of the date of the Closing in
accordance with Exhibit "H" attached hereto. Any subsequent adjustments to the
sum of the Purchase
Price shall be reflected in the allocation hereunder in a
manner consistent with Treasury Regulation Section 1.1060-1T(f). For all Tax
purposes, the Parties
agree to report the
transactions
contemplated
in this
Agreement in a manner consistent with the terms of this Agreement,
including the
allocation set forth in Exhibit "H" attached hereto, and that none of them will
take any position
inconsistent therewith
in any Tax return, Tax
refund claim,
litigation, or otherwise.
3. The Escrow Amount; Purchase Price Adjustments; Net Liabilities. As set forth
in Section 2.2.2
above, upon the
execution of this Agreement by each of the
Parties, Nu Skin Enterprises will deliver Three Million Dollars
($3,000,000) of
the Class A Purchase Price (the "Escrow Amount") to the Escrow
Agent for deposit
into the Escrow
pursuant to the terms of the Escrow
Agreement.
As set forth
below in this Section 3 and in the Escrow Agreement, the Purchase
Price shall be
subject to downward
adjustment on a dollar
for dollar basis to
the extent the
Net Liabilities
of Nu Skin USA, as
indicated in the Closing Date Balance Sheet
(as that term is defined in Section 3.2 below) exceeded One Million Dollars
($1,000,000). Such
downward adjustment
shall be effected by
disbursements of
funds from the Escrow Amount in accordance with the Escrow
Agreement. As further
provided in the Escrow Agreement, the Purchase Price may further be
adjusted by
the amount of any adjustments provided for in the Foreign Entity
Stock Purchase
Agreement(s) (as such term is defined in the Escrow Agreement).
If any conflict
exists between this Agreement and the Escrow Agreement regarding the adjustment
of the Purchase
Price by disbursements from the Escrow Amount or other
disbursements from the Escrow, the Escrow Agreement shall govern
and control.
<PAGE>
3.1 Draft Closing Date Balance Sheet. Within sixty (60) days after
the
date of the Closing, Nu Skin USA will prepare and deliver to Nu
Skin Enterprises
and the Escrow Agent a draft unaudited consolidated balance sheet (the "Draft
Closing Date
Balance Sheet") of Nu Skin USA as of the date of the Closing
(determined on a pro forma basis as though the Parties had not
consummated
the
transactions contemplated by this Agreement). Nu Skin USA will
prepare the Draft
Closing Date Balance
Sheet in accordance
with generally
accepted accounting
principles applied on
a basis consistent
with the preparation of Nu Skin USA's
December 31, 1998 balance sheet; provided, however, that assets, liabilities,
gains, losses,
revenues, and expenses in interim periods or
as of dates other
than year-end
(which normally are determined through the application of
so-called interim accounting conventions or procedures) will be
determined, for
purposes of the Draft Closing Date Balance Sheet, through full application of
the procedures used in preparing Nu Skin USA's December 31, 1998
balance sheet.
3.2 Objections to Draft Closing Date Balance Sheet; Appointment of
"Big
5" Accounting
Firm. If Nu Skin Enterprises has any objections to the Draft
Closing Date Balance Sheet, it shall deliver a detailed statement
describing its
objections to Nu Skin
USA and the Escrow
Agent within
thirty (30) days
after
receiving the Draft Closing Date Balance Sheet. Nu Skin
Enterprises and Nu
Skin
USA will then use reasonable efforts to resolve any such objections
themselves.
If Nu Skin Enterprises
and Nu Skin USA do not
agree on a final
resolution of
such objections
within thirty (30) days after Nu Skin USA
receives Nu Skin
Enterprises's
statement describing
its objections, Nu
Skin Enterprises
shall
appoint one of the so-called "Big 5" national accounting firms to resolve any
remaining objections to the Draft Closing Date Balance Sheet;
provided, however,
that the "Big 5" accounting firm so appointed shall not at
that time be engaged
by Nu Skin Enterprises
to provide it with auditing services (the "'Big 5'
Accountant"). The
appointment of the "Big 5" Accountant by Nu Skin Enterprises,
as provided by this Section 3.2, and the determinations and conclusions of the
"Big 5" Accountant
pursuant hereto,
shall be conclusive
and binding upon
the
Parties. Nu Skin USA
will revise the Draft
Closing Date Balance Sheet, as
appropriate, to
reflect the resolution
of any objections
thereto pursuant
to
this Section 3.2. For purposes of this Agreement, the term "Closing
Date Balance
Sheet" shall
mean the Draft
Closing Date Balance Sheet together with any
revisions made thereto by Nu Skin USA pursuant to this Section 3.2.
In the event
Nu Skin Enterprises
and Nu Skin USA submit
any unresolved
objections
to the
Draft Closing Balance Sheet to the "Big 5" Accountant for
resolution as provided
above in this Section
3.2, Nu Skin Enterprises and Nu Skin USA will share
equally the fees and expenses of the "Big 5" Accountant.
