Prepared by MerrillDirect





AMENDMENT
NO. 4 TO CREDIT AGREEMENT


 


             AMENDMENT NO. 4 TO CREDIT AGREEMENT (this
“Amendment”) is entered into as of March 31, 2001, by and among HAUSER, INC., a Delaware corporation (the
“Company”), HAUSER TECHNICAL SERVICES, INC.,
a Delaware corporation (“Technical”), BOTANICALS
INTERNATIONAL EXTRACTS, INC., a Delaware corporation, ZETAPHARM, INC., a New York corporation,
and WILCOX NATURAL PRODUCTS, INC.,
a Delaware 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
Credit Agreement dated as of June 11, 1999, as heretofore amended (the
“Current Agreement”; and as amended hereby, the “Agreement”); and


                           WHEREAS, the aggregate amount of Revolving
Loans presently outstanding under the Current Agreement exceeds the aggregate
Borrowing Base thereunder;


                           WHEREAS, the Lender and the Borrowers have
agreed to certain changes in the terms and conditions set forth in the
Agreement and have agreed to amend the Agreement to reflect said changes.


                           NOW, THEREFORE, for valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree that the Agreement shall be amended as follows:


             A.         Amendments.


                           1.         
Section 1.01 of the Agreement, the
defined term “Borrowing Base” is amended by replacing the period at the end of
the definition with a semicolon and adding the following:  “provided, however, that the Lender in its
sole and absolute discretion may allow over advances not to exceed $4,000,000
in the aggregate at any time outstanding, it being acknowledged by the
Borrowers, without limiting the Lender’s discretion as aforesaid, that the
Lender does not intend to allow any such over advances to exist after August
15, 2001.”


                           2.         
Section 1.01 of the Agreement is
further amended by deleting entirely the defined term “Commitment,” and
replacing it with the following new definition:





                           “‘Commitment’ means the
Lender’s ‘Revolving Credit Commitment,’ as such commitment may be
reduced from time to time pursuant to Section 2.07.  The initial amount of the Lender’s Revolving Credit Commitment is
$24,500,000, which amount shall be reduced to $21,000,000 effective October 30,
2000, $19,000,000 effective March 31, 2001 and $17,000,000 effective
August 15, 2001.”



                           3.         
Section 6.07(b) of the Agreement is
amended by deleting entirely the provisions thereof and replacing them with the
following:


                           "The Borrowers shall not permit the
Consolidated Tangible Net Worth at the end of any fiscal quarter of the Company
to be less than $4,000,000."



                           4.         
Section 6.07(c) of the Agreement is
amended by deleting entirely the provisions thereof and replacing them with the
following:


                           "The Borrowers will not permit the
Consolidated Operating Cash Flow to be less than negative $1,220,000 at the end
of the fiscal quarter of the Company ending June 30, 2001; negative $2,040,000
at the end of the fiscal quarter of the Company ending September 30, 2001;
positive $1,400,000 at the end of the fiscal quarter of the Company ending
December 31, 2001; and positive $430,000 at the end of the fiscal quarter of
the Company ending March 31, 2002."



             B.          Amendment Fee.  The Borrowers agree, jointly and severally,
to pay to the Lender, simultaneously with the execution and delivery of this
Amendment, an amendment fee of $10,000.


             C.          Conditions.  This Amendment shall not become effective
until the date on which pursuant to the provisions of Section 8.03 of the
Agreement, the Borrowers shall have paid, or reimbursed the Lender for, all of
the Lender’s costs and expenses (including the 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 Agreement.


             D.         Covenants.  The Company agrees that upon the sale by the
Company of certain assets relating to the Company’s Hauser Technical Services
Division, which Division performs analytical testing, chemical synthesis,
process development, custom chemical manufacturing, product testing and design
of pharmaceutical, dietary supplement, plastic pipe and medical device
products, the Company will apply the net proceeds (i.e. the gross proceeds of
the sale, less closing costs and other costs of sale actually paid) it receives
from such asset sale to payment of the outstanding Base Rate Revolving Loans.


             E.          General.  Except as specifically provided herein, all
terms and conditions of the Agreement remain in full force and effect, without
waiver or modification.  All terms
defined in the Agreement shall have the same meaning when used in this
Amendment.  This Amendment shall be
effective upon delivery by the Lender to the Company of an executed counterpart
original or facsimile copy.


             The
Borrowers hereby remake all representations and warranties contained in the
Agreement and reaffirm all covenants set forth therein.  The Borrowers further certify that as of the
date of this Amendment, giving effect to the provisions hereof, there exists no
Event of Default as defined in the Agreement, nor any condition, act or event
which with the giving of notice or the passage of time or both would constitute
any such Event of Default.


[INTENTIONALLY
LEFT BLANK]


 





             IN WITNESS WHEREOF, the parties
hereto have caused this Amendment to be executed as of the date and year first
written above.


	HAUSER,
  INC.


By: /S/ KENNETH CLEVELAND


Name:  Kenneth Cleveland
Title:    Chief Executive Officer	WELLS
  FARGO BANK, N.A.


By: 
  /S/ ART BROKX


Name:  Art Brokx
Title:    Vice President
	 	 
	BOTANICALS INTERNATIONAL
EXTRACTS, INC.


By: /S/ KENNETH CLEVELAND


Name:  Kenneth Cleveland

  Title:    Chief Executive Officer	ZETAPHARM,
  INC.



By: 
  /S/ KENNETH CLEVELAND


Name:  Kenneth Cleveland

  Title:    Chief Executive Officer
	 	 
	WILCOX NATURAL PRODUCTS, INC.


By: 
  /S/ KENNETH CLEVELAND


Name:  Kenneth Cleveland

  Title:    Chief Executive Officer	HAUSER TECHNICAL SERVICES, INC.


By: /S/ KENNETH CLEVELAND


Name:  Kenneth Cleveland

  Title:    Chief Executive Officer