Document:

Exhibit 10.3 NSE 2003 10-K 2nd Amendment to Note Purchase Agreement

SECOND AMENDMENT TO
NOTE PURCHASE AGREEMENT 

        THIS
SECOND AMENDMENT dated as of October 31, 2003 (this “Second
Amendment”) to the Note Purchase Agreement dated as of October 12, 2000, as
amended through the date hereof (the “Note Agreement”) is between Nu Skin
Enterprises, Inc., a Delaware corporation (the “Company”), and The
Prudential Insurance Company of America (“Prudential”). 

RECITALS 

         A.       
          The Company and Prudential have heretofore entered into the Note Agreement. 

         B.       
          The Company and Prudential now desire to amend the Note Agreement in the
          respects, but only in the respects, hereinafter set forth. 

         C.       
          Capitalized terms used herein shall have the respective meanings ascribed
          thereto in the Note Agreement unless herein defined or the context shall
          otherwise require. 

         D.       
          All requirements of law have been fully complied with and all other acts and
          things necessary to make this Second Amendment a valid, legal and binding
          instrument according to its terms for the purposes herein expressed have been
          done or performed. 

        NOW,
THEREFORE, upon the full and complete satisfaction of the conditions precedent to the
effectiveness of this Second Amendment set forth in Section 3 hereof, and in
consideration of good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the Company and Prudential do hereby agree as follows: 

Section 1.     Amendments to
Note Agreement 

        1.1    
Section 9.6 of the Note Agreement is hereby amended by deleting the title of such Section
and inserting in place thereof “Security; Execution of Pledge Agreement, Foreign
Subsidiary Guaranty and Subsidiary Guaranty”. 

        1.2    
Section 9.6(a) of the Note Agreement is hereby amended by deleting the title of such
Section 9.6(a) in its entirety and inserting in place thereof the following: 

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

                    

1 

          		
    (i)       
               Pledged Securities of each Material Foreign Subsidiary. In each instance
               where the Company elects to comply with clause (x) of Section 9.6(a) above,
               within 5 days after the Company or any of its Restricted Subsidiaries acquires a
               Material Foreign Subsidiary or within 5 days after the Company delivers
               consolidating financial statements pursuant to Section 7.1 showing that any of
               Company’s existing Subsidiaries has become a Material Foreign Subsidiary,
               the Company shall cause the Pledged Securities of such Material Foreign
               Subsidiary to be pledged pursuant to a supplement to the Pledge Agreement
               (unless a pledge of such Pledged Securities (x) is legally unobtainable or (y)
               the consent of a governmental authority is required in order to obtain such
               pledge and such consent has not been obtained after the Company’s
               commercially reasonable efforts to obtain such consent, and Company delivers an
               opinion of outside counsel, in form and substance reasonably satisfactory to the
               holders of the Notes and their counsel, to the effect that such pledge was not
               legally obtainable or such consent was not obtained; provided,
               however, if the consolidated total revenues of NSE Korea Ltd., a Korean
               corporation, equal or exceed 10% of the consolidated total revenues during the
               four most recently ended fiscal quarters of the Company and its Subsidiaries
               during such period, then the Company shall be required to comply with this
               Section 9.6(a)(i) regardless of the foregoing). The Company shall promptly take
               all actions as may be necessary or desirable to give to the Collateral Agent,
               for the ratable benefit of the holders of the Notes and the other Senior Secured
               Creditors, a valid and perfected first priority Lien on and security interest in
               the Pledged Securities of such Material Foreign Subsidiary and shall promptly
               deliver to the holders of the Notes (i) a supplement to the Pledge Agreement
               executed by each Pledgor of the Pledged Securities of such Material Foreign
               Subsidiary, (ii) a certificate executed by the secretary or an assistant
               secretary of each Pledgor as to (a) the incumbency and signatures of the
               officers of such Pledgor executing the supplement to the Pledge Agreement, and
               (b) the fact that the attached resolutions of the Board of Directors of such
               Pledgor authorizing the execution, delivery and performance of the supplement to
               the Pledge Agreement are in full force and effect and have not been modified or
               rescinded, (iii) at the request of a holder of any Note, a favorable opinion of
               counsel, in form and substance reasonably satisfactory to the holders of the
               Notes and their counsel, as to (a) the due organization and good standing of
               such Pledgor, (b) the due authorization, execution and delivery by such Pledgor
               of the supplement to the Pledge Agreement, (c) the enforceability of the
               supplement to the Pledge Agreement, and (d) such other matters as the Required
               Holders may reasonably request, all of the foregoing to be satisfactory in form
               and substance to the holders of the Notes and their counsel; provided
               that the opinion described in this clause (iii) may be given by the
               Company’s in-house counsel and may contain reasonable assumptions, if
               necessary, relating to the fact that such counsel may not be admitted to
               practice law  

               

2 

          		
 in the applicable jurisdiction, and (iv) such other assurances,
               certificates, documents, consents or opinions as the Required Holders reasonably
               may require. 

