Document:

Exhbiit 10.3 NSE 3Q 10-Q

AMENDED AND RESTATED
COLLATERAL AGENCY 
AND INTERCREDITOR
AGREEMENT 

        This
AMENDED AND RESTATED COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT (this
“Agreement”), dated as of August 26, 2003, is entered into among the 2000
Senior Noteholder listed on the signature pages hereof (together with assignees of such
2000 Senior Noteholder, the “2000 Senior Noteholders”), the 2003 Senior
Noteholder listed on the signature pages hereof (together with assignees of such 2003
Senior Noteholder and any Prudential Affiliate that may become a party hereto and
assignees thereof, the “2003 Senior Noteholders”), the Senior Lenders
listed on the signature pages hereof (together with any assignees of such Senior Lenders,
the “Senior Lenders”) and Bank of America, N.A., as Agent for the Senior
Lenders (in such capacity, together with any successor in such capacity, the
“Agent”), any Additional Creditors that may become parties to this
Agreement (either directly or through their agent), and U.S. Bank National Association, as
successor to State Street Bank and Trust Company of California, N.A., in its capacity as
collateral agent for the 2000 Senior Noteholders, the 2003 Senior Noteholders, the Senior
Lenders, the Agent and the Additional Creditors (the “Collateral Agent”). 

R E C I T A L S 

             A.       
          Nu Skin Enterprises, Inc., a Delaware corporation (the
          “Company”), has issued to the 2000 Senior Noteholder its 3.03%
          Senior Notes due October 12, 2010 in the aggregate principal amount of
          JP¥9,706,500,000 (the “2000 Senior Noteholder Notes”)
          pursuant to that certain Note Purchase Agreement, dated as of October 12, 2000
          (as the same may be amended, supplemented, amended and restated or otherwise
          modified from time to time, the “2000 Note Purchase
          Agreement”), between the Company and the 2000 Senior Noteholder. 

             B.       
          The Company and/or one or more Issuer Subsidiaries (as defined in the 2003
          Private Shelf Agreement described below) may from time to time issue and sell to
          the 2003 Senior Noteholder and/or one or more Prudential Affiliates (as defined
          in the 2003 Private Shelf Agreement) its senior promissory notes in the
          aggregate principal amount of up to US$125,000,000 or the equivalent amount in
          certain other currencies (the “2003 Senior Noteholder Notes”)
          pursuant to that certain Private Shelf Agreement, dated as of August 26, 2003
          (as the same may be amended, supplemented, amended and restated or otherwise
          modified from time to time, the “2003 Private Shelf
          Agreement”), between the Company and each Issuer Subsidiary which may
          become party thereto, on the one hand, and the 2003 Senior Noteholder and each
          Prudential Affiliate which may become party thereto, on the other hand. 

             C.       
          The Company, the Senior Lenders and the Agent have entered into a Credit
          Agreement dated as of May 10, 2001 (as amended, supplemented, amended and
          restated or otherwise modified from time to time, the “Credit
          Agreement”), pursuant to which the Senior Lenders may from time to time
          make loans and other financial accommodations to the Company. 

             D.       
          Each of the Material Domestic Subsidiaries of the Company (together with any
          future Material Domestic Subsidiaries entering into a guaranty agreement with
          respect to the Obligations (as defined below), the “Subsidiary
          Guarantors”) has entered into a guaranty agreement pursuant to which
          the Subsidiary Guarantors guarantee to the Senior Lenders the payment and
          performance of all of the Company’s obligations under the Loan Documents
          (as defined in the Credit Agreement) (as such guaranty agreement may be
          modified, amended, renewed or replaced, including any increase in the amount
          guaranteed thereunder, the “Bank Obligation Guaranty”). 

1 

             E.       
          The Subsidiary Guarantors have entered into a guaranty agreement pursuant to
          which the Subsidiary Guarantors have guaranteed to the 2000 Senior Noteholders
          the payment of the 2000 Noteholder Obligations and the payment and performance
          of all of the Company’s obligations under the 2000 Note Purchase Agreement
          and the 2000 Senior Noteholders Notes (as such guaranty agreement may be
          modified, amended, renewed or replaced, including any increase in the amount
          guaranteed thereunder, the “2000 Note Obligation Guaranty”). 

             F.       
          Pursuant to the 2003 Private Shelf Agreement, (i) the Company will, with respect
          to any 2003 Senior Noteholders Notes issued by any Issuer Subsidiary, guarantee
          to the 2003 Senior Noteholders the payment of the 2003 Noteholder Obligations
          and the payment and performance of each such Issuer Subsidiary’s
          obligations under the 2003 Private Shelf Agreement and the 2003 Senior
          Noteholders Notes and (ii) the Subsidiary Guarantors will enter into a guaranty
          agreement pursuant to which the Subsidiary Guarantors will guarantee to the 2003
          Senior Noteholders the payment of the 2003 Noteholder Obligations and the
          payment and performance of all of the Company’s and each Issuer
          Subsidiary’s obligations under the 2003 Private Shelf Agreement and the
          2003 Senior Noteholders Notes (such guaranty agreements of the Company and the
          Subsidiary Guarantors as they may be modified, amended, renewed or replaced,
          including any increase in the amount guaranteed thereunder, collectively, the
          “2003 Note Obligation Guaranty”). 

             G.       
          The Company may enter into additional note purchase agreements and/or credit
          agreements with investors and/or lenders which become parties to this Agreement,
          may enter into one or more interest rate swaps or collars, foreign currency
          exchange agreements, equity swap agreements, commodity price protection
          agreements or interest rate, currency exchange, equity price or commodity price
          hedging arrangements (any such agreement or arrangement, a “Hedging
          Agreement”) with persons or entities which become parties to this
          Agreement and may incur obligations (“Cash Management
          Obligations”) in respect of overdrafts or related liabilities or in
          connection with treasury, depositary or cash management services, including in
          connection with automated clearing house transfers of funds, to persons or
          entities which become parties to this Agreement (any such investor, lender or
          other party, together with the lenders and other parties referred to in the next
          sentence, the “Additional Creditors”; and the obligations of
          the Company under any such agreement or arrangement or in respect of any such
          overdrafts or related liabilities or any such services, the “Additional
          Company Obligations”), and such Additional Company Obligations may be
          guaranteed by one or more of the Subsidiary Guarantors pursuant to one or more
          guaranties (the “Additional Subsidiary Guaranties”). In
          addition, one or more Subsidiary Guarantors may become direct obligors (in
          respect of loans, reimbursement obligations relating to Letters of Credit,
          Hedging Agreements and/or Cash Management Obligations) to persons or entities
          which become parties to this Agreement and therefore are Additional Creditors,
          and the obligations of such Subsidiary Guarantors to such lenders or other
          parties (the “Direct Subsidiary Obligations” and, together with
          the Additional Company Obligations, the “Additional
          Obligations”) may be guaranteed by the Company and the other Subsidiary
          Guarantors. 

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             H.       
          Certain foreign subsidiaries of the Company may enter into one or more guaranty
          agreements pursuant to which such foreign subsidiary guarantors will guarantee
          to the Benefitted Parties (as defined below) the payment and performance of all
          of the Company’s and each Issuer Subsidiary’s obligations, as the case
          may be, under the Senior Loan Documents (as defined below) (as each such
          guaranty agreement may be modified, amended, renewed or replaced, including any
          increase in the amount guaranteed thereunder, a “Foreign Subsidiary
          Guaranty”). 

             I.       
          The Bank Obligation Guaranty, the 2000 Note Obligation Guaranty, the 2003 Note
          Obligation Guaranty, any Additional Subsidiary Guaranty, any Direct Subsidiary
          Obligation and any Foreign Subsidiary Guaranty are each hereinafter referred to
          as a “Subsidiary Guaranty.” The Loan Documents, the 2000 Note
          Purchase Agreement, the 2003 Private Shelf Agreement, each Subsidiary Guaranty
          and any additional credit agreement, note purchase agreement, Hedging Agreement
          or agreement relating to Cash Management Obligations entered into in favor of
          any Additional Creditor are hereinafter referred to, collectively, as the
          “Senior Loan Documents”. 

             J.       
          The Company has secured all present and future obligations to the 2000 Senior
          Noteholders under the 2000 Senior Noteholder Notes and the 2000 Note Purchase
          Agreement (all such obligations, including, without limitation, principal,
          interest, Make-Whole Amounts, fees and indemnities, being referred to herein as
          the “2000 Senior Noteholder Obligations”), all present and
          future obligations to the 2003 Senior Noteholders under the 2003 Senior
          Noteholder Notes and the 2003 Private Shelf Agreement (all such obligations,
          including, without limitation, principal, interest, Make-Whole Amounts, fees and
          indemnities, being referred to herein as the “2003 Senior Noteholder
          Obligations”) and all present and future obligations to the Senior
          Lenders, including, without limitation, principal, interest, letter of credit
          obligations (including Contingent L/C Obligations), break-funding amounts, fees
          and indemnities (the “Senior Lender Obligations”) and may
          secure all Additional Obligations, pursuant to the terms of that certain Pledge
          Agreement dated as of October 12, 2000 between the Company and the Collateral
          Agent (the “Pledge Agreement”) and any similar documents
          executed after the date hereof, as the same may be amended, supplemented or
          modified from time to time (the “Security Documents”). The 2000
          Senior Noteholder Obligations, the 2003 Senior Noteholder Obligations, the
          Senior Lender Obligations and the Additional Obligations are collectively
          referred to as the “Obligations.” The 2000 Senior Noteholders,
          the 2003 Senior Noteholders, the Senior Lenders and the Additional Creditors are
          sometimes collectively referred to as the “Benefitted Parties”
          and individually referred to as a “Benefitted Party.” The
          Pledge Agreement grants to the Collateral Agent, for the ratable benefit of the
          Benefitted Parties, a valid, perfected and enforceable first priority lien on
          and a security interest in 65% of the equity securities of certain foreign
          subsidiaries of the Company (hereinafter all of such collateral, together with
          all rights to payment under any Subsidiary Guaranty, shall be referred to
          collectively as the “Collateral”). 

             K.       
          The 2000 Senior Noteholders, the 2003 Senior Noteholders, the Senior Lenders and
          the Additional Creditors wish to set forth their understandings and agreements
          regarding their respective rights and priorities with respect to amounts
          recovered through the exercise of any right of set off, payments received after
          a Triggering Event (as defined in Section 2(a), below) and proceeds of the
          Collateral. 

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             L.       
          The Collateral Agent and the Benefitted Parties are parties to a Collateral
          Agency and Intercreditor Agreement dated as of October 12, 2000, as amended by
          that certain First Amendment dated as of May 10, 2001 (as amended to date, the
          “Existing Collateral Agency and Intercreditor Agreement”), and
          intend for this Agreement to replace and supercede the Existing Collateral
          Agency and Intercreditor Agreement. 

             M.       
          Capitalized terms used herein without being defined shall have the meanings set
          forth in the 2000 Note Purchase Agreement. 

            NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and the mutual covenants and promises set forth herein, each of the
parties to this Agreement agrees as follows: 

     1.    
          Sharing. 

             (a)       
          The liens of the Collateral Agent relating to the Collateral shall be held by
          the Collateral Agent for the benefit of the Benefitted Parties, and any proceeds
          realized in respect thereof shall be shared by the Benefitted Parties and
          distributed in accordance with the rights and priorities set forth in this
          Agreement. Any Collateral Proceeds, Triggering Event Balances, Triggering Event
          Payments or Setoff Proceeds (as such terms are defined in Section 2(b)) shall be
          shared by the Benefitted Parties and distributed in accordance with the rights
          and priorities set forth in this Agreement. As used herein, the term
          “Triggering Event” means (a) the occurrence and continuation of
          a Bankruptcy Proceeding (as defined below) with respect to the Company, any
          Issuer Subsidiary, any Subsidiary Guarantor or any Material Foreign Subsidiary,
          (b) the Collateral Agent’s receipt of a written notice that the unpaid
          principal amount of any of the Obligations has not been paid at the stated
          maturity thereof or has been declared to be then due and payable by the holder
          or holders thereof prior to the due date as a result of an event of default or
          (c) any exercise of any right of setoff or banker’s lien by any Benefitted
          Party. As used herein, the term “Bankruptcy Proceeding” means,
          with respect to any Person, a general assignment of such Person for the benefit
          of its creditors, or the institution by or against such Person of any proceeding
          seeking relief as debtor, or seeking to adjudicate such Person as bankrupt or
          insolvent, or seeking reorganization, arrangement, adjustment or composition of
          such Person or its debts, under any law relating to bankruptcy, insolvency,
          reorganization or relief of debtors, or seeking appointment of a receiver,
          trustee, custodian or other similar official for such Person or for any
          substantial part of its property. 

             (b)       
          Notwithstanding anything to the contrary set forth herein, any Collateral
          Proceeds, Triggering Event Balances, Triggering Event Payments or Setoff
          Proceeds which are to be remitted to any Benefitted Party on account of
          Obligations which are Contingent L/C Obligations (as defined 

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      below) shall be
          remitted to the Collateral Agent to be held in a separate cash collateral
          account (the “L/C Account”) by the Collateral Agent and
          distributed by the Collateral Agent only in accordance with this Section 1(b).
          In the event, and upon the condition that, any Contingent L/C Obligation becomes
          an absolute obligation of the Company upon the honoring of a draw under any
          Letter of Credit (as defined below), upon receipt of written direction from the
          applicable Benefitted Party, the Collateral Agent shall withdraw from the L/C
          Account and shall pay over to such Benefitted Party (or issuing bank on behalf
          of such Benefitted Party) that honored such draw an amount equal to the
          Withdrawal Amount (as defined below) with respect to the amount of such draw
          together with interest on such Withdrawal Amount at the rate earned while on
          deposit in the L/C Account. In the event that the Collateral Agent receives
          written notice that any Contingent L/C Obligation lapses on account of the
          expiration or other termination of the applicable Letter of Credit, an amount
          equal to the Withdrawal Amount with respect to such lapsed Contingent L/C
          Obligation, together with interest on account of such amount at the rate earned
          while on deposit in the L/C Account, shall be released from the L/C Account and
          shall be distributed by the Collateral Agent to the Benefitted Parties in
          accordance with clause “third” of Section 2(c). As used herein
          “Withdrawal Amount” means the product of (a) the quotient of
          (i) the amount of a Contingent L/C Obligation which has then become an absolute
          obligation on account of a draw or the amount of a Contingent L/C Obligation
          which has lapsed on account of the expiration or termination of the applicable
          Letter of Credit, as the case may be, over (ii) the total amount of all
          Contingent L/C Obligations, and (b) the total amount then deposited in the L/C
          Account. 

            As
used herein, the term “Contingent L/C Obligations” means any and all
contingent obligations of the Company to reimburse the issuers of Letters of Credit for
drawings under such Letters of Credit. 

            As
used herein, the term “Letter of Credit” means a letter of credit issued
by a Benefitted Party, or an issuing bank on behalf of a Benefitted Party, for the account
of the Company or any of the Subsidiary Guarantors pursuant to the Loan Documents or any
additional credit agreements with lenders which become party to this Agreement. 

          	2. 	  	
               Cash Collateral Account; Application of Proceeds 

               

          	(a) 	  	
               The Collateral Agent has established an interest-bearing demand deposit cash
               collateral account subject to the lien and security interest created by the
               Security Documents (the “Cash Collateral Account”) in the name
               of the Collateral Agent into which the proceeds, payments and amounts described
               in subsections (b)(i), (b)(ii), (b)(iii) and (b)(iv) below shall be deposited
               and from which only the Collateral Agent may effect withdrawals. Such amounts
               shall be held by the Collateral Agent in the Cash Collateral Account and shall
               be distributed from time to time by the Collateral Agent in accordance with
               Section 2(c) below. 

               

          	(b) 	  	
               The following proceeds, payments and amounts shall be deposited and held by the
               Collateral Agent in the Cash Collateral Account and shall be distributed from
               time to time by the Collateral Agent in accordance with Section 2(c) below: 

               

          	(i) 	  	
               any proceeds of any collection, recovery, receipt, appropriation, realization or
               sale of any or all of the Collateral or the enforcement of the Security
               Documents (the “Collateral Proceeds”) received by the
               Collateral Agent or any Benefitted Party; 

               

          	(ii) 	  	
               any amounts held in the Cash Collateral Account at the time a Triggering Event
               occurs (the “Triggering Event Balances”); 

               

          	(iii) 	  	
               any payments received or otherwise realized by any Benefitted Party in respect
               of any Obligations on or after the date on which a Triggering Event has occurred
               (the “Triggering Event Payments”); and 

               

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          	(iv) 	  	
               any amounts received or recovered by any Benefitted Party through any exercise
               of any right of setoff or banker’s lien at any time on or after the
               occurrence of a Triggering Event (whether by law, contract or otherwise, but
               excluding any amount deposited into an account of the Company or any Subsidiary
               maintained with a Benefitted Party that is applied solely to pay overdrafts in,
               or fees and charges related to the maintenance of, such account or any related
               account) (the “Setoff Proceeds”). 

               

            Each
Benefitted Party agrees to deliver any Collateral Proceeds, any Triggering Event Balances,
any Triggering Event Payments and any Setoff Proceeds to the Collateral Agent within two
(2) Business Days after receipt (other than pursuant to subsection (c) below) of such
Collateral Proceeds, Triggering Event Balances, Triggering Event Payments or Setoff
Proceeds. (c) The Collateral Agent shall distribute the proceeds described in subsections
(b)(i), (b)(ii), (b)(iii) and (b)(iv) above which are held in the Cash Collateral Account
to the Collateral Agent and the Benefitted Parties in accordance with the following
priorities: 

	  	        first,
to the reasonable costs and expenses of the Collateral Agent incurred in connection with
the maintenance of the Cash Collateral Account and any collection, recovery, receipt,
appropriation, legal proceeding (whether by or against any such party), realization or
sale of any or all of the Collateral or the enforcement of the Security Documents; 

	  	        second,
after payment in full of all amounts set forth in item first, to the Benefitted
Parties in payment of any and all amounts owed to the Benefitted Parties for reimbursement
of amounts paid by them to the Collateral Agent in accordance with Section 4(g) pro
rata in proportion to such amounts owed to such Benefitted Parties; 

	  	        third,
after payment in full of all amounts set forth in item second, to the payment and
permanent reduction of the principal amount of the outstanding Obligations and the
Contingent L/C Obligations, pro rata, based on the proportion that the
principal amount of such outstanding Obligations and Contingent L/C Obligations held by
each Benefitted Party at such time bears to the sum of the principal amount of all such
Obligations and Contingent L/C Obligations; 

	  	        fourth,
after payment in full of all amounts set forth in item third, to the payment and
permanent reduction of the amount of the outstanding Obligations representing interest,
pro rata, based on the proportion that such outstanding Obligations representing interest
held by each Benefitted Party at such time bears to the sum of all such Obligations
representing interest; 

	  	        fifth,
after payment in full of all amounts set forth in item fourth, to the payment and
permanent reduction of all other outstanding Obligations not representing principal,
Contingent L/C Obligations or interest, pro rata, based on the proportion that such
outstanding Obligations not representing principal, Contingent L/C Obligations or interest
held by each Benefitted Party at such time bears to the sum of all such Obligations not
representing principal, Contingent L/C Obligations or interest; and 

6 

	  	        sixth,
after payment in full of all amounts set forth in item fifth, to or at the
direction of the Company or as a court of competent jurisdiction may otherwise direct. 

            The
Collateral Agent shall make such distributions promptly after the deposit of any
Collateral Proceeds, Triggering Event Balances, Triggering Event Payments or Setoff
Proceeds into the Cash Collateral Account. A Benefitted Party’s pro rata share of the
Obligations on any distribution date shall be determined by assuming that all Obligations
are denominated in U.S. Dollars based upon the quoted spot rate at which the Collateral
Agent’s principal office offers to exchange any applicable currency for U.S. Dollars
at 11:00 A.M. (local time at such principal office) on the Business Day preceding such
distribution date (the “Applicable Exchange Rate”). For any distribution,
the Collateral Agent shall exchange the relevant portion of such distribution into the
applicable currency and make each such distribution in the applicable currency. 

             3.    
          Payment of Obligations; Distributions Recovered. 

                 (a)    
          The Company, each Issuer Subsidiary and each Subsidiary Guarantor agree that any
          amounts received by a Benefitted Party and delivered by such Benefitted Party to
          the Collateral Agent pursuant to the terms of this Agreement will not be deemed
          to be a payment in respect of any Obligations owing to such Benefitted Party
          until such Benefitted Party receives its pro rata share of such amount from the
          Collateral Agent and then only to the extent of the actual payment and receipt
          of such pro rata share; provided that no Subsidiary Guarantor shall be
          obligated to pay any amount in respect of the Obligations (including, in the
          case of an Issuer Subsidiary, in respect of its Direct Subsidiary Obligations)
          in excess of the maximum amount of the Obligations that may be paid by such
          Subsidiary Guarantor without rendering any Subsidiary Guaranty issued by such
          Subsidiary Guarantor (or, in the case of an Issuer Subsidiary, any of its Direct
          Subsidiary Obligations) void, voidable or illegal under any applicable law
          (including, without limitation, any fraudulent conveyance or fraudulent
          transfer). 

                 (b)    
          Notwithstanding anything to the contrary contained in this Agreement, in each
          case in which any proceeds (or the value thereof) or payments are recovered as a
          preferential or otherwise voidable payment (whether by a trustee in bankruptcy
          or otherwise) from the party (the “Distributor”) which
          distributed those proceeds to another party or parties under this Agreement,
          each party (a “Distributee”) to whom any of those proceeds were
          ultimately distributed shall, upon the Distributor’s notice of the recovery
          to the Distributee, return to the Distributor an amount equal to the
          Distributee’s ratable share of the amount recovered, together with a
          ratable share of interest thereon to the extent the Distributor is required to
          pay interest thereon. For purposes of this Agreement,
          “proceeds” means any payment (whether made voluntarily or
          involuntarily) from any source, including, without limitation, any offset of any
          deposit or other indebtedness, any security (including, without limitation, any
          guaranty or any collateral) or otherwise. 

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                 (c)    
          Notwithstanding anything to the contrary contained in this Agreement, including
          Section 2 and the foregoing provisions of this Section 3, the Benefitted Parties
          may, without the consent of the Company, any Issuer Subsidiary or any Subsidiary
          Guarantor, enter into such other arrangements (including, without limitation,
          the purchase of participations) as the Benefitted Parties determine are
          necessary or appropriate to accomplish the ratable sharing of recoveries on the
          Obligations contemplated by this Agreement. 

