COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT
This COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT (this "Agreement"),
dated as of October 12, 2000, is entered into among the Senior Noteholder listed
on the signature pages hereof (together with assignees of such Senior
Noteholder, the "Senior Noteholders"), the Senior Lender listed on the signature
pages hereof (together with any assignees of such Senior Lender, the "Senior
Lenders"), any Additional Creditors that may become parties to this Agreement
(either directly or through their agent), and State Street Bank and Trust
Company of California, N.A., in its capacity as collateral agent for the Senior
Noteholders, the Senior Lenders 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"), will
issue and sell to the Senior Noteholder its 3.03% Senior Notes due October 12,
2010 in the aggregate principal amount of JPY9,706,500,000 (the "Senior
Noteholder Notes") pursuant to that certain Note Purchase Agreement, dated as of
October 12, 2000 (as the same may be amended, supplemented or otherwise modified
from time to time, the "Note Purchase Agreement"), between the Company and the
Senior Noteholder.
B. The Senior Lender (i) has made and may from time to time make loans up
to an aggregate principal amount of US$10,000,000 to the Company pursuant to
that certain Grid Note, dated May 24, 2000, executed by the Company in favor of
the Senior Lender, and (ii) may from time to time issue letters of credit for
the account of the Company pursuant to that certain Master Letter of Credit
Agreement and Addendum, each dated as of August 4, 2000, between the Company and
the Senior Lender (such Grid Note and Master Letter of Credit Agreement and
Addendum, as the same may be amended, supplemented or otherwise modified or
renewed or replaced from time to time, including any increase in the amount of
the obligations thereunder, the "Credit Documents").
C. 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")
have 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 Credit Documents (as such guaranty agreement
may be modified, amended, renewed or replaced, including any increase in the
amount guaranteed thereunder, the "Bank Obligation Guaranty").
D. Pursuant to the Note Purchase Agreement, the Subsidiary Guarantors will
enter into a guaranty agreement pursuant to which the Subsidiary Guarantors will
guarantee to the Senior Noteholders the payment of the Noteholder Obligations
and the payment and performance of all of the Company's obligations under the
Note Purchase Agreement and the Senior Notes (as such guaranty agreement may be
modified, amended, renewed or replaced, including any increase in the amount
guaranteed thereunder, the "Note Obligation Guaranty").
E. The Company may enter into additional note purchase agreements and/or
credit agreements with investors and/or lenders which become party to this
Agreement (such investors
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and lenders, together with the lenders referred to in the next sentence, the
"Additional Creditors") the obligations under which (the "Additional Company
Obligations") will be guaranteed by one or more of the Subsidiary Guarantors
(the "Additional Subsidiary Guaranties"). In addition, one or more Subsidiary
Guarantors may become direct obligors to lenders which become party to this
Agreement and therefore are Additional Creditors, and the obligations of such
Subsidiary Guarantors to such lenders (the "Direct Subsidiary Obligations" and
together with the Additional Company Obligations, the "Additional Obligations")
will be guaranteed by the Company and the other Subsidiary Guarantors.
F. The Bank Obligation Guaranty, the Note Obligation Guaranty, any
Additional Subsidiary Guaranty and any Direct Subsidiary Obligation are each
hereinafter referred to as a "Subsidiary Guaranty." The Credit Documents, the
Note Purchase Agreement and any additional note purchase agreements and/or
credit agreements with investors and/or lenders which become party to this
Agreement are hereinafter referred to, collectively, as the "Senior Loan
Documents."
G. The Company has secured all present and future obligations to the Senior
Noteholders under the Senior Noteholder Notes and the Note Purchase Agreement
(all such obligations, including, without limitation, principal, interest,
Make-Whole Amounts, fees and indemnities, being referred to herein as the
"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 the date hereof 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 Senior Noteholder Obligations, the Senior Lender
Obligations and the Additional Obligations are collectively referred to as the
"Obligations"). The 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").
H. The 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.
I. Capitalized terms used herein without being defined shall have the
meanings set forth in the Note Purchase Agreement.
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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 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 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 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 the 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
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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
Credit 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
(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) (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.
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(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
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
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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 and each of the Subsidiary Guarantors 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.
(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 computed on the amount to be
returned from the date of the recovery. For purposes of this Agreement,
"proceeds" means any payment (whether made voluntarily or involuntary) 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.
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 each 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 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
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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 pursuant to Section
5(a) hereof may be withdrawn or modified by the party or parties who originally
gave such directions 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
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 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 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 of such Obligations for purposes of calculating distributions
pursuant to Section 2(c)).
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(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, 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 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
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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 Xxxxx'x 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, and may accept fees and other consideration
from the Company or any affiliate thereof for services in connection with this
Agreement and otherwise without having to account for the same to any Benefitted
Party.
(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 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 the Benefitted Parties
holding, in the aggregate, more than 50% of the sum of (a) the face amount of
any commitments for undrawn Letters of Credit plus (b) the outstanding funded
principal amount of the Obligations (such amounts to be determined by assuming
that all such commitments and Obligations are denominated in U.S. Dollars based
upon the Applicable Exchange Rate). For purposes of the foregoing definitions,
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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 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.
10
6. Third Party Beneficiaries. This Agreement is solely for the benefit of
the parties hereto and their respective successors and assigns, and neither the
Company nor any other person or entity, including, without limitation, any
guarantor of the obligations of the Company, are intended to be third party
beneficiaries hereunder or to have any right, benefit, priority or interest
under, or shall have any right to enforce this Agreement.
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
other party regarding the financial condition of the Company or any of its
subsidiaries 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 and nothing contained herein shall
limit or in any way modify any of the obligations of the Company or any
Subsidiary Guarantor to the Benefitted Parties.
8. Acknowledgment of Guaranties. Each party expressly acknowledges the
existence and validity of the Note Obligation Guaranty and the Bank Obligation
Guaranty, agrees not to contest or challenge the validity of the Note Obligation
Guaranty or the Bank Obligation Guaranty and agrees that the judicial or other
determination of the invalidity of the 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
communication 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.
11
(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 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.
Upon the receipt of such Officers' Certificate, Secured Party shall, at
such Pledgor's expense, execute and deliver such releases of its security
interest in such Collateral which is to be so sold, transferred or disposed of,
as may be reasonably requested by such Pledgor.
(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 Senior
Noteholder Obligations by a 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 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 Collateral Agency and Intercreditor Agreement substantially in the
form attached hereto as Exhibit A (a "Counterpart") and become a party to this
Agreement.
(e) Additional Creditors. Upon the execution of a Counterpart by any
Additional Creditors (either directly or through their agents) and delivery of
such Counterpart to the other parties hereto, such entity or entities shall be
as fully a party to this Agreement as a Benefitted Party as if such entity or
entities were an original signatory hereof without any action required to be
taken by any other party hereto, provided that each such entity or entities
shall execute this Agreement simultaneously with the Subsidiary Guarantors'
execution and delivery to it or them 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
Creditors as parties to this Agreement.
12
(f) 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.
(g) 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.
(h) 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.
(i) 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.
(j) 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.
(k) 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 the ability of the Company 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, 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 Benefitted Party has entered into its respective
financial agreements with the Company 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.
(l) 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.
(m) 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.
[Remainder of page intentionally left blank]
13
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A.,
as Collateral Agent
By:
Name: Xxxxxxx Xxxxxx
Title: Vice President
Address for Notices:
State Street Bank and Trust
Company of California, N.A.
000 Xxxx 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Trust Department
Facsimile: (000) 000-0000
S-1
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA,
as Senior Noteholder
By:
Name:
Title:
Address for Notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group - Corporate Finance
Xxxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Managing Director
Facsimile: (000) 000-0000
S-2
ABN AMRO BANK N.V.,
as Senior Lender
By:
Name:
Title:
By:
Name:
Title:
Address for Notices:
ABN AMRO Bank N.V.
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention: Credit Administration
Facsimile: (000) 000-0000
with a copy to:
ABN AMRO Bank N.V.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxxxxxx
Facsimile: (000) 000-0000
S-3
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:
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
NU SKIN INTERNATIONAL, INC.
NU SKIN HONG KONG, INC.
NU SKIN TAIWAN, INC.
NU SKIN UNITED STATES, INC.
By:
Name: Xxxxx X. Xxxxxxx
Title: Vice President
Address for Notices: Xxx Xx Xxxx Xxxxx
00 Xxxx Xxxxxx Xxxxxx
Xxxxx, Xxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
S-4
EXHIBIT A
Counterpart Collateral Agency and Intercreditor Agreement
IN WITNESS WHEREOF, the undersigned has caused this Counterpart 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 Collateral
Agency and Intercreditor Agreement [and shall be as fully a party to the
Collateral Agency and Intercreditor Agreement as if such Additional Benefitted
Party were an original signatory to the Collateral Agency and Intercreditor
Agreement].
[Name of Additional Benefitted Party]
By:
Name:
Title:
