expenses
were the costs incurred during the first quarter in 2001 for the Company's
convention in the United States which added approximately $5.0 million in
selling, general and administrative expenses.
Other income (expense), net increased $0.7 million for the three-month
period ended September 30, 2001 compared to the same prior-year period resulting
in net other income of $0.2 million. This increase related primarily to a $2.3
million gain from the sale of an interest in the Company's Malaysian subsidiary
and was offset by a $1.9 million loss resulting from the exchange of
intercompany payables and receivables as well as the exchange loss on the
Company's yen based bank debt, which is translated into U.S. dollars for
financial reporting purposes. Other income (expense), net increased $5.1 million
for the nine-month period ended September 30, 2001 compared to the same period
in the prior year resulting in net other income of $5.4 million. This increase
related primarily to foreign currency gains resulting from the strength of the
U.S. dollar and the sale of an interest in the Company's Malaysian subsidiary.
Provision for income taxes decreased to $7.4 million and $21.6 million
for the three and nine-month periods ended September 30, 2001 from $8.4 million
and $25.6 million for the same prior-year periods. This decrease is largely due
to the decreases in operating income as compared to the same prior-year periods,
offset by an increase in the effective tax rate from 36.0% in the third quarter
of 2000 to 37.0% in the third quarter of 2001.
Net income decreased to $12.5 million and $36.7 million for the three and
nine-month periods ended September 30, 2001 from $15.0 million and $45.5 million
for the same prior-year periods, respectively. Net income decreased primarily
because of the factors noted above in "gross profit" and "distributor
incentives" and was somewhat offset by the factors noted in "selling, general
and administrative," "other income (expense), net" and "provision for income
taxes" above.
Liquidity and Capital
Resources
Historically, the Company's principal needs for funds have been for
distributor incentives, working capital (principally inventory purchases),
operating expenses, capital expenditures and the development of operations in
new markets. The Company has generally relied on cash flow from operations to
meet its business objectives without incurring long-term debt to unrelated third
parties to fund operating activities.
The Company typically generates positive cash flow from operations due to
favorable gross margins, the variable nature of distributor commissions which
comprise a significant percentage of operating expenses and minimal capital
requirements. During the nine-month period ended September 30, 2001, the Company
generated $49.5 million from operations compared to $18.0 million during the
nine-month period ended September 30, 2000. This increase in cash generated from
operations in 2001 compared to the same prior-year period is primarily related
to reduced cash payments to vendors for purchases of inventory resulting from
increased efficiencies in the Company's management of inventory and reduced
foreign taxes paid in 2001 versus 2000.
As of September 30, 2001, working capital was $129.7 million compared to
$122.8 million as of December 31, 2000. Cash and cash equivalents at September
30, 2001 and December 31, 2000 were $65.9 million and $64.0 million,
respectively. In addition to factors such as capital expenditures, dividends and
stock repurchases, the Company's U.S. dollar reported cash position was
negatively impacted during the nine-month period from the strength of the U.S.
dollar relative to other currencies, particularly the Japanese yen.
Capital expenditures, primarily for equipment, computer systems and
software, office furniture and leasehold improvements, were $11.6 million for
the nine-month period ended September 30, 2001. In addition, the Company
anticipates additional capital expenditures in 2001 of approximately $5.0
million to further enhance its infrastructure, including enhancements to
computer systems and Internet related software in order to expand the Company's
Internet capabilities.
-11-
In March 1998, the Company completed the acquisition of Nu Skin
International, Inc. (the "NSI Acquisition"). Pursuant to the terms of the NSI
Acquisition, Nu Skin International, Inc. ("NSI") and the Company are required to
pay certain contingent payments if specific earnings growth targets are met. The
Company and NSI did not meet the specified earnings growth targets for the years
ended December 31, 1999 and 2000. Contingent upon NSI and the Company meeting
specified earnings growth targets during 2001, the Company may pay up to $75.0
million in cash over the next year to the stockholders of NSI. However,
management believes it is unlikely that such contingency payments will be made.
On October 12, 2000, the Company refinanced the $87.1 million balance of
its existing credit facility with the proceeds of a private placement of 9.7
billion Japanese yen of ten-year senior notes (the "Notes") to The Prudential
Insurance Company of America. The Notes bear interest at an effective rate of
3.03% per annum and are due October 2010, with principal payments beginning
October 2004. As of September 30, 2001, the outstanding balance on the Notes was
9.7 billion Japanese yen, or $81.3 million.
On May 10, 2001, the Company entered into a $60.0 million revolving
credit agreement (the "Revolving Credit Facility") with Bank of America, N.A.
and Bank One, N.A. for which Bank of America, N.A. acted as agent. The proceeds
may be used for working capital, capital expenditures and other purposes
including repurchases of the Company's outstanding shares of Class A common
stock. There were no outstanding balances relating to the Revolving Credit
Facility as of September 30, 2001.
Since August 1998, the board of directors has authorized the Company to
repurchase up to $70.0 million of the Company's outstanding shares of Class A
common stock. The repurchases are used primarily to fund the Company's equity
incentive plans. During the three and nine-month periods ended September 30,
2001, the Company repurchased approximately 480,000 and 1,977,000 shares for an
aggregate price of approximately $3.5 million and $14.2 million, respectively.
As of September 30, 2001, the Company had repurchased a total of approximately
6.2 million shares for an aggregate price of approximately $54.5 million.
In August 2001, the board of directors declared a quarterly cash dividend
of $0.05 per share for all classes of common stock. This quarterly cash dividend
of approximately $4.2 million was paid on September 27, 2001, to stockholders of
record on September 10, 2001. In addition, the board of directors has
subsequently declared a quarterly cash dividend of $0.05 per share for all
classes of common stock payable on December 20, 2001. Management believes that
cash flows from operations will be sufficient to fund future dividend
payments.
The Company had related party payables of $7.0 million and $9.0 million
at September 30, 2001 and December 31, 2000, respectively. In addition, the
Company had related party receivables of $12.8 million and $13.2 million,
respectively, at those dates. These balances are largely related to the
acquisition of Big Planet, Inc. and the Nu Skin USA, Inc. transactions completed
during 1999, as well as a loan to a significant stockholder.
Management considers the Company to be sufficiently liquid to be able to
meet its obligations on both a short- and long-term basis. Management currently
believes existing cash balances together with future cash flows from operations
will be adequate to fund cash needs relating to the implementation of the
Company's strategic plans.
Seasonality
In addition to general economic factors, the direct selling industry is
impacted by seasonal factors and trends such as major cultural events and
vacation patterns. For example, Japan, Taiwan, Hong Kong, South Korea and
Thailand celebrate their respective local New Year in the first quarter, which
generally has a negative impact on such quarter. Management believes that direct
selling in Japan, the United States and Europe is also generally negatively
impacted during the month of August, which is in the Company's third quarter,
when many individuals traditionally take vacations.
-12-
Distributor
Information
The following table provides information concerning the number of active
and executive distributors as of the dates indicated. Active distributors are
those distributors who were resident in the countries in which the Company
operated and purchased products during the three months ended as of the date
indicated. An executive distributor is an active distributor who has achieved
required personal and group sales volumes.
| |
|
As of September 30, 2001 |
As of September 30, 2000 |
| |
|
Active |
Executive |
Active |
Executive |
| |
North Asia |
303,000 |
16,873 |
292,000 |
13,957 |
| |
Southeast Asia |
121,000 |
4,177 |
98,000 |
2,957 |
| |
North America |
75,000 |
2,494 |
70,000 |
2,926 |
| |
Other |
24,000
|
1,009
|
18,000
|
624
|
| |
Total |
523,000 |
24,553 |
478,000 |
20,464 |
| |
|
––––––––––– |
––––––––––– |
––––––––––– |
––––––––––– |
Currency Risk
and Exchange Rate Information
A majority of the Company's revenue and many of the Company's expenses
are recognized primarily outside of the United States except for inventory
purchases which are primarily transacted in U.S. dollars from vendors in the
United States. Each subsidiary's local currency is considered the functional
currency. All revenue and expenses are translated at weighted average exchange
rates for the periods reported. Therefore, the Company's reported sales and
earnings will be positively impacted by a weakening of the U.S. dollar and will
be negatively impacted by a strengthening of the U.S. dollar.
Given the uncertainty of exchange rate fluctuations, the Company cannot
estimate the effect of these fluctuations on the Company's future business,
product pricing, results of operations or financial condition. However, because
a majority of the Company's revenue is realized in local currencies and the
majority of the Company's cost of sales is denominated in U.S. dollars, the
Company's gross profits will be positively affected by a weakening in the U.S.
dollar and will be negatively affected by strengthening in the U.S. dollar. The
Company seeks to reduce its exposure to fluctuations in foreign exchange rates
through the use of foreign currency exchange contracts, through intercompany
loans of foreign currency and through its Japanese yen denominated debt. The
Company does not use such derivative financial instruments for trading or
speculative purposes. The Company regularly monitors its foreign currency risks
and periodically takes measures to reduce the impact of foreign exchange
fluctuations on the Company's operating results.
The Company's foreign currency derivatives are comprised of
over-the-counter forward contracts with major international financial
institutions. As of September 30, 2001, the primary currency for which the
Company had net underlying foreign currency exchange rate exposure was the
Japanese yen. Based on the Company's foreign exchange contracts at September 30,
2001 as discussed in Note 4 of the Notes to the Consolidated Financial
Statements, the impact of a 10% appreciation or 10% depreciation of the U.S.
dollar against the Japanese yen would not represent a material potential loss in
fair value, earnings or cash flows against such contracts. This potential loss
does not consider the underlying foreign currency transaction or translation
exposures of the Company.
Note Regarding
Forward-Looking Statements
With the exception of historical facts, the statements contained in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Reform Act") which reflect the
Company's current expectations and beliefs regarding the future results of
operations, performance and achievements of the Company. These statements are
subject to risks and uncertainties and are based
-13-
upon assumptions and beliefs
that may not materialize. These forward-looking statements include, but are not
limited to, statements concerning:
| |
• |
the belief that operations in the United States were in-line to show level or
slightly positive growth prior to the tragic events of September 11, 2001; |
| |
• |
the belief that operations in Taiwan have stabilized; |
| |
• |
the Company's belief that existing cash and cash flow from operations will be
adequate to fund cash needs; |
| |
• |
the expectation that the Company will spend $5 million for capital expenditures
during the remainder of 2001; and |
| |
• |
the anticipation that cash will be sufficient to pay future dividends. |
In addition, when used in this report, the words or phrases, "will likely
result," "expects," "anticipates," "will continue," "intends," "plans,"
"believes," "the Company or management believes," and similar expressions are
intended to help identify forward-looking statements.