             4.    
          The Collateral Agent. 

                 (a)    
          By execution and delivery hereof, each Benefitted Party hereby appoints State
          Street Bank and Trust Company of California, N.A. as Collateral Agent and its
          representative hereunder and under the Security Documents and authorizes the
          Collateral Agent to act as such hereunder and thereunder on behalf of such
          Benefitted Party. The Collateral Agent agrees to act as such upon the express
          conditions contained in this Agreement. In performing its functions and duties
          under this Agreement and the Security Documents, the Collateral Agent shall act
          solely as agent of the Benefitted Parties to the extent, but only to the extent,
          provided in this Agreement and does not assume, and shall not be deemed to have
          assumed, any obligation towards or relationship of agency, fiduciary or trust
          with or for any other Person, other than as set forth herein and in the Security
          Documents. 

                 (b)    
          The Collateral Agent shall take any action with respect to the Collateral and/or
          the Security Documents only as directed in accordance with Section 5(a) hereof;
          provided that the Collateral Agent shall not be obligated to follow any
          directions given in accordance with Section 5(a) hereof to the extent that the
          Collateral Agent has received advice from its counsel to the effect that such
          directions are in conflict with any provisions of law, this Agreement, the
          Security Documents or any order of any court or administrative agency;
          provided further that the Collateral Agent shall not, under any
          circumstances, be liable to any Benefitted Party or any other person for
          following the written directions received in accordance with Section 5(a)
          hereof. Any directions given by the Required Creditors pursuant to Section 5(a)
          hereof may be withdrawn or modified by the Required Creditors by delivering
          written notice of withdrawal or modification to the Collateral Agent prior to
          the time when the Collateral Agent takes any action pursuant to such directions. 

                 (c)    
          Each Benefitted Party authorizes the Collateral Agent to take such action on
          such Benefitted Party’s behalf and to exercise such powers hereunder as are
          specifically delegated to the Collateral Agent by the terms hereof and of the
          Security Documents, together with such powers as are reasonably incidental
          thereto. The Collateral Agent shall have only those duties and responsibilities
          that are expressly specified in this Agreement and the Security Documents, and
          it may perform such duties by or through its agents or employees. Nothing in
          this Agreement or the Security Documents, express or implied, is intended to or
          shall be construed as imposing upon the Collateral Agent any obligations in
          respect of this Agreement or such Security Documents except as expressly set
          forth herein. 

                 (d)    
          The Collateral Agent shall not be responsible to any Benefitted Party for the
          execution, effectiveness, genuineness, validity, perfection, enforceability,
          collectibility, value or sufficiency of the Collateral or the Security Documents
          or for any representations, warranties, recitals or statements made in any
          document executed in connection with the Obligations or 

8 

     made in any written or
          oral statement or in any financial or other statements, instruments, reports,
          certificates or any other documents in connection herewith or therewith
          furnished or made by or on behalf of the Company and its Subsidiaries (including
          any Issuer Subsidiary) to any Benefitted Party or be required to ascertain or
          inquire as to the performance or observance by the Company or any of its
          Subsidiaries (including any Issuer Subsidiary) or any other pledgor or guarantor
          of any of the terms, conditions, provisions, covenants or agreements contained
          in any document executed in connection with the Obligations or of the existence
          or possible existence of any Triggering Event. 

                 (e)    
          The Collateral Agent shall not be liable to any Benefitted Party for any action
          taken or omitted hereunder or under the Security Documents or in connection
          herewith or therewith except to the extent caused by the Collateral Agent’s
          gross negligence or willful misconduct. The Collateral Agent shall be entitled
          to rely, and shall be fully protected in relying, upon any written statement,
          instrument or document believed by it to be genuine and correct and to have been
          signed or sent by the proper person or persons and, except as otherwise
          specifically provided in this Agreement, shall be entitled to rely upon the
          written direction of the Required Creditors (as defined in Section 5(a))
          certifying that the persons signing such direction constitute the “Required
          Creditors,” and shall be entitled to rely and shall be fully protected in
          relying on opinions and judgments of counsel, accountants, experts and other
          professional advisors selected by it in good faith and with due care. The
          Collateral Agent shall be entitled to refrain from exercising any power,
          discretion or authority vested in it under this Agreement or the Security
          Documents unless and until it has obtained the directions in accordance with
          Section 5(a) hereof with respect to the matters covered thereby. The Collateral
          Agent shall be entitled to request from each Benefitted Party a certificate
          setting out the amount of the respective Obligations held by it (including,
          without limitation, amounts representing principal, Contingent L/C Obligations
          or interest on such Obligations) for purposes of calculating distributions
          pursuant to Section 2(c). 

                 (f)    
          Each Benefitted Party agrees not to take any action whatsoever to enforce any
          term or provision of the Security Documents or to enforce any of its rights in
          respect of the Collateral, in each case except through the Collateral Agent
          acting in accordance with this Agreement. 

                 (g)    
          The Company and each of its subsidiaries which is party to this Agreement, and
          any Issuer Subsidiary which may become party to this Agreement pursuant to
          Section 10(f) hereof, by its execution of the signature page of this Agreement,
          agrees to pay and save the Collateral Agent harmless from liability for payment
          of all costs and expenses of the Collateral Agent in connection with this
          Agreement and the Security Documents, other than liabilities, costs and expenses
          resulting from the Collateral Agent’s gross negligence or willful
          misconduct. Each Benefitted Party severally agrees to indemnify the Collateral
          Agent, pro rata (to the extent set forth in the penultimate
          sentence of this Section 4(g)), to the extent the Collateral Agent shall not
          have been reimbursed by or on behalf of the Company or from proceeds of the
          Collateral or otherwise, from and against any and all liabilities, obligations,
          losses, damages, penalties, actions, judgments, suits, costs, reasonable
          expenses (including, without limitation, reasonable counsel fees and
          disbursements) or disbursements of any kind or nature whatsoever which may be
          imposed on, incurred by or asserted against the Collateral Agent in performing
          its duties hereunder or under the Security Documents in its capacity as the
          Collateral Agent in any way relating to or arising out of this Agreement, the
          Security Documents  

9 

      and/or the Collateral; provided that no Benefitted
          Party shall be liable for any portion of such liabilities, obligations, losses,
          damages, penalties, actions, judgments, suits, costs, expenses or disbursements
          resulting from the Collateral Agent’s gross negligence, willful misconduct
          or breach of the express terms of this Agreement. For purposes of this Section
          4(g), any pro rata calculation shall be on the basis of the
          outstanding principal amount of the Obligations (determined by assuming that all
          Obligations are denominated in U.S. Dollars based upon the Applicable Exchange
          Rate) held by or for each Benefitted Party at the time of the act, omission or
          transaction giving rise to the reimbursement or indemnity required by this
          Section 4(g). The provisions of this Section 4(g) shall survive the payment in
          full of all the Obligations and the termination of this Agreement and all other
          documents executed in connection with the Obligations. 

                 (h)    
          The Collateral Agent may resign at any time by giving sixty (60) days’
          prior written notice thereof to the Benefitted Parties and the Company, subject
          to the acceptance of its appointment by a successor Collateral Agent
          simultaneously with or prior to any resignation of the Collateral Agent. Upon
          any such notice of resignation, the Required Creditors (as defined in Section
          5(a) below) shall have the right to appoint a successor Collateral Agent. The
          Collateral Agent may be removed at any time with or without cause, by an
          instrument in writing delivered to the Collateral Agent, the Company and the
          other Benefitted Parties by the Required Creditors (as defined in Section 5(a)
          below). Upon the acceptance of any appointment as Collateral Agent hereunder by
          a successor Collateral Agent, such successor Collateral Agent shall thereupon
          succeed to and become vested with all the rights, powers, privileges and duties
          of the retiring or removed Collateral Agent, and the retiring or removed
          Collateral Agent shall be discharged from its duties and obligations under this
          Agreement and the Security Documents; provided, however, that the
          retiring or removed Collateral Agent will continue to remain liable for all acts
          of, or the omission to act by, such retiring or removed Collateral Agent which
          occurred prior to such retirement or removal. If no successor Collateral Agent
          shall have been so appointed and shall have accepted such appointment within
          forty-five (45) days after the retiring Collateral Agent’s giving of notice
          of resignation, then, upon five days’ prior written notice to the Company
          and the Benefitted Parties, the retiring Collateral Agent may, on behalf of the
          Benefitted Parties, appoint a successor Collateral Agent, which shall be a bank
          or trust company organized under the laws of the United States or any state
          thereof (or under the laws of a foreign country and having a branch or agency
          located in the United States) having a combined capital and surplus of at least
          $500,000,000, and the short term unsecured debt obligations of which are rated
          at least P-1 by Moody’s Investors Service or A-1 by Standard &
          Poor’s, or any affiliate of such bank. After any retiring or removed
          Collateral Agent’s resignation or removal hereunder as Collateral Agent,
          the provisions of this Agreement shall inure to its benefit as to any actions
          taken or omitted to be taken by it while it was the Collateral Agent under this
          Agreement and the Security Documents. 

                 (i)    
          Except as expressly set forth herein, the Collateral Agent and each of its
          affiliates may accept deposits from, lend money to and generally engage in any
          kind of banking, trust, financial advisory or other business with the Company or
          any affiliate thereof (including any Issuer Subsidiary), and may accept fees and
          other consideration from the Company or any affiliate thereof (including any
          Issuer Subsidiary) for services in connection with this Agreement and otherwise
          without having to account for the same to any Benefitted Party. 

10 

                 (j)    
          The Collateral Agent shall not be liable for or by reason of (i) any failure or
          defect in the registration, filing or recording of any of the Security
          Documents, or any notice, caveat or financing statement with respect to the
          foregoing, or (ii) any failure to do any act necessary to constitute, perfect
          and maintain the priority of the security interest created by the Security
          Documents. 

                 (k)    
          Notwithstanding anything to the contrary contained in this Agreement or any
          document executed in connection with any of the Obligations, the Collateral
          Agent, unless it shall have actual knowledge thereof, shall not be deemed to
          have any knowledge of any Triggering Event unless and until it shall have
          received written notice from the Company, any Issuer Subsidiary, or any
          Benefitted Party describing such Triggering Event in reasonable detail
          (including, to the extent known, the date of occurrence of the same). 

             (l)    
          Upon receipt by the Collateral Agent of any direction by the Required Creditors,
          all of the Benefitted Parties will be bound by such direction. 

             5.    
          Relating to Defaults and Remedies. 

                 (a)    
          The Required Creditors may, after any Triggering Event (other than an
          Involuntary Proceeding) has occurred (or upon the occurrence and continuation of
          an Involuntary Proceeding for at least 60 consecutive days) and by giving the
          Collateral Agent written notice of such election, instruct and cause the
          Collateral Agent to exercise its rights and remedies under the Security
          Documents. The Collateral Agent shall follow the instructions of the Required
          Creditors with respect to the enforcement action to be taken. For purposes of
          this Agreement, the term “Required Creditors” shall mean (a)
          the Required Lenders as defined in the Credit Agreement, and (b) the 2000 Senior
          Noteholders and the 2003 Senior Noteholders holding a majority in principal
          amount of the 2000 Senior Noteholder Notes plus the 2003 Senior Noteholder
          Notes, each, in the case of both clause (a) and clause (b) above,
          voting as a class; provided that if at any time (i) the aggregate
          outstanding principal amount of Obligations (including the face amount of any
          undrawn Letters of Credit) owed to the Senior Lenders under and as defined in
          the Credit Agreement, or (ii) the aggregate outstanding principal amount of the
          2000 Senior Noteholders Notes plus the aggregate outstanding principal amount of
          the 2003 Senior Noteholders Notes represents, in either case, less than 10% of
          the sum of the aggregate amounts referred to in clauses (i) and (ii) above, then
          “Required Creditors” shall mean Benefitted Parties, considered
          as a single class, holding more than 50% of the sum of (A) the face amount of
          any undrawn Letters of Credit plus (B) the outstanding funded principal amount
          of the Obligations (it being understood that all amounts referred to in this
          sentence shall be determined by assuming that such amounts are denominated in
          U.S. Dollars based upon the Applicable Exchange Rate). For purposes of the
          foregoing definitions, any Benefitted Party that has purchased a participation
          in the Obligations owing to another Benefitted Party shall be deemed to be the
          holder of the amount of such Obligations which are the subject of such
          participation. 

                 (b)    
          Notwithstanding anything to the contrary contained in this Agreement, the
          Collateral Agent shall not commence or otherwise take any action or proceeding
          to enforce any Collateral Document or to realize upon any or all of the
          Collateral unless and until the Collateral Agent has received instructions in
          accordance with Section 5(a) above. Upon receipt by the  

11

     Collateral Agent of any
          such instructions, the Collateral Agent shall seek to enforce the Security
          Documents and to realize upon the Collateral in accordance with such
          instructions; provided that the Collateral Agent shall not be obligated
          to follow any such directions as to which the Collateral Agent has received a
          written opinion of its counsel to the effect that such directions are in
          conflict with any provisions of law, this Agreement, the Security Documents or
          any order of any court or administrative agency, and the Collateral Agent shall
          not, under any circumstances, be liable to any Benefitted Party or any other
          Person for following the written directions received in accordance with Section
          5(a) above. 

                 (c)    
          The duties and responsibilities of the Collateral Agent hereunder shall consist
          of and be limited to (i) selling, releasing, surrendering, realizing upon or
          otherwise dealing with, in any manner and in any order, all or any portion of
          the Collateral, (ii) exercising or refraining from exercising any rights,
          remedies or powers of the Collateral Agent under this Agreement or the Security
          Documents or under applicable law in respect of all or any portion of the
          Collateral, (iii) making any demands or giving any notices under the Security
          Documents, (iv) effecting amendments to and granting waivers under the Security
          Documents in accordance with the terms hereof, and (v) maintaining the Cash
          Collateral Account under its exclusive dominion and control for the benefit of
          the Benefitted Parties and making deposits therein and withdrawals therefrom as
          necessary to effect the provisions of this Agreement. 

                 (d)    
          In the event that the Collateral Agent proceeds to foreclose upon, collect, sell
          or otherwise dispose of or take any other action with respect to any or all of
          the Collateral or to enforce any provisions of the Security Documents or takes
          any other action pursuant to this Agreement or any provision of the Security
          Documents or requests directions from the Required Creditors as provided herein,
          upon the request of the Collateral Agent or any Benefitted Party, each of the
          Benefitted Parties agrees that such Benefitted Party (or any agent of or
          representative for such Benefitted Party) shall promptly notify the Collateral
          Agent in writing, as of any time that the Collateral Agent may specify in such
          request, (i) of the aggregate amount of the respective Obligations then owing to
          such Benefitted Party as of such date and (ii) such other information as the
          Collateral Agent may reasonably request. 

                 (e)    
          Promptly after the Collateral Agent receives written notice of the occurrence of
          any Triggering Event pursuant to Section 2(a), it shall promptly send copies of
          such notice to each of the Benefitted Parties. 

                 (f)    
          The Collateral Agent shall not be obliged to expend its own funds in performing
          its obligations under this Agreement and shall be entitled to require that the
          Benefitted Parties provide it with sufficient funds prior to taking any action
          required under this Agreement. 

             6.    
          Third Party Beneficiaries. This Agreement is solely for the benefit of
          the parties hereto and their respective successors and assigns, and none of the
          Company, any Issuer Subsidiary or any other person or entity, including, without
          limitation, any guarantor of the obligations of the Company or any Issuer
          Subsidiary, is intended to be a third party beneficiary hereunder or to have any
          right, benefit, priority or interest under, or shall have any right to enforce,
          this Agreement. 

12

             7.    
          Relation of Creditors. This Agreement is entered into solely for the
          purposes set forth herein, and no Benefitted Party assumes any responsibility to
          any other party hereto to advise such other party of information known to such
          Benefitted Party regarding the financial condition of the Company or any of its
          Subsidiaries (including any Issuer Subsidiary) or of any other circumstances
          bearing upon the risk of nonpayment of any Obligation. Each Benefitted Party
          specifically acknowledges and agrees that nothing contained in this Agreement is
          or is intended to be for the benefit of the Company or any of its Subsidiaries
          (including any Issuer Subsidiary) and nothing contained herein shall limit or in
          any way modify any of the obligations of the Company, any Issuer Subsidiary or
          any Subsidiary Guarantor to the Benefitted Parties. 

             8.    
          Acknowledgment of Guaranties. Each party expressly acknowledges the
          existence and validity of the 2000 Note Obligation Guaranty, the 2003 Note
          Obligation Guaranty and the Bank Obligation Guaranty, agrees not to contest or
          challenge the validity of the 2000 Note Obligation Guaranty, the 2003 Note
          Obligation Guaranty or the Bank Obligation Guaranty and agrees that the judicial
          or other determination of the invalidity of the 2000 Note Obligation Guaranty,
          the 2003 Note Obligation Guaranty or the Bank Obligation Guaranty shall not
          affect the provisions of this Agreement. 

             9.    
          Notice of Certain Events. Each Benefitted Party agrees that upon the
          occurrence of a Triggering Event, it shall promptly notify the Collateral Agent
          of the occurrence of such Triggering Event. In addition, each Benefitted Party
          agrees to provide to the Collateral Agent the amount and currency of its
          Obligations at such reasonable times as may be necessary to determine such
          Benefitted Party’s pro rata share of the outstanding principal amount of
          the Obligations. 

             10.    
          Miscellaneous. 

                 (a)    
          Notices. All notices and other communications provided for herein,
          (including, without limitation, any modifications of, or waivers or consents
          under, this Agreement) shall be sent (i) by telecopy if the sender on the same
          day sends a confirming copy of such notice by a recognized overnight delivery
          service (charges prepaid), or (ii) by registered or certified mail with return
          receipt requested (postage prepaid), or (iii) by a recognized overnight delivery
          service (with charges prepaid) to the intended recipient at the address for
          notices specified beneath the signature of such party hereto; or as to any party
          at such other address as shall be designated by such party in a notice to each
          other party. Except as otherwise provided in this Agreement, all such
          communications shall be deemed to have been duly given when actually received. 

                 (b)    
          Amendments, Waivers, Consents. All amendments, waivers or consents of any
          provision of this Agreement shall be effective only if the same shall be in
          writing and signed by all of the Benefitted Parties. 

                 (c)    
          Releases of Collateral. The parties hereto agree that the Collateral
          Agent shall release all or any portion of the Collateral (other than in
          connection with the exercise of its rights and remedies pursuant to Section 5)
          only upon the receipt by the Collateral Agent of (i) a written approval from the
          Required Creditors, or (ii) so long as no event of default exists under any
          Senior Loan Document and releasing such Collateral is not prohibited by any
          Senior Loan 

13

      Document, an Officers’ Certificates of the Company and any
          applicable Subsidiary Guarantor, which shall be true and correct, (x) stating
          that the Collateral subject to such disposition is being sold, transferred or
          otherwise disposed of in compliance with the terms of each of the Senior Loan
          Documents, and (y) specifying the Collateral being sold, transferred or
          otherwise disposed of in the proposed transaction. Upon the receipt of such
          written approval or Officers’ Certificates (so long as the Collateral Agent
          has no reason to believe that the Officers’ Certificates delivered with
          respect to such disposition are not true and correct), the Collateral Agent
          shall, at the Company’s expense, execute and deliver such releases of its
          security interest in such Collateral to be released, and provide a copy of such
          releases to each of the Benefitted Parties. In connection therewith, the
          Benefitted Parties hereby irrevocably authorize the Collateral Agent from time
          to time to release such Collateral or consent to such release in accordance with
          the terms of this Agreement. Notwithstanding anything provided herein to the
          contrary, no release of security shall in any way affect the guaranties by the
          Material Domestic Subsidiaries of the Obligations, which guaranties shall
          continue to remain in full force and effect after any such release. 

                 (d)    
          Successors and Assigns. This Agreement shall be binding upon and inure to
          the benefit of the parties hereto and their respective successors and assigns.
          At the time of any assignment of all or any portion of the 2000 Senior
          Noteholder Obligations by a 2000 Senior Noteholder, or of all or any portion of
          the 2003 Senior Noteholder Obligations by a 2003 Senior Noteholder, or of all or
          any portion of the Senior Lender Obligations by a Senior Lender, or of all or
          any portion of the Additional Obligations by any Additional Creditor, such
          assigning 2000 Senior Noteholder, 2003 Senior Noteholder, Senior Lender or
          Additional Creditor, as the case may be, shall cause its assignee (each an
          “Additional Benefitted Party”) to execute a Counterpart Amended
          and Restated Collateral Agency and Intercreditor Agreement substantially in the
          form attached hereto as Exhibit A (a “Counterpart”) and
          become a party to this Agreement. 

                 (e)    
          Purchasers of 2003 Senior Noteholder Notes. As a condition precedent to
          purchasing any 2003 Senior Noteholder Notes, each Prudential Affiliate that
          becomes a party to the 2003 Private Shelf Agreement, if not then a party to this
          Agreement, shall execute a Counterpart and become a party to this Agreement, and
          each such Prudential Affiliate shall be as fully a party to this Agreement as a
          Benefitted Party as if it was an original signatory hereof without any action
          required to be taken by any other party hereto. Each other party to this
          Agreement expressly agrees that its rights and obligations arising hereunder
          shall continue after giving effect to the addition of each such Prudential
          Affiliate as a Benefitted Party to this Agreement. 

                 (f)    
          Additional Creditors. Upon the execution of a Counterpart by any
          Additional Creditor (either directly or through its agents) and delivery of such
          Counterpart to the other parties hereto, such Additional Creditor shall be as
          fully a party to this Agreement as a Benefitted Party as if such Additional
          Creditor was an original signatory hereof without any action required to be
          taken by any other party hereto, provided that each such Additional Creditor
          shall execute this Agreement simultaneously with the Subsidiary Guarantors’
          execution and delivery to it of a Subsidiary Guaranty. Each other party to this
          Agreement expressly agrees that its rights and obligations arising hereunder
          shall continue after giving effect to the addition of such Additional Creditor
          as a party to this Agreement. Notwithstanding the foregoing, after

14

     the
          occurrence and during the continuation of an event of default under any Senior
          Loan Document, no Additional Creditor (other than a Prudential Affiliate
          pursuant to Section 10(e) hereof) may become party to this Agreement. 

                 (g)    
          Issuer Subsidiaries. Upon the execution of an Issuer Subsidiary
          Counterpart in the form attached hereto as Exhibit B (an “Issuer
          Subsidiary Counterpart”) by any Issuer Subsidiary which may become a
          party to the 2003 Private Shelf Agreement and delivery of such Issuer Subsidiary
          Counterpart to the other parties hereto, such Issuer Subsidiary shall be deemed
          to acknowledge and consent to this Agreement, including without limitation
          Section 3 hereof, as if such Issuer Subsidiary was an original signatory hereof
          without any action required to be taken by any other party hereto, provided that
          as a condition precedent to issuing any 2003 Senior Noteholder Notes each such
          Issuer Subsidiary shall execute this Agreement. Each other party to this
          Agreement expressly agrees that its rights and obligations arising hereunder
          shall continue after giving effect to the addition of each such Issuer
          Subsidiary as a party to this Agreement. Notwithstanding the foregoing or any
          other provision of this Agreement, no entity may become an Issuer Subsidiary
          unless either (i) such entity has executed and delivered a counterpart of the
          Bank Obligation Guaranty or (ii) the Required Lenders (as defined in the Credit
          Agreement) have consented thereto. 

