NU SKIN ENTERPRISES INC
<DOCUMENT>
<TYPE>EX-10.37
<SEQUENCE>7
<FILENAME>nuskin_ex1037.txt
<TEXT>
EX-10.37

                    TAX SHARING AND INDEMNIFICATION AGREEMENT

         THIS TAX SHARING AND  INDEMNIFICATION  AGREEMENT (the  "Agreement")  is
dated as of December 31, 1997,  is by and among Nu Skin  International,  Inc., a
Utah corporation  ("NSI"), Nu Skin USA, Inc., a Delaware  corporation  ("NUSA"),
and the  shareholders  of NSI and NUSA and their  successors  and  assigns  (the
"Shareholders").

                                    RECITALS

         WHEREAS, NSI and NUSA have entered into a Contribution and Distribution
Agreement dated as of December 31, 1997 (the "Distribution Agreement"); and

         WHEREAS,  pursuant to the Distribution Agreement,  NSI shall distribute
all  the  issued  and  outstanding  common  stock  of  NUSA  (pro  rata)  to the
Shareholders (the "Distribution"); and

         WHEREAS, there are no tax allocation agreements between NSI and NUSA;

         WHEREAS,  NSI and NUSA each have been  taxed as an "S  corporation"  as
that term is  defined  in  Section  1361 of the Code at all times  during  their
respective existences;

         WHEREAS,  the  Shareholders  intend to transfer  the stock of NSI along
with the stock of other  corporations to Nu Skin Asia Pacific,  Inc., a Delaware
corporation ("NSAP") in exchange for stock of NSAP.

         WHEREAS,  NSI  will  receive  or  has  received  an  opinion  of  Price
Waterhouse that the Distribution, taking into account the contribution of NSI by
the  Shareholders  to NSAP,  will qualify for tax-free  treatment  under Section
368(a)(1)(D) and 355 of the Code;

         WHEREAS,  NSI,  NUSA and the  Shareholders  desire  to enter  into this
Agreement to provide for the allocation  among NSI, NUSA and the Shareholders of
all  responsibilities,  liabilities and benefits  relating to or affecting Taxes
(as hereinafter defined) paid or payable by any of them for all taxable periods,
whether  beginning  before,  on or after the  Distribution  Date (as hereinafter
defined), to indemnify NSI if the Contribution and Distribution fails to qualify
for tax-free  treatment under Section  368(a)(1)(D)  and 355 of the Code, and to
provide for certain other matters.  This  Agreement  also provides,  among other
things,  for NUSA, NSI and the  Shareholders to assist each other for an interim
period in the preparation of Tax Returns (as hereinafter defined) required to be
filed after the Distribution Date.
<PAGE>
         NOW,  THEREFORE,  in consideration of the mutual covenants and promises
contained  herein,  and other good and valuable  consideration,  the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

                                    AGREEMENT

                                   ARTICLE I.

                                   DEFINITIONS

         Section 1.1 As used in this  Agreement,  the following terms shall have
the  following  meanings  (such  meanings to be equally  applicable  to both the
singular  and the plural  forms of the terms  defined).  Capitalized  terms used
herein and not otherwise  defined  shall have the meanings  given to them in the
Distribution Agreement.

         "Action" shall have the meaning ascribed to such term in Section 4.1.

         "Change"  shall mean (i) any audit,  amendment or other change in a Tax
Return, or (ii) the expiration of the statute of limitations with respect to any
Tax Item allocated to NUSA and/or NSI in the Workpapers; provided, such Tax Item
was not subject to a Change by application of clause (i) of this definition.

         "Closing  Balance Sheets" shall mean the NUSA Closing Balance Sheet and
the NSI Closing Balance Sheet.

         "Code" means the Internal  Revenue Code of 1986, as amended,  and shall
include corresponding provisions of any subsequently enacted federal tax laws.

         "Corporate-Level  Restructuring  Taxes" shall mean Restructuring  Taxes
payable by NSI or NUSA.

         "Corporate-Level  Taxes"  means Taxes that are taxed to NSI or NUSA and
not to the Shareholders.

         "Distribution"  shall  have the  meaning  ascribed  to such term in the
recitals.