The Company wishes to caution readers that the risks and uncertainties
described below, and the other risks and factors described herein and in the
Company's other filings with the Securities and Exchange Commission (which
contain a more detailed discussion of the risks and uncertainties related to the
Company's business) could cause (and in some cases in the past have caused) the
Company's actual results and outcomes to differ materially from those discussed
or anticipated. The Company also wishes to advise readers not to place any undue
reliance on such forward-looking statements, which reflect the Company's beliefs
and expectations only as of the date of this report. The Company assumes no
obligation to update or revise these forward-looking statements to reflect new
events or circumstances or any changes in its beliefs or expectations. Important
factors, risks and uncertainties that might cause actual results to differ from
those anticipated include, but are not limited to, the following:
| |
(a) |
Management believes that the tragic events of September 11th had a negative
impact on business in the United States during the end of the third quarter.
Although the Company experienced a modest rebound in the United States in
October, there continues to be uncertainty regarding current world tensions,
terrorist threats, and the U.S. military action in Afghanistan and the
corresponding impact on the Company's business, particularly in the United
States and the Southeast Asia region. |
| |
(b) |
Because a substantial majority of the Company's sales are generated from the
Asian regions, particularly from Japan and Taiwan, significant variations in
operating results including revenue, gross margin and earnings from those
expected could be caused by |
| |
|
• |
renewed or sustained weakness of Asian economies or consumer confidence, |
| |
|
• |
weakening of foreign currencies, particularly the Japanese yen in light of
current economic and political conditions, or |
| |
|
• |
higher than anticipated expenses associated with the Company's Japanese
convention and other initiatives. |
| |
(c) |
Many of the initiatives and strategies that have helped stabilize revenue in
Japan, and which the Company believes have helped stabilize revenue in Taiwan,
have only been recently introduced and there is still uncertainty concerning the
long-term effect of these initiatives. There can be no assurance that such
initiatives will continue to be successful |
-14-
| |
|
or that planned initiatives for future periods will have a similar impact. In
addition, there is a risk that the continued refinement and implementation of
the Company's divisional strategy, Internet initiatives and promotions could
create renewed confusion or uncertainty among distributors and not increase
distributor productivity. In addition, costs associated with these initiatives,
particularly the Internet and related technology initiatives, may be greater
than anticipated. |
| |
(d) |
The ability of the Company to retain its key and executive level distributors or
to sponsor new executive distributors is critical to the Company's success.
Because the Company's products are distributed exclusively through its
distributors, the Company's operating results could be adversely affected if the
Company's existing and new business opportunities and products do not generate
sufficient economic incentive to retain its existing distributors or to sponsor
new distributors on a sustained basis, or if the Company receives adverse
publicity. |
| |
(e) |
Risks associated with the Company's new product offerings and initiatives
planned for the remainder of 2001 and the beginning of 2002,
including: |
| |
|
• |
the risk that such products will not gain market acceptance or meet the
Company's expectations, |
| |
|
• |
the risk that sales from such product offerings could reduce sales of existing
products and not generate significant incremental revenue growth or help
increase distributor numbers and productivity, |
| |
|
• |
technological problems could delay or adversely affect the Company's Internet
and technology initiatives; and |
| |
|
• |
any legal or regulatory restrictions that might delay or prevent the Company
from offering its new products into all of its markets or limit the ability of
the Company to effectively market such products. |
| |
(f) |
Risks associated with efforts to renew growth in the United States, including: |
| |
|
• |
the risk that the Company's efforts to harmonize and simplify its divisional
approach in the United States will not be sufficient to generate sustained and
renewed sponsoring and sales activities in the United States by its
distributors, and |
| |
|
• |
uncertainties concerning the actual impact that the new initiatives and
enhancements to distributor incentives will have on revenue and distributor
incentives as a percentage of revenue. |
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by Item 3 of Part I of Form 10-Q is incorporated
herein by reference from the section entitled "Currency Risk and Exchange Rate
Information" in "Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations" of Part I and also in Note 4 to the
Financial Statements contained in Item 1 of Part I.
-15-
PART II.
OTHER INFORMATION
ITEM 1.
LEGAL PROCEEDINGS
Reference is made to the Company's Annual Report on Form 10-K for the
year ended December 31, 2000 and the Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 2001 for information concerning legal proceedings.
ITEM 2.
CHANGES IN SECURITES
None.
ITEM 3.
DEFAULTS UPON SENIOR SECURITES
None.
ITEM 4.
SUMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5.
OTHER INFORMATION
None.
ITEM 6.
EXHIBITS AND REPORTS ON FORM 8-K
| |
(a) |
Exhibits
Regulation S-K
Number |
Description
|
| |
|
|
|
| |
|
10.1 |
Sale and Purchase Agreement between the Company and Dato' Mohd Nadzmi Bin Mohd Sulleh dated
the 17th day of August, 2001
|
| |
|
|
|
| |
|
10.2 |
Sale and Purchase Agreement between the Company and Kiow Kim Yoon Frankie Kiow dated
the 17th day of August, 2001
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
(b) |
|
Reports on Form 8-K. No current Reports on Form 8-K were filed during the
quarter ended September 30, 2001.
|
-16-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on this 14th day of
November, 2001.
| |
|
NU SKIN ENTERPRISES, INC. |
|
| |
|
|
|
| |
|
|
|
| |
By: |
/s/ Corey B. Lindley
|
|
| |
|
Corey B. Lindley |
|
| |
Its: |
Chief Financial Officer |
|
| |
|
(Principal Financial and Accounting Officer) |
|
-17-
EXHIBIT INDEX
| |
|
10.1 |
Sale and Purchase Agreement between the Company and Dato' Mohd Nadzmi Bin Mohd Sulleh dated
the 17th day of August, 2001
|
| |
|
|
|
| |
|
10.2 |
Sale and Purchase Agreement between the Company and Kiow Kim Yoon Frankie Kiow dated
the 17th day of August, 2001
|
-18-
Exhibit 10-1 3rd Quarter 10-Q Share Purchase Agreement with Dato' Mohd Nadzmi Bin Mohd Salleh
DATED THIS 17TH DAY OF
AUGUST, 2001
BETWEEN
NU SKIN
ENTERPRISES, INC.
(as VENDOR)
AND
DATA' MOHD NADZMI MOHD SALLEH
(as PURCHASER)
SALE &
PURCHASE AGREEMENT
(in respect of 450,000 ordinary shares of RM1.00 each in
NU SKIN MALAYSIA HOLDINGS SDN. BHD.)
KHAW & PARTNERS
ADVOCATES& SOLICITORS
KUALA LUMPUR
THIS AGREEMENT is made this 17th day of August 2001
BETWEEN
NU SKIN ENTERPRISES, INC., a
company incorporated in the State of Delaware, United States of America and
having its principal place of business at 75 West Center Street, Provo, Utah
84601, United States of America of the one part
AND
DATO' MOHD NADZMI BIN MOHD SALLEH
(NRIC No. 540501-0305293) of No. 36-1, Jalan PJU8/5B, Perdana Business Centre,
Bandar Damansara Perdana, 47820 Petaling Jaya, Selangor Darul Ehsan of the other part.
WHEREAS:-
| |
|
A) |
NSMH is a private limited
company incorporated in Malaysia on 3.7.2001. |
| |
|
B) |
As at the date of this Agreement:-
|
| |
|
|
i) |
the authorised share capital of NSMH is RM100,000.00 (Ringgit One Hundred
Thousand) divided into 100,000 (One Hundred Thousand) Ordinary NSMH
Shares; |
| |
|
|
ii) |
the issued and paid up share capital of NSMH is RM2.00 (Ringgit Two)
divided into 2 (Two) Ordinary NSMH Shares and held entirely by the
VENDOR; and |
| |
|
|
iii) |
NSMH is currently not carrying on any business. |
| |
|
A) |
NSM, a wholly owned subsidiary of NSMH,
is a private limited company incorporated in Malaysia in 19.9.1996
|
| |
|
B) |
As at the date of this Agreement:-
|
| |
|
|
i) |
the authorised share capital of NSM is RM100,000.00 (Ringgit One Hundred
Thousand) divided into 100,000 (One Hundred Thousand) Ordinary NSM
Shares; |
| |
|
|
ii) |
the issued and paid up share capital of NSM is RM2.00 (Ringgit Two)
divided into 2 (Two) Ordinary NSM Shares and held entirely by NSMH; and |
| |
|
|
iii) |
NSMH is currently not carrying on any business. |
| |
III. |
APPLICATION BY NSM
OF A DIRECT SALE LICENCE |
| |
|
A) |
NSM is desirous of
undertaking a multi-level direct sales business in Malaysia and is preparing an
application for submission to the MDTCA for the issue by the MDTCA to NSM of a
DS Licence. |
| |
|
B) |
To fulfil the equity
requirements set out by the MDTCA pursuant to the DS Guidelines, the VENDOR is
willing to restructure NSMH (as the holding company of NSM) and to divest, in
the manner described in Recital III(C), its right to
70% (Seventy percent) of its effective equity shareholdings in NSM to
Malaysians, including 30% (Thirty percent) thereof to Bumiputera
Malaysian. |
| |
|
C) |
The VENDOR intends,
by this Agreement, to divest to the PURCHASER, its right to
30% (Thirty Percent) of the share capital of NSMH as restructured. As the
VENDOR is currently identifying prospective Malaysian Bumiputera investor(s)
with a view to divesting the 10% Block to such investor(s), the PURCHASER
understands and accepts that, following the completion of the sale and purchase
of the Sale Shares, his equity interest in the enlarged share capital of NSMH
will be diluted and so as to maintain the PURCHASER’s shareholdings in NSMH
at 20% (Twenty Percent), the VENDOR is willing to divest further Ordinary
NSMH Shares to the PURCHASER [or his nominee(s)] upon such terms and conditions
to be agreed upon. The VENDOR is currently in discussion with LEMBAGA TABUNG
ANGKATAN TENTERA with a view to its being the Malaysian Bumiputera investor to
take up the 10% Block pursuant to the proposed divestment. |
| |
|
D) |
As currently envisaged,
NSM’s equity restructuring exercise for the purposes of compliance with the
DS Guidelines will encompass the following:- |
| |
|
|
i) |
following the grant by MTDCA