<PAGE>
3.3 Work Papers.
Nu Skin USA will make
the work papers
and back-up
materials used in preparing the Draft Closing Date Balance Sheet
available to Nu
Skin Enterprises
and its representatives and to the "Big 5" Accountant at
reasonable times
and upon reasonable notice at any time during (i) the
preparation by Nu Skin
USA of the Draft
Closing Date Balance
Sheet, (ii) the
review by Nu Skin Enterprises and its representatives of the Draft
Closing Date
Balance Sheet, (iii)
the discussion by Nu Skin Enterprises and Nu Skin USA of
any objections Nu Skin Enterprises may have thereto, and (iv) the resolution by
the "Big 5" Accountant
of any unresolved
objections to the
Draft Closing Date
Balance Sheet as set forth in Section 3.2 above.
3.4 Adjustment to Escrow Amount. As set forth in the Escrow
Agreement,
if the Net Liabilities
are more than One
Million Dollars ($1,000,000), the
Escrow Agent will promptly return to Nu Skin Enterprises the amount
by which the
Net Liabilities exceeded One Million Dollars ($1,000,000) in
accordance with the
provisions of the Escrow Agreement. Any such amount payable by the
Escrow Agent
to Nu Skin Enterprises
pursuant to this Section 3.4 shall be paid by the Escrow
Agent pursuant
to the terms of the Escrow Agreement. There shall be no
adjustment to the Escrow Amount for any amount by which the Net
Liabilities are
less than One Million Dollars ($1,000,000).
4. Closing; Closing Deliveries. The closing of the transactions
contemplated by
this Agreement (the
"Closing") shall take
place effective as set
forth in the
preface above. At the Closing, each Party shall make the following
deliveries:
4.1 Nu Skin
USA Deliveries.
4.1.1 At the Closing,
Nu Skin USA
will deliver to Nu Skin
Enterprises the following certificates, instruments, and
documents:
4.1.1.1 the original certificate(s) evidencing the
Class A Shares properly endorsed for transfer or accompanied by a
stock power(s)
executed in blank and properly guaranteed with a Medallion
guarantee;
4.1.1.2 an
originally
executed
copy
of the
Indemnification Limitation Agreement;
4.1.1.3 a legal opinion of Holland & Hart, L.L.P.,
counsel to Nu Skin
USA, substantially in the form of Exhibit "G" attached
hereto; and
4.1.1.5 such other
documents and instruments as Nu
Skin Enterprises or its counsel reasonably may request.
<PAGE>
4.1.2 At the Closing,
Nu Skin USA
will deliver to Nu Skin
United States the following certificates, instruments, and
documents:
4.1.2.1 a Bill of Sale and Assignment substantially
in the form of Exhibit "D" attached hereto; and
4.1.2.2 such other
documents and instruments as Nu
Skin Enterprises or its counsel reasonably may request.
4.2
Nu Skin
Enterprises Deliveries.
4.2.1 At the Closing,
Nu Skin Enterprises
will deliver to Nu
Skin USA the following certificates, instruments, and
documents:
4.2.1.1 Five Million Six Hundred Eighty-Two Thouand
One Hundred
Ninety-Eight Million
Dollars ($5,682,198)
of the Class A Purchase
Price, as indicated in Section 2.2.2 above; and
4.2.1.2 such other
documents and instruments as Nu
Skin USA or its counsel reasonably may request.
4.2.1 At the Closing,
Nu Skin Enterprises will deliver to the
Escrow Agent the following certificates, instruments, and
documents:
4.2.1.1 Three Million
Dollars ($3,000,000)
of the
Class A Purchase Price, as indicated in Section 2.2.2 above;
and
4.2.1.2 such other
documents and instruments as Nu
Skin USA or its counsel reasonably may request.
4.3 Nu Skin
United States Deliveries.
4.3.1 At the Closing, Nu Skin United States will deliver to Nu
Skin USA the following certificates, instruments, and
documents:
4.3.1.1 an
originally
executed
copy
of the
Instrument of
Assumption
substantially
in the form of Exhibit
"E" attached
hereto; and
4.3.1.2 such other
documents and instruments as Nu
Skin USA or its counsel reasonably may request.
5. Representations
and Warranties of Nu Skin USA. Nu Skin
USA represents and
warrants to each of the Nu Skin Entities that the statements contained in this
Section 5 are correct and complete as of the effective date of this Agreement,
except as set
forth in Nu Skin
USA's disclosure schedule attached to this
Agreement and
initialed by the Parties (the "Disclosure Schedule"). The
Disclosure Schedule will be arranged in paragraphs corresponding to
the numbered
paragraphs contained in this Section 5.
<PAGE>
5.1 Organization
of Nu Skin USA.
Nu Skin USA is a
corporation
duly
organized, validly existing, and in good standing under the laws of
the State of
Delaware, and to our
knowledge, is duly
qualified to do business in all states
where its activities or assets
