Document:

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                                                                    Exhibit 10.5

                               [LETTERHEAD OF RCN]

                                December 5, 2001

Mr. William Savoy
Vulcan, Inc
505 Union Station
505 Fifth Avenue, Suite 900
Seattle, Washington 98104

Dear Mr. Savoy:

          Reference is made to that certain Stock Purchase Agreement dated
October 1, 1999, as amended from time to time (the "Stock Purchase Agreement"),
                                                    ------------------------
by and among RCN Corporation, a Delaware corporation (the "Company"), and Vulcan
                                                           -------
Ventures Incorporated, a Washington corporation ("Vulcan") and that certain
Rights Agreement dated December 5, 2001 (the "Rights Agreement"), by and among
                                              ----------------
the Company and HSBC Bank USA, a banking corporation and trust company duly
organized and validly existing under the laws of the State of New York (the
"Right Agent"). Capitalized terms used and not otherwise defined herein shall
 -----------
have the meanings set forth in the Rights Agreement.

          We are writing to confirm that in conjunction with the Company's
adoption of the Rights Agreement, the Company's Board of Directors has resolved
that from and after such time as any of the Rights issued under the rights
Agreement become exercisable, Vulcan and its Affiliates (as defined in the Stock
Purchase Agreement) shall be entitled to exercise any such Rights which they may
hold or be entitled to under the Rights Agreement and acquire Common Stock or
other securities of the Company upon the exercise of such Rights without regard
to any of the restrictions otherwise set forth in the Stock Purchase Agreement,
including but not limited to those set forth in Sections 6.03 and 6.04 of the
Stock Purchase Agreement.

          Please confirm your agreement with the foregoing by signing and
returning to the undersigned the duplicate copy of this letter enclosed
herewith.

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          This Agreement shall be governed by and constructed in accordance with
the law of the State of New York, without regard to conflicts of law rules of
such state.

                                     Sincerely,

                                     RCN CORPORATION

                                     By: /s/ John J. Jones
                                         ---------------------------------------
                                         Name:  John J. Jones
                                         Title: Executive Vice President and
                                                General Counsel

ACCEPTED AND AGREED:
-------------------

VULCAN VENTURE INCORPORATED

By: /s/ William D. Savoy
   ----------------------------------
Name:  William D. Savoy
Title: President

[Logo of RCN]<PAGE>

                      $10,750,000 Revolving Credit Facility
                          $7,804,438 Term Loan Facility

                              AMENDED AND RESTATED

                                CREDIT AGREEMENT

                                   dated as of

                                December 7, 2001

                                      among

                                  HAUSER, INC.

                         HAUSER TECHNICAL SERVICES, INC.

                     BOTANICALS INTERNATIONAL EXTRACTS, INC.

                                 ZETAPHARM, INC.

                                       and

                                WELLS FARGO BANK,
                              NATIONAL ASSOCIATION

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     AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") dated as of
     December 7, 2001, among HAUSER, INC., a Delaware corporation as successor
     to HAUSER, INC., a Colorado corporation, HAUSER TECHNICAL SERVICES, INC., a
     Delaware corporation, BOTANICALS INTERNATIONAL EXTRACTS, INC., a Delaware
     corporation, ZETAPHARM, INC., a New York corporation, and WELLS FARGO BANK,
     NATIONAL ASSOCIATION.

                                    RECITALS

     WHEREAS, Borrowers (as hereinafter defined) are currently indebted to
Lender (as hereinafter defined) pursuant to the terms and conditions of that
certain Credit Agreement dated as of June 11, 1999, as heretofore amended (the
"Current Agreement"); and

     WHEREAS, Borrowers and Lender have agreed to amend certain provisions of
the Current Agreement, and in connection therewith, to amend and restate the
Current Agreement in its entirety, as hereinafter provided; and

     WHEREAS, it is the intent of the parties hereto that this Agreement not
constitute a novation of the obligations and liabilities of the parties under
the Current Agreement or be deemed to be evidence or constitute repayment of all
or any portion of such obligations and liabilities and that this Agreement amend
and restate in its entirety the Current Agreement and re-evidence the
obligations of the Borrowers thereunder.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that the
Agreement is hereby amended and restated in its entirety to read as follows:

                                    ARTICLE I

                                   Definitions
                                   -----------

     SECTION 1.01 Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:

     "Account Creditors Aged Listing" means a list of the names, addresses and
telephone numbers of all of the Borrowers' account creditors and an aged listing
of the balances owed to such account creditors.

     "Account Debtor" means any Person who is or may become obligated under,
with respect to or on account of an Account Receivable.

     "Accounts Receivable" of a Person shall mean (i) all present and future
accounts, chattel paper and documents, as such terms are defined in the Uniform
Commercial Code as in effect in any applicable jurisdiction, of such Person,
(ii) all right, title and interest, and all the rights, remedies, security and
liens, in, to and in respect of any Accounts Receivable of such Person,
including, without limitation, guaranties or other contracts of suretyship with
respect to

                                       1

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Accounts Receivable, deposits, or other security for the obligation of any
Account Debtor, and credit and other insurance, and (iii) all right, title and
interest of such Person in, to and in respect of invoices or other documents or
instruments with respect to, or otherwise representing or evidencing, any
Account Receivable.

     "Acknowledgment and Consent" has the meaning given to such term in Section
4.03(a).

     "Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

     "Availability Period" means the period from and including the Effective
Date to but excluding the date of termination of the Revolving Credit Facility
and the Term Loan Facility, in each case as provided in Section 2.06 hereof.

     "Base Rate" means, a rate of interest per annum equal to the Prime Rate,
plus the margin specified in Section 2.11 hereof. Each change in the Base Rate
will be effective as of the effective date of any change in the Prime Rate
giving rise thereto.

     "Board" means the Board of Governors of the Federal Reserve System of the
United States of America.

     "Borrower" means each of Hauser, Inc., a Delaware corporation, Hauser
Technical Services, Inc., a Delaware corporation, Botanicals International
Extracts, Inc., a Delaware corporation, and ZetaPharm, Inc., a New York
corporation.

     "Borrowing" means a group of Loans made on the same date.

     "Borrowing Base", with respect to a Borrower, means an amount equal to the
sum of (i) Eligible Receivables (excluding those included in clause (ii))
multiplied by 80%, (ii) Eligible Receivables of Nutraco S.A., Luxembourg insured
under FCIA insurance policy satisfactory to the Lender multiplied by 90% less
any deductible payable by Borrowers under such policy, and (iii) 50% of Eligible
Inventory not to exceed $5,000,000.

     "Borrowing Base Certificate" means a certificate in the form attached
hereto and marked Exhibit A.

     "Borrowing Request" means a request by a Borrower for a Borrowing in
accordance with Section 2.03.

     "Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in California are authorized or required by law to remain
closed.

     "Capital Expenditures" means, for any period, the sum (without duplication)
of all amounts that would, in accordance with GAAP, be included as additions to
property, plant and equipment and other capital expenditures on a consolidated
statement of cash flows for the

                                       2

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Company and its Subsidiaries during such period (including the amount of assets
leased under any Capital Lease Obligation).

     "Capital Lease" means any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, the
obligations of the lessee under which are required to be classified and
accounted for as capital leases on the balance sheet of such lessee under GAAP.

     "Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any Capital Lease, and the amount of
such obligations shall be the capitalized amount thereof determined in
accordance with GAAP.

     "CERCLA" means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C.ss.ss. 9601 et seq.), as amended from time to
time.

     "Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) other than
the Zuellig Owners, of shares representing more than 25% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock of
the Company; (b) occupation of a majority of the seats (other than vacant seats)
on the board of directors of any Borrower by Persons who were neither (i)
nominated by the board of directors of such Borrower nor (ii) appointed by
directors so nominated; (c) the acquisition of direct or indirect Control of any
Borrower by any Person or group other than the Zuellig Owners; (d) the ownership
by any Person other than the Company of any capital stock of another Borrower;
or (e) the ownership by any Person other than the Zuellig Owners of any capital
stock of the Zuellig Group.

     "Change in Law" means (a) the adoption of any law, rule or regulation after
the date of this Agreement, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the date of this Agreement or (c) compliance by Lender with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

     "Character", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans
or Term Loans.

     "Chief Financial Officer" of a Borrower means the individual designated as
such in the by-laws of the relevant Borrower or by resolutions of such
Borrower's Board of Directors duly adopted in accordance with such by-laws, or
if no such individual is so designated, any Financial Officer of such Borrower.

     "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

     "Collateral" means any property or rights in which, pursuant to the
Security Documents, there has been granted (or purported to have been granted)
to, or for the benefit of, the Lender a security interest.

                                       3

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     "Collateral Assignments" shall mean either or both of the Collateral
Assignment of Trademarks, Trademark Applications, Patents and Patent
Applications substantially in the form of Exhibit 1.01-A to the Security
Agreements and the Collateral Assignment of Patents and Patent Applications
substantially in the form of Exhibit 1.01-B to the Security Agreements.

     "Collateral Audit" means, collectively, an audit or inspection performed by
the Lender or another auditor or inspector acceptable to the Lender as to the
values and conditions of the assets and properties of the Borrowers.

     "Commitment" means, collectively, the Lender's Term Loan Facility
Commitment and the Lender's Revolving Credit Commitment. The amount of the
Lender's Revolving Commitment is $10,750,000. The amount of the Lender's Term
Loan Facility Commitment is $7,804,438.

     "Company" means Hauser, Inc., a Delaware corporation.

     "Consolidated Operating Cash Flow" means, for any period, the net income
(or deficit) of the Company and its subsidiaries for such period, plus
depreciation and amortization, as the case may be, on the statements of income
of the Company and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP.

     "Consolidated Tangible Net Worth" means, as of the date of determination,
Consolidated Net Worth plus Indebtedness which is subordinated to the
Obligations to the Lender under a subordination agreement in form and substance
acceptable to the Lender or by subordination language acceptable to the Lender
in the instrument evidencing such Indebtedness, less (i) all assets which would
be classified as intangible assets under GAAP, including goodwill, patents,
trademarks, trade names, copyrights, capitalized software and organizational
costs, licenses and franchises, and (ii) assets which the Lender determines in
its business judgment would not be available or would be of relatively small
value in a liquidation of the Borrowers' businesses, including loans to officers
or Affiliates and other items.

     "Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.

     "Current Agreement" has the meaning set forth in the first "WHEREAS" clause
above.

     "Deeds of Trust" means, collectively, (i) the Deed of Trust from Hauser to
the Public Trustee of the County of Weld, State of Colorado for the use and
benefit of the Lender, dated as of June 11, 1999, and (ii) the Deed of Trust
from Hauser to the Public Trustee of the County of Boulder, State of Colorado
for the use and benefit of the Lender, dated as of June 11, 1999.

                                       4

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     "Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.

     "dollars" or "$" refers to lawful money of the United States of America.

     "Effective Date" means the date on which the conditions specified in
Section 4.03 are satisfied (or waived in accordance with Section 9.02).

     "Eligible Inventory" of a Borrower shall mean only such Inventory of such
Borrower as is comprised of finished goods (other than shipping and packaging
materials) or raw materials, valued at the lower of cost or fair market value,
is subject to no Liens other than a first priority fully perfected Lien in favor
of the Lender, and is located at such Borrower's warehouses in the United
States; provided, however, that Eligible Inventory shall not include Inventory
that is itemized as "Exclusions from Inventory" in the Borrowing Base
Certificate.

     "Eligible Receivables" of a Borrower shall mean and include all unpaid
Accounts Receivable of such Borrower that are subject to no Liens other than a
first priority fully perfected Lien in favor of the Lender, other than such
Accounts Receivable as are itemized as "Exclusions from Accounts Receivable" in
the Borrowing Base Certificate.

     "Environmental Laws" means all present and future laws, rules, regulations,
codes, ordinances, regulations, orders, decrees, judgments, licenses, permits,
directives, injunctions, notices or binding agreements, or the equivalent of any
of the foregoing, issued, promulgated or entered into by any Governmental
Authority, or duties under the common law, relating in any way to the
environment, wastes, pollution, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters, including CERCLA, the Hazardous
Materials Transportation Act (49 U.S.C. ss.ss. 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C.ss.ss. 6901 et seq.), the Toxic
Substances Control Act (15 U.S.C.ss.ss. 2601 et seq.) and the Clean Air Act (42
U.S.C.ss.ss. 7401 et seq.), all as amended from time to time.

     "Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs, fees (including attorneys' and
consultants' fees), expenses and disbursements, natural resource damages, costs
of environmental remediation and other compliance or remedial measures,
settlements, awards, fines, penalties or indemnities), of any Borrower directly
or indirectly resulting from or based upon (a) violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment, including on-site or off-site contamination of surface or
subsurface soil or water, or (e) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.

     "Equipment" of a Person shall mean all present and future machinery,
equipment, fixtures, trade fixtures, engineering drawings and diagrams, tools
and tooling (including any rights in respect of tools or tooling in the
possession of others), computer and other data

                                       5

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processing equipment, furniture, office furniture, production or data processing
supplies on hand or in transit, other miscellaneous supplies and other tangible
property of any kind now owned or hereafter acquired by such Person or in which
such Person now has or may hereafter acquire any right, title or interest and
wheresoever located, including all equipment of such Person as defined in the
Uniform Commercial Code in effect in any applicable jurisdiction and all such
property located in any plant, warehouse, office or other space leased, owned or
occupied by such Person and all of such Person's interest in all leasehold
improvements and any and all additions, accessions and appurtenances thereto,
substitutions therefor and replacements thereof, together with all attachments,
components, parts and accessories installed thereon or affixed thereto.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.

     "ERISA Affiliate" means any trade or business (whether or not incorporated)
that, together with any Borrower, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.

     "ERISA Event" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by any Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan,
(e) the receipt by any Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by any
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by any Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from any Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

     "Event of Default" has the meaning given to such term in Article VII.

     "Excluded Taxes" means, with respect to the Lender, income or franchise
taxes imposed on (or measured by) its net income.

     "Financial Officer" means the chief financial officer, principal accounting
officer, treasurer or controller of the Company.

