Exhibit 10-2 Prudential Private Shelf Facility Agreement

















NU SKIN ENTERPRISES,
INC. 



$125,000,000 



MULTI-CURRENCY 



PRIVATE SHELF FACILITY 








PRIVATE SHELF AGREEMENT 



August 26, 2003 



























                                               Table of Contents
                                                                                                             Page

1.       AUTHORIZATION OF ISSUE OF NOTES.........................................................................1

2.       PURCHASE AND SALE OF NOTES..............................................................................2

2A       [Intentionally Omitted.]................................................................................2

         2B(1).   Facility.......................................................................................2

         2B(2).Issuance Period...................................................................................2

         2B(3).Request for Purchase..............................................................................2

         2B(4).Rate Quotes.......................................................................................3

         2B(5).Acceptance........................................................................................3

         2B(6).Market Disruption.................................................................................4

         2B(7).Facility Closings.................................................................................4

         2B(8).Fees..............................................................................................5

3.       CONDITIONS OF CLOSING...................................................................................7

                  3A.      Certain Documents.....................................................................7

                  3B.      Opinion of Purchaser's Special Counsel................................................8

                  3C.      Representations and Warranties; No Default............................................9

                  3D.      Purchase Permitted by Applicable Laws.................................................9

                  3E.      Payment of Fees.......................................................................9

                  3F.      Counterpart Amended and Restated Collateral Agency and Intercreditor Agreement........9

                  3G.      Issuer Subsidiary Counterpart.........................................................9

                  3H.Subsidiary Guaranty or Foreign Subsidiary Guaranty..........................................9

4.       [Intentionally Omitted.]...............................................................................10

5.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................................................10

         5.1      Organization; Power and Authority.............................................................10

         5.2      Authorization, etc............................................................................10

         5.3      Disclosure....................................................................................10

         5.4      Organization and Ownership of Shares of Subsidiaries; Affiliates..............................11

         5.5      Financial Statements..........................................................................11

         5.6      Compliance with Laws, Other Instruments, etc..................................................12

         5.7      Governmental Authorizations, etc..............................................................12


                                                          -i-







                                             Table of Contents
                                                  (continued)
                                                                                                             Page

         5.8      Litigation; Observance of Agreements, Statutes and Orders.....................................12

         5.9      Taxes.........................................................................................13

         5.10     Title to Property; Leases.....................................................................13

         5.11     Licenses, Permits, etc........................................................................13

         5.12     Compliance with ERISA.........................................................................14

         5.13     Private Offering by the Company...............................................................14

         5.14     Use of Proceeds; Margin Regulations...........................................................15

         5.15     Existing Indebtedness and Liens...............................................................15

         5.16     Foreign Assets Control Regulations, etc.......................................................15

         5.17     Status under Certain Statutes.................................................................15

         5.18     Environmental Matters.........................................................................16

         5.19     Hostile Tender Offers.........................................................................16

6.       REPRESENTATIONS OF THE PURCHASERS......................................................................16

         6.1      Purchase for Investment.......................................................................16

         6.2      Source of Funds...............................................................................17

7.       INFORMATION AS TO COMPANY..............................................................................18

         7.1      Financial and Business Information............................................................18

         7.2      Officer's Certificate.........................................................................21

8.       PREPAYMENT OF THE NOTES................................................................................22

         8.1      Required Prepayments..........................................................................22

         8.2      Optional Prepayments with Make-Whole Amount...................................................22

         8.3      Allocation of Partial Prepayments.............................................................22

         8.4      Maturity; Surrender, etc......................................................................23

         8.5      Purchase of Notes.............................................................................23

         8.6      Make-Whole Amount.............................................................................23

9.       AFFIRMATIVE COVENANTS..................................................................................26

         9.1      Compliance with Law...........................................................................27

         9.2      Insurance.....................................................................................27

         9.3      Maintenance of Properties.....................................................................27

         9.4      Payment of Taxes and Claims...................................................................27


                                                                -ii-








                                               Table of Contents
                                                  (continued)
                                                                                                             Page
         9.5      Corporate Existence, etc......................................................................28

         9.6      Security; Execution of Pledge Agreement, Foreign Subsidiary Guaranty and Subsidiary Guaranty..28

         9.7      Maintenance of Ownership......................................................................30

         9.8      Pari Passu Ranking............................................................................30

         9.9      Payment of Notes and Maintenance of Office....................................................30

10.      NEGATIVE COVENANTS.....................................................................................31

         10.1     Transactions with Affiliates..................................................................31

         10.2     Merger, Consolidation, Sale of Assets, etc....................................................31

         10.3     Liens.........................................................................................34

         10.4     Minimum Consolidated Net Worth................................................................35

         10.5     Limitation on Indebtedness....................................................................36

         10.6     Minimum Fixed Charges Coverage................................................................36

         10.7     Nature of the Business........................................................................36

         10.8     Designation of Restricted and Unrestricted Subsidiaries.......................................36

         10.9     Limitation on Swap Agreements.................................................................37

         10.10    Limitation on Restricted Payments.............................................................37

11.      EVENTS OF DEFAULT......................................................................................37

12.      REMEDIES ON DEFAULT, ETC...............................................................................40

         12.1     Acceleration..................................................................................40

         12.2     Other Remedies................................................................................40

         12.3     Rescission....................................................................................41

         12.4     No Waivers or Election of Remedies, Expenses, etc.............................................41

13.      REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES..........................................................41

         13.1     Registration of Notes.........................................................................41

         13.2     Transfer and Exchange of Notes................................................................42

         13.3     Replacement of Notes..........................................................................42

14.      PAYMENTS ON NOTES......................................................................................43

         14.1     Place of Payment..............................................................................43

         14.2     Home Office Payment...........................................................................43


                                                            -iii-







                                               Table of Contents
                                                 (continued)
                                                                                                             Page

         14.3     Currency of Payments..........................................................................43

         14.4     Payments Free and Clear of Taxes..............................................................44

15.      EXPENSES, ETC..........................................................................................45

         15.1     Transaction Expenses..........................................................................45

         15.2     Survival......................................................................................45

16.      SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT...........................................46

         17.2     Notes held by Company, etc....................................................................47

18.      NOTICES................................................................................................47

21.      GUARANTEED OBLIGATIONS.................................................................................49

         21.1     Guaranteed Obligations........................................................................49

         21.2     Payments and Performance......................................................................50

         21.3     Releases......................................................................................50
         21.4     Waivers.......................................................................................51

         21.5     Marshaling....................................................................................52

         21.6     Immediate Liability...........................................................................53

         21.7     Primary Obligations...........................................................................53

         21.8     No Reduction or Defense.......................................................................53

         21.9     Subordination.................................................................................54

         21.10    No Election...................................................................................55

         21.11    Severability..................................................................................55

         21.12    Appropriations................................................................................55

         21.13    Other Enforcement Rights......................................................................55

         21.14    Invalid Payments..............................................................................56

         21.15    No Waivers or Election of Remedies; Expenses; etc.............................................56

         21.16    Restoration of Rights and Remedies............................................................56

         21.17    No Setoff or Counterclaim.....................................................................56

         21.18    Further Assurances............................................................................56

         21.19    Survival......................................................................................57

22.      JUDICIAL PROCEEDINGS...................................................................................57

                                                             -iv-






                                                Table of Contents
                                                   (continued)
                                                                                                              Page

         22.1     Consent to Jurisdiction.......................................................................57

         22.2     Service of Process............................................................................57

         22.3     No Limitation on Service or Suit..............................................................57

23.      MISCELLANEOUS..........................................................................................58

         23.1     Successors and Assigns........................................................................58

         23.2     Accounting Principles.........................................................................58

         23.3     Payments Due on Non-Business Days.............................................................58

         23.4     Severability..................................................................................58

         23.5     Construction..................................................................................58

         23.6     Counterparts..................................................................................58

         23.7     Governing Law.................................................................................59

         23.8     Binding Agreement.............................................................................59

SCHEDULES

Schedule A .......-   Defined Terms
Schedule B........-   Unrestricted Subsidiaries
Schedule 5.8......-   Litigation
Schedule 5.11.....-   Licenses, Permits, etc.
Schedule 10.3.....-   Liens

EXHIBITS

Exhibit A ........-   Form of Note
Exhibit B.........-   Form of Request for Purchase
Exhibit C.........-   Form of Confirmation of Acceptance
Exhibit D.........-   Form of Opinion
Exhibit E ........-   Form of Subsidiary Guaranty
Exhibit F.........-   Form of Amended and Restated Subordination Agreement
Exhibit G.........-   Form of Amended and Restated Collateral Agency and Intercreditor
                       Agreement



                                                         -v-







NU SKIN ENTERPRISES, INC. 

One Nu Skin Plaza 

75 West Center Street 

Provo, Utah 84601 





August 26, 2003 



Prudential Investment Management,
Inc. (“Prudential”)

 Each Prudential Affiliate (as hereinafter

 defined)
which becomes bound by certain

 provisions of this Agreement as hereinafter

 provided
(together with Prudential,

 the “Purchasers”) 



c/o Prudential Capital
Group 
Four Embarcadero Center 

Suite 2700 

San Francisco, California
94111 



Ladies and Gentlemen: 



        The
undersigned, Nu Skin Enterprises, Inc., a Delaware corporation (the
“Company”), and each Issuer Subsidiary which from time to time may
execute a Confirmation of Acceptance or issue Notes hereunder, hereby agree with the
Purchasers as follows: 



1.        AUTHORIZATION OF
ISSUE OF NOTES. 



        The
Company (or in the case of an Issuer Subsidiary, such Issuer Subsidiary) may authorize the
issue of its senior promissory notes (the “Notes”) in the aggregate
principal amount of $125,000,000 (including the equivalent in the Available Currencies),
to be dated the date of issue thereof, to mature, in the case of each Note so issued, no
more than ten years after the date of original issuance thereof, to have an average life
of not more than seven years, to bear interest on the unpaid balance thereof from the date
thereof at the rate per annum, to rank pari passu with all other outstanding
Notes, and to have such other particular terms, as shall be set forth, in the case of each
Note so issued, in the Confirmation of Acceptance with respect to such Note delivered
pursuant to Section 2B(5), and to be substantially in the form of Exhibit A
attached hereto. The terms “Note” and “Notes” as used
herein shall include each Note delivered pursuant to any provision of this Agreement and
each Note delivered in substitution or exchange for any such Note pursuant to any such
provision. Notes which have (i) the same final maturity, (ii) the same scheduled principal
prepayment dates, (iii) the same principal prepayment amounts (as a percentage of the
original principal amount of each Note), (iv) the same interest rate, (v) the same
interest payment periods, (vi) the same currency specification, (vii) the same issuer, and
(viii) the same date of issuance (which, in the case of a Note issued in exchange for
another Note, shall be deemed for these purposes the date on which such Note’s
ultimate predecessor Note was issued), are herein called a “Series” of
Notes. The Notes shall at all times be 





1 










 guaranteed by all current and future Material
Domestic Subsidiaries of the Company (the “Subsidiary Guarantors”)
pursuant to the Subsidiary Guaranty, and shall at all times, at the option of the Company,
either be (x) secured by a pledge of the Pledged Securities of each Material Foreign
Subsidiary pursuant to the Pledge Agreement or (y) guaranteed by each Material Foreign
Subsidiary pursuant to a Foreign Subsidiary Guaranty. Certain capitalized terms used in
this Agreement are defined in Schedule A; references to a “Schedule” or
an “Exhibit” are, unless otherwise specified, to a Schedule or an Exhibit
attached to this Agreement. 




2.        PURCHASE AND SALE OF
NOTES. 



        2A     [Intentionally
Omitted.] 



             2B(1).    
          Facility. Prudential is willing to consider, in its sole discretion and
          within limits which may be authorized for purchase by Prudential and Prudential
          Affiliates from time to time, the purchase of Notes pursuant to this Agreement.
          The willingness of Prudential to consider such purchase of Notes is herein
          called the “Facility.” At any time, the aggregate principal
          amount of Notes stated in Section 1, minus the aggregate principal amount
          of Notes purchased and sold pursuant to this Agreement prior to such time,
          minus the aggregate principal amount of Accepted Notes (as hereinafter
          defined) which have not yet been purchased and sold hereunder prior to such
          time, is herein called the “Available Facility Amount” at such
          time. For purposes of the preceding sentence, all aggregate principal amounts of
          Notes and Accepted Notes shall be calculated in Dollars with the aggregate
          amount of any Notes denominated or Accepted Notes to be denominated in any
          Available Currency other than Dollars being converted to Dollars at the rate of
          exchange used by Prudential to calculate the Dollar equivalent at the time of
          the applicable Acceptance under Section 2B(5). NOTWITHSTANDING THE
          WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES OF NOTES, THIS AGREEMENT IS
          ENTERED INTO ON THE EXPRESS UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY
          PRUDENTIAL AFFILIATE SHALL BE OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE
          NOTES, OR TO QUOTE RATES, SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC
          PURCHASES OF NOTES, AND THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A
          COMMITMENT BY PRUDENTIAL OR ANY PRUDENTIAL AFFILIATE. 



             2B(2).    
          Issuance Period. Notes may be issued and sold pursuant to this Agreement
          until the earlier of (i) the third anniversary of the date of this Agreement (or
          if such anniversary is not a New York Business Day, the New York Business Day
          next preceding such anniversary) and (ii) the thirtieth day after Prudential
          shall have given to the Company, or the Company shall have given to Prudential,
          written notice stating that it elects to terminate the issuance and sale of
          Notes pursuant to this Agreement (or if such thirtieth (30) day is not a New
          York Business Day, the New York Business Day next preceding such thirtieth (30)
          day). The period during which Notes may be issued and sold pursuant to this
          Agreement is herein called the “Issuance Period.” 



             2B(3).    
          Request for Purchase. The Company may from time to time during the
          Issuance Period make requests for purchases of Notes (each such request being
          herein called a “Request for Purchase”). Each Request for
          Purchase shall be made to Prudential by 




2 












      telefacsimile or overnight delivery
          service to the applicable address set forth in the Information Schedule, and
          shall (i) specify the currency (which shall be an Available Currency) of the
          Notes covered thereby, (ii) specify the aggregate principal amount of Notes
          covered thereby, which, in the case of the initial draw, shall not be less than
          $10,000,000 (or its equivalent in another Available Currency) or which, in the
          case of any subsequent draw, shall not be less than $5,000,000 (or its
          equivalent in another Available Currency), and not be greater than the Available
          Facility Amount at the time such Request for Purchase is made, (iii) specify the
          principal amounts, final maturities, principal prepayment dates and amounts and
          interest payment periods (quarterly or semi-annually in arrears, with quarterly
          available only in the case of Notes denominated in Dollars) of the Notes covered
          thereby, (iv) specify the use of proceeds of such Notes, (v) specify the
          proposed day for the closing of the purchase and sale of such Notes, which shall
          be a Business Day during the Issuance Period not less than 6 Business Days (or,
          if the issuer of such notes will be an Issuer Subsidiary organized in a
          jurisdiction outside of the United States, not less than 15 Business Days) and
          not more than 42 days after the making of such Request for Purchase, (vi)
          specify the number of the account and the name and address of the depository
          institution to which the purchase prices of such Notes are to be transferred on
          the Closing Day for such purchase and sale, (vii) certify that the
          representations and warranties contained in Section 5 are true on and as of the
          date of such Request for Purchase and that there exists on the date of such
          Request for Purchase no Event of Default or Default, (viii) specify the issuer
          of the Notes (which shall be the Company or an Issuer Subsidiary), and (ix) be
          substantially in the form of Exhibit B attached hereto. Each Request for
          Purchase shall be deemed made when received by Prudential. 






             2B(4).    
          Rate Quotes. Not later than two (2) Business Days after the Company shall
          have given Prudential a Request for Purchase pursuant to Section 2B(3),
          Prudential may, but shall be under no obligation to, provide to the Company by
          telephone or telefacsimile, in each case between 9:30 a.m. and 1:30 p.m. New
          York City local time (or such later time as Prudential may elect) interest rate
          quotes for the several currencies, principal amounts, maturities, principal
          prepayment schedules, and interest payment periods of Notes specified in such
          Request for Purchase (each such interest rate quote provided in response to a
          Request for Purchase herein called a “Quotation”). Each
          Quotation shall represent the interest rate per annum payable on the outstanding
          principal balance of such Notes at which Prudential or a Prudential Affiliate
          would be willing to purchase such Notes at 100% of the principal amount thereof. 



             2B(5).    
          Acceptance. Within the Acceptance Window, an Authorized Officer of the
          Company may, subject to Section 2B(6), elect to accept a Quotation as to the
          aggregate principal amount of the Notes specified in the related Request for
          Purchase (each such Note being herein called an “Accepted Note”
          and such acceptance being herein called an “Acceptance”). The
          day the Company notifies an Acceptance with respect to any Accepted Notes is
          herein called the “Acceptance Day” for such Accepted Notes. Any
          Quotation as to which Prudential does not receive an Acceptance within the
          Acceptance Window shall expire, and no purchase or sale of Notes hereunder shall
          be made based on any such expired Quotation. Subject to Section 2B(6) and the
          other terms and conditions hereof, the Company agrees to sell (or to cause the
          applicable Issuer Subsidiary to sell) to Prudential or one or more Prudential
          Affiliates, and Prudential agrees to purchase, or to cause the purchase by one
          or more Prudential Affiliates of, the Accepted Notes at 100% of the principal
          amount of such Notes, which purchase  



3 








      price shall be paid in the currency in
          which such Notes are to be denominated. As soon as practicable following the
          Acceptance Day, the Company, the Issuer Subsidiary (if applicable), Prudential
          and each Prudential Affiliate which is to purchase any such Accepted Notes will
          execute a confirmation of such Acceptance substantially in the form of
          Exhibit C attached hereto (herein called a “Confirmation of
          Acceptance”). If the Company and the Issuer Subsidiary (if applicable)
          should fail to execute and return to Prudential within three Business Days
          following receipt thereof a Confirmation of Acceptance with respect to any
          Accepted Notes, Prudential may at its election at any time prior to its receipt
          thereof cancel the closing with respect to such Accepted Notes by so notifying
          the Company in writing. 





             2B(6).    
          Market Disruption. Notwithstanding the provisions of Section 2B(5), any
          Quotation provided pursuant to Section 2B(4) shall expire if prior to the time
          an Acceptance with respect to such Quotation shall have been notified to
          Prudential in accordance with Section 2B(5): (i) in the case of any Notes, the
          domestic market for U.S. Treasury securities or derivatives shall have closed or
          there shall have occurred a general suspension, material limitation, or
          significant disruption of trading in securities generally on the New York Stock
          Exchange or in the domestic market for U.S. Treasury securities or derivatives,
          or (ii) in the case of Notes to be denominated in a currency other than Dollars,
          the markets for the relevant government securities (which in the case of the
          Euro, shall be the German Bund) or the spot and forward currency market, the
          financial futures market or the interest rate swap market shall have closed or
          there shall have occurred a general suspension, material limitation, or
          significant disruption of trading then such interest. No purchase or sale of
          Notes hereunder shall be made based on such expired Quotation. If the Company
          thereafter notifies Prudential of the Acceptance of any such Quotation, such
          Acceptance shall be ineffective for all purposes of this Agreement, and
          Prudential shall promptly notify the Company that the provisions of this Section
          2B(6) are applicable with respect to such Acceptance. 



             2B(7).    
          Facility Closings. Not later than 2:00 p.m. (New York City local time) on
          the Document Delivery Date for any Accepted Notes, the Company will deliver to
          each Purchaser listed in the Confirmation of Acceptance relating thereto at the
          offices of Prudential Capital Group (as set forth in this Agreement or such
          alternative address as is provided to the Company pursuant to Section 18(a)),
          the Accepted Notes to be purchased by such Purchaser in the form of one or more
          Notes in authorized denominations as such Purchaser may request for each Series
          of Accepted Notes to be purchased on the Closing Day, dated the Closing Day and
          registered in such Purchaser’s name (or in the name of its nominee),
          against payment on the Closing Day of the purchase price thereof by transfer of
          immediately available funds for credit to the Company’s account specified
          in the Request for Purchase of such Notes. If the Company fails to timely tender
          to any Purchaser the Accepted Notes to be purchased by such Purchaser on the
          applicable Document Delivery Date, or any of the conditions specified in Section
          3 shall not have been fulfilled by the time required on the applicable Document
          Delivery Date, the Company shall, prior to 2:30 p.m., New York City local time,
          on the applicable Document Delivery Date notify Prudential (which notification
          shall be deemed received by each Purchaser) in writing whether (i) such closing
          is to be rescheduled (such rescheduled date to be a Business Day during the
          Issuance Period not less than one (1) day and not more than ten (10) days after
          such scheduled Closing Day (the “Rescheduled Closing Day”)) and
          certify to Prudential (which certification shall be for the benefit of each
          Purchaser) that the Company reasonably believes that it will be able to comply
          with the conditions set forth in Section 3 on the Document Delivery  



4 








     Date
          applicable to such Rescheduled Closing Day and that the Company will pay the
          Delayed Delivery Fee in accordance with Section 2B(8)(iii) or (ii) such closing
          is to be canceled. If a Rescheduled Closing Day is established in respect of
          Notes denominated in a currency other than Dollars, such Notes shall have the
          same maturity date, principal prepayment dates and amounts and interest payment
          dates as originally scheduled, but such Notes shall be dated the actual date of
          issuance. In the event that the Company shall fail to give such notice referred
          to in the second preceding sentence, Prudential (on behalf of each Purchaser)
          may at its election, at any time after 2:30 p.m., New York City local time, on
          such Document Delivery Date, notify the Company in writing that such closing is
          to be canceled. Notwithstanding anything to the contrary appearing in this
          Agreement, the Company may not elect to reschedule a closing with respect to any
          given Accepted Notes on more than one occasion, unless Prudential shall have
          otherwise consented in writing. 




             2B(8).    
          Fees. 



                 2B(8)(i)       
          Structuring Fee. In consideration for the time, effort and expense
          involved in the structuring of this transaction and the preparation, negotiation
          and execution of this Agreement, at the time of the execution and delivery of
          this Agreement by the Company and Prudential, the Company will pay to Prudential
          in immediately available funds a fee (herein called the “Structuring
          Fee”) in the amount of $50,000. 



                 2B(8)(ii).       
          Issuance Fee. The Company will pay to each Purchaser in immediately
          available funds a fee (herein called the “Issuance Fee”) on
          each Closing Day in an amount equal to 0.10% of the Dollar equivalent of the
          aggregate principal amount of Notes to be sold to such Purchaser on such Closing
          Day (calculated for Notes which are to be denominated in an Available Currency
          other than Dollars using the rate of exchange used by Prudential to calculate
          the Dollar equivalent at the time of the applicable Acceptance under Section
          2B(5)). Such fee shall be payable in Dollars. 



                 2B(8)(iii).       
          Delayed Delivery Fee. If the closing of the purchase and sale of any
          Accepted Note is delayed for any reason beyond the original Closing Day for such
          Accepted Note, the Company shall pay the Purchaser which shall have agreed to
          purchase such Accepted Note, on the Cancellation Date or Document Delivery Date
          applicable to the actual Closing Day of such purchase and sale, an amount (the
          “Delayed Delivery Fee”) equal to 



          		            (a)       
               in the case of an Accepted Note denominated in Dollars, the product of (1) the
               amount determined by Prudential to be the amount by which the bond equivalent
               yield per annum of such Accepted Note exceeds the investment rate per annum on
               an alternative Dollar investment of the highest quality selected by Prudential
               and having a maturity date or dates the same as, or closest to, the Rescheduled
               Closing Day from time to time fixed for the delayed delivery of such Accepted
               Note, (2) the principal amount of such Accepted Note, and (3) a fraction the
               numerator of which is equal to the number of actual days elapsed from and
               including the original Closing Day for such Accepted Note to but excluding the
               date of such payment, and the denominator of which is 360; and 



               




5 













          		            (b)       
               in the case of an Accepted Note denominated in a currency other than Dollars,
               the sum of (1) the product of (x) the amount by which the bond equivalent yield
               per annum of such Accepted Note exceeds the arithmetic average of the Overnight
               Interest Rates on each day from and including the original Closing Day for such
               Accepted Note, (y) the principal amount of such Accepted Note, and (z) a
               fraction the numerator of which is equal to the number of actual days elapsed
               from and including the original Closing Day for such Accepted Note to but
               excluding the date of such payment, and the denominator of which is 360 and (2)
               the costs and expenses (if any) incurred by such Purchaser or its affiliates
               with respect to any interest rate, currency exchange or similar agreement
               entered into by the Purchaser or any such affiliate in connection with the
               delayed closing of such Accepted Notes. 



               



                In
no case shall the Delayed Delivery Fee be less than zero. The Delayed Delivery Fee
described in clause (b), above, shall be paid in the currency in which the Accepted Notes
are denominated. Nothing contained herein shall obligate any Purchaser to purchase any
Accepted Note on any day other than the Closing Day for such Accepted Note, as the same
may be rescheduled from time to time in compliance with Section 2B(7). Notwithstanding the
foregoing, no Delayed Delivery Fee shall be due to any Purchaser which shall have failed
to purchase an Accepted Note when each of the conditions precedent in Section 3 (other
than the condition set forth in Section 3B) has been timely satisfied on the applicable
Document Delivery Date. 



                 2B(8)(iv).       
          Cancellation Fee. If (a) the Company at any time notifies Prudential in
          writing that the Company is canceling the closing of the purchase and sale of
          any Accepted Note, or (b) if Prudential notifies the Company in writing under
          the circumstances set forth in the penultimate sentence of Section 2B(7) that
          the closing of the purchase and sale of such Accepted Note is to be canceled, or
          (c) if the closing of the purchase and sale of such Accepted Note is not
          consummated on or prior to the last day of the Issuance Period (the date of any
          such notification, or the last day of the Issuance Period, as the case may be,
          being herein called the “Cancellation Date”), the Company shall
          pay the Purchaser which shall have agreed to purchase such Accepted Note in
          immediately available funds on the Cancellation Date an amount (the
          “Cancellation Fee”) equal to 



          		            (a)       
               in the case of an Accepted Note denominated in Dollars, the product of (1) the
               principal amount of such Accepted Note and (2) the quotient (expressed in
               decimals) obtained by dividing (y) the excess of the ask price (as determined by
               Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid
               price (as determined by Prudential) of the Hedge Treasury Note(s) on the
               Acceptance Day for such Accepted Note by (z) such bid price, with the foregoing
               bid and ask prices as reported on TradeWeb, or if such information ceases to be
               available on TradeWeb, any publicly available source of such market data
               selected by Prudential, and rounded to the second decimal place; and 



               



          		            (b)       
               in the case of an Accepted Note denominated in a currency other than Dollars,
               the sum of (1) the amount described in clause (a) above (calculated with respect
               to the Dollar principal amount and interest rate utilized by Prudential in
               providing the Quotation pursuant to Section 2B(4) relevant to such Accepted
               Note) and (2) aggregate of all unwinding costs incurred by such Purchaser or its
               affiliates on positions  



               



6 







          		
 described in this clause (2) shall be
               offset against any such unwinding costs described in this clause (2). Such
               positions include (without limitation) currency and interest rate swaps, futures
               and forwards, government bond hedges and currency exchange contracts, all of
               which may be subject to substantial price volatility. Such costs may also
               include (without limitation) losses incurred by such Purchaser or its affiliates
               as a result of fluctuations in exchange rates. All unwinding costs incurred by
               such Purchaser shall be determined by Prudential or its affiliate in accordance
               with generally accepted financial practice. 



               



                In
no case shall the Cancellation Fee be less than zero. Notwithstanding the foregoing, no
Cancellation Fee shall be due to any Purchaser which shall have failed to purchase an
Accepted Note when each of the conditions precedent in Section 3 (other than the condition
set forth in Section 3B) has been timely satisfied on the applicable Document Delivery
Date. 