of the DS Approval, the VENDOR will do the following acts and things in the following
order:- |
| |
|
|
|
|
a) |
cause NSMH to increase its authorised share capital to
RM5,000,000.00 (Ringgit Five Million) divided into 2,500,000 (Two
Million and Five Hundred Thousand) Ordinary NSMH Shares and 2,500,000
(Two Million and Five Hundred Thousand) ICPS; |
| |
|
|
|
|
b) |
cause NSMH to increase its issued share capital to RM2,500,000.00
(Ringgit Two Million and Five Hundred Thousand) divided into 2,500,000
(Two Million and Five
Hundred Thousand) ICPS, all of which are to be
subscribed for by the VENDOR at par payable upon allotment; |
| |
|
|
|
|
c) |
cause NSM to increase its authorised share capital to
RM5,000,000.00 (Ringgit Five Million) divided into 5,000,000 (Five
Million) Ordinary NSM Shares; |
| |
|
|
|
|
d) |
cause NSM to increase its issued share capital to RM2,500,000.00
(Ringgit Two Million and Five Hundred Thousand) divided into 2,500,000
(Two Million and Five Hundred Thousand) Ordinary NSM Shares, all of which are to
be subscribed for by NSMH at par payable upon allotment; |
| |
|
|
|
|
e) |
convert 1,500,000 (One Million and Five Hundred Thousand) ICPS into 1,500,000
(One Million and Five Hundred Thousand) Ordinary NSMH Shares; |
| |
|
|
|
|
f) |
complete in accordance with the provisions of this Agreement, the sale by the
VENDOR to the PURCHASER of the Sale Shares; and |
| |
|
|
|
|
g) |
complete in accordance with the provisions of the SPA(Nadzmi), the sale
by the VENDOR to Dato’ Nadzmi of 600,000 (Six Hundred Thousand)
Ordinary NSMH Shares comprising 40% (Forty Percent) of NSMH’s total
issued share capital immediately upon the completion of SPA(Nadzmi). |
| |
|
|
ii) |
following the fulfilment
of all of the conditions precedent contained in SPA(OBI), the VENDOR will do the
following acts and things in the following order:- |
| |
|
|
|
|
a) |
convert 750,000 (Seven Hundred and Fifty Thousand) ICPS held by it
in NSMH into 750,000 (Seven Hundred and Fifty Thousand) Ordinary NSMH
Shares; |
| |
|
|
|
|
b) |
complete, in accordance
with the provisions of SPA(OBI), the sale by the VENDOR to the Other Bumiputera
Investor of the 10% Block; and
|
| |
|
|
|
|
c) |
divest to FRANKIE, a further 300,000
(Three Hundred Thousand) Ordinary NSMH Shares so as to maintain his equity
shareholding interest in NSMH at 40% (Forty Percent) of NSMH’s
enlarged share capital. |
| |
IV. |
AGREEMENT FOR SALE AND PURCHASE OF SALE SHARES |
| |
The PURCHASER wishes to purchase and the VENDOR is willing to sell to the PURCHASER,
the Sale Shares on a willing buyer and willing seller basis at the Purchase
Price upon the terms and subject to the conditions hereinafter appearing. |
| |
Prior to or simultaneously with the execution of this Agreement, the VENDOR will enter
into the SPA(FK) whereby the VENDOR will sell to Dato’ Nadzmi, upon the
terms and subject to the conditions therein appearing, 600,000 (Six
Hundred Thousand) Ordinary NSMH Shares. |
| |
|
NOW IT IS HEREBY
AGREED as follows:- |
| |
1. |
DEFINITIONS &
INTERPRETATION |
| |
In this Agreement, unless the context otherwise requires, the following expressions
shall have the meanings set forth opposite such expressions:- |
| |
|
"Completion" |
: |
the completion in
accordance with the provisions of this Agreement of the sale by the VENDOR and
the purchase by the PURCHASER of the Sale Shares |
| |
|
"Completion Confirmation" |
: |
the confirmation
(substantially in the form of "Annexure 1") signed by the Parties upon
Completion of the Sale Shares pursuant to Clause 4.3 |
| |
|
"Completion Date" |
: |
the date stipulated by the
VENDOR and occurring during the Completion Period on which Completion takes
place |
| |
|
"Completion Period" |
: |
a period of 30
(Thirty) days commencing from the date on which all of the Conditions Precedent
are fulfilled in accordance with the provisions of this Agreement |
| |
|
"Conditional Period" |
: |
a period of 3
(Three) calendar months commencing from the date of this Agreement and expiring
on a date corresponding to the date of this Agreement (or such longer period as
the Parties may mutually agree upon in writing) |
| |
|
"Conditions Precedent" |
: |
the conditions set forth in Clauses 2.1.1 to 2.1.4 |
| |
|
"DS Application" |
: |
the application by NSM to MDTCA (in terms acceptable to NSM) for the grant of a
DS Licence pursuant to the Direct Sales Act 1993 and the DS
Guidelines |
| |
|
"DS Approval" |
: |
the approval of MDTCA
described in Clause 2.1.1 and includes the reply to an appeal lodged
therefor |
| |
|
"DS Guidelines" |
: |
the Guidelines for the
Application of a Direct Sale Licence and the Guidelines on Foreign Participation
in Wholesale and Retail Trade |
| |
|
"DS Licence" |
: |
a multi-level direct sales
licence issued pursuant to the Direct Sales Act 1993 |
| |
|
"Effective Clauses" |
: |
Clauses 1, 2 and 6 to 19 |
| |
|
"FRANKIE" |
: |
KIOW KIM YOON, FRANKIE
(NRIC No. 570723-08-6077) (former NRIC No. 5276427) of 27, Jalan Keruing,
Kebun-Teh Park, Johor Baru, Johor |
| |
|
"ICPS" |
: |
an irredeemable
convertible non voting preference share having a par value of RM1.00 (Ringgit
One) each in NSMH |
| |
|
"Indebtedness" |
: |
the Purchase Price and
all interest accrued thereon or any part thereof remaining unpaid by the
PURCHASER from time to time to the VENDOR |
| |
|
"MDTCA" |
: |
Ministry of Domestic Trade & Consumer Affairs |
| |
|
"NSM" |
: |
NU SKIN (MALAYSIA) SDN. BHD. (Company No. 402787-V), a company incorporated in
Malaysia under the Companies Act 1965 and having its registered address at c/o
6th Floor, Menara Boustead, No. 69, Jalan Raja Chulan, 50200 Kuala
Lumpur |
| |
|
"NSMH" |
: |
NU SKIN MALAYSIA HOLDINGS SDN. BHD. (Company No. 552189-P), a company
incorporated in Malaysia under the Companies Act 1965 and having its registered
address at c/o 6th Floor, Menara Boustead, No. 69, Jalan Raja Chulan, 50200
Kuala Lumpur |
| |
|
"Ordinary NSM Share" |
: |
an ordinary share having a par value of RM1.00 (Ringgit One) in NSM |
| |
|
"Ordinary NSMH Share" |
: |
an ordinary share having a par value of RM1.00 (Ringgit One) in NSMH |
| |
|
"Other Bumiputera Investor" |
: |
such prospective Malaysian Bumiputera
investor(s) (other than Dato’ Nadzmi) as is identified by and as is
acceptable to the VENDOR to acquire the 10% Block |
| |
|
"Parties" |
: |
the VENDOR and the PURCHASER |
| |
|
"Party" |
: |
either of the Parties |
| |
|
"PURCHASER" |
: |
DATO' MOHD NADZMI BIN MOHD SALLEH (NRIC No. 540501-03-5293) above described |
| |
|
"Purchase Price" |
: |
RM 8,920,000.00 (Ringgit
Eight Million Nine Hundred and Twenty Thousand)
) |
| |
|
"Sale Shares" |
: |
450,000 (Four Hundred and Fifty Thousand) Ordinary NSMH Shares to
be held by the VENDOR as the beneficial owner thereof following the conversion
of ICPS referred to in Recital III(D)(i)(e) |
| |
|
"SPA (FK)" |
: |
the sale and purchase agreement for the sale by the VENDOR and the purchase by
FRANKIE of 600,000 (Six Hundred Thousand) Ordinary
NSMH Shares described in Recital V and includes such variations and
modifications as may be agreed between the parties thereto |
| |
|
"SPA (OBI)" |
: |
the sale and purchase agreement for the sale by the VENDOR and the purchase by
the Other Bumiputera Investor of the 10% Block and includes such variations and
modifications as may be agreed between the parties thereto |
| |
|
"10% Block" |
: |
225,000 (Two Hundred and Twnety Five THousand) Ordinary NSMH Shares or
such other number of Ordinary NSMH Shares as is equivalent to 10%
(Ten Percent) of NSMH's enlarged issued share capital following the shares
subscription referred to in Recital III(D)(ii)(a) |
| |
|
"VENDOR" |
: |
NU SKIN ENTERPRISES, INC.(Registration No. 2659781) above described |
| |
|
1.2.1 |
The Annexures hereto shall
be taken, read and construed as essential parts of this Agreement. The headings
in this Agreement are inserted for convenience of reference only and shall not
be taken, read and construed as essential parts of this Agreement. |
| |
|
1.2.2 |
All references to
Annexures, Recitals and Clauses are to be construed as references to the
annexures, recitals and clauses of this Agreement. All references to provisions
of statutes include such provisions as modified, re-certified or re-enacted. All
references to this Agreement include this Agreement as amended or modified from
time to time by written agreement between the Parties. All references to a
natural person shall include such person’s heirs, personal representatives,
successors-in-title and permitted assigns. All references to a company shall
include such company’s successors-in-title and permitted assigns.
|
| |
|
1.2.3 |
Except where the context
otherwise requires, words applicable to natural persons include any body of
persons, company, corporation, firm or partnership corporate or incorporate and
vice versa; words importing the masculine gender shall include the feminine and
neuter genders and vice versa; words importing the singular number shall include
the plural number and vice versa.
|
| |
|
1.2.4 |
Where two or more persons
or parties are included or comprised in any expression, agreements, covenants,
terms, stipulations and undertakings expressed to be made by or on the part of
such persons shall, unless otherwise provided herein, be deemed to be made by
and be binding upon such persons jointly and severally.
|
| |
|
1.2.5 |
In computing time for the
purposes of this Agreement, unless the contrary intention appears, a period of
days from the happening of an event or the doing of any act or thing shall be
deemed to be exclusive of the day on which the event happens or the act or thing
is done and if the last day of the period is a weekly or public holiday, the
period shall include the next following day which is not a weekly or public
holiday.
|
| |
The provisions of this Agreement (save for the Effective Clauses) are conditional
upon the fulfilment of the following conditions within the Conditional Period:- |
| |
|
2.1.1 |
the grant by MDTCA to NSM
of its approval for the issue of a DS Licence upon such terms and conditions
acceptable to NSM and the VENDOR;
|
| |
|
2.1.2 |
the subscription by the
VENDOR of 2,500,000 (Two Million and Five Hundred Thousand) ICPS in NSMH
at par payable in full upon allotment;
|
| |
|
2.1.3 |
the subscription by NSMH
of 2,500,000 (Two Million and Five Hundred Thousand) Ordinary NSM Shares
at par to be paid in full upon allotment; and
|
| |
|
2.1.4 |
the execution by the
VENDOR, FRANKIE and the PURCHASER of a Shareholders Agreement (as
holders of NSMH Shares) in terms acceptable to the NU SKIN.