     "Further Collateral Assignment" has the meaning given to such term in
Section 5.01(l).

                                       6

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     "GAAP" means generally accepted accounting principles in the United States
of America.

     "Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

     "Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of guaranty issued to support such Indebtedness or obligation; provided,
that the term Guarantee shall not include endorsements for collection or deposit
in the ordinary course of business.

     "Hazardous Materials" means all materials or substances that, whether by
their nature or use, are now or hereafter defined as hazardous wastes, hazardous
substances, pollutants or contaminants under any Environmental Law, or which are
toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous and which now or hereafter regulated under any
Environmental Law, or which are or contain petroleum, petroleum distillates,
asbestos, polychorinated biphenyls, radon gas, medical wastes, gasoline, diesel
fuel or another petroleum hydrocarbon product.

     "Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.

     "Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease

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Obligations of such Person, (i) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty and (j) all obligations, contingent or otherwise, of such Person in
respect of bankers' acceptances. The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.

     "Indemnified Taxes" means Taxes other than Excluded Taxes.

     "Interest Payment Date" means the last day of each calendar month and each
Maturity Date.

     "Inventory" of a Person shall mean all present and future inventory, goods
held for sale or lease or to be furnished under contracts for service, goods so
leased or furnished, raw materials, component parts, work in process or
materials used or consumed in such Person's business now owned or hereafter
acquired by such Person or in which such Person now has or may hereafter acquire
any right, title or interest and wheresoever located, including all inventory of
such Person as defined in the Uniform Commercial Code in effect in any
applicable jurisdiction.

     "Leases" means the leases of real property set forth on Schedule 1.01-1.

     "Lender" means Wells Fargo Bank, National Association and any other Person
that shall have become a party hereto pursuant to a "Transfer" (as defined in
Section 9.04(b)), other than any such Person that purchases a participation
herein or that ceases to be a party hereto pursuant to a further Transfer.

     "Lender Capital Leases" means Capital Leases between the Lender or an
Affiliate thereof as lessor and a Borrower as lessee.

     "Lender Leases" means Lender Operating Leases and Lender Capital Leases.

     "Lender Operating Leases" means Operating Leases between the Lender or any
Affiliate thereof as lessor and a Borrower as lessee.

     "Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.

     "Loan Documents" means this Agreement, the Notes delivered pursuant hereto,
the Security Documents, any agreements between the Lender or any Affiliate
thereof and a Borrower pertaining to Lender Leases and any instruments or
agreements executed and delivered pursuant to any of the foregoing, in each case
as supplemented, amended or modified from time

                                       8

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to time, and any document, instrument, or agreement supplementing, amending, or
modifying, or waiving any provision of, any of the foregoing.

     "Loan Debt" has the meaning given to such term in Article IX(c).

     "Loans" means the loans made by the Lender pursuant to this Agreement.

     "Material Adverse Effect" means, in respect of any Person, a material
adverse effect on (a) the business, assets, operations, prospects or condition,
financial or otherwise, of such Person, (b) the ability of such Person to
perform any of its obligations under this Agreement or any other Loan Document
to which it is a party or (c) the rights of or benefits available to the Lender
in respect of such Person under this Agreement or any other Loan Document.

     "Material Indebtedness" means, in respect of any Person, Indebtedness
(other than the Loans or obligations under Lender Leases), or obligations in
respect of one or more Hedging Agreements, of any one or more of such Person and
its Subsidiaries in an aggregate principal amount exceeding $500,000. For
purposes of determining Material Indebtedness, the "principal amount" of the
obligations of any Person or any Subsidiary in respect of any Hedging Agreement
at any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that such Person would be required to pay if such Hedging Agreement
were terminated at such time.

     "Maturity Date," in the case of the Revolving Loan, means August 31, 2003,
and in the case of the Term Loan, means June 30, 2002.

     "Moody's" means Moody's Investors Service, Inc.

     "Multiemployer Plan" means a multiemployer plan as defined in Section 4001
(a)(3) of ERISA.

     "Notes" means the Revolving Credit Note and the Term Note.

     "Obligations" means, without duplication, all obligations defined as
"Obligations" in the Security Documents.

     "Operating Lease" means any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, the
obligations of the lessee under which are not required to be classified and
accounted for as capital leases on the balance sheet of such lessee under GAAP.

     "Operating Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any Operating Lease.

     "Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.

                                       9

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     "Paclitaxel Patents" means the patents and patent applications listed on
Exhibit A to Exhibit 1.01-B to the Security Agreements.

     "PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.

     "Perfection Certificates" means the Perfection Certificates prepared by the
Company or any other Borrower and delivered pursuant to the Security Agreements.

     "Permit" means any license, permit, franchise or authorization of a
Governmental Authority.

     "Permitted Encumbrances" means:

     (a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.04;

     (b) carriers', warehousemen's, mechanics', materialmen's, repairmen's and
other like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.04;

     (c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations;

     (d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;

     (e) (i) as to real properties leased to any Borrower, easements, zoning
restrictions, rights-of-way and similar encumbrances on real property imposed by
law or arising in the ordinary course of business that do not secure any
monetary obligations and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of any
Borrower, and (ii) as to real properties owned by any Borrower, the matters set
forth in Schedule B-1 of each of the title insurance policies insuring the Liens
of the Lender under the Deeds of Trust, and any other encumbrances approved by
the Lender in writing; and

     (f) Liens arising under or in connection with equipment leases or
conditional sale agreements listed on Schedule 4.01(j);

provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness or any Lien on any Collateral.

     "Permitted Investments" means:

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<PAGE>

     (a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;

     (b) investments in commercial paper maturing within 270 days from the date
of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Moody's;

     (c) investments in certificates of deposit, banker's acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the United States of America or any state thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;

     (d) fully collateralized repurchase agreements with a term of not more than
30 days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c) above; and

     (e) shares of any money market mutual fund registered under the Investment
Company Act of 1940 having assets in excess of $1,000,000,000 and in respect of
which a Lender or an Affiliate of a Lender acts as investment advisor.

     "Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

     "Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which any Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.

     "Pledge Agreement" means the Pledge and Security Agreement dated as of June
11, 1999 made by Hauser in favor of the Lender.

     "Prime Rate" means at any time the rate of interest most recently announced
within the Lender at its principal office as its Prime Rate, with the
understanding that the Prime Rate is one of the Lender's base rates and serves
as the basis upon which effective rates of interest are calculated for those
loans making reference thereto, and is evidenced by the recording thereof after
its announcement in such internal publication or publications as the Lender may
designate. Each change in the Prime Rate shall be effective from and including
the date such change is so announced as being effective.

     "Proxy Statement" means the Proxy Statement of the Company dated August 24,
2001.

                                       11

<PAGE>

     "Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System (or any successor thereto) as the same may be amended or
supplemented from time to time.

     "Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.

     "Restricted Payment" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any shares of any class of
capital stock of a Borrower, any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such shares of capital stock of a Borrower, or any option, warrant or other
right to acquire any such shares of capital stock of a Borrower, or any payment
of principal, interest, or any other amount in respect of or for the purchase of
any Indebtedness of any Borrower that is subordinated to any obligations arising
under the Loan Documents.

     "Revolving Borrowing" means a Borrowing under the Revolving Loan, pursuant
to Sections 2.02 and 2.03.

     "Revolving Credit Commitment" means the commitment of the Lender to make a
Revolving Loan hereunder as set forth in Section 2.01. The amount of the
Lender's Revolving Credit Commitment is $10,750,000.

     "Revolving Credit Exposure" means, with respect to the Lender at any time,
the sum of the outstanding principal amount of the Lender's Revolving Loans at
such time.

     "Revolving Credit Facility" means the revolving credit facility available
on the Effective Date.

     "Revolving Credit Facility Availability Period" means the period beginning
on the Effective Date and ending on August 31, 2003.

     "Revolving Credit Note" has the meaning given to such term in Section
4.03(b).

     "Revolving Loan" means a Loan made by the Lender to a Borrower pursuant to
the Revolving Credit Commitment.

     "S&P" means Standard & Poor's, a Division of The McGraw-Hill Companies,
Inc.

     "Secured Party" means the Lender.

     "Securities Act" means the Securities Act of 1933, as amended.

     "Security Agreements" means, collectively, (i) the Security Agreement dated
as of June 11, 1999 among Hauser, Shuster Laboratories, Inc., a Massachusetts
corporation, and the

                                       12

<PAGE>

Lender, and (ii) the Amended and Restated Security Agreement dated as of June
11, 1999, among Zeullig Botanical Extracts, Inc., a Delaware corporation,
ZetaPharm, Inc., a New York corporation, Wilcox Drug Company, Inc., a Delaware
corporation, and the Lender, in each case as amended.

     "Security Documents" means each of the Security Agreements, Pledge
Agreement, Deeds of Trust, Collateral Assignments, Acknowledgment and Consent,
security agreements, pledge agreements, deeds of trust or similar agreements
executed as part of the Construction Financing Agreements entered into pursuant
to the Current Agreement and any instruments or agreements executed and
delivered pursuant to any of the foregoing, in each case as supplemented,
amended, confirmed or modified as contemplated hereby and otherwise from time to
time, and any document, instrument or agreement supplementing, amending or
modifying, or waiving any provision of, any of the foregoing.

     "Subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.

     "Taxes" means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

     "Term Loan" means the Loan made by the Lender to a Borrower pursuant to the
Term Loan Facility Commitment.

     "Term Loan Exposure" means, with respect to the Lender at any time, the sum
of (i) the outstanding principal amount of the Term Loan plus (ii) the
outstanding Operating Lease Obligations and Capital Lease Obligations under
Lender Leases, each at such time.

     "Term Loan Facility Commitment" means the commitment of the Lender to make
a Term Loan hereunder as set forth in Section 2.01, in an aggregate maximum
principal amount not to exceed $7,804,438.

     "Term Loan Repayment Amount" has the meaning given to such term in Section
2.07(a).

     "Term Loan Repayment Date" has the meaning given to such term in Section
2.07(a).

     "Term Note" has the meaning given to such term in Section 4.03(b).

                                       13

<PAGE>

     "Total Exposure" means, at any time, the sum of the Lender's Revolving
Credit Exposure at such time and Term Loan Exposure at such time.

     "Total Liabilities" means, at any time, all liabilities of the Borrowers
which would be construed as such in accordance with GAAP, excluding (i)
Indebtedness which is subordinated to the Obligations to the Lender under a
subordination agreement in form and substance acceptable to the Lender or by
subordination language acceptable to the Lender in the instrument evidencing
such Indebtedness, and (ii) indebtedness for accounts payable and borrowed money
due to Affiliates.

     "Transactions" means the execution, delivery and performance by each
Borrower of this Agreement and each other Loan Document to which such Borrower
is a party, the creation of the security interests contemplated by the Security
Documents, the borrowing of Loans, the use of the proceeds of Loans and the
other transactions contemplated by the Loan Documents.

     "Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

     "Zuellig Credit Agreement" means the Credit Agreement dated June 11, 1999
between the Lender and Zuellig Botanicals, Inc., and all "Loan Documents" (as
defined therein), as the same may be supplemented, modified or amended from time
to time, including by the amendment and restatement thereof in connection with
the contemplated restructuring of the Indebtedness outstanding thereunder.

     "Zuellig Group" means Zuellig Group N.A., Inc., a Delaware corporation.

     "Zuellig Owners" means any of Zatpack Inc., a British Virgin Islands
company, which is the sole shareholder of Zuellig Group, the trusts established
for the benefit of certain members of the Zuellig family that are referred to in
the Proxy Statement that are shareholders of Zatpack Inc. or the beneficiaries
of such trusts.

     SECTION 1.02 Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Character (e.g., a
"Revolving Loan"). Borrowings also may be classified and referred to by
Character (e.g., a "Revolving Borrowing").

     SECTION 1.03 Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to

                                       14

<PAGE>

include such Person's successors and assigns, (c) the words "herein," "hereof"
and "hereunder," and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (d)
all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.

     SECTION 1.04 Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Borrowers notify the Lender that the Borrowers request an amendment to any
provision hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or in the application thereof on the operation of such provision
(or if the Lender requests an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.

                                   ARTICLE II

                                   The Credits
                                   -----------

     SECTION 2.01 Commitments.

     (a) Revolving Loan Commitment. Subject to the terms and conditions set
forth herein, the Lender agrees to make Revolving Loans to any Borrower from
time to time during the Revolving Credit Facility Availability Period, for
general working capital purposes, in an aggregate principal amount that will not
result in the Lender's Revolving Credit Exposure exceeding the Lender's
Revolving Credit Commitment, provided that immediately after giving effect to
each Revolving Loan, the aggregate amount of Revolving Loans outstanding shall
not exceed such Borrower's Borrowing Base. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrowers may borrow,
repay and reborrow Revolving Loans.

     (b) Term Loan Commitment. Subject to the terms and conditions set forth
herein, the Lender agrees to make a Term Loan to the Borrowers, in one drawing,
on the Effective Date, for the purpose of refinancing the unpaid Term Loan
balance outstanding under the Current Agreement as of the Effective Date (the
"Original Term Loan"), in an aggregate principal amount that will not result in
the Lender's Term Loan Exposure exceeding the Lender's Term Loan Facility
Commitment. The proceeds of the Original Term Loan were used for purposes
permitted by Section 2.01(b) of the Current Agreement. Amounts paid or prepaid
in respect of the Term Loan may not be reborrowed.

                                       15

<PAGE>

     SECTION 2.02 Loans and Borrowings.

     (a) Each Borrowing shall be comprised only and entirely of Base Rate Loans
as the Borrower may request in accordance herewith.

     (b) There shall be no minimum amount or increment for Revolving Borrowings.
Borrowings of more than one Character may be outstanding at the same time.

     SECTION 2.03 Requests for Revolving Borrowings. To request a Revolving
Borrowing, the Borrower thereof shall notify the Lender of such request by
telephone not later than 11:00 a.m., California time, on the date of the
proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable
and shall be confirmed promptly by hand delivery or telecopy to the Lender of a
written Borrowing Request, confirming that the conditions contained in Section
4.02 hereof have been satisfied and in a form approved by the Lender and signed
by the Borrower thereunder. Each such telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.02:

          (i) the aggregate amount of the requested Borrowing;

          (ii) the date of such Borrowing, which shall be a Business Day; and

          (iii) the location and number of the Borrower's account to which funds
     are to be disbursed, which shall comply with the requirements of Section
     2.05.