         "Final  Determination" shall mean the final resolution of the liability
for any Tax Item for a taxable  period,  (i) by IRS Form 870 or  870-AD  (or any
successor forms  thereto),  on the date of acceptance by or on behalf of the IRS
with respect to United States Federal taxes,  or by a comparable  form under the
laws of other jurisdictions; except that a Form 870 or 870-AD or comparable form
that  reserves  (whether by its terms or by  operation  of law) the right of the
taxpayer to file a claim for refund and/or the right of the taxing  authority to
assert a  further  deficiency  for any Tax Item  shall  not  constitute  a Final
Determination for such Tax Item; (ii) by a decision,  judgment, decree, or other
order  by a  court  of  competent  jurisdiction,  which  has  become  final  and
unappealable; (iii) by a closing agreement or accepted offer in compromise under
Section 7121 or 7122 of the Code,  with respect to Federal Taxes,  or comparable
agreements as to other Taxes under the laws of other  jurisdictions;  (iv) by an
allowance of a refund or credit in respect of any  overpayment  of Tax, but only
after the expiration of all periods during which such refund may be recovered by
the Tax imposing jurisdiction; or (v) by any other final disposition,  including
by reason of the expiration of the applicable statute of limitations.
<PAGE>
         "IRS" shall mean the Internal Revenue Service.

         "NSI  Businesses"  means the  businesses  conducted by NSI  immediately
following the Distribution.

         "NSI Closing  Balance Sheet" shall mean the balance sheet of NSI, dated
as of December 31, 1997.

         "NSI Group" shall mean NSI and all  of its future subsidiaries.

         "NSI" shall have the meaning ascribed to such term in the preamble.

         "NUSA  Businesses"  means the businesses  conducted by NUSA immediately
following the Distribution.

         "NUSA  Closing  Balance  Sheet" shall mean the balance  sheet of NUSA ,
dated as of December 31, 1997.

         "NUSA Group" shall mean NUSA and all of its future subsidiaries.

         "NUSA" shall have the meaning ascribed to such term in the preamble.

         "Permanent Tax Item" shall mean any Tax Item other than a Temporary Tax
Item.

         "Reorganization"  shall  mean  NSI's  distribution  of all of the  NUSA
shares to the Shareholders.

         "Restricted  Period"  shall  mean the  two-year  period  following  the
Distribution Date.

         "Restructuring  Taxes"  means any Taxes  (other  than  Transfer  Taxes)
resulting  from  the  Reorganization  or  the  Distribution  including,  without
limitation,  any Tax arising  pursuant to, or as a result of, Section 311 of the
Code.

         "Settlement  Amount"  shall have the  meaning  ascribed to such term in
Section 4.1.
<PAGE>
         "Tax Benefit"  means any item of loss,  deduction,  credit or any other
Tax Item which decreases Taxes paid or payable.

         "Tax Detriment" means any item or income,  gain, recapture of credit or
any other Tax Item which increases Taxes paid or payable.

         "Tax Item"  means any  return,  form,  filing,  questionnaire  or other
document  required to be filed (or which may be filed),  including  requests for
extensions of time, filings made with estimated tax payments,  claims for refund
and amended returns that may be filed,  for any period with any taxing authority
(whether  domestic or foreign) in connection  with any Tax or Taxes  (whether or
not a payment is required to be made with respect to such filing).

         "Tax  Returns"  means  any  return,  declaration,   statement,  report,
schedule,  certificate,  form,  information  return or any other  document  (and
related or  supporting  information)  including an amended tax return filed with
respect to Taxes.

         "Taxes" means all forms of taxation,  whenever created or imposed,  and
whether of the  United  States or  elsewhere,  and  whether  imposed by a local,
municipal,  governmental,  state, federation or other body, and without limiting
the generality of the foregoing,  shall include income,  sales, use, ad valorem,
gross  receipts,  value  added,  franchise,  transfer,  recording,  withholding,
payroll,  employment,  excise, occupation, and property taxes, together with any
related interest, penalties and additions to any such tax, or additional amounts
imposed by any taxing  authority  (domestic  or foreign)  upon NSI or NUSA their
divisions or branches or upon the Shareholders.

         "Temporary  Tax Item"  shall  mean any Tax Item to the  extent  the Tax
Detriment or Tax Benefit  relating to such Tax Item in one tax period creates or
results from a corresponding  Tax Benefit or Tax Detriment,  respectively,  in a
different tax period;  provided,  that if the parties cannot agree whether a Tax
Item is a Temporary Tax Item, then generally accepted  accounting  principles in
effect on the Distribution Date shall determine if a Tax Item is a Temporary Tax
Item.

         "Transfer Taxes" shall mean any real property transfer or gains, sales,
use,  transfer,  value added,  stock  transfer,  and stamp taxes,  any transfer,
recording,  registration,  and other fees,  and any similar  Taxes which  become
payable in connection with the Distribution or Reorganization.

         "Workpapers"  shall mean the workpapers  underlying the  preparation of
the 1997 Federal Tax Return of NSI and the Closing Balance Sheets.
<PAGE>
                                   ARTICLE II.