3.         CONDITIONS OF CLOSING. 



                On
the date on which this Agreement is executed and delivered, (i) the Company shall pay to
Prudential the Structuring Fee referenced in Section 2B(8)(i), (ii) the Amended and
Restated Collateral Agency and Intercreditor Agreement shall have been duly executed and
delivered by the parties thereto and shall be in full force and effect and each Purchaser
shall have received a copy thereof, (iii) the Subsidiary Guaranty shall have been duly
executed and delivered by each Subsidiary Guarantor and shall be in full force and effect
and each Purchaser shall have received a copy thereof, and (iv) the Amended and Restated
Subordination Agreement shall have been duly executed and delivered by the Company and
each Subordinated Creditor named therein and shall be in full force and effect and each
Purchaser shall have received a copy thereof. The obligation of any Purchaser to purchase
and pay for any Notes is subject to the satisfaction, on or before the applicable Document
Delivery Date for such Notes, of the foregoing conditions and the following additional
conditions: 



             3A.    
          Certain Documents. Such Purchaser shall have received the following, each
          dated the date of the applicable Closing Day (except as otherwise noted below): 



	(i)	The
Note(s) to be purchased by such Purchaser.  







	(ii) 	Certified
copies of the resolutions of (a) the Board of Directors of the Company
               authorizing the execution and delivery of this Agreement (including the
               provision of the Parent Guaranty), the Collateral Documents and the
issuance of                the Notes, and of all documents evidencing other necessary
corporate action and                governmental approvals, if any, with respect to this
Agreement, the Collateral                Documents and the Notes, (b) the Board of
Directors of each of the Subsidiary                Guarantors authorizing the execution
and delivery of the Collateral Documents                and (c), if applicable, certified
copies of resolutions of the Board of                Directors of the Issuer Subsidiary
authorizing execution and delivery of the                Notes and of a Confirmation of
Acceptance with respect to this Agreement and the                Notes. 7  








7 












          		            (iii)       
               Certificates of the Secretary or Assistant Secretary and one other officer of
               each of the Company, the Subsidiary Guarantors, and, if applicable, the Issuer
               Subsidiary certifying the names and true signatures of the officers of the
               Company, the Subsidiary Guarantors and, if applicable, the Issuer Subsidiary
               authorized to sign this Agreement, the Collateral Documents, the applicable
               Confirmation of Acceptance and the Notes (as applicable) and the other documents
               to be delivered hereunder or thereunder. 



               



          		            (iv)       
               Certified copies of the Company’s, each Subsidiary Guarantor’s, and,
               if applicable, the Issuer Subsdiary’s Certificate of Incorporation and
               By-laws. 



               



          		            (v)       
               A favorable opinion of the General Counsel of the Company, the Subsidiary
               Guarantors and, if applicable, the Issuer Subsidiary (or such other counsel
               designated by the Company and acceptable to the Purchaser(s)) and substantially
               in the form of Exhibit D attached hereto, and as to such other matters as
               such Purchaser may reasonably request and (b) if Notes are to be issued by an
               Issuer Subsidiary which is not organized or incorporated under United States
               law, a favorable opinion of special counsel to such Issuer Subsidiary, which
               special counsel shall be satisfactory to the Purchasers and admitted to practice
               in the jurisdiction in which such Issuer Subsidiary is incorporated or
               organized, addressing such matters as the Purchasers may require. The Company
               and, if applicable, the Issuer Subsidiary hereby direct each such counsel to
               deliver such opinion, agree that the issuance and sale of any Notes will
               constitute a reconfirmation of such authorization, and understand and agree that
               each Purchaser receiving each such opinion(s) will and is hereby authorized to
               rely on such opinion(s). 



               



          		            (vi)       
               A good standing (or equivalent) certificate for each of the Company, the
               Subsidiary Guarantors and, if applicable, the Issuer Subsidiary from the
               secretary of state (or equivalent official) of its jurisdiction of organization
               dated as of a recent date and such other evidence of the status of the Company,
               the Subsidiary Guarantors, and, if applicable, the Issuer Subsidiary as such
               Purchaser may reasonably request. 



               



          		            (vii)       
               Additional documents or certificates with respect to legal matters or corporate
               or other proceedings related to the transactions contemplated hereby as may be
               reasonably requested by such Purchaser. 



               



                For
Closing Days subsequent to the Closing Day on which Notes are first issued, the
requirements of clauses (ii), (iii) and (iv) above may, to the extent appropriate, be
satisfied by delivery of “bring-down” certifications from the applicable
officers. 



             3B.    
          Opinion of Purchaser’s Special Counsel. If Notes are to be issued by
          an Issuer Subsidiary which is not organized or incorporated under United States
          law, such Purchaser shall have received from its special U.S. counsel and
          special foreign counsel, favorable opinions satisfactory to such Purchaser as to
          such matters incident to the matters herein contemplated as it may reasonably
          request. 



8 









             3C.    
          Representations and Warranties; No Default. The representations and
          warranties contained in Section 5 shall be true on and as of such Closing Day;
          there shall exist on such Closing Day no Event of Default or Default; and the
          Company shall have delivered to such Purchaser an Officer’s Certificate,
          dated such Closing Day, to both such effects. 



             3D.    
          Purchase Permitted by Applicable Laws. On such Closing Day each
          Purchaser’s purchase of Notes shall (i) be permitted by the laws and
          regulations of each jurisdiction to which such Purchaser is subject, without
          recourse to provisions (such as Section 1405(a)(8) of the New York Insurance
          Law) permitting limited investments by insurance companies without restriction
          as to the character of the particular investment, (ii) not violate any
          applicable law or regulation (including, without limitation, Regulation T, U or
          X of the Board of Governors of the Federal Reserve System) and (iii) not subject
          such Purchaser to any tax, penalty or liability on the date thereof. If
          requested by a Purchaser, it shall have received an Officer’s Certificate
          certifying as to such matters of fact as it may reasonably specify to enable it
          to determine whether such purchase is so permitted. 



             3E.    
          Payment of Fees. The Company shall have paid to Prudential any fees due
          it pursuant to or in connection with this Agreement, including any remaining
          balance of the Structuring Fee due pursuant to Section 2B8(i), any Issuance Fee
          due pursuant to Section 2B(8)(ii), and any Delayed Delivery Fee due pursuant to
          Section 2B(8)(iii). 



             3F.    
          Counterpart Amended and Restated Collateral Agency and Intercreditor
          Agreement. The Purchasers, if not then a party to the Amended and Restated
          Collateral Agency and Intercreditor Agreement, shall have duly executed and
          delivered the Counterpart Amended and Restated Collateral Agency and
          Intercreditor Agreement to the Collateral Agent and such Counterpart shall be in
          full force and effect. 



             3G.    
            Issuer Subsidiary Counterpart. The applicable Issuer Subsidiary,
          if not then a party to the Amended and Restated Collateral Agency and
          Intercreditor Agreement, shall have duly executed and delivered the Issuer
          Subsidiary Counterpart to the Collateral Agent and such Counterpart shall be in
          full force and effect. 



             3H.    
          Subsidiary Guaranty or Foreign Subsidiary Guaranty. The applicable Issuer
          Subsidiary, if not then a party to the Subsidiary Guaranty or a Foreign
          Subsidiary Guaranty, shall have duly executed and delivered the Subsidiary
          Guaranty or Foreign Subsidiary Guaranty, as applicable, to the holders of the
          Notes and such Issuer Subsidiary shall have duly executed and delivered the same
          Subsidiary Guaranty or Foreign Subsidiary Guaranty, as applicable, to, and for
          the benefit of, each Senior Secured Creditor party to the Amended and Restated
          Collateral Agency and Intercreditor Agreement, and such Subsidiary Guaranties or
          Foreign Subsidiary Guaranties, as applicable, shall be in full force and effect. 


9 







     4.        
          [Intentionally Omitted.] 



     5.        
          REPRESENTATIONS AND WARRANTIES OF THE COMPANY. 



        The
Company represents and warrants to each Purchaser that: 



        5.1         Organization; Power
and Authority. 



                The
Company is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and is duly qualified as a foreign corporation
and is in good standing in each jurisdiction in which such qualification is required by
law, other than those jurisdictions as to which the failure to be so qualified or in good
standing could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The Company has the corporate power and authority to own or hold
under lease the properties it purports to own or hold under lease, to transact the
business it transacts and proposes to transact, to execute and deliver this Agreement, the
Collateral Documents to which it is a party and the Notes, and to perform the provisions
hereof and thereof. 



        5.2         Authorization, etc. 



                This
Agreement, the Notes and the Collateral Documents to which the Company is a party have
been duly authorized by all necessary corporate action on the part of the Company, and
this Agreement and each of the Collateral Documents to which it is a party constitutes,
and upon execution and delivery thereof each Note will constitute, a legal, valid and
binding obligation of the Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by (a) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally, and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law). 



        5.3         Disclosure. 



                Neither
this Agreement nor any other document, certificate or statement furnished to any Purchaser
by or on behalf of the Company or any Issuer Subsidiary in connection herewith contains
any untrue statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein not misleading. Except as
disclosed in the form 10-K filed by the Company with the Securities and Exchange
Commission for the period immediately prior to the applicable Document Delivery Date of
the Notes or in any Form 10-Q, Form 8-K or other report filed by the Company with the
Securities and Exchange Commission for any period subsequent to the date of such form 10-K
filed by the Company (but at least five (5) Business Days prior to the applicable Document
Delivery Date of such Notes), there is no fact peculiar to the Company or any of its
Subsidiaries which has had a Material Adverse Effect or in the future may (so far as the
Company can now foresee) have a Material Adverse Effect which has not been set forth in
this Agreement or in the other documents or certificates furnished to the Purchasers in
connection herewith. 




10 










        5.4         Organization
and Ownership of Shares of Subsidiaries; Affiliates. 



             (a)    
          All of the outstanding shares of capital stock or similar equity interests owned
          by the Company and its Subsidiaries at any time have been validly issued, are
          fully paid and nonassessable and are owned by the Company or another Subsidiary
          free and clear of any Lien (except for Permitted Liens, directors’
          qualifying shares, shares required to be owned by Persons pursuant to applicable
          foreign laws regarding foreign ownership). 



             (b)    
          Each Subsidiary is a corporation or other legal entity duly organized, validly
          existing and in good standing under the laws of its jurisdiction of
          organization, and is duly qualified as a foreign corporation or other legal
          entity and is in good standing in each jurisdiction in which such qualification
          is required by law, other than those jurisdictions as to which the failure to be
          so qualified or in good standing could not, individually or in the aggregate,
          reasonably be expected to have a Material Adverse Effect. Each such Subsidiary
          has the corporate or other power and authority to own or hold under lease the
          properties it purports to own or hold under lease and to transact the business
          it transacts and proposes to transact. 



             (c)    
          No Material Subsidiary, is a party to, or otherwise subject to any legal
          restriction or any agreement (other than this Agreement and customary
          limitations imposed by corporate law statutes) restricting the ability of such
          Material Subsidiary to pay dividends out of profits or make any other similar
          distributions of profits to the Company or any of its Subsidiaries that owns
          outstanding shares of capital stock or similar equity interests of such Material
          Subsidiary. 



        5.5         Financial Statements. 



                The
Company has furnished each Purchaser of any Accepted Notes with the following financial
statements: (i) a consolidated balance sheet of the Company and its Subsidiaries as of the
last day in each of the three fiscal years of the Company most recently completed prior to
the date as of which this representation is made or repeated to such Purchaser (other than
fiscal years completed within 120 days prior to such date for which audited financial
statements have not been released) and consolidated statements of income, cash flows and
shareholders’ equity of the Company and its Subsidiaries for each such year, all
reported on by PricewaterhouseCoopers (which financial statements shall in all respects be
consistent with the requirements of Section 7.1(b) hereof, including the provisos thereto)
and (ii) a consolidated balance sheet of the Company and its Subsidiaries as at the end of
the quarterly period (if any) most recently completed prior to such date and after the end
of such fiscal year (other than quarterly periods completed within 60 days prior to such
date for which financial statements have not been released) and the comparable quarterly
period in the preceding fiscal year and consolidated statements of income, cash flows and
shareholders’ equity for the periods from the beginning of the fiscal years in which
such quarterly periods are included to the end of such quarterly periods, prepared by the
Company (which financial statements shall in all respects be consistent with the
requirements of Section 7.1(a) hereof, including the provisos thereto). Such financial
statements (including any related schedules and/or notes) fairly present the consolidated
financial condition of the Company and its Subsidiaries as of the respective dates
specified 


11 











 therein and the results of their operations and cash flows for the periods
specified therein (subject, as to interim statements, to changes resulting from audits and
year-end adjustments), have been prepared in accordance with GAAP consistently followed
throughout the periods involved and show all liabilities, direct and contingent, of the
Company and its Subsidiaries required to be shown in accordance with GAAP. The balance
sheets fairly present the condition of the Company and its Subsidiaries as at the dates
thereof, and the statements of income, stockholders’ equity and cash flows fairly
present the results of the operations of the Company and its Subsidiaries and their cash
flows for the periods indicated. There has been no material adverse change in the
business, property or assets, condition (financial or otherwise), operations or prospects
of the Company and its Subsidiaries taken as a whole since the end of the most recent
fiscal year for which such audited financial statements have been furnished. 





        5.6         Compliance with
Laws, Other Instruments, etc. 



                The
execution, delivery and performance by the Company, each Subsidiary Guarantor and the
Issuer Subsidiary (if applicable) of this Agreement, the Collateral Documents and the
Notes (as applicable) will not (i) contravene, result in any breach of, or constitute a
default under, or result in the creation of any Lien in respect of any property of the
Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan, note
purchase or credit agreement, corporate charter or bylaws, or any other Material
agreement, lease or instrument to which the Company or any Subsidiary is bound or by which
the Company or any Subsidiary or any of their respective properties may be bound or
affected, (ii) conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority applicable to the Company or any Subsidiary, or (iii) violate any
provision of any statute or other rule or regulation of any Governmental Authority
applicable to the Company or any Subsidiary. 



        5.7         Governmental
Authorizations, etc. 



                No
consent, approval or authorization of, or registration, filing or declaration with, any
Governmental Authority is required in connection with the execution, delivery or
performance by the Company, any Subsidiary Guarantor and any Issuer Subsidiary (if
applicable) of this Agreement, the Collateral Documents or the Notes (as applicable). 



        5.8     Litigation;
Observance of Agreements, Statutes and Orders. 



                 (a)       
          There are no actions, suits or proceedings pending or, to the knowledge of the
          Company, threatened against or affecting the Company or any Subsidiary or any
          property of the Company or any Subsidiary in any court or before any arbitrator
          of any kind or before or by any Governmental Authority that, individually or in
          the aggregate, could reasonably be expected to have a Material Adverse Effect. 



                 (b)       
          Neither the Company nor any Restricted Subsidiary is in default under any term
          of any agreement or instrument to which it is a party or by which it is bound,
          or any order, judgment, decree or ruling of any court, arbitrator or
          Governmental Authority or is in violation of any applicable law, ordinance, rule
          or regulation (including without limitation Environmental Laws) of any
          Governmental Authority, which default or violation, individually or in the
          aggregate, could reasonably be expected to have a Material Adverse Effect. 


12 







        5.9         Taxes. 



                The
Company and its Subsidiaries have filed all tax returns that are required to have been
filed in any jurisdiction (other than those tax returns which individually or collectively
are not Material), and have paid all taxes shown to be due and payable on such returns and
all other taxes and assessments levied upon them or their properties, assets, income or
franchises, to the extent such taxes and assessments have become due and payable and
before they have become delinquent, except for any taxes and assessments (i) the amount of
which is not individually or in the aggregate Material, or (ii) the amount, applicability
or validity of which is currently being contested in good faith by appropriate proceedings
and with respect to which the Company or a Subsidiary, as the case may be, has established
adequate reserves in accordance with GAAP. The Company knows of no basis for any other tax
or assessment that could reasonably be expected to have a Material Adverse Effect. The
charges, accruals and reserves on the books of the Company and its Subsidiaries in respect
of Federal, state or other taxes for all fiscal periods are adequate in accordance with
GAAP. 



        5.10         Title to Property;
Leases. 



                The
Company and the Restricted Subsidiaries have good and sufficient title to their respective
properties that individually or in the aggregate are Material, including all such
properties reflected in the most recent audited balance sheet referred to in Section 5.5
or purported to have been acquired by the Company or any Restricted Subsidiary after said
date (except as sold or otherwise disposed of in the ordinary course of business), in each
case free and clear of Liens prohibited by this Agreement or the Collateral Documents. All
leases that individually or in the aggregate are Material are valid and subsisting and are
in full force and effect in all material respects. 



        5.11         Licenses, Permits,
etc. 



              Except
as disclosed in Schedule 5.11,



             (a)    
          the Company and the Restricted Subsidiaries own or possess all licenses,
          permits, franchises, authorizations, patents, copyrights, service marks,
          trademarks and trade names, or rights thereto, that individually or in the
          aggregate are Material, without any known Material conflict with the rights of
          others; 



             (b)    
          to the best knowledge of the Company, no product of the Company infringes in any
          material respect any license, permit, franchise, authorization, patent,
          copyright, service mark, trademark, trade name or other right owned by any other
          Person; and 



             (c)    
          to the best knowledge of the Company, there is no Material violation by any
          Person of any right of the Company or any Restricted Subsidiary with respect to
          any patent, copyright, service mark, trademark, trade name or other right owned
          or used by the Company or any Restricted Subsidiary. 



13 











        5.12         Compliance with
ERISA. 



             (a)    
          The Company and each ERISA Affiliate have operated and administered each Plan in
          compliance with all applicable laws except for such instances of noncompliance
          as have not resulted in and could not reasonably be expected to result in a
          Material Adverse Effect. Neither the Company nor any ERISA Affiliate has
          incurred any liability pursuant to Title I or IV of ERISA or the penalty or
          excise tax provisions of the Code relating to employee benefit plans (as defined
          in Section 3 of ERISA), and no event, transaction or condition has occurred or
          exists that could reasonably be expected to result in the incurrence of any such
          liability by the Company or any ERISA Affiliate, or in the imposition of any
          Lien on any of the rights, properties or assets of the Company or any ERISA
          Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty
          or excise tax provisions or to Section 401(a)(29) or 412 of the Code, other than
          such liabilities or Liens as would not be, individually or in the aggregate,
          Material. 



             (b)    
          Neither the Company nor any ERISA Affiliate maintains a “single employer
          plan” or a Multiemployer Plan that is subject to Title IV of ERISA. 



             (c)    
          The Company and its ERISA Affiliates have not incurred withdrawal liabilities
          (and are not subject to contingent withdrawal liabilities) under section 4201 or
          4204 of ERISA in respect of Multiemployer Plans that individually or in the
          aggregate are Material. 



             (d)    
          The expected postretirement benefit obligation (determined as of the last day of
          the Company’s most recently ended fiscal year in accordance with Financial
          Accounting Standards Board Statement No. 106, without regard to liabilities
          attributable to continuation coverage mandated by section 4980B of the Code) of
          the Company and its Subsidiaries is not Material or has otherwise been disclosed
          in the most recent consolidated financial statements of the Company and its
          Subsidiaries. 



             (e)    
          The execution and delivery of this Agreement and the Collateral Documents and
          the issuance and sale of the Notes hereunder will not involve any transaction
          that is subject to the prohibitions of section 406 of ERISA or in connection
          with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the
          Code. The representation by the Company in the first sentence of this Section
          5.12(e) is made in reliance upon and subject to the accuracy of each
          Purchaser’s representation in Section 6.2 as to the sources of the funds
          used to pay the purchase price of the Notes to be purchased by it. 



        5.13         Private Offering by
the Company. 



                Neither
the Company nor anyone acting on its behalf has offered the Notes or any similar
securities for sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any Person other than the Purchasers and
not more than 18 other Institutional Investors, each of which has been offered the Notes
or any similar securities at a private sale for investment. Neither the Company nor anyone
acting on its behalf has taken, or will take, any action that would subject the issuance
or sale of the Notes to the registration requirements of Section 5 of the Securities Act. 





14 










        5.14         Use
of Proceeds; Margin Regulations.



                No
part of the proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, so as to involve the Company, any Issuer Subsidiary or any holder of a Note in
a violation of Regulation U of the Board of Governors of the Federal Reserve System (12
CFR 221) or Regulation X of said Board (12 CFR 224), or to involve any broker or dealer in
a violation of Regulation T of said Board (12 CFR 220). Margin stock does not constitute
more than 15% of the value of the consolidated assets of the Company and its Subsidiaries
and the Company does not have any present intention that margin stock will constitute more
than 15% of the value of such assets. As used in this Section, the term “margin
stock” shall have the meanings assigned to them in said Regulation U. 



        5.15         Existing
Indebtedness and Liens. 



                Neither
the Company nor any of its Restricted Subsidiaries has outstanding any Debt except as
permitted by Section 10.5. There exists no default under the provisions of any instrument
evidencing such Debt or of any agreement relating thereto which would constitute an Event
of Default under clause (f) of Section 11. Neither the Company nor any of its Restricted
Subsidiaries has agreed or consented to, or agreed to cause or permit in the future (upon
the happening of a contingency or otherwise), any of its property, whether now owned or
hereafter acquired, to be subject to a Lien not permitted by Section 10.3. 



        5.16         Foreign Assets
Control Regulations, etc. 



                Neither
the sale of the Notes by the Company or any Issuer Subsidiary hereunder nor its use of the
proceeds thereof will violate the Trading with the Enemy Act, as amended, or any of the
foreign assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating
thereto. Without limiting the foregoing, neither the Company nor any of its Subsidiaries
or its Affiliates (a) is or will become a Person whose property or interests in property
are blocked pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism (66 Fed. Reg. 49079 (2001)) or (b) engages or will engage in any
dealings or transactions, or be otherwise associated, with any such Person. The Company
and its Subsidiaries and its Affiliates are in compliance, in all Material respects, with
the Uniting And Strengthening America By Providing Appropriate Tools Required To Intercept
And Obstruct Terrorism (USA Patriot Act of 2001). No part of the proceeds from the sale of
the Notes hereunder has been or will be used, directly or indirectly, for any payments to
any governmental official or employee, political party, official of a political party,
candidate for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation of the
United States Foreign Corrupt Practices Act of 1977, as amended. 



        5.17         Status under
Certain Statutes. 



                None
of the Company, any Subsidiary Guarantor, any Issuer Subsidiary or any Restricted
Subsidiary is subject to regulation under the Investment Company Act of 1940, as amended,
the Public Utility Holding Company Act of 1935, as amended, the Interstate Commerce Act,
as amended, or the Federal Power Act, as amended. 



15










        5.18         Environmental
Matters. 



                Neither
the Company nor any of its Subsidiaries has knowledge of any claim or has received any
notice of any claim, and no proceeding has been instituted raising any claim against the
Company or any of its Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other assets, alleging any damage to
the environment or violation of any Environmental Laws, except, in each case, such as
could not reasonably be expected to result in a Material Adverse Effect. Except as
otherwise disclosed to each Purchaser in writing, 



             (a)    
          neither the Company nor any of its Subsidiaries has knowledge of any facts which
          would give rise to any claim, public or private, of violation of Environmental
          Laws or damage to the environment emanating from, occurring on or in any way
          related to real properties now or formerly owned, leased or operated by any of
          them or to other assets or their use, except, in each case, such as could not
          reasonably be expected to result in a Material Adverse Effect; 



             (b)    
          neither the Company nor any of its Subsidiaries has stored any Hazardous
          Materials on real properties now or formerly owned, leased or operated by any of
          them in a manner contrary to any Environmental Laws and has not disposed of any
          Hazardous Materials in a manner contrary to any Environmental Laws, in each case
          in any manner that could reasonably be expected to result in a Material Adverse
          Effect; and 



             (c)    
          all buildings on all real properties now owned, leased or operated by the
          Company or any of its Subsidiaries are in compliance with all applicable
          Environmental Laws, except where failure to comply could not reasonably be
          expected to result in a Material Adverse Effect. 



        5.19     Hostile
Tender Offers.  None of the proceeds of the sale of any Notes will be used to finance a
Hostile Tender Offer. 



6.         REPRESENTATIONS OF
THE PURCHASERS. 



        6.1         Purchase for
Investment. 



                Each
Purchaser represents that it is an institutional “accredited investor” within
the meaning of subparagraphs (1), (2), (3) or (7) of Rule 501(a) promulgated under the
Securities Act. Each Purchaser represents that it is purchasing the Notes to be purchased
by it for its own account or for one or more separate accounts maintained by it or for the
account of one or more pension or trust funds and not with a view to the distribution
thereof, provided that the disposition of its or their property shall at all times be
within its or their control. Each Purchaser understand that the Notes have not been
registered under the Securities Act and may be resold only if registered pursuant to the
provisions of the Securities Act or if an exemption from registration is available, except
under circumstances where neither such registration nor such an exemption is required by
law, and that the Company is not required to register the Notes. 






16 








        6.2         Source
of Funds. 



                Each
Purchaser represents that at least one of the following statements is an accurate
representation as to each source of funds (a “Source”) to be used by it
to pay the purchase price of the Notes to be purchased by it hereunder: 



             (a)    
          the Source is an “insurance company general account” (as the term is
          defined in the United States Department of Labor’s Prohibited Transaction
          Exemption (“PTE”) 95-60) in respect of which the reserves and
          liabilities (as defined by the annual statement for life insurance companies
          approved by the National Association of Insurance Commissioners (the
          “NAIC Annual Statement”)) for the general account contract(s)
          held by or on behalf of any employee benefit plan together with the amount of
          the reserves and liabilities for the general account contract(s) held by or on
          behalf of any other employee benefit plans maintained by the same employer (or
          affiliate thereof as defined in PTE 95-60) or by the same employee organization
          in the general account do not exceed 10% of the total reserves and liabilities
          of the general account (exclusive of separate account liabilities) plus surplus
          as set forth in the NAIC Annual Statement filed with such Purchaser’s state
          of domicile; or 



             (b)    
          the Source is a separate account that is maintained solely in connection with
          such Purchaser’s fixed contractual obligations under which the amounts
          payable, or credited, to any employee benefit plan (or its related trust) that
          has any interest in such separate account (or to any participant or beneficiary
          of such plan (including any annuitant)) are not affected in any manner by the
          investment performance of the separate account; or 



             (c)    
          the Source is either (i) an insurance company pooled separate account, within
          the meaning of PTE 90-1, or (ii) a bank collective investment fund, within the
          meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the
          Company in writing pursuant to this paragraph (c), no employee benefit plan or
          group of plans maintained by the same employer or employee organization
          beneficially owns more than 10% of all assets allocated to such pooled separate
          account or collective investment fund; or 



             (d)    
          the Source constitutes assets of an “investment fund” (within the
          meaning of Part V of PTE 84-14 (the “QPAM Exemption”)) managed
          by a “qualified professional asset manager” or “QPAM”
          (within the meaning of Part V of the QPAM Exemption), no employee benefit
          plan’s assets that are included in such investment fund, when combined with
          the assets of all other employee benefit plans established or maintained by the
          same employer or by an affiliate (within the meaning of Section V(c)(1) of the
          QPAM Exemption) of such employer or by the same employee organization and
          managed by such QPAM, exceed 20% of the total client assets managed by such
          QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied,
          neither the QPAM nor a person controlling or controlled by the QPAM (applying
          the definition of “control” in Section V(e) of the QPAM Exemption)
          owns a 5% or more interest in the Company and (i) the identity of such QPAM and
          (ii) the names of all employee benefit plans whose assets are included in such
          investment fund have been disclosed to the Company in writing pursuant to this
          paragraph (d); or 




17 









             (e)    
          the Source constitutes assets of a “plan(s)” (within the meaning of
          Section IV of PTE 96-23 (the “INHAM Exemption”)) managed by an
          “in-house asset manager” or “INHAM” (within the meaning of
          Part IV of the INHAM exemption), the conditions of Part I(a), (g) and (h) of the
          INHAM Exemption are satisfied, neither the INHAM nor a person controlling or
          controlled by the INHAM (applying the definition of “control” in
          Section IV(h) of the INHAM Exemption) owns a 5% or more interest in the Company
          and (a) the identity of such INHAM and (b) the name(s) of the employee benefit
          plan(s) whose assets constitute the Source have been disclosed to the Company in
          writing this paragraph (e); or 



             (f)    
          the Source is a governmental plan; or 



             (g)    
          the Source is one or more employee benefit plans, or separate account or trust
          fund comprised of one or more employee benefit plans, each of which has been
          identified to the Company in writing pursuant to this paragraph (g); or 



             (h)    
          the Source does not include assets of any employee benefit plan, other than a
          plan exempt from the coverage of ERISA. 