               

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

               

        1.3     Section 10.4 of the Note
Agreement is hereby amended in its entirety to read as follows:

        
        "10.4    Minimum Consolidated Net
Worth."

	  	        The
Company will not, at any time, permit Consolidated Net Worth to be less than the sum of
(i) $271,935,200, (ii) an aggregate amount equal to 60% of Consolidated Net Income (but,
in each case, only if a positive number) earned in (a) the six months ended December 31,
2000, and (b) unless clause (iii) below is operative for any given fiscal quarter (in
which case such fiscal quarter shall be excepted from this clause (ii)), each complete
fiscal  

3 

	  	
quarter thereafter, (iii) for the fiscal quarter ended December 31, 2003 and each
fiscal quarter ended thereafter to but not including the fiscal quarter in which Total
Indebtedness is first reduced to $120,000,000 or less, an aggregate amount equal to 70% of
Consolidated Net Income (in each case to the extent a positive number) earned in each such
fiscal quarter, and (iv) 50% of the net proceeds realized by the Company and its
Restricted Subsidiaries from the sale of Equity Securities subsequent to June 30, 2000,
excluding issuances of Equity Securities upon exercise of employee stock options or rights
under any employee benefit plans (excluding such exercise by any Person that owns greater
than 5% of the Equity Securities of the Company), issuances of Equity Securities in
connection with acquisitions by the Company and its Restricted Subsidiaries and
reissuances of up to $60,000,000 of treasury securities purchased by the Company after
October 12, 2000, so long as not purchased in the fourth quarter of 2003.” 

        
1.4    Section 11(l) of the Note
Agreement is hereby amended in its entirety to read as follows: 

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

               

        1.5    
Schedule A of the Note Agreement is hereby amended by inserting the following definition
in proper alphabetical order: 

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

        1.6    
Schedule A of the Note Agreement is hereby further amended by amending and restating the
definition of “Material Subsidiaries” in the following manner: 

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

4 

	  	
 total revenues during the four most recently ended fiscal quarters
equaled or exceeded 10% of the consolidated total revenues of the Company and its
Subsidiaries during such period, or (ii) is an obligor under any Guaranty with respect to
the Indebtedness of the Company under any Significant Credit Facility. 

        1.7    
Schedule A of the Note Agreement is hereby further amended by amending and restating the
definition of “Collateral Documents” in the following manner: 

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

        1.8    
Schedule A of the Note Agreement is hereby further amended by amending and restating the
definition of “Consolidated Net Worth” in the following manner: 

	  	        “Consolidated
Net Worth” means, at any time, (a) the consolidated stockholders’ equity of
the Company and the Restricted Subsidiaries, as defined according to GAAP, plus (b)
to the extent funded with the proceeds of a debt offering and cash and not with proceeds
of any equity issuance, the amount (not to exceed $150,000,000) paid by the Company in the
fourth quarter of 2003 for repurchases of its outstanding common stock, less (c) the sum
of (i) to the extent included in clause (a), all amounts attributable to minority
interests, if any, in the securities of Restricted Subsidiaries, and (ii) the amount by
which Restricted Investments exceed 20% of the amount determined in clause (a). 

Section 2.    
Representations and Warranties and Covenants of the Company. 

        2.1    
 To induce Prudential to execute and deliver this Second Amendment (which
                    representations shall survive the execution and delivery of this
Second                     Amendment), the Company represents and warrants to Prudential
that:  

               	 	(a)       

                     this Second Amendment has been duly authorized, executed and delivered by it
                    and this Second Amendment constitutes the legal, valid and binding obligation,
                    contract and agreement of the Company enforceable against it in accordance with
                    its terms, except as enforcement may be limited by (i) bankruptcy, insolvency,
                    reorganization, moratorium or similar laws or equitable principles relating to
                    or limiting creditors’ rights generally and (ii) general principles of
                    equity (regardless of whether such enforceability is considered in a proceeding
                    in equity or at law); 

                    

               	 	(b)       

                     the Note Agreement, as amended by this Second Amendment, constitutes the legal,
                    valid and binding obligation, contract and agreement of the Company enforceable
                    against it in accordance with its terms, except as enforcement may be  

                    

5 

               	 	 limited by
                    (i) bankruptcy, insolvency, reorganization, moratorium or similar laws or
                    equitable principles relating to or limiting creditors’ rights generally
                    and (ii) general principles of equity (regardless of whether such enforceability
                    is considered in a proceeding in equity or at law); 

                    