     SECTION 2.04 Intentionally Omitted.

     SECTION 2.05 Funding of Borrowings. The Lender will make each loan to be
made by it hereunder available to the Borrower thereof by promptly crediting
such amount to an account of the Borrower thereof maintained with the Lender and
designated by such Borrower in the applicable Borrowing Request.

     SECTION 2.06 Termination and Reduction of Commitments. The Revolving Credit
Facility Commitment, unless previously terminated, shall automatically terminate
at 5:00 p.m. California time, on August 31, 2003. The Term Loan Facility
Commitment shall automatically terminate at 5:00 p.m. California time, on the
Effective Date.

     SECTION 2.07 Repayment of Loans; Evidence of Debt. (a) The Borrowers
hereby, jointly and severally, unconditionally promise to pay (i) to the Lender
the then unpaid principal amount of each Revolving Loan and (to the extent not
previously paid) the Term Loan, together with any accrued but unpaid interest
thereon, on the respective Maturity Date, and (ii) to the Lender an aggregate
principal amount of the Term Loan (subject to adjustment pursuant to Section
2.08) on the dates (each, a "Term Loan Repayment Date"), and in the respective
amounts (such amount, as adjusted pursuant to Section 2.08(b), the "Term Loan
Repayment Amount"), set forth in Schedule 2.07; such promise of each Borrower to
repay each Loan shall apply unconditionally to each Loan irrespective of which
Borrower was the Borrower of such Loan.

                                       16

<PAGE>

     (b) The Lender shall maintain in accordance with its usual practice an
account or accounts in which it shall record (i) the amount of each Loan made
hereunder, the Character thereof and the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become due
and payable from the Borrowers to the Lender hereunder and (iii) the amount of
any payment received by the Lender hereunder.

     (c) The entries made in the accounts maintained pursuant to paragraph (b)
of this Section shall be prima facie evidence of the existence and amounts of
the obligations recorded therein absent manifest error; provided that the
failure of the Lender to maintain such accounts or any error therein shall not
in any manner affect the joint and several obligation of the Borrowers to repay
the Loans in accordance with the terms of this Agreement or the Notes.

     (d) The Loans made by the Lender will be evidenced by the Notes.

     SECTION 2.08 Prepayment of Loans. (a) The Borrowers shall have the right at
any time and from time to time to prepay any Borrowing in whole or in part,
without premium or penalty, subject, however, to prior notice in accordance with
paragraph (b) of this Section and subject to the other applicable terms and
provisions hereof.

     (b) The Borrowers shall notify the Lender by telephone (confirmed by
telecopy) of any such prepayment hereunder not later than 11:00 a.m., California
time, on the date of prepayment. Each such notice shall be irrevocable and shall
specify the Borrower of such Borrowing, the prepayment date, whether the
prepayment relates to a Borrowing of Revolving Loans or Term Loans, and the
respective principal amounts of each such Borrowing (or portion thereof) to be
prepaid. Optional prepayments of Term Loans shall be applied to remaining
installments of principal thereof in the inverse order of maturity. If
applicable, each such prepayment of a Borrowing shall be applied ratably to the
Loans included in the prepaid Borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 2.10.

     (c) In the event that the Revolving Credit Exposure of the Lender with
respect to any Borrower shall at any time exceed the Borrowing Base with respect
to such Borrower, the Borrowers agree, jointly and severally, immediately to
repay to the Lender the excess amount.

     SECTION 2.09 Intentionally Omitted.

     SECTION 2.10 Interest. (a) The Loans shall bear interest as follows:

          (i) Term Loan Borrowings shall bear interest at a rate equal to the
     Prime Rate plus a margin of three percent (3.00%); and

          (ii) Revolving Loan Borrowings shall bear interest at a rate equal to
     the Prime Rate plus a margin of two percent (2.00%). Upon the timely
     repayment of all principal and interest payable under the Term Loan and, so
     long as at the time, no Default or Event of Default shall have occurred and
     be continuing, the Revolving Loan Borrowings shall bear interest at the
     Prime Rate plus a margin of one percent (1.00%).

                                       17

<PAGE>

     (b) Notwithstanding the foregoing, if any principal of or interest on any
Loan or any fee or other amount payable by the Borrowers hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable under paragraph (a)(i) of this Section.

     (c) Accrued interest on each Loan shall be payable by the Borrowers,
jointly and severally, in arrears on each Interest Payment Date for such Loan
and, in the case of Revolving Loans, upon termination of the Revolving Credit
Commitment; provided that (i) interest accrued pursuant to paragraph (b) of this
Section shall be payable on demand, and (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of a Revolving Loan prior to the
end of the Availability Period), accrued interest on the principal amount repaid
or prepaid shall be payable on the date of such repayment or prepayment.

     (d) All interest hereunder shall be computed on the basis of a year of 360
days and shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Base Rate shall be
determined by the Lender, and such determination shall be conclusive absent
manifest error.

     SECTION 2.11 Increased Costs. (a) If the Lender determines that any Change
in Law regarding capital requirements has or would have the effect of reducing
the rate of return on the Lender's capital or on the capital of the Lender's
holding company, if any, as a consequence of this Agreement or the Loans made by
the Lender, to a level below that which the Lender or the Lender's holding
company could have achieved but for such Change in Law (taking into
consideration the Lender's policies and the policies of the Lender's holding
company with respect to capital adequacy), then from time to time the Borrowers
will pay to the Lender, within ten (10) days after written demand therefor, such
additional amount or amounts as will compensate the Lender or the Lender's
holding company for any such reduction suffered. The Lender's determination as
to such amount or amounts shall be conclusive absent manifest error.

     (b) Failure or delay on the part of the Lender to demand compensation
pursuant to this Section shall not constitute a waiver of the Lender's right to
demand such compensation; provided that the Borrowers shall not be required to
compensate the Lender pursuant to this Section for any increased costs or
reductions incurred more than 180 days prior to the date that the Lender
notifies the Borrowers of the Change in Law giving rise to such increased costs
or reductions and of the Lender's intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the 180-day period referred to above shall be
extended to include the period of retroactive effect thereof.

     SECTION 2.12 Intentionally Omitted.

     SECTION 2.13 Taxes. (a) Any and all payments by or on account of any
obligation of the Borrowers hereunder shall be made free and clear of and
without deduction for

                                       18

<PAGE>

any Indemnified Taxes or Other Taxes; provided that if any Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) the Lender receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.

     (b) In addition, the Borrowers shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

     (c) The Borrowers shall indemnify the Lender, within ten (10) days after
written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes paid by the Lender, on or with respect to any payment by or on account of
any obligation of the Borrowers hereunder (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. The Lender's determination as to the amount or amounts that the
Lender is entitled to receive pursuant to this Section shall be conclusive
absent manifest error.

     (d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by a Borrower to a Governmental Authority, the Borrowers shall deliver to
the Lender the original or a certified copy of a receipt issued by such
Governmental Authority evidencing such payment, and a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Lender.

     SECTION 2.14 Payments Generally. (a) Each Borrower shall make each payment
required to be made by it hereunder (whether of principal, interest or fees, or
of amounts payable under Section 2.11 or 2.13, or otherwise) and under any other
Loan Document prior to 1:00 p.m., California time, on the date when due, in
immediately available funds, without set-off, deduction or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Lender, be deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall be made to the
Lender at its offices at c/o Wells Fargo Bank, N.A., 333 South Grand Avenue, 9th
Floor, Los Angeles, California 90071, or at such other place as the Lender may
designate, except that payments pursuant to Section 9.03 shall be made directly
to the Persons entitled thereto. If any payment hereunder shall be due on a day
that is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.

     (b) If at any time insufficient funds are received by and available to the
Lender to pay fully all amounts of principal, interest and fees then due
hereunder, such funds shall be applied (i) first, towards payment of interest
and fees then due hereunder, and (ii) second, towards payment of principal then
due hereunder.

                                       19

<PAGE>

                                   ARTICLE III

                         Representations and Warranties
                         ------------------------------

     The Borrowers jointly and severally represent and warrant to the Lender
that:

     SECTION 3.01 Organization; Powers. Each Borrower is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as
now conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect in respect of such Borrower, is qualified to do business in, and is in
good standing in, every jurisdiction where such qualification is required.

     SECTION 3.02 Authorization; Enforceability. The Transactions are within the
corporate powers of the Borrowers and have been duly authorized by all necessary
corporate (including, if required, stockholder) action. This Agreement and each
other Loan Document has been duly executed and delivered by each Borrower that
is a party thereto and constitutes a legal, valid and binding obligation of such
Borrower, enforceable in accordance with its respective terms.

     SECTION 3.03 Governmental Approvals; No Conflicts, No Defaults. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except such as
have been obtained or made and are in full force and effect, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of any Borrower or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon any Borrower or its assets, or give
rise to a right thereunder to require any payment to be made by any Borrower,
and (d) will not result in the creation or imposition of any Lien (except in
favor of the Lender) on any asset now owned or hereafter acquired of any
Borrower. No Borrower is in default under, or violation of, in any manner, and
no condition exists which, upon notice or the passage of time (or both) would
constitute a default under, any provision of (i) any indenture or other
agreement, contract or instrument evidencing Indebtedness, or (ii) any other
material agreement, contract or instrument to which it is a party or by which it
or any of its properties or assets are or may be bound.

     SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The
Company has heretofore furnished to the Lender (i) its consolidated balance
sheet and statements of income, stockholders equity and cash flows as of and for
the fiscal year ended March 31, 2001, reported on by Arthur Andersen LLP,
independent public accountants, (ii) consolidating balance sheets of the Company
setting forth such information separately for the Company and each Subsidiary
and related consolidating statements of operations for the Company setting forth
such information separately for the Company and each Subsidiary as of and for
the fiscal year ended March 31, 2001, and including in comparative form the
figures for the preceding fiscal year, certified by its Chief Financial Officer,
and (iii) a copy of the consolidated financial statements of the Company as of
and for the fiscal period ended June 30, 2001 included with the Company's Form
10-Q filed with the United States Securities and Exchange Commission on

                                       20

<PAGE>

August 14, 2001. All such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Company and of its Subsidiaries as of such dates and for such periods in
accordance with GAAP.

     (b) Except as disclosed on Schedule 3.04 and as otherwise permitted under
the Current Agreement, the Borrowers have no liabilities, contingent or
otherwise, not disclosed on the financial statements referred to in this
Section, other than in respect of goods and services arising in the ordinary
course of business; provided, however, that the Borrowers, in the aggregate,
shall not be required to disclose on Schedule 3.04 liabilities that, in the
aggregate, total less than $100,000.

     (c) Except as disclosed in the Proxy Statement or on Schedule 3.04, since
August 24, 2001, there has been no (i) change or event which could reasonably be
expected to have a Material Adverse Effect with respect to any Borrower (other
than general trends or new laws, rules, or regulations applicable to similarly
situated companies), (ii) declaration, setting aside or payment of any dividend
or other distribution with respect to the capital stock of any Borrower, (iii)
issuance of capital stock or options, warrants or rights to acquire capital
stock of any Borrower, (iv) material loss, destruction or damage to any property
of any Borrower, whether or not insured, (v) acceleration or prepayment of any
indebtedness for borrowed money or capital leases or the refunding of any such
indebtedness, (vi) labor trouble involving any Borrower or any material change
in its personnel or the general terms and conditions of employment of key
employees, (vii) waiver of any valuable right in favor of any Borrower, (viii)
loan or extension of credit to any officer or employee of any Borrower other
than advances for travel-related expenses and similar advances to officers and
employees in the ordinary course of business, (ix) acquisition, material
writedown or write-off for accounting purposes or disposition of any material
assets (or any contract or arrangement therefor) of or with respect to any
Borrower, (x) redemption or repurchase of any capital stock of any Borrower, or
any other material transaction by any Borrower otherwise than for fair value in
the ordinary course of business or (xi) termination of any contract, agreement
or arrangement which is or was material to the business, assets, operations,
prospects or condition, financial or otherwise, of any Borrower.

     SECTION 3.05 Properties. (a) Each Borrower has good title (free of Liens
except such as are permitted under Section 6.02) to, or valid leasehold
interests in, all its real and personal property material to its business,
except for minor defects in title that do not interfere with its ability to
conduct its business as currently conducted or to utilize such properties for
their intended purposes. Except as set forth on Schedule 4.01(j), no Borrower is
a party to any contract, agreement, lease or instrument (other than the Loan
Documents) the performance of which, either unconditionally or upon the
happening of any event, will result in or require the creation of a Lien (except
in favor of the Lender) on any of its property or assets (now owned or hereafter
acquired) or otherwise result in a violation of any Loan Documents.

     (b) Each Borrower owns free and clear of any Liens other than Liens which
could not reasonably be expected to have a Material Adverse Effect on the
Borrower, or is licensed to use, all patents (and applications therefor), patent
disclosures, marks (and applications therefor), trade names, copyrights (and
applications therefor), inventions,

                                       21

<PAGE>

discoveries, processes, know-how, scientific, technical, engineering and
marketing data, formulae, techniques and other intellectual property material to
its business, and the use thereof by such Borrower does not infringe upon the
rights of any other Person except an infringement which would not reasonably be,
expected to have a Material Adverse Effect on the Borrower. All such
intellectual property owned as of the date hereof, including, where applicable,
registration or issuance information, and identification of the owner thereof,
is set forth on Schedule 3.05.

     SECTION 3.06 Litigation and Environmental Matters. (a) Except as disclosed
on Schedule 3.06 annexed hereto, there are no actions, suits or proceedings by
or before any arbitrator or Governmental Authority pending against or, to the
knowledge of any Borrower, threatened against or affecting any Borrower (i)
which, if adversely determined, could reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect in respect of any Borrower
or (ii) that involve this Agreement or the Transactions. To the knowledge of the
Borrowers, there is no fact which might result in or form the basis for any such
action, suit or proceeding. No Borrower is subject to any order, writ, judgment,
injunction, decree, determination or award of any court or other Governmental
Authority which could reasonably be expected to have a Material Adverse Effect
on such Borrower.