|
| |
2.2 |
Fulfilment of the Conditions Precedent |
| |
|
2.2.1 |
The VENDOR shall use its
best endeavours to procure, at its own costs and expense, the fulfilment of the
Conditions Precedent described in Clause 2.1.2 and 2.1.3.
|
| |
|
2.2.2 |
The VENDOR shall procure
NSM to submit the DS Application to MDTCA. The PURCHASER shall use its best
endeavours to assist NSM to obtain, in a timely manner, the DS Approval and the
issue of the DS Licence.
|
| |
|
2.2.3 |
Each Party shall promptly
sign and do all documents, acts and things required by applicable laws,
regulations and guidelines to be signed and done by such Party to procure the
fulfilment with all due speed of the Conditions Precedent AND, if so requested
by such Party, the other Party shall, upon written request, provide such
information and particulars as may be necessary or reasonably required to
procure the fulfilment of the Conditions Precedent.
|
| |
2.3 |
Approvals deemed unacceptable |
| |
The DS Approval shall be deemed not to be granted and the Conditions Precedent shall
be deemed to be unfulfilled in the following cases:- |
| |
|
2.3.1 |
if MDTCA does not grant the DS Approval within the Conditional Period; and
|
| |
|
2.3.2 |
if MDTCA grants (within the Conditional Period) the DS Approval upon terms
and/or conditions which are unacceptable to NSM and the VENDOR and upon any
appeal thereof (lodged upon terms and grounds deemed appropriate by NSM and the
VENDOR), the terms and/or conditions of the DS Approval are not modified or are
modified in such manner that they remain unacceptable to NSM and the VENDOR.
|
| |
2.4. |
Waiver & non-fulfilment
of Conditions Precedent |
| |
|
2.4.1 |
The VENDOR may (but shall not be obliged to) waive or modify (by written
agreement between the Parties) any of the Conditions Precedent referred to in
Clauses 2.1.1 to 2.1.4 whereupon the Condition Precedent concerned shall be
deemed to be (as applicable) deleted or modified as aforesaid.
|
| |
|
2.4.2 |
If all or any of the Conditions Precedent (as shall not have been waived
pursuant to the foregoing provisions) are not fulfilled within the Conditional
Period, this Agreement shall (unless extended by written consent between the
Parties) become null and void and the respective obligations of the Parties
hereunder (including the Effective Clauses) shall wholly cease and no Party
shall have any claim hereunder against the other Party save in respect of any
antecedent breach of any provision of this Agreement.
|
| |
3. |
AGREEMENT FOR SALE &
PURCHASE OF THE SALE SHARES |
Following
the fulfilment of the Conditions Precedent, the VENDOR (as the beneficial owner
of the Sale Shares) shall sell to the PURCHASER and the PURCHASER shall purchase
from the VENDOR on a willing buyer and willing seller basis, the Sale Shares at
the Purchase Price and upon the terms and conditions herein set forth:-
| |
3.1 |
free from all charges, liens, equities, third party
interest or other encumbrances whatsoever; and |
| |
3.2 |
with all rights, benefits
and advantages attached thereto including all dividends and other distributions
which may be declared, made or paid in respect of the Sale Shares subsequent to
the Completion Date. |
| |
4. |
COMPLETION OF THE SALE &
PURCHASE OF SALE SHARES |
| |
If the Conditions Precedent are fulfilled (in accordance with the provisions of
this Agreement) within the Conditional Period, completion of the sale and
purchase hereunder of the Sale Shares shall take place simultaneously with the
completion of SPA(Nadzmi) on the Completion Date at Khaw & Partners’
office at 6th Floor, Menara Boustead, No. 69, Jalan Raja Chulan, 50200 Kuala
Lumpur (or such other place acceptable to the PURCHASER as the VENDOR may
nominate. |
| |
4.2 |
VENDOR's obligations on Completion |
Unless the Parties otherwise agree in writing, the VENDOR shall, at Completion:-
| |
|
4.2.1 |
convert 1,500,000 (One Million and Five Hundred Thousand) ICPS in NSMH
held by the VENDOR into 1,500,000 (One Million and Five Hundred Thousand)
Ordinary NSMH Shares;
|
| |
|
4.2.2 |
cause NSMH to issue directly to the PURCHASER, such number of Ordinary NSMH
Shares (as converted) as is equivalent to the Sale Shares;
|
| |
|
4.2.3 |
cause NSMH to deliver to the PURCHASER, the original share certificate(s) to the
Sale Shares issued in the name of the PURCHASER; and
|
| |
|
4.2.4 |
cause the appointment of the PURCHASER's nominee as a director of NSMH and the
PURCHASER as a director NSM (Subject to the PURCHASER's delivery to the VENDOR
not less than 7 (Seven) days
prior to the Completion Date, of 3 (Three) copies of Forms 48A of the
Companies Regulations 1966 duly completed and sworn by the PURCHASER for his
appointment as director of NSM and NSMH.
|
| |
4.3 |
Completion Confirmation |
| |
|
4.3.1 |
Following and subject to Completion, the Parties shall execute the Completion Confirmation.
|
| |
|
4.3.2 |
The execution by a Party of the Completion Confirmation pursuant to Clause 4.3.1
shall be without prejudice to the other Party’s rights and remedies in this
Agreement against the first mentioned Party none of which rights shall be deemed
to be thereby waived or varied by the second mentioned Party.
|
| |
The VENDOR shall also execute and do, all such other documents, acts and things (if
any) as the PURCHASER may reasonably require of the VENDOR to perfect the right,
title and interest of the PURCHASER in and to the Sale Shares. |
| |
4.5 |
No Partial Completion |
Unless the VENDOR otherwise agrees in writing:-
| |
|
4.5.1 |
the PURCHASER shall not be entitled to complete the purchase of some only of the
Sale Shares and the failure by the PURCHASER to complete the purchase hereunder
of any number of the Sale Shares shall accordingly be construed as a failure to
complete in respect of all of the Sale Shares; and
|
| |
|
4.5.2 |
the VENDOR shall be entitled, notwithstanding any provisions to the contrary
herein, to terminate this Agreement if the PURCHASER fails to complete the
purchase of all of the Sale Shares.
|
| |
5.1 |
Payment of the Purchase Price |
| |
|
5.1.1 |
At the request of the PURCHASER, the VENDOR agrres:-
|
| |
|
|
i) |
to defer payment by the PURCHASER of the Purchase Price so long
as the PURCHASER holds the Sale Shares as the registered holder and the beneficial
owner thereof following Completion; and |
| |
|
|
ii) |
to the application by the PURCHASER of all dividends and other cash distributions (if any)
made by NSMH from time to time towards payment of the indebtedness. |
| |
|
5.1.2 |
The PURCHASER agrees and undertakes with the VENDOR that the PURCHASER shall:-
|
| |
|
|
i) |
pay the Indebtedness to the VENDOR upon demand by the VENDOR in the event that following
Completion, the PURCHASER ceases to hold, as the registered holder and beneficial owner thereof, any of the
Sale Shares; and |
| |
|
|
ii) |
until the Indebtedness shall be paid in full by the PURCHASER to the VENDOR,
direct and authorise NSMH to pay directly to the VENDOR, all such dividends and
other cash distributions (if any) as are payable by NSMH to the PURCHASER. |
| |
|
5.1.3 |
If on the date of the 4th (Forth) anniversary of the date of the Completion
Confirmation, all of the Indebtedness shall not have been paid by the PURCHASER
to the VENDOR, then subject to the application prior thereto by the PURCHASER of
all dividends and other cash distributions paid by NSMH to the PURCHASER, the VENDOR
shall waive its right to payment by the PURCHASER of all such balance of the
Indebtedness as may then remain unpaid by the PURCHASER to VENDOR.
|
| |
|
5.2.1 |
The PURCHASER shall pay to the VENDOR, interest on such part of the Purchase
Price remaining unpaid from time to time at the rate of 2% (Two
Percent) per annum calculated from the due date for payment of the Purchase
Price and until the date of full payment thereof.
|
| |
|
5.2.2 |
The PURCHASER agrees that any payment made by or on behalf of the PURCHASER
towards payment of the Indebtedness shall firstly be utilised towards settlement
of the interest charged pursuant to Clause 5.2.1.
|
| |
5.3. |
Indebtedness as debt |
| |
The PURCHASER acknowledges that such part of the Indebtedness as remains unpaid from
time to time by the PURCHASER to the VENDOR shall constitute a valid debt
payable by the PURCHASER to the VENDOR in accordance with the provisions hereof
and all such other documents as may be agreed upon by the Parties with or
without others. |
| |
Until the full payment of Indebtedness to the VENDOR, the PURCHASER shall create in
favour of and grant to the VENDOR and/or the VENDOR’s nominee, such
security interest (including a charge) and powers and rights over inter alia the
Sale Shares and execute and perfect such security documentation (including a
memorandum of charge in such terms and conditions acceptable to the VENDOR) as
the VENDOR may require to secure the payment of the Indebtedness. |
| |
A certificate duly signed by the VENDOR stating the amount of the Indebtedness
payable by the PURCHASER to the VENDOR from time to time and at any time shall
be final, conclusive and binding on the PURCHASER and shall not, in the absence
of manifest error, be questioned on any account. |
| |
6. |
PARTIES' RESPECTIVE WARRANTIES |
The VENDOR hereby represents and warrants to the PURCHASER that:-
| |
|
6.1.1 |
the statements in Recital I, II, III(A) and V are true and accurate;
|
| |
|
6.1.2 |
the VENDOR will, at Completion, be the beneficial owner of the Sale Shares; and
|
| |
|
6.1.3 |
the Sale Shares are free from all charges, liens, equities, third party interest
or other encumbrances whatsoever.
|
| |
6.2. |
PURCHASER's Warranties |
The PURCHASER hereby represents and warrants to the VENDOR that:-
| |
|
6.2.1 |
the PURCHASER is not a bankrupt and has not committed any act of bankruptcy;
|
| |
|
6.2.2 |
the PURCHASER has not committed any criminal offence;
|
| |
|
6.2.3 |
the PURCHASER and his legal, financial and other advisors (if any) have the
financial and business experience to make an informed decision for an investment
and acquisition of the Sale Shares and the PURCHASER together with such advisors
has evaluated the feasibility of an acquisition of or investment in the Sale
Shares;
|
| |
|
6.2.4 |
the PURCHASER and his legal, financial and other advisors (if any) have had
ample opportunity to investigate the proposed business of NSMH and NSM and to
review all relevant documents and to ask all such questions of such persons and
representatives of the VENDOR as the PURCHASER and its advisors consider
necessary for purposes of making an informed decision for an investment in and
acquisition of the Sale Shares;
|
| |
|
6.2.5 |
the PURCHASER has determined on the basis of his own investigation that the
Purchase Price is fair and a reasonable valuation of the Sale Shares;
|
| |
|
6.2.6 |
except for the representations and warranties contained in this Agreement, the
PURCHASER is not relying on any representation or warranty (whether given by the
VENDOR or otherwise) in making his decision to invest in and to acquire the Sale
Shares; and
|
| |
|
6.2.7 |
that the PURCHASER is purchasing the Sale Share for his own account, for
investment purposes only, not for the account of any other person and not with a
view to the distributions, assignment or resale thereof to others.