As used in this Section 6.2, the
terms “employee benefit plan”, “governmental plan” and
“separate account” shall have the respective meanings assigned to such
terms in Section 3 of ERISA. 



7.         INFORMATION AS TO
COMPANY. 



        7.1         Financial and
Business Information. 



                The
Company shall deliver to Prudential and each holder of Notes that is an Institutional
Investor: 



          	(a)	  	
               Quarterly Statements — within 60 days (or if sooner, on the date
               consolidated statements are required to be delivered to any other creditor of
               the Company) after the end of each quarterly fiscal period in each fiscal year
               of the Company (other than the last quarterly fiscal period of each such fiscal
               year), duplicate copies of, 



               



          	(i) 	  	
               a consolidated and a consolidating balance sheet of the Company and its
               Subsidiaries as at the end of such quarter, and 



               



          	(ii) 	  	
               consolidated and consolidating statements of income, changes in
               shareholders’ equity and cash flows of the Company and its Subsidiaries,
               for such quarter and (in the case of the second and third quarters) for the
               portion of the fiscal year ending with such quarter, 



               



setting forth in each case in
comparative form the figures for the corresponding periods in the previous fiscal year,
all in reasonable detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial Officer as fairly
presenting, in all material respects, the financial position of the companies being
reported on and their results of operations and cash flows, subject to changes resulting
from year-end adjustments; provided that delivery within the time period specified
above of copies of the Company’s Quarterly Report on Form 10-Q prepared in compliance
with the requirements therefor and filed with the Securities and Exchange Commission shall
be deemed to satisfy the  




18 










requirements of this Section 7.1(a) to provide consolidated
financial statements so long as such Quarterly Report on Form 10-Q includes the
consolidated financial statements identified in clauses (i) and (ii) above;
provided further that such consolidating financial statements shall show the
elimination of all Unrestricted Subsidiaries and the resultant consolidated financial
statements of the Company and its Restricted Subsidiaries; 








          	(b) 	  	
               Annual Statements — within 120 days (or if sooner, on the date
               consolidated statements are required to be delivered to any other creditor of
               the Company) after the end of each fiscal year of the Company, duplicate copies
               of, 



               



          	(i) 	  	
               a consolidated and a consolidating balance sheet of the Company and its
               Subsidiaries, as at the end of such year, and 



               



          	(ii) 	  	
               consolidated and consolidating statements of income, changes in
               shareholders’ equity and cash flows of the Company and its Subsidiaries,
               for such year, 



               



setting forth in each case in
comparative form the figures for the previous fiscal year, all in reasonable detail,
prepared in accordance with GAAP, which consolidated financial statements shall be
accompanied by an opinion thereon of independent certified public accountants of
recognized national standing, which opinion shall state that such consolidated financial
statements present fairly, in all material respects, the financial position of the
companies being reported upon and their results of operations and cash flows and have been
prepared in conformity with GAAP, and that the examination of such accountants in
connection with such consolidated financial statements has been made in accordance with
generally accepted auditing standards, and that such audit provides a reasonable basis for
such opinion in the circumstances, and which consolidating financial statements shall be
certified by a Senior Financial Officer as fairly presenting, in all material respects,
the financial position of the companies being reported on and their results of operations
and cash flows, subject to changes resulting from year-end adjustments; provided that the
delivery within the time period specified above of the Company’s Annual Report on
Form 10-K for such fiscal year (together with the Company’s annual report to
shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in
accordance with the requirements therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this Section 7.1(b) to provide
consolidated financial statements so long as such Annual Report on Form 10-K includes the
consolidated financial statements identified in clauses (i) and (ii) above;
provided further that such consolidating financial statements shall show the
elimination of all Unrestricted Subsidiaries and the resultant consolidated financial
statements of the Company and its Restricted Subsidiaries; 



          	(c) 	  	
               SEC and Other Reports — promptly upon their becoming available, one
               copy of (i) each financial statement, report, notice or proxy statement sent by
               the Company or any Subsidiary to public securities holders generally, and (ii)
               each regular or periodic report, each registration statement (without exhibits
               except as expressly requested by such holder), and each prospectus and all
               amendments thereto filed by the Company or any Subsidiary with the Securities
               and Exchange Commission and of all press releases and other statements made
               



               



19 










          	  	  	
               available generally by the Company or any Material Domestic Subsidiary to the
               public concerning developments that are Material; 



               



          	(d) 	  	
               Notice of Default or Event of Default — promptly, and in any event
               within five days, after a Responsible Officer becoming aware of the existence of
               any Default or Event of Default or that any Person has given any notice or taken
               any action with respect to a claimed default hereunder or that any Person has
               given any notice or taken any action with respect to a claimed default of the
               type referred to in Section 11(f), a written notice specifying the nature and
               period of existence thereof and what action the Company is taking or proposes to
               take with respect thereto; 



               



          	(e) 	  	
               ERISA Matters — promptly, and in any event within fifteen days after
               a Responsible Officer becoming aware of any of the following, a written notice
               setting forth the nature thereof and the action, if any, that the Company or an
               ERISA Affiliate proposes to take with respect thereto: 



               



          	(i) 	  	
               with respect to any Plan, any reportable event, as defined in section 4043(b) of
               ERISA and the regulations thereunder, for which notice thereof has not been
               waived pursuant to such regulations as in effect on the date hereof, which could
               reasonably be expected to have a Material Adverse Effect; or 



               



          	(ii) 	  	
               the taking by the PBGC of steps to institute, or the threatening by the PBGC of
               the institution of, proceedings under section 4042 of ERISA for the termination
               of, or the appointment of a trustee to administer, any Plan, or the receipt by
               the Company or any ERISA Affiliate of a notice from a Multiemployer Plan that
               such action has been taken by the PBGC with respect to such Multiemployer Plan,
               which could reasonably be expected to have a Material Adverse Effect; or 



               



          	(iii) 	  	
               any event, transaction or condition that could result in the incurrence of any
               liability by the Company or any ERISA Affiliate pursuant to Title I or IV of
               ERISA or the penalty or excise tax provisions of the Code relating to employee
               benefit plans, or in the imposition of any Lien on any of the rights, properties
               or assets of the Company or any ERISA Affiliate pursuant to Title I or IV of
               ERISA or such penalty or excise tax provisions, if such liability or Lien, taken
               together with any other such liabilities or Liens then existing, could
               reasonably be expected to have a Material Adverse Effect; 



               



          	(f) 	  	
               Notices from Governmental Authority — promptly, and in any event
               within 30 days of receipt thereof, copies of any notice to the Company or any
               Subsidiary from any Federal or state Governmental Authority relating to any
               order, ruling, statute or other law or regulation that could reasonably be
               expected to have a Material Adverse Effect; and 



               



          	(g) 	  	
               Requested Information — with reasonable promptness, such other data
               and information relating to the business, operations, affairs, financial
               condition, assets or properties of the Company or any of its Subsidiaries or
               relating to the ability of the Company to perform its obligations hereunder and
               under the Notes as from time to time may be reasonably  



               




20












          	  	  	
               requested by any such
               holder of Notes, including without limitation, such information as is required
               by Rule 144A promulgated under the Securities Act to be delivered to a
               prospective transferee of the Notes. 



               



        7.2         Officer’s
Certificate. 



        Each
set of financial statements delivered to a holder of Notes pursuant to Section 7.1 hereof
shall be accompanied by a certificate of a Senior Financial Officer setting forth: 



             (a)    
          Covenant Compliance — the information (including detailed
          calculations) required in order to establish whether the Company was in
          compliance with the requirements of Section 10.2 through Section 10.6 hereof,
          inclusive, during the quarterly or annual period covered by the statements then
          being furnished (including with respect to each such Section, where applicable,
          the calculations of the maximum or minimum amount, ratio or percentage, as the
          case may be, permissible under the terms of such Sections, and the calculation
          of the amount, ratio or percentage then in existence); and 



             (b)    
          Event of Default — a statement that such officer has reviewed the
          relevant terms hereof and has made, or caused to be made, under his or her
          supervision, a review of the transactions and conditions of the Company and its
          Subsidiaries from the beginning of the quarterly or annual period covered by the
          statements then being furnished to the date of the certificate and that such
          review shall not have disclosed the existence during such period of any
          condition or event that constitutes a Default or an Event of Default or, if any
          such condition or event existed or exists (including, without limitation, any
          such event or condition resulting from the failure of the Company or any
          Subsidiary to comply with any Environmental Law), specifying the nature and
          period of existence thereof and what action the Company shall have taken or
          proposes to take with respect thereto. 



        7.3         Inspection. 



        The
Company shall permit the representatives of each holder of Notes that is an Institutional
Investor: 



             (a)    
          No Default — if no Default or Event of Default then exists, at the
          expense of such holder and upon reasonable prior notice to the Company, to visit
          the principal executive office of the Company, to discuss the affairs, finances
          and accounts of the Company and its Subsidiaries with the Company’s
          officers, and (with the consent of the Company, which consent will not be
          unreasonably withheld) its independent public accountants, and (with the consent
          of the Company, which consent will not be unreasonably withheld) to visit the
          other offices and properties of the Company and each Restricted Subsidiary, all
          at such reasonable times during business hours and as often as may be reasonably
          requested in writing; and 



             (b)    
          Default — if a Default or Event of Default then exists, at the
          expense of the Company to visit and inspect any of the offices or properties of
          the Company or any Subsidiary, to examine all their respective books of account,
          records, reports and other papers, to make copies and extracts therefrom, and to
          discuss their respective affairs, finances and accounts with their respective
          officers and independent public accountants (and by this provision the  





21 












     Company
          authorizes said accountants to discuss the affairs, finances and accounts of the
          Company and its Subsidiaries), all at such reasonable times and as often as may
          be requested. 






     8.        
          PREPAYMENT OF THE NOTES.



        8.1 Required
Prepayments. Each Series of Notes shall be subject to the required prepayments, if
any, as are set forth in the Notes of such Series; provided that upon any partial
prepayment of the Notes of a Series pursuant to Section 8.2, the principal amount of each
required prepayment of the Notes of such Series becoming due on and after the date of such
prepayment or purchase, as well as the payment required at maturity, shall be reduced in
the same proportion as the aggregate unpaid principal amount of the Notes of such Series
is reduced as a result of such prepayment or purchase. 



        8.2         Optional Prepayments
with Make-Whole Amount. 



             (a)    
          Prepayment Amount. The Company (or the Issuer Subsidiary, if applicable)
          may, at its option, upon notice as provided below, prepay on any Business Day
          all, or from time to time any part of, the Notes in an amount not less than 5%
          of the aggregate principal amount of the Notes then outstanding in the case of a
          partial prepayment, at 100% of the principal amount so prepaid, plus accrued
          interest thereon, plus the Make-Whole Amount determined for the prepayment date
          with respect to such principal amount. 



             (b)    
          Notice. The Company (or the Issuer Subsidiary, if applicable) will give
          each holder of Notes written notice of each optional prepayment under this
          Section 8.2 not less than 30 days and not more than 60 days prior to the
          Business Day fixed for such prepayment. Each such notice shall specify the
          prepayment date, the aggregate principal amount of the Notes to be prepaid on
          such date, the principal amount of each Note held by such holder to be prepaid
          (determined in accordance with Section 8.3), and the interest to be paid on the
          prepayment date with respect to such principal amount being prepaid, and shall
          be accompanied by a certificate of a Senior Financial Officer as to the
          estimated Make-Whole Amount due in connection with such prepayment (calculated
          as if the date of such notice were the date of the prepayment), setting forth
          the details of such computation. Two Business Days prior to such prepayment, the
          Company (or the Issuer Subsidiary, if applicable) shall deliver to each holder
          of Notes which shall have designated a recipient for such notices in the
          Purchaser Schedule attached to the applicable Confirmation of Acceptance or by
          notice in writing to the Company a certificate of a Senior Financial Officer
          specifying the calculation of such Make-Whole Amount as of the specified
          prepayment date. 



             (c)    
          Prepayments under the Amended and Restated Collateral Agency and
          Intercreditor Agreement. Any prepayments of the Notes in accordance with the
          Amended and Restated Collateral Agency and Intercreditor Agreement under
          circumstances in which the Notes have not been declared due and payable under
          Section 11 hereof shall be treated as optional prepayments under this Section 8
          for purposes of calculating any Make-Whole Amount due in connection with such
          prepayment. 



        8.3         Allocation of
Partial Prepayments. 




22












                In
the case of each partial prepayment of the Notes, the principal amount of the Notes to be
prepaid shall be allocated among all of the Notes at the time outstanding in proportion,
as nearly as practicable, to the respective unpaid principal amounts thereof not
theretofore called for prepayment. 



        8.4         Maturity; Surrender,
etc. 



                In
the case of each prepayment of Notes pursuant to this Section 8, the principal amount of
each Note to be prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date and the
applicable Make-Whole Amount, if any. From and after such date, unless the Company (or the
Issuer Subsidiary, if applicable) shall fail to pay such principal amount when so due and
payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be
surrendered to the Company (or the Issuer Subsidiary, if applicable) and cancelled and
shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount
of any Note. 



        8.5         Purchase of Notes. 



                The
Company will not and will not permit any Affiliate to purchase, redeem, prepay or
otherwise acquire, directly or indirectly, any of the outstanding Notes except upon the
payment or prepayment of the Notes in accordance with the terms of this Agreement and the
Notes. The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant
to any payment, prepayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such Notes. 



        8.6         Make-Whole Amount. 



                The
term “Make-Whole Amount” means, with respect to any Note, an amount equal
to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with
respect to the Called Principal of such Note over the amount of such Called Principal;
provided that the Make-Whole Amount may in no event be less than zero. For the
purposes of determining the Make-Whole Amount, the following terms have the following
meanings: 



	  	
“Called
Principal” means, with respect to any Note, the principal of such Note that is to
be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and
payable pursuant to Section 12.1, as the context requires. 






	  	
“Discounted
Value” means, with respect to the Called Principal of any Note, the amount
obtained by discounting all Remaining Scheduled Payments with respect to such Called
Principal from their respective scheduled due dates to the Settlement Date with respect to
such Called Principal, in accordance with accepted financial practice and at a discount
factor (applied on the same periodic basis as that on which interest on the Notes is
payable) equal to the Reinvestment Yield with respect to such Called Principal. 






	  	
“Implied
Canadian Dollar Yield” shall mean, with respect to the Called Principal of any
Note, the yield to maturity implied by (i) the yields reported as of 10:00 a.m. (New York
time) on the second Business Day preceding the 








23















	  	
Settlement Date with respect to such Called
Principal, on the display designated as “Page 0#CABMK” on the Reuters Screen (or
such other display as may replace “Page 0#CABMK” on the Reuters Screen) for
actively traded benchmark Canadian Government bonds having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date, ascertainable,
(ii) the average of the yields for such securities as determined by Recognized Canadian
Government Bond Market Makers. Such implied yield shall be determined, if necessary, by
(a) converting quotations to bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between (1) the actively traded benchmark Canadian
Government bonds with the maturity closest to and greater than the Remaining Average Life
of such Called Principal and (2) the actively traded benchmark Canadian Government bonds
wit the maturity closest to and less than the Remaining Average Life of such Called
Principal. 
















	  	
“Implied
Dollar Yield” shall mean, with respect to the Called Principal of any Note, the
yield to maturity implied by (i) the yields reported as of 10:00 a.m. (New York time) on
the Business Day next preceding the Settlement Date with respect to such Called Principal
for actively traded U.S. Treasury securities having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date on the Treasury Yield
Monitor page of Standard & Poor’s MMS – Treasury Market Insight (or, if
Standard & Poor’s shall cease to report such yields in MMS – Treasury Market
Insight or shall cease to be Prudential Capital Group’s customary source of
information for calculating Make-Whole Amounts on privately placed notes, then such source
as is then Prudential Capital Group’s customary source of such information), or if
such yields shall not be reported as of such time or the yields reported as of such time
shall not be ascertainable, (ii) the Treasury Constant Maturity Series yields reported,
for the latest day for which such yields shall have been so reported as of the Business
Day next preceding the Settlement Date with respect to such Called Principal, in Federal
Reserve Statistical Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date. Such implied yield shall
be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond
equivalent yields in accordance with accepted financial practice and (b) interpolating
linearly between yields reported for various maturities. 






	  	
“Implied
British Pound Yield” means, with respect to the Called Principal of any Note, the
yield to maturity implied by (i) the yields reported, as of 10:00 a.m. (New York time) on
the second Business Day preceding the Settlement Date with respect to such Called
Principal, on the display designated as “Page 0#GBBMK” on the Reuters Screen (or
such other display as may replace “Page 0#GBBMK”on the Reuters Screen) for
actively traded benchmark gilt-edged securities having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date, or if such yields are
not reported as of such time or the yields reported shall not be ascertainable, (ii) the
average of the yields for such securities as determined by Recognized British Government
Bond Market Makers. Such 










24














	  	
implied yield will be determined, if necessary, by (a) converting
quotations to bond-equivalent yields in accordance with accepted financial practice and
(b) interpolating linearly between (1) the actively benchmark traded gilt-edged securities
with the maturity closest to and greater than the Remaining Average life, and (2) the
actively traded benchmark gilt-edged securities with the maturity closest to and less than
the Remaining Average Life. 







	  	
“Implied
Euro Yield” shall mean, with respect to the Called Principal of any Note, the
yield to maturity implied by (i) the yields reported, as of 10:00 a.m. (New York time) on
the second Business Day preceding the Settlement Date with respect to such Called
Principal, on the display designated as “Page 0#DEBMK” on the Reuters Screen (or
such other display as may replace “Page 0#DEBMK” on the Reuters Screen) for the
actively traded benchmark German Bunds having a maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date, or if such yields are not
reported as of such time or the yields reported shall not be ascertainable, (ii) the
average of the yields for such securities as determined by Recognized German Bund Market
Makers. Such implied yield will be determined, if necessary, by (a) converting quotations
to bond-equivalent yields in accordance with accepted financial practice and (b)
interpolating linearly between (1) the actively traded benchmark German Bunds with the
maturity closest to and greater than the Remaining Average Life of such Called Principal
and (2) the actively traded benchmark German Bunds with the maturity closest to and less
than the Remaining Average Life of such Called Principal. 






	  	
“Implied
Yen Yield” means, with respect to the Called Principal of any Note, the yield to
maturity implied by (i) the yields reported, as of 10:00 a.m. (New York time) on the
second Business Day preceding the Settlement Date with respect to such Called Principal,
on the display designated as “Page 0#JPBMK” on the Reuters Screen (or such other
display as may replace “Page 0#JPBMK” on the Reuters Screen) for the actively
traded benchmark Japanese Government bonds having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date, or if such yields are
not reported as of such time or the yields reported shall not be ascertainable, (ii) the
average of the yields for such securities as determined by Recognized Japanese Government
Bond Market Makers. Such rate will be determined, if necessary, by (a) converting
quotations to bond-equivalent yields in accordance with accepted financial practice and
(b) interpolating linearly between (1) the actively traded benchmark Japanese Government
bonds with the maturity closest to and greater than the Remaining Average Life of such
Called Principal and (2) actively traded benchmark Japanese Government bonds with the
maturity closest to and less than the Remaining Average Life of such Called Principal. 






	  	
“Recognized
British Government Bond Market Makers” shall mean two internationally recognized
dealers of gilt edged securities reasonably selected by Prudential. “Recognized
Canadian Government Bond Market Makers” shall mean two internationally recognized
dealers of Canadian Government bonds reasonably selected by Prudential. 







25











	  	
“Recognized
German Bund Market Makers” shall mean two internationally recognized dealers of
German Bunds reasonably selected by Prudential. 






	  	
“Recognized
Japanese Government Bond Market Makers” shall mean two internationally recognized
dealers of Japanese Government bonds reasonably selected by Prudential. 






	  	
“Reinvestment
Yield” shall mean, with respect to the Called Principal of any Note denominated
in (i) Dollars, 50 basis points plus the Implied Dollar Yield, (ii) British Pounds, the
Implied British Pound Yield, (iii) Canadian Dollars, the Implied Canadian Dollar Yield,
(iv) Euros, the Implied Euro Yield, and (v) Yen, the Implied Yen Yield. The Reinvestment
Yield will be rounded to that number of decimals as appears in the coupon for the
applicable Note. 






	  	
“Remaining
Average Life” means, with respect to any Called Principal, the number of years
(calculated to the nearest one-twelfth year) obtained by dividing (i) such Called
Principal into (ii) the sum of the products obtained by multiplying (a) the principal
component of each Remaining Scheduled Payment with respect to such Called Principal by (b)
the number of years (calculated to the nearest one-twelfth year) that will elapse between
the Settlement Date with respect to such Called Principal and the scheduled due date of
such Remaining Scheduled Payment. 






	  	
“Remaining
Scheduled Payments” means, with respect to the Called Principal of any Note, all
payments of such Called Principal and interest thereon that would be due after the
Settlement Date with respect to such Called Principal if no payment of such Called
Principal were made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are due to be made under the
terms of the Notes, then the amount of the next succeeding scheduled interest payment will
be reduced by the amount of interest accrued to such Settlement Date and required to be
paid on such Settlement Date pursuant to Section 8.2 or 12.1. 






	  	
“Settlement
Date” means, with respect to the Called Principal of any Note, the date on which
such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is
declared to be immediately due and payable pursuant to Section 12.1, as the context
requires. 






9.         AFFIRMATIVE COVENANTS. 



                The
Company covenants that during the Issuance Period and so long thereafter as any of the
Notes are outstanding: 



26










        9.1         Compliance with Law. 



                The
Company will and will cause each of its Subsidiaries to comply with all laws, ordinances
or governmental rules or regulations to which each of them is subject, including, without
limitation, Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations necessary to the
ownership of their respective properties or to the conduct of their respective businesses,
in each case to the extent necessary to ensure that non-compliance with such laws,
ordinances or governmental rules or regulations or failures to obtain or maintain in
effect such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect. 



        9.2         Insurance. 



                The
Company will and will cause each of the Restricted Subsidiaries to maintain, with
financially sound and reputable insurers, insurance with respect to their respective
properties and businesses against such casualties and contingencies, of such types, on
such terms and in such amounts (including deductibles, co-insurance and self-insurance, if
adequate reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business and
similarly situated. 



        9.3         Maintenance of
Properties. 



                The
Company will and will cause each of the Restricted Subsidiaries to maintain and keep, or
cause to be maintained and kept, their respective properties in good repair, working order
and condition (other than ordinary wear and tear), so that the business carried on in
connection therewith may be properly conducted at all times, provided that this Section
shall not prevent the Company or any Restricted Subsidiary from discontinuing the
operation and the maintenance of any of its properties if such discontinuance is desirable
in the conduct of its business and the Company has concluded that such discontinuance
could not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. 



        9.4         Payment of Taxes and
Claims. 



                The
Company will and will cause each of its Subsidiaries to file all tax returns required to
be filed in any jurisdiction and to pay and discharge all taxes shown to be due and
payable on such returns and all other taxes, assessments, governmental charges, or levies
imposed on them or any of their properties, assets, income or franchises, to the extent
such taxes and assessments have become due and payable and before they have become
delinquent and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Subsidiary, provided that
neither the Company nor any Subsidiary need pay any such tax or assessment or claims if
(i) the amount, applicability or validity thereof is contested by the Company or such
Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company
or such Subsidiary has established adequate reserves therefor in accordance with GAAP on
the books of the Company or such Subsidiary, or (ii) the nonpayment of all such taxes and
assessments and claims in the aggregate could not reasonably be expected to have a
Material Adverse Effect. 




27











        9.5         Corporate Existence,
etc. 



                The
Company will at all times preserve and keep in full force and effect its corporate
existence and the existence of any Issuer Subsidiary. Subject to Section 10.2, the Company
will at all times preserve and keep in full force and effect the corporate existence of
each Restricted Subsidiary (unless merged into the Company or a Restricted Subsidiary) and
all rights and franchises of the Company and the Restricted Subsidiaries unless, in the
good faith judgment of the Company, the termination of or failure to preserve and keep in
full force and effect such corporate existence, right or franchise could not, individually
or in the aggregate, have a Material Adverse Effect. 



        9.6        Security;
Execution of Pledge Agreement, Foreign Subsidiary Guaranty and Subsidiary Guaranty. 



          	(a) 	  	
               The Notes and other Senior Secured Indebtedness will, at the option of the
               Company, either be (x) secured by the Pledged Securities of each Material
               Foreign Subsidiary, or (y) guaranteed by each Material Foreign Subsidiary
               pursuant to a foreign subsidiary guaranty substantially in the form of the
               Subsidiary Guaranty (with such modifications as the Required Holders may
               reasonably request) (a “Foreign Subsidiary Guaranty”), in
               either case, as set forth below; provided that if the Company elects to
               cause a Material Foreign Subsidiary to deliver a Foreign Subsidiary Guaranty,
               such Material Foreign Subsidiary shall also deliver the same Foreign Subsidiary
               Guaranty to, and for the benefit of, each Senior Secured Creditor party to the
               Amended and Restated Collateral Agency and Intercreditor Agreement. 



               



          	(i) 	  	
               Pledged Securities of each Material Foreign Subsidiary. In each instance
               where the Company elects to comply with clause (x) of Section 9.6(a) above,
               within 5 days after the Company or any of its Restricted Subsidiaries acquires a
               Material Foreign Subsidiary or within 5 days after the Company delivers
               consolidating financial statements pursuant to Section 7.1 showing that any of
               Company’s existing Subsidiaries has become a Material Foreign Subsidiary,
               the Company shall cause the Pledged Securities of such Material Foreign
               Subsidiary to be pledged pursuant to a supplement to the Pledge Agreement. The
               Company shall promptly take all actions as may be necessary or desirable to give
               to the Collateral Agent, for the ratable benefit of the holders of the Notes and
               the other Senior Secured Creditors, a valid and perfected first priority Lien on
               and security interest in the Pledged Securities of such Material Foreign
               Subsidiary and shall promptly deliver to the holders of the Notes (i) a
               supplement to the Pledge Agreement executed by each Pledgor of the Pledged
               Securities of such Material Foreign Subsidiary, (ii) a certificate executed by
               the secretary or an assistant secretary of each Pledgor as to (a) the incumbency
               and signatures of the officers of such Pledgor executing the supplement to the
               Pledge Agreement, and (b) the fact that the attached resolutions of the Board of
               Directors of such Pledgor authorizing the execution, delivery and performance of
               the supplement to the Pledge Agreement are in full force and effect and have not
               been modified or rescinded, (iii) at the request of a holder of any Note, a
               favorable opinion of counsel, in form and substance reasonably satisfactory to
               the holders of the Notes and their counsel, as to (a) the due organization and
               good standing of  



               




28
















          	 	  	
               Pledged Securities of each Material Foreign Subsidiary. In each instance
               such Pledgor, (b) the due authorization, execution and delivery
               by such Pledgor of the supplement to the Pledge Agreement, (c) the
               enforceability of the supplement to the Pledge Agreement, and (d) such other
               matters as the Required Holders may reasonably request, all of the foregoing to
               be satisfactory in form and substance to the holders of the Notes and their
               counsel; provided that the opinion described in this clause (iii) may be
               given by the Company’s in-house counsel and may contain reasonable
               assumptions, if necessary, relating to the fact that such counsel may not be
               admitted to practice law in the applicable jurisdiction, and (iv) such other
               assurances, certificates, documents, consents or opinions as the Required
               Holders reasonably may require. 