     (b) Notwithstanding anything to the contrary contained in this Agreement
and in addition to the other representations and warranties contained herein and
except for legal amounts of Hazardous Materials used, stored and handled by a
Borrower and present in such Borrower's facilities in the ordinary course of
business and in accordance with applicable laws: (i) Each Borrower and its
respective operations are in compliance with all applicable Environmental Laws
and have obtained and maintained in effect all licenses, permits and other
authorizations or registrations required under all Environmental Laws and are in
material compliance therewith; (ii) no Borrower has performed or suffered any
act which could give rise to, or has otherwise incurred, Environmental Liability
to any Person (governmental or not), nor has any Borrower received notice of any
such liability or any claim therefor or submitted notice pursuant to Section 103
of CERCLA to any Governmental Authority with respect to any of its assets; (iii)
no Hazardous Material has been released, placed, dumped or otherwise come to be
located on, at, beneath or near any of the assets or properties owned or leased
by any Borrower or any surface waters or groundwaters thereon or thereunder in
violation of any Environmental Laws or that could subject any Borrower to
liability under any Environmental Laws (provided, however, that as to actions of
Persons other than Borrowers or their predecessors this item (iii) is only to
the best knowledge of the Borrowers); (iv) no Borrower owns or operates, or has
ever owned or operated, aboveground or underground storage tanks used for
storing petroleum products and which are subject to underground storage tank
removal or clean-up requirements in effect on the date hereof; (v) with respect
to any or all of the real property owned or leased by any Borrower, to the
Borrowers' best knowledge (A) there are no Hazardous Materials present at any
such properties, and (B) there are no wetlands, as defined under any
Environmental Law, located on any such properties; (vi) to the Borrowers' best
knowledge none of such real properties (A) has been used or is now used for the
generation, transportation, storage, handling, treatment or disposal of any
Hazardous Materials, or (B) is identified on a federal, state or local listing
of sites which require or might require environmental cleanup; (vii) to the best
of the Borrowers' knowledge, no condition exists on any of the real properties
owned or leased by any

                                       22

<PAGE>

Borrower that upon the failure to act, the passage of time or the giving of
notice would give rise to liability under any Environmental Law; and (viii)
there are no ongoing investigations or negotiations, or pending or, to the best
of the Borrowers' knowledge, threatened, administrative, judicial or regulatory
proceedings, or consent decrees or other agreements in effect, that relate to
environmental conditions in, on, under, about or related to any Borrower, its
respective operations or the real properties owned or leased by any of them.

     SECTION 3.07 Compliance with Laws and Agreements; Permits. (a) Each
Borrower is in compliance with, and is not in violation or default under (i) all
laws, regulations, ordinances, rules and orders of any Governmental Authority
applicable to it or its property, including, without limitation, laws or
regulations relating to: the Food and Drug Administration, the Foreign Corrupt
Practices Act, occupational safety and health, employee benefits, ERISA plans,
wages and hours of work, work place safety and equal employment opportunity and
discrimination, zoning, land use and building and fire codes, (ii) all
indentures, agreements and other instruments binding upon it or its property,
and (iii) the requirements of (1) any insurance policies covering the properties
of each Borrower and (2) any insurance underwriting or similar organization,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect with respect to a
Borrower. No Default has occurred and is continuing.

     (b) Each Borrower has all Permits necessary to the ownership of its
respective property and to the operation of its respective business, which if
violated or not obtained could reasonably be expected to have a Material Adverse
Effect with respect to such Borrower. No Borrower has finally been denied any
application for any such Permit. There is no action pending, or to the best
knowledge of the Borrowers, threatened or recommended by any Governmental
Authority to revoke, withdraw, or suspend any such Permit, or which would have a
material adverse effect on any such Permit.

     SECTION 3.08 Investment and Holding Company Status; Margin Regulations. No
Borrower is (a) an "investment company" as defined in, or subject to regulation
under, the Investment Company Act of 1940 or (b) a "holding company" as defined
in, or subject to regulation under, the Public Utility Holding Company Act of
1935. No Borrower is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying
any margin stock (within the meaning of Regulation U of the Board). No part of
the proceeds of any Loan will be used, directly or indirectly and whether
immediately, incidentally or ultimately, for any purpose which entails a
violation of or which is inconsistent with, the provisions of the regulations of
the Board, including, without limitation, Regulation G, T, U or X thereof.

     SECTION 3.09 Taxes. Each Borrower has timely filed or caused to be filed
all Tax returns and reports required to have been filed and has paid or caused
to be paid all Taxes required to have been paid by it, except Taxes that are
being contested in good faith by appropriate proceedings and for which such
Borrower has set aside on its books adequate reserves.

                                       23

<PAGE>

     SECTION 3.10 ERISA. No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect in respect of any Borrower. The present
value of all accumulated benefit obligations under each Plan (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed by more than $50,000 the fair market value of the assets of
such Plan, and the present value of all accumulated benefit obligations of all
underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than
$150,000 the fair market value of the assets of all such underfunded Plans.

     SECTION 3.11 Subsidiaries. On the date hereof, the Subsidiaries of the
Company and their jurisdictions of organization, addresses and number of shares
authorized, issued and outstanding are set forth on Schedule 3.11. All of the
issued and outstanding capital stock of each Subsidiary of the Company has been
duly authorized and validly issued, is fully paid and non-assessable, and is
owned of record and beneficially by the Company, free and clear of any Lien,
claim or other legal or equitable encumbrance, limitation or restriction. There
are no outstanding options, warrants, agreements, conversion rights, preemptive
rights or other rights to subscribe for, purchase or otherwise acquire, or
commitments to issue or transfer, any issued or unissued shares of capital stock
of any Subsidiary of the Company. No Borrower other than the Company has any
Subsidiaries or investments in, or joint ventures or partnerships with, any
Person as of the Effective Date.

     SECTION 3.12 SEC Matters. The Company is current in all required disclosure
and otherwise in compliance in all respects with applicable federal and state
securities laws and/or rules and regulations of the Securities and Exchange
Commission, and with applicable state securities laws and/or rules and
regulations of state securities authorities and of any stock exchanges or other
self regulatory organizations having jurisdiction of the Company and/or its
securities.

     SECTION 3.13 Labor Matters. Except as set forth on Schedule 3.13, there are
no strikes or other material labor disputes or grievances pending or, to the
knowledge of any Borrower, threatened, against any Borrower. As of the date
hereof, except as set forth on Schedule 3.13, no Borrower is a party to any
collective bargaining agreement.

     SECTION 3.14 Security Documents.

     (a) Each of the Security Agreements has been duly executed and delivered by
the Borrowers signatory thereto, and has created in favor of the Lender a legal,
valid and enforceable security interest in the Collateral (as such term is
defined in such Security Agreement); financing statements or Collateral
Assignments in appropriate form have been filed in the offices specified therein
and remain in effect; and the Lien created under each Security Agreement
constitutes a fully perfected Lien on, and security interest in, all right,
title and interest of the Borrowers signatory thereto in such Collateral, in
each case prior and superior in right to any other Person, subject only to
Permitted Encumbrances.

                                       24

<PAGE>

     (b) The Pledge Agreement has been duly executed by the parties thereto, and
has created in favor of the Lender a legal, valid and enforceable security
interest in the Collateral (as such term is defined in the Pledge Agreement);
such Collateral has been delivered to the Lender together with duly executed,
undated instruments of transfer; and the Pledge Agreement and the Lien created
thereunder constitute a fully perfected first priority Lien on, and security
interest in such Collateral, in each case prior and superior in right to any
other Person.

     (c) The Deeds of Trust have been duly executed and delivered by the
Company, and have created a valid first Lien in favor of the Lender on the
properties described therein, subject to no Liens or encumbrances other than the
Permitted Encumbrances.

     (d) The Acknowledgment and Consent has been duly executed and delivered by
each Borrower.

     SECTION 3.15 Lock Boxes. No Borrower is a party to, or bound or affected
by, any agreement or other document establishing or pertaining to lock boxes or
similar arrangements involving the collection or processing of Accounts
Receivable or otherwise dealing with the proceeds of the sale of Inventory of
such Borrower.

     SECTION 3.16 Restrictive Agreements. No Borrower is a party to any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of such Borrower to create, incur or permit to
exist any Lien upon any of its property or assets, or (b) the ability of any
Borrower to pay dividends or other distributions with respect to any shares of
its capital stock or other equity interests; other than (i) restrictions and
conditions imposed by law or by this Agreement and the other Loan Documents and
(ii) restrictions and conditions existing on the date hereof identified on
Schedule 3.16.

     SECTION 3.17 Disclosure. The Borrowers have disclosed to the Lender all
agreements, instruments and corporate or other restrictions to which each
Borrower is subject, and all other matters known to it, that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect in respect of any Borrower. None of the reports, financial statements,
certificates or other information furnished by or on behalf of the Borrowers to
the Lender in connection with the negotiation of this Agreement or any other
Loan Document or delivered hereunder or thereunder (as modified or supplemented
by other information so furnished), contains any misstatement of a material fact
or omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.

     SECTION 3.18 Real Property. The Borrowers own or lease no real property
other than the properties listed in Schedule 3.18. Each lease of real property
so listed is in full force and effect and has not been modified except as
provided in Schedule 3.18. The tenant under each such lease has not assigned its
interest thereunder (other than to the Lender) and has not sublet any portion of
the leased premises except as indicated in Schedule 3.18. Neither party is in
default under any such lease, and the tenant thereunder has received no notice
of default or other material notice from the landlord thereunder. All rentals
payable under such leases which

                                       25

<PAGE>

are due through the date hereof have been paid in full except non-payments which
would not have a Material Adverse Effect with respect to a Borrower.

                                   ARTICLE IV

                                   Conditions
                                   ----------

     SECTION 4.01 Conditions Under the Current Agreement. Each of the
obligations of the Lender to make Loans under the Current Agreement was subject
to the following conditions, all of which were satisfied effective as of June
11, 1999 (or waived in accordance with Section 8.02 of the Current Agreement):

     (a) The Lender shall have received (i) from each Borrower either a
counterpart of this Agreement signed on behalf of such Borrower or written
evidence satisfactory to the Lender (which may include telecopy transmission of
a signed signature page of this Agreement) that such Borrower has signed a
counterpart of this Agreement; (ii) from each Borrower, as applicable, a duly
executed counterpart of the Security Agreement in the form of Exhibit 4.01-A or
the Amended and Restated Security Agreement in the form of Exhibit 4.01-B, as
applicable (as either may be supplemented, amended, or modified from time to
time, a "Security Agreement" and collectively, the "Security Agreements")
together with Form UCC-1 financing statements in connection therewith in proper
form for filing in the offices therein specified; (iii) from the Company, a duly
executed counterpart of the Pledge and Security Agreement in the form of Exhibit
4.01-C (as it may be supplemented, amended or modified from time to time, the
"Pledge Agreement") together with certificates representing the securities
pledged thereunder and related undated stock powers endorsed in blank; (iv) from
the Company, the duly executed Deeds of Trust in the forms of Exhibits 4.01-D, E
and F (as each may be supplemented, amended or modified from time to time, each
a "Deed of Trust" and collectively, the "Deeds of Trust"); (v) from the
appropriate Borrowers, duly executed Collateral Assignments; and (vi) from the
appropriate Borrowers, a landlord waiver and an estoppel certificate from the
landlord under each Lease, in form and substance satisfactory to the Lender.

     (b) The Lender shall have received a favorable written opinion of Chrisman,
Bynum & Johnson, P.C., counsel for the Borrowers, addressed to the Lender, dated
the Effective Date and substantially in the form of Exhibit C, and covering such
other matters relating to the Borrowers, this Agreement, the other Loan
Documents or the Transactions as the Lender shall reasonably request. The
Borrowers hereby request such counsel to deliver such opinion.

     (c) The Lender shall have received (i) a copy of the certificate of
incorporation, including all amendments thereto, of each Borrower, certified as
of a recent date by the Secretary of State of the state of its organization,
(ii) a certificate as to the good standing of each Borrower as of a recent date,
from the Secretary of State of the state of its organization; (iii) a
certificate of the Secretary or Assistant Secretary of each Borrower, dated the
Effective Date and certifying (A) that attached thereto is a true and complete
copy of the by-laws of such Borrower as in effect on the Effective Date and at
all times since a date prior to the date of the resolutions described in clause
(B) below, (B) that attached thereto is a true and complete copy of resolutions
duly adopted by the Board of Directors (and, if required, stockholders) of such

                                       26

<PAGE>

Borrower, authorizing the execution, delivery and performance of the Loan
Documents and (in the case of each Borrower) the borrowings hereunder, and that
such resolutions have not been modified, rescinded or amended and are in full
force and effect as of the Effective Date, (C) that the certificate of
incorporation of such Borrower has not been amended since the date of the last
amendment thereto shown on the certificate of good standing furnished pursuant
to clause (ii) above and (D) as to the incumbency and specimen signature of each
officer executing any Loan Document or any other document delivered in
connection herewith on behalf of such Borrower; (iii) a certificate of another
officer as to the incumbency and specimen signature of the Secretary or
Assistant Secretary executing the certificate pursuant to clause (ii) above; and
(iv) such other documents as the Lender or its counsel may reasonably request.

     (d) The Lender shall have received a duly executed Revolving Credit Note (a
"Revolving Credit Note"), and a duly executed Term Note (a "Term Note"), in the
forms of Exhibit D and E, respectively.

     (e) The Lender shall have received the results of a search of the Uniform
Commercial Code (or equivalent filings) filings made with respect to each
Borrower in the states (or other jurisdictions) in which the chief executive
offices of such Persons are located, or in which any offices of such Persons in
which records have been kept relating to Accounts are located and in the other
jurisdictions in which Uniform Commercial Code filings (or equivalent filings)
are to be made pursuant to the Security Documents, together with copies of the
financing statements (or similar documents) disclosed by such search, and
accompanied by evidence satisfactory to the Lender that the Liens indicated in
any such financing statement, other than any Liens in favor of the Lender, have
been released.