|
| |
6.3 |
Subsistence of warranteis |
| |
The representations, warranties and agreements given or made by the respective
Parties under this Agreement shall remain in full force and effect and shall
continue to subsist hereafter notwithstanding Completion which will take place
on the basis of the statements made herein. |
| |
6.4. |
Breach of warranty before Completion |
| |
If prior to Completion, any of the representations and warranties on the part of a
Party have not been carried out or complied with or are in any material respects
untrue or incorrect (and in respect of any breach which is capable of remedy,
such Party have failed to remedy such breach within 14 (Fourteen) days
after the other Party’s written notice to the first mentioned Party
requiring the same to be remedied) the second mentioned Party shall be entitled
by notice in writing to the first mentioned Party to terminate this Agreement
(without prejudice to the second mentioned Party’s rights and remedies at
law and hereunder in respect of the first Party’s misrepresentation and/or
breach of warranty). |
| |
Any notice or request with reference to this Agreement shall be in writing signed by
the Party by whom it is served or by its solicitors and shall be deemed to be
sufficiently served or given for all purposes herein on the Party to whom it is
served if it is left by hand at or sent by commercial courier, registered post
or facsimile (with copy by hand or commercial courier or ordinary or registered
post) to (as applicable) the address of the Party to whom it is sent as set out
below or the registered office for the time being of such Party or such other
address as one Party may from time to time notify to the other Party in writing. |
| |
|
7.1.1 |
to the VENDOR
NU SKIN ENTERPRISES, INC.
75 West Center Street
Provo, Utah 84601,
United States of America
Telefax: 00 1 801 345 3899
Attn: ............................
|
| |
|
7.1.2 |
to the PURCHASER
NU SKIN ENTERPRISES, INC.
DATO' MOHD NADZMI BIN MOHD SALLEH
No. 36-1, Jalan PJU8/5B
Perdana Business Centre
47820 Petaling Jaya
Selengor Darul Ehsan
Telefax: ...................
|
| |
|
7.2.1 |
by facsimile (and confirmed by the delivery of a copy thereof by hand or
commercial courier or ordinary or registered post) shall be deemed to have been
served and received upon completion of the effective transmission of such notice
and a written record of the transmission is printed out from the sender’s
facsimile machine;
|
| |
|
7.2.2 |
by ordinary or registered post within Malaysia shall be deemed to have been
served and received on the 3rd (Third) day occurring after the date on
which it is posted;
|
| |
|
7.2.3 |
by an ordinary or registered post outside Malaysia shall be deemed to have been
served and received on the 10th (Tenth) day occurring after the date on
which it is posted;
|
| |
|
7.2.4 |
by hand or commercial courier shall be deemed to have been served at the time of
delivery of the notice.
|
Each
Party shall bear its own solicitors’ costs of and incidental to this
Agreement.
| |
8.2 |
Stamp duty on purchase of Sale Shares |
| |
As the intended purchaser hereunder of the Sale Shares, the PURCHASER shall bear
the stamp duty chargeable on this Agreement and its acquisition of the Sale
Shares (if any) and all other relevant documents incidental to this Agreement
and, if relevant, any penalties for late stamping. |
| |
|
Time wherever mentioned shall be
the essence of this Agreement |
| |
10. |
AUTHORITY TO EXECUTE AGREEMENT |
| |
|
Each of the Parties warrants to
the other Party:- |
| |
|
10.1 |
that it/he has (as
applicable) the power, authority and capacity to enter into and to execute and
deliver this Agreement and to carry the terms hereof into effect;
and |
| |
|
10.2 |
that it/his agreements and
undertakings as contained in this Agreement constitute legal, valid and binding
obligations on it in accordance with the provisions herein. |
| |
11. |
GOVERNING LAW &
JURISDICTION |
This
Agreement is governed by the laws of Malaysia and subject to Clause 12, the
Parties submit themselves and their assets to the non-exclusive jurisdiction of
the courts in Malaysia.
| |
12.1 |
Reference to Arbitration |
| |
Any dispute or difference which may arise between the Parties at any time hereafter
whether during the continuance in force of this Agreement or upon or after its
termination, touching any matter or thing herein contained or the operation or
construction of this Agreement or any matter or thing in any way connected with,
arising from or in relation to this Agreement or the rights, duties, liabilities
of the Parties hereunder shall be finally settled by arbitration in accordance
with the United Nations Commission on International Trade Law Arbitration Rules
1976. |
| |
12.2 |
Arbitral Proceedings |
| |
A reference to arbitration shall be to 3 (Three) arbitrators. The
arbitration shall be held in Provo, Utah, United States of America and the
language to be used in the arbitral proceedings shall be English. |
| |
Pending the establishment of the arbitral tribunal, the Parties may apply to the courts
in Malaysia (which shall be a non-exclusive jurisdiction) for the grant of
interim injunctions and orders for the protection and preservation of property
subject of or relating to this Agreement. |
Knowledge
or acquiescence by any Party of or in any breach of any of the terms, conditions
or covenants herein contained shall not operate as or be deemed to be a waiver
of such terms, conditions or covenants or any of them and notwithstanding such
knowledge or acquiescence, such Party shall be entitled to exercise such
Party’s rights under this Agreement and to require strict performance by
the other Parties of the terms, conditions and covenants herein.
Any
amendment or alteration to or modification of any part of this Agreement shall
be conferred upon and determined in writing by mutual consultation between the
Parties.
Any
term, condition, stipulation, provision, covenant or undertaking in this
Agreement which is illegal, void, prohibited or unenforceable shall be
ineffective to the extent of such illegality, voidness, prohibitions or
unenforceability without invalidating the remaining provisions hereof, and any
such illegality, voidness, prohibition or unenforceability shall not invalidate
or render illegal, void or unenforceable any other term, condition stipulation,
provision, covenant or undertaking herein contained.
| |
16. |
ENTIRETY OF AGREEMENT |
This
Agreement constitutes the sole and entire agreement between the Parties with
respect to the subject matter hereof and supersedes all previous proposals,
negotiations and understandings whether written or oral between the Parties with
respect to the subject matter hereof.
No
Party shall be entitled to assign such Party’s rights and/or obligations
hereunder without the prior written consent of the other Party.
This
Agreement shall be binding on the successors-in-title and permitted assigns of
the VENDOR and the heirs, personal representatives and permitted assigns of the
PURCHASER.
This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and any of the Parties may
execute this Agreement by signing any such counterpart.
IN WITNESS
WHEREOF the Parties have hereunto executed this Agreement the day and
year first above written.
SIGNED BY
D. MATTHEW DORNY
for and on behalf of
NU SKIN ENTERPRISES, INC.
the VENDOR aforesaid
in the presence of:-
.......................................
signature of witness
Name:
Passport No:
SIGNED BY
DATA' MOHD NADZMI
BIN MOHD SALLEH
the PURCHASER aforesaid
in the presence of:-
)
This is the execution page of the Sale and Purchase Agreement dated the
day of 2001 between NU
SKIN ENTERPRISES, INC. and DATO' MOHD NADZMI BIN MOHD SALLEH (NRIC No. 540501-03-5293)
in respect of the sale and purchase of shares in NU SKIN
MALAYSIA HOLDINGS SDN. BHD.
"Annexure 1" to the Sale and
Purchase Agreement dated the day of
2001 between NU SKIN ENTERPRISES, INC. and
KIOW KIM YOON, FRANKIE
FORM OF
COMPLETION CONFIRMATION
COMPLETION
CONFIRMATION
issued pursuant to Clause 4.3 of the
Sale and Purchase Agreement dated ........................ ("SPA") between:-
i) NU SKIN ENTERPRISES, INC ("VENDOR"); and
ii) DATO' MOHD NADZMI BIN MOHD SALLEH
("PURCHASER")
1.
We, the parties to the
SPA hereby CONFIRM that Completion (as defined in the SPA) has taken
place in accordance with the provisions of the SPA on the date of this
confirmation.
2.
The PURCHASER's CONFIRMS:-
2.1
its receipt from the VENDOR
of the original share certificate(s) to the Sale Shares issued in the name
of the PURCHASER; and
2.2
that the PURCHASER has been appointed as a director of NSMH and NSM.
3.
All expressions used in this Completion Confirmation and defined in the SPA shall have the meanings
given to them by the SPA.
Dated this day of
2001
VENDOR:-
D. MATTHEW DORNY
for and on behalf of
NU SKIN ENTERPRISES, INC. |
PURCHASER:-
DATO' MOHD NADZMI BIN MOHD SALLEH |
Exhibit 10-2 3rd Quarter 10-Q Share Purchase Agreement with Frankie Kiow
DATED THIS 17TH DAY OF
AUGUST, 2001
BETWEEN
NU SKIN
ENTERPRISES, INC.
(as VENDOR)
AND
KIOW KIM YOON
(as PURCHASER)
SALE &
PURCHASE AGREEMENT
(in respect of 600,000 ordinary shares of RM1.00 each in
NU SKIN MALAYSIA HOLDINGS SDN. BHD.)
KHAW & PARTNERS
ADVOCATES& SOLICITORS
KUALA LUMPUR
THIS AGREEMENT is made this 17th day of August 2001
BETWEEN
NU SKIN ENTERPRISES, INC., a
company incorporated in the State of Delaware, United States of America and
having its principal place of business at 75 West Center Street, Provo, Utah
84601, United States of America of the one part
AND
KIOW KIM YOON, FRANKIE
(NRIC No. 570723-08-6077) (Former NRIC No. 5276427) of 27, Jalan Keruing, Kebun-Teh Park,
Johor Baru of the other part.