               








          	(ii) 	  	
               Foreign Subsidiary Guaranty. In each instance where the Company elects to
               comply with clause (y) of Section 9.6(a) above, within 5 days after the Company
               or any of its Restricted Subsidiaries acquires a Material Foreign Subsidiary or
               within 5 days after the Company delivers consolidating financial statements
               pursuant to Section 7.1 showing that any of Company’s existing Subsidiaries
               has become a Material Foreign Subsidiary, the Company shall cause such Material
               Foreign Subsidiary to execute and deliver a Foreign Subsidiary Guaranty. The
               Company shall promptly deliver to the holders of the Notes, together with the
               Foreign Subsidiary Guaranty, (i) a certificate executed by the secretary or an
               assistant secretary of such Material Foreign Subsidiary as to (a) the incumbency
               and signatures of the officers of such Material Foreign Subsidiary executing the
               Foreign Subsidiary Guaranty, and (b) the fact that the attached resolutions of
               the Board of Directors of such Material Foreign Subsidiary authorizing the
               execution, delivery and performance of the Foreign Subsidiary Guaranty are in
               full force and effect and have not been modified or rescinded, (ii) at the
               request of a holder of any Note, a favorable opinion of counsel, in form and
               substance reasonably satisfactory to the holders of the Notes and their counsel,
               as to (a) the due organization and good standing of such Material Foreign
               Subsidiary, (b) the due authorization, execution and delivery by such Material
               Foreign Subsidiary of the Foreign Subsidiary Guaranty, (c) the enforceability of
               the Foreign Subsidiary Guaranty, and (d) such other matters as the Required
               Holders may reasonably request, all of the foregoing to be satisfactory in form
               and substance to the holders of the Notes and their counsel; provided
               that the opinion described in this clause (ii) may be given by the
               Company’s in-house counsel and may contain reasonable assumptions, if
               necessary, relating to the fact that such counsel may not be admitted to
               practice law in the applicable jurisdiction, and (iii) such other assurances,
               certificates, documents, consents or opinions as the Required Holders reasonably
               may require. 



               




          	(b) 	  	
               Within 5 days after the Company or any of its Restricted Subsidiaries acquires a
               Material Domestic Subsidiary or within 5 days after the Company delivers
               consolidating financial statements pursuant to Section 7.1 showing that any of
               Company’s existing Subsidiaries has become a Material Domestic Subsidiary
               (but not later than the time when such Material Domestic Subsidiary provides a
               guaranty or co-obligor agreement to the lenders party to any Significant Credit
               Facility) the Company will (x) cause such Material Domestic Subsidiary to
               execute and deliver to the holders of the Notes a counterpart of the  



               



29











          	 	  	
               Subsidiary
               Guaranty, and (y) if the lenders party to such Significant Credit Facility are
               not then party to the Amended and Restated Collateral Agency and Intercreditor
               Agreement (either directly or through their agent) cause such lenders (either
               directly or through their agent) to become party to the Amended and Restated
               Collateral Agency and Intercreditor Agreement. The Company shall promptly
               deliver to the holders of the Notes, together with such counterpart of the
               Subsidiary Guaranty (i) certified copies of such Material Domestic
               Subsidiary’s Articles or Certificate of Incorporation, together with a good
               standing certificate from the Secretary of State of the jurisdiction of its
               incorporation, each to be dated a recent date prior to their delivery to the
               holders of the Notes, (ii) a copy of such Material Domestic Subsidiary’s
               Bylaws, certified by its corporate secretary or an assistant corporate secretary
               as of a recent date prior to their delivery to the holders of the Notes, (iii) a
               certificate executed by the secretary or an assistant secretary of such Material
               Domestic Subsidiary as to (a) the incumbency and signatures of the officers of
               such Material Domestic Subsidiary executing the counterpart of the Subsidiary
               Guaranty, and (b) the fact that the attached resolutions of the Board of
               Directors of such Material Domestic Subsidiary authorizing the execution,
               delivery and performance of the counterpart of the Subsidiary Guaranty are in
               full force and effect and have not been modified or rescinded, (iv) at the
               request of a holder of any Note, a favorable opinion of counsel to the Company
               and such Material Domestic Subsidiary, in form and substance reasonably
               satisfactory to the holders of the Notes and their counsel, as to (a) the due
               organization and good standing of such Material Domestic Subsidiary, (b) the due
               authorization, execution and delivery by such Material Domestic Subsidiary of
               the counterpart of the Subsidiary Guaranty, (c) the enforceability of the
               counterpart of the Material Domestic Subsidiary, and (d) such other matters as
               the Required Holders may reasonably request, all of the foregoing to be
               satisfactory in form and substance to the holders of the Notes and their
               counsel; provided, that the opinion described in clause (iv) above may be
               given by the Company’s in-house counsel and may contain reasonable
               assumptions, if necessary, relating to the fact that counsel to the Company and
               such Material Domestic Subsidiary may not be admitted to practice law in the
               applicable jurisdiction, and (v) such other assurances, certificates, documents,
               consents or opinions as the Required Holders reasonably may require. 



               
















        9.7         Maintenance of
Ownership. The Company shall, at all times when Notes of an Issuer Subsidiary are
outstanding, own, directly or indirectly, no less than 100% of the capital stock of such
Issuer Subsidiary. 



        9.8         Pari Passu Ranking.
The Company and each Issuer Subsidiary shall cause its respective obligations under the
Notes and this Agreement to at all times rank at least pari passu, without
preference or priority, with all of their respective other outstanding and future secured
and unsubordinated obligations, except for those obligations that are mandatorily
preferred by law. 



        9.9         Payment of Notes and
Maintenance of Office. The Company and each Issuer Subsidiary will punctually pay, or
cause to be paid, the principal and interest (and Make-Whole Amount, if any) to become due
in respect of the Notes according to the terms thereof and will maintain an office at the
address of the Company set forth in Section 18(c) hereof where notices, presentations and
demands in respect hereof or the Notes may be made upon it. Such office will be maintained
at such address until such time as such Company will notify the holders of the Notes of
any change of location of such office. 



30










10.         NEGATIVE COVENANTS. 



                The
Company covenants that during the Issuance Period and so long thereafter as any of the
Notes are outstanding: 



        10.1         Transactions with
Affiliates. 



                The
Company will not and will not permit any Restricted Subsidiary to enter into, directly or
indirectly, any Material transaction or Material group of related transactions (including
without limitation the purchase, lease, sale or exchange of properties of any kind or the
rendering of any service) with any Affiliate (other than the Company or another Restricted
Subsidiary), except as approved by a majority of the disinterested directors of the
Company, and upon fair and reasonable terms no less favorable to the Company or such
Restricted Subsidiary than would be obtainable in a comparable arm’s-length
transaction with a Person not an Affiliate; provided that the foregoing restrictions shall
not apply to Standard Securitization Undertakings effected as part of a Permitted
Securitization Program. 



        10.2         Merger,
Consolidation, Sale of Assets, etc. 



          	(a) 	  	
               The Company will not and will not permit any Restricted Subsidiary to
               consolidate with or merge with any other Person unless immediately after giving
               effect to any consolidation or merger no Default or Event of Default would exist
               and: 



               



          	(i) 	  	
               in the case of a consolidation or merger of a Restricted Subsidiary, (x) the
               Company or another Restricted Subsidiary is the surviving or continuing
               corporation, (y) the surviving or continuing corporation is or immediately
               becomes a Restricted Subsidiary, or (z) such consolidation or merger, if
               considered as the sale of the assets of such Restricted Subsidiary to such other
               Person, would be permitted by Section 10.2(c); and 



               



          	(ii) 	  	
               in the case of a consolidation or merger of the Company or an Issuer Subsidiary,
               as the case may be, the successor corporation or surviving corporation which
               results from such consolidation or merger (the “surviving
               corporation”), if not the Company or an Issuer Subsidiary, (A) is a
               solvent U.S. corporation, (B) executes and delivers to each holder of the Notes
               its assumption of (x) the due and punctual payment of the principal of and
               premium, if any, and interest on all of the Notes, and (y) the due and punctual
               performance and observation of all of the covenants in this Agreement, the
               Collateral Documents and the Notes to be performed or observed by the Company or
               the Issuer Subsidiary, as applicable, and (C) furnishes to each holder of the
               Notes an opinion of counsel, reasonably satisfactory to the Required Holders, to
               the effect that the instrument of assumption has been duly authorized, executed
               and delivered and constitutes the legal, valid and binding contract and
               agreement of the surviving corporation enforceable in accordance with its terms,
               except as enforcement of such terms may be limited by bankruptcy, insolvency,
               reorganization, moratorium and similar laws affecting the enforcement of
               creditors’ rights generally and by general equitable principles. 



               




31 










          	(b) 	  	
               The Company will not sell, lease (as lessor) or otherwise transfer all or
               substantially all of its assets in a single transaction or series of
               transactions to any Person unless immediately after giving effect thereto no
               Default or Event of Default would exist and: 



               



          	(i) 	  	
               the successor corporation to which all or substantially all of the
               Company’s assets have been sold, leased or transferred (the
               “successor corporation”) is a solvent U.S. corporation, and 



               



          	(ii) 	  	
               the successor corporation executes and delivers to each holder of the Notes its
               assumption of the due and punctual payment of the principal of and premium, if
               any, and interest on all of the Notes, and the due and punctual performance and
               observation of all of the covenants in this Agreement, the Collateral Documents
               and the Notes to be performed or observed by the Company and shall furnish to
               such holders an opinion of counsel, reasonably satisfactory to the Required
               Holders, to the effect that the instrument of assumption has been duly
               authorized, executed and delivered and constitutes the legal, valid and binding
               contract and agreement of such successor corporation enforceable in accordance
               with its terms, except as enforcement of such terms may be limited by
               bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
               the enforcement of creditors’ rights generally and by general equitable
               principles. 



               



                No
such conveyance, transfer or lease of all or substantially all of the assets of the
Company shall have the effect of releasing the Company or any successor corporation that
shall theretofore have become such in the manner prescribed in this Section 10.2 from its
liability under this Agreement or the Notes. 



          	(c) 	  	
               The Company will not, and will not permit any Restricted Subsidiary to, sell,
               lease (as lessor), transfer, abandon or otherwise dispose of assets to any
               Person; provided that the foregoing restrictions do not apply to: 



               



          	(i) 	  	
               the sale, lease, transfer or other disposition of assets of the Company to a
               Restricted Subsidiary or of a Restricted Subsidiary to the Company or another
               Restricted Subsidiary; 



               



          	(ii) 	  	
               the sale in the ordinary course of business of inventory held for sale, or
               equipment, fixtures, supplies or materials that are no longer required in the
               operation of the business of the Company or any Restricted Subsidiary or are
               obsolete; 



               



          	(iii) 	  	
               the sale of property of the Company or any Restricted Subsidiary and the
               Company’s or any Restricted Subsidiary’s subsequent lease, as lessee,
               of the same property, within 270 days following the acquisition or construction
               of such property; 



               



          	(iv) 	  	
               the sale of assets of the Company or any Restricted Subsidiary for cash or other
               property to a Person or Persons (other than an Affiliate) if (A) such assets
               (valued at net book value) do not constitute a “substantial part” of
               the assets of the Company and the Restricted Subsidiaries, (B) in the opinion of
               a 



               



32








          	 	  	
                Responsible Officer of the Company, the sale is for fair value and is in the
               best interests of the Company, and (C) immediately after giving effect to the
               transaction, no Default or Event of Default would exist; or 



               





          	(v) 	  	
               the sale of assets meeting the conditions set forth in clauses (B) and (C) of
               subparagraph (iv) above, as long as the net proceeds from such sale in excess of
               a substantial part of the assets of the Company and the Restricted Subsidiaries
               are (x) applied within 270 days of the date of receipt to the acquisition of
               productive assets useful and intended to be used in the operation of the
               business of the Company or the Restricted Subsidiaries, or (y) used to repay any
               Indebtedness of the Company (which in the case of the Notes shall be with the
               Make-Whole Amount) or the Restricted Subsidiaries (other than Indebtedness that
               is in any manner subordinated in right of payment or security in any respect to
               Indebtedness evidenced by the Notes, Indebtedness owing to the Company, any of
               its Subsidiaries or any Affiliate and Indebtedness in respect of any revolving
               credit or similar credit facility providing the Company or any of the Restricted
               Subsidiaries with the right to obtain loans or other extensions of credit from
               time to time, except to the extent that in connection with such payment of
               Indebtedness the availability of credit under such credit facility is
               permanently reduced not later than 270 days after the date of receipt of such
               proceeds by an amount not less than the amount of such proceeds applied to the
               payment of such Indebtedness). 



               



          	(d) 	  	
               For purposes of Section 10.2(c), a sale of assets will be deemed to involve a
               “substantial part” of the assets of the Company and the
               Restricted Subsidiaries if the book value of such assets, together with all
               other assets sold during such fiscal year (except those assets sold pursuant to
               clauses (i) through (iii) of Section 10.2(c)), exceeds 10% of the Consolidated
               Total Assets of the Company and the Restricted Subsidiaries determined as of the
               end of the immediately preceding fiscal year. 



               



          	(e) 	  	
               The Company will not, and will not permit any Restricted Subsidiary to, issue
               shares of stock (or any options or warrants to purchase stock or other
               Securities exchangeable for or convertible into stock) of any Restricted
               Subsidiary except (i) to the Company, (ii) to a Wholly-Owned Restricted
               Subsidiary, (iii) to any Restricted Subsidiary that owns equity in the
               Restricted Subsidiary issuing such equity, or (iv) with respect to a Restricted
               Subsidiary that is a partnership or joint venture, to any other Person who is a
               partner or equity owner if such issuance is made pursuant to the terms of the
               Joint Venture Agreement or Partnership Agreement entered into in connection with
               the formation of such partnership or joint venture; provided, that Restricted
               Subsidiaries may issue directors’ qualifying shares and shares required to
               be issued by any applicable foreign law regarding foreign ownership
               requirements. The Company will not, and will not permit any Restricted
               Subsidiary to sell, transfer or otherwise dispose of its interest in any stock
               (or any options or warrants to purchase stock or other Securities exchangeable
               for or convertible into stock) of any Restricted Subsidiary (except to the
               Company or a Wholly-Owned Restricted Subsidiary) unless such sale, transfer or
               disposition would be permitted under Section 10.2(c). 



               





33









        10.3         Liens. 



                The
Company will not and will not permit any of the Restricted Subsidiaries to directly or
indirectly create, incur, assume or permit to exist (upon the happening of a contingency
or otherwise) any Lien on or with respect to any property or asset (including, without
limitation, any document or instrument in respect of goods or accounts receivable) of the
Company or any Restricted Subsidiary, whether now owned or hereafter acquired, or any
income or profits therefrom (unless the Company makes, or causes to be made, effective
provision whereby the Notes will be equally and ratably secured with any and all other
obligations thereby secured, such security to be pursuant to an agreement reasonably
satisfactory to the Required Holders and, in any such case, the Notes shall have the
benefit, to the fullest extent that, and with such priority as, the holders of the Notes
may be entitled under applicable law, of any equitable Lien on such property), except for
the following (which are collectively referred to as “Permitted Liens”): 



             (a)    
          Liens for taxes, assessments or other governmental charges which are not yet
          delinquent or that are being contested in good faith; 



             (b)    
          Liens incidental to the conduct of business or the ownership of properties and
          assets (including landlords’, carriers’, warehousemen’s,
          mechanics’ materialmen’s, and other similar Liens) and Liens to secure
          the performance of bids, tenders, leases or trade contracts, or to secure
          statutory obligations (including obligations under workers compensation,
          unemployment insurance and other social security legislation), surety or appeal
          bonds or other Liens incurred in the ordinary course of business and not in
          connection with the borrowing of money; 



             (c)    
          Liens resulting from judgments, unless such judgments are not, within 60 days,
          discharged or stayed pending appeal, or shall not have been discharged within 60
          days after the expiration of any such stay; 



             (d)    
          Liens securing Indebtedness of a Restricted Subsidiary owed to the Company or to
          a Wholly-Owned Restricted Subsidiary; 



             (e)    
          Liens in existence on the date of this Agreement and reflected in Schedule
          10.3 hereto; 



             (f)    
          minor survey exceptions and the like which do not Materially detract from the
          value of such property; 



             (g)    
          leases, subleases, easements, rights of way, restrictions and other similar
          charges or encumbrances incidental to the ownership of property or assets or the
          ordinary conduct of the Company’s or any of the Restricted
          Subsidiaries’ businesses, provided that the aggregate of such Liens do not
          Materially detract from the value of such property; 



34










             (h)    
          Liens (i) existing on property at the time of its acquisition or construction by
          the Company or a Restricted Subsidiary and not created in contemplation thereof;
          (ii) on property created contemporaneously with its acquisition or within 180
          days of the acquisition or completion of construction or improvement thereof to
          secure the purchase price or cost of construction or improvement thereof,
          including such Liens arising under Capital Leases; or (iii) existing on property
          of a Person at the time such Person is acquired by, consolidated with, or merged
          into the Company or a Restricted Subsidiary and not created in contemplation
          thereof; provided that such Liens shall attach solely to the property
          acquired or constructed and the principal amount of the Indebtedness secured by
          the Lien shall not exceed the principal amount of such Indebtedness just prior
          to the time such Person is consolidated with or merged into the Company or a
          Restricted Subsidiary; 



             (i)    
          Liens on receivables of the Company or a Restricted Subsidiary and the related
          assets of the type specified in clauses (A) through (D) in the definition of
          “Permitted Securitization Program” in connection with any Permitted
          Securitization Program; 



             (j)    
          Liens in favor of the holders of the Notes and the other Senior Secured
          Creditors party to the Amended and Restated Collateral Agency and Intercreditor
          Agreement in connection with the pledge of the Pledged Securities of each
          Material Foreign Subsidiary; 



             (k)    
          banker’s Liens and similar Liens (including set-off rights) in respect of
          bank deposits; provided, however, that any such Liens held by parties to the
          Amended and Restated Collateral Agency and Intercreditor Agreement will be
          governed by and subject to the Amended and Restated Collateral Agency and
          Intercreditor Agreement; 



             (l)    
          Liens in favor of customs and revenue authorities as a matter of law to secure
          payment of custom duties and in connection with the importation of goods in the
          ordinary course of the Company’s and its Subsidiaries’ business; 



             (m)    
          any Lien renewing, extending or replacing Liens permitted by Sections 10.3(e),
          (h), and (i), provided that (i) the principal amount of the Indebtedness
          secured is neither increased nor the maturity thereof changed to an earlier
          date, (ii) such Lien is not extended to any other property, and (iii)
          immediately after such extension, renewal or refunding, no Default or Event of
          Default would exist; and 



             (n)    
          other Liens securing Indebtedness not otherwise permitted by paragraphs (a)
          through (m) of this Section 10.3, provided that Priority Indebtedness
          shall not, at any time, exceed an amount equal to 13% of Consolidated Net Worth. 



Any Lien originally incurred in
compliance with paragraph (n) of this Section 10.3 may be renewed, extended or replaced so
long as the conditions set forth in subparagraphs (i), (ii) and (iii) of paragraph (m) of
this Section 10.3 are satisfied. 



        10.4         Minimum
Consolidated Net Worth. 



                The
Company will not, at any time, permit Consolidated Net Worth to be less than the sum of
(i) $271,935,200, (ii) an aggregate amount equal to 60% of Consolidated Net Income (but,
in each case, only if a positive number) earned in (a) the six months ended December 31,
2000, and (b) each complete fiscal year thereafter, and (iii) 50% of the net proceeds
realized by the Company and its Restricted Subsidiaries from the sale of Equity 



35








Securities
subsequent to June 30, 2000, excluding issuances of Equity Securities upon exercise of
employee stock options or rights under any employee benefit plans (excluding such exercise
by any Person who owns greater than 5% of the Equity Securities of the Company), issuances
of Equity Securities in connection with acquisitions by the Company and its Restricted
Subsidiaries, and reissuances of up to $60,000,000 of treasury securities purchased by the
Company after October 12, 2000. 





        10.5         Limitation on
Indebtedness. 



             (a)    
          The Company will not permit at any time (i) the ratio of Total Indebtedness to
          EBITDA for the four most recently ended fiscal quarters of the Company to be
          greater than 1.85 to 1.0, or (ii) Priority Indebtedness to exceed 13% of
          Consolidated Net Worth. 



             (b)    
          [Intentionally Omitted.] 



             (c)    
          The Company will not, and will not permit any Restricted Subsidiary to, incur,
          assume or create any Indebtedness under any Significant Credit Facility unless
          each of the lenders under such Significant Credit Facility immediately becomes a
          party to the Amended and Restated Collateral Agency and Intercreditor Agreement. 



        10.6         Minimum Fixed
Charges Coverage. 



                The
Company will not permit, as of the end of each fiscal quarter of the Company, the ratio of
Consolidated Income Available for Fixed Charges to Fixed Charges, for the period
consisting of such fiscal quarter and the preceding three fiscal quarters, to be less than
2.75 to 1.0. 



        10.7         Nature of the
Business. 



                The
Company will not, and will not permit any Restricted Subsidiary, to engage in any business
if, as a result, the general nature of the business of the Company and the Restricted
Subsidiaries, taken as a whole, which would then be engaged in by the Company and the
Restricted Subsidiaries would be substantially changed from the general nature of the
business engaged in by the Company and the Restricted Subsidiaries, taken as a whole, on
the date of this Agreement. 



        10.8         Designation
of Restricted and Unrestricted Subsidiaries. 



                The
Company may designate in writing to each of the holders of the Notes any Unrestricted
Subsidiary as a Restricted Subsidiary and may designate in writing to each of the holders
of the Notes any Restricted Subsidiary as an Unrestricted Subsidiary; provided that (i) no
such designation of a Restricted Subsidiary as an Unrestricted Subsidiary shall be
effective unless (A) such designation is treated as a transfer under Section 10.2 and such
designation is permitted by Section 10.2, and (B) such Subsidiary does not own any stock,
other equity interest or Indebtedness of the Company or a Restricted Subsidiary; and (ii)
no such designation shall be effective unless, immediately after giving effect thereto no
Default or Event of Default would exist; provided, further, that any
Subsidiary that has been designated as a Restricted Subsidiary or an Unrestricted
Subsidiary may not thereafter be redesignated as a Restricted Subsidiary or an





36












Unrestricted Subsidiary, as the case may be, more than once; and provided,
further, that no Securitization Entity shall be a Restricted Subsidiary unless
designated as such by the Company. Notwithstanding anything to the contrary in this
Agreement, upon any Unrestricted Subsidiary becoming a Material Subsidiary, it shall
immediately be deemed to be a Restricted Subsidiary. 








        10.9         Limitation on Swap
Agreements. 



                The
Company will not, and will not permit any Restricted Subsidiary to, have any obligations
(contingent or otherwise) existing or arising under any Swap Agreement, unless such
obligations are (or were) entered into by such Person in the ordinary course of business
for the purpose of mitigating risks associated with liabilities, commitments or assets
held by such Person, and not for purposes of speculation. 



        10.10         Limitation on
Restricted Payments. 



                The
Company will not, and will not permit any Restricted Subsidiary to, do any of the
following if a Default or Event of Default exists or would exist immediately after giving
effect thereto: 



             (a)    
          Declare or pay any dividends, either in cash or property, on any shares of
          capital stock of any class of the Company or any Restricted Subsidiary (except
          (i) dividends or other distributions payable solely in shares of common stock,
          and (ii) dividends and distributions paid by a Restricted Subsidiary solely to
          the Company or a Wholly-Owned Restricted Subsidiary); or 



             (b)    
          Directly or indirectly, or through any Restricted Subsidiary, purchase, redeem
          or retire any shares of capital stock of any class of the Company or any
          Restricted Subsidiary or any warrants, rights or options to purchase or acquire
          any shares of capital stock of the Company or any Restricted Subsidiary; or 



             (c)    
          Make any other payment or distribution, either directly or indirectly or through
          any Restricted Subsidiary, in respect of capital stock of any class of the
          Company or any Restricted Subsidiary (except payments and distributions made by
          a Restricted Subsidiary solely to the Company or a Wholly-Owned Restricted
          Subsidiary). 