                 (h)    
          Captions. The captions and Section headings appearing herein are included
          solely for convenience of reference and are not intended to affect the
          interpretation of any provision of this Agreement. 

                 (i)    
          Conflicts. In the event of a conflict between the terms of this Agreement
          and the terms of any of the Security Documents, the terms of this Agreement
          shall control. 

                 (j)    
          Counterparts. This Agreement may be executed in any number of
          counterparts, all of which taken together will constitute one and the same
          instrument and any of the parties hereto may execute this Agreement by signing
          any such counterpart. 

                 (k)    
          GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
          ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
          AND PERFORMED IN THE STATE OF NEW YORK. 

                 (l)    
          Merger. This Agreement and the Security Documents supersede all prior
          agreements, written or oral, among the parties with respect to the subject
          matter of such agreements. 

                 (m)    
          Independent Investigation. None of the Collateral Agent or any of the
          Benefitted Parties, nor any of their respective directors, officers, agents or
          employees, shall be responsible to any of the others for the solvency or
          financial condition of the Company or any applicable Issuer Subsidiary or the
          ability of the Company or any applicable Issuer Subsidiary to repay any of the
          Obligations, or for the value, sufficiency, existence or ownership of any of the
          Collateral, or the statements of the Company or any applicable Issuer
          Subsidiary, oral or written, or for the validity, sufficiency or enforceability
          of any of the Obligations or any document or agreement executed or delivered in
          connection with or pursuant to any of the foregoing. Each 

15

      Benefitted Party has
          entered into its respective financial agreements with the Company or any
          applicable Issuer Subsidiary based upon its own independent investigation, and
          makes no warranty or representation to the other, nor does it rely upon any
          representation by any of the others, with respect to the matters identified or
          referred to in this Section. 

                 (n)    
          Severability. In case any one or more of the provisions contained in this
          Agreement shall be invalid, illegal or unenforceable in any respect, the
          validity, legality and enforceability of the remaining provisions of this
          Agreement shall not in any way be affected or impaired thereby. 

                 (o)    
          Effect of Bankruptcy or Insolvency. This Agreement shall continue in
          effect notwithstanding the bankruptcy or insolvency of any party hereto or the
          Company or any of its Subsidiaries (including any Issuer Subsidiary). 

[Remainder of page
intentionally left blank] 

16

        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
set forth above. 

U.S. BANK NATIONAL ASSOCIATION,

as successor to State Street Bank and Trust Company

of California, N.A. as Collateral Agent

By:          /s/ Brad E. Scarbrough 

Name:     Brad E. Scarbrough

Title:       Vice President 

Address for Notices: 

U.S.
Bank National Association

633 W 5th Street, 24th
Floor 

Los
Angeles, California 90071

Attention: Brad Scarbrough

Vice
President

Telephone: (213) 615-6047

Facsimile: 
(213) 615-6197

THE
PRUDENTIAL INSURANCE
 COMPANY OF AMERICA,

as 2000 Senior
Noteholder 

                                                       By:        /s/ Iris Krause    

                                                            Name:    Iris Krause

                                                            Title:      Vice President

Address for Notices: 

The
Prudential Insurance Company of America

 c/o Prudential Capital Group – Corporate
Finance 

Four Embarcadero Center, Suite 2700

 San Francisco, California 94111 

Attention:
Managing Director

 Facsimile: (415) 421-6233 

PRUDENTIAL
INVESMENT 
MANAGEMENT, INC.,

as 2003 Senior
Noteholder 

                                                       By:        /s/ Iris Krause 

                                                            Name:    Iris Krause

                                                            Title:      Vice President

Address for Notices: 

Investment Management, Inc.

 c/o Prudential Capital Group – Corporate Finance

 Four
Embarcadero Center, Suite 2700 

San Francisco, California 94111 

Attention: Managing
Director 

Facsimile: (415) 421-6233 

BANK OF AMERICA, N.A., 

as
Agent to the Senior Lenders and a Senior Lender 

                                                       By:      /s/ Sharon Burks Horos 

                                                            Name:  Sharon Burks Horos

                                                            Title:    Vice President

Address for Notices: 

Bank of America, N.A. 

231 South LaSalle Street 

Chicago, Illinois 60697 

Attn: Sharon Burks Horos 

Tel (312) 828-2149 

Fax (312) 828-6269 

BANK ONE, N.A., 

with its main office in Chicago, Illinois (as successor by merger
to Bank One, Utah, NA 

as a Senior Lender

                                                       By:        /s/ Mark F. Nelson  

                                                            Name:    Mark F. Nelson

                                                            Title:      Vice President

Address for Notices: 

Bank One, N.A. 

80 West Broadway, Suite
200 

Salt Lake City, Utah
84101 

Attn: Mark F. Nelson 

Tel (801) 481-5041 

Fax (801) 481-5351 

EACH OF THE UNDERSIGNED HEREBY
ACKNOWLEDGES AND CONSENTS TO THE FOREGOING, INCLUDING, WITHOUT LIMITATION, SECTION 3. EACH
OF THE UNDERSIGNED HEREBY CONSENTS TO THE RELEASE BY THE COLLATERAL AGENT TO THE
BENEFITTED PARTIES OF ANY INFORMATION PROVIDED TO OR OBTAINED BY THE COLLATERAL AGENT
UNDER OR IN CONNECTION WITH THE SECURITY DOCUMENTS. EACH OF THE UNDERSIGNED HEREBY
COVENANTS TO PAY TO THE COLLATERAL AGENT FROM TIME TO TIME REASONABLE REMUNERATION FOR ITS
SERVICES HEREUNDER AND WILL PAY OR REIMBURSE THE COLLATERAL AGENT UPON ITS REQUEST FOR ALL
REASONABLE EXPENSES, DISBURSEMENTS AND ADVANCES INCURRED OR MADE BY THE COLLATERAL AGENT
IN THE ADMINISTRATION OR EXECUTION OF THE COLLATERAL AGENCY HEREBY CREATED (INCLUDING THE
REASONABLE COMPENSATION AND THE DISBURSEMENTS OF ITS COUNSEL AND ALL OTHER ADVISERS AND
ASSISTANTS NOT REGULARLY IN ITS EMPLOY) BOTH BEFORE ANY DEFAULT HEREUNDER AND THEREAFTER
UNTIL ALL DUTIES OF THE COLLATERAL AGENT HEREUNDER SHALL BE FINALLY AND FULLY PERFORMED
EXCEPT ANY SUCH EXPENSE, DISBURSEMENT OR ADVANCE AS MAY ARISE OUT OF OR RESULT FROM THE
COLLATERAL AGENT’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. THE UNDERSIGNED HEREBY
AGREES TO PROVIDE TO EACH OF THE BENEFITTED PARTIES TRUE AND CORRECT COPIES OF ALL
NOTICES, CERTIFICATES, SCHEDULES AND OTHER INFORMATION PROVIDED TO THE COLLATERAL AGENT
PURSUANT TO THIS AGREEMENT AND THE SECURITY DOCUMENTS. 

NU SKIN ENTERPRISES, INC.

By:        /s/ D. Matthew Dorny 

     Name:    D. Matthew Dorny  

     Title:      Vice President 

NU SKIN INTERNATIONAL,
INC.

NU SKIN ENTERPRISES HONG KONG, INC.

NU SKIN TAIWAN, INC.

NU SKIN UNITED STATES, INC.

BIG PLANET, INC. 

By:        /s/ D. Matthew Dorny

     Name:    D. Matthew Dorny

     Title:       Vice President

NSE KOREA LTD., 

a Korean corporation domesticated under
under the laws of Delaware 

By:        /s/ Sung Tae Han  

     Name:    Sung Tae Han

     Title:      President, Representative Director and General Manager

Address for Notices:

 One
Nu Skin Plaza 

75
West Center Street

Provo, Utah 84601

Attention: General Counsel

Facsimile: (801) 345-6099 

EXHIBIT A 

Counterpart Amended
and Restated Collateral Agency and Intercreditor Agreement 

        IN
WITNESS WHEREOF, the undersigned has caused this Counterpart Amended and Restated
Collateral Agency and Intercreditor Agreement, dated as of ________, 20__ (this
“Counterpart”), to be duly executed and delivered by its duly authorized
officer. Upon execution and delivery of this Counterpart to Collateral Agent, the
undersigned shall be an Additional Benefitted Party under the Amended and Restated
Collateral Agency and Intercreditor Agreement and shall be as fully a party to the Amended
and Restated Collateral Agency and Intercreditor Agreement as if such Additional
Benefitted Party were an original signatory to the Amended and Restated Collateral Agency
and Intercreditor Agreement. 

[Name
of Additional Benefitted Party]

                                                          By:    

Name:

Title: 

A-1

EXHIBIT B 

Issuer Subsidiary
Counterpart  

        IN
WITNESS WHEREOF, the undersigned has caused this Issuer Subsidiary Counterpart, dated
as of ________, 20__ (this “Issuer Subsidiary Counterpart”), to be duly executed
and delivered by its duly authorized officer. Upon execution and delivery of this Issuer
Subsidiary Counterpart to Collateral Agent, the undersigned shall be an Issuer Subsidiary
under the Amended and Restated Collateral Agency and Intercreditor Agreement and shall be
deemed to acknowledge and consent to the Amended and Restated Collateral Agency and
Intercreditor Agreement, including without limitation Section 3 thereof, as if such Issuer
Subsidiary were an original signatory to the Amended and Restated Collateral Agency and
Intercreditor Agreement. 

[Name
of Issuer Subsidiary]

                                                          By: 

Name: 

Title: 

B-1Exhibit 10.4 NSE 2Q 10-Q

        STOCK
ACQUISITION AGREEMENT, made and entered into effective as of 12:00:01 am, August 1, 2003,
among NU SKIN ENTERPRISES, INC., a Delaware corporation (“NSE”), Orrin T.
Colby III, an individual (“Purchaser”), and Cygnus Resources Inc., a
Delaware corporation (“Cygnus”) 

WITNESSETH: 

        WHEREAS,
NSE owns, as of the date of this Agreement, all of the issued and outstanding capital
stock of Cygnus, consisting of 1,000 shares of Common Stock, $0.001 par value (the
“Cygnus Shares”); 

        WHEREAS,
NSE desires to transfer to Purchaser, and Purchaser desires to acquire the Cygnus Shares
(the “Stock Acquisition”), all on the terms and subject to the conditions
hereinafter set forth in exchange for, and in consideration for, the Cash Consideration
(as defined herein) upon the terms and subject to the conditions set forth herein; 

        WHEREAS,
Cygnus is liable for the outstanding obligations and costs related to the employee medical
benefit claims left unpaid by Meridian Benefit, Inc. and Intercare Health Plan, and NSE is
willing to agree to assume such liabilities; 

        WHEREAS,
pursuant to that certain Settlement and Mutual Release Agreement dated as of February 3,
2003 between Cygnus, AdvantEdge Business Group, L.L.C., and various other related parties,
AdvantEdge currently owes Cygnus approximately $110,000 (the “AdvantEdge
Proceeds”), and Cygnus is willing to assign its rights to the AdvantEdge Proceeds
as a way to offset the Meridian Liabilities assumed by NSE; 

        WHEREAS,
pursuant to that certain Continuing Guarantee executed by NSE on September 23, 2002 NSE
agreed to guarantee the obligations of Cygnus under a policy of group health insurance
issued to Cygnus by IHC effective as of October 1, 2002 and ending on December 31, 2003
(the “IHC Guarantee”), and the parties desire to take such actions as are
necessary so that the IHC Guarantee does not continue, or have efficacy, beyond the
current term of the Cygnus group health insurance policy; 

        WHEREAS,
the parties desire to make certain representations, warranties, covenants and other
agreements in connection herewith; 

        NOW,
THEREFORE, in consideration of the premises and the mutual agreements and covenants
hereinafter set forth, NSE, Purchaser and Cygnus hereby agree as follows: 

ARTICLE I 

ACQUISITION AND TRANSFER 

        SECTION
1.01. Acquisition and Transfer of Cygnus Shares. Upon the terms and subject to the
conditions of this Agreement, at the Closing (as hereinafter defined), NSE shall assign,
transfer, convey and deliver to Purchaser the Cygnus Shares and deliver one or more
certificates representing such Cygnus Shares (the “Cygnus Share
Certificates”) to Purchaser as provided in Section 1.03 below in consideration of
the Purchase Price described in Section 1.03 below. 