                      PREPARATION AND FILING OF TAX RETURNS

         Section 2.1 Manner of Preparation. All Tax Returns of NSI or NUSA filed
after the  Distribution  Date shall be prepared  on a basis which is  consistent
with the tax opinions  obtained from Price  Waterhouse  in  connection  with the
Reorganization  and the Distribution (in the absence of a controlling  change in
law or circumstances)  and shall be filed on a timely basis (including  pursuant
to extensions) by the party responsible for such filing under this Agreement. In
the  absence  of a  controlling  change  in law or  circumstances,  or except as
otherwise agreed in writing, all Tax Returns of NSI or NUSA filed after the date
of this Agreement  shall be prepared on a basis  consistent  with the elections,
accounting  methods,  conventions,  and principles of taxation used for the most
recent taxable periods for which Tax Returns of NSI involving  similar Tax Items
have been filed,  except  that,  with  respect to Tax Items not  relating to the
Reorganization or Distribution,  one party may take an inconsistent  position to
the extent that, with respect to Tax Items not relating to the Reorganization or
Distribution,  such  position does not create a Tax Detriment to the other party
or to the Shareholders of the other party.

         Section 2.2 Pre-Distribution Tax Returns.

                  (a) All federal or state  income Tax Returns that are required
         to be filed for periods beginning before the Distribution Date shall be
         prepared and filed by the Shareholders or by NSI.

                  (b) All Tax Returns for state and local sales, use,  property,
         transfer and other Taxes for periods  beginning before the Distribution
         Date which are not  measured by income  shall be prepared  and filed by
         NSI.  NSI shall  prepare  all  Federal  and state  payroll  Tax Returns
         required  to be filed by it after the  Distribution  which  include any
         period beginning before the Distribution Date.

                  (c) All  foreign  Tax  Returns  and any other Tax  Returns not
         described  elsewhere  in this Section 2.2 that are required to be filed
         for any period beginning before the Distribution Date shall be prepared
         and filed by NSI.

         Section 2.3  Post-Distribution  Corporate Tax Returns.  All Tax Returns
for periods  beginning after the Distribution  Date with respect to NSI shall be
prepared  and filed by NSI.  All tax  returns for  periods  beginning  after the
Distribution  Date with respect to NUSA shall be prepared and filed by NUSA. The
Shareholders shall file all Tax Returns required to be filed by them that relate
to or include Tax Items associated with NSI or NUSA.
<PAGE>
                                  ARTICLE III.

                                PAYMENT OF TAXES

         Section 3.1 Tax for Taxable Periods Beginning Prior to the Distribution
Date.

                  (a) The  Shareholders  shall pay all Taxes due (or receive all
         refunds)  in  connection  with the filing of NSI's  federal  income Tax
         Returns for all taxable  periods  ending on or before the  Distribution
         Date.

                  (b) NSI or the  Shareholders  shall pay to the relevant taxing
         authority all non-U.S. federal income Taxes for the Tax Returns for all
         taxable periods ending on or before the Distribution  Date with respect
         to  which  NSI and  the  Shareholders  each  have a  respective  filing
         responsibility under relevant state, local or foreign law.

                  (c) NSI shall be responsible  for the payment of all Taxes due
         or payable with respect to taxable  periods  beginning on or before the
         Distribution  Date that are  required to be reported on the Tax Returns
         described in Sections 2.2(b) and 2.2(c).

         Section  3.2 NSI and  Shareholder  Tax  Deficiencies  and  Refunds  for
Periods  Prior to the  Distribution  Date.  If there is a Change in a Tax Return
filed by NSI and with  respect to which NSI,  for a taxable  period prior to the
Distribution  Date, has tax liability  pursuant to Section 3.1,  irrespective of
whether such Change occurs before, on or after the Distribution  Date, NSI shall
pay and  discharge  any Tax or receive  any refund of Tax  associated  with such
Change.  For taxable  periods  beginning  prior to the  Distribution  Date,  the
Shareholders  shall  bear the  burden  of any Tax  arising  from a Change in Tax
Returns  filed by them that relate to or include Tax Items  associated  with NSI
and with  respect to which they are  liable,  and shall have the  benefit of any
refund of Tax associated  with such Change,  irrespective of whether such Change
occurs before, on or after the Distribution Date.

         Section 3.3 Transfer Taxes.  NUSA or the Shareholders  shall pay to the
relevant taxing authority all Transfer Taxes.

         Section 3.4 Indemnities, Payments, Temporary Tax Items and Code Section
336(e).