     11.        
          EVENTS OF DEFAULT.



        An
“Event of Default” shall exist if any of the following conditions or events
shall occur and be continuing: 



             (a)    
          the Company or any Issuer Subsidiary defaults in the payment of any principal or
          Make-Whole Amount, if any, on any Note when the same becomes due and payable,
          whether at maturity or at a date fixed for prepayment or by declaration or
          otherwise; or 



             (b)    
          the Company or any Issuer Subsidiary defaults in the payment of any interest on
          any Note or any amount payable under Section 14.4 for more than five Business
          Days after the same becomes due and payable; or 



37










             (c)    
          the Company defaults in the performance of or compliance with any term contained
          in Section 10; or 



             (d)    
          the Company or any of its Subsidiaries defaults in the performance of or
          compliance with any term contained herein (other than those referred to in
          paragraphs (a), (b) and (c) of this Section 11) or in any Collateral Document
          and such default is not remedied within 30 days after the earlier of (i) a
          Responsible Officer obtaining actual knowledge of such default, and (ii) the
          Company or such Subsidiary receiving written notice of such default from any
          holder of a Note (any such written notice to be identified as a “notice of
          default” and to refer specifically to this paragraph (d) of Section 11); or 



             (e)    
          any representation or warranty made in writing by or on behalf of the Company,
          any Issuer Subsidiary or any Subsidiary Guarantor or by any officer of the
          Company, any Issuer Subsidiary or any Subsidiary Guarantor in this Agreement,
          the Collateral Documents or in any writing furnished in connection with the
          transactions contemplated hereby or thereby proves to have been false or
          incorrect in any material respect on the date as of which made; or 



             (f)    
          (i) the Company or any Restricted Subsidiary is in default (as principal or as
          guarantor or other surety) in the payment of any principal of or premium or
          make-whole amount or interest on any Indebtedness beyond any period of grace
          provided with respect thereto, or (ii) the Company or any Restricted Subsidiary
          is in default for more than 20 Business Days in the performance of or compliance
          with any term of any evidence of any Indebtedness or of any mortgage, indenture
          or other agreement relating thereto or any other condition exists, and as a
          consequence of such default or condition (x) such Indebtedness has become, or
          has been declared (or one or more Persons are entitled to declare such
          Indebtedness to be) due and payable before its stated maturity or before its
          regularly scheduled dates of payment, or (y) one or more Persons have the right
          to require the Company or any Restricted Subsidiary to purchase or repay such
          Indebtedness, or (iii) as a consequence of the occurrence or continuation of any
          event or condition (other than the passage of time or the right of the holder of
          Indebtedness to convert such Indebtedness into equity interests), (x) the
          Company or any Restricted Subsidiary has become obligated to purchase or repay
          any Indebtedness before its regular maturity or before its regularly scheduled
          dates of payment, or (y) one or more Persons have exercised any right to require
          the Company or any Restricted Subsidiary to purchase or repay such Indebtedness,
          provided that the aggregate amount of all foregoing Indebtedness with
          respect to which a payment, performance or compliance default shall have
          occurred or a failure or other event causing or permitting the purchase or
          repayment by the Company or any Restricted Subsidiary shall have occurred
          exceeds $7,500,000; or 



             (g)    
          the Company, any Issuer Subsidiary or any Material Subsidiary (i) is generally
          not paying, or admits in writing its inability to pay, its debts as they become
          due, (ii) files, or consents by answer or otherwise to the filing against it of,
          a petition for relief or reorganization or arrangement or any other petition in
          bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency,
          reorganization, moratorium or other similar law of any jurisdiction, (iii) makes
          an assignment for the benefit of its creditors, (iv) consents to the appointment
          of a custodian, receiver, trustee or other officer with similar powers with
          respect to it or with respect to any substantial part of its property, (v) is
          adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for
          the purpose of any of the foregoing; or 




38










             (h)    
          a court or governmental authority of competent jurisdiction enters an order
          appointing, without consent by the Company, any Issuer Subsidiary or any
          Material Subsidiary, a custodian, receiver, trustee or other officer with
          similar powers with respect to it or with respect to any substantial part of its
          property, or constituting an order for relief or approving a petition for relief
          or reorganization or any other petition in bankruptcy or for liquidation or to
          take advantage of any bankruptcy or insolvency law of any jurisdiction, or
          ordering the dissolution, winding-up or liquidation of the Company, any Issuer
          Subsidiary or any Material Subsidiary, or any such petition shall be filed
          against the Company, any Issuer Subsidiary or any Material Subsidiary and such
          petition shall not be dismissed within 60 days; or 



             (i)    
          a final judgment or judgments for the payment of money aggregating in excess of
          $10,000,000 are rendered against one or more of the Company, any Issuer
          Subsidiary and any Restricted Subsidiary and which judgments are not, within 60
          days after entry thereof, bonded, discharged or stayed pending appeal, or are
          not discharged within 60 days after the expiration of such stay; or 



             (j)    
          the Subsidiary Guaranty ceases to be in full force and effect with respect to
          any Material Domestic Subsidiary, or any Material Domestic Subsidiary contests
          the validity thereof; or 



             (k)    
          the Pledge Agreement ceases to be in full force and effect with respect to any
          Material Foreign Subsidiary, any Pledgor contests the validity of the Pledge
          Agreement, or the Collateral Agent shall fail to have a valid, perfected and
          enforceable first priority security interest in the Pledged Securities; or 



             (l)    
          a Foreign Subsidiary Guaranty ceases to be in full force and effect with respect
          to any Material Foreign Subsidiary (or any other Foreign Subsidiary executing
          such Foreign Subsidiary Guaranty), or any Material Foreign Subsidiary (or any
          other Foreign Subsidiary executing such Foreign Subsidiary Guaranty) contests
          the validity thereof; or 



             (m)    
          the Parent Guaranty shall cease to be in full force and effect or shall be
          declared by a court or administrative or governmental body of competent
          jurisdiction to be void, voidable or unenforceable against the Company, or the
          validity or enforceability of the Parent Guaranty against the Company shall be
          contested by the Company, or any Subsidiary or Affiliate of the Company, or the
          Company, or any Subsidiary or Affiliate of the Company, shall deny that the
          Company has any further liability or obligation under the Parent Guaranty; or 



             (n)    
          (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the
          Code for any plan year or part thereof or a waiver of such standards or
          extension of any amortization period is sought or granted under section 412 of
          the Code, (ii) a notice of intent to terminate any Plan shall have been or is
          reasonably expected to be filed with the PBGC or the PBGC shall have instituted
          proceedings under ERISA section 4042 to terminate or appoint a trustee to
          administer any Plan or the PBGC shall have notified the Company or any ERISA
          Affiliate that a Plan may become a subject of any such proceedings, (iii) the
          aggregate “amount of unfunded benefit liabilities” (within the meaning
          of section 4001(a)(18) of ERISA) under all Plans, determined in accordance with
          Title IV of ERISA, shall exceed 5% of Consolidated Net Worth as of the end of
          the most recently ended fiscal quarter of the Company, (iv) the Company  



39









     
          or any of its Subsidiaries establishes or amends any employee welfare benefit
          plan that provides post-employment welfare benefits in a manner that would
          increase the liability of the Company or any of its Subsidiaries thereunder; and
          any such event or events described in clauses (i) through (vi) above, either
          individually or together with any other such event or events, could reasonably
          be expected to have a Material Adverse Effect. 





As used in Section 11(n), the terms
“employee benefit plan” and “employee welfare benefit
plan” shall have the respective meanings assigned to such terms in Section 3 of
ERISA. 



12.         REMEDIES ON DEFAULT,
ETC. 



        12.1         Acceleration. 



             (a)    
          If an Event of Default with respect to the Company or any Issuer Subsidiary
          described in paragraph (g) or (h) of Section 11 (other than an Event of Default
          described in clause (i) of paragraph (g) or described in clause (vi) of
          paragraph (g) by virtue of the fact that such clause encompasses clause (i) of
          paragraph (g)) has occurred, all the Notes then outstanding shall automatically
          become immediately due and payable. 



             (b)    
          If any other Event of Default has occurred and is continuing, any holder or
          holders of more than 50% in principal amount of the Notes at the time
          outstanding may at any time at its or their option, by notice or notices to the
          Company, declare all the Notes then outstanding to be immediately due and
          payable. 



             (c)    
          If any Event of Default described in paragraph (a) or (b) of Section 11 has
          occurred and is continuing, any holder or holders of Notes at the time
          outstanding affected by such Event of Default may at any time, at its or their
          option, by notice or notices to the Company, declare all the Notes held by it or
          them to be immediately due and payable. 



        Upon
any Notes becoming due and payable under this Section 12.1, whether automatically or by
declaration, such Notes will forthwith mature and the entire unpaid principal amount of
such Notes, plus (x) all accrued and unpaid interest thereon and (y) the Make-Whole Amount
determined in respect of such principal amount (to the full extent permitted by applicable
law), shall all be immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are hereby waived. The
Company and each Issuer Subsidiary acknowledge, and the parties hereto agree, that each
holder of a Note has the right to maintain its investment in the Notes free from repayment
by the Company or such Issuer Subsidiary (except as herein specifically provided for) and
that the provision for payment of a Make-Whole Amount by the Company or such Issuer
Subsidiary in the event that the Notes are prepaid or are accelerated as a result of an
Event of Default, is intended to provide compensation for the deprivation of such right
under such circumstances. 



        12.2         Other Remedies. 




40









                If
any Default or Event of Default has occurred and is continuing, and irrespective of
whether any Notes have become or have been declared immediately due and payable under
Section 12.1, the holder of any Note at the time outstanding may proceed to protect and
enforce the rights of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained herein, in the
Collateral Documents or in any Note, or for an injunction against a violation of any of
the terms hereof or thereof, or in aid of the exercise of any power granted hereby or
thereby or by law or otherwise. 



        12.3         Rescission. 



                At
any time after any Notes have been declared due and payable pursuant to clause (b) or (c)
of Section 12.1, the Required Holders, by written notice to the Company, may rescind and
annul any such declaration and its consequences, and at any time after any Notes have
become due and payable pursuant to clause (a) of Section 12.1, the holders of all Notes
then outstanding, by written notice to the Company, may rescind acceleration of the Notes
resulting from the occurrence of an Event of Default described in paragraph (h) of Section
11, if in each case (i) the Company or the Issuer Subsidiary has paid all overdue interest
on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due
and payable and are unpaid other than by reason of such declaration, and all interest on
such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default Rate, (ii)
all Events of Default and Defaults, other than non-payment of amounts that have become due
solely by reason of such declaration or acceleration, have been cured or have been waived
pursuant to Section 17, and (iii) no judgment or decree has been entered for the payment
of any monies due pursuant hereto or to the Notes. No rescission and annulment under this
Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair
any right consequent thereon. 



        12.4         No Waivers or
Election of Remedies, Expenses, etc. 



                No
course of dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice such
holder’s rights, powers or remedies. No right, power or remedy conferred by this
Agreement, the Collateral Documents or by any Note upon any holder thereof shall be
exclusive of any other right, power or remedy referred to herein or therein or now or
hereafter available at law, in equity, by statute or otherwise. Without limiting the
obligations of the Company under Section 15, the Company will pay to the holder of each
Note on demand such further amount as shall be sufficient to cover all costs and expenses
of such holder incurred in any enforcement or collection under this Section 12, including,
without limitation, reasonable attorneys’ fees, expenses and disbursements. 



13.         REGISTRATION;
EXCHANGE; SUBSTITUTION OF NOTES. 



        13.1         Registration of
Notes. 



        The
Company shall keep at its principal executive office a register for the registration and
registration of transfers of Notes. The name and address of each holder of one or more
Notes, each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for registration of
transfer, 



41 












 the Person in whose name any Note shall be registered shall be deemed and
treated as the owner and holder thereof for all purposes hereof, and the Company shall not
be affected by any notice or knowledge to the contrary. The Company shall give to any
holder of a Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered holders of Notes. 







        13.2         Transfer and
Exchange of Notes. 



                Upon
surrender of any Note at the principal executive office of the Company for registration of
transfer or exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or his attorney duly authorized in writing and accompanied
by the address for notices of each transferee of such Note or part thereof), the Company
or the applicable Issuer Subsidiary shall execute and deliver, at its expense (except as
provided below), one or more new Notes (as requested by the holder thereof) in exchange
therefor, in an aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such holder may
request and shall be substantially in the form of Exhibit A. Each such new Note
shall be dated and bear interest from the date to which interest shall have been paid on
the surrendered Note or dated the date of the surrendered Note if no interest shall have
been paid thereon. The Company or the applicable Issuer Subsidiary may require payment of
a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any
such transfer of Notes. Notes shall not be transferred in denominations of less than
$100,000 (or its equivalent if denominated in another currency), provided that if
necessary to enable the registration of transfer by a holder of its entire holding of
Notes, one Note may be in a denomination of less than $100,000 (or its equivalent if
denominated in another currency). Any transferee, by its acceptance of a Note registered
in its name (or the name of its nominee), shall be deemed to have made the representations
set forth in Section 6. Each transferee of a Note shall, as a condition to transfer,
simultaneously become a party to the the Amended and Restated Collateral Agency and
Intercreditor Agreement. Each transferee of a Note which was not previously a holder of
the Notes under this Agreement and which is not incorporated under the laws of the United
States of America or a state thereof shall, within three Business Days of becoming a
holder, deliver to the Company such certificate and other evidence as the Company may
reasonably request to establish that such holder is entitled to receive payments under the
Notes without deduction or withholding of any United States federal income taxes. 



        13.3         Replacement of
Notes. 



                Upon
receipt by the Company or the applicable Issuer Subsidiary of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of
any Note (which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such loss, theft, destruction or
mutilation), and 



             (a)    
          in the case of loss, theft or destruction, of indemnity reasonably satisfactory
          to it (provided that if the holder of such Note is, or is a nominee for,
          an original Purchaser or another holder of a Note with a minimum net worth of at
          least $100,000,000, such Person’s own unsecured agreement of indemnity
          shall be deemed to be satisfactory), or 





42 












             (b)    
          in the case of mutilation, upon surrender and cancellation thereof, 



the Company or such Issuer Subsidiary
at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and
bearing interest from the date to which interest shall have been paid on such lost,
stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or
mutilated Note if no interest shall have been paid thereon. 



14.         PAYMENTS ON NOTES. 



        14.1         Place of Payment. 



        Subject
to Section 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming
due and payable on the Notes shall be made in Provo, Utah at the principal office of the
Company in such jurisdiction. The Company may at any time, by notice to each holder of a
Note, change the place of payment of the Notes so long as such place of payment shall be
either the principal office of the Company in such jurisdiction or the principal office of
a bank or trust company in such jurisdiction. 



        14.2         Home Office Payment. 



                So
long as any Purchaser or its nominee shall be the holder of any Note, and notwithstanding
anything contained in Section 14.1 or in such Note to the contrary, the Company and each
Issuer Subsidiary will pay all sums becoming due on such Note for principal, Make-Whole
Amount, if any, and interest by wire transfer of immediately available funds to the
account or accounts specified in the Purchaser Schedule to the Confirmation of Acceptance
with respect to such Note, or by such other method or at such other address as such
Purchaser shall have from time to time specified to the Company or such Issuer Subsidiary
in writing for such purpose, without the presentation or surrender of such Note or the
making of any notation thereon, except that upon written request of the Company or such
Issuer Subsidiary made concurrently with or reasonably promptly after payment or
prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation,
reasonably promptly after any such request, to the Company at its principal executive
office or at the place of payment most recently designated by the Company pursuant to
Section 14.1. Prior to any sale or other disposition of any Note held by any Purchaser or
its nominee such Purchaser will, at its election, either endorse thereon the amount of
principal paid thereon and the last date to which interest has been paid thereon or
surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section
13.2. The Company and each Issuer Subsidiary will afford the benefits of this Section 14.2
to any Institutional Investor that is the direct or indirect transferee of any Note
purchased under this Agreement that has made the same agreement relating to such Note as
the Purchasers have made in this Section 14.2. 



        14.3         Currency of
Payments. 



             (a)    
          All payments under this Agreement and the Notes shall be made in the Available
          Currency in which the relevant Notes are denominated. 



             (b)    
          All expenses required to be reimbursed pursuant to this Agreement or the Notes
          shall be reimbursed in the currency in which such expenses were originally
          incurred. 



43










             (c)    
          To the fullest extent permitted by applicable law, the obligation of the Company
          and each Issuer Subsidiary in respect of any amount due under or in respect of
          this Agreement and the Notes, notwithstanding any payment in any currency other
          than the currency required to be used to pay such amount (as set forth in this
          Section 14.3(c)), whether as a result of (1) any judgment or order or the
          enforcement thereof, (2) the realization on any security, (3) the liquidation of
          the Company or any Issuer Subsidiary, (4) any voluntary payment by the Company
          or any Issuer Subsidiary or any of them or (5) any other reason, shall be
          discharged only to the extent of the amount of the applicable Available Currency
          that each holder of Notes entitled to receive such payment may, in accordance
          with normal banking procedures, purchase with the sum paid in such other
          currency (after any premium and costs of exchange) on the New York Business Day
          immediately following the day on which such holder receives such payment and if
          the amount in such Available Currency that may be so purchased for any reason is
          less than the amount originally due, the Company or the applicable Issuer
          Subsidiary shall indemnify and save harmless such holder from and against all
          loss or damage arising out of or as a result of such deficiency. This indemnity
          shall constitute an obligation separate and independent from the other
          obligations contained in this Agreement and the Notes, shall give rise to a
          separate and independent cause of action, shall apply irrespective of any
          indulgence granted by such holder from time to time and shall continue in full
          force and effect notwithstanding any judgment or order for a liquidated sum in
          respect of an amount due under this Agreement or the Notes or under any judgment
          or order. 



        14.4         Payments Free and
Clear of Taxes. 



             (a)    
          Payments. The Company and each Issuer Subsidiary will pay all amounts of
          principal of, applicable Make-Whole Amount, if any, and interest on the Notes,
          and all other amounts payable hereunder or under the Notes, without set-off or
          counterclaim and free and clear of, and without deduction or withholding for or
          on account of, all present and future income, stamp, documentary and other taxes
          and duties, and all other levies, imposts, charges, fees, deductions and
          withholdings, now or hereafter imposed, levied, collected, withheld or assessed
          by any Governmental Authority (except net income taxes and franchise taxes in
          lieu of net income taxes imposed on any holder of any Note by its jurisdiction
          of incorporation or the jurisdiction in which its applicable lending office is
          located) (all such non-excluded taxes, duties, levies, imposts, duties, charges,
          fees, deductions and withholdings being hereinafter called
          “Taxes”). If any Taxes are required to be withheld from any
          amounts payable to a holder of any Notes, the amounts so payable to such holder
          shall be increased to the extent necessary to yield such holder (after payment
          of all Taxes) interest on any such other amounts payable hereunder at the rates
          or in the amounts specified in this Agreement and the Notes. Whenever any Taxes
          are payable by the Company or such Issuer Subsidiary, as promptly as possible
          thereafter, the Company or such Issuer Subsidiary shall send to each holder of
          the Notes, a certified copy of an original official receipt received by the
          Company or such Issuer Subsidiary showing payment thereof. If the Company or
          such Issuer Subsidiary fails to pay any Taxes when due to the appropriate taxing
          authority or fails to remit to each holder of the Notes the required receipts or
          other required documentary evidence, the Company or such Issuer Subsidiary shall
          indemnify each holder of the Notes for any taxes (including interest or
          penalties) that may become payable by such holder as a result of any such
          failure. The obligations of the Company and each Issuer Subsidiary under this
          subsection 14.4(a) shall survive the payment and performance of the Notes and
          the termination of this Agreement. 




44










             (b)    
          Withholding Exemption Certificates. On or prior to the applicable Closing
          Day, each holder of the Notes which is not organized under the laws of the
          United States of America or a state thereof shall deliver to the Company such
          certificates and other evidence as the Company may reasonably request to
          establish that such holder is entitled to receive payments under the Notes
          without deduction or withholding of any United States federal income taxes. Each
          such holder further agrees (i) promptly to notify the Company of any change of
          circumstances (including any change in any treaty, law or regulation) which
          would prevent such holder from receiving payments under the Notes without any
          deduction or withholding of such taxes, and (ii) on or before the date that any
          certificate or other form delivered by such holder under this Section 14.4(b)
          expires or becomes obsolete or after the occurrence of any event requiring a
          change in the most recent such certificate or form previously delivered by such
          holder, to deliver to the Company a new certificate or form, certifying that
          such holder is entitled to receive payments under the Notes without deduction or
          withholding of such taxes. If any holder of the Notes which is not organized
          under the laws of the United States of America or a state thereof fails to
          provide to the Company pursuant to this Section 14.4(b) (or in the case of a
          transferee of a Note, Section 13.2) any certificates or other evidence required
          by such provision to establish that such holder is, at the time it becomes a
          holder, entitled to receive payments under the Notes without deduction or
          withholding of any United States federal income taxes, such holder shall not be
          entitled to any indemnification under Section 14.4(a) for any Taxes imposed on
          such holder. 



     15.    
          EXPENSES, ETC. 



        15.1         Transaction
Expenses. 



                Whether
or not the transactions contemplated hereby are consummated, the Company will pay all
costs and expenses (including reasonable attorneys’ fees of one special counsel and,
if reasonably required, local or other counsel) incurred by the Collateral Agent, each
Purchaser or holder of a Note in connection with such transactions and in connection with
any amendments, waivers or consents under or in respect of this Agreement, the Collateral
Documents or the Notes (whether or not such amendment, waiver or consent becomes
effective), including, without limitation: (a) the costs and expenses incurred in
enforcing or defending (or determining whether or how to enforce or defend) any rights
under this Agreement, the Collateral Documents or the Notes or in responding to any
subpoena or other legal process or informal investigative demand issued in connection with
this Agreement, the Collateral Documents or the Notes, or by reason of being a holder of
any Note, and (b) the costs and expenses, including financial advisors’ fees,
incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary
or in connection with any work-out or restructuring of the transactions contemplated
hereby, by the Collateral Documents and by the Notes. The Company will pay, and will save
each holder of a Note harmless from, all claims in respect of any fees, costs or expenses
if any, of brokers and finders (other than those retained by such holder). 



        15.2         Survival. 




45











                The
obligations of the Company under this Section 15 will survive the payment or transfer of
any Note, the enforcement, amendment or waiver of any provision of this Agreement, the
Collateral Documents or the Notes, and the termination of this Agreement and the
Collateral Documents. 



16.         SURVIVAL OF
REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. 



        All
representations and warranties contained herein, in the Collateral Documents or in any
Confirmation of Acceptance shall survive the execution and delivery of this Agreement, the
Collateral Documents, such Confirmation of Acceptance and the Notes, the purchase or
transfer by any holder of any Note or portion thereof or interest therein and the payment
of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any
investigation made at any time by or on behalf of any Purchaser or any other holder of a
Note. All statements contained in any certificate or other instrument delivered by or on
behalf of the Company pursuant to this Agreement or the Collateral Documents shall be
deemed representations and warranties of the Company under this Agreement. Subject to the
preceding sentence, this Agreement, the Collateral Documents and the Notes embody the
entire agreement and understanding between the Prudential and the Purchasers, on the one
hand, and the Company and each Issuer Subsidiary, on the other hand, and supersede all
prior agreements and understandings relating to the subject matter hereof. 



17.         AMENDMENT AND WAIVER. 



        17.1         Requirements. 



                This
Agreement and the Collateral Documents may be amended, and the Company (or any Issuer
Subsidiary, as applicable) may take any action herein prohibited, or omit to perform any
act herein required to be performed by it, if the Company (or such Issuer Subsidiary, as
applicable) shall obtain the written consent to such amendment, action or omission to act,
of the Required Holder(s) of the Notes, except that: 



          	(i) 	  	
               without the written consent of the holders of all Notes of a particular Series,
               and if an Event of Default shall have occurred and be continuing, of the holders
               of all Notes of all Series, at the time outstanding, the Notes of such Series
               may not be amended or the provisions thereof waived to change the maturity
               thereof, to change or affect the principal thereof, or to change or affect the
               rate or time of payment of interest on or any Make-Whole Amount payable with
               respect to the Notes of such Series, 



               



          	(ii) 	  	
               without the written consent of the holder or holders of all Notes at the time
               outstanding, no amendment to or waiver of the provisions of this Agreement shall
               change or affect the provisions of Section 12 or this Section 17 insofar as such
               provisions relate to proportions of the principal amount of the Notes of any
               Series, or the rights of any individual holder of Notes, required with respect
               to any declaration of Notes to be due and payable or with respect to any
               consent, amendment, waiver or declaration, 



               



46






          	(iii) 	  	
               without the written consent of Prudential, the provisions of Section 2B may not
               be amended or waived (provided that if any such amendment or waiver would affect
               any rights or obligations with respect to the purchase and sale of Notes which
               shall have become Accepted Notes prior to such amendment or waiver, the
               requirements of clause (iv), below, must also be satisfied), and 



               



          	(iv) 	  	
               without the written consent of all of the Purchasers which shall have become
               obligated to purchase Accepted Notes of any Series, no provision of Sections 2B
               or 3 may be amended or waived if such amendment or waiver would affect the
               rights or obligations with respect to the purchase and sale of the Accepted
               Notes of such Series or the terms and provisions of such Accepted Notes. 



               



Each holder of any Note at the time
or thereafter outstanding shall be bound by any consent authorized by this Section 17,
whether or not such Note shall have been marked to indicate such consent. No course of
dealing between the Company and the holder of any Note nor any delay in exercising any
rights hereunder or under any Note shall operate as a waiver of any rights of any holder
of such Note. 



As used herein, the term “this
Agreement” and “the Collateral Documents” and references thereto shall mean
this Agreement and the Collateral Documents, respectively, as they may from time to time
be amended or supplemented. 



        17.2         Notes held by
Company, etc. 



                Solely
for the purpose of determining whether the holders of the requisite percentage of the
aggregate principal amount of Notes or any Series thereof then outstanding have approved
or consented to any amendment, waiver or consent to be given under this Agreement or the
Notes or any Series thereof, or have directed the taking of any action provided herein or
in the Notes or any Series thereof to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes or any Series thereof then
outstanding, Notes or any Series thereof directly or indirectly owned by the Company or
any of its Affiliates shall be deemed not to be outstanding. 



18.         NOTICES. 



                All
notices and communications provided for hereunder (other than communication provided for
in Section 2, which shall be provided as contemplated therein) shall be in writing and
sent (a) by telefacsimile if the sender on the same day sends a confirming copy of such
notice by a recognized overnight delivery service (charges prepaid), or (b) by registered
or certified mail with return receipt requested (postage prepaid), or (c) by a recognized
overnight delivery service (with charges prepaid). Any such notice must be sent: 



             (a)    
          if to any Purchaser or its nominee, to such Person at the address specified for
          such communications in the Purchaser Schedule attached to the applicable
          Confirmation of Acceptance, or at such other address as such Person shall have
          specified to the Company in writing, 



             (b)    
          if to any other holder of any Note, to such holder at such address as such other
          holder shall have specified to the Company in writing, or 



47









             (c)    
          if to the Company or any Issuer Subsidiary, to the Company at One Nu Skin Plaza,
          75 West Center Street, Provo, Utah 84601 to the attention of the Chief Financial
          Officer, or at such other address as the Company or such Issuer Subsidiary shall
          have specified to the holder of each Note in writing. 



Notices under this Section 18 will be
deemed to have been given and received when delivered at the address so specified. Any
communication pursuant to Section 2 shall be made by a method specified for such
communication in Section 2, and shall be effective to create any rights or obligations
under this Agreement only if, in the case of a telephone communication, an Authorized
Officer of the party conveying the information and of the party receiving the information
are parties to the telephone call, and in the case of a telefacsimile communication, the
communication is signed by an Authorized Officer of the party conveying the information,
addressed to the attention of an Authorized Officer of the party receiving the
information, and in fact received at the telefacsimile terminal the number of which is
listed for the party receiving the communication on the Information Schedule hereto or at
such other telefacsimile terminal as the party receiving the information shall have
specified in writing to the party sending such information. 



19.         REPRODUCTION OF
DOCUMENTS. 



                This
Agreement, the Collateral Documents and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be executed, (b)
documents received by any Purchaser may at the Closing Day (except the Notes themselves),
and (c) financial statements, certificates and other information previously or hereafter
furnished to any Purchaser, may be reproduced by such Purchaser by any photographic,
photostatic, microfilm, microcard, miniature photographic or other similar process and
such Purchaser may destroy any original document so reproduced. The Company agrees and
stipulates that, to the extent permitted by applicable law, any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such reproduction was made
in the regular course of business) and any enlargement, facsimile or further reproduction
of such reproduction shall likewise be admissible in evidence. This Section 19 shall not
prohibit the Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence to
demonstrate the inaccuracy of any such reproduction. 



20.         CONFIDENTIAL
INFORMATION. 



                For
the purposes of this Section 20, “Confidential Information” means information
delivered to any Purchaser by or on behalf of the Company or any Subsidiary in connection
with the transactions contemplated by or otherwise pursuant to this Agreement that is
proprietary in nature and that was clearly marked or labeled or otherwise adequately
identified when received by such Purchaser as being confidential information of the
Company or such Subsidiary, provided that such term does not include information
that (a) was publicly known or otherwise known to such Purchaser prior to the time of such
disclosure, (b) subsequently becomes publicly known through no act or omission by such
Purchaser or any person acting on its behalf, (c) otherwise becomes known to such
Purchaser other than through disclosure (x) by 





48









the Company or any Subsidiary, or (y) by
another Person known by such Purchaser to be bound by a confidentiality agreement with the
Company, or (d) constitutes financial statements delivered to such Purchaser under Section
7.1 that are otherwise publicly available. Each Purchaser will maintain the
confidentiality of such Confidential Information in accordance with procedures adopted by
it in good faith to protect confidential information of third parties delivered to it,
provided that each Purchaser may deliver or disclose Confidential Information to
(i) its directors, officers, employees, agents, attorneys and affiliates (to the extent
such disclosure reasonably relates to the administration of the investment represented by
any Notes), (ii) its financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with the terms of
this Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor to
which such Purchaser sells or offers to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 20), (v) any Person
from which such Purchaser offers to purchase any security of the Company (if such Person
has agreed in writing prior to its receipt of such Confidential Information to be bound by
the provisions of this Section 20), (vi) any federal or state regulatory authority having
jurisdiction over such Purchaser, (vii) the National Association of Insurance
Commissioners or any similar organization, or any nationally recognized rating agency that
requires access to information about such Purchaser’s investment portfolio or (viii)
any other Person to which such delivery or disclosure may be necessary or appropriate (w)
to effect compliance with any law, rule, regulation or order applicable to such Purchaser,
(x) in response to any subpoena or other legal process (provided that such Purchaser give
prompt notice to the Company of such subpoena or legal process to the extent such
Purchaser is legally permitted to do so), (y) in connection with any litigation to which
such Purchaser is a party, or (z) if an Event of Default has occurred and is continuing,
to the extent such Purchaser may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for the protection of the rights and
remedies under its Notes, this Agreement and the Collateral Documents. Each holder of a
Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be
entitled to the benefits of this Section 20 as though it were a party to this Agreement.
On reasonable request by the Company in connection with the delivery to any holder of a
Note of information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement or its
nominee), such holder will enter into an agreement with the Company embodying the
provisions of this Section 20. 