WHEREAS:-
| |
|
A) |
NSMH is a private limited
company incorporated in Malaysia on 3.7.2001. |
| |
|
B) |
As at the date of this Agreement:-
|
| |
|
|
i) |
the authorised share capital of NSMH is RM100,000.00 (Ringgit One Hundred
Thousand) divided into 100,000 (One Hundred Thousand) Ordinary NSMH
Shares; |
| |
|
|
ii) |
the issued and paid up share capital of NSMH is RM2.00 (Ringgit Two)
divided into 2 (Two) Ordinary NSMH Shares and held entirely by the
VENDOR; and |
| |
|
|
iii) |
NSMH is currently not carrying on any business. |
| |
|
A) |
NSM, a wholly owned subsidiary of NSMH,
is a private limited company incorporated in Malaysia in 19.9.1996
|
| |
|
B) |
As at the date of this Agreement:-
|
| |
|
|
i) |
the authorised share capital of NSM is RM100,000.00 (Ringgit One Hundred
Thousand) divided into 100,000 (One Hundred Thousand) Ordinary NSM
Shares; |
| |
|
|
ii) |
the issued and paid up share capital of NSM is RM2.00 (Ringgit Two)
divided into 2 (Two) Ordinary NSM Shares and held entirely by NSMH; and |
| |
|
|
iii) |
NSMH is currently not carrying on any business. |
| |
III. |
APPLICATION BY NSM
OF A DIRECT SALE LICENCE |
| |
|
A) |
NSM is desirous of
undertaking a multi-level direct sales business in Malaysia and is preparing an
application for submission to the MDTCA for the issue by the MDTCA to NSM of a
DS Licence. |
| |
|
B) |
To fulfil the equity
requirements set out by the MDTCA pursuant to the DS Guidelines, the VENDOR is
willing to restructure NSMH (as the holding company of NSM) and to divest, in
the manner described in Recital III(C), its right to
70% (Seventy percent) of its effective equity shareholdings in NSM to
Malaysians, including 30% (Thirty percent) thereof to Bumiputera
Malaysian. |
| |
|
C) |
The VENDOR intends,
by this Agreement, to divest to the PURCHASER, its right to
40% (Forty Percent) of the share capital of NSMH as restructured. As the
VENDOR is currently identifying prospective Malaysian Bumiputera investor(s)
with a view to divesting the 10% Block to such investor(s), the PURCHASER
understands and accepts that, following the completion of the sale and purchase
of the Sale Shares, his equity interest in the enlarged share capital of NSMH
will be diluted and so as to maintain the PURCHASER’s shareholdings in NSMH
at 40% (Forty Percent), the VENDOR is willing to divest further Ordinary
NSMH Shares to the PURCHASER [or his nominee(s)] upon such terms and conditions
to be agreed upon. The VENDOR is currently in discussion with LEMBAGA TABUNG
ANGKATAN TENTERA with a view to its being the Malaysian Bumiputera investor to
take up the 10% Block pursuant to the proposed divestment. |
| |
|
D) |
As currently envisaged,
NSM’s equity restructuring exercise for the purposes of compliance with the
DS Guidelines will encompass the following:- |
| |
|
|
i) |
following the grant by MTDCA
of the DS Approval, the VENDOR will do the following acts and things in the following
order:- |
| |
|
|
|
|
a) |
cause NSMH to increase its authorised share capital to
RM5,000,000.00 (Ringgit Five Million) divided into 2,500,000 (Two
Million and Five Hundred Thousand) Ordinary NSMH Shares and 2,500,000
(Two Million and Five Hundred Thousand) ICPS; |
| |
|
|
|
|
b) |
cause NSMH to increase its issued share capital to RM2,500,000.00
(Ringgit Two Million and Five Hundred Thousand) divided into 2,500,000
(Two Million and Five
Hundred Thousand) ICPS, all of which are to be
subscribed for by the VENDOR at par payable upon allotment; |
| |
|
|
|
|
c) |
cause NSM to increase its authorised share capital to
RM5,000,000.00 (Ringgit Five Million) divided into 5,000,000 (Five
Million) Ordinary NSM Shares; |
| |
|
|
|
|
d) |
cause NSM to increase its issued share capital to RM2,500,000.00
(Ringgit Two Million and Five Hundred Thousand) divided into 2,500,000
(Two Million and Five Hundred Thousand) Ordinary NSM Shares, all of which are to
be subscribed for by NSMH at par payable upon allotment; |
| |
|
|
|
|
e) |
convert 1,500,000 (One Million and Five Hundred Thousand) ICPS into 1,500,000
(One Million and Five Hundred Thousand) Ordinary NSMH Shares; |
| |
|
|
|
|
f) |
complete in accordance with the provisions of this Agreement, the sale by the
VENDOR to the PURCHASER of the Sale Shares; and |
| |
|
|
|
|
g) |
complete in accordance with the provisions of the SPA(Nadzmi), the sale
by the VENDOR to Dato’ Nadzmi of 450,000 (Six Hundred Thousand)
Ordinary NSMH Shares comprising 30% (Thirty Percent) of NSMH’s total
issued share capital immediately upon the completion of SPA(Nadzmi). |
| |
|
|
ii) |
following the fulfilment
of all of the conditions precedent contained in SPA(OBI), the VENDOR will do the
following acts and things in the following order:- |
| |
|
|
|
|
a) |
convert 750,000 (Seven Hundred and Fifty Thousand) ICPS held by it
in NSMH into 750,000 (Seven Hundred and Fifty Thousand) Ordinary NSMH
Shares; |
| |
|
|
|
|
b) |
complete, in accordance
with the provisions of SPA(OBI), the sale by the VENDOR to the Other Bumiputera
Investor of the 10% Block; and
|
| |
|
|
|
|
c) |
divest to the PURCHASER [or his nominee(s)], a further 300,000
(Three Hundred Thousand) Ordinary NSMH Shares so as to maintain his equity
shareholding interest in NSMH at 40% (Forty Percent) of NSMH’s
enlarged share capital. |
| |
IV. |
AGREEMENT FOR SALE AND PURCHASE OF SALE SHARES |
| |
The PURCHASER wishes to purchase and the VENDOR is willing to sell to the PURCHASER,
the Sale Shares on a willing buyer and willing seller basis at the Purchase
Price upon the terms and subject to the conditions hereinafter appearing. |
| |
Prior to or simultaneously with the execution of this Agreement, the VENDOR will enter
into the SPA(Nadzmi) whereby the VENDOR will sell to Dato’ Nadzmi, upon the
terms and subject to the conditions therein appearing, 450,000 (Four
Hundred and Fifty Thousand) Ordinary NSMH Shares. |
| |
|
NOW IT IS HEREBY
AGREED as follows:- |
| |
1. |
DEFINITIONS &
INTERPRETATION |
| |
In this Agreement, unless the context otherwise requires, the following expressions
shall have the meanings set forth opposite such expressions:- |
| |
|
"Completion" |
: |
the completion in
accordance with the provisions of this Agreement of the sale by the VENDOR and
the purchase by the PURCHASER of the Sale Shares |
| |
|
"Completion Confirmation" |
: |
the confirmation
(substantially in the form of "Annexure 1") signed by the Parties upon
Completion of the Sale Shares pursuant to Clause 4.3 |
| |
|
"Completion Date" |
: |
the date stipulated by the
VENDOR and occurring during the Completion Period on which Completion takes
place |
| |
|
"Completion Period" |
: |
a period of 30
(Thirty) days commencing from the date on which all of the Conditions Precedent
are fulfilled in accordance with the provisions of this Agreement |
| |
|
"Conditional Period" |
: |
a period of 3
(Three) calendar months commencing from the date of this Agreement and expiring
on a date corresponding to the date of this Agreement (or such longer period as
the Parties may mutually agree upon in writing) |
| |
|
"Conditions Precedent" |
: |
the conditions set forth in Clauses 2.1.1 to 2.1.4 |
| |
|
"DS Application" |
: |
the application by NSM to MDTCA (in terms acceptable to NSM) for the grant of a
DS Licence pursuant to the Direct Sales Act 1993 and the DS
Guidelines |
| |
|
"DS Approval" |
: |
the approval of MDTCA
described in Clause 2.1.1 and includes the reply to an appeal lodged
therefor |
| |
|
"DS Guidelines" |
: |
the Guidelines for the
Application of a Direct Sale Licence and the Guidelines on Foreign Participation
in Wholesale and Retail Trade |
| |
|
"DS Licence" |
: |
a multi-level direct sales
licence issued pursuant to the Direct Sales Act 1993 |
| |
|
"Dato' Nadzmi" |
: |
DATO' MOHD NADZMI BIN MOHD
SALLEH (NRIC No. 540501-03-5293) of No. 36-1, Jalan PJU8/5B, Perdana Business
Centre, Bandar Damansara Perdana, 47820 Petaling Jaya, Selangor Darul
Ehsan |
| |
|
"Effective Clauses" |
: |
Clauses 1, 2 and 6 to 19 |
| |
|
"ICPS" |
: |
an irredeemable
convertible non voting preference share having a par value of RM1.00 (Ringgit
One) each in NSMH |
| |
|
"Indebtedness" |
: |
the Purchase Price and
all interest accrued thereon or any part thereof remaining unpaid by the
PURCHASER from time to time to the VENDOR |
| |
|
"MDTCA" |
: |
Ministry of Domestic Trade & Consumer Affairs |
| |
|
"NSM" |
: |
NU SKIN (MALAYSIA) SDN. BHD. (Company No. 402787-V), a company incorporated in
Malaysia under the Companies Act 1965 and having its registered address at c/o
6th Floor, Menara Boustead, No. 69, Jalan Raja Chulan, 50200 Kuala
Lumpur |
| |
|
"NSMH" |
: |
NU SKIN MALAYSIA HOLDINGS SDN. BHD. (Company No. 552189-P), a company
incorporated in Malaysia under the Companies Act 1965 and having its registered
address at c/o 6th Floor, Menara Boustead, No. 69, Jalan Raja Chulan, 50200
Kuala Lumpur |
| |
|
"Ordinary NSM Share" |
: |
an ordinary share having a par value of RM1.00 (Ringgit One) in NSM |
| |
|
"Ordinary NSMH Share" |
: |
an ordinary share having a par value of RM1.00 (Ringgit One) in NSMH |
| |
|
"Other Bumiputera Investor" |
: |
such prospective Malaysian Bumiputera
investor(s) (other than Dato’ Nadzmi) as is identified by and as is
acceptable to the VENDOR to acquire the 10% Block |
| |
|
"Parties" |
: |
the VENDOR and the PURCHASER |
| |
|
"Party" |
: |
either of the Parties |
| |
|
"PURCHASER" |
: |
KIOW KIM YOON, FRANKIE above described |
| |
|
"Purchase Price" |
: |
RM (Ringgit)
) |
| |
|
"Sale Shares" |
: |
600,000 (Six Hundred Thousand) Ordinary NSMH Shares to
be held by the VENDOR as the beneficial owner thereof following the conversion
of ICPS referred to in Recital III(D)(i)(e) |
| |
|
"SPA (Nadzmi)" |
: |
the sale and purchase agreement for the sale by the VENDOR and the purchase by
Dato’ Nadzmi of 450,000 (Four Hundred and Fifty Thousand) Ordinary
NSMH Shares described in Recital V and includes such variations and
modifications as may be agreed between the parties thereto |
| |
|
"SPA (OBI)" |
: |
the sale and purchase agreement for the sale by the VENDOR and the purchase by
the Other Bumiputera Investor of the 10% Block and includes such variations and
modifications as may be agreed between the parties thereto |
| |
|
"VENDOR" |
: |
NU SKIN ENTERPRISES, INC. above described |
| |
|
1.2.1 |
The Annexures hereto shall
be taken, read and construed as essential parts of this Agreement. The headings
in this Agreement are inserted for convenience of reference only and shall not
be taken, read and construed as essential parts of this Agreement. |
| |
|
1.2.2 |
All references to
Annexures, Recitals and Clauses are to be construed as references to the
annexures, recitals and clauses of this Agreement. All references to provisions
of statutes include such provisions as modified, re-certified or re-enacted. All
references to this Agreement include this Agreement as amended or modified from
time to time by written agreement between the Parties. All references to a
natural person shall include such person’s heirs, personal representatives,
successors-in-title and permitted assigns. All references to a company shall
include such company’s successors-in-title and permitted assigns.