     (f) The Lender shall have received Perfection Certificates with respect to
each of the Borrowers dated the Effective Date and duly executed by the Chief
Financial Officer of the Company.

     (g) The Lender shall have received a copy of the insurance policies
satisfying the requirements of Section 5.05, each of which shall be endorsed or
otherwise amended to include a lender's loss payable endorsement (except in the
case of liability policies) and to name the Lender as a loss payee as its
interest may appear and shall provide for at least thirty (30) days' prior
written notice from such insurance company to the Lender of any change,
termination or cancellation thereof, in form and substance reasonably
satisfactory to the Lender.

     (h) After giving effect to the Transactions, on the Effective Date the
Borrowers shall have no Indebtedness other than Indebtedness under the Loan
Documents and Indebtedness set forth on Schedule 4.01(h).

     (i) On the Effective Date, immediately prior to the effectiveness hereof,
there shall be no Default or Event of Default (as such terms are used in the
Zuellig Credit Agreement) under the Zuellig Credit Agreement, and the chief
executive officer of Zuellig Botanicals, Inc. shall have delivered to the Lender
a certificate to such effect.

                                       27

<PAGE>

     (j) The Lender shall have received a certificate, dated the Effective Date
and signed by the Chief Executive Officer and Chief Financial Officer of each
Borrower, confirming compliance with the conditions set forth in paragraphs (a)
and (b) of Section 4.02.

     (k) The Lender shall have received ALTA Loan policies of title insurance
from an insurer acceptable to the Lender, covering all of the real property
owned by the Company, insuring the liens of the Deeds of Trust as valid first
Liens on such property, subject to no liens or encumbrances other than the
Permitted Encumbrances, and containing (x) such affirmative coverage with
respect to specific Permitted Encumbrances as the Lender may require and (y) an
ALTA-9 endorsement and such other endorsements as the Lender may require, and
(ii) if the Lender requires reinsurance with respect to such title insurance
policies.

     (l) The Lender shall have received ALTA surveys of each parcel of real
property owned by the Company, certified to the Lender and the Lender's title
insurer, prepared by a surveyor satisfactory to the Lender and showing no
encroachments or other items which are not acceptable to the Lender. Without
limiting the generality of the foregoing, each such survey shall show the
location of all easements affecting the property covered thereby.

     (m) The Lender shall have received satisfactory appraisals of each parcel
of real property owned by the Company, indicating an aggregate value not less
than Six Million, Nine Hundred Thousand Dollars ($6,900,000).

     (n) The Lender shall have received satisfactory Phase I Environmental
Studies with respect to each parcel of real property owned by the Company, and,
if in Lender's reasonable judgment, the results of any Phase I Environmental
Study indicate that a Phase II Environmental Study should be performed, the
Lender shall have received a satisfactory Phase II Environmental Study for the
applicable property, and if any such study indicates the presence of Hazardous
Materials or the violation or possible violation of Environmental Laws, the
Lender shall have received from the Company an acceptable plan for the
remediation or clean-up of the condition in question.

     (o) The Lender shall have received reasonably satisfactory evidence that
all parcels of real property owned by the Company, and the property covered by
the Leases, comply with all applicable zoning and land use laws, regulations,
ordinances and other legal requirements.

     (p) The Lender shall have received true and complete copies of all
certificates of occupancy for any building located on any parcel of real
property owned by the Company, and the use and occupancy of any such building
shall be permitted by the applicable certificate of occupancy.

     (q) The Lender shall have received satisfactory evidence that no building
on any real property owned by the Company, and no property leased under any of
the Leases, is subject to any violation of any law, ordinance, regulation or
other legal requirement (or, if any such violation exists, the Borrowers shall
have provided to the Lender evidence that the same has been cured or is being
cured). The Borrowers agree that any such violation will be promptly discharged
of record upon the cure thereof.

                                       28

<PAGE>

     (r) If any Borrower is the landlord or sublandlord under any lease or
sublease, the Lender shall have received a copy of the applicable lease or
sublease, together with evidence satisfactory to the Lender that (i) neither
party is in default thereunder, (ii) all rental payments are then current and
(iii) no such lease or sublease contains any option to purchase or right of
first refusal.

     (s) The Lender shall have received copies of all of the Leases.

     (t) The Lender shall be satisfied that the consummation of the Transactions
will not (i) violate any applicable law, statute, rule or regulation or (ii)
conflict with, or result in a default or event of default under any material
agreement of any Borrower.

     (u) The Lender shall have received evidence satisfactory to it that there
has been no material adverse change in the business, assets, operations,
prospects or conditions, financial or otherwise, of any Borrower since the date
of the Proxy Statement.

     (v) The Lender shall have received all fees and other amounts due and
payable on or prior to the Effective Date, including, to the extent invoiced,
reimbursement or payment of all expenses required to be reimbursed or paid by
the Borrowers hereunder.

     (w) All legal matters incident to this Agreement and the Borrowing
hereunder shall be satisfactory to the Lender and its counsel.

     The Lender shall notify the Borrowers of the Effective Date, and such
notice shall be conclusive and binding. Notwithstanding the foregoing, the
obligations of the Lender to make Loans hereunder shall not become effective
unless each of the foregoing conditions is satisfied (or waived pursuant to
Section 8.02) at or prior to 3:00 p.m., California time, on June 30, 1999 (and,
in the event such conditions are not so satisfied or waived, the Commitments
shall terminate at such time).

     SECTION 4.02 Each Credit Event. The obligation of the Lender to make a Loan
on the occasion of any Borrowing, is subject to the satisfaction of the
following conditions:

     (a) The representations and warranties of the Borrowers set forth in this
Agreement shall be true and correct on and as of the date of such Borrowing or
the date of such continuation or conversion, as applicable.

     (b) Such Borrowing shall comply with the applicable Borrower's Borrowing
Base limit as demonstrated by the Borrowing Base Certificate most recently
delivered pursuant to Section 5.01(g).

     (c) At the time of and immediately after giving effect to such Borrowing or
such continuation or conversion, as applicable, no Default or Event of Default
shall have occurred and be continuing.

                                       29

<PAGE>

Each Borrowing and each continuation or conversion of any Loan shall be deemed
to constitute a representation and warranty by the Borrowers on the date thereof
as to the matters specified in paragraphs (a), (b) and (c) of this Section.

     SECTION 4.03 Conditions to Effectiveness. The obligation of the Lender to
make a Loans hereunder shall not become effective until the date on which each
of the following conditions is satisfied (or waived in accordance with Section
9.02):

     (a) The Lender shall have received (i) from each Borrower either a
counterpart of this Agreement signed on behalf of such Borrower or written
evidence satisfactory to the Lender (which may include telecopy transmission of
a signed signature page of this Agreement) that such Borrower has signed a
counterpart of this Agreement; (ii) from each Borrower, as applicable, a duly
executed Acknowledgment and Consent (an "Acknowledgment and Consent") in the
form of Exhibit 4.03-A.

     (b) The Lender shall have received (i) a duly executed Revolving Credit
Note (a "Revolving Credit Note") and (ii) a duly executed Term Note (a "Term
Note"), in the forms of Exhibits D and E, respectively.

     (c) The Lender shall have received the results of a search of the Uniform
Commercial Code (or equivalent filings) filings made with respect to each
Borrower in the states (or other jurisdictions) in which the chief executive
offices of such Persons are located, or in which any offices of such Persons in
which records have been kept relating to Accounts are located, in the state of
incorporation and in the other jurisdictions in which Uniform Commercial Code
filings (or equivalent filings) have been or are to be made pursuant to the
Security Documents, together with copies of the financing statements (or similar
documents) disclosed by such search, and accompanied by evidence satisfactory to
the Lender that the Liens indicated in any such financing statement, other than
any Liens in favor of the Lender, have been released.

     (d) On the Effective Date, immediately prior to giving effect to the
Transactions, the outstanding principal balance of the Loans outstanding under
the Current Agreement shall not exceed $18,554,438 and all interest due on such
loans shall have been paid, it being acknowledged and agreed that the Lender is
hereby authorized to debit the amount of such interest from the account listed
on Schedule 4.03(d).

     (e) After giving effect to the Transactions, on the Effective Date the
Borrowers shall have no Indebtedness other than Indebtedness under the Loan
Documents and Indebtedness set forth on Schedule 4.03(f).

     (f) No Event of Default, as that term is defined in the Current Agreement,
and no event which with the giving of notice or the passage of time or both
would constitute such an Event of Default, shall have occurred and be
continuing.

     (g) No Event of Default and no event which with the giving of notice or the
passage of time or both would constitute such an Event of Default, will occur as
a result of this

                                       30

<PAGE>

Agreement or the Security Documents and the consummation of the transactions
contemplated hereby or thereby.

     (h) The Lender shall have received a favorable written opinion of Willkie,
Farr & Gallagher, counsel for the Borrowers, addressed to the Lender, dated the
Effective Date and substantially in the form of Exhibit 4.03-h, and covering
such other matters relating to the Borrowers, this Agreement, the other Loan
Documents or the Transactions as the Lender shall reasonably request. The
Borrowers hereby request such counsel to deliver such opinion.

     (i) The Lender shall have received (i) a certificate as to the good
standing of each Borrower as of a recent date, from the Secretary of State of
the state of its organization; (ii) a certificate of the Secretary or Assistant
Secretary of each Borrower, dated the Effective Date and certifying (A) that the
certificate of incorporation, by-laws and incumbency certificate of such
Borrower provided to the Lender on June 11, 1999 in connection with the Current
Agreement are each true and correct on the Effective Date and at all times since
a date prior to the date of the resolutions described in clause (B) below, and
have not been amended, rescinded or revoked since June 11, 1999 and (B) that
attached thereto is a true and complete copy of resolutions duly adopted by the
Board of Directors (and, if required, stockholders) of such Borrower,
authorizing the execution, delivery and performance of the Loan Documents and
(in the case of each Borrower) the borrowings hereunder, and that such
resolutions have not been modified, rescinded or amended and are in full force
and effect as of the Effective Date; (iii) a certificate of another officer as
to the incumbency and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to clause (ii) above; and (iv) such other
documents as the Lender or its counsel may reasonably request.

     (j) The closing of the restructuring of the Indebtedness outstanding under
the Zuellig Credit Agreement shall have occurred.

     (k) The Lender shall have received a certificate, dated the Effective Date
and signed by the Chief Executive Officer and Chief Financial Officer of each
Borrower, confirming compliance with the conditions set forth in paragraphs (a)
and (b) of Section 4.02.

     (l) The Lender shall be satisfied that the consummation of the Transactions
will not (i) violate any applicable law, statute, rule or regulation or (ii)
conflict with, or result in a default or event of default under any material
agreement of any Borrower.

     (m) The Lender shall have received evidence satisfactory to it that there
has been no material adverse change in the business, assets, operations,
prospects or conditions, financial or otherwise, of any Borrower since the date
of the Proxy Statement.

     (n) The Lender shall have received all fees and other amounts due and
payable on or prior to the Effective Date, including, to the extent invoiced,
reimbursement or payment of all expenses required to be reimbursed or paid by
the Borrowers hereunder, it being acknowledged and agreed that the Lender is
hereby authorized to debit the amount of such fees, expenses and other amounts
due and payable from the account listed on Schedule 4.03(d).

                                       31

<PAGE>

     (o) The Lender shall have received insurance certificates and other
reasonably satisfactory evidence of Borrowers compliance with the requirements
of Section 5.05.

     (p) The Lender shall have received a restructuring fee equal to $531,856.

     (q) All legal matters incident to this Agreement and the Borrowing
hereunder shall be satisfactory to the Lender and its counsel.

                                    ARTICLE V

                              Affirmative Covenants
                              ---------------------

     Until the Commitments have expired or been terminated and the principal of
and interest on each Loan and all fees payable hereunder shall have been paid in
full, the Borrowers covenant and agree, jointly and severally, with the Lender
that:

     SECTION 5.01 Financial Statements and Other Information. From and after the
Effective Date, the Borrowers will furnish to the Lender:

     (a) within ninety (90) days after the end of each fiscal year of the
Company, (i) its audited consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows as of the end of and for such
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by Arthur Andersen, LLP or other
independent public accountants of recognized national standing to the effect
that such consolidated financial statements present fairly in all material
respects the financial condition and results of operations of the Company and
its Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, and (ii) consolidating balance sheets setting forth such information
separately for the Company and for each other Borrower as of the end of such
fiscal year and consolidating statements of operations setting forth such
information separately for the Company and for each other Borrower for such
fiscal year, such consolidating balance sheet and consolidating statements of
operations to be certified by the Chief Financial Officer of the Company as
fairly presenting the financial condition and results of operations of the
Company and each other Borrower as of the end of, and for, such fiscal period in
accordance with GAAP;

     (b) within sixty (60) days after the end of the first three fiscal quarters
of each fiscal year of the Company, (i) its consolidated balance sheet and
related statements of operations and cash flows as of the end of and for such
fiscal quarter (except in the case of the statements of cash flows) and the then
elapsed portion of the fiscal year, setting forth in each case in comparative
form the figures for the corresponding period or periods of (or, in the case of
the balance sheet, as of the end of) the previous fiscal year, all certified by
its Chief Financial Officer as presenting fairly in all material respects the
financial condition and results of operations of the Company and its
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes, and (ii) consolidating balance sheets of the Company and of each
other Borrower setting forth such information separately for the Company and for
each other Borrower and

                                       32

<PAGE>

related consolidating statements of operations of the Company and of each other
Borrower setting forth such information separately for the Company and each
other Borrower as of the end of and for such quarter and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form the
figures for the corresponding period or periods of (or in the case of the
balance sheets, as of the end of) the previous fiscal year, all of which shall
be certified by the Chief Financial Officer of the Company as fairly presenting
the financial condition and results of operations therein shown in accordance
with GAAP consistently applied subject to normal year-end adjustments and the
absence of footnotes;

     (c) within twenty (20) days after the end of the first two months of each
of the first three fiscal quarters of each fiscal year of the Company, (i) its
consolidated balance sheet and related statements of operations and cash flows
as of the end of and for such month and (except in the case of statements of
cash flows) and then elapsed portion of fiscal year, all certified by its Chief
Financial Officer as presenting fairly in all material respects the financial
condition and results of operations of the Company and its subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes, and (ii)
consolidated balance sheets of the Company and of each other Borrower setting
forth such information separately for the Company and for each other Borrower
and related consolidating statements of operations of the Company and of each
other Borrower setting forth such information separately for the Company and
each other Borrower as of the end of and for such month and then elapsed portion
of the fiscal year, all of which shall be certified by the Chief Financial
Officer of the Company as fairly presenting the financial condition and results
of operations therein shown in accordance with GAAP consistently applied subject
to normal year-end adjustments and the absence of footnotes.