                  (a) NUSA and Shareholders Indemnity Obligations.  NUSA and the
         Shareholders shall indemnify and hold harmless NSI against:

                           (i)   any   and   all    Restructuring    Taxes   and
                  Corporate-Level Restructuring Taxes imposed as a result of the
                  completion of the  Distribution or  Reorganization,  except to
                  the extent that such taxes result  solely from NSI's breach of
                  the covenants contained in Section 5.4, and

                           (ii)  any  and  all  Taxes  for  which  NUSA  or  the
                  Shareholders have agreed to be responsible pursuant to Article
                  III of this Agreement.
<PAGE>
                  (b) NSI Indemnity  Obligations.  NSI shall  indemnify and hold
         harmless NUSA and the Shareholders  against any Restructuring  Taxes or
         Corporate-Level  Restructuring  Taxes  imposed  upon or incurred by the
         Shareholders or NUSA if NSI breaches the covenants contained in Section
         5.4 and such  breach  results  in the  failure of the  Distribution  or
         Reorganization   to  qualify  for  tax-free   treatment  under  Section
         368(a)(1)(D)  or Section 355 of the Code or similar  provisions  of the
         state or local law.  The  Shareholders  shall be  indemnified  and held
         harmless  under this Section 3.4(b) without regard to the fact that NSI
         received an opinion or ruling from the IRS as  contemplated  by Section
         5.4(b).

                  (c) All  payments  required  to be made  by NUSA  pursuant  to
         Section  3.4(a) or by NSI  pursuant to Section  3.4(b) shall be made no
         later  than 10 days  after  notice  of a  Final  Determination  of such
         Restructuring Taxes or Corporate-Level Restructuring Taxes. Any payment
         not so made  within  10 days  shall  thereafter  bear  interest  at two
         percentage  points  above  the  applicable   Federal   short-term  rate
         established pursuant to Section 6621 of the Code.

                  (d)  If  Section   3.4(a)(i)   applies   to  the   payment  of
         Corporate-Level  Restructuring  Taxes,  and the Tax Item  creating such
         Corporate-Level  Restructuring Taxes is a Temporary Tax Item, NSI shall
         pay to  NUSA  _______  percent  of the  Tax  Benefit  relating  to such
         Temporary Tax Item that NSI realizes.  Any payment  required to be made
         under this  Section  3.4(c) shall be made at the time the Tax Return on
         which such Tax Benefit is realized is filed.

                  (e) If NSI is otherwise required to recognize gain pursuant to
         Section 311 of the Code with respect to the Distribution,  then, to the
         extent permitted by law or regulation, the parties shall elect pursuant
         to  Section  336(e)  of  the  Code  to  treat  the  Distribution  as  a
         disposition of all the assets of NUSA.

         Section 3.5 Reduction in Corporate-Level Taxes.

                  (a) If there is a reduction  of any  Corporate-Level  Taxes of
         NSI for a taxable  period  beginning  after the  Distribution  Date, by
         reason of a Tax Item  attributable to the NUSA Businesses  arising with
         respect to a period on or before the  Distribution  Date, NSI shall pay
         NUSA an  amount  equal  to such  reduction  in  Taxes.  If  there  is a
         reduction  of any  Corporate-Level  Taxes of NUSA for a taxable  period
         beginning  after  the  Distribution  Date,  by  reason  of a  Tax  Item
         attributable to the NSI Businesses  arising with respect to a period on
         or before the Distribution  Date, NUSA shall pay NSI an amount equal to
         such reduction in Taxes.
<PAGE>
                  (b) Any payment  required to be made  pursuant to this Section
         3.5  shall be made no later  than 10 days  after the Tax  reduction  is
         actually or deemed received, credited or otherwise utilized by a party.
         Any payment not so made within 10 days shall  thereafter  bear interest
         at two percentage points above the then applicable  Federal  short-term
         rate established pursuant to Section 6621 of the Code.

         Section 3.6 Payment.  Pursuant to the  Assumption  of  Liabilities  and
Indemnification  Agreement  and Article III of this  Agreement,  NSI will or may
assume  or  satisfy,  or make an  indemnification  payment  with  respect  to, a
liability of NUSA, and vice versa.  If, pursuant to a Final  Determination,  the
after-Tax  position of either NUSA or NSI is  different  than it would have been
had NSI or NUSA made all payments directly to the relevant third party obligees,
then such  party  shall make a payment  to the other  party (or the other  party
shall make a payment to such  party) in an amount  such  that,  on an  after-Tax
basis,  the parties will share the payment of the underlying claim in accordance
with  the  allocation  of such  claim  between  NUSA  and NSI set  forth  in the
Assumption of Liabilities and  Indemnification  Agreement or this Agreement,  as
the case may be.