               	 	(c)       

                     the execution, delivery and performance by the Company of this Second Amendment
                    (i) has been duly authorized by all requisite corporate action and, if
                    required, shareholder action, (ii) does not require the consent or approval
                    of any governmental or regulatory body or agency, and (iii) will not
                    (A) violate (1) any provision of law, statute, rule or regulation or
                    its certificate of incorporation or bylaws, (2) any order of any court or
                    any rule, regulation or order of any other agency or government binding upon it,
                    or (3) any provision of any material indenture, agreement or other
                    instrument to which it is a party or by which its properties or assets are or
                    may be bound, or (B) result in a breach or constitute (alone or with due
                    notice or lapse or both) a default under any indenture, agreement or other
                    instrument referred to in clause (iii)(A)(3) of this Section 2.1(c);
                    and 

                    

               	 	(d)       

                     as of the date hereof and after giving effect to this Second Amendment, no
                    Default or Event of Default has occurred which is continuing. 

                    

        2.2;    The
Company agrees that it shall promptly pay the reasonable fees and expenses
                    of O’Melveny & Myers LLP in connection with the negotiation,
                    preparation, approval, execution and delivery of this Second
Amendment.  

Section 3.    
Conditions to Effectiveness of This Amendment. This Second Amendment shall become
effective as of October __, 2003 (the “Second Amendment Effective Date”)
upon (i) the delivery to Prudential of executed counterparts of this Second Amendment,
duly executed by the Company and the Required Holders, (ii) the execution of a counterpart
to the Subsidiary Guaranty by NSE Korea Ltd., a Delaware corporation, (iii) the execution
of a counterpart to the Amended and Restated Collateral Agency and Intercreditor Agreement
by NSE Korea Ltd., a Delaware corporation, and (iv) the execution of a counterpart to the
Amended and Restated Subordination Agreement by NSE Korea Ltd., a Delaware corporation. 

Section 4.     Certain Matters
regarding NSE Korea Ltd. The Company and Prudential acknowledge that, notwithstanding
the execution and delivery by NSE Korea Ltd., a Korean corporation domesticated under the
laws of Delaware (“NSE Korea Ltd.”), of a counterpart of the Subsidiary
Guaranty, certain laws and/or regulations in Korea may make the Subsidiary Guaranty (or
certain provisions thereof) unenforceable with respect to NSE Korea Ltd. in Korea and/or
restrict the ability of NSE Korea Ltd. to make payments under the Subsidiary Guaranty.
Accordingly, Required Holders agree that (a) no representation or warranty (i) made by NSE
Korea Ltd. in Section 3.2 or 3.3 of the Subsidiary Guaranty or (ii) made by the Company in
Section 5.6 or 5.7 of the Note Agreement shall be deemed to be false or incorrect to the
extent that such representation or warranty would be true absent the application of Korean
laws and/or regulations; and (b) no Event of Default or Default shall occur under Section
11(d), 11(e) or 11(j) of the Note Agreement as a result of the Subsidiary Guaranty not
being valid and enforceable under any Korean law or regulation. In consideration of the
foregoing, within 60 

6 

days following the Second Amendment Effective
Date, to the effect that the pledge of the Equity Securities of NSE Korea Ltd., a Korean
corporation, by the Company is not (x) legally obtainable or (y) the consent of a
governmental authority is required in order to obtain such pledge and such consent has not
been obtained. 

Section 5.     Miscellaneous. 

         5.1.       
          This Second Amendment shall be construed in connection with and as part of the
          Note Agreement, and except as modified and expressly amended by this Second
          Amendment, all terms, conditions, and covenants contained in the Note Agreement
          and the Notes are hereby ratified and shall be and remain in full force and
          effect. 

         5.2.       
          Any and all notices, requests, certificates and other instruments executed and
          delivered after the execution and delivery of this Second Amendment may refer to
          the Note Agreement without making specific reference to this Second Amendment
          but nevertheless all such references shall include this Second Amendment unless
          the context otherwise requires. 

         5.3.       
          The descriptive heading of the various Sections or parts of this Second
          Amendment are for convenience only and shall not affect the meaning or
          construction of any of the provisions hereof. 

         5.4.       
          This Second Amendment shall be governed by and construed in accordance with the
          laws of the State of New York. 

         5.5.       
          The execution hereof by you shall constitute a contract between us for the uses
          and purposes hereinabove set forth, and this Second Amendment may be executed in
          any number of counterparts, each executed counterpart constituting an original,
          but all together only one agreement. 

[Remainder
of page intentionally left blank.] 

7 

        IN
WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be duly
executed and delivered by their respective officers thereunto duly authorized as of the
date first written above. 

NU SKIN ENTERPRISES,
INC. 