     (d) concurrently with any delivery of financial statements under clause (a)
or (b) above, a certificate of the Chief Financial Officer of the Company (i)
certifying as to whether a Default has occurred and, if a Default has occurred,
specifying the details thereof and any action taken or proposed to be taken with
respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Section 6.07 and (iii) stating whether any change
in the application of GAAP in respect of the audited financial statements
referred to in Section 3.04 has occurred and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate;

     (e) promptly after receipt by the Company or any other Borrower, a copy of
each management letter (if prepared) of the accounting firm that reported on the
financial statements referred to in clause (a), (b) or (c) above (together with
any response thereto prepared by the Company or such Borrower);

     (f) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by the
Company or any Subsidiary thereof with the Securities and Exchange Commission,
or any Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by the
Company to its shareholders generally, as the case may be; and copies of any
documents and information furnished by any Borrower to any other government
agency (except if in the ordinary course of business), including the Internal
Revenue Service;

                                       33

<PAGE>

     (g) within twenty (20) days after the end of each calendar month, (i)
consolidated Accounts Receivable aging schedules, Account Creditors Aged
Listings and consolidated Inventory schedules of the Borrowers, and (ii) a
Borrowing Base Certificate of each Borrower;

     (h) promptly, a copy of any amendment or waiver of any provision of any
instrument referred to in Section 6.10;

     (i) promptly following any request therefor, such other information
regarding the operations, business, affairs, and financial condition of each
Borrower or compliance with the terms of this Agreement or the other Loan
Documents, as the Lender may reasonably request;

     (j) within twenty (20) days after December 31, 2001, and within twenty (20)
days after the end of each six (6) month period thereafter, a schedule listing
each Account Debtor of the Borrowers and an aged listing of their balances,
including both factored and unfactored accounts, and a list of the names,
addresses and phone numbers of all such Account Debtors; and

     (k) as soon as the same are available, copies of each report (monthly or
otherwise) submitted by any Borrower to its board of directors.

     (l) within ten (10) business days after the Effective Date, the Borrowers
will deliver to the Lender duly executed Collateral Assignments in the form
annexed hereto as Exhibit 5.01(l), (the "Further Collateral Assignment").

     SECTION 5.02 Notices of Certain Events. From and after the Effective Date,
the Borrowers will furnish to the Lender prompt written notice of the following:

     (a) the occurrence of any Default;

     (b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting any
Borrower or any Affiliate thereof that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect in respect of such
Borrower;

     (c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred as to the Borrowers, could reasonably be
expected to result in liability of any Borrower in an aggregate amount exceeding
One Hundred Twenty-Five Thousand Dollars ($125,000);

     (d) (i) any matter materially affecting the value, enforceability or
collectability of any portion of the Collateral (x) having a value of Two
Hundred Fifty Thousand Dollars ($250,000) or more or (y) which, together with
all other matters affecting any portion of the Collateral occurring during the
twelve (12) month period preceding the occurrence of such matter and which have
not been fully remedied or resolved, affects Collateral having an aggregate
value of Five Hundred Thousand Dollars ($500,000) or more, or any Borrower's
reclamation or repossession of, or the return to any Borrower of, goods having a
value of Two

                                       34

<PAGE>

Hundred Fifty Thousand Dollars ($250,000) or more, or claims or disputes
asserted by any customer or other obligor of a Borrower where the potential loss
to such Borrower equals Two Hundred Fifty Thousand Dollars ($250,000) or more,
and (ii) any material adverse change in the relationship between any Borrower
and any of its suppliers that is not an Affiliate of such Borrower, which
supplier accounted for at least twenty percent (20%) of such Borrower's
aggregate sources of supply as of the immediately preceding fiscal year end of
such Borrower.

     (e) any other development that results in, or could reasonably be expected
to result in, a Material Adverse Effect in respect of any Borrower.

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of a Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

     SECTION 5.03 Existence; Conduct of Business. Each Borrower will do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of its business.

     SECTION 5.04 Payment of Obligations. Each Borrower will pay its
obligations, including liabilities for Taxes that, if not paid, could result in
a Material Adverse Effect in respect of such Borrower, before the same shall
become delinquent or in default, except where (a) the validity or amount thereof
is being contested in good faith by appropriate proceedings, (b) such Borrower
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP, (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect in respect of such
Borrower, and (d) the same shall be paid or discharged or fully and adequately
bonded before it might become a Lien upon any property or asset of such
Borrower.

     SECTION 5.05 Maintenance of Properties; Insurance. Each Borrower will (a)
keep and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted, and (b) maintain,
with financially sound and reputable insurance companies, insurance in such
amounts and against such risks as are customarily maintained by companies
engaged in the same or similar businesses operating in the same or similar
locations, including, without limitation, insurance against fire, and public
liability insurance against such risks and in such amounts, and having such
deductible amounts as are customary, with companies in the same or similar
businesses and which is no less than may be required by law, which insurance
policies shall name the Lender as loss payee (or mortgagee, as set forth in the
Deeds of Trust with respect to the real property subject thereto) as its
interest may appear and shall provide for at least thirty (30) days' prior
written notice from such insurance company to the Lender of any change,
termination or cancellation thereof.

     SECTION 5.06 Books and Records; Inspection Rights. Each Borrower will keep
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and
activities. Each Borrower will permit any

                                       35

<PAGE>

representatives designated by the Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, and to verify the status of any Collateral, and
provide such further financial information as may be reasonably requested by the
Lender, all at such reasonable times and as often as reasonably requested.

     SECTION 5.07 Compliance with Laws; Environmental Laws. (a) Each Borrower
will comply with all laws, rules, regulations and orders of any Governmental
Authority applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect in respect of such Borrower.

     (b) Without limiting the preceding paragraph, each Borrower will (i) comply
in all material respects with, and use reasonable best efforts to ensure
compliance in all material respects by all tenants and subtenants, if any, with,
all applicable Environmental Laws; and (ii) conduct and complete (or cause to be
conducted and completed) all investigations, studies, sampling and testing, and
all remedial, removal and other actions required under Environmental Laws and in
a timely fashion comply in all material respects with all lawful orders and
directives of all Governmental Authorities regarding Environmental Laws except
to the extent that the same are being contested in good faith by appropriate
proceedings and the pendency of such proceedings could not be reasonably
expected to have a Material Adverse Effect in respect of any Borrower.

     SECTION 5.08 Use of Proceeds. The proceeds of the Term Loan will be used
only as provided in Section 2.01(b). The proceeds of the Revolving Loans will be
used only for working capital purposes. No part of the proceeds of any Loan will
be used, whether directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations G, U and
X.

     SECTION 5.09 Further Assurances. Each Borrower will execute any and all
further documents, financing statements, agreements and instruments, and take
all further action (including filing Uniform Commercial Code and other financing
statements) that may be required under applicable law, or that the Lender may
request, in order to effectuate the transactions contemplated by the Loan
Documents and in order to grant, preserve, protect and perfect the validity and
first priority of the security interests created or intended to be created by
the Security Documents, it being understood that it is the intent of the parties
that the Obligations shall be secured by, among other things, all the real and
personal property of each Borrower, including any such real and personal
property acquired subsequent to the Effective Date. Such security interests and
Liens will be created under the Security Documents and other security
agreements, and other instruments and documents in form and substance
satisfactory to the Lender, and the Borrowers shall deliver or cause to be
delivered to the Lender all such instruments and documents (including legal
opinions, and lien searches) as the Lender shall reasonably request to evidence
compliance with this Section. The Borrowers agree to provide such evidence as
the Lender shall reasonably request as to the perfection and priority status of
each such security interest and Lien.

                                       36

<PAGE>

     SECTION 5.10 Intentionally Omitted.

     SECTION 5.11 Leases. Each Borrower will (a) comply with the material terms
of each Lease to which it is a party; and (b) furnish to the Lender promptly, a
copy of any material notice given or received by such Borrower under or in
connection with such Lease.

     SECTION 5.12 Collateral Audits. Each Borrower will permit the Lender to
conduct, or cause to be conducted, at the Borrowers' expense, a Collateral Audit
within ninety (90) days after the Effective Date, and, thereafter, semi-annually
at mutually agreed upon times, and will provide such access to its facilities,
books and records, and furnish such other cooperation, as the Lender may request
in connection therewith. The Borrowers agree that each such Collateral Audit
must reflect values and conditions of the assets and properties of the Borrowers
that are satisfactory to the Lender.

                                   ARTICLE VI

                               Negative Covenants
                               ------------------

     Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full, the
Borrowers covenant and agree, jointly and severally, that without the prior
written consent of the Lender:

     SECTION 6.01 Indebtedness. No Borrower will create, incur, assume or permit
to exist any Indebtedness, except Indebtedness created hereunder or under the
other Loan Documents and the subordinated loan to the Company from Zatpack,
Inc., a British Virgin Islands corporation in the principal amount of $3,000,000
made pursuant to a Note Purchase Agreement dated as of October 11, 2001, and
subordinated to the Loans pursuant to an Agreement dated as of October 11, 2000
among the Company, Zatpack, Inc. and Lender; provided that the Borrowers, in the
aggregate, shall be entitled to incur, in the ordinary course of business,
Indebtedness which, in the aggregate, does not total more than $200,000.

     SECTION 6.02 Liens. No Borrower will create, incur, assume or permit to
exist any Lien on any property or asset now owned or hereafter acquired by it,
or assign or sell any income or revenues (including accounts receivable) or
rights in respect of any thereof, except additional security interests and Liens
consented to in writing by the Lender in its sole discretion and (ii) Liens
arising under the Loan Documents and Permitted Encumbrances.

     SECTION 6.03 Certain Changes; Prohibited Transactions. (a) No Borrower will
(i) liquidate or dissolve, or merge into or consolidate with any other Person,
or permit any other Person to merge into or consolidate with it; provided,
however, that any Borrower that is a Subsidiary of the Company or the Company
may be merged into another Borrower that is a Subsidiary of the Company, or (ii)
other than in the ordinary course of business, sell, transfer, lease or
otherwise dispose of (in one transaction or in a series of transactions) assets
in an amount such that after giving effect thereto the aggregate of all such
sales, transfers, leases, or other dispositions by all Borrowers shall have
exceeded $100,000; provided, however, that the Lender hereby confirms its
consent, pursuant to the Waiver of Credit Agreement, by and among

                                       37

<PAGE>

the Borrowers, Wilcox Natural Products, Inc. and the Lender, dated as of
November 5, 2001, to (i) the merger of Wilcox Drug Company, Inc., a wholly-owned
subsidiary of the Company with and into Wilcox Natural Products, Inc., a
wholly-owned subsidiary of the Company and (ii) the dissolution of Wilcox
Natural Products, Inc. into the Company.

     (b) No Borrower will (i) change its accounting policies in any way that
could have a material effect on the presentation of financial reports, (ii)
alter in any material respect the nature of the business of such Borrower from
that conducted on the Effective Date, or (iii) change its fiscal year from the
fiscal year in effect on the Effective Date; provided that such accounting
policies may change to accord with a change in GAAP; provided further that in
the event of any such change, all financial reports required hereunder that are
thereby affected relating to the fiscal quarter (including, if such fiscal
quarter is the fourth quarter, the fiscal year end), immediately following such
change, shall be presented in two formats, one of which shall reflect such
change and the other of which shall reflect the original accounting policy.

     (c) No Borrower will sell, assign, discount or otherwise dispose of notes,
Accounts Receivable or other rights to receive payment, with or without
recourse, except for collections and credits (to the extent permitted under the
Security Documents) in the ordinary course of business.

     (d) No Borrower will enter into any arrangement, directly or indirectly,
with any Person whereby it shall sell or transfer any property, real or
personal, and used or useful in its business, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property
being sold or transferred.

     SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions. No
Borrower will establish any new Subsidiaries, or purchase, hold or acquire
(including pursuant to any merger with any Person that was not a wholly owned
Subsidiary prior to such merger) any capital stock, evidences of indebtedness or
other securities (including any option, warrant or other right to acquire any of
the foregoing) of, make or permit to exist any loans or advances to, Guarantee
any obligations of, or make or permit to exist any investment or any other
interest in, any other Person, or purchase or otherwise acquire (in one
transaction or a series of transactions) any assets of any other Person
constituting a business unit, except Permitted Investments and the Company's
investments existing on the date hereof in the capital stock of the other
Borrowers. The Bank understands that the Borrowers are considering entering into
joint ventures (which may include partially owned Subsidiaries) with third
parties and agrees upon request of the Company to consider amendments to this
Agreement to permit, within such parameters as the Bank in its sole discretion
may determine, the Borrowers to enter into such joint ventures. However, the
Bank may grant or deny any such request in its sole discretion and is under no
obligation to provide any consent to enter into any such joint venture.

     SECTION 6.05 Hedging Agreements. No Borrower will enter into any Hedging
Agreement for purposes of speculation or investment, or otherwise outside of the
ordinary course of the business of such Borrower.

                                       38

<PAGE>

     SECTION 6.06 Restricted Payments. No Borrower will pay, declare or make, or
agree to pay or make, directly or indirectly, any Restricted Payment, other than
(i) cash dividends to the Company from the other Borrowers.