        SECTION
1.02. Closing. The Closing of the transactions contemplated by this Agreement (the
“Closing”) shall take place as soon as practicable after execution of
this Agreement, but not later than August 20, 2003, and shall take place at the offices of
NSE at 75 West Center Street, Provo, Utah 84601. 

        SECTION
1.03. Delivery of Shares and Payment of Purchase Price. 

         (a)       
          At the Closing, NSE shall deliver to Purchaser the Cygnus Share Certificates
          evidencing the Cygnus Shares duly endorsed in the name of Purchaser or his
          designee. 

         (b)       
          Subject to the terms and conditions set forth herein, in consideration for the
          assignment, transfer, conveyance and delivery of the Cygnus Shares, Purchaser
          will make annual payments (the “Annual Payments”) to NSE in cash, by
          check, or by wire transfer no later than 31 days after each Annual Payment Due
          Date (described below), equal to the lesser of (i) Cygnus’ Adjusted EBIT
          (as defined below) for the twelve months just ended on the applicable Annual
          Payment Due Date and (ii) the amount listed opposite the corresponding Annual
          Payment Due Date (the “Amount”). 

      Annual
Payment Schedule: 

	Annual Payment Due Date

December 31,
	Amount

	2004	 	$  25,000	 
	2005	 	$  75,000	 
	2006	 	$125,000	 
	2007	 	$175,000	 
	2008	 	$225,000	 
	2009	 	$255,000	 

         (i)       
          “Adjusted EBIT” shall mean annual calendar year earnings from Cygnus
          operations before deduction of interest payments and income taxes, as determined
          in accordance with generally accepted accounting principles (“GAAP”)
          consistently applied, minus 3.0% of the client employee wages earned during the
          same period. Adjusted EBIT shall be determined by Cygnus promptly after the
          close of each fiscal year, and copies of its report setting forth its
          computation of EBIT shall be submitted in writing to NSE as soon as practicable
          after the close of each fiscal year. NSE shall have reasonable access to the
          books and records of Cygnus to verify the computations of Adjusted EBIT made by
          Cygnus. Unless NSE notifies Cygnus within 45 days after receipt of the report
          that it objects to the computation of Adjusted EBIT set forth therein, such
          report shall be binding and conclusive for purposes of this Agreement. If NSE
          notifies Cygnus within 45 days after receipt of the report that it objects to
          the computation of Adjusted EBIT set forth therein, NSE and Cygnus shall
          negotiate in good faith to determine Adjusted EBIT for that period. If no
          agreement is reached within 30 days, the determination shall be made by a
          mutually agreeable third-party independent certified public accountant, whose
          determination shall be binding and conclusive on the parties. If the independent
          accountant determines that Adjusted EBIT has been materially understated by
          Cygnus, Cygnus shall pay the independent accountant’s fees, costs, and
          expenses. Otherwise, NSE shall pay such costs, fees, and expenses. 

         (ii)       
          Purchaser shall have no further obligation to make payments to NSE hereunder
          following the December 31, 2009 Annual Payment Due Date, provided,
          however, that this provision shall in no way be construed so as to
          relieve Purchaser from liability for defaults in payments of amounts otherwise
          due as provided in Section 1.03 (b). 

         (iii)       
          Notwithstanding the foregoing, if, with respect to any given Annual Payment Due
          Date, Purchaser is obligated to make an Annual Payment equal to Adjusted EBIT as
          provided above, Purchaser shall be obligated during the following year
          thereafter to make quarterly payments equal to the Adjusted EBIT for the
          applicable quarter until the Deficiency Amount (as defined below) has been paid
          in full. If such quarterly payments do not result in the Deficiency Amount being
          paid in full, then the remaining unpaid portion of the Deficiency Amount shall
          be eliminated as a Deficiency Amount, carried over to the following Annual
          Payment Due Date and added to the corresponding Amount, with the resulting
          amount replacing such corresponding Amount listed in the Annual Payment Schedule
          above. For purposes of the foregoing, the “Deficiency Amount” with
          respect to any particular Annual Payment Due Date shall mean the difference, if
          any, between the corresponding Amount and Adjusted EBIT. 

         (iv)       
          Purchaser may, without penalty, prepay Amounts not yet due. The amounts of any
          such prepayments shall be deducted from the Amount due for the following Annual
          Payment Due Date, with the resulting amount replacing such corresponding Amount
          listed in the Annual Payment Schedule above. 

         (v)       
          “Purchase Price” shall mean the aggregate of all payments required to
          be made pursuant to this Section 1.03. In no event shall the Purchase Price
          exceed $880,000. 

         (vi)       
          Purchaser shall be entitled to rely on the funds of Cygnus as the sole source of
          funds for payment of the Purchase Price. Purchaser shall not be obligated to pay
          the Purchase Price out of any source other than the funds of Cygnus.
          Notwithstanding the foregoing, if with respect to any given Annual Payment Due
          Date there is a Deficiency Amount, , the foregoing provisions of Section
          1.03(b)(vi) shall be void and have no effect with respect to that portion of the
          Deficiency Amount equal to any distribution from Cygnus that Purchaser receives
          or becomes entitled to (other than reasonable compensation and Purchase Price
          payments) with respect to the accounting year corresponding to such Annual
          Payment Due Date. 

         (vii)       
          Notwithstanding the foregoing, in the event that (a) Cygnus is acquired by means
          of a stock acquisition, reorganization, merger, consolidation or the like, (b)
          Cygnus sells, leases, or otherwise transfers or conveys all or substantially all
          of its assets, or (c) is otherwise liquidated, dissolved, or wound up, then
          $880,000 (less any amount of the Purchase Price already paid) shall become
          immediately due and payable. This provision shall in no way be construed to
          alter the provisions of Section 1.03(b)(iv), (v), or (vi). 

         (viii)       
          Purchaser hereby pledges and assigns to NSE, and hereby grants to NSE a first
          priority security interest in all of Purchaser’s right, title and interest
          in and to the Cygnus Shares and any derivatives thereof as collateral security
          for payment of the Purchase Price when due. Purchaser shall deliver to NSE the
          certificate(s) representing the Cygnus Shares along with an executed blank stock
          assignment. Upon default by Purchaser of his obligation to pay the Purchase
          Price in accordance with the terms of this Agreement, NSE shall have the right
          to transfer to or register in the name of NSE the Cygnus Shares. So long as all
          Purchase Price payments are made as they become due under this Agreement,
          Purchaser shall have the right to vote all of the Cygnus shares. Purchaser shall
          not sell, transfer, encumber, or otherwise dispose of any part of the Cygnus
          Shares without the prior written consent of NSE. This pledge of shares shall
          continue until the full Purchase Price is paid according to the terms of this
          Agreement, at which time the Cygnus Shares shall be promptly delivered to
          Purchaser. 

ARTICLE II 

REPRESENTATIONS AND
WARRANTIES OF NSE 

        NSE
represents and warrants to Purchaser that the statements contained in this Article II are
true and correct as of the date hereof, and will be true as of the Closing. 

	  	
SECTION
2.01. Organization. Authority and Qualification of Cygnus: Execution and Delivery. 
(a) Cygnus (i) is a corporation duly organized, validly existing and in good standing
under the laws of its 

jurisdiction of incorporation, (ii)
has all the necessary corporate power and authority to own, operate or lease the
properties and assets now owned, operated or leased by it and to carry on the business as
it has been and is currently conducted by it. 

         (b)       
          Cygnus is duly licensed or qualified to do business and is in good standing in
          each jurisdiction in which the properties owned or leased by it or the operation
          of its business makes such licensing or qualification necessary, except where
          the failure to be so licensed or qualified would not result in a material
          adverse effect on Cygnus. 

         (c)       
          All corporate actions taken by Cygnus have been duly authorized, and Cygnus has
          not taken any action that conflicts with, constitutes a default under or results
          in a violation of any provision of its Certificate of Incorporation or Bylaws in
          any material way. 

        SECTION
2.02. Due Execution and Delivery by Cygnus and NSE. This Agreement has been duly
executed and delivered by Cygnus and NSE, and (assuming due authorization, execution and
delivery by Purchaser) this Agreement constitutes legal, valid and binding obligations of
Cygnus and NSE enforceable against Cygnus and NSE in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors’ rights generally and except that the availability of
equitable remedies, including specific performance, is subject to the discretion of the
court before which any proceeding therefor may be brought. 

        SECTION
2.03. Capital Stock of Cygnus; NSE’s Ownership of Cygnus Shares. 

         (a)       
          The authorized capital stock of Cygnus consists of 1,000,000 shares of capital
          stock, 600,000 of which are designated as “Common Stock”, and 400,000
          of which are designated as “Preferred Stock”. As of the date hereof,
          1,000 shares of Common Stock are issued and outstanding, all of which are duly
          authorized, validly issued, fully paid and nonassessable. Except for the Cygnus
          Shares, there are no other equity securities of Cygnus outstanding. There are no
          options, warrants, convertible securities or other rights, agreements,
          arrangements or commitments of any character relating to the capital stock of
          Cygnus or obligating Cygnus or NSE to issue or sell any shares of capital stock
          of, or any other interest in, Cygnus. There are no outstanding contractual
          obligations of Cygnus to repurchase, redeem or otherwise acquire any of its
          shares or to provide funds to, or make any investment (in the form of a loan,
          capital contribution, or otherwise) in, any other person. 

         (b)       
          As of the date hereof, NSE is the record and beneficial owner of and has good
          and valid title to the Cygnus Shares, free and clear of all encumbrances (except
          for restrictions on transfer imposed by applicable securities laws). Upon
          consummation of the transaction contemplated by this Agreement and registration
          of the Cygnus Shares in the name of Purchaser, Purchaser will own all the issued
          and outstanding capital stock of Cygnus free and clear of all encumbrances. Upon
          consummation of the transaction contemplated by this Agreement, the Cygnus
          Shares will be fully paid and nonassessable. There are no voting trusts,
          stockholder agreements, proxies or other agreements or understandings in effect
          with respect to the voting or transfer of any of the Cygnus Shares. 