21.         GUARANTEED
OBLIGATIONS. 



        21.1         Guaranteed
Obligations. 



                The
Company, in consideration of the execution and delivery of this Agreement and the purchase
by the Purchasers of any Notes issued by an Issuer Subsidiary, hereby irrevocably,
unconditionally, absolutely, jointly and severally guarantees, on a continuing basis, to
each holder of Notes as and for the Company’s own debt, until final and indefeasible
payment has been made the due and punctual payment by each Issuer Subsidiary of the
principal of, and interest, and the Make-Whole Amount (if any) on, the Notes issued by
such Issuer Subsidiary at any time outstanding and the due and punctual payment of all
other amounts payable, and all other indebtedness owing, by such Issuer Subsidiary to the
holders of such Notes under this Agreement and such Notes, in each case when and as the
same shall become due and payable, 




49









 whether at maturity, pursuant to mandatory or optional
prepayment, by acceleration or otherwise, all in accordance with the terms and provisions
hereof and thereof; it being the intent of the Company that the guaranty set forth herein
shall be a continuing guaranty of payment and not a guaranty of collection. All of the
obligations set forth in this Section 21.1 are referred to herein as the
“Guaranteed Obligations” and the guaranty thereof set forth in this
Section 21 is referred to herein as the “Parent Guaranty.” 






        21.2         Payments and
Performance. 



                In
the event that an Issuer Subsidiary fails to make, on or before the due date thereof, any
payment to be made of any principal amount of, or interest or Make-Whole Amount on, or in
respect of, the Notes issued by such Issuer Subsidiary or of any other amounts due to any
holder of Notes under the Notes or this Agreement, after giving effect to any applicable
grace periods or cure provisions or waivers or amendments, the Company shall cause
forthwith to be paid the moneys in respect of which such failure has occurred in
accordance with the terms and provisions of this Agreement and the Notes. In furtherance
of the foregoing, if any or all of the Notes have been accelerated as provided in Section
12.1 (and such acceleration has not been rescinded), the Guaranteed Obligations in respect
of such Notes shall forthwith become due and payable without notice, regardless of whether
the acceleration of such Notes shall be stayed, enjoined, delayed or deemed ineffective.
Nothing shall discharge or satisfy the obligations of the Company hereunder except the
full, final and indefeasible payment of the Guaranteed Obligations. 



        21.3         Releases. 



                The
Company consents and agrees that, without any notice whatsoever to or by the Company,
except with respect to any action (but not any failure to act) referred to in clauses (i),
(ii) and (iv) below (it being understood that the Company shall be deemed to have notice
of any matter as to which any Issuer Subsidiary has knowledge), and without impairing,
releasing, abating, deferring, suspending, reducing, terminating or otherwise affecting
the obligations of the Company hereunder, each holder of Notes, by action or inaction,
may: 



          	(i) 	  	
               compromise or settle, renew or extend the period of duration or the time for the
               payment, or discharge the performance of, or may refuse to, or otherwise not,
               enforce, or may, by action or inaction, release all or any one or more parties
               to, any one or more of the Notes, this Agreement, or any other guaranty or
               agreement or instrument related thereto or hereto; 



               



          	(ii) 	  	
               assign, sell or transfer, or otherwise dispose of, any one or more of the Notes; 



               



          	(iii) 	  	
               grant waivers, extensions, consents and other indulgences of any kind whatsoever
               to any Issuer Subsidiary or any other Person liable in any manner in respect of
               all or any part of the Guaranteed Obligations; 



               



          	(iv) 	  	
               amend, modify or supplement in any manner whatsoever and at any time (or from
               time to time) any one or more of the Notes, this Agreement, or any other
               guaranty or any agreement or instrument related thereto or hereto; 



               




50










          	(v) 	  	
               release or substitute any one or more of the endorsers or guarantors of the
               Guaranteed Obligations whether parties hereto or not; and 



               



          	(vi) 	  	
               sell, exchange, release, accept, surrender or enforce rights in, or fail to
               obtain or perfect or to maintain, or cause to be obtained, perfected or
               maintained, the perfection of any security interest or other Lien on, by action
               or inaction, any property at any time pledged or granted as security in respect
               of the Guaranteed Obligations, whether so pledged or granted by the Company, any
               Issuer Subsidiary or any other Person. 



               



                The
Company hereby ratifies and confirms any such action specified in this Section 21.3 and
agrees that the same shall be binding upon the Company. The Company hereby waives any and
all defenses, counterclaims or offsets which the Company might or could have by reason
thereof. 



        21.4         Waivers. 



	  	
To
the fullest extent permitted by law, the Company hereby waives: 






          	(i) 	  	
               notice of acceptance of this Agreement; 



               



          	(ii) 	  	
               notice of any purchase or acceptance of the Notes under this Agreement, or the
               creation, existence or acquisition of any of the Guaranteed Obligations, subject
               to the Company’s right to make inquiry of each holder of Notes to ascertain
               the amount of the Guaranteed Obligations at any reasonable time; 



               



          	(iii) 	  	
               notice of the amount of the Guaranteed Obligations, subject to the
               Company’s right to make inquiry of each holder of Notes to ascertain the
               amount of the Guaranteed Obligations at any reasonable time; 



               



          	(iv) 	  	
               notice of adverse change in the financial condition of any Issuer Subsidiary or
               any other guarantor or any other fact that might increase the Company’s
               risk hereunder; 



               



          	(v) 	  	
               notice of presentment for payment, demand, protest, and notice thereof as to the
               Notes or any other instrument; 



               



          	(vi) 	  	
               notice of any Default or Event of Default, so long as any Issuer Subsidiary has
               knowledge thereof; 



               



          	(vii) 	  	
               all other notices and demands to which the Company might otherwise be entitled
               (except if such notice or demand is specifically otherwise required to be given
               to the Company under this Agreement); 



               



          	(viii) 	  	
               the right by statute or otherwise to require any or each holder of Notes to
               institute suit against any Issuer Subsidiary or any other guarantor or to
               exhaust the rights and remedies of any or each holder of Notes against any
               Issuer  



               




51 












          	  	  	
                Subsidiary or any other guarantor, the Company being bound to the payment
               of each and all Guaranteed Obligations, whether now existing or hereafter
               accruing, as fully as if such Guaranteed Obligations were directly owing to each
               holder of Notes by the Company; 



               



          	(ix) 	  	
               any defense arising by reason of any disability or other defense (other than the
               defense that the Guaranteed Obligations shall have been fully, finally and
               indefeasibly paid) of any Issuer Subsidiary or by reason of the cessation from
               any cause whatsoever of the liability of any Issuer Subsidiary in respect
               thereof; 



               



          	(x) 	  	
               any stay (except in connection with a pending appeal), valuation, appraisal,
               redemption or extension law now or at any time hereafter in force that, but for
               this waiver, might be applicable to any sale of property of the Company made
               under any judgment, order or decree based on this Agreement, and the Company
               covenants that it will not at any time insist upon or plead, or in any manner
               claim or take the benefit or advantage of any such law; and 



               



          	(xi) 	  	
               at all times prior to full, final and indefeasible payment of the Guaranteed
               Obligations, any claim of any nature arising out of any right of indemnity,
               contribution, reimbursement, indemnification or any similar right or any claim
               of subrogation (whether such right or claim arises under contract, common law or
               statutory or civil law (including, without limitation, section 509 of the United
               States Bankruptcy Code)) arising in respect of any payment made under this
               Agreement or in connection with this Agreement, against any Issuer Subsidiary or
               the estate of any Issuer Subsidiary (including Liens on the property of any
               Issuer Subsidiary or the estate of any Issuer Subsidiary), in each case whether
               or not any Issuer Subsidiary at any time shall be the subject of any proceeding
               brought under any Bankruptcy Law, and the Company further agrees that, except as
               provided in Section 21.9, it will not file any claims against any Issuer
               Subsidiary or the estate of any Issuer Subsidiary in the course of any such
               proceeding or otherwise, and further agrees that each holder of Notes may
               specifically enforce the provisions of this clause (xi). 



               



        21.5         Marshaling. 



The Company
consents and agrees: 



             (a)    
          that each holder of Notes, and each Person acting for the benefit of one or more
          of the holders of Notes, shall be under no obligation to marshal any assets in
          favor of the Company or against or in payment of any or all of the Guaranteed
          Obligations; and 



             (b)    
          that, to the extent that any Issuer Subsidiary makes a payment or payments to
          any holder of Notes, which payment or payments or any part thereof are
          subsequently invalidated, declared to be fraudulent or preferential, set aside
          or required, for any of the foregoing reasons or for any other reason, to be
          repaid or paid over to a custodian, trustee, receiver or any other party under
          any Bankruptcy Law, other common or civil law, or equitable  




52











      cause, then, to the
          extent of such payment or repayment, the obligation or part thereof intended to
          be satisfied thereby shall be revived and continued in full force and effect as
          if such payment or payments had not been made and the Company shall be primarily
          liable for such obligation. 





        21.6         Immediate Liability. 



                The
Company agrees that the liability of the Company in respect of this Parent Guaranty shall
be immediate and shall not be contingent upon the exercise or enforcement by any holder of
Notes or any other Person of whatever remedies such holder of Notes or other Person may
have against any Issuer Subsidiary or any other guarantor or the enforcement of any Lien
or realization upon any security such holder of Notes or other Person may at any time
possess. 



        21.7         Primary Obligations. 



                This
Parent Guaranty is a primary and original obligation of the Company and is an absolute,
unconditional, continuing and irrevocable guaranty of payment and shall remain in full
force and effect without respect to any action by any holder of Notes specified in Section
21.3 hereof or any future changes in conditions, including, without limitation, change of
law or any invalidity or irregularity with respect to the issuance or assumption of any
obligations (including, without limitation, the Notes) of or by any Issuer Subsidiary or
any other guarantor, or with respect to the execution and delivery of any agreement
(including, without limitation, the Notes and this Agreement) by any Issuer Subsidiary or
any other Person. 



        21.8         No Reduction or
Defense. 



                The
obligations of the Company under this Agreement, and the rights of any holder of Notes to
enforce such obligations by any proceedings, whether by action at law, suit in equity or
otherwise, shall not be subject to any reduction, limitation, impairment or termination,
whether by reason of any claim of any character whatsoever or otherwise (other than
payment in full of all amounts owing hereunder or under the Notes), including, without
limitation, claims of waiver, release, surrender, alteration or compromise, and shall not
be subject to any defense (other than any defense based upon the irrevocable payment in
full of the obligations under this Agreement and the Notes), set-off, counterclaim,
recoupment or termination whatsoever. 



                Without
limiting the generality of the foregoing, the obligations of the Company shall not be
discharged or impaired by: 



             (a)    
          any default (including, without limitation, any Default or Event of Default),
          failure or delay, willful or otherwise, in the performance of any obligations by
          any Issuer Subsidiary or any of its respective Subsidiaries or Affiliates; 



53









             (b)    
          any proceeding of, or involving, any Issuer Subsidiary under any Bankruptcy Law,
          or any merger, consolidation, reorganization, dissolution, liquidation, sale of
          assets or winding up or change in corporate constitution or corporate identity
          or loss of corporate identity of any Issuer Subsidiary or any of its
          Subsidiaries or Affiliates; 



             (c)    
          any incapacity or lack of power, authority or legal personality of, or
          dissolution or change in the directors, stockholders or status of, any Issuer
          Subsidiary or any of its Subsidiaries or any other Person (other than the
          Company); 



             (d)    
          impossibility or illegality of performance on the part of any Issuer Subsidiary
          under this Agreement or the Notes; 



             (e)    
          the invalidity, irregularity or unenforceability of the Notes, this Agreement or
          any documents referred to therein or herein; 



             (f)    
          in respect of any Issuer Subsidiary, any change of circumstances, whether or not
          foreseen or foreseeable, whether or not imputable to any Issuer Subsidiary, or
          impossibility of performance through fire, explosion, accident, labor
          disturbance, floods, droughts, embargoes, wars (whether or not declared),
          terrorist activities, civil commotions, acts of God or the public enemy, delays
          or failure of suppliers or carriers, inability to obtain materials or any other
          causes affecting performance, or any other force majeure, whether or not beyond
          the control of any Issuer Subsidiary and whether or not of the kind hereinbefore
          specified; 



             (g)    
          any attachment, claim, demand, charge, Lien, order, process, encumbrance or any
          other happening or event or reason, similar or dissimilar to the foregoing, or
          any withholding or diminution at the source, by reason of any taxes,
          assessments, expenses, indebtedness, obligations or liabilities of any
          character, foreseen or unforeseen, and whether or not valid, incurred by or
          against any Person, corporation or entity, or any claims, demands, charges,
          Liens or encumbrances of any nature, foreseen or unforeseen, incurred by any
          Person, or against any sums payable under this Agreement or the Notes, so that
          such sums would be rendered inadequate or would be unavailable to make the
          payments herein provided; or 



             (h)    
          any order, judgment, decree, ruling or regulation (whether or not valid) of any
          court of any nation or of any governmental authority or agency thereof, or any
          other action, happening, event or reason whatsoever which shall delay, interfere
          with, hinder or prevent, or in any way adversely affect, the performance by any
          Issuer Subsidiary of its obligations under this Agreement or the Notes, as the
          case may be. 



        21.9         Subordination. 



                In
the event that, for any reason whatsoever, any Issuer Subsidiary is now or hereafter
becomes indebted or obligated to the Company in any manner, the Company agrees that the
amount of such obligation, interest thereon if any, and all other amounts due with respect
thereto, shall, at all times during the existence of a Default or an Event of Default, be
subordinate as to time of payment and in all other respects to all the Guaranteed
Obligations, and the Company shall not be entitled to enforce or receive payment thereof
until all sums then due and owing to the holders of the Notes in respect of the Guaranteed
Obligations shall have been fully, finally and indefeasibly paid in full in cash, except
that the Company may enforce (and shall enforce, at the request of the Required Holders,
and at the Company’s expense) any obligations in respect of any such obligation owing
to the Company from any Issuer Subsidiary so long as all proceeds in respect of any
recovery from such enforcement shall be held by the Company in trust for the benefit of
the holders of the Notes, to be paid thereto as promptly as reasonably possible.  






54 













If any
other payment, other than pursuant to the immediately preceding sentence, shall have been
made to the Company by any Subsidiary in respect of any such obligation during any time
that a Default or an Event of Default exists and there are Guaranteed Obligations
outstanding, the Company shall hold in trust all such payments for the benefit of the
holders of Notes, to be paid thereto as promptly as reasonably possible. 





        21.10         No Election. 



                Each
holder of Notes shall, individually or collectively, have the right to seek recourse
against the Company to the fullest extent provided for herein for its obligations under
this Agreement. No election to proceed in one form of action or proceeding, or against any
party, or on any obligation, shall constitute a waiver of such holder’s right to
proceed in any other form of action or proceeding or against other parties unless such
holder of Notes has expressly waived such right in writing. Specifically, but without
limiting the generality of the foregoing, no action or proceeding by or on behalf of any
holder of Notes against an Issuer Subsidiary or any other Person under any document or
instrument evidencing obligations of such Issuer Subsidiary or such other Person to or for
the benefit of such holder of Notes shall serve to diminish the liability of the Company
under this Agreement except to the extent that such holder of Notes unconditionally shall
have realized payment by such action or proceeding. 



        21.11         Severability. 



                Each
of the rights and remedies granted under this Section 21 to each holder of Notes in
respect of the Notes held by such holder may be exercised by such holder without notice
to, or the consent of or any other action by, any other holder of Notes. 



        21.12         Appropriations. 



                Until
all amounts which may be or become payable by all Issuer Subsidiaries under or in
connection with this Agreement or the Notes or by the Company under or in connection with
this Agreement have been irrevocably paid in full, any holder of Notes (or any trustee or
agent on its behalf) may refrain from applying or enforcing any moneys, security or rights
held or received by such holder of Notes (or any trustee or agent on its behalf) in
respect of those amounts, or apply and enforce the same in such manner and order as it
sees fit (whether against those amounts or otherwise) and the Company shall not be
entitled to the benefit of the same; provided, however, that any payments received from
any Issuer Subsidiary, or the Company on behalf of any Issuer Subsidiary, will be applied
to amounts owing by such Issuer Subsidiary hereunder or in respect of the Notes issued by
it. 



        21.13         Other Enforcement
Rights. 



                Each
holder of Notes may proceed to protect and enforce this Agreement by suit or suits or
proceedings in equity, at law or in bankruptcy or insolvency, and whether for the specific
performance of any covenant or agreement contained herein or in execution or aid of any
power herein granted, or for the recovery of judgment for the obligations hereby
guarantied or for the enforcement of any other proper, legal or equitable remedy available
under applicable law. 




55










        21.14               Invalid
Payments.



                To
the extent that any payment is made to any holder of Notes in respect of the Guaranteed
Obligations by any Person, which payment or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required, for any of the foregoing
reasons or for any other reason, to be repaid or paid over to a custodian, trustee,
receiver, administrative receiver, administrator or any other party or officer under any
Bankruptcy Law, or any other common or civil law or equitable cause, then to the extent of
such payment or repayment, the obligation or part thereof intended to be satisfied shall
be revived and continued in full force and effect as if said payment had not been made and
the Company shall be primarily liable for such obligation. 



        21.15            No Waivers or
Election of Remedies; Expenses; etc. 



                No
course of dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice such
holder’s rights, powers or remedies. No right, power or remedy conferred by this
Agreement upon any holder of Notes shall be exclusive of any other right, power or remedy
referred to herein or therein or now or hereafter available at law, in equity, by statute
or otherwise. 



        21.16         Restoration of
Rights and Remedies. 



                If
any holder of Notes shall have instituted any proceeding to enforce any right or remedy
under this Agreement or any Note held by such holder and such proceeding shall have been
discontinued or abandoned for any reason, or shall have been determined adversely to such
holder, then and in every such case each such holder of Notes, the Issuer Subsidiary which
is the issuer of such Notes and the Company shall, except as may be limited or affected by
any determination in such proceeding, be restored severally and respectively to its
respective former position hereunder and thereunder, and thereafter the rights and
remedies of such holder of Notes shall continue as though no such proceeding had been
instituted. 



        21.17         No Setoff or
Counterclaim. 



	  	
Except
as otherwise required by law, each payment by the Company shall be made without setoff or
counterclaim. 






        21.18         Further Assurances. 



                The
Company will cooperate with the holders of the Notes and execute such further instruments
and documents as the Required Holders shall reasonably request to carry out, to the
reasonable satisfaction of the Required Holders, the transactions contemplated by this
Agreement, the Notes and the documents and instruments related hereto and thereto. 




56








        21.19         Survival.



                So
long as the Guaranteed Obligations shall not have been fully and finally performed and
indefeasibly paid, the obligations of the Company under this Parent Guaranty shall survive
the transfer and payment of any Note and the payment in full of all the Notes. 



22.         JUDICIAL PROCEEDINGS. 



        22.1         Consent to
Jurisdiction. 



                The
Company and each Issuer Subsidiary irrevocably submits to the non-exclusive jurisdiction
of any New York State or United States federal court sitting in New York City, and
irrevocably waives its own forum, over any suit, action or proceeding arising out of or
relating to this Agreement or any Note. The Company and each Issuer Subsidiary irrevocably
waives, to the fullest extent it may effectively do so under applicable law, any objection
which it may have or hereafter have to the laying of the venue of any such suit, action or
proceeding brought in any such court and any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum. The
Company and each Issuer Subsidiary agrees, to the fullest extent it may effectively do so
under applicable law, that a final judgment in any such suit, action or proceeding brought
in such court shall be conclusive and binding upon the Company and each Issuer Subsidiary
may be enforced in the courts of the United States, the State of New York (or any other
courts to the jurisdiction of which the Company is or may be subject) by a suit upon such
judgment, provided that service of process is effected on the Company or such
Issuer Subsidiary in one of the manners specified below or as otherwise permitted by law. 



        22.2         Service of Process. 



        
        The
Company and each Issuer Subsidiary hereby consents to process being served in any suit,
action or proceeding of the nature referred to in Section 22.1 by the mailing of a copy
thereof by registered or certified air mail, postage prepaid, return receipt requested, to
the address of the Company or such Issuer Subsidiary set forth in Section 18. The Company
and each Issuer Subsidiary irrevocably waives, to the fullest extent it may effectively do
so under applicable law, all claim of error by reason of any such service and agrees that
such service (a) shall be deemed in every respect effective service of process upon the
Company or such Issuer Subsidiary in any such suit, action or proceeding, and (b) shall,
to the fullest extent permitted by law, be taken and held to be valid personal service
upon the Company. 



        22.3         No Limitation on
Service or Suit. 



        Nothing
in this Section 22 shall affect the right of any hold        er of the Notes to serve process in
any manner permitted by law or limit the right of any holder of the Notes to bring
proceedings against the Company or any Issuer Subsidiary in the courts of any jurisdiction
or jurisdictions or to enforce in any lawful manner a judgment obtained in one
jurisdiction in any other jurisdiction. 



57









23.         MISCELLANEOUS. 



        23.1         Successors and
Assigns. 



                All
covenants and other agreements contained in this Agreement and the Collateral Documents by
or on behalf of any of the parties hereto or thereto bind and inure to the benefit of
their respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not. 



        23.2         Accounting
Principles. 



                
 The Company shall prepare its accounts and financial statements required to
be delivered pursuant to Section 7.1 hereof in accordance with GAAP as in effect on the
date of, or at the end of the period covered by, such accounts and financial statements as
specified in Section 7.1 hereof, and any such accounts and financial statements delivered
pursuant to Section 7.1 hereof shall be audited, and an audit report or opinion in respect
thereof shall be executed, by independent public accountants of recognized national
standing, as more particularly set forth in Section 7.1 hereof. 



        23.3         Payments Due on
Non-Business Days. 



                Anything
in this Agreement, the Collateral Documents or the Notes to the contrary notwithstanding,
any payment of principal of or Make-Whole Amount or interest on any Note that is due on a
date other than a New York Business Day shall be made on the next succeeding New York
Business Day without including the additional days elapsed in the computation of the
interest payable on such next succeeding New York Business Day. 



        23.4         Severability. 



        Any
provision of this Agreement or the Collateral Documents that 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 or thereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or render
unenforceable such provision in any other jurisdiction. 



        23.5         Construction. 



                Each
covenant contained herein shall be construed (absent express provision to the contrary) as
being independent of each other covenant contained herein, so that compliance with any one
covenant shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action to be
taken by any Person, or which such Person is prohibited from taking, such provision shall
be applicable whether such action is taken directly or indirectly by such Person. 



        23.6         Counterparts. 



                This
Agreement and the Collateral Documents may be executed in any number of counterparts, each
of which shall be an original but all of which together shall constitute one 



58








 instrument.
Each counterpart may consist of a number of copies hereof, each signed by less than all,
but together signed by all, of the parties hereto. 



        23.7         Governing Law. 



        This
Agreement shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the law of the State of New York excluding choice-of-law
principles of the law of such State (other than Section 5-1401 of the New York General
Obligations Law) that would require the application of the laws of a jurisdiction other
than such State. 



        23.8         Binding Agreement. 



                When
this Agreement is executed and delivered by the Company and Prudential, it shall become a
binding agreement between the Company and Prudential. This Agreement shall also inure to
the benefit of each Purchaser and Issuer Subsidiary which shall have executed and
delivered a Confirmation of Acceptance, and each such Purchaser and Issuer Subsidiary
shall be bound by this Agreement to the extent provided in such Confirmation of
Acceptance. 








59 

















Very truly yours, 



NU SKIN ENTERPRISES,
INC. 



By:  /s/ Ritch N. Wood

       Name:  Ritch N. Wood

       Title:  Chief Financial Officer





The foregoing Agreement is hereby
accepted as of the date first above written. 



PRUDENTIAL INVESTMENT
MANAGEMENT, INC. 



By:    /s/ Iris Krause

          Name:    Iris Krause

          Title:      Vice President













S-1 

















SCHEDULE A 



DEFINED TERMS 



        As
used herein, the following terms have the respective meanings set forth below or set forth
in the Section hereof following such term: 



        “Acceptance”
shall have the meaning specified in Section 2B(5). 



        “Acceptance
Day” shall have the meaning specified in Section 2B(5). 



        “Accepted
Note” shall have the meaning specified in Section 2B(5). 



        “Acceptance
Window” shall mean, with respect to any Quotation, the time period designated by
Prudential during which the Company and Prudential shall be in live communication and the
Company may elect to accept such Quotation. 



        “Affiliate”
means, at any time, (a) with respect to any Person, any other Person that at such time
directly or indirectly through one or more intermediaries Controls, or is Controlled by,
or is under common Control with, such first Person, and (b) with respect to the Company
and its Subsidiaries, any Person beneficially owning or holding, directly or indirectly,
5% or more of any class of voting or equity interests of the Company or any of its
Subsidiaries or any corporation of which the Company and its Subsidiaries beneficially own
or hold, in the aggregate, directly or indirectly, 5% or more of any class of voting or
equity interests. As used in this definition, “Control” means the
possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting securities,
by contract or otherwise. Unless the context otherwise clearly requires, any reference to
an “Affiliate” is a reference to an Affiliate of the Company. 



        “Amended
and Restated Collateral Agency and Intercreditor Agreement” means the Amended and
Restated Collateral Agency and Intercreditor Agreement, substantially in the form of
Exhibit G hereto, dated as of the date hereof, by and among the Collateral Agent,
the Purchasers and each of the other Senior Secured Creditors, and acknowledged by the
Company and the Subsidiary Guarantors, as such agreement may be amended, supplemented or
modified from time to time. 



        “Available
Currencies” shall mean British Pounds, Canadian Dollars, Dollars, Euros, and Yen. 



        “Available Facility
Amount” shall have the meaning specified in Section 2B(1). 



        “British
Pounds” means the lawful currency of the United Kingdom. 



        “Business
Day” shall mean (i) other than as provided in clauses (ii) and (iii) below, any
day other than a Saturday, a Sunday or a day on which commercial banks in New York City
are authorized or required to be closed, (ii) for purposes of Section 2B(3) only, any day
which is both a New York Business Day and a day on which Prudential is open for business
and (iii) for purposes of Section 8.6 only, (a) if with respect to Notes denominated in
British  




A-1 









 Pounds, any day which is both a New York Business Day and a day on which
commercial banks are not required or authorized to be closed in London, (b) if with
respect to Notes denominated in Canadian Dollars, any day which is both a New York
Business Day and a day on which commercial banks are not required or authorized to be
closed in Ottawa, (c) if with respect to Notes denominated in Dollars, a New York Business
Day, (d) if with respect to Notes denominated in Euros, any day which is both a New York
Business Day and a day on which commercial banks are not required or authorized to be
closed in Frankfurt and Brussels, and (e) if with respect to Notes denominated in Yen, any
day which is both a New York Business Day and a day on which commercial banks are not
required or authorized to be closed in Tokyo, Japan. 





        “Canadian
Dollars” means the lawful currency of Canada. 



        “Cancellation
Date” shall have the meaning specified in Section 2B(8)(iv). 



        “Cancellation Fee”
shall have the meaning specified in Section 2B(8)(iv). 



        “Capital
Lease” means, at any time, a lease with respect to which the lessee is required
concurrently to recognize the acquisition of an asset and the incurrence of a liability in
accordance with GAAP. 



        “Closing
Day” shall mean, with respect to any Accepted Note, the Business Day specified
for the closing of the purchase and sale of such Accepted Note in the Confirmation of
Acceptance with respect to such Accepted Note, provided that (i) if the Company and the
Purchaser which is obligated to purchase such Accepted Note agree on an earlier Business
Day for such closing, the “Closing Day” for such Accepted Note shall be such
earlier Business Day, and (ii) if the closing of the purchase and sale of such Accepted
Note is rescheduled pursuant to Section 2B(7), the Closing Day for such Accepted Note, for
all purposes of this Agreement except references to “original Closing Day” in
Section 2B(8)(iii), shall mean the Rescheduled Closing Day with respect to such Accepted
Note. 