|
| |
|
1.2.3 |
Except where the context
otherwise requires, words applicable to natural persons include any body of
persons, company, corporation, firm or partnership corporate or incorporate and
vice versa; words importing the masculine gender shall include the feminine and
neuter genders and vice versa; words importing the singular number shall include
the plural number and vice versa.
|
| |
|
1.2.4 |
Where two or more persons
or parties are included or comprised in any expression, agreements, covenants,
terms, stipulations and undertakings expressed to be made by or on the part of
such persons shall, unless otherwise provided herein, be deemed to be made by
and be binding upon such persons jointly and severally.
|
| |
|
1.2.5 |
In computing time for the
purposes of this Agreement, unless the contrary intention appears, a period of
days from the happening of an event or the doing of any act or thing shall be
deemed to be exclusive of the day on which the event happens or the act or thing
is done and if the last day of the period is a weekly or public holiday, the
period shall include the next following day which is not a weekly or public
holiday.
|
| |
The provisions of this Agreement (save for the Effective Clauses) are conditional
upon the fulfilment of the following conditions within the Conditional Period:- |
| |
|
2.1.1 |
the grant by MDTCA to NSM
of its approval for the issue of a DS Licence upon such terms and conditions
acceptable to NSM and the VENDOR;
|
| |
|
2.1.2 |
the subscription by the
VENDOR of 2,500,000 (Two Million and Five Hundred Thousand) ICPS in NSMH
at par payable in full upon allotment;
|
| |
|
2.1.3 |
the subscription by NSMH
of 2,500,000 (Two Million and Five Hundred Thousand) Ordinary NSM Shares
at par to be paid in full upon allotment; and
|
| |
|
2.1.4 |
the execution by the
VENDOR, the PURCHASER and Dato’ Nadzmi of a Shareholders Agreement (as
holders of NSMH Shares) in terms acceptable to the VENDOR.
|
| |
2.2 |
Fulfilment of the Conditions Precedent |
| |
|
2.2.1 |
The VENDOR shall use its
best endeavours to procure, at its own costs and expense, the fulfilment of the
Conditions Precedent described in Clause 2.1.2 and 2.1.3.
|
| |
|
2.2.2 |
The VENDOR shall procure
NSM to submit the DS Application to MDTCA. The PURCHASER shall use its best
endeavours to assist NSM to obtain, in a timely manner, the DS Approval and the
issue of the DS Licence.
|
| |
|
2.2.3 |
Each Party shall promptly
sign and do all documents, acts and things required by applicable laws,
regulations and guidelines to be signed and done by such Party to procure the
fulfilment with all due speed of the Conditions Precedent AND, if so requested
by such Party, the other Party shall, upon written request, provide such
information and particulars as may be necessary or reasonably required to
procure the fulfilment of the Conditions Precedent.
|
| |
2.3 |
Approvals deemed unacceptable |
| |
The DS Approval shall be deemed not to be granted and the Conditions Precedent shall
be deemed to be unfulfilled in the following cases:- |
| |
|
2.3.1 |
if MDTCA does not grant the DS Approval within the Conditional Period; and
|
| |
|
2.3.2 |
if MDTCA grants (within the Conditional Period) the DS Approval upon terms
and/or conditions which are unacceptable to NSM and the VENDOR and upon any
appeal thereof (lodged upon terms and grounds deemed appropriate by NSM and the
VENDOR), the terms and/or conditions of the DS Approval are not modified or are
modified in such manner that they remain unacceptable to NSM and the VENDOR.
|
| |
2.4. |
Waiver & non-fulfilment
of Conditions Precedent |
| |
|
2.4.1 |
The VENDOR may (but shall not be obliged to) waive or modify (by written
agreement between the Parties) any of the Conditions Precedent referred to in
Clauses 2.1.1 to 2.1.4 whereupon the Condition Precedent concerned shall be
deemed to be (as applicable) deleted or modified as aforesaid.
|
| |
|
2.4.2 |
If all or any of the Conditions Precedent (as shall not have been waived
pursuant to the foregoing provisions) are not fulfilled within the Conditional
Period, this Agreement shall (unless extended by written consent between the
Parties) become null and void and the respective obligations of the Parties
hereunder (including the Effective Clauses) shall wholly cease and no Party
shall have any claim hereunder against the other Party save in respect of any
antecedent breach of any provision of this Agreement.
|
| |
3. |
AGREEMENT FOR SALE &
PURCHASE OF THE SALE SHARES |
Following
the fulfilment of the Conditions Precedent, the VENDOR (as the beneficial owner
of the Sale Shares) shall sell to the PURCHASER and the PURCHASER shall purchase
from the VENDOR on a willing buyer and willing seller basis, the Sale Shares at
the Purchase Price and upon the terms and conditions herein set forth:-
| |
3.1 |
free from all charges, liens, equities, third party
interest or other encumbrances whatsoever; and |
| |
3.2 |
with all rights, benefits
and advantages attached thereto including all dividends and other distributions
which may be declared, made or paid in respect of the Sale Shares subsequent to
the Completion Date. |
| |
4. |
COMPLETION OF THE SALE &
PURCHASE OF SALE SHARES |
| |
If the Conditions Precedent are fulfilled (in accordance with the provisions of
this Agreement) within the Conditional Period, completion of the sale and
purchase hereunder of the Sale Shares shall take place simultaneously with the
completion of SPA(Nadzmi) on the Completion Date at Khaw & Partners’
office at 6th Floor, Menara Boustead, No. 69, Jalan Raja Chulan, 50200 Kuala
Lumpur (or such other place acceptable to the PURCHASER as the VENDOR may
nominate. |
| |
4.2 |
VENDOR's obligations on Completion |
Unless the Parties otherwise agree in writing, the VENDOR shall, at Completion:-
| |
|
4.2.1 |
convert 1,500,000 (One Million and Five Hundred Thousand) ICPS in NSMH
held by the VENDOR into 1,500,000 (One Million and Five Hundred Thousand)
Ordinary NSMH Shares;
|
| |
|
4.2.2 |
cause NSMH to issue directly to the PURCHASER, such number of Ordinary NSMH
Shares (as converted) as is equivalent to the Sale Shares;
|
| |
|
4.2.3 |
cause NSMH to deliver to the PURCHASER, the original share certificate(s) to the
Sale Shares issued in the name of the PURCHASER; and
|
| |
|
4.2.4 |
cause the appointment of the PURCHASER as a director of NSMH and NSM (subject to
the PURCHASER’s delivery to the VENDOR not less than 7 (Seven) days
prior to the Completion Date, of 3 (Three) copies of Forms 48A of the
Companies Regulations 1966 duly completed and sworn by the PURCHASER for his
appointment as director of NSMH and NSM
|
| |
4.3 |
Completion Confirmation |
| |
|
4.3.1 |
Following and subject to Completion, the Parties shall execute the Completion Confirmation.
|
| |
|
4.3.2 |
The execution by a Party of the Completion Confirmation pursuant to Clause 4.3.1
shall be without prejudice to the other Party’s rights and remedies in this
Agreement against the first mentioned Party none of which rights shall be deemed
to be thereby waived or varied by the second mentioned Party.
|
| |
The VENDOR shall also execute and do, all such other documents, acts and things (if
any) as the PURCHASER may reasonably require of the VENDOR to perfect the right,
title and interest of the PURCHASER in and to the Sale Shares. |
| |
4.5 |
No Partial Completion |
Unless the VENDOR otherwise agrees in writing:-
| |
|
4.5.1 |
the PURCHASER shall not be entitled to complete the purchase of some only of the
Sale Shares and the failure by the PURCHASER to complete the purchase hereunder
of any number of the Sale Shares shall accordingly be construed as a failure to
complete in respect of all of the Sale Shares; and
|
| |
|
4.5.2 |
the VENDOR shall be entitled, notwithstanding any provisions to the contrary
herein, to terminate this Agreement if the PURCHASER fails to complete the
purchase of all of the Sale Shares.
|
| |
5.1 |
Payment of the Purchase Price |
| |
|
5.1.1 |
The PURCHASER acknowledge that such part of the Purchase Price remaining unpaid
by the PURCHASER to the VENDOR on the Completion Date shall constitute a valid
debt payable by the PURCHASER to the VENDOR upon demand by the VENDOR. At the
request of the PURCHASER, the VENDOR agrees to the application by the PURCHASER
of all dividends and other cash distributions (if any) made by NSMH from time to
time towards payment of the Indebtedness.
|
| |
|
5.1.2 |
The PURCHASER agrees and undertakes with the VENDOR that the PURCHASER shall:-
|
| |
|
|
i) |
pay the Indebtedness to the VENDOR upon demand by the VENDOR; and |
| |
|
|
ii) |
until the Indebtedness shall be paid in full by the PURCHASER to the VENDOR,
direct and authorise NSMH to pay directly to the VENDOR, all such dividends and
other cash distributions (if any) as are payable by NSMH to the PURCHASER. |
| |
|
5.2.1 |
The PURCHASER shall pay to the VENDOR, interest on such part of the Purchase
Price remaining unpaid from time to time at the rate of 12% (Twele
Percent) per annum calculated from the due date for payment of the Purchase
Price and until the date of full payment thereof.
|
| |
|
5.2.2 |
The PURCHASER agrees that any payment made by or on behalf of the PURCHASER
towards payment of the Indebtedness shall firstly be utilised towards settlement
of the interest charged pursuant to Clause 5.2.1.