        SECTION
2.04. No Conflict. Assuming that all required consents, approvals, authorizations
and other actions described in Section 3.06 have been obtained, the execution, delivery
and performance of this Agreement by Cygnus and NSE and the consummation of the
transaction contemplated herein in the manner contemplated hereby do not and will not
violate, conflict with or result in the breach of any provision of the charter or by-laws
of Cygnus. 

ARTICLE III 

REPRESENTATIONS AND
WARRANTIES OF PURCHASER 

        Purchaser
represents and warrants to NSE as follows: 

        SECTION
3.01. Investment Purpose. Purchaser is acquiring the Cygnus Shares solely for the
purpose of investment and not with a view to, or for offer or sale in connection with, any
distribution thereof. 

ARTICLE IV 

ADDITIONAL AGREEMENTS
AND COVENANTS 

        SECTION
4.01. Assumption of Liabilities. 

         (a)       
          NSE agrees to and hereby does expressly assume and agree to pay, discharge,
          perform, satisfy and resolve the Meridian Liabilities (as defined in Section
          4.01(b) below). NSE does not agree to assume any liabilities or obligations of
          Cygnus other than the Meridian Liabilities, provided, however, that this does
          not negate the indemnification obligations provided in Article VI. 

         (b)       
          “Meridian Liabilities” include any and all liabilities or obligations
          of any kind, character, or description, whether known or unknown, absolute or
          contingent, accrued or unaccrued, disputed or undisputed, liquidated or
          unliquidated, secured or unsecured, joint or several or otherwise, arising out
          of or related to employee benefit claims left unpaid by Meridian Benefit, Inc.
          and Intercare Health Plan , including but not limited to payments of medical
          claims, legal and all other costs and expenses, governmental and regulatory
          fines, and claims by or obligations to brokers, third party administrators,
          AdvantEdge, Meridian, or any other person in relation thereto. Meridian
          Liabilities expressly include, but are not limited to, the corresponding
          compliance liabilities related to the United States Department of Labor and
          other governmental authorities, including penalties, fines, adverse claims and
          the like from such authorities. 

         (c)       
          NSE agrees to keep Cygnus reasonably informed of the status of the resolution of
          the Meridian Liabilities on an on-going basis, including making permanently
          available all pertinent records, files, correspondence, and the like. NSE also
          agrees to promptly inform Cygnus of any matters it is aware of related to the
          Meridian Liabilities which could reasonably impact the business of Cygnus in any
          material way. 

        SECTION
4.02. Assignment of AdvantEdge Proceeds. Cygnus agrees to and hereby does assign to
NSE its rights to receive the AdvantEdge Proceeds (as previously defined herein). If
AdvantEdge pays any of the AdvantEdge proceeds to Cygnus, Cygnus agrees that NSE is the
legal owner of these funds, and Cygnus will immediately pay or forward these funds to NSE.
In addition, Cygnus agrees to inform AdvantEdge of this assignment of proceeds as soon as
practicable after the Closing. NSE agrees to hold Cygnus harmless from any costs or other
liabilities incurred by NSE in pursuit of the AdvantEdge Proceeds. 

        SECTION
4.03. IHC Guarantee. Cygnus agrees that it will not renew, extend or otherwise
continue its current policy of group health insurance issued by IHC beyond the current
policy period ending December 31, 2003 unless and until IHC has released NSE from its
guarantee obligations under the IHC Guarantee (as previously defined herein). 

        SECTION
4.04. Liability Insurance. The parties agree that after the Closing, Cygnus shall
be responsible for obtaining its own liability insurance, and that NSE shall have no
obligation to maintain liability insurance on behalf of Cygnus. NSE agrees to provide
Cygnus with copies of any insurance policies it is aware of that are in Cygnus’ name,
and to inform Cygnus within 10 business days of any removal of Cygnus’ name or
property from any liability insurance carried by NSE on Cygnus’ behalf. 

        SECTION
4.05 Intercompany Agreements. NSE and Cygnus agree that all agreements, contracts,
and the like between NSE (or its affiliates) and Cygnus shall be terminated as of the
Closing Date, and after the Closing Date, neither party shall be bound thereby or have any
liability thereunder, other than unsatisfied obligations incurred pursuant to such
agreements, contracts, and the like prior to the Closing Date. 

        SECTION
4.06. Use of NSE Resources. The parties agree that until September 30, 2003, Cygnus
may continue to utilize the facilities, equipment, administrative resources, technical
support, and the like in a manner consistent with its use of such prior to the Closing at
no cost to Cygnus, provided, however, that if such NSE facility and
resources are used by Cygnus in a manner that exceeds current practice, or if Cygnus
desires to continue to utilize the facilities and resources of NSE after September 30,
2003, it may only do so pursuant to an arrangement acceptable to NSE that provides for
payment by Cygnus for such use of resources. NSE is under no obligation to allow Cygnus to
continue its occupation of NSE premises or use of its resources after September 30, 2003. 

        SECTION
4.07. Confidentiality. NSE and Purchaser each agree to, and shall cause each of
their respective agents, representatives and affiliates to: (i) treat and hold as
confidential (and not disclose or provide access to any person to) all information
relating to trade secrets, processes, patent and trademark applications, product
development, pricing and marketing plans, policies and strategies, operations methods,
product development techniques, new personnel acquisition plans and all other confidential
information with respect to Cygnus (in the case of NSE) and NSE (in the case of
Purchaser), (ii) in the event that NSE or Purchaser or any agent, representative,
affiliate, employee, officer or director of each becomes legally compelled to disclose any
such information, provide NSE or Purchaser, as the case may be, with prompt written notice
of such requirement so that NSE or Purchaser, as the case may be, may seek a protective
order or other remedy or waive compliance with this Section 4.07 and (iii) in the event
that such protective order or other remedy is not obtained, or NSE or Purchaser, as the
case may be, waives compliance with this Section 4.07 furnish only that portion of such
confidential information which is legally required to be provided and exercise its best
efforts to obtain assurances that confidential treatment will be accorded such
information. NSE and Purchaser each agrees and acknowledges that remedies at law for any
breach of their obligations under this Section 4.07 are inadequate and that in addition
thereto NSE and Purchaser shall be entitled to seek equitable relief, including injunction
and specific performance, in the event of any such breach. 

        SECTION
4.08. Regulatory and Other Authorizations: Notices and Consents. 

         (a)       
          NSE and Purchaser shall cooperate in obtaining (or causing Cygnus to obtain) all
          authorizations, consents, orders and approvals of all governmental authorities
          and officials that may be or become necessary for the execution and delivery of,
          and the performance of, obligations pursuant to this Agreement and will
          cooperate in promptly seeking to obtain all such authorizations, consents,
          orders and approvals. 

         (b)       
          NSE and Purchaser shall cooperate in giving promptly such notices to third
          parties and use their best efforts to obtain such third party consents and
          estoppel certificates as may be necessary or desirable in connection with the
          transactions contemplated by this Agreement. 

         (c)       
          NSE and Purchaser agree that, in the event any consent, approval or
          authorization necessary or desirable to preserve for Cygnus any right or benefit
          under any lease, license, contract, commitment or other agreement or arrangement
          to which Cygnus is a party is not obtained prior to the Closing, NSE will,
          subsequent to the Closing, cooperate with Purchaser in attempting to obtain such
          consent, approval or authorization as promptly thereafter as practicable. 

        SECTION
4.09 Records, Files, etc. NSE agrees to provide originals or copies of all records,
files, data and other documents, electronic or otherwise, pertinent to the business of
Cygnus. 

        SECTION
4.10 Tax Returns. NSE agrees to continue filing consolidated tax returns for Cygnus
through the period ending as of the date hereof. 

        SECTION
4.11. Further Action. Each of the parties hereto shall use all reasonable efforts
to take, or cause to be taken, all appropriate action, do or cause to be done all things
necessary, proper or advisable under applicable law, and execute and deliver such
documents and other papers, as may be required to carry out the provisions of this
Agreement and consummate and make effective the transactions contemplated by this
Agreement. 

ARTICLE V 

CONDITIONS TO CLOSING 

        SECTION
5.01. Conditions to Obligations of all parties. The obligations of each party to
consummate the transaction contemplated by this Agreement shall be subject to the
fulfillment, at or prior to the Closing, of the following conditions by the other parties: 

         (a)       
          Representations, Warranties, and Covenants. The representations and
          warranties of the other parties contained in this Agreement shall have been true
          and correct when made and shall be true and correct in all material respects as
          of the Closing, with the same force and effect as if made as of the Closing, and
          the covenants and agreements contained in this Agreement to be complied with by
          the other parties on or before the Closing shall have been complied with in all
          material respects. 

         (b)       
          Governmental Consents. All authorizations, consents, orders, and
          approvals of all governmental authorities and officials that may be necessary
          for the execution and delivery of, and the performance of, obligations pursuant
          to this Agreement shall have been obtained. 

         (c)       
          Intercompany Payables. The books of NSE shall have been adjusted
          appropriately to reflect the capitalization by NSE of the approximately $690,000
          intercompany debt owed by Cygnus to NSE on the closing books for July 2003, and
          NSE shall have delivered to Purchaser Cygnus’ unaudited balance sheet for
          the period ended July 31, 2003, reflecting such capitalization. 

         (d)       
          Cygnus Financial Statements. NSE shall have delivered to Purchaser copies
          of the balance sheet, income statement, and statement of cash flows of Cygnus
          for the period ending July 31, 2003. Such financial statements shall reflect the
          capitalization of intercompany debt as provided in Section 5.01(c). 

         (e)       
          Schedule of Cygnus Assets. NSE shall have delivered to Purchaser a
          complete schedule of the assets that, to the knowledge of NSE, are owned by
          Cygnus as of July 31, 2003. 

         (f)       
          Schedule of Cygnus Liabilities. NSE shall have delivered to Purchaser a
          complete schedule of liabilities that, to the knowledge of NSE, are owed by
          Cygnus as of the date hereof. This schedule of liabilities is the same as that
          referenced below in Section 6.02(e). 

         (g)       
          Officers and Directors. Each current officer and director of Cygnus shall
          have resigned from their respective positions, effective as of the Closing. 

         (h)       
          Corporate Documents. NSE shall have delivered to Purchaser originals of
          the Stock Register, Articles of Incorporation, Bylaws, Board Minute Book, and
          Corporate Seal. 

ARTICLE VI 

INDEMNIFICATION 

        SECTION
6.01. Survival of Representations and Warranties. The representations and
warranties of the parties contained in this Agreement, the indemnification provisions of
this Article VI and all statements contained in this Agreement or other document delivered
pursuant to this Agreement or in connection with the transaction contemplated by this
Agreement (collectively, the “Acquisition Documents”), shall survive the
Closing. Neither the survival nor the liability of the parties with respect to their
representations and warranties shall be reduced by any investigation made at any time by
or on behalf of any other party. 

        SECTION
6.02. Indemnification by NSE. Purchaser, his affiliates and their successors and
assigns, and the officers, directors, employees and agents of Purchaser, his affiliates,
and their successors and assigns (each an “Indemnified Party”) shall be
indemnified and held harmless by NSE (the “Indemnifying Party”) for any
and all liabilities, losses, damages, claims, costs and expenses, interest, awards,
judgments and penalties (including, without limitation, attorneys’ and
consultants’ fees and expenses) actually suffered or incurred by them (including,
without limitation, any action brought or otherwise initiated by any of them) (hereinafter
a “Loss”), arising out of or resulting from: 

         (a)       
          the breach of any representation or warranty made by NSE contained in the
          Acquisition Documents; 

         (b)       
          the breach of any covenant or agreement by NSE contained in the Acquisition
          Documents; 

         (c)       
          any liabilities or obligations of Cygnus arising from or relating to actions or
          inactions of Cygnus or the conduct of its business prior to the Closing,
          including, but not limited to, taxes, assessments, penalties, fines, and
          interest associated with the filing of consolidated tax returns by NSE through
          the date hereof; or 

         (d)       
          any and all Losses suffered or incurred by Cygnus by reason of or in connection
          with any claim or cause of action of any third party to the extent arising out
          of any action, inaction, event, condition, liability or obligation of Cygnus
          prior to the Closing. 