By:       /s/     Ritch Wood

Name:  Ritch Wood

Its:        Chief Financial Officer 

THE PRUDENTIAL
INSURANCE
 COMPANY OF AMERICA 

By:         /s/    Iris Krause

Name:    Iris Krause

Its:         Vice President

S-1Exhibit 10.5 NSE 2003 FORM 10-K Pledge Agreements

FORM OF PLEDGE AMENDMENT 

        This
Pledge Amendment, dated December 31, 2003, is delivered pursuant to Section 6(b)
of the Pledge Agreement referred to below. The undersigned hereby agrees that this Pledge
Amendment may be attached to the Pledge Agreement dated October 12, 2000, between Nu Skin
Enterprises, Inc., as Pledgor, and State Street Bank and Trust Company of California,
N.A., as Secured Party (the “Pledge Agreement”, capitalized terms defined therin
being used herein as therin defined), and that the Pledged Shares listed on this Pledge
Amendment shall be deemed to be part of the Pledged Shares and shall become part of the
Pledged Collateral and shall secure all Secured Obligations. 

NU
SKIN ENTERPRISES, INC.

By:   /s/  Ritch N. Wood

         Ritch Wood 

         Chief Financial Officer 

Notice Address

Nu Skin Enterprises, Inc.

Attn:    D. Matthew Dorny

75 West Center Street 

Provo, Utah 84601

(801)345-3800 

[PLEDGE SHARE DETAILS
TO FOLLOW] 

	Issuer
	 	Class

of Stock
	 	Stock

Certificate

Nos.
	 	Par Value
	 	Number of

Shares
	 	Number of

Shares Issued

and Outstanding
	 	Percentage

Represented by

Pledged Shares

	 	Holder of

Shares Not

Pledged
	 
	NSE Korea, Ltd., a Delaware Corp.	 	Common	 	015	 	$3,240,000	 	6,000	 	6,000	 	100%	 	N/A	 

FORM OF PLEDGE AMENDMENT 

        This
Pledge Amendment, dated December 31, 2003, is delivered pursuant to Section 6(b)
of the Pledge Agreement referred to below. The undersigned hereby agrees that this Pledge
Amendment may be attached to the Pledge Agreement dated October 12, 2000, between Nu Skin
Enterprises, Inc., as Pledgor, and State Street Bank and Trust Company of California,
N.A., as Secured Party (the “Pledge Agreement”, capitalized terms defined therin
being used herein as therin defined), and that the Pledged Shares listed on this Pledge
Amendment shall be deemed to be part of the Pledged Shares and shall become part of the
Pledged Collateral and shall secure all Secured Obligations. 

NU SKIN ENTERPRISES, INC.

By:   /s/  Ritch N. Wood

         Ritch Wood 

         Chief Financial Officer 

Notice Address

Nu Skin Enterprises, Inc.

Attn:    D. Matthew Dorny

75 West Center Street 

Provo, Utah 84601

(801)345-3800 

[PLEDGE SHARE DETAILS
TO FOLLOW] 

	Issuer
	 	Class

of Stock
	 	Stock

Certificate

Nos.
	 	Par Value
	 	Number of

Shares
	 	Number of

Shares Issued

and Outstanding
	 	Percentage

Represented by

Pledged Shares

	 	Holder of

Shares Not

Pledged
	 
	NSE Korea, Ltd.	 	Common		100001	 	420,000	 	1	 	 	 	 	 	 	 	 	 
	
		
		
		
		
		
		
		
	
	NSE Korea, Ltd.	 	Common		100002	 	420,000	 	1	 
	
		
		
		
		
		
		
		
	
	NSE Korea, Ltd.	 	Common		100003	 	420,000	 	1	 
	
		
		
		
		
		
		
		
	
	NSE Korea, Ltd.	 	Common		100011	 	4,200,000	 	10	 
	
		
		
		
		
		
		
		
	
	NSE Korea, Ltd.	 	Common	 	100012	 	4,200,000	 	10	 
	
		
		
		
		
		
		
		
	
	NSE Korea, Ltd.	 	Common	 	100013	 	4,200,000	 	10	 
	
		
		
		
		
		
		
		
	
	NSE Korea, Ltd.	 	Common	 	100014	 	4,200,000	 	10	 
	
		
		
		
		
		
		
		
	
	NSE Korea, Ltd.	 	Common	 	100101	 	42,000,000	 	100	 
	
		
		
		
		
		
		
		
	
	NSE Korea, Ltd.	 	Common	 	101001	 	420,000,000	 	1,000	 
	
		
		
		
		
		
		
		
	
	NSE Korea, Ltd.	 	Common	 	101002	 	420,000,000	 	1,000	 
	
		
		
		
		
		
		
		
	
	NSE Korea, Ltd.	 	Common	 	101003	 	420,000,000	 	1,000	 
	
		
		
		
		
		
		
		
	
	NSE Korea, Ltd.	 	Common	 	110001	 	4,200,000,000	 	10,000	 
	
		
		
		
		
		
		
		
	
	 	 		 	 	 		 	13,143	 	13,143	 	100%	 	N/A

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