|
| |
5.3. |
Indebtedness as debt |
| |
The PURCHASER acknowledges that such part of the Indebtedness as remains unpaid from
time to time by the PURCHASER to the VENDOR shall constitute a valid debt
payable by the PURCHASER to the VENDOR in accordance with the provisions hereof
and all such other documents as may be agreed upon by the Parties with or
without others. |
| |
Until the full payment of Indebtedness to the VENDOR, the PURCHASER shall create in
favour of and grant to the VENDOR and/or the VENDOR’s nominee, such
security interest (including a charge) and powers and rights over inter alia the
Sale Shares and execute and perfect such security documentation (including a
memorandum of charge in such terms and conditions acceptable to the VENDOR) as
the VENDOR may require to secure the payment of the Indebtedness. |
| |
A certificate duly signed by the VENDOR stating the amount of the Indebtedness
payable by the PURCHASER to the VENDOR from time to time and at any time shall
be final, conclusive and binding on the PURCHASER and shall not, in the absence
of manifest error, be questioned on any account. |
| |
6. |
PARTIES' RESPECTIVE WARRANTIES |
The VENDOR hereby represents and warrants to the PURCHASER that:-
| |
|
6.1.1 |
the statements in Recital I, II, III(A) and V are true and accurate;
|
| |
|
6.1.2 |
the VENDOR will, at Completion, be the beneficial owner of the Sale Shares; and
|
| |
|
6.1.3 |
the Sale Shares are free from all charges, liens, equities, third party interest
or other encumbrances whatsoever.
|
| |
6.2. |
PURCHASER's Warranties |
The PURCHASER hereby represents and warrants to the PURCHASER that:-
| |
|
6.2.1 |
the PURCHASER is not a bankrupt and has not committed any act of bankruptcy;
|
| |
|
6.2.2 |
the PURCHASER has not committed any criminal offence;
|
| |
|
6.2.3 |
the PURCHASER and his legal, financial and other advisors (if any) have the
financial and business experience to make an informed decision for an investment
and acquisition of the Sale Shares and the PURCHASER together with such advisors
has evaluated the feasibility of an acquisition of or investment in the Sale
Shares;
|
| |
|
6.2.4 |
the PURCHASER and his legal, financial and other advisors (if any) have had
ample opportunity to investigate the proposed business of NSMH and NSM and to
review all relevant documents and to ask all such questions of such persons and
representatives of the VENDOR as the PURCHASER and its advisors consider
necessary for purposes of making an informed decision for an investment in and
acquisition of the Sale Shares;
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6.2.5 |
the PURCHASER has determined on the basis of his own investigation that the
Purchase Price is fair and a reasonable valuation of the Sale Shares;
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6.2.6 |
except for the representations and warranties contained in this Agreement, the
PURCHASER is not relying on any representation or warranty (whether given by the
VENDOR or otherwise) in making his decision to invest in and to acquire the Sale
Shares; and
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6.2.7 |
that the PURCHASER is purchasing the Sale Share for his own account, for
investment purposes only, not for the account of any other person and not with a
view to the distributions, assignment or resale thereof to others.
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6.3 |
Subsistence of warranteis |
| |
The representations, warranties and agreements given or made by the respective
Parties under this Agreement shall remain in full force and effect and shall
continue to subsist hereafter notwithstanding Completion which will take place
on the basis of the statements made herein. |
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6.4. |
Breach of warranty before Completion |
| |
If prior to Completion, any of the representations and warranties on the part of a
Party have not been carried out or complied with or are in any material respects
untrue or incorrect (and in respect of any breach which is capable of remedy,
such Party have failed to remedy such breach within 14 (Fourteen) days
after the other Party’s written notice to the first mentioned Party
requiring the same to be remedied) the second mentioned Party shall be entitled
by notice in writing to the first mentioned Party to terminate this Agreement
(without prejudice to the second mentioned Party’s rights and remedies at
law and hereunder in respect of the first Party’s misrepresentation and/or
breach of warranty). |
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Any notice or request with reference to this Agreement shall be in writing signed by
the Party by whom it is served or by its solicitors and shall be deemed to be
sufficiently served or given for all purposes herein on the Party to whom it is
served if it is left by hand at or sent by commercial courier, registered post
or facsimile (with copy by hand or commercial courier or ordinary or registered
post) to (as applicable) the address of the Party to whom it is sent as set out
below or the registered office for the time being of such Party or such other
address as one Party may from time to time notify to the other Party in writing. |
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7.1.1 |
to the VENDOR
NU SKIN ENTERPRISES, INC.
75 West Center Street
Provo, Utah 84601,
United States of America
Telefax: 00 1 801 345 3899
Attn: ............................
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7.1.2 |
to the PURCHASER
NU SKIN ENTERPRISES, INC.
KIOW KIM YOON, FRANKIE
5-C, Heng Fa Villa
100, Shing Tai Road
Hong Kong
Telefax: 00 852 2898 8271
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7.2.1 |
by facsimile (and confirmed by the delivery of a copy thereof by hand or
commercial courier or ordinary or registered post) shall be deemed to have been
served and received upon completion of the effective transmission of such notice
and a written record of the transmission is printed out from the sender’s
facsimile machine;
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7.2.2 |
by ordinary or registered post within Malaysia shall be deemed to have been
served and received on the 3rd (Third) day occurring after the date on
which it is posted;
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7.2.3 |
by an ordinary or registered post outside Malaysia shall be deemed to have been
served and received on the 10th (Tenth) day occurring after the date on
which it is posted;
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7.2.4 |
by hand or commercial courier shall be deemed to have been served at the time of
delivery of the notice.
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Each
Party shall bear its own solicitors’ costs of and incidental to this
Agreement.
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8.2 |
Stamp duty on purchase of Sale Shares |
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As the intended purchaser hereunder of the Sale Shares, the PURCHASER shall bear
the stamp duty chargeable on this Agreement and its acquisition of the Sale
Shares (if any) and all other relevant documents incidental to this Agreement
and, if relevant, any penalties for late stamping. |
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Time wherever mentioned shall be
the essence of this Agreement |
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10. |
AUTHORITY TO EXECUTE AGREEMENT |
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Each of the Parties warrants to
the other Party:- |
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|
10.1 |
that it has (as
applicable) the power, authority and capacity to enter into and to execute and
deliver this Agreement and to carry the terms hereof into effect;
and |
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|
10.2 |
that it agreements and
undertakings as contained in this Agreement constitute legal, valid and binding
obligations on it in accordance with the provisions herein. |
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11. |
GOVERNING LAW &
JURISDICTION |
This
Agreement is governed by the laws of Malaysia and subject to Clause 12, the
Parties submit themselves and their assets to the non-exclusive jurisdiction of
the courts in Malaysia.
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12.1 |
Reference to Arbitration |
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Any dispute or difference which may arise between the Parties at any time hereafter
whether during the continuance in force of this Agreement or upon or after its
termination, touching any matter or thing herein contained or the operation or
construction of this Agreement or any matter or thing in any way connected with,
arising from or in relation to this Agreement or the rights, duties, liabilities
of the Parties hereunder shall be finally settled by arbitration in accordance
with the United Nations Commission on International Trade Law Arbitration Rules
1976. |
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12.2 |
Arbitral Proceedings |
| |
A reference to arbitration shall be to 3 (Three) arbitrators. The
arbitration shall be held in Provo, Utah, United States of America and the
language to be used in the arbitral proceedings shall be English. |
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Pending the establishment of the arbitral tribunal, the Parties may apply to the courts
in Malaysia (which shall be a non-exclusive jurisdiction) for the grant of
interim injunctions and orders for the protection and preservation of property
subject of or relating to this Agreement. |
Knowledge
or acquiescence by any Party of or in any breach of any of the terms, conditions
or covenants herein contained shall not operate as or be deemed to be a waiver
of such terms, conditions or covenants or any of them and notwithstanding such
knowledge or acquiescence, such Party shall be entitled to exercise such
Party’s rights under this Agreement and to require strict performance by
the other Parties of the terms, conditions and covenants herein.
Any
amendment or alteration to or modification of any part of this Agreement shall
be conferred upon and determined in writing by mutual consultation between the
Parties.
Any
term, condition, stipulation, provision, covenant or undertaking in this
Agreement which is illegal, void, prohibited or unenforceable shall be
ineffective to the extent of such illegality, voidness, prohibitions or
unenforceability without invalidating the remaining provisions hereof, and any
such illegality, voidness, prohibition or unenforceability shall not invalidate
or render illegal, void or unenforceable any other term, condition stipulation,
provision, covenant or undertaking herein contained.
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16. |
ENTIRETY OF AGREEMENT |
This
Agreement constitutes the sole and entire agreement between the Parties with
respect to the subject matter hereof and supersedes all previous proposals,
negotiations and understandings whether written or oral between the Parties with
respect to the subject matter hereof.
No
Party shall be entitled to assign such Party’s rights and/or obligations
hereunder without the prior written consent of the other Party.
This
Agreement shall be binding on the successors-in-title and permitted assigns of
the VENDOR and the heirs, personal representatives and permitted assigns of the
PURCHASER.
This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and any of the Parties may
execute this Agreement by signing any such counterpart.
IN WITNESS
WHEREOF the Parties have hereunto executed this Agreement the day and
year first above written.
SIGNED BY
D. MATTHEW DORNY
for and on behalf of
NU SKIN ENTERPRISES, INC.
the VENDOR aforesaid
in the presence of:-
.......................................
signature of witness
Name:
Passport No:
SIGNED BY
KIOW KIM YOON
the PURCHASER aforesaid
in the presence of:-
)
.............................................
Kiow Kim Yoon
.......................................
signature of witness
Name:
Passport No:
This is the execution page of the Sale and Purchase Agreement dated the
day of 2001 between NU
SKIN ENTERPRISES, INC. and KIOW KIM YOON, FRANKIE in respect of the sale and purchase of shares in NU SKIN
MALAYSIA HOLDINGS SDN. BHD.
"Annexure 1" to the Sale and
Purchase Agreement dated the day of
2001 between NU SKIN ENTERPRISES, INC. and
KIOW KIM YOON, FRANKIE
FORM OF
COMPLETION CONFIRMATION
COMPLETION
CONFIRMATION
issued pursuant to Clause 4.3 of the
Sale and Purchase Agreement dated ........................ ("SPA") between:-
i) NU SKIN ENTERPRISES, INC ("VENDOR"); and
ii) KIOW KIM YOON, FRANKIE ("PURCHASER")
1.
We, the parties to the
SPA hereby CONFIRM that Completion (as defined in the SPA) has taken
place in accordance with the provisions of the SPA on the date of this
confirmation.
2.
The PURCHASER's CONFIRMS:-
2.1
its receipt from the VENDOR
of the original share certificate(s) to the Sale Shares issued in the name
of the PURCHASER; and
2.2
that the PURCHASER has been appointed as a director of NSMH and NSM.
3.
All expressions used in this Completion Confirmation and defined in the SPA shall have the meanings
given to them by the SPA.
Dated this day of
2001
VENDOR:-
D. MATTHEW DORNY
for and on behalf of
NU SKIN ENTERPRISES, INC. |
PURCHASER:-
KIOW KIM YOON, FRANKIE |