         (e)       
          Notwithstanding the foregoing, the indemnification obligations provided by NSE
          in this Section 6.02 do not apply to the liabilities described in Schedule
          6.02(e), relating to ordinary course liabilities of Cygnus as reflected in
          Cygnus’ books as of the date hereof, and any such liabilities relating to
          the period between the date hereof and the Closing. 

        SECTION
6.03. Indemnification by Cygnus. NSE, its affiliates and their successors and
assigns, and the officers, directors, employees and agents of NSE, its affiliates, and
their successors and assigns (each an “Indemnified Party”) shall be
indemnified and held harmless by Cygnus (the “Indemnifying Party”)
for any and all liabilities, losses, damages, claims, costs and expenses, interest,
awards, judgments and penalties (including, without limitation, attorneys’ and
consultants’ fees and expenses) actually suffered or incurred by them (including,
without limitation, any action brought or otherwise initiated by any of them) (hereinafter
a “Loss”), arising out of or resulting from: 

         (a)       
          the breach of any representation or warranty made by Purchaser contained in the
          Acquisition Documents; 

         (b)       
          the breach of any covenant or agreement by Cygnus or Purchaser contained in the
          Acquisition Documents; 

         (c)       
          liabilities incurred by NSE pursuant to the IHC Guarantee arising out of actions
          or inactions of Cygnus or the conduct of its business after the Closing; 

         (d)       
          any liabilities or obligations of Cygnus arising from or relating to actions or
          inactions of Cygnus or the conduct of its business after the Closing; or 

         (e)       
          any and all Losses suffered or incurred by NSE by reason of or in connection
          with any claim or cause of action of any third party to the extent arising out
          of any action, inaction, event, condition, liability or obligation of Cygnus
          after the Closing. 

        SECTION
6.04. Indemnification Procedures. An Indemnified Party shall give the applicable
Indemnifying Party notice of any matter which an Indemnified Party has determined has
given or could give rise to a right of indemnification under this Agreement, within 60
days of such determination, stating the amount of the Loss, if known, and method of
computation thereof, and containing a reference to the provisions of this Agreement in
respect of which such right of indemnification is claimed or arises. If an Indemnified
Party shall receive notice of any claim by a third party, the Indemnified Party shall give
the applicable Indemnifying Party notice of such third party claim within 30 days of the
receipt by the Indemnified Party of such notice; provided, however, that the
failure to provide such notice shall not release such Indemnifying Party from any of its
obligations under this Article VI except to the extent the indemnifying party is
materially prejudiced by such failure and shall not relieve such Indemnifying Party from
any other obligation or liability that they may have to any Indemnified Party otherwise
than under this Article VI. If any Indemnifying Party acknowledges in writing its
obligation to indemnify the Indemnified Party hereunder against any Losses that may result
from such third party claim, then such Indemnifying Party shall be entitled to assume and
control the defense of such third party claim at its expense and through counsel of its
choice if it gives notice of its intention to do so to the Indemnified Party within five
days of the receipt of such notice from the Indemnified Party; provided, however,
that if there exists or is reasonably likely to exist a conflict of interest that
would make it inappropriate in the judgment of the Indemnified Party, in its sole and
absolute discretion, for the same counsel to represent both the Indemnified Party and the
Indemnifying Party, then the Indemnified Party shall be entitled to retain its own
counsel, in each jurisdiction for which the Indemnified Party determines counsel is
required, at the expense of the Indemnifying Party. In the event the Indemnifying Party
exercises the right to undertake any such defense against any such third party claim as
provided above, the Indemnified Party shall cooperate with the Indemnifying Party in such
defense and make available to the Indemnifying Party, at the Indemnifying Party’s
expense, an witnesses, pertinent records, materials and information in the Indemnified
Party’s possession or under the Indemnified Party’s control relating thereto as
is reasonably required by the Indemnifying Party. Similarly, in the event the Indemnified
Party is, directly or indirectly, conducting the defense against any such third party
claim, the Indemnifying Party shall cooperate with the Indemnified Party in such defense
and make available to the Indemnified Party, at the Indemnifying Party’s expense, all
such witnesses, records, materials and information in the Indemnifying Party’s
possession or under the Indemnifying Party’s control relating thereto as is
reasonably required by the Indemnified Party. No such third party claim may be settled by
the Indemnifying Party without the prior written consent of the Indemnified Party. 

ARTICLE VII 

GENERAL PROVISIONS 

        SECTION
7.01. Expenses. Except as otherwise specified in this Agreement, all costs and
expenses, including, without limitation, fees and disbursements of counsel, financial
advisors and accountants, incurred in connection with this Agreement and the transaction
contemplated hereby shall be paid by the party incurring such costs and expenses, whether
or not the Closing shall have occurred. 

        SECTION
7.02. Notices. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given or made (and shall be deemed to have been
duly given or made upon receipt by delivery in person, by courier service, by cable, by
telecopy, by telegram, by telex or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance with this
Section 7.02): 

(a) 

if to NSE: 

Nu Skin Enterprises, Inc.

One Nu Skin Plaza

75 West Center

Provo, Utah 84601

Telecopy:(801) 345-3899

Attention: D. Matthew Dorny 

(b) 

if to Purchaser or Cygnus: 

Orrin T. Colby III

 406 Oakley St. 

Salt Lake City, UT 84116

 Telecopy: (801) 406-0209

 Attention: Orrin T. Colby III 

        SECTION
7.03. Headings. The descriptive headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement. 

        SECTION
7.04. Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any law or public policy, all other terms and
provisions of this Agreement shall nevertheless remain in full force and effect so long as
the economic or legal substance of the transactions contemplated hereby is not affected in
any manner materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in an acceptable manner in order that the transactions
contemplated hereby are consummated as originally contemplated to the greatest extent
possible. 

        SECTION
7.05. Entire Agreement. This Agreement constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof and supersedes all prior
agreements and undertakings, both written and oral, between the parties with respect to
the subject matter hereof. 

        SECTION
7.06. Assignment. This Agreement may not be assigned by operation of law or
otherwise without the express written consent of the other parties (which consent may be
granted or withheld in the sole discretion of such other parties); provided, however,
that NSE may assign this Agreement to an affiliate of NSE without the consent of the
other parties, provided further, however that no such assignment shall release NSE
from its payment and performance obligations herewith, and that NSE agrees to notify
Purchaser and Cygnus of such assignment within 15 days. 

        SECTION
7.07. No Third Party Beneficiaries. Except for the provisions of Article VII
relating to Indemnified Parties, this Agreement shall be binding upon and inure solely to
the benefit of the parties hereto and their permitted assigns and nothing herein, express
or implied, is intended to or shall confer upon any other Person any legal or equitable
right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. 

        SECTION
7.08. Amendment. This Agreement may not be amended or modified except by an
instrument in writing signed by, or on behalf of, each party. 

        SECTION
7.09. Waiver. Any party may (a) extend the time for the performance of any of the
obligations or other acts of an other party, (b) waive any inaccuracies in the
representations and warranties of an other party contained herein or in any document
delivered by an other party pursuant thereto or (c) waive compliance with any of the
agreements or conditions of an other party contained herein. Any such extension or waiver
shall be valid only if set forth in an instrument in writing signed by the party to be
bound thereby. Any waiver of any term or condition shall not be construed as a waiver of
any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of
any other term or condition, of this Agreement. The failure of any party to assert any of
its rights hereunder shall not constitute a waiver of any of such rights. 

        SECTION
7.10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
UTAH, EXCLUDING (TO THE GREATEST EXTENT PERMISSIBLE BY LAW) ANY RULE OF LAW THAT WOULD
CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF UTAH. 

        SECTION
7.11. Counterparts. This Agreement may be executed in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall constitute one and
the same agreement. 

        SECTION
7.12. Specific Performance. The parties hereto agree that irreparable damage would
occur in the event any provision of this Agreement was not performed in accordance with
the terms hereof and that the parties shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or equity. 

        IN
WITNESS WHEREOF, the NSE, Purchaser, and Cygnus have caused this Agreement to be executed
as of the date first written above by their respective officers thereunto duly authorized. 

NU SKIN ENTERPRISES,
INC., a Delaware corporation (“NSE”) 

By:        /s/ Mark L. Adams

Name:    Mark L. Adams

Title:      Vice President

ORRIN T. COLBY III, an
individual (“PURCHASER”) 

/s/ Orrin T. Colby III 

CYGNUS RESOURCES, INC.,
a Delaware corporation (“CYGNUS”) 

By:        /s/ Paul D. Swan

Name:    Paul D. Swan

Title:      President

   SCHEDULE 6.02(e) 

CYGNUS LIABILITES 

		
	Accounts Payable	 	 	 
	     	 	 	 
	Trade Payables	 	92,361	 
	     	 	 	 
	     Accounts Payables Total	 	 	92,361
	     	 	 	 
	     	 	 	 
	Accrued Liabilities	 	 	 
	     	 	 	 
	     Wages Payable	 	(357	)
	     Accrued Payroll Taxes	 	9,612	 
	     Other Accrued Liabilities	 	116,722	 
	     Cafeteria Plan (125) Payable	 	(5437	)
	     401(k) Payable	 	1,452	 
	     Other Accruals - Clearing	 	17,279	 
	     Sales Tax - AP	 	(254	)
	     Social Security W/H	 	4,531	 
	     Medicare W/H	 	1,210	 
	     Federal W/H	 	1,384	 
	     State W/H	 	32,894	 
	     City Tax	 	736	 
	     	 	 	 
	Accrued Liabilities Total	 	 	179,772 
	 	 	 	 
	Cygnus Liabilities TOTAL	 	 	272,133

ASSIGNMENT SEPARATE
FROM CERTIFICATE 

        FOR
VALUE RECEIVED, Nu Skin Enterprises, Inc. hereby sells, assigns, and transfers unto Orrin
T. Colby III, one thousand (1,000) shares of the Common Stock of Cygnus Resources, Inc.,
standing in the undersigned’s name on the books of said corporation, represented by
Certificate No. 001, and does hereby irrevocably constitute and appoint D. Matthew Dorny
attorney to transfer the said stock on the books of the said corporation with full power
of substitution in the premises. 

Dated:_________________________ 

NU SKIN ENTERPRISES, INC. 

By:___________________________

Name:

Title:

ASSIGNMENT SEPARATE
FROM CERTIFICATE 

        FOR
VALUE RECEIVED, Orrin T. Colby hereby sells, assigns, and transfers unto Nu Skin
Enterprises, Inc. _______________ (_______) shares of the Common Stock of Cygnus
Resources, Inc., standing in the undersigned’s name on the books of said corporation,
represented by Certificate(s) No. _________, and does hereby irrevocably constitute and
appoint _________________ attorney to transfer the said stock on the books of the said
corporation with full power of substitution in the premises. 

Dated:_________________________ 

_________________ 

(signature) 

_________________ 

(print name) 

[This assignment may only be
completed and delivered in accordance with the terms of the Stock Acquisition Agreement
dated as of August 1, 2003 between the signatory hereof and Nu Skin Enterprises, Inc.]

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