     SECTION 6.07 Certain Financial Covenants.

     (a) The Borrowers shall not permit the Consolidated Tangible Net Worth (i)
at the end of the fiscal quarter of the Company ending December 31, 2001 to be
less than $2,400,000; at the end of the fiscal quarter of the Company ending
March 31, 2002 to be less than $2,300,000; at the end of the fiscal quarter of
the Company ending June 30, 2002 to be less than $6,300,000; at the end of the
fiscal quarter of the Company ending September 30, 2002 to be less than
$7,100,000; at the end of the fiscal quarter of the Company ending December 31,
2002 to be less than $7,800,000; at the end of the fiscal quarter of the Company
ending March 31, 2003 to be less than $8,200,000; at the end of the fiscal
quarter of the Company ending June 30, 2003 to be less than $8,700,000; and at
the end of the fiscal quarter of the Company ending September 30, 2003 to be
less than $7,300,000.

     (b) The Borrowers will not permit the Consolidated Operating Cash Flow to
be less than negative $1,800,000 at the end of the fiscal quarter of the Company
ending December 31, 2001; positive $200,000 at the end of the fiscal quarter of
the Company ending March 31, 2002; positive $600,000 at the end of the fiscal
quarter of the Company ending June 30, 2002; positive $600,000 at the end of the
fiscal quarter of the Company ending September 30, 2002; positive $900,000 at
the end of the fiscal quarter of the Company ending December 31, 2002; positive
$600,000 at the end of the fiscal quarter of the Company ending March 31, 2003,
and as of the end of each fiscal quarter of the Company thereafter.

     SECTION 6.08 Transactions with Affiliates. No Borrower will sell, lease or
otherwise transfer any property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except in the ordinary course of
business at prices and on terms and conditions not less favorable to such
Borrower than could be obtained on an arm's length basis from unrelated third
parties.

     SECTION 6.09 Restrictive Agreements. No Borrower will directly or
indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon (a) the
ability of such Borrower to create, incur or permit to exist any Lien upon any
of its property or assets, or (b) the ability of such Borrower to pay dividends
or other distributions with respect to any shares of its capital stock or other
equity interests; provided that the foregoing shall not apply to restrictions
and conditions imposed by law or by this Agreement or the other Loan Documents;
provided further that for the purposes of clause (a) the Borrowers, in the
aggregate, shall be entitled to incur in the ordinary course of business,
Indebtedness incurred by Liens which, in the aggregate, do not total more than
$200,000.

     SECTION 6.10 Amendment of Certain Documents. The Borrowers shall not permit
any amendment, waiver or modification to the Certificate of Incorporation or
By-Laws of any Borrower except for amendments, modifications or waivers that are
not adverse in any respect to the Lender.

                                       39

<PAGE>

     SECTION 6.11 Leases. The Borrowers will not commit, suffer or permit to
exist any material default under, or breach or violation of, any Lease.

                                   ARTICLE VII

                                Events of Default
                                -----------------

     If any of the following events ("Events of Default") shall occur:

     (a) the Borrowers shall fail to pay any principal of any Loan when and as
the same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;

     (b) the Borrowers shall fail to pay any interest on any Loan or any fee or
any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement, when and as the same shall become due and
payable;

     (c) any representation or warranty made or deemed made by or on behalf of
any Borrower in or in connection with this Agreement or any other Loan Document,
or in any report, certificate, financial statement or other document furnished
pursuant to or in connection with this Agreement or any other Loan Document,
shall prove to have been incorrect in any material respect when made or deemed
made;

     (d) the Borrowers shall fail to observe or perform any covenant, condition
or agreement contained in Article V or in Article VI hereof, or in any Security
Document;

     (e) the Borrowers shall fail to observe or perform any other covenant,
condition or agreement contained in this Agreement (other than those specified
in clause (a), (b) or (d) of this Article), and such failure shall continue
unremedied for a period of 30 days after notice thereof from the Lender to the
Company;

     (f) any Borrower shall fail to make any payment (whether of principal or
interest and regardless of amount) in respect of any Material Indebtedness, when
and as the same shall become due and payable;

     (g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;

     (h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of any Borrower or its debts, or of a substantial part of its assets,
under any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment of a

                                       40

<PAGE>

receiver, trustee, custodian, sequestrator, conservator or similar official for
any Borrower or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for 60 days or an order
or decree approving or ordering any of the foregoing shall be entered;

     (i) any Borrower shall (i) voluntarily commence any proceeding or file any
petition seeking liquidation, reorganization or other relief under any Federal,
state or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or petition described in clause
(h) of this Article, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestration, conservator or similar official for
such Borrower or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors or (vi)
take any action for the purpose of effecting any of the foregoing;

     (j) any Borrower shall become unable, admit in writing or fail generally to
pay its debts as they become due;

     (k) one or more judgments for the payment of money in an aggregate amount
in excess of $500,000 shall be rendered against any Borrower and the same shall
remain undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of any Borrower to enforce
any such judgment;

     (l) an ERISA Event shall have occurred that, in the opinion of the Lender,
when taken together with all other ERISA Events that have occurred, could
reasonably be expected to result in liability of any Borrower in an aggregate
amount exceeding (i) $50,000 in any year or (ii) $150,000 for all periods;

     (m) a Change in Control shall occur or the Zuellig Owners shall not own,
directly for indirectly, forty-one (41%) percent or more of the outstanding
common stock of the Company on a fully diluted basis; provided, however, for the
purposes of this subsection (m);

     (n) Kenneth Cleveland shall cease to be actively employed by the Company
and shall not have been replaced within sixty (60) days thereafter with another
individual acceptable to the Lender, whose approval shall not be unreasonably
delayed or withheld;

     (o) A Default or Event of Default (as therein defined) under any Lender
Lease shall occur;

     (p) (i) any security interest or mortgage in favor of or for the benefit of
the Lender created or purported to be created under the Security Agreement, the
Deeds of Trust, the Collateral Assignments (other than as permitted by the
Security Agreement to which the Company is a party, in connection with the sale
by the Company of the Paclitaxel Patents and other assets of its Paclitaxel
business as permitted by Section 6.03), the Further Collateral Assignment, or
under any other Security Document shall, in any such case, no longer provide the
lien or priority contemplated by such Security Document or any party having
granted any such

                                       41

<PAGE>

security interests or mortgages (or any successor thereto or representative
thereof) shall make any claim or assertion to such effect, or (ii) any Borrower
(or any successor thereto or representative thereof) shall claim or assert that
this Agreement or any other Loan Document or any right or remedy of the Lender
hereunder shall not be enforceable in accordance with its terms, or any Person
(other than the Lender) shall claim or assert that any other Loan Document or
any right or remedy of the Lender thereunder shall not be enforceable in
accordance with its terms;

     (q) Borrower conceals, removes or transfers any part of its property with
intent to hinder, delay or defraud its creditors, or makes or suffers any
transfer of any of its property which may be fraudulent under any bankruptcy,
fraudulent conveyance or similar law; or

     (r) the shares of the Company's Common Stock, par value $.001 per share,
shall not be publicly traded on the Nasdaq National Market or on the New York
Stock Exchange or the American Stock Exchange, or quoted on the National
Association of Securities Dealers Over-the-Counter Bulletin Board;

then, and in every such event (other than an event described in clause (h) or
(i) of this Article), and at any time thereafter during the continuance of such
event, the Lender may, by notice to the Borrowers, take any of the following
actions, at the same or different times: (i) terminate the Commitments, and
thereupon the Commitments shall terminate immediately, (ii) declare the Loans
then outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
obligations of the Borrowers accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrowers, and (iii) enforce rights or
cause the enforcement of rights or exercise or cause the exercise of any
remedies available under any Loan Document or otherwise; and in case of any
Event of Default described in clause (h) or (i) of this Article, the Commitments
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrowers accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers.

                                  ARTICLE VIII

                              Intentionally Omitted
                              ---------------------

                                   ARTICLE IX

                                  Miscellaneous
                                  -------------

     SECTION 9.01 Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for

                                       42

<PAGE>

herein shall be in writing and shall be delivered by hand or overnight courier
service, with confirmed delivery receipt, mailed by certified or registered mail
or sent by telecopy, with confirmed delivery receipt, as follows:

     (a) if to the Borrowers or to any Borrower, to the Borrowers c/o the
Company at 2550 El Presidio Street, Long Beach, CA 90810, Attention of Thomas W.
Hanlon (Telecopy No. (310) 637-9807); and

     (b) if to the Lender, to Wells Fargo Bank, National Association, 333 South
Grand Avenue, 9th Floor, Los Angeles, California 90071, Attention of Art Brokx
(Telecopy No. (213) 253-5913), with a copy to G. Carla Axelrod, Esq., Wells
Fargo Bank, National Association, 333 South Grand Avenue, 10th Floor, Los
Angeles, California 90071 (Telecopy No. (213) 628-9918).

Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.

     SECTION 9.02 Waivers; Amendments. (a) No failure or delay by the Lender in
exercising any right or power hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the Lender
hereunder or under any other Loan Document are cumulative and are not exclusive
of any rights or remedies that it would otherwise have. No waiver of any
provision of this Agreement or any other Loan Document or consent to any
departure by the Borrowers therefrom shall in any event be effective unless the
same shall comply with paragraph (b) of this Section, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. Without limiting the generality of the foregoing, the making of a
Loan shall not be construed as a waiver of any Default, regardless of whether
the Lender may have had notice or knowledge of such Default at the time.

     (b) Neither this Agreement or any of the other Loan Documents nor any
provision hereof or thereof may be waived, amended or modified except pursuant
to an agreement or agreements in writing entered into by the Borrowers and the
Lender.

     SECTION 9.03 Expenses; Indemnity; Damage Waiver. (a) The Borrowers shall
pay (i) all out-of-pocket expenses incurred by the Lender, including the
reasonable fees, charges and disbursements of counsel for the Lender (including
counsel employed in-house by the Lender), in connection with the preparation and
administration of this Agreement and the other Loan Documents, or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated) and (ii) all out-of-pocket expenses incurred by the Lender,
including the reasonable fees, charges and disbursements of counsel for the
Lender (including counsel employed in-house by the Lender), in connection with
the enforcement or protection of its rights against any Borrower in

                                       43

<PAGE>

connection with this Agreement or the other Loan Documents, including its rights
against any Borrower under this Section, or against any Borrower in connection
with the Loans made hereunder or any Collateral, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Collateral.

     (b) The Borrowers shall indemnify the Lender and each Related Party of the
Lender (each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document, or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto or thereto of their
respective obligations hereunder or thereunder or the consummation of the
Transactions or any other transactions contemplated hereby or thereby, (ii) any
Loan or the use of the proceeds therefrom, (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property owned or operated by
any Borrower, or any Environmental Liability related in any way to any Borrower,
or (iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee.

     (c) To the extent permitted by applicable law, the Borrowers shall not
assert, and each Borrower hereby waives, any claim against any Indemnitee, on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement, any other Loan Document, or any
agreement or instrument contemplated hereby or thereby, the Transactions, any
Loan or the use of the proceeds thereof.

     (d) All amounts due under this Section shall be payable promptly after
written demand therefor.

     SECTION 9.04 Successors and Assigns. (a) The provisions of this Agreement
and the other Loan Documents shall be binding upon and inure to the benefit of
the parties hereto and thereto and their respective successors and assigns
permitted hereby and thereby, except that the Borrowers may not assign or
otherwise transfer any of their rights or obligations hereunder or thereunder
without the prior written consent of the Lender (and any attempted assignment or
transfer by a Borrower without such consent shall be null and void). Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of the Lender) any legal or equitable right, remedy or claim under or by
reason of this Agreement.

     (b) The Lender may sell, assign, transfer, negotiate or grant
participations in all or any part of, or any interest in, its rights and
obligations under this Agreement and the other

                                       44

<PAGE>

Loan Documents (including all or a portion of its Commitments and the Loans at
the time owing to it) (each a "Transfer"). In connection therewith, the Lender
may disclose all documents and information which the Lender now has or may
hereafter acquire relating to the Borrowers, their respective businesses or any
Collateral.

     SECTION 9.05 Survival. All covenants, agreements, representations and
warranties made by the Borrowers herein and in the other Loan Documents and in
the certificates or other instruments delivered in connection with or pursuant
to this Agreement or any other Loan Documents shall be considered to have been
relied upon by the Lender and shall survive the execution and delivery of this
Agreement and the making of any Loans, regardless of any investigation made by
the Lender or on its behalf and notwithstanding that the Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement is outstanding and unpaid
and so long as the Commitments have not expired or terminated. The provisions of
Sections 2.11, 2.13 and 9.03 shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Commitments or the
termination of this Agreement or any provision hereof.

     SECTION 9.06 Counterparts; Integration; Effectiveness. This Agreement 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 contract. This Agreement and the other
Loan Documents constitute the entire contract among the parties thereto relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof.

     It is the intention of each of the parties hereto that the Current
Agreement be amended and restated so as to preserve the perfection and priority
of all security interests securing indebtedness and obligations under the
Current Agreement and that this Agreement shall not constitute a novation of the
obligations and liabilities existing under the Current Agreement or be deemed to
evidence or constitute repayment of all or any portion of any such obligations
or liabilities.

     SECTION 9.07 Severability. Any provision of this Agreement or any other
Loan Document held to be invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

     SECTION 9.08 Right of Setoff. If an Event of Default shall have occurred
and be continuing, the Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other obligations at any time owing by the Lender to or for the credit
or the account of a Borrower against any of and all the obligations of

                                       45

<PAGE>

the Borrowers now or hereafter existing under this Agreement or any other Loan
Document held by the Lender, irrespective of whether or not the Lender shall
have made any demand under this Agreement or such other Loan Document and
although such obligations may be unmatured. The rights of the Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which the Lender may have.