        “Code”
means the Internal Revenue Code of 1986, as amended from time to time, and the rules and
regulations promulgated thereunder from time to time. 



        “Collateral
Agent” means State Street Bank and Trust Company of California, N.A., acting in
its capacity as collateral agent under the Amended and Restated Collateral Agency and
Intercreditor Agreement, together with its successors and assigns. 



        “Collateral
Documents” means the Pledge Agreement, the Subsidiary Guaranty, the Amended and
Restated Collateral Agency and Intercreditor Agreement, any Foreign Subsidiary Guaranty,
and all other documents, evidencing, securing or relating to the Notes, the payment of the
indebtedness evidenced by the Notes and all other amounts due from the Company or any
Restricted Subsidiary evidenced or secured by this Agreement, the Notes or the Collateral
Documents. 



        “Company”
means Nu Skin Enterprises, Inc., a Delaware corporation. 



        “Confidential
Information” is defined in Section 20. 



A-2 










        “Confirmation of
Acceptance” shall have the meaning specified in Section 2B(5). 



        “Consolidated
Income Available for Fixed Charges” means, with respect to any period,
Consolidated Net Income for such period plus all amounts deducted in the computation
thereof on account of (a) Fixed Charges, and (b) taxes imposed on or measured by income or
excess profits of the Company and the Restricted Subsidiaries. 



        “Consolidated
Net Income” means, with respect to any period, the net income (or loss) of the
Company and the Restricted Subsidiaries for such period (taken as a cumulative whole), as
determined in accordance with GAAP, after eliminating all offsetting debits and credits
between the Company and the Restricted Subsidiaries and all other items required to be
eliminated in the course of the preparation of consolidated financial statements of the
Company and the Restricted Subsidiaries in accordance with GAAP. 



        “Consolidated
Net Worth” means, at any time, (a) the consolidated stockholders’ equity of
the Company and the Restricted Subsidiaries, as defined according to GAAP, less (b)
the sum of (i) to the extent included in clause (a), all amounts attributable to minority
interests, if any, in the securities of Restricted Subsidiaries, and (ii) the amount by
which Restricted Investments exceed 20% of the amount determined in clause (a). 



        “Consolidated
Total Assets” means, at any date of determination, on a consolidated basis for
the Company and the Restricted Subsidiaries, total assets, determined in accordance with
GAAP. 



        “Counterpart
Amended and Restated Collateral Agency and Intercreditor Agreement” means
counterpart to the Amended and Restated Collateral Agency and Intercreditor Agreement
attached thereto as Exhibit A. 



        “Credit
Facility” means any credit facility providing for the borrowing of money or the
issuance of letters of credit (a) for the Company, or (b) for any Restricted Subsidiary,
if its obligations under such credit facility are guaranteed by the Company. 



        “Default”
means an event or condition the occurrence or existence of which would, with the lapse of
time or the giving of notice or both, become an Event of Default. 



        “Default
Rate” shall mean (i) in the case of any Note denominated in Dollars, the greater
of 2% over the interest rate expressed in such Note and 2% over the rate announced from
time to time in New York City by the Bank of New York as its “base” or
“prime” rate and (ii) in the case of any Note denominated in a currency other
than Dollars, 2% over the interest rate expressed in such Note. 



        “Delayed
Delivery Fee” shall have the meaning specified in Section 2B(8)(iii). 



        “Document
Delivery Date” shall mean (i) the applicable Closing Day in the case of any
Accepted Notes to be denominated in Dollars, (ii) two New York Business Days prior to the
applicable Closing Day in the case of any Accepted Notes to be denominated in British
Pounds, Canadian Dollars or Euros and (iii) three New York Business Days prior to the
applicable Closing Day in the case of any Accepted Notes to be denominated in Yen. 



A-3 









        “Dollars”
and the symbol “$” mean the lawful money of the United States of America
unless, in the case of “Dollars” or “$", if immediately preceded by
the name of another country (e.g. “Canadian Dollars”). 



        “Domestic
Subsidiary” means, at any time, each Subsidiary of the Company (a) which is
created, organized or domesticated in the United States or under the law of the United
States or any state or territory thereof, (b) which was included as a member of the
Company’s affiliated group in the Company’s most recent consolidated United
States federal income tax return, or (c) the earnings of which were includable in the
taxable income of the Company or any other Domestic Subsidiary (to the extent of the
Company’s and/or such other Domestic Subsidiary’s ownership interest of such
Subsidiary) in the Company’s most recent consolidated United States federal income
tax return. 



        “EBITDA”
means, with respect to any period, the sum of (i) Consolidated Net Income for such period
without giving effect to extraordinary gains and losses, gains and losses resulting from
changes in GAAP and one time non-recurring income and expenses resulting from acquisitions
and similar events, plus (ii) to the extent deducted in the calculation of
Consolidated Net Income, the amount of all interest expense, depreciation expense,
amortization expense, and income tax expense; provided that EBITDA will include or
exclude, as applicable, acquisitions and divestitures of Restricted Subsidiaries or other
business units on a pro forma basis as if such acquisitions or divestitures occurred on
the first day of the applicable period. 



        “Environmental
Laws” means any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and
the protection of the environment or the release of any materials into the environment,
including but not limited to those related to hazardous substances or wastes, air
emissions and discharges to waste or public systems. 



        “Equity
Securities” of any Person means (a) all common stock, Preferred Stock,
participations, shares, partnership interest, membership interest or other equity interest
in and of such Person (regardless of how designated and whether or not voting or
non-voting), and (b) all warrants, options and other rights to acquire any of the
foregoing. 



        “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in effect. 



        “ERISA
Affiliate” means any trade or business (whether or not incorporated) that is
treated as a single employer together with the Company under section 414 of the Code. 



        “Euros”
shall mean the single currency of participating member states of the European Union. 



        “Event
of Default” is defined in Section 11. 



A-4










        “Exchange
Act” means the Securities Exchange Act of 1934, as amended. 



        “Facility”
shall have the meaning specified in Section 2B(1). 



        “Fixed
Charges” means, with respect to any period, the sum of (i) Interest Expense for
such period, and (ii) Lease Rentals for such period. 



        “Foreign
Subsidiary” means, at any time, each Subsidiary of the Company that is not a
Domestic Subsidiary. 



        “Foreign
Subsidiary Guaranty” shall have the meaning specified in Section 9.6(a). 



        “GAAP”
means generally accepted accounting principles as in effect from time to time in the
United States of America. 



      “Governmental
Authority” means



		    (a)                        the
government of  








          		    (i)       
          the United States of America or any State or other political subdivision
          thereof, or  



               




          		    (ii)       
               the jurisdiction of organization of any Issuer Subsidiary, or 



               



          		    (iii)       
               any jurisdiction in which the Company or any Subsidiary conducts all or any part
               of its business, or which asserts jurisdiction over any properties of the
               Company or any Subsidiary, or 



               



          		    (b)       
               any entity exercising executive, legislative, judicial, regulatory or
               administrative functions of, or pertaining to, any such government. 



               



        “Guaranty”
means, with respect to any Person, any obligation (except the endorsement in the ordinary
course of business of negotiable instruments for deposit or collection) of such Person
guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of
any other Person in any manner, whether directly or indirectly, including (without
limitation) obligations incurred through an agreement, contingent or otherwise, by such
Person: 



          		    (a)       
               to purchase such indebtedness or obligation or any property constituting
               security therefor; 



               



          		    (b)       
               to advance or supply funds (i) for the purchase or payment of such indebtedness
               or obligation, or (ii) to maintain any working capital or other balance sheet
               condition or any income statement condition of any other Person or otherwise to
               advance or make available funds for the purchase or payment of such indebtedness
               or obligation; 



               





A-5












          		    (c)       
               to lease properties or to purchase properties or services primarily for the
               purpose of assuring the owner of such indebtedness or obligation of the ability
               of any other Person to make payment of the indebtedness or obligation; or 



               



          		    (d)       
               otherwise to assure the owner of such indebtedness or obligation against loss in
               respect thereof. 



               



In any computation of the
indebtedness or other liabilities of the obligor under any Guaranty, the indebtedness or
other obligations that are the subject of such Guaranty shall be assumed to be direct
obligations of such obligor. 



        “Hazardous
Material” means any and all pollutants, toxic or hazardous wastes or any other
substances that might pose a hazard to health or safety, the removal of which may be
required or the generation, manufacture, refining, production, processing, treatment,
storage, handling, transportation, transfer, use, disposal, release, discharge, spillage,
seepage, or filtration of which is or shall be restricted, prohibited or penalized by any
applicable law (including, without limitation, asbestos, urea formaldehyde foam insulation
and polychlorinated biphenyls). 



        “Hedge
Treasury Note(s)” shall mean, with respect to any Accepted Note, the United
States Treasury Note or Notes whose cash flow duration (as determined by Prudential) most
closely matches the duration of such Accepted Note. 



        “holder”
means, with respect to any Note, the Person in whose name such Note is registered in the
register maintained by the Company pursuant to Section 13.1. 



        “Hostile
Tender Offer” shall mean, with respect to the use of proceeds of any Note, any
offer to purchase, or any purchase of, shares of capital stock of any corporation or
equity interests in any other entity, or securities convertible into or representing the
beneficial ownership of, or rights to acquire, any such shares or equity interests, if
such shares, equity interests, securities or rights are of a class which is publicly
traded on any securities exchange or in any over-the-counter market, other than purchases
of such shares, equity interests, securities or rights representing less than 5% of the
equity interests or beneficial ownership of such corporation or other entity for portfolio
investment purposes, and such offer or purchase has not been duly approved by the board of
directors of such corporation or the equivalent governing body of such other entity prior
to the date on which the Company makes the Request for Purchase of such Note. 



        “Indebtedness”
with respect to any Person means, at any time, without duplication, 



          		    (a)       
               its liabilities for borrowed money and its redemption obligations in respect of
               mandatorily redeemable Preferred Stock; 



               



          		    (b)       
               its liabilities for the deferred purchase price of property acquired by such
               Person (excluding accounts payable arising in the ordinary course of business
               but including all liabilities created or arising under any conditional sale or
               other title retention agreement with respect to any such property); 



               


A-6











          		    (c)       
               all liabilities appearing on its balance sheet in accordance with GAAP in
               respect of Capital Leases; 



               



          		    (d)       
               all liabilities for borrowed money secured by any Lien with respect to any
               property owned by such Person (whether or not it has assumed or otherwise become
               liable for such liabilities); 



               



          		    (e)       
               Securitization Debt; and 



               



          		    (f)       
               any Guaranty (other than the Subsidiary Guaranty) of such Person with respect to
               liabilities of a type described in any of clauses (a) through (e) hereof. 



               



Indebtedness of any Person shall
include all obligations of such Person of the character described in clauses (a) through
(f) to the extent such Person remains legally liable in respect thereof notwithstanding
that any such obligation is deemed to be extinguished under GAAP. 



        “INHAM
Exemption” shall have the meaning provided in Section 6.2(e). 



        “Institutional
Investor” means (a) any original purchaser of a Note, and (b) any bank, trust
company, savings and loan association or other financial institution, any pension plan,
any investment company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form, holding more than $2,000,000
(or its equivalent in another Available Currency) in of the aggregate principal amount of
the Notes then outstanding or more than 20% of the aggregate principal amount of the Notes
then outstanding. 



        “Interest
Expense” means, with respect to the Company and the Restricted Subsidiaries for
any period, the sum, determined on a consolidated basis in accordance with GAAP, of (a)
all interest paid, accrued or scheduled for payment on the Indebtedness of the Company and
the Restricted Subsidiaries during such period (including interest attributable to Capital
Leases), plus (b) all fees in respect of outstanding letters of credit paid, accrued or
scheduled for payment by the Company and the Restricted Subsidiaries during such period. 



        “Investment”
means any investment, made in cash or by delivery of property, by the Company or any
Restricted Subsidiary (a) in any Person, whether by acquisition of stock, Indebtedness or
other obligation or Security, or by loan, Guaranty, advance, capital contribution or
otherwise; or (b) in any property. 



        “Issuance
Period” shall have the meaning specified in Section 2B(2). 



        “Issuance Fee”
shall have the meaning provided in Section 2B(8)(ii). 



        “Issuer
Subsidiary” shall mean (a) any Subsidiary Guarantor of the Company which has
issued or proposes to issue any Notes, or (b) any Foreign Subsidiary of the Company which
has issued or proposes to issue any Notes and has executed and delivered a Foreign
Subsidiary Guaranty to the holders of the Notes and has executed and delivered the same
Foreign Subsidiary Guaranty to, and for the benefit of, each Senior Secured Creditor party
to the Amended and Restated Collateral Agency and Intercreditor Agreement. 





A-7 












        “Lease
Rentals” means, with respect to any period, the sum of the rental and other
obligations required to be paid during such period by the Company or any Restricted
Subsidiary as lessee under all leases of real or personal property (other than Capital
Leases) as determined on a consolidated basis for the Company and the Restricted
Subsidiaries in accordance with GAAP. 



        “Lien”
means, with respect to any Person, any mortgage, lien, pledge, charge, security interest
or other encumbrance, or any interest or title of any vendor, lessor, lender or other
secured party to or of such Person under any conditional sale or other title retention
agreement or Capital Lease, upon or with respect to any property or asset of such Person
(including in the case of stock, stockholder agreements, voting trust agreements and all
similar arrangements). 



        “Make-Whole
Amount” is defined in Section 8.6. 



        “Material”
or “Materially” means material or materially, as the case may be, in
relation to the business, operations, affairs, financial condition, assets, properties or
prospects of the Company and the Restricted Subsidiaries taken as a whole. 



        “Material
Adverse Effect” means a material adverse effect on (a) the business, operations,
affairs, financial condition, assets or properties of the Company and the Restricted
Subsidiaries taken as a whole, or (b) the ability of the Company or any Subsidiary to
perform its obligations under this Agreement, the Notes or the Collateral Documents (as
applicable), or (c) the validity or enforceability of this Agreement, the Notes or any of
the Collateral Documents. 



        “Material
Domestic Subsidiary” means each Domestic Subsidiary of the Company that also is a
Material Subsidiary. 



        “Material
Foreign Subsidiary” means each Foreign Subsidiary of the Company that also is a
Material Subsidiary. 



        "Material
Subsidiaries" means, at any time, (a) Nu Skin Japan Co., Ltd., a Japanese corporation, Nu
Skin International, Inc., a Utah corporation, Nu Skin Enterprises Hong Kong, Inc., a Utah
corporation, Nu Skin Taiwan, Inc., a Utah corporation, Nu Skin United States, Inc., a
Delaware corporation, and Big Planet, Inc., a Delaware corporation; and (b) each other
Subsidiary of the Company which (i) had revenues during the four most recently ended
fiscal quarters equal to or greater than 5.0% of the consolidated total revenues of the
Company and its Subsidiaries during such period (provided that if the Company and
Subsidiaries collectively own not more than 30% of the outstanding equity, by value, of
Nu Skin Malaysia Holdings, then Nu Skin Malaysia Holdings and its subsidiaries shall not
be deemed Material Subsidiaries by reason of this clause (i) unless their consolidated
revenues during the four most recently ended fiscal quarters equaled or exceeded 15.0% of
the consolidated total revenues of the Company and its Subsidiaries during such period),
or (ii) is an obligor under any Guaranty with respect to the Indebtedness of the Company
under any Significant Credit Facility. 



      “Memorandum”
is defined in Section 5.3.



        “Multiemployer Plan”
means any Plan that is a “multiemployer plan” (as such term is defined in
section 4001(a)(3) of ERISA). 




A-8










        “NAIC
Annual Statement” shall have the meaning provided in Section 6.2(a). 



        “New
York Business Day” shall mean any day other than a Saturday, a Sunday or a day on
which commercial banks in New York are required or authorized to be closed. 



      “Notes”
is defined in Section 1.



        “Officer’s
Certificate” means a certificate of a Senior Financial Officer or of any other
officer of the Company whose responsibilities extend to the subject matter of such
certificate. 



        “Overnight
Interest Rate” means with respect to an Accepted Note denominated in a currency
other than Dollars, the actual rate of interest, if any, received by the Purchaser which
intends to purchase such Accepted Note on the overnight deposit of the funds intended to
be used for the purchase of such Accepted Note, it being understood that reasonable
efforts will be made by or on behalf of the Purchaser to make any such deposit in an
interest bearing account. 



        “Parent
Guaranty” shall mean the guaranty of the Company pursuant to Section 21 hereof of
any Notes issued by any Issuer Subsidiary. 



        “PBGC”
means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any
successor thereto. 



        “Permitted
Securitization Program” means any transaction or series of transactions that may
be entered into by the Company or any Restricted Subsidiary pursuant to which the Company
or any Restricted Subsidiary may sell, convey or otherwise transfer to (i) a
Securitization Entity (in the case of a transfer by the Company or any Restricted
Subsidiary) and (ii) any other Person (in the case of a transfer by a Securitization
Entity), or may grant a security interest in, any receivables (whether now existing or
arising or acquired in the future) of the Company or any Restricted Subsidiary, and any
assets related thereto including (A) all collateral securing such receivables, (B) all
contracts and contract rights and all guarantees or other obligations in respect of such
receivables, (C) proceeds of such receivables, and (D) other assets (including contract
rights) that are customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions involving
receivables; provided that the resultant Securitization Debt, together with all
other Priority Indebtedness then outstanding, shall not exceed the amount of Priority
Indebtedness permitted by Section 10.5(a)(ii). 



        “Person”
means an individual, partnership, corporation, limited liability company, association,
trust, unincorporated organization, or a government or agency or political subdivision
thereof. 



        “Plan”
means an “employee benefit plan” (as defined in section 3(3) of ERISA) that is
or, within the preceding five years, has been established or maintained, or to which
contributions are or, within the preceding five years, have been made or required to be
made, by the Company or any ERISA Affiliate or with respect to which the Company or any
ERISA Affiliate may have any liability. 



A-9 











        “Pledge
Agreement” means the Pledge Agreement, dated as of October 12, 2000, executed and
delivered by the Pledgors and the Collateral Agent, as amended, supplemented and modified
from time to time. 



        “Pledged
Securities” means (a) the Equity Securities described in Schedule I attached to
the Pledge Agreement and the Equity Securities of each Person that becomes a Material
Foreign Subsidiary, including all securities convertible into, and rights, warrants,
options and other rights to purchase or otherwise acquire, any of the foregoing now or
hereafter owned by such Pledgor, and the certificates or other instruments representing
any of the foregoing and any interest of such Pledgor in the entries on the books of any
securities intermediary pertaining thereto (the “Pledged Shares”), and
all dividends, distributions, returns of capital, cash, warrants, option, rights,
instruments, right to vote or manage the business of such Person pursuant to
organizational documents governing the rights and obligations of the stockholders, and
other property or proceeds from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such Pledged Shares; provided, that
the Pledged Shares shall not include any Equity Securities of such issuer in excess of the
number of shares or other equity interests of such issuer possessing up to but not
exceeding 65% of the voting power of all classes of Equity Securities entitled to vote of
such issuer, and all dividends, cash, warrants, rights, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of such Equity Securities; and (b) to the extent not covered by
clause (a) above, all proceeds of any or all of the foregoing. 



        “Pledgor”
means each Person who pledges Pledged Securities under the Pledge Agreement. 



        “Preferred
Stock” means any class of capital stock of a corporation that is preferred over
any other class of capital stock of such corporation as to the payment of dividends or the
payment of any amount upon liquidation or dissolution of such corporation. 



        “Priority
Indebtedness” means (without duplication) the sum of (a) any unsecured
Indebtedness of the Restricted Subsidiaries other than (i) guarantees under the Subsidiary
Guaranty, (ii) Indebtedness of a Restricted Subsidiary if (x) the Company has guaranteed
such Indebtedness or is a primary obligor of such Indebtedness, and (y) the holder of such
Indebtedness becomes a party to the Amended and Restated Collateral Agency and
Intercreditor Agreement (provided that until the holder of such Indebtedness
becomes a party to the Amended and Restated Collateral Agency and Intercreditor Agreement,
such Indebtedness will be considered Priority Indebtedness), (iii) Indebtedness owed to
the Company or any other Restricted Subsidiary, and (iv) Indebtedness of Issuer
Subsidiaries evidenced by the Notes and (b) Indebtedness of the Company and its Restricted
Subsidiaries secured by a Lien not permitted by paragraphs (a) through (m) of Section
10.3, and (c) Securitization Debt. 



        “property”
or “properties” means and includes each and every interest in any
property or asset, whether tangible or intangible and whether real, personal or mixed. 



        “Prudential”
shall mean Prudential Investment Management, Inc.. 



A-10 











        “Prudential
Affiliate” shall mean (i) any corporation or other entity controlling, controlled
by, or under common control with, Prudential and (ii) any managed account or investment
fund which is managed by Prudential or a Prudential Affiliate described in clause (i) of
this definition. For purposes of this definition the terms “control”,
“controlling” and “controlled” shall mean the ownership, directly or
through subsidiaries, of a majority of a corporation’s or other Person’s voting
stock or equivalent voting securities or interests. 



        “PTE”
shall have the meaning provided in Section 6.2(a). 



        “Purchasers”
shall mean with respect to any Accepted Notes, Prudential and/or the Prudential
Affiliate(s) which are purchasing such Accepted Notes. 



        “QPAM
Exemption” shall have the meaning provided in Section 6.2(d). 



        “Quotation”
shall have the meaning provided in Section 2B(4). 



        “Request
for Purchase” shall have the meaning specified in Section 2B(3). 



        “Required
Holder(s)” shall mean the holder or holders of at least 51% of the aggregate
principal amount of the Notes or of a Series of Notes, as the context may require, from
time to time outstanding and, if no Notes are outstanding, shall mean Prudential. 



        “Rescheduled
Closing Day” shall have the meaning specified in Section 2B(7). 



        “Responsible Officer”
means any Senior Financial Officer and any other officer of the Company or its
Subsidiaries with responsibility for the administration of the relevant portion of this
Agreement or the Collateral Documents. 



        “Restricted
Investments” means all Investments except any of the following: (i) property to
be used in the ordinary course of business; (ii) assets arising from the sale of goods and
services in the ordinary course of business; (iii) Investments in one or more Restricted
Subsidiaries or any Person that immediately becomes a Restricted Subsidiary; (iv)
Investments existing at the date of Closing; (v) Investments in obligations, maturing
within one year, issued by or guaranteed by the United States of America, or an agency
thereof, or Canada, or any province thereof; (vi) Investments in tax-exempt obligations,
maturing within one year, which are rated in one of the top two rating classifications by
at least one national rating agency; (vii) Investments in certificates of deposit or
banker’s acceptances maturing within one year issued by Bank of America or other
commercial banks which are rated in one of the top two rating classifications by at lest
one national rating agency; (viii) Investments in commercial paper, maturing within 270
days, rated in one of the top two rating classifications by at least one national rating
agency; (ix) Investments in repurchase agreements; (x) treasury stock; (xi) Investments in
money market instrument programs which are classified as current assets in accordance with
GAAP; (xii) Investments in foreign currency risk hedging contracts used in the ordinary
course of business; and (xiii) Investments in Securitization Entities. 



        “Restricted
Subsidiary” means any Subsidiary (a) at least a majority of the voting securities
of which are owned by the Company and/or one or more Wholly-Owned Restricted Subsidiaries,
and (b) which the Company has not designated as an Unrestricted  



A-11 














        “Restricted
Subsidiary” means any Subsidiary (a) at least a majority of the voting securities
of which are owned by the Company and/or one or more Wholly-Owned Restricted Subsidiaries,
and (b) which the Company has not designated as an Unrestricted Subsidiary in accordance
with Section 10.8; provided that upon any Unrestricted  





        “Securities
Act” means the Securities Act of 1933, as amended from time to time. 



        “Security”
has the meaning set forth in section 2(l) of the Securities Act. 



        “Securitization
Debt” for the Company and the Restricted Subsidiaries shall mean, in connection
with any Permitted Securitization Program, (a) any amount as to which any Securitization
Entity or other Person has recourse to the Company or any Restricted Subsidiary with
respect to such Permitted Securitization Program by way of a Guaranty and (b) the amount
of any reserve account or similar account or asset shown as an asset of the Company or a
Restricted Subsidiary under GAAP that has been pledged to any Securitization Entity or any
other Person in connection with such Permitted Securitization Program. 



        “Securitization
Entity” means a wholly-owned Subsidiary (other than a Restricted Subsidiary) of
the Company (or another Person in which the Company or any of its Subsidiaries makes an
investment and to which the Company or any of its Subsidiaries transfers receivables and
related assets) that engages in no activities other than in connection with the financing
of receivables and that is designated by the Board of Directors of the Company (as
provided below) as a Securitization Entity (i) no portion of the Indebtedness or any other
obligations (contingent or otherwise) of which (A) is guaranteed by the Company or any of
its Subsidiaries (excluding guarantees of obligations (other than the principal of, and
interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (B) is
recourse to or obligates the Company or any of its Subsidiaries in any way other than
pursuant to Standard Securitization Undertakings, or (C) subjects any property or asset of
the Company or any other Subsidiary of the Company, directly or indirectly, continently or
otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization
Undertakings, (ii) with which neither the Company nor any of its Subsidiaries has any
material contract, agreement, arrangement or understanding other than on terms no less
favorable to the Company or such Subsidiary than those that might be obtained at the time
from Persons that are not Affiliates of the Company, other than fees payable in the
ordinary course of business in connection with servicing receivables of such entity, and
(iii) to which neither the Company nor any of its Subsidiaries has any obligation to
maintain or preserve such entity’s financial condition or cause such entity to
achieve certain levels of operating results. 



        “Senior
Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or comptroller of the Company. 



        “Senior
Secured Creditor” means (a) each holder of a Note, (b) each holder of a 3.03%
Senior Note due October 12, 2010 issued pursuant to that certain Note Purchase Agreement
dated as of October 12, 2000, and (c) each lender under a Significant Credit Facility. 



        “Senior
Secured Indebtedness” means the Indebtedness of the Company under (a) this
Agreement and the Notes, (b) the 3.03% Senior Notes due October 12, 2010 issued pursuant
to that certain Note Purchase Agreement dated as of October 12, 2000, and (c) any
Significant Credit Facility. 





A-12 











        “Significant
Credit Facility” means (a) any Credit Facility that has at least $7,500,000
available to be borrowed and/or outstanding at any time, and (b) any Credit Facility if
the aggregate amount available to be borrowed and/or outstanding under all of the Credit
Facilities exceeds $25,000,000 at any time; provided that the term “Significant
Credit Facility” shall not include any Priority Indebtedness to the extent that such
Priority Indebtedness is permitted by Section 10.5(a)(ii), any Indebtedness secured by a
Lien permitted by Section 10.3(h), or any Indebtedness secured by a Lien renewing,
extending or replacing Liens as described in Section 10.3(m). 



        “Standard
Securitization Undertakings” means representations, warranties, covenants and
indemnities entered into by the Company or any of its Subsidiaries that are reasonably
customary in a receivables securitization transaction. 



        “Structuring
Fee” shall have the meaning provided in Section 2B(8)(i). 



        “Subsidiary”
means, as to any Person, (a) any corporation of which more than 50% of the issued and
outstanding Equity Securities having ordinary voting power to elect a majority of the
Board of Directors of such corporation (irrespective of whether at the time capital stock
of any other class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency) is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its Subsidiaries or by one or
more of such Person’s other Subsidiaries, (b) any partnership, joint venture, limited
liability company or other association of which more than 50% of the equity interest
having the power to vote, direct or control the management of such partnership, joint
venture, limited liability company or other association is at the time owned and
controlled by such Person, by such Person and one or more of the other Subsidiaries or by
one or more of such Person’s other Subsidiaries, or (c) any other Person included in
the financial statements of such Person on a consolidated basis.. Unless the context
otherwise clearly requires, any reference to a “Subsidiary” is a reference to a
Subsidiary of the Company. 



        “Subsidiary
Guarantors” means all current and future Material Domestic Subsidiaries of the
Company. 



