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ASSUMPTION OF LIABILITIES AND INDEMNIFICATION

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ASSUMPTION OF LIABILITIES AND



INDEMNIFICATION AGREEMENT



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





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



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



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



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





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



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



"Benefits Agreement" shall mean that certain Employee Benefits Allocation Agreement entered into by NSI and NUSA as of the Effective Date.

"Claim" shall mean: (a) A suit, proceeding or investigation by or before any court or governmental or regulatory agency or body or a written demand for payment of a Liability or cause of action, asserted against NSI, NUSA or both by a Claimant; or (b) a written demand or assertion by or on behalf of a Claimant that a cause of action giving rise or relating to a Liability exists against NSI or NUSA.



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



"Effective Date" shall mean December 31, 1997.



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



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



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



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



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



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



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



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

"NSI Employees" shall mean all individuals who immediately prior to the Effective Date were employed by NSI and who, after giving effect to the transactions contemplated by the Contribution and Distribution Agreement, are intended to remain employed by NSI or in the NSI Continuing Business.



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



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



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



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



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



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



"Settlement Payment" shall mean a payment made by a party hereto to the other party pursuant to and in exercise of its rights under Section 4.10 hereof.

"Tax Sharing and Indemnification Agreement" shall mean that certain Tax Sharing and Indemnification Agreement entered into by NSI and NUSA as of the Effective Date.



2. ASSUMPTION AND ALLOCATION OF LIABILITIES.



2.1 NSI Retained Liabilities. Except as may be otherwise

specifically provided herein, NSI shall retain, assume, pay, perform

and discharge all of the NSI Retained Liabilities.



2.2 NUSA Assumed Liabilities. Except as otherwise specifically

provided herein, from and after the Effective Date, NUSA shall assume,

pay, perform and discharge the NUSA Assumed Liabilities. In addition to

those items specifically referenced as NUSA Assumed Liabilities on the

Listing of Liabilities, NUSA Assumed Liabilities shall include the

following:



(a) Liabilities that result from a Claim arising out of

the operation of the NUSA Acquired Business, whether

based on events occurring prior to or after the

Effective Date; and



(b) Liabilities that arise out of or relate to any

activity undertaken by, or any failure to act by,

NUSA after the Effective Date.



2.3 Jointly Shared Liabilities. From and after the Effective

Date, NSI shall assume, pay, perform and discharge 50%, and NUSA shall

assume, pay, perform and discharge 50% of the Jointly Shared

Liabilities, unless a different allocation of any particular Jointly

Assumed Liabilities is specified in the Listing of Liabilities. In

addition to those Liabilities identified as Jointly Shared Liabilities

in the Listing of Liabilities, Jointly Shared Liabilities shall include

the following:



(a) Liabilities arising from Claims based on events

occurring prior to the Effective Date and which: (i)

are not identified in the Listing of Liabilities as

either NSI Retained Liabilities or as NUSA Assumed

Liabilities, and (ii) arise, in more than a de

minimis way, from the businesses or operations of

both the NSI Continuing Business and the NUSA

Acquired Business.



(b) Liabilities not identified as either NSI Retained

Liabilities or NUSA Acquired Liabilities in the

Listing of Liabilities, which result from Claims for

indemnification (and the advancement of expenses in

connection with a proceeding as to which such a Claim

may later be asserted) arising out of facts or

circumstances existing on or events occurring on or

prior to the Effective Date, made against NSI

pursuant to any law or any provision in any

certificate of incorporation, bylaws or agreement, by

any director, officer, employee or agent of NSI whose

duties involved, in more than a de minimis way, both

the NSI Continuing Business and the NUSA Acquired



2.4 Intent of Assumption and Allocation. In applying Sections

2.1, 2.2 and 2.3, the parties intend that Liabilities not specifically

identified in the Listing of Liabilities but incurred (or based on

facts existing) prior to the Effective Date ("Unidentified Existing

Liabilities") be allocated by a fair and reasonable application of the

principle that: (i) NSI shall be solely responsible for Liabilities

arising from or relating to the NSI Retained Assets or the conduct of

the NSI Continuing Business and in which the NUSA Acquired Assets and

NUSA Acquired Business had no more than a de minimis role; and (ii)

NUSA shall be solely responsible for Liabilities arising from or

relating to the NUSA Acquired Assets or the conduct of the NUSA

Acquired Business and in which the NSI Retained Assets and NSI

Continuing Business had no more than a de minimis role. Unidentified

Existing Liabilities in which both (i) the NSI Retained Assets or NSI

Continuing Business and (ii) the NUSA Acquired Assets or NUSA Acquired

Business have more than a de minimis role shall be shared by NSI and

NUSA in accordance with the provisions of Section 2.3, as Jointly

Shared Liabilities.



2.5 Liability Insurance Coverage. If any Liabilities to which

this Section 2 applies are covered by any liability insurance carried

by NSI for periods prior to the Effective Date, NSI and NUSA shall each

have access to such insurance within the aggregate limits thereof, in

proportion to their respective obligations pursuant to this Section 2.

Any insurance recoveries covering Liabilities to be assumed and

allocated pursuant to Section 2.3 shall be shared by the parties in the

proportions provided in Section 2.3



2.6 Actions to Effect Assignment and Assumption of NUSA

Assumed Liabilities.



(a) NSI and NUSA shall use their reasonable best efforts

to cause all rights and obligations of NSI in respect

of the NUSA Assumed Liabilities to be assigned to and

assumed by NUSA effective as of the Effective Date,

or as promptly thereafter as practicable.



(b) From and after the Effective Date, NSI and NUSA shall

use their reasonable best efforts to obtain from each

obligee to which the NUSA Assumed Liabilities are

owed a full release of NSI from any liability or

obligation in respect of such NUSA Assumed

Liabilities, effective as of the Effective Date or as

of the earliest possible date.



(c) Each of NSI and NUSA shall cooperate with the other

and execute such instruments and documents as may be

necessary or reasonably requested by the other party

in connection with the assignment, assumption and

release of any NUSA Assumed Liabilities as

contemplated herein.

(d) If and to the extent that NSI and NUSA are unable to

obtain the assignment, assumption and release of any

NUSA Assumed Liabilities as contemplated herein, as

between NSI and NUSA, effective as of the Effective

Date, NUSA agrees to pay and perform as and when due

all Liabilities and obligations of NSI in respect of

such NUSA Assumed Liabilities, whether arising prior

to, on or after the Effective Date, and, in the event

that for any reason NUSA does not make any such

payment or perform any such obligation as and when

due or NSI makes any such payment or performs any

such obligation, NUSA shall promptly reimburse NSI

for all costs and expenses incurred by NSI in

connection therewith.



3. INDEMNIFICATION.



3.1 By NSI. NSI shall indemnify and hold harmless NUSA, and

each officer, director, employee and agent of NUSA, from and against

any and all Liabilities and Claims which NSI has agreed to assume, pay,

perfor
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