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EXHIBIT 10.2
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (the "Pledge Agreement") is entered into
effective as of this 1st day of April, 1999, by and between Nu Skin Enterprises,
Inc., a Delaware corporation, and any of its successors, assigns, transferees,
conveyees or purchasers (the "Secured Party"), and Nu Skin USA, Inc., a Delaware
corporation (the "Pledgor").
RECITALS
WHEREAS, the Secured Party has agreed to make a loan to Big Planet,
Inc., a Utah corporation ("Big Planet"), of $7,500,000 (the "Loan"), and Big
Planet has agreed to deliver to the Secured Party a promissory note,
substantially in the form attached hereto as Exhibit "A", in the amount of
$7,500,000 (the "Promissory Note"); and
WHEREAS, the Secured Party is willing to make the Loan only upon
receiving adequate security therefor, and the Pledgor, which owns over
29,000,000 shares of Big Planet's outstanding Series A Preferred Stock, $.001
par value per share, desires to pledge such Shares as collateral to secure Big
Planet's obligations under the Promissory Note in order that Big Planet can
obtain necessary financing to fund its operations.
NOW, THEREFORE, in consideration of the premises set forth above, the
mutual covenants and agreements set forth hereinbelow, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. GRANT OF SECURITY INTEREST. The Pledgor hereby pledges to the
Secured Party and hereby grants to the Secured Party a security interest (the
"Security Interest") in all of the Pledgor's right, title and interest in and to
the following collateral (collectively, the "Collateral"):
(a) 29,000,000 shares of Series A Preferred Stock, $.001 par
value per share, that are evidenced by or included in the stock certificates
described on Exhibit "B" attached hereto, together with any substitutes therefor
(the "Pledged Shares");
(b) all dividends, cash, options, warrants, rights, instruments
and other property, or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any and all of the
Pledged Shares; and
(c) all proceeds, products, rents and profits of or from any and
all of the foregoing.
2. SECURITY FOR PROMISSORY NOTE. This Pledge Agreement secures, and the
Collateral is collateral security for, the prompt payment of the Promissory Note
when due or otherwise payable and the performance in full of all obligations of
Big Planet as set forth in such Promissory Note (collectively, "Big Planet's
Obligations").
3. DELIVERY OF PLEDGED SHARES. Upon execution of this Pledge Agreement,
the Pledgor shall promptly deliver and transfer possession of the original
certificate(s) representing the Pledged Shares (the "Certificates") to the
Secured Party to be held by the Secured Party, or its appointed agent for and on
behalf of the Secured Party, until termination of this Pledge Agreement or
disposition of the Collateral as provided herein. The Certificates shall be
accompanied by duly executed assignments on
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stock powers in blank, substantially in the form attached hereto as Exhibit "C".
The Pledgor shall perform all acts as the Secured Party may reasonably request
so as to perfect and maintain a valid security interest for the Secured Party in
the Collateral.
4. NO ASSUMPTION. Notwithstanding any of the foregoing provisions, this
Pledge Agreement shall not in any way be deemed to obligate the Secured Party,
any purchaser at any foreclosure sale under this Pledge Agreement, or any other
person or entity to assume any of Big Planet's Obligations or the Pledgor's
obligations under this Pledge Agreement unless the Secured Party, such purchaser
or such other person or entity otherwise expressly agrees in writing to assume
any or all of Big Planet's Obligations.
5. VOTING OF PLEDGED SHARES. Unless an Event of Default (as that term
is defined in Section 10 below) has occurred and is continuing:
(a) The Pledgor shall be entitled to exercise any and all voting
and other rights pertaining to all or any part of the Pledged Shares for any
purpose not inconsistent with the terms of this Pledge Agreement.
(b) The Secured Party or any agent of the Secured Party shall
execute and deliver, or cause to be executed and delivered, to the Pledgor all
proxies and other instruments reasonably requested by the Pledgor in writing for
the purpose of enabling the Pledgor to exercise the voting and other rights that
she is entitled to exercise pursuant to this Section 5.
6. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and warrants
that:
(a) The Pledgor is the owner of the Pledged Shares and, with
respect to any Collateral to be acquired by the Pledgor on the Pledged Shares,
will be the owner of such Collateral, in each case free and clear of any liens
or encumbrances, except for the liens created by this Pledge Agreement. No
effective financing statement or other document or instrument similar in effect
covering all or any part of the Collateral is on file in any recording or filing
office, except such as may have been recorded or filed in favor of the Secured
Party relating to this Pledge Agreement.