        “Subsidiary
Guaranty” means that certain Subsidiary Guaranty, substantially in the form of
Exhibit E hereto, dated as of the date hereof, executed and delivered by the
Subsidiary Guarantors, as amended, supplemented and modified from time to time. 



        “Swap
Agreement” means (a) any and all rate swap transactions, basis swaps, forward
rate transactions, interest rate options, forward foreign exchange transactions, cap
transactions, floor transactions, collar transactions, currency swap transactions,
cross-currency rate swap transactions, currency options, or any other similar transactions
or any combination of any of the foregoing (including any options to enter into any of the
foregoing), provided that any such transaction is governed by or subject to a Master
Agreement, and (b) any and all transactions of any kind, and the related confirmations,
which are subject to the terms and conditions of, or governed by, any form of master
agreement published by the International 





A-13 










Swaps and Derivatives Association, Inc., or any
other master agreement published by any successor organization thereto (any such master
agreement, together with any related schedules, as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, a “Master
Agreement”), including any such obligations or liabilities under any Master
Agreement. 




      “Taxes”
is defined in Section 14.4(a).



        “Total
Indebtedness” means, at any date of determination, the sum of (i) the total of
all Indebtedness of the Company and the Restricted Subsidiaries outstanding on such date,
after eliminating all offsetting debits and credits between the Company and the Restricted
Subsidiaries and all other items required to be eliminated in the course of the
preparation of consolidated financial statements of the Company and the Restricted
Subsidiaries in accordance with GAAP, plus (ii) the aggregate amount of
Indebtedness of the Company to any of its Restricted Subsidiaries that is not subordinated
to the Notes pursuant to an Amended and Restated Subordination Agreement substantially in
the form set forth in Exhibit F. 



        “Unrestricted
Subsidiary” means any Subsidiary which is designated as an Unrestricted
Subsidiary on Schedule B or is designated as such in writing by the Company to each
of the holders of the Notes pursuant to Section 10.8; provided that no Material
Subsidiary shall be an Unrestricted Subsidiary. 



        “Wholly-Owned
Restricted Subsidiary” means, at any time, (a) with respect to Domestic
Subsidiaries, any Restricted Subsidiary one hundred percent (100%) of all of the equity
interests (except directors’ qualifying shares) and voting interests of which are
owned by any one or more of the Company and the Company’s other wholly-owned
Restricted Subsidiaries at such time, and (b) with respect to Foreign Subsidiaries, any
Restricted Subsidiary ninety-five percent (95%) of all of the equity interests (except
directors’ qualifying shares) and voting interests of which are owned by any one or
more of the Company and the Company’s other Wholly-Owned Restricted Subsidiaries at
such time. 



        “Yen”
means the lawful currency of Japan. 


A-14 














SCHEDULE B 

UNRESTRICTED SUBSIDIARIES




Shanghai Nu SKin Daily-Use and
Health Products Co., Ltd., a Chinese company 




Nu Skin Enterprises Singapore Pte.
Lts., a Singapore corporation 




Nu Skin (Malaysia) Sdn. Bhd., a
Malaysian corporation 





Cygnus Resources, Inc., a Delaware
corporation 














SCHEDULE 5.8
 LITIGATION 





None. 















SCHEDULE 5.11

LICENSES, PERMITS, ETC. 





	  	1.  	  	The
Company's Taiwan subsidiary has received a claim for infringement of patent rights in
respect of hand-set free equipment for mobile phones.  Nu Skin Taiwan's counsel drafted
letters of reply, but has not recieved any responses from the claimant.  The Company does
not believe that the claimants will pursue the claim any further. 








	  	2.  	  	The
Company is party to routine trademark matters involving oppositions to various trademarks
of the Comapny and the trademarks of other parties in its markets world-wide. 


















SCHEDULE 10.3 
 LIENS 






	  	1.  	  	The
Company has granted a security interest in 65% of its shares of stock of Nu Skin Japan
Co., Ltd. to State Street Bank and Trust of California as collateral agent for the
lenders party to that certain Intercreditor Agreement dated as of October 12, 2000, as
amended from time to time to add additional lenders as parties and to make certain other
changes. 









	  	2.  	  	The
Company and its subsidiaries have netered into various operating leases for equipment.
 Many of the equipment vendors have filed UCC notice filings with respect to these leases. 




















EXHIBIT A 



[FORM OF NOTE] 



[NU SKIN ENTERPRISES,
INC.] 

[NAME OF ISSUER
SUBSIDIARY] 



SERIES __ SENIOR NOTE 



No.         
                   
           



CURRENCY AND ORIGINAL
PRINCIPAL AMOUNT:

ORIGINAL ISSUE DATE:

INTEREST RATE:

INTEREST PAYMENT DATES:

FINAL MATURITY DATE: 

PRINCIPAL PREPAYMENT
DATES AND AMOUNTS: 



        FOR
VALUE RECEIVED, the undersigned, [NU SKIN ENTERPRISES, INC. (herein called the
“Company”)] [name of ISSUER SUBSIDIARY (herein called the
“Issuer Subsidiary”)], a corporation organized and existing under [the
laws of Delaware] [_______], hereby promises to pay to [________________], or registered
assigns, the principal sum of
                              
[specify principal amount and currency] [on the Final Maturity Date specified above]
[, payable on the Principal Payment Dates and in the amounts specified above, and on the
Final Maturity Date as specified above in an amount equal to the unpaid balance of the
principal hereof,] with interest (computed on the basis of a [360-day year of twelve
30-day months)]1 [365-day year and actual days elapsed)]2 (a) on the
unpaid balance thereof at the Interest Rate per annum specified above, payable on each
Interest Payment Date specified above and on the Final Maturity Date specified above,
commencing with the Interest Payment Date next succeeding the date hereof, until the
principal hereof shall have become due and payable, and (b) on any overdue payment
(including any overdue prepayment) of principal, any overdue payment of any Make-Whole
Amount and any overdue payment of interest, payable on each Interest Payment Date as
aforesaid (or, at the option of the registered holder hereof, on demand), at a rate per
annum from time to time equal to the Default Rate. 



        Payments
of principal, Make-Whole Amount, if any, and interest are to be made at The Bank of New
York in New York City or at such other place as the holder hereof shall designate to the
Company in writing, in lawful money of [specify country or European Union]. 



        This
Note is one of a series of Senior Notes (herein called the “Notes”)
issued pursuant to a Private Shelf Agreement, dated as of August 26, 2003 (as from time to
time amended, herein called the “Agreement”), between Nu Skin
Enterprises, Inc. (the “Company”) and each Issuer Subsidiary which
becomes party thereto, on the one hand,  









 and is entitled
to the benefits thereof. Capitalized terms used and not otherwise defined herein shall
have the meanings provided in the Agreement. Each holder of this Note will be deemed, by
its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in
Section 20 of the Agreement, and (ii) to have made the representations set forth in
Section 6 of the Agreement. This Note is secured by the Collateral Documents and is
guaranteed by the Subsidiary Guarantors pursuant to the Subsidiary Guaranty. 




        This
Note is subject to optional prepayment, in whole or from time to time in part, on the
terms specified in the Agreement. 



        This
Note is a registered Note and, as provided in the Agreement, upon surrender of this Note
for registration of transfer, duly endorsed, or accompanied by a written instrument of
transfer duly executed, by the registered holder hereof or such holder’s attorney
duly authorized in writing, a new Note for the then outstanding principal amount will be
issued to, and registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the [Company] [Issuer Subsidiary] may treat the person in whose
name this Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the [Company] [Issuer Subsidiary] shall not be affected by any
notice to the contrary. 




        [This
Note is guaranteed by the Company pursuant to the Parent Guaranty set forth in the
Agreement.] 



        In
case an Event of Default shall occur and be continuing, the principal of this Note may be
declared or otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount), and with the effect provided in the Agreement. 



        This
Note shall be construed and enforced in accordance with, and the rights of the parties
shall be governed by, the law of the State of New York excluding choice-of-law principles
of the law of such State (other than Section 5-1401 of the New York General Obligations
Law) that would require the application of the laws of a jurisdiction other than such
State. 



[NU
SKIN ENTERPRISES, INC.]

[NAME OF ISSUER SUBSIDIARY]




By:

Name:

Title: 






















EXHIBIT D 



[FORM OF OPINION OF
GENERAL COUNSEL 



TO THE COMPANY, THE SUBSIDIARY
GUARANTORS, AND, IF APPLICABLE, THE ISSUER SUBSIDIARY] 



[Letterhead of Nu Skin
Enterprises, Inc.] 



[Date of Closing Day] 



[Name of Each Purchaser]

c/o Prudential Capital Group

Four Embarcadero Center, Suite 2700

San Francisco,
California 94111-4180 



      Re:
Nu Skin Enterprises, Inc. – Series ___ Note Issuance 



Ladies and Gentlemen: 



        I
am the General Counsel of Nu Skin Enterprises, Inc., a Delaware corporation (the
“Company”), [and _______, a _______ corporation (the “Issuer
Subsidiary”),] and in such capacity have represented the Company[, the Issuer
Subsidiary] and certain of the Company’s subsidiaries listed on Schedule I
hereto (the “Subsidiaries,” and together with the Company [and the Issuer
Subsidiary], the “Note Parties”), in connection with (i) the issuance and
sale by [the Company] [the Issuer Subsidiary] on today’s date of [describe Notes] (
the “Notes”) to the Purchaser[s] pursuant to the Private Shelf Agreement
dated as of August 19, 2003 (the “Agreement”) by and among the Company
[and the Issuer Subsidiary)], on the one hand, and Prudential Investment Management, Inc.
(“Prudential”) and each Prudential Affiliate which has become bound by
certain provisions thereof, on the other hand, (ii) the execution of the Subsidiary
Guaranty, dated as of August 26, 2003, by each of the Subsidiaries in favor of Prudential
and each of the holders of the Notes issued pursuant to the Agreement (the
“Subsidiary Guaranty”), (iii) the execution and delivery of the Pledge
Agreement dated as of October 12, 2000, by State Street Bank and Trust Company of
California, N.A. (the “Collateral Agent”) and the Company (the
“Pledge Agreement”), (iv) the Amended and Restated Collateral Agency and
Intercreditor Agreement dated as of August 26, 2003 (the “Intercreditor
Agreement”) by and among the Purchasers, the other senior creditors identified
therein, and the Collateral Agent and acknowledged by the Company, the Subsidiaries and
any Issuer Subsidiary which may become party to the Agreement, and (v) the execution and
delivery of the Amended and Restated Subordination Agreement dated as of August 26, 2003
(the “Subordination Agreement”) by the Company and each of the
Subsidiaries and Nu Skin Japan Co., Ltd., [and (vi) the execution and delivery of the
Foreign Subsidiary Guaranty, dated as of _________, by __________ in favor of Prudential
and each of the holders of the Notes issued pursuant to the Agreement (the
“Foreign Subsidiary Guaranty”)]. [Note: clause (vi) only relevant if
Issuer 












 Subsidiary is a Foreign Subsidiary that must execute a Foreign Subsidiary
Guaranty.] The Agreement, together with the Notes, the Subsidiary Guaranty, the
Intercreditor Agreement, the Pledge Agreement and the Subordination Agreement [and the
Foreign Subsidiary Guaranty] are collectively referred to in this opinion as the
“Transaction Documents”). [The Company has provided its Parent Guaranty
with respect to the Notes pursuant to the Agreement.] 





        This
opinion is delivered to you pursuant to Section 3A(v) of the Agreement and with the
understanding that you are purchasing the Notes in reliance hereon. Capitalized terms not
otherwise defined herein are used herein with the meanings ascribed to such terms in the
Agreement. “Applicable Laws” shall mean those laws, rules and regulations that
in my experience, based on the nature of the transactions contemplated by the Transaction
Documents and the nature of the business of the Company and its Subsidiaries [and the
Issuer Subsidiary], are normally applicable to the transactions contemplated by the
Transaction Documents (provided that the term “Applicable Laws” does not include
(i) state securities laws, (ii) anti-fraud laws, or (iii) any law, rule or regulation that
may have become applicable to the transactions contemplated by the Transaction Documents
because of any fact specifically pertaining to the Purchasers) but without having made any
special investigation concerning the applicability of any other law, rule or regulation.
“Charter Documents” shall mean the Articles or Certificate of Incorporation, as
the case may be, and the Bylaws, of a corporate entity [and ________ [specify if
relevant]]. 



        In
connection with this opinion, I have examined the following documents: 



         (a)       
          counterparts of the Agreement, together with all schedules and exhibits thereto,
          executed by each of the parties thereto; 



         (b)       
          counterparts of the Subsidiary Guaranty, together with all schedules and
          exhibits thereto, executed by each of the parties thereto; 



         (c)       
          counterparts of the Pledge Agreement, together with all schedules and exhibits
          thereto, executed by each of the parties thereto; 



         (d)       
          counterparts of the Intercreditor Agreement, together with all schedules and
          exhibits thereto, executed by each of the parties thereto; 



         (e)       
          counterparts of a Subordination Agreement, executed by each of the parties
          thereto; 



         [(f)       
          counterparts of the Subsidiary Guaranty, together with all schedules and
          exhibits thereto, executed by each of the parties thereto;] 



         [(f)][(g)]       
          originals of the Notes, executed by the [Company] [Issuer Subsidiary]; 



         [(g)][(h)]       
          certificates of public officials from the States of Delaware and Utah [and
          _____________ [for the applicable Issuer Subsidiary]] as I have deemed necessary
          for the purpose of rendering this opinion; 








         [(h)][(i)]       
          the Charter Documents of the Company[, the Issuer Subsidiary] and the
          Subsidiaries, in each case as amended to date; 



         [(i)][(j)]       
          certified copies of resolutions of the [Board of Directors] of the Company[, the
          Issuer Subsidiary] and of each Subsidiary relating to the respective Transaction
          Documents; and 



         [(j)][(k)]       
          such other documents, instruments and certificates as I have deemed necessary
          for the purpose of rendering this opinion. 



        In
my examination of the Transaction Documents, to the extent my opinions set forth below are
dependent thereon, I have assumed without independent investigation that (i) each
party to each Transaction Document (other than any Note Party) is a corporation or other
entity duly incorporated or otherwise organized and validly existing under the laws of the
jurisdiction of its incorporation or organization, (ii) each party to each Transaction
Document (other than any Note Party) has full corporate power and authority to execute,
deliver and perform each Transaction Document to which it is a party, (iii) the execution,
delivery and performance by each party (other than any Note Party) of each Transaction
Document to which it is a party has been duly authorized by all necessary corporate
action, (iv) the genuineness of all signatures (other than those of any Note Party),
(v) the authenticity of all documents submitted to me as originals, (vi) the
conformity to originals of all such documents submitted to me as copies, (vii) each
Transaction Document has been duly executed and delivered by each of the parties thereto
(other than any Note Party), and (viii) the Company has, or will have at the relevant
time, rights in the Pledged Securities (as hereinafter defined) in which the Company has
granted a security interest to the Collateral Agent within the meaning of Section
9-203(b)(2) of the NYUCC (as hereinafter defined) at all times
relevant to this opinion. 



        As
to all questions of fact material to my opinions below, I have relied upon, without
independent investigation, and assumed the accuracy and completeness of, the
representations and warranties of the parties to the Transaction Documents contained in
the Transaction Documents and the certificates of such parties or their officers,
partners, or managers, as the case may be, or of public officials. I have made no
independent investigation of any of the facts stated in any of the representations. 



        Based
upon and subject to the foregoing and subject to the limitations and qualifications set
forth below, I am of the opinion that: 



          		    1.       
               The Company has been duly incorporated and is validly existing and in good
               standing as a corporation under the laws of the State of Delaware and is duly
               qualified as a foreign corporation to do business and is in good standing in the
               State of Utah. [The Issuer Subsidiary has been duly incorporated and is validly
               existing and in good standing as a corporation under the laws of the State of
               [________] and is duly qualified as a foreign corporation to do business and is
               in good standing in the State of Utah.] Each Subsidiary has been duly
               [incorporated in its respective state of incorporation and is validly existing
               and in good standing as corporation under the laws of such state] [alternative
               language, as appropriate, if any Subsidiary is not a corporation], and each
               Subsidiary that is a Delaware corporation is duly qualified as a foreign
               corporation to do business, and is in good standing, in the State of Utah. 



               













          		    2.       
               The execution, delivery and performance by each Note Party of each Transaction
               Document to which it is a party are within its corporate powers and have been
               duly authorized by all necessary [corporate] [alternative language, as
               appropriate, if any Subsidiary is not a corporation] action. The execution,
               delivery and performance by each Note Party of each Transaction Document to
               which it is a party do not, and will not, contravene its respective Charter
               Documents or any Applicable Laws. 



               



          		    3.       
               No order, filing, consent or approval of any Governmental Authority under
               Applicable Laws or filing with any Governmental Authority is required on the
               part of any Note Party in connection with the execution, delivery or performance
               by such Note Party of any Transaction Document to which it is a party except as
               expressly contemplated by the Transaction Documents and except such as have been
               made or obtained and are in full force and effect and routine governmental
               filings required in the ordinary course of business. 



               



          		    4.       
               Each Transaction Document has been duly executed and delivered by each Note
               Party that is a party thereto. 



               



          		    5.       
               Each Transaction Document constitutes the legal, valid and binding obligation of
               each Note Party, enforceable against each such Note Party in accordance with its
               respective terms. 



               



          		    6.       
               Neither the extension of credit evidenced by the Notes nor the use of proceeds
               thereof will violate Regulation T, U or X of the Board of Governors of the
               Federal Reserve System. 



               



          		    7.       
               The Pledge Agreement and delivery to the Collateral Agent in the State of New
               York of the security certificates representing the shares of stock identified in
               Schedule I to the Pledge Agreement (the “Pledged Securities”)
               endorsed to the Collateral Agent or in blank, created in favor of the Collateral
               Agent, as security for the payment of the Secured Obligations (as defined in the
               Pledge Agreement), a perfected security interest under the Uniform Commercial
               Code as in effect on the date of the Pledge Agreement in the State of New York
               (the “NYUCC”) in the Pledged Securities, and such perfected
               security interest continues to be in full force and effect. Assuming the
               Collateral Agent acquired its interest in such Pledged Securities in good faith
               and without notice of any adverse claims (as to which I express no opinion), the
               Collateral Agent has acquired its security interest in such Pledged Securities
               free of adverse claims within the meaning of the NYUCC. 



               



          		    8.       
               Assuming the accuracy of (i) the Company’s representations in the first
               sentence of Section 5.13 of the Agreement and (ii) your representations in
               Section 6.1 of the Agreement, it is not necessary in connection with the
               execution and delivery of the Notes under the circumstances contemplated by the
               Agreement to register the Notes under the Securities Act of 1933, as amended or
               to qualify an indenture in respect thereof under the Trust Indenture Act of
               1939, as amended. 



               









          		    9.       
               No Note Party is an “investment company” within the meaning of the
               Investment Company Act of 1940, as amended. 



               



          		    10.       
               Assuming that the State of New York has a sufficient relationship to the parties
               to the Transaction Documents or the transactions contemplated in the
               Transactions, in any proceedings duly taken in the courts of the State of Utah
               or a United States court sitting in the State of Utah to enforce any Transaction
               Document, the choice of New York law as the substantive law governing such
               Transaction Document would be recognized and such law would be applied. 



               



        At
your request, I also confirm to you the following: 



         (i)       
          The execution and delivery by each Note Party of each Transaction Document to
          which it is a party do not, and the performance by each Note Party of each
          Transaction Document to which it is a party will not, (i) violate, breach or
          result in default under, or result in the imposition of any Lien upon any
          property of any Note Party pursuant to, the [describe all material credit
          agreements] or, to my knowledge, any existing obligation or restriction on any
          Note Party under any other agreement, instrument or indenture applicable to it,
          or (ii) to my knowledge, breach or otherwise violate any existing obligation of
          or restriction on any Note Party under any order, judgment or decree applicable
          to it. 



         (ii)       
          To my knowledge, except as disclosed in the Transaction Documents, no actions,
          suits, proceedings or investigations are pending or threatened against any Note
          Party before any Governmental Authority or arbitrator that (a) could reasonably
          be expected (alone or in the aggregate) to have a Material Adverse Effect or (b)
          seek to enjoin, either directly or indirectly, the execution, delivery or
          performance by any Note Party of any Transaction Documents to which it is a
          party or the transactions contemplated thereby. 



        The
opinions and confirmations set forth herein are predicated upon, limited by and subject to
the following assumptions, qualifications, limitations and exceptions in addition to those
set forth elsewhere herein: 



          		    A.       
               I am an attorney admitted to practice in the State of Utah. Except as set forth
               below, the opinions expressed above are limited to the laws of the State of
               Utah, the State of New York (as to the opinion expressed in paragraphs 5 and 7)
               and the federal laws of the United States, and I do not express any opinion
               herein concerning any other law. In rendering the opinions set forth in
               paragraphs 1 and 2, to the extent such opinions concern the corporations
               incorporated under Delaware law, such opinions are limited to the published
               compilations of the Delaware General Corporation Law. In rendering the opinions
               set forth in paragraph 1, to the extent such opinions concern Delaware
               corporations, I have relied solely on (i) my review of the certificates of
               incorporation certified by the Secretary of State of Delaware, (ii) my review of
               the current published compilations of the Delaware General Corporation Law
               regarding the required content and execution of a certificate of incorporation,
               (iii) Certificates of Good Standing issued by the Secretary of State of
               Delaware, and (iv) Section 105 of the Delaware General 



               









          		 Corporation Law
               regarding the required content and execution of a certificate of incorporation,
               (iii) Certificates of Good Standing issued by the Secretary of State of
               Delaware, and (iv) Section 105 of the Delaware General Corporation Law which
               provides that a certificate of incorporation duly certified by the Secretary of
               State and accompanied by the certificate of the recorder of the county in which
               it has been recorded, shall be received in all courts, public offices, and
               official bodies, as prima facie evidence of: (a) due execution, acknowledgment,
               filing and recording of the instrument; (b) observance and performance of all
               acts and conditions necessary to have been observed and performed precedent to
               the instrument becoming effective; and (c) any other facts required or permitted
               by law to be stated in the instrument. I note that the Transaction Documents are
               governed by the laws of the State of New York, and for purposes of the opinions
               expressed in paragraphs 5and 7, I have assumed that the laws of the State of New
               York are the same as the laws of the State of Utah. [Note: For any Issuer
                Subsidiary not incorporated in the State of Delaware, this paragraph
               will need to be modified to address  the relevant state.] 



               




          		    B.       
               The qualification of the confirmations requested by the words “to my
               knowledge” or “of which I have knowledge” is intended to indicate
               that I do not have current and actual knowledge of the inaccuracy of such
               statement. However, except as expressly indicated in the following sentence, I
               have not undertaken any independent investigation to determine the accuracy of
               such statement. I have, however, made inquiry of each of the in-house counsel of
               the Company with respect to each matter and have also made inquiry to the Chief
               Executive Officer and Chief Financial Officer of the Company with respect to
               each matter. 



               



          		    C.       
               My opinion in paragraph 5 is subject to the effect of any applicable bankruptcy,
               insolvency (including, without limitation, all laws relating to fraudulent
               transfers), reorganization, moratorium or similar law affecting creditors’
               rights generally. 



               



          		    D.       
               My opinion in paragraph 5 is subject to the effect of general principles of
               equity, including, without limitation, concepts of materiality, reasonableness,
               good faith and fair dealing (regardless of whether considered in a proceeding in
               equity or at law) and the availability of specific performance or any other
               equitable remedy. Such principles of equity are of general application, and in
               applying such principles a court, among other things, might not allow a creditor
               to accelerate the maturity of a debt, or might decline to order the Note Parties
               to perform covenants. Such principles applied by a court might include a
               requirement that creditors act with reasonableness and in good faith. Such a
               requirement might be applied, among other situations, to the provisions of any
               Transaction Document purporting to authorize conclusive determinations by any
               Purchaser. Further, Section 2.4.e. of the Subsidiary Guaranty, which provides
               that the liabilities of the parties thereto shall not be affected by amendments,
               waivers or similar actions with respect to the Note Documents might be
               enforceable only to the extent that such amendments, waivers or other actions
               are not so material as to constitute a new contract among the parties. 



               



          		    E.       
               My opinion in paragraph 7 is subject to the following qualifications: 



               









          		    (1)       
               in the case of property that becomes Pledged Collateral (as defined in the
               Pledge Agreement) after the date hereof, Section 552 of the Federal Bankruptcy
               Code limits the extent to which property acquired by a debtor after the
               commencement of a case under the Federal Bankruptcy Code may be subject to a
               security interest arising from a security agreement entered into by the debtor
               before the commencement of such case; 



               



          		    (2)       
               in the case of proceeds, continuation of perfection of the Collateral
               Agent’s security interest therein is limited to the extent set forth in
               Section 9-3115 of the NYUCC; 



               



          		    (3)       
               I express no opinion as to the priority of security interests as against any
               lien creditor (as defined in Section 9-102(a)(52) of the NYUCC) to the extent
               set forth in Section 9-323(b) of the NYUCC; 



               



          		    (4)       
               in the case of the issuance or other distribution in respect of the Pledged
               Collateral of additional instruments (as such term is defined in Article 9
               of the NYUCC), the security interest of the Collateral Agent therein will be
               perfected only if possession thereof is obtained in accordance with the
               provisions of Article 9 of the NYUCC; 



               



          		    (5)       
               in the case of the Pledged Collateral consisting of investment property (as
               defined in Article 9 of the NYUCC), Sections 9-312, 9-314 and 9-106 of the NYUCC
               provide that perfection of a security interest in such investment property may
               be perfected by control (as defined in Article 8 of the NYUCC) or by filing; 



               



          		    (6)       
               I have assumed that the Collateral Agent will maintain possession of the Pledged
               Securities in the State of New York; and 



               



          		    (7)       
               in the case of property of a type as to which the Federal laws of the United
               States have preempted the NYUCC with respect to the validity or perfection of
               the security interest therein, the security interest may not be valid or
               perfected without compliance with applicable Federal law. In addition, Federal
               and State securities laws may limit the right to transfer or dispose of Pledged
               Collateral which may constitute securities under such laws. 



               



          		    F.       
               I express no opinion as to any provision in the Transaction Documents providing
               for the payment or reimbursement of costs or expenses or indemnifying a party or
               the waiver of rights, to the extent such provisions may be held unenforceable as
               contrary to public policy. 



               



          		    G.       
               I express no opinion as to the enforceability of Section 14.3 of the Agreement
               and Section 2.16 of the Subsidiary Guaranty providing for the respective Note
               Party’s payments of obligations to the Purchaser in the Available Currency
               in which the Notes are denominated after a court judgment in another currency. 



               



          		    H.       
               I advise you that Section 22.1 of the Agreement and Section 4.1 of the
               Subsidiary Guaranty, which provide for non-exclusive jurisdiction of the courts
               of the State of New York and federal courts sitting in the State of New York,
               may not be binding on federal courts sitting in New York (or any federal
               appellate court). 



               









          		    I.       
               In addition to any other limitation by operation of law upon the scope, meaning,
               or purpose of this letter, this letter speaks only as of the date hereof. I have
               no obligation to advise the recipients of this letter of changes of law or fact
               that may occur after the date hereof even though the change may affect the legal
               analysis, a legal conclusion or any informational confirmation herein. 



               



        The
opinions expressed in this letter are solely for the use of the Purchasers, and their
successors and permitted transferees and assigns, in matters directly related to the
Agreement and the transactions contemplated thereunder, and these opinions may not be
relied on by any other persons or for any other purpose. 



Very truly yours, 




D. Matthew Dorny

                                                     General Counsel 















Schedule I





Nu Skin Enterprises
Hong Kong, Inc. 



Nu Skin International,
Inc. 



Nu Skin Taiwan, Inc. 



Nu Skin United States, Inc. 



Big Planet, Inc. 



NSE Korea Ltd.