                                   ARTICLE IV.
                   TAX AUDITS, TRANSACTIONS AND OTHER MATTERS

         Section  4.1 Notice of  Proposed  Adjustments.  If a notice of audit is
given, an audit is begun, an audit adjustment is (or has been) proposed,  or any
other claim is (or has been made) by any taxing  authority with respect to a Tax
liability  that,  pursuant  to the  terms  hereof,  which  could be  indemnified
pursuant to Article III of this Agreement  (collectively,  a "Notice of Proposed
Adjustment"),  the party  receiving  such  Notice of Proposed  Adjustment  shall
promptly  notify the other parties to this Agreement in writing of such receipt.
Thereafter,  the party receiving such Notice of Proposed  Adjustment  shall keep
the other parties, on a timely basis,  informed of all material  developments in
connection with audits, administrative proceedings, litigation and other similar
matters that may affect their  respective Tax  liabilities.  Failure or delay in
providing  notification  hereunder  shall not  relieve  any party  hereto of any
obligation  hereunder in respect of any particular Tax liability,  except to the
extent  that (i) such  failure or delay  precludes  the ability of such party to
contest such  liability  administratively  or in the courts,  and (ii) otherwise
materially and adversely prejudices such party.
<PAGE>
         Section 4.2 Tax Audits and Controversies Involving  Corporate-Level Tax
Items.  In the event (i) either NSI or NUSA  notifies the other party in writing
that it wishes to settle any audit, inquiry, suit, action or proceeding (each an
"Action")  affecting  the  Tax  liability  of  the  other  party  (including  by
application of this  Agreement),  and (ii) the Action relates to a Permanent Tax
Item,  such other  party shall have the right (by giving  written  notice to the
party  wishing  to  settle  the  Action  within  a  reasonable  amount  of time,
considering  all the facts and  circumstances,  of having received notice of the
intention  to settle),  to  prohibit  such  settlement,  in which case the party
favoring settlement shall have the right (within 30 days of receipt of the other
party's written notice prohibiting the settlement) to pay to the other party (or
receive from the other  party) an amount (a  `Settlement  Amount')  equal to the
aggregate  amount which it would have paid (or received),  after  application of
each  provision  of  this  Agreement  other  than  this  Section  4.2,  in  full
satisfaction  of the  Action  and its  obligation  to pay  amounts  (or right to
receive  amounts)  as  provided  in  this  Agreement.  The  party  opposing  the
settlement shall thereafter  control, in its sole and absolute  discretion,  the
further defense and disposition of the Action,  shall be fully and wholly liable
for all Taxes (and receive any refund of Taxes)  resulting  therefrom  and shall
indemnify and hold harmless the party favoring the  settlement  from and any and
all liability for Taxes which results from the ultimate resolution of the Action
in excess of the Settlement Amount. The party opposing the settlement shall have
no  obligation  or duty to reimburse or refund to the other party any portion of
the Settlement Amount,  regardless of the ultimate resolution of the Action. The
party  favoring the  settlement  shall have the right,  at its own  expense,  to
participate  in any Action for which the other party has assumed  control  under
this Section 4.2. If the party  favoring  settlement  does not on a timely basis
exercise its right to make or receive a Settlement  Amount,  the  obligations of
NSI and NUSA  under  this  Agreement  shall  be  determined  as if the  proposed
settlement did not exist (e.g., the party favoring  settlement  cannot settle an
action  without  again  complying  with the  procedure set forth in this Section
4.2).

         Section 4.3  Retention of Books and  Records.  NSI agrees to retain all
Tax Returns,  related  schedules and  Workpapers,  and all material  records and
other documents  relating thereto existing on the date hereof or created through
or with respect to taxable  periods ending on or before the  Distribution  Date,
until the later of (i) the expiration of the statute of  limitations  (including
extensions)  of the taxable  year to which such Tax Returns and other  documents
relate, or (ii) ten years from the date hereof.

         Section  4.4   Cooperation   in  Return   Filings,   Examinations   and
Controversies.

                  (a) In addition  to any  obligations  imposed  pursuant to the
         Distribution Agreement, NUSA and the Shareholders shall fully cooperate
         with  NSI  and  its  representatives  and  with  the  Shareholders  (if
         necessary),  in a prompt and timely manner,  in connection with (i) the
         preparation  and filing of and (ii) any  inquiry,  audit,  examination,
         investigation,  dispute, or litigation involving,  any Tax Return filed
         or  required  to be  filed by or for NSI and the  Shareholders  for any
         taxable period beginning before the Distribution Date. Such cooperation
         shall include,  but not be limited to, making  available to NSI and the
         Shareholders,  during normal business hours, and within sixty (60) days
         of any request  therefor,  all books,  records and  information  (which
         books, records and information may be copied by NSI or the Shareholders
         at their  expense),  and the  assistance of all officers and employees,
         reasonably necessary or useful in connection with any Action.
<PAGE>
                  (b) In addition  to any  obligations  imposed  pursuant to the
         Distribution Agreement,  NSI and the Shareholders shall fully cooperate
         with NUSA and its  representatives,  in a prompt and timely manner,  in
         connection with (i) the preparation and filing of and (ii) any inquiry,
         audit,  examination,  investigation,  dispute, or litigation involving,
         any  Tax  Return  filed  or  required  to be  filed  by or  NUSA or the
         Shareholders.  Such  cooperation  shall include,  but not be limited to
         making available to NUSA and the  Shareholders,  during normal business
         hours, and within sixty (60) days of any request  therefor,  all books,
         records and  information  (which books,  records and information may be
         copied  by  NUSA  or  the  Shareholders  at  their  expense),  and  the
         assistance  of all  officers  and  employees,  reasonably  necessary or
         useful in connection with any Action.

                                   ARTICLE V.
                          REPRESENTATIONS AND COVENANTS

         Section 5.1 Representations of NUSA and the Shareholders.  NUSA and the
Shareholders  hereby  represent  and  warrant  to NSI that  NUSA has no  present
intention to undertake  any of the  transactions  set forth in Section 5.2 or to
cease to engage in the active conduct of the NUSA Businesses (within the meaning
of Section 355(b)(2) of the Code).

         Section 5.2 Covenants of the Shareholders and NUSA.

                  (a) Except as provided in Section  5.2(b),  the  Shareholders,
         both  directly and on behalf of NUSA,  and NUSA  directly  covenant and
         agree with NSI that during the Restricted Period:

                           (i) NUSA shall continue to actively  conduct the NUSA
                  Businesses in the United States (within the meaning of Section
                  355(b)(2)  of the Code) and shall  continue to maintain in the
                  United States a substantial portion of its assets and business
                  operations as they existed prior to the Distribution, provided
                  that the  foregoing  shall not be deemed to prohibit NUSA from
                  entering  into or acquiring  other  businesses  or  operations
                  which may or may not be consistent with NUSA's  Businesses and
                  operations as they existed prior to the  Distribution  so long
                  as NUSA continues to conduct the NUSA Businesses in the United
                  States and continues to so maintain such  substantial  portion
                  of its assets in the United States;
<PAGE>
                           (ii) NUSA shall not dispose of any of the assets that
                  NUSA  owned  immediately  after the  Distribution,  except for
                  dispositions  of such  assets made in the  ordinary  course of
                  business;

                           (iii)   neither  NUSA  nor  any  of  its   directors,
                  officers, or other representatives shall undertake, authorize,
                  approve, recommend, facilitate, or enter into any contract, or
                  consummate any  transaction  with respect to: (A) the issuance
                  of NUSA capital stock (including options,  warrants, rights or
                  securities  exercisable for, or convertible into, NUSA capital
                  stock) in a single  transaction  or in a series of  related or
                  unrelated  transactions or otherwise or in the aggregate which
                  would exceed ten percent (10%) when  expressed as a percentage
                  of the outstanding capital stock of NUSA immediately following
                  the  Distribution;  (B) any redemptions,  repurchases or other
                  acquisitions or capital stock of NUSA in a single  transaction
                  or a series of related or unrelated  transactions or otherwise
                  or in the aggregate  which would exceed ten percent (10%) when
                  expressed as a percentage of the outstanding  capital stock of
                  NUSA  immediately  following  the  Distribution;  or  (C)  the
                  dissolution, merger or complete or partial liquidation of NUSA
                  or any announcement of such action.

                  (b) The Shareholders, both directly and on behalf of NUSA, and
         NUSA  directly,  may take any  action or engage  in  conduct  otherwise
         prohibited  by Section  5.2 so long as prior to such action or conduct,
         as the case may be, NUSA  receives:  (i) an opinion from NUSA's counsel
         in form and substance reasonably satisfactory to NSI and upon which NSI
         can rely to the effect that the proposed action or conduct, as the case
         may be, will not cause the Distribution and  Reorganization  to fail to
         qualify for the  tax-free  treatment  under  Section  368(a)(1)(D)  and
         Section  355 of the  Code,  or (ii) a  ruling  from the IRS in form and
         substance reasonably satisfactory to NSI and upon which NSI can rely to
         the effect that the  proposed  action or  conduct,  as the case may be,
         will not cause the Distribution and  Reorganization  to fail to qualify
         for tax-free  treatment under Section  368(a)(1)(D)  and Section 355 of
         the Code.

         Section 5.3  Representations of NSI. NSI hereby represents and warrants
to the  Shareholders  that NSI has no present  intention to undertake any of the
transactions  set  forth in  Section  5.4 or to cease to  engage  in the  active
conduct of the NSI  Businesses  (within the meaning of Section  355(b)(2) of the
Code).
<PAGE>
         Section 5.4 Covenants of NSI.

                  (a) Except as provided in Section  5.4(b),  NSI  covenants and
         agrees  with  NUSA and the  Shareholders  that  during  the  Restricted
         Period:

                           (i) NSI shall  continue to  actively  conduct the NSI
                  Businesses in the United States (within the meaning of Section
                  355(b)(2)  of the Code) and shall  continue to maintain in the
                  United States a substantial portion of its assets and business
                  operations as they existed prior to the Distribution, provided
                  that the  foregoing  shall not be deemed to prohibit  NSI from
                  entering  into or acquiring  other  businesses  or  operations
                  which may or may not be consistent with the NSI Businesses and
                  operations as they existed prior to the  Distirbution  so long
                  as NUSA  continues to conduct the NSI Businesses in the United
                  States and continues to so maintain such  substantial  portion
                  of its assets in the United States;

                           (ii) NSI not  dispose of any of the  assets  that NSI
                  owned  immediately  after  the  Distribution,  except  for the
                  dispositions  of such  assets made in the  ordinary  course of
                  business;

                           (iii) neither NSI nor any of its directors, officers,
                  or other representatives shall undertake,  authorize, approve,
                  recommend,   facilitate,   or  enter  into  any  contract,  or
                  consummate any  transaction  with respect to: (A) the issuance
                  of NSI capital stock (including  options,  wrrants,  rights or
                  securities  exercisable for, or convertible  into, NSI capital
                  stock) in a single  transaction  or in a series of  related or
                  unrelated  transactions or otherwise or in the aggregate which
                  would exceed ten percent (10%) when  expressed as a percentage
                  of the outstanding capital stock of NSI immediately  following
                  the  Distribution;  (B) any redemptions,  repurchases or other
                  acquisitions  of capital stock of NSI in a single  transaction
                  or a series of related or unrelated  transactions or otherwise
                  or in the aggregate  which would exceed ten percent (10%) when
                  expressed as a percentage of the outstanding  capital stock of
                  NSI  immediately  following  the  Distribution;   or  (C)  the
                  dissolution,  merger or complete or partial liquidation of NSI
                  or any announcement of such action.
<PAGE>
                  (b) NSI may take any  action or engage  in  conduct  otherwise
         prohibited  by Section  5.4 so long as prior to such action or conduct,
         as the case may be, NSI receives  (i) an opinion from NSI's  counsel in
         form and substance reasonably  satisfactory to NUSA and upon which NUSA
         can rely to the effect that the proposed action or conduct, as the case
         may be, will not cause the Distribution and  Reorganization  to fail to
         qualify for the  tax-free  treatment  under  Section  368(a)(1)(D)  and
         Section  355 of the  Code,  or (ii) a  ruling  from the IRS in form and
         substance reasonably  satisfactory to NUSA and upon which NUSA can rely
         to the effect that the proposed action or conduct,  as the case may be,
         will not cause the Distribution and  Reorganization  to fail to qualify
         for tax-free  treatment under Section  368(a)(1)(D)  and Section 355 of
         the Code.

         Section 5.5 The parties  hereto  recognize  that failure to comply with
their  respective  obligations  under this Section 5.1 may result in irreparable
harm to the  other  party  and  that  the  other  party  may  not be  adequately
compensated by monetary damages for such failure.  If either party shall fail to
comply with its respective  obligations  under this Section 5.1, the other party
shall be entitled to injunctive  relief and specific  performance in addition to
all other remedies.

                                   ARTICLE VI.
                                  MISCELLANEOUS

         Section  6.1  Expenses.  Unless  otherwise  expressly  provided in this
Agreement or in the  Distribution  Agreement,  each party shall bear any and all
expenses that arise from their respective obligations under this Agreement.

         Section 6.2 Entire  Agreement;  Termination of Prior  Agreements.  This
Agreement constitutes the entire agreement of the parties concerning the subject
matter hereof and supersedes all other  agreements,  whether or not written,  in
respect of any Tax  between or among  them.  This  Agreement  may not be amended
except by an agreement  in writing,  signed by the parties  hereto.  Anything in
this Agreement or the Distribution  Agreement  and/or  Assumption of Liabilities
and Indemnification Agreement to the contrary notwithstanding,  in the event and
to the extent that there  shall be a conflict  between  the  provisions  of this
Agreement and the  Distribution  Agreement  and/or the Assumption of Liabilities
and Indemnification Agreement, the provisions of this Agreement shall control.

         Section 6.3  Notices.  All notices and other  communications  hereunder
shall be in writing and shall be  delivered by hand or mailed by  registered  or
certified  mail  (return  receipt  requested)  to the  parties at the  following
addresses (or at such other  addresses for a party as shall be specified by like
notice) and shall be deemed given on the date on which such notice is received:
<PAGE>
                            If to NSI:

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

                            If to NUSA:

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

                            With a copy to:

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

If the last day for providing any notice,  communication or payment hereunder is
a Saturday, Sunday or legal holiday, such due date shall be extended to the next
business day.

         Section 6.4 Resolution of Disputes.  In the event of a dispute  arising
with respect to this Agreement  which the parties are unable to resolve on their
own,  such dispute  shall be resolved by  arbitration  conducted as described in
Section 3.9 of the Assumption of Liabilities and Indemnification Agreement being
executed  concurrently  herewith,  with the  parties on each side of the dispute
selecting one arbitrator and the two  arbitrators so selected  selecting a third
arbitrator.

         Section  6.5  Application  to  Present  and Future  Subsidiaries.  This
Agreement is being entered into by NSI and NUSA on behalf of themselves and each
member of the NSI Group  and NUSA  Group,  respectively.  This  Agreement  shall
constitute a direct  obligation  of each such member and shall be deemed to have
been readopted and affirmed on behalf of any corporation  which becomes a member
of the NSI Group or NUSA Group in the future.  NSI and NUSA hereby guarantee the
performance of all actions,  agreements and obligations  provided for under this
Agreement of each member of the NSI Group and the NUSA Group, respectively.  NSI
and NUSA  shall,  upon the  written  request  of the  other,  cause any of their
respective  Group members  formally to execute this  Agreement.  This  Agreement
shall be binding  upon,  and shall  inure to the  benefit  of,  the  successors,
assigns and persons controlling any of the corporations bound hereby for so long
as such successors,  assigns or controlling persons are members of the NSI Group
or the NUSA Group, respectively, or their respective successors and assigns.
<PAGE>
         Section  6.6  Term.  This  Agreement  shall  commence  on the  date  of
execution indicated below and shall continue in effect until otherwise agreed to
in writing by NSI and NUSA, or their successors.

         Section 6.7 Titles and Headings. Titles and headings to sections herein
are inserted for the  convenience of reference only and are not intended to be a
part or to affect the meaning or interpretation of this Agreement.

         Section 6.8 Legal Enforceability. Any provision of this Agreement which
is  prohibited  or  unenforceable   in  any  jurisdiction   shall,  as  to  such
jurisdiction,   be   ineffective   to  the   extent  of  such   prohibition   or
unenforceability  without invalidating the remaining provisions hereof. Any such
prohibition  or  unenforceability  in any  jurisdiction  shall not invalidate or
render unenforceable such provision in any other jurisdiction. Without prejudice
to any rights or remedies  otherwise  available to any party hereto,  each party
hereto acknowledges that damages would be an inadequate remedy for any breach of
the provisions of this Agreement and agrees that the  obligations of the parties
hereunder shall be specifically enforceable.

         Section 6.9 Singular and Plural.  As used  herein,  the singular  shall
include the plural and vice versa.

         Section 6.10  Governing  Law. This  Agreement  shall be governed by the
laws of Utah.

          IN WITNESS WHEREOF, the parties have executed this agreement as of the
31st day of December, 1997.

                                    THE COMPANIES:

                                    NU SKIN INTERNATIONAL, INC.

                                    By:    /s/ Keith Halls
                                    Name:  Keith Halls
                                    Title: Vice President
<PAGE>
                                    NU SKIN USA, INC.

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

                                    THE SHAREHOLDERS:

                                    /s/ Blake M. Roney
                                    Blake M. Roney

                                    /s/ Nedra Dee Roney
                                    Nedra Dee Roney

                                    /s/Sandie N. Tillotson
                                    Sandie N. Tillotson

                                    /s/ Craig Bryson
                                    Craig Bryson

                                    /s/ Craig S. Tillotson
                                    Craig S. Tillotson

                                    /s/ Steven J. Lund
                                    Steven J. Lund

                                    /s/ Brooke R. Roney
                                    Brooke R. Roney

                                    /s/ Kirk V. Roney
                                    Kirk V. Roney

                                    /s/ Keith R. Halls
                                    Keith R. Halls
</TEXT>
</DOCUMENT>
