Exhibit

10.3




 




WAIVER

AND AMENDMENT NO. 3 TO CREDIT AGREEMENT




 




 




                THIS WAIVER AND AMENDMENT NO. 3 TO

AMENDED AND RESTATED CREDIT AGREEMENT (this “Waiver and Amendment”)

is entered into as of October 3, 2002, by and among HAUSER, INC., a Delaware

corporation (the “Company”), HAUSER TECHNICAL SERVICES, INC., a Delaware

corporation (“HTS”), BOTANICALS INTERNATIONAL EXTRACTS, INC., a

Delaware corporation, and ZETAPHARM, INC., a New York corporation,

(collectively, the “Borrowers”), and WELLS FARGO BANK, N.A. (the “Lender”).




RECITALS 




                                WHEREAS,

the Borrowers are currently indebted to the Lender pursuant to the terms and

conditions of that certain Amended and Restated Credit Agreement dated as of

December 7, 2001 (the “Current Agreement”; as amended hereby and from

time to time, the “Agreement”); and




                                WHEREAS,

the Lender and the Borrowers have agreed to certain changes in the terms and

conditions set forth in the Current Agreement and have agreed to amend the

Current Agreement to reflect said changes; and




                                WHEREAS,

the Lender has agreed to waive compliance by the Borrowers with  certain provisions of the Agreement.




                                NOW,

THEREFORE, for valuable consideration, the receipt and sufficiency

of which are hereby acknowledged, the parties hereto agree as follows:




A.            Amendments.




1.             In Section 1.01 of the Current

Agreement, the defined term “Commitment” is amended by replacing the dollar

amount “$9,500,000” with the dollar amount “$10,000,000”.




2.             In Section 1.01 of the Current

Agreement, the defined term “Revolving Credit Commitment” is amended by

replacing the dollar amount “$9,500,000” with the dollar amount “$10,000,000”.




B.            Waivers.




1.                     The Lender

hereby waives compliance by the Borrowers with their covenants contained in

Section 6.03(a)(ii), Section 6.03(c), Section 6.03(d), Section 6.06 and Section

6.08 of the Agreement so as to permit (i) the sale of the real property located

at 4750 Nautilus Court South, Boulder, Colorado 80301 (the “Premises”)

to 4750 Nautilus Court South, LLC, a Colorado limited liability company (the “Purchaser”)

in




 





























 




accordance with

the terms and conditions of a Contract to Buy and Sell Real Estate

(Commercial), dated as of June 6, 2002, as amended by the First Amendment to

Contract to Buy and Sell Real Estate (Commercial), dated August 28, 2002 (the “Purchase

Agreement”), a true and complete copy of which the Borrowers have furnished

to the Lender, (ii) the lease of the Premises from the Purchaser pursuant to

the Lease of Space, dated as of September 1, 2002, between the Purchaser and

Hauser Contract Research Organization, a division of HTS, a true a complete

copy of which has been furnished to the Lender and (iii) the payment of the

Proceeds to Zuellig Botanicals, Inc., a Delaware corporation (“Zuellig”)

as partial repayment of indebtedness to Zuellig.




2.                     The

Lender hereby releases its liens on the Premises, if any (but not on the

Proceeds (as defined below)).




 




C.            Conditions.




 




Notwithstanding

the foregoing, this Waiver and Amendment is subject the following conditions:




 




1.             The net cash proceeds from the sale

of the Premises at the closing of the sale of the Premises (the “Closing”)

shall not be less than $1,598,494.76 (the “Proceeds”);




 




2.             The Company shall have irrevocably

directed Purchaser to pay the entire amount of the Proceeds to Zuellig, in

partial payment of amounts due to Zuellig 

from the Company, pursuant to a letter of direction substantially in the

form attached hereto as Exhibit A;




 




4.             The Lender shall have received

payment of the Proceeds pursuant to Section D.1 below;




 




5.             Purchaser shall have delivered to

the Lender a Landlord’s Waiver, with respect to any of the Lender’s Collateral

located on the Premises;




 




6.             Borrowers shall have delivered to

Lender a duly executed Revolving Credit Note substantially in the form attached

hereto as Exhibit B (the “Revolving Credit Note”), which

Revolving Credit Note will supersede and replace the existing Revolving Credit

Note, dated August 31, 2002;




 




7.             Zuellig shall have executed and

delivered to the Lender, and Zuellig Group, N.A., Inc. shall have acknowledged

and agreed to, a Waiver of Credit Agreement dated the hereof, and all

conditions set forth in such Waiver of Credit Agreement shall have been

satisfied;




 




 




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9.             If the Closing under the Purchase

Agreement and payment of the Proceeds to the Lender shall not have occurred on

or prior to October 4, 2002, then this Waiver and Amendment will be void and of

no force and effect.