     SECTION 9.09 Arbitration. (a) Agreement. Upon the demand of either the
Lender or any Borrower (which demand of such Borrower will bind all of the
Borrowers), any Dispute shall be resolved by binding arbitration (except as set
forth in paragraph (e) below) in accordance with the terms of this Agreement. A
"Dispute" shall mean any action, dispute, claim or controversy of any kind,
whether in contract or tort, statutory or common law, legal or equitable, now
existing or hereafter arising under or in connection with, or in any way
pertaining to, this Agreement or any of the other Loan Documents, or any past,
present or future extensions of credit and other activities, transactions or
obligations of any kind related directly or indirectly to this Agreement or any
of the other Loan Documents, including without limitation, any of the foregoing
arising in connection with the exercise of any self-help, ancillary or other
remedies pursuant to this Agreement or any of the other Loan Documents. Any
party may by summary proceedings bring an action in court to compel arbitration
of a Dispute. Any party who fails or refuses to submit to arbitration following
a lawful demand by the other party shall bear all costs and expenses incurred by
such other party in compelling arbitration of any Dispute.

     (b) Governing Rules. Arbitration proceedings shall be administered by the
American Arbitration Association ("AAA") or such other administrator as the
parties shall mutually agree upon in accordance with the AAA Commercial
Arbitration Rules. All Disputes submitted to arbitration shall be resolved in
accordance with the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in this Agreement or any
of the other Loan Documents. The arbitration shall be conducted at a location in
California selected by the AAA or other administrator. If there is any
inconsistency between the terms hereof and any such rules, the terms and
procedures set forth herein shall control. All statutes of limitation applicable
to any Dispute shall apply to any arbitration proceeding. All discovery
activities shall be expressly limited to matters directly relevant to the
Dispute being arbitrated. Judgment upon any award rendered in an arbitration may
be entered in any court having jurisdiction; provided however, that nothing
contained herein shall be deemed to be a waiver by the Lender of the protections
afforded to it under 12 U.S.C. ss. 91 or any similar applicable state law.

     (c) No Waiver; Provisional Remedies, Self-Help and Foreclosure. No
provision hereof shall limit the right of the Lender to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property Collateral or security, or to obtain provisional or ancillary remedies,
including without limitation injunctive relief, sequestration, attachment,
garnishment or the appointment of a receiver, from a court of competent
jurisdiction before, after or during the pendency of any arbitration or other
proceeding. The exercise of any such remedy shall not waive the right of any
party to compel arbitration or reference hereunder.

     (d) Arbitrator Qualifications and Powers; Awards. Arbitrators must be
active members of the California State Bar or retired judges of the state or
federal judiciary of

                                       46

<PAGE>

California, with expertise in the substantive laws applicable to the subject
matter of the Dispute. Arbitrators are empowered to resolve Disputes by summary
rulings in response to motions filed prior to the final arbitration hearing.
Arbitrators (i) shall resolve all Disputes in accordance with the substantive
law of the State of California, (ii) may grant any remedy or relief that a court
of the State of California could order or grant within the scope hereof and such
ancillary relief as is necessary to make effective any award, and (iii) shall
have the power to award recovery of all costs and fees, to impose sanctions and
to take such other actions as they deem necessary to the same extent a judge
could pursuant to the Federal Rules of Civil Procedure, the California Rules of
Civil Procedure or other applicable law. Any Dispute in which the amount in
controversy is $5,000,000 or less shall be decided by a single arbitrator who
shall not render an award of greater than $5,000,000 (including damages, costs,
fees and expenses). By submission to a single arbitrator, each party expressly
waives any right or claim to recover more than $5,000,000. Any Dispute in which
the amount in controversy exceeds $5,000,000 shall be decided by majority vote
of a panel of three arbitrators; provided however, that all three arbitrators
must actively participate in all hearings and deliberations.

     (e) Judicial Review. Notwithstanding anything herein to the contrary, in
any arbitration in which the amount in controversy exceeds $25,000,000, the
arbitrators shall be required to make specific, written findings of fact and
conclusions of law. In such arbitrations (i) the arbitrators shall not have the
power to make any award which is not supported by substantial evidence or which
is based on legal error, (ii) an award shall not be binding upon the parties
unless the findings of fact are supported by substantial evidence and the
conclusions of law are not erroneous under the substantive law of the State of
California, and (iii) the parties shall have in addition to the grounds referred
to in the Federal Arbitration Act for vacating, modifying or correcting an award
the right to judicial review of (A) whether the findings of fact rendered by the
arbitrators are supported by substantial evidence, and (B) whether the
conclusions of law are erroneous under the substantive law of the State of
California. Judgment confirming an award in such a proceeding may be entered
only if a court determines the award is supported by substantial evidence and
not based on legal error under the substantive law of the State of California.

     (f) Real Property Collateral; Judicial Reference. Notwithstanding anything
herein to the contrary, no Dispute shall be submitted to arbitration if the
Dispute concerns Collateral comprised of real property or interests therein
unless (i) the holder of the mortgage, lien or security interest specifically
elects in writing to proceed with the arbitration, or (ii) all parties to the
arbitration waive any rights or benefits that might accrue to them by virtue of
the single action rule statute of California, thereby agreeing that all
indebtedness and obligations of the parties, and all mortgages, liens and
security interests securing such indebtedness and obligations, shall remain
fully valid and enforceable. If any such Dispute is not submitted to
arbitration, the Dispute shall be referred to a referee in accordance with
California Code of Civil Procedure Section 638 et seq., and this general
reference agreement is intended to be specifically enforceable in accordance
with said Section 638. A referee with the qualifications required herein for
arbitrators shall be selected pursuant to the AAA's selection procedures.
Judgment upon the decision rendered by a referee shall be entered in the court
in which such proceeding was commenced in accordance with California Code of
Civil Procedure Sections 644 and 645.

                                       47

<PAGE>

     (g) Miscellaneous. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business, by applicable law or
regulation, or to the extent necessary to exercise any judicial review rights
set forth herein. If more than one agreement for arbitration by or between the
parties potentially applies to a Dispute, the arbitration provision most
directly related to this Agreement or the other relevant Loan Documents or the
subject matter of the Dispute shall control. This arbitration provision shall
survive termination, amendment or expiration of this Agreement and any of the
other Loan Documents or any relationship between the parties.

     SECTION 9.10 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW
OF THE STATE OF CALIFORNIA.

     (b) Each Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Superior Court
of the State of California sitting in Los Angeles County and of the United
States District Court for the Central District of California, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement not subject to arbitration under Section 9.09 above, or for
recognition or enforcement of any judgment or arbitral award, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
California State or, to the extent permitted by law, such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement
(other than Section 9.09, if applicable) shall affect any right that the Lender
may otherwise have to bring any action or proceeding relating to this Agreement
against any Borrower or its properties in the courts of any jurisdiction.

     (c) Each Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
court referred to in paragraph (b) of this Section. Each Borrower hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

     (d) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 9.01. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.

     SECTION 9.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE OTHER

                                       48

<PAGE>

LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED
ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     SECTION 9.12 Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall-not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

     SECTION 9.13 Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively the "Charges"), shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by the Lender in accordance with applicable law, the rate
of interest payable in respect of such Loan hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the
extent lawful, the interest and Charges that would have been payable in respect
of such Loan but were not payable as a result of the operation of this Section
shall be cumulated and the interest and Charges payable to the Lender in respect
of other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Base Rate to the date of repayment, shall have been received by the Lender.

                                    ARTICLE X

                                 Joint Borrowers
                                 ---------------

     Each Borrower agrees that the representations and warranties made by, and
the liabilities, obligations, and covenants of and applicable to any or all of
the Borrowers under this Agreement, shall in every case (whether or not
specifically so stated in each such case herein) be joint and several. Every
notice by or to any Borrower shall be deemed also to constitute notice by and to
the other Borrowers, every act or omission by any Borrower also shall be binding
upon the other Borrowers, and the Lender is fully authorized by each Borrower to
act and rely also upon the representations and warranties, covenants, notices,
acts, and omissions of the other Borrowers. Without limiting the foregoing:

     (a) Each Borrower has determined and represents to the Lender that it is in
its best interests and in pursuance of its legitimate business purposes to
induce the Lender to extend credit pursuant to this Agreement. Each Borrower
acknowledges and represents that its business is related to the business of the
other Borrowers, the availability of the commitments provided for herein
benefits all Borrowers, and advances and other credit extensions made hereunder
will be for and inure to the benefit of Borrowers, individually and as a group.

                                       49

<PAGE>

     (b) Each Borrower has determined and represents to the Lender that it has,
and after giving effect to the transactions contemplated by this Agreement will
have, assets having a fair saleable value in excess of its debts, after giving
effect to any rights of contribution or subrogation which may be available to
such Borrower, each Borrower has, and will have, access to adequate capital for
the conduct of its business and the ability to pay it debts as such debts
mature, and that no Borrower intends to, nor does it believe that it will, incur
debts beyond its ability to pay such debts as they mature.

     (c) Each Borrower agrees that it is jointly and severally liable to the
Lender for, and each Borrower agrees to pay to the Lender when due the full
amount of, all indebtedness, obligations and liabilities now existing or
hereafter arising to the Lender under or in connection with this Agreement and
the other Loan Documents ("Loan Debt") and all modifications, extensions and
renewals thereof, including all Loans made to any Borrower, all interest which
accrues thereon, all fees, costs, and expenses chargeable to the Borrowers or
any of them in connection therewith. The obligations of the Borrowers to the
Lender for the Loan Debt shall be in addition to any obligations of Borrowers to
the Lender under any other agreement heretofore or hereafter given to the Lender
unless said other agreement is expressly modified or revoked in writing, and
this Agreement shall not, unless expressly herein provided, affect or invalidate
any such other agreement.

     (d) The liability of each Borrower for the Loan Debt shall be reinstated
and revived and the rights of the Lender shall continue if and to the extent
that for any reason any amount at any time paid on account of any of the Loan
Debt is rescinded or must otherwise be restored by the Lender, whether as a
result of any proceedings in bankruptcy or reorganization or other wise, all as
though such amount had not been paid.

     (e) Each Borrower authorizes the Lender, without notice to or demand on
such Borrower, and without affecting such Borrower's liability for the Loan
Debt, from time to time to:

     (1) alter, compromise, extend, accelerate or otherwise change the time for
payment of, or otherwise change the terms of, the liabilities and obligations of
any other Borrower to the Lender on account of the Loan Debt;

     (2) take and hold security from the other Borrowers for the payment of the
Loan Debt, and exchange, enforce, waive, subordinate or release any such
security;

     (3) apply such security and direct the order or manner of sale thereof,
including without limitation, a non-judicial sale permitted by the terms of the
controlling security agreement or deed of trust, as the Lender in its discretion
may determine;

     (4) release or substitute any one or more of the endorsers or any
guarantors of the Loan Debt, or any other party obligated thereon; and

     (5) apply payments received by the Lender from any other Borrower to
indebtedness of such other Borrower to the Lender other than the Loan Debt;

                                       50

<PAGE>

     (f) Each Borrower represents and warrants to the Lender that it has
established adequate means of obtaining from each other Borrower on a continuing
basis financial and other information pertaining to each other Borrower's
financial condition, and each Borrower agrees to keep adequately informed from
such means of any facts, events or circumstances which might in any way affect
its risks hereunder. Each Borrower further agrees that the Lender shall have no
obligation to disclose to it any information or material about any other
Borrower which is acquired by the Lender in any manner.

     (g) Each Borrower waives any right to require the Lender to:

     (1) proceed against any other Borrower or any other person;

     (2) proceed against or exhaust any security held from any other Borrower or
any other person;

     (3) pursue any other remedy in the Lender's power;

     (4) apply payments received by the Lender from any other Borrower to the
Loan Debt; or

     (5) make any presentments or demands for performance, or give any notices
of nonperformance, protests, notices of protest, or notices of dishonor in
connection with the Loan Debt.

     (h) Each Borrower waives any defense to its liability for the Loan Debt
based upon or arising by reason of:

     (1) any disability or other defense of any other Borrower or any other
person;

     (2) the cessation or limitation for any cause whatsoever, other than
payment in full, of the liability of any other Borrower for the Loan Debt;

     (3) any lack of authority of any officer, director, partner, agent or other
person acting or purporting to act on behalf of any other Borrower or any defect
in the formation of any other Borrower;

     (4) the application by any other Borrower of the proceeds of the Loan Debt
for the purposes other than the purposes intended or understood by the Lender or
the Borrower;

     (5) any act or omission by the Lender which directly or indirectly results
in or aids the discharge of any other Borrower by operation of law or otherwise,
or which in any way impairs or suspends any rights or remedies of the Lender
against any other Borrower;

                                       51

<PAGE>

     (6) any impairment of the value of any interest in any security for the
Loan Debt, including the failure to obtain or maintain perfection or recordation
of any interest in any such security, the release of any such security without
substitution, and /or failure to preserve the value of, or to comply with
applicable law in disposing of, any such security; or

     (7) any modification of the obligations or liabilities of any other
Borrower for the Loan Debt, including the renewal, extension, acceleration or
other change in time for payment of, or other change in the terms of, the
indebtedness of any other Borrower for the Loan Debt, including increase or
decrease of the rate of interest thereon. Until the Loan Debt and all
indebtedness of each Borrower to the Lender arising under or in connection with
this Agreement shall have been indefeasibly paid in full, no Borrower shall have
any right of subrogation against any other Borrower, in connection with or by
virtue of any payment by such Borrower of any of the Loan Debt or otherwise.
Each Borrower waives all rights and defenses it may have arising out of:

     (i) any election of remedies by the Lender, even though that election of
remedies, such as non-judicial foreclosure with respect to any security for the
Loan Debt, destroys its rights of subrogation or its rights to proceed against
other Borrowers for reimbursement, or

     (ii) any loss of rights it may suffer by reason of any rights, powers or
remedies of any other Borrower in connection with any anti-deficiency laws or
any other laws limiting, qualifying, or discharging any Borrower's indebtedness
for the Loan Debt, whether by operation of Sections 726 or 580d of the
California Code of Civil Procedure as from time to time amended, or otherwise.
Until the Loan Debt and all indebtedness of all Borrowers to the Lender arising
under or in connection with this Agreement shall have been indefeasibly paid in
full, each