(b) The execution and delivery of this Pledge Agreement and the
delivery of the Certificates to the Secured Party create a valid and perfected
first priority lien on and security interest in the Collateral, enforceable
against all third parties and securing the performance of the Pledgor's
Obligations, and all filings and other actions necessary or desirable to perfect
and protect such liens and security interests have been duly made or taken by
the Pledgor.
(c) All of the Certificates, instruments and other documents
constituting, evidencing or representing Collateral shall be promptly delivered
to the Secured Party upon execution of this Pledge Agreement.
(d) The Pledged Shares are duly authorized, validly issued,
fully paid and non-assessable.
(e) There is no agreement or arrangement restricting the
transfer of the Pledged Shares or the transfer of any other Collateral, except
as provided in this Pledge Agreement.
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(f) There is no suit, proceeding or other legal action or
proceeding against the Pledgor or the Certificates that involves or affects, or
that may involve or affect, any of the Collateral.
7. COVENANTS OF PLEDGOR.
(a) Affirmative Covenants. So long as any of Big Planet's
Obligations shall remain unpaid or unperformed, the Pledgor shall do the
following at the Pledgor's own cost and expense:
(i) xxxx conspicuously each Certificate evidencing or
representing any of the Pledged Shares, and at the request of the Secured Party,
each of the Pledgor's records pertaining to the Pledged Shares or the
Certificates, with a legend, in form and substance satisfactory to the Secured
Party, indicating that the Certificate is subject to the Security Interest
granted to the Secured Party by this Pledge Agreement;
(ii) deliver to the Secured Party promptly upon receipt
all notes, certificates, instruments and other documents constituting,
evidencing or representing any of the Collateral, duly endorsed or accompanied
by instruments of transfer or assignment on stock powers duly executed in blank,
in each case with signatures guaranteed and otherwise in form and substance
satisfactory to the Secured Party;
(iii) execute and file such financing or continuation
statements, and such amendments to those statements, and such other documents,
instruments or notices, as may be necessary or desirable, or as the Secured
Party may request, in order to perfect and preserve the pledges, liens and the
Security Interest granted or purported to be granted to the Secured Party by
this Pledge Agreement;
(iv) promptly notify the Secured Party in writing of any
lien or claim made or asserted against any of the Collateral and take all steps
necessary or proper, or, in the judgment of the Secured Party, advisable, to
preserve all of the Secured Party's rights in the Collateral;
(v) furnish to the Secured Party from time to time written
statements and schedules further identifying and describing the Collateral and
other reports in connection with the Collateral requested by the Secured Party,
all in reasonable detail;
(vi) advise the Secured Party promptly, in sufficient
written detail, of any substantial change in the Collateral, and of the
occurrence of any event that could materially and adversely affect the value of
the Collateral or the validity or priority of the liens and the Security
Interest granted to the Secured Party by this Pledge Agreement;
(vii) comply with all rules and regulations of each
governmental body or agency and all decisions, rulings, orders and awards of
each arbitrator applicable to the Collateral or any part of the Collateral or to
the Pledgor;
(viii) promptly pay and discharge before they become
delinquent, all taxes assessed, levied or imposed upon or relating to, and all
claims against the Collateral (or any part of the Collateral) or the Pledgor, if
the failure to so pay could adversely affect the value of the Collateral or the
validity or
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priority of the liens or the Security Interest granted to the Secured Party by
this Pledge Agreement, except those contested in good faith and for which
adequate reserves are maintained;
(ix) permit representatives of the Secured Party at any
time during normal business hours to inspect and make abstracts from the
Pledgor's records relating to the Collateral;
(x) perform and observe all of the terms and provisions of
the Collateral to be performed or observed by the Pledgor, except as otherwise
provided by applicable law;
(xi) subject to Section 10 below, collect all amounts due
or to become due to the Pledgor under the Collateral and otherwise enforce her
rights under and in respect of the Collateral;
(xii) furnish to the Secured Party promptly upon receipt
copies of all notices, requests and other documents or instruments received by
the Pledgor under or in respect of the Collateral (or any part of the
Collateral) and from time to time (A) furnish to the Secured Party the
information and reports regarding those obligations requested by the Secured
Party and (B) at the request of the Secured Party, make the demands and requests
for information or action that the Pledgor is entitled to make under the
Collateral;
(xiii) notify the Secured Party of any change in the
Pledgor's name within ten (10) days of such change; and
(xiv) give the Secured Party fifteen (15) days prior
written notice of any change in the Pledgor's chief place of business, chief
executive office or residence, or the office where the Pledgor keeps her records
regarding the Collateral.
(xv) Pledgor agrees that in the event any amounts are paid
by Pledgor to the Secured Party pursuant to this Pledge Agreement or the
Promissory Note, Pledgor's liability hereunder and thereunder shall continue in
full force and effect in the event that all or any part of any such payment is
thereafter recovered as a preference or fraudulent transfer under any applicable
bankruptcy or insolvency law.
(b) Negative Covenants. So long as any of Big Planet's
Obligations shall remain unpaid or unperformed, the Pledgor shall not do any of
the following without the prior written approval of the Secured Party:
(i) transfer any of the Collateral, whether by operation
of law or otherwise;
(ii) create, incur, assume or suffer to exist any lien on
or in respect of any of the Collateral, except pursuant to this Pledge Agreement
or the Promissory Note;
(iii) use, store or keep any of the Collateral or records
relating to the Collateral in any location other than those expressly permitted
by this Pledge Agreement; or
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(iv) take any action in connection with any of the
Collateral that could materially and adversely affect the value of the
Collateral (or any part thereof) or the validity or priority of the liens or the
Security Interest granted to the Secured Party by this Pledge Agreement.
(v) Pledgor shall not challenge or institute any
proceedings, or allow the institution of any proceedings, to challenge the
validity, binding effect or enforceability of this Pledge Agreement.
8. SECURED PARTY MAY PERFORM. If the Pledgor fails to perform any
agreement contained herein, the Secured Party may itself perform, or cause the
performance of, such agreement, and all costs and expenses of the Secured Party
incurred in connection therewith shall promptly be payable to the Secured Party
by the Pledgor under Section 11 below.
9. STANDARD OF CARE.
(a) The powers conferred on the Secured Party hereunder are
solely to protect its interests in the Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the exercise of reasonable care
in the custody of the Collateral in its possession and the accounting for any
monies actually received by it hereunder, the Secured Party shall have no duty
as to the Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to the Collateral.
The Secured Party shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if such Collateral
is accorded treatment substantially equal to that accorded by the Secured Party
to its own property of a similar nature.
(b) Whenever this Pledge Agreement or any other document,
instrument or agreement contemplated hereby provides that the Secured Party is
permitted or required to make a decision in the "discretion" or the "sole
discretion" (or other similar terms) of the Secured Party, the Secured Party
shall be entitled to consider only such interests and factors as it desires, and
the Secured Party shall have no duty or obligation to give any consideration to
any interest of or factors affecting the Pledgor or any other person or entity.
10. REMEDIES.
(a) In the event of a default in the payment or performance of
any of the Pledgor's Obligations or upon the occurrence of any event of default
under or breach of any representation, warranty or covenant in this Pledge
Agreement or any event of default under the Promissory Note (each an "Event of
Default"), in the sole discretion of the Secured Party, without demand or
notice, all or any part of any indebtedness evidenced by the Promissory Note
shall become immediately due and payable. Upon the occurrence of an Event of
Default, the Secured Party may exercise all rights to which it is entitled under
this Pledge Agreement or which are otherwise available to it and exercise all
the rights and remedies of a secured party upon default under the Uniform
Commercial Code as in effect in any relevant jurisdiction (the "UCC") (whether
or not the UCC applies to the affected Collateral). Without limiting the
generality of the foregoing, the Secured Party may immediately transfer into or
register in its name instruments, certificates or documents evidencing or
constituting all or part of the Collateral without notice to the Pledgor and
immediately apply the Collateral against Big Planet's Obligations and the
Secured Party's costs of collection until Big Planet's Obligations and the
Secured Party's costs of collection are satisfied in full, notwithstanding any
rights Pledgor may have under the UCC. Without limiting any of the foregoing,
the
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Secured Party may in its sole discretion, without notice, demand for performance
or advertisement (all of each such notices, demands or advertisement are hereby
expressly waived), collect, receive, appropriate and realize upon the Collateral
and/or sell, assign, grant an option or options to purchase or otherwise dispose
of the Collateral or any part thereof in one or more parcels at public or
private sale, at or on any exchange or broker's board or at any of the Secured
Party's offices or elsewhere, for cash, on credit or for future delivery without
assumption of credit risk, free of any claims or rights, at such time or times
and at such price or prices and upon such other terms and conditions as the
Secured Party may deem commercially reasonable, irrespective of the impact of
any such sales on the market price of the Collateral. The Secured Party may be
the purchaser of any or all of the Collateral at any such sale and the Secured
Party, for itself or on behalf of any other person or entity, shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any part of the Collateral sold at any such sale, to use and
apply any of Big Planet's Obligations as a credit on account of the purchase
price for any Collateral payable by the Secured Party at such sale. Each
purchaser at any such sale shall hold the property sold absolutely free from any
claim or right on the part of the Pledgor, and the Pledgor hereby waives all
rights of redemption, stay and appraisal that the Pledgor now has or may at any
time in the future have under any rule of equity, law or statute now existing or
hereafter enacted. The Pledgor agrees that, to the extent notice of sale shall
be required by applicable law, at least ten (10) days notice to the Pledgor of
the time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification. The Secured Party shall
not be obligated to make any sale of the Collateral regardless of whether notice
of sale has been given. The Secured Party may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor in the
notice thereof, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. Without limiting the generality of the
foregoing, the Secured Party may at any time appropriate and apply (directly or
by way of set-off) to the payment of Big Planet's Obligations all amounts
representing dividends or distributions then or thereafter in the possession of
the Secured Party.
(b) The Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as amended (the
"Securities Act"), and applicable state securities laws, rules and regulations,
the Secured Party may be compelled, with respect to any sale of all or any part
of the Collateral conducted without prior registration or qualification of such
Collateral under the Securities Act and such state securities laws, rules and
regulations, to limit purchases to those persons or entities who will agree,
among other things, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. The
Pledgor acknowledges that any such private sales may be at prices and on terms
and conditions less favorable than those obtainable through a public sale
without such restrictions (including, without limitation, a public offering made
pursuant to a registration statement filed under the Securities Act) and,
notwithstanding such circumstances, the Pledgor agrees that any such private
sale shall be deemed to have been made in a commercially reasonable manner and
that the Secured Party shall have no obligation to engage in public sales and
shall have no obligation to delay the sale of any of the Collateral for the
period of time necessary to permit the Pledgor to register any of the Pledged
Shares that constitute a portion of the Collateral or any other item of
Collateral for a form of public sale requiring registration under the Securities
Act or under applicable state securities laws, rules and regulations, even if
the Pledgor would, or should, agree to so register those Pledged Shares or other
items of Collateral.
11. APPLICATION OF PROCEEDS. Except as expressly provided elsewhere in
this Pledge Agreement, all proceeds received by the Secured Party in respect of
any sale of, collection from, or other
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realization upon all or any part of the Collateral may, in the sole discretion
of the Secured Party, be held by the Secured Party as Collateral for, or then,
or at any other time thereafter, be applied in full or in part by the Secured
Party against, the Pledgor's Obligations in the following order of priority:
(a) to pay or reimburse in full the costs and expenses of such
sale, collection or other realization, including, without limitation, reasonable
compensation to the Secured Party and its agents and counsel, and all other
costs, expenses, obligations and other liabilities incurred or paid by the
Secured Party in connection therewith, and all amounts for which the Secured
Party is entitled to indemnification hereunder and all advances made by the
Secured Party hereunder for the account of the Pledgor, and to the payment of
all costs and expenses paid or incurred by the Secured Party in connection with
the exercise of any right or remedy hereunder, all in accordance with this
Section 11;
(b) to pay all other obligations and thereafter in such order as
the Secured Party shall elect; and
(c) to pay to or upon the order of the Pledgor, or to whomsoever
may be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct, the balance of the proceeds.
12. INDEMNITY AND EXPENSES.
(a) The Pledgor shall indemnify the Secured Party and its
Related Persons (as that term is defined below) (individually, an "Indemnified
Person" and, collectively, the "Indemnified Persons") against all losses, costs,
expenses (including attorneys' fees and expenses), judgments, fines, amounts
paid in settlement and other liabilities incurred, suffered or paid by the
Indemnified Persons (collectively, "Indemnified Expenses") in connection with
any threatened, pending or completed claim, action, suit, complaint,
investigation, inquiry or other proceeding, whether civil, criminal,
administrative or investigative, that is or was brought or threatened against
any Indemnified Person by reason of or in connection with actions taken or
omitted to be taken by one or more Indemnified Persons in the performance of the
exercise of the rights and powers or performance of the obligations of the
Secured Party under this Pledge Agreement or otherwise in connection with this
Pledge Agreement, except that the Pledgor shall have no liability under this
Section 12 with respect to any Indemnified Expenses to the extent the liability
results from the fraud or willful misconduct of the Indemnified Person, as
determined by a final judgment or final adjudication. For purposes of this
Pledge Agreement, the term "Related Persons" means, with respect to any person,
any other person that directly or indirectly controls or is controlled by or is
under common control with the specified person and the direct or indirect
controlling persons, principals, partners, trustees, stockholders, officers,
directors, employees, independent contractors and agents for or of any of the
foregoing.
(b) To the fullest extent permitted by applicable law, the
Pledgor shall, from time to time, advance Indemnified Expenses to an Indemnified
Person prior to the final disposition of the action upon receipt by the Pledgor
of an undertaking by or on behalf of the Indemnified Person to repay such amount
if it shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in this Section 12.
(c) The Pledgor shall pay to the Secured Party upon demand the
amount of any and all costs and expenses, including, without limitation, the
reasonable fees and expenses of its counsel and of
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any experts and agents, that the Secured Party may incur in connection with (i)
the administration of this Pledge Agreement or the Promissory Note, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Secured Party hereunder or under the Promissory Note,
or (iv) the failure by the Pledgor to perform or observe any of the provisions
hereof or of the Promissory Note.
13. WAIVERS BY PLEDGOR, ETC.
(a) The Pledgor agrees that Big Planet's Obligations hereunder
are irrevocable, absolute, independent and unconditional and shall not be
affected by any circumstance that constitutes a legal or equitable discharge of
a guarantor or surety other than indefeasible payment in full of Big Planet's
Obligations. In furtherance of the foregoing and without limiting the generality
thereof, the Pledgor agrees as follows:
(i) The Secured Party, for itself or on behalf of any
other person or entity, may from time to time, without notice or demand and
without affecting the validity or enforceability of this Pledge Agreement and
without giving rise to any limitation, impairment or discharge of the Pledgor's
liability or obligations hereunder, (A) create, increase, renew, extend,
accelerate or otherwise change the time, place, manner or terms of payment of
Big Planet's Obligations, (B) settle, compromise, release or discharge, or
accept or refuse any offer of performance with respect to, or substitutions for,
Big Planet's Obligations or any agreement relating thereto and/or subordinate
the payment of the same to the payment of any other obligation, (C) request and
accept guaranties of any of Big Planet's Obligations and take and hold other
security for the payment of Big Planet's Obligations, (D) release, exchange,
compromise, subordinate or modify, with or without consideration, any other
security for payment of Big Planet's Obligations, any guaranties of Big Planet's
Obligations, or any other obligation of any person or entity with respect to Big
Planet's Obligations, (E) enforce and apply any other security now or hereafter
held by or for the benefit of the Secured Party or any other person or entity in
respect of Big Planet's Obligations and direct the order or manner of sale
thereof, or the exercise of any other right or remedy that the Secured Party or
any other person or entity, may have against any such security, as the Secured
Party in its sole discretion may determine, consistent with the terms of any
applicable security agreement, including, without limitation, application of the
Collateral against and in satisfaction Big Planet's Obligations, and even though
such action operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of the Pledgor against another party or any
other security for Big Planet's Obligations (and the Pledgor expressly
acknowledges that such exercise of a right or remedy that impairs or
extinguishes the Pledgor's right of reimbursement or subrogation would create a
possible defense by the Pledgor against any liability hereunder, but the Pledgor
expressly and knowingly waives any such defense), and (F) exercise any other
rights available to the Secured Party or any other person or entity under the
Promissory Note, at law or in equity; and
(ii) this Pledge Agreement and the obligations of the
Pledgor hereunder shall be valid and enforceable and shall not be subject to any
limitation, impairment or discharge for any reason (other than indefeasible
payment and performance in full of Big Planet's Obligations), including, without
limitation, the occurrence of any of the following, whether or not the Pledgor
shall have had notice or knowledge of any of them: (A) any failure to assert or
enforce or any agreement not to assert or enforce, or the stay or enjoining, by
order of court, by operation of law or otherwise, of the exercise or enforcement
of, any claim or demand or any right, power or remedy with respect to Big
Planet's Obligations or any
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agreement relating thereto, or with respect to any guaranty of or other security
for the payment of Big Planet's Obligations, (B) any waiver, amendment or
modification of, or any consent to departure from, any of the terms or
provisions (including, without limitation, provisions relating to events of
default) of the Promissory Note, this Pledge Agreement or any agreement,
document or instrument executed pursuant hereto or thereto, or of any guaranty
or other security for Big Planet's Obligations, (C) Big Planet's Obligations, or
any agreement relating thereto, at any time being found to be illegal, invalid
or unenforceable in any respect, (D) the application of payments received from
any source to the payment of indebtedness other than Big Planet's Obligations,
even though the Secured Party or any other person or entity might have elected
to apply such payment to any part or all of Big Planet's Obligations, (E) any
failure to perfect or continue perfection of a security interest in any other
collateral that secures any of Big Planet's Obligations, (F) any defenses,
set-offs or counterclaims that the related obligor may allege or assert against
the Secured Party in respect of Big Planet's Obligations, including, without
limitation, failure of consideration, breach of warranty, payment, statute of
frauds, statute of limitations, accord and satisfaction, and usury, and (G) any
other act, thing or omission, or delay to do any other act or thing, that may or
might in any manner or to any extent vary the risk of the Pledgor obligors in
respect of Big Planet's Obligations.
(b) The Pledgor hereby waives for the benefit of the Secured
Party:
(i) any right to require the Secured Party, as a condition
of payment or performance by the Pledgor, to (A) proceed against any guarantor
of the Pledgor or any other person or entity, (B) proceed against or exhaust any
other security held from any guarantor of Big Planet's Obligations or any other
person or entity, (C) proceed against or have resort to any balance of any
deposit account or credit on the books of the Secured Party or any other person
or entity, or (D) pursue any other remedy in the power of the Secured Party or
any other person or entity whatsoever;
(ii) any defense arising by reason of the incapacity, lack
of authority or any disability or other defense, including, without limitation,
any defense based on or arising out of the lack of validity or the
unenforceability of Big Planet's Obligations or any agreement or instrument
relating thereto or by reason of the cessation of the liability;
(iii) any defense based upon any statute or rule of law
that provides that the obligation of a surety must be neither larger in amount
nor in other respects more burdensome than that of the principal;
(iv) any defense based upon the errors or omissions of the
Secured Party or any other person or entity in the administration of Big
Planet's Obligations, except behavior that amounts to fraud or wilful
misconduct;
(v) (A) any principles or provisions of law, statutory or
otherwise, that are or might be in conflict with the terms of this Pledge
Agreement and any legal or equitable discharge of Big Planet's Obligations
hereunder, (B) the benefit of any statute of limitations affecting the Pledgor's
liability hereunder or the enforcement hereof, (C) any rights to set-offs,
recoupments and counterclaims, and (D) promptness, diligence and any requirement
that the Secured Party or any other person or entity protect, secure, perfect or
insure any other lien or security interest or any property subject thereto;
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(vi) notices, demands, presentments, protests, notices of
protest, notices of dishonor and notices of any action or inaction, notices of
default under the Promissory Note or any agreement or instrument related
thereto, notices of any renewal, extension or modification of Big Planet's
Obligations or any agreement related thereto, notices of any extension of credit
to the Pledgor and notices of any of the matters referred to in Section 13(b)(v)
above and any right to consent to any thereof; and
(vii) to the fullest extent permitted by applicable law,
any defenses or benefits that may be derived from or afforded by law that limit
the liability of or exonerate guarantors or sureties in general, or that may
conflict with the terms of this Pledge Agreement.
14. CONTINUING SECURITY INTEREST; TRANSFER OF OBLIGATIONS.
(a) This Pledge Agreement shall create a continuing security
interest in the Collateral and shall (i) remain in full force and effect until
the indefeasible payment and performance in full of Big Planet's Obligations,
(ii) be binding upon the Pledgor and her successors and assigns, and (iii)
inure, together with the rights and remedies of the Secured Party hereunder, to
the benefit of the Secured Party and its successors, assigns, transferees,
conveyees and purchasers. Without limiting the generality of the foregoing
clause (iii), the Secured Party may assign or otherwise transfer totally to
another person or entity all or any part of the Secured Party's right, title and
interest in Big Planet's Obligations, and such other person or entity shall
thereupon become vested with all the benefits in respect thereof granted to the
Secured Party herein or otherwise.
(b) Upon the indefeasible payment and performance in full of Big
Planet's Obligations, the liens and the Security Interest granted hereby shall
terminate and all rights to the Collateral shall revert to the Pledgor. Upon any
such termination, the Secured Party shall, at the Pledgor's expense, execute and
deliver to the Pledgor such documents and instruments as the Pledgor shall
reasonably request to evidence such termination.
15. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of the Secured Party in the exercise of any power,
right or privilege hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude any
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Pledge Agreement are cumulative to, and
not exclusive of, any rights or remedies otherwise available.
16. COSTS AND EXPENSES. Pledgor shall on the date hereof pay all costs
and expenses of the Secured Party in connection with the preparation and
negotiation of this Pledge Agreement and the Promissory Note. The Pledgor shall
pay all costs and expenses, including, without limitation, reasonable attorneys'
fees and expenses, incurred by or on behalf of the Secured Party in the
enforcement of this Pledge Agreement and the Promissory Note.
17. NOTICES. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly given two (2) business
days after being sent by registered or certified mail, return receipt requested,
postage prepaid, and addressed to the intended recipient as set forth below:
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o If to the Pledgor:
Nu Skin USA, Inc.
00 Xxxx Xxxxxx Xxxxxx
Xxxxx, Xxxx 00000
Telephone: (000) 000-0000
o If to the Secured Party:
Nu Skin Enterprises, inc
00 Xxxx Xxxxxx Xxxxxx
Xxxxx, Xxxx 00000
Attention: M. Xxxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may send any notice, request, demand, claim or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, ordinary mail or electronic mail). Any party may change the address to
which notices, requests, demands, claims and other communications hereunder are
to be delivered by giving the other party notice in the manner herein set forth.
18. NO WAIVERS; REMEDIES; SPECIFIC PERFORMANCE.
No failure or delay by any party in exercising any right, power
or privilege under this Pledge Agreement shall operate as a waiver of the right,
power or privilege. A single or partial exercise of any right, power or
privilege shall not preclude any other or further exercise of the right, power
or privilege or the exercise of any other right, power or privilege hereunder.
The rights and remedies provided in this Pledge Agreement shall be cumulative
and not exclusive of any rights or remedies provided by applicable law.
19. AMENDMENTS, ETC. No amendment, modification, termination or waiver
of any provision of this Pledge Agreement, and no consent to any departure by a
party to this Pledge Agreement from any provision hereof, shall be effective
unless it shall be in writing and signed and delivered by the other parties to
this Pledge Agreement, and then it shall be effective only in the specific
instance and for the specific purpose for which it is given.
20. SUCCESSORS AND ASSIGNS.
(a) As further provided in Section 14, the Secured Party may
assign or transfer its rights and delegate its obligations under this Pledge
Agreement; such assignee or transferee shall accept those rights and assume
those obligations for the benefit of the Secured Party in writing in form
reasonably satisfactory to the Pledgor. Thereafter, without any further action
by any person or entity, all references in this Pledge Agreement to "Secured
Party", and all comparable references, shall be deemed to be references to the
assignee or transferee, but the Pledgor shall not be released from any
obligation or liability under this Pledge Agreement.
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(b) Except as provided in Section 20(a) above, no party may
assign or transfer its rights under this Pledge Agreement. Any delegation in
contravention of this Section 20(b) shall be void ab initio and shall not
relieve the delegating party of any duty or obligation under this Pledge
Agreement.
(c) The provisions of this Pledge Agreement shall be binding
upon and inure to the benefit of the parties to this Pledge Agreement and their
respective successors and permitted assigns, transferees, conveyees and
purchasers.
21. GOVERNING LAW. This Pledge Agreement shall be governed by and
construed in accordance with the internal laws of the State of Utah. All rights
and obligations of the parties hereto shall be in addition to and not in
limitation of those provided by applicable law.
22. COUNTERPARTS; EFFECTIVENESS. This Pledge Agreement may be signed by
facsimile in any number of counterparts, each of which shall be deemed to be an
original, with the same effect as if all signatures were on the same instrument.
23. SEVERABILITY OF PROVISIONS. Any provision of this Pledge Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of the prohibition or
unenforceability without invalidating the remaining provisions of this Pledge
Agreement or affecting the validity or enforceability of the prohibited or
unenforceable provision in any other jurisdiction.
24. HEADINGS AND REFERENCES. Section headings in this Pledge Agreement
are included herein for convenience of reference only and do not constitute a
part of this Pledge Agreement for any other purpose. References to parties and
Sections in this Pledge Agreement are references to the parties to or the
Sections of this Pledge Agreement, as the case may be, unless the context shall
require otherwise.
25. ENTIRE AGREEMENT. Except as otherwise specifically provided in this
Section 25, this Pledge Agreement and the documents and instruments referenced
herein embody the entire agreement and understanding of the respective parties
and supersedes all prior agreements and understandings with respect to the
subject matter of those documents. The Pledgor and the Secured Party shall
remain subject to the Promissory Note in accordance with the terms thereof.
26. SURVIVAL. Except as otherwise specifically provided in this Pledge
Agreement, each representation, warranty or covenant contained herein or made
pursuant to this Pledge Agreement shall survive the execution of this Pledge
Agreement and shall remain in full force and effect, notwithstanding any
investigation or notice to the contrary or any waiver by any other party of a
related condition precedent to the performance by such other party of an
obligation under this Pledge Agreement.
27. EXCLUSIVE JURISDICTION. Each of the Pledgor and the Secured Party
(a) agrees that any legal action with respect to this Pledge Agreement shall be
brought exclusively in the courts of the State of Utah or in the United States
District Court for the District of Utah, (b) accepts for itself and in respect
of its property, generally and unconditionally, the jurisdiction of those
courts, and (c) irrevocably waives any objection, including, without limitation,
any objection to the laying of venue or based on the grounds of forum non
conveniens, that it may now or hereafter have to the bringing of any legal
action in those jurisdictions; provided, however, that each of the Pledgor and
the Secured Party may assert in a
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legal action in any other jurisdiction or venue each mandatory defense, third
party claim or similar claim that, if not so asserted in such action, may not be
asserted in an original legal action in the courts referred to in clause (a) of
this Section 27.
28. WAIVER OF JURY TRIAL. Each party waives any right to a trial by
jury in any action to enforce or defend any right under this Pledge Agreement or
any amendment, instrument, document or agreement delivered, or that in the
future may be delivered, in connection with this Pledge Agreement, and agrees
that any action shall be tried before a court and not before a jury.
29. NON-RECOURSE AGAINST SECURED PARTY CONTROLLING PERSONS. No
recourse under this Pledge Agreement shall be had against any "controlling
person" (within the meaning of Section 20 of the Exchange Act) of the Secured
Party or the shareholders, directors, officers, employees, agents and affiliates
of the Secured Party or such controlling persons, whether by the enforcement of
any assessment or by any legal or equitable proceeding, or by virtue of any rule
or regulation, it being expressly agreed and acknowledged that no personal
liability whatsoever shall attach to, be imposed on or otherwise be incurred by
such controlling person, shareholder, director, officer, employee, agent or
affiliate, as such, for any obligations of the Secured Party under this Pledge
Agreement or the Promissory Note or for any claim based on, in respect of or by
reason of, such obligations or their creation.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have executed this Pledge Agreement
as of the date first above written.
THE PLEDGOR: THE SECURED PARTY:
NU SKIN USA, INC. NU SKIN ENTERPRISES, INC.
By: /s/ Xxxxx X. Halls By: /s/ Xxxxxx X. Xxxx
----------------------------- -----------------------------------
Xxxxx X. Halls Xxxxxx X. Xxxx
Its: President Its: Chief Executive Officer
[Exhibits omitted.]
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