 




10.           Borrowers shall have paid or

reimbursed the Lender for all of the Lender’s costs and expenses, including

fees and disbursements of outside counsel and allocated in-house counsel, in

connection with, or related to, the negotiating and execution and effectiveness

of this Waiver and Amendment.




 




D.            General.




1.             Any amounts payable to the Lender

hereunder shall be paid by wire transfer to the following account:




 




Wells Fargo Bank,

N.A.




ABA 121000248




BNF=LAG OPS

Account # 02714-50720




OBI=Zuellig-obligor

#9978768505




 




2.             Except as specifically provided

herein, all terms and conditions of the Agreement remain in full force and

effect, without waiver or modification. 

Borrowers acknowledge that except as specifically provided in this

Waiver and Amendment, nothing in this Waiver and Amendment shall affect

Borrowers’ obligations under the Agreement, which obligations remain valid,

binding and enforceable, or shall constitute a waiver by Lender of any of

Lender’s rights or remedies, now or at any time in the future, with respect to

any requirement under the Agreement or with respect to an Event of Default or

Default, occurring now or at any time in the future




3.             All terms defined in the Agreement

shall have the same meaning when used in this Waiver and Amendment.  This Waiver and Amendment and the Agreement

shall be read together as one document. This Waiver and Amendment may be

executed in counterparts (and by different parties hereto on different

counterparts), each of which shall constitute an original, but all of which

when taken together shall constitute a single document.




4.             The Borrowers

hereby remake all representations and warranties contained in the Agreement and

reaffirm all covenants set forth therein. 

Without limiting the foregoing, Borrowers hereby confirm that their

obligations under Section 9.03 of the Agreement apply to Lender’s indemnity

obligations under the Landlord’s Waiver dated the date hereof by and between

the Lender and 4750 Nautilus Court South, LLC and acknowledged and agreed to by

certain of the Borrowers.  The Borrowers

further certify that as of the date of this Waiver and Amendment, giving effect

to the provisions hereof, there exists no Event of Default as defined in the

Agreement, nor any condition, act or 




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event which with

the giving of notice or the passage of time or both would constitute any such

Event of Default.




 




 




 




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IN

WITNESS WHEREOF,

the parties hereto have caused this Amendment to be executed as of the date and

year first written above.




 




	

  HAUSER, INC.


  	

   


  	

  WELLS FARGO BANK, N.A.


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  By: 


  	

  /s/   Kenneth C. Cleveland


  	

   


  	

  By:


  	

   /s/ 

  Art Brokx


  
	

  Name:   Kenneth Cleveland


  	

   


  	

  Name:  Art Brokx


  
	

  Title:     President


  	

   


  	

  Title:    Vice President


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  HAUSER TECHNICAL SERVICES, INC.


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  By: 


  	

  /s/  Thomas W. Hanlon


  	

   


  	

   


  
	

  Name:  Thomas W. Hanlon


  	

   


  	

   


  
	

  Title:    Secretary and Treasurer


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  BOTANICALS INTERNATIONAL EXTRACTS, INC.


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  By: 


  	

  /s/  Kenneth C. Cleveland


  	

   


  	

   


  
	

  Name:  Kenneth C. Cleveland


  	

   


  	

   


  
	

  Title:    Chief Executive Officer


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  ZETAPHARM, INC.


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  By: 


  	

  /s/  Thomas W. Hanlon


  	

   


  	

   


  
	

  Name:  Thomas W. Hanlon


  	

   


  	

   


  
	

  Title:    Secretary and Treasurer


  	

   


  	

   


  





 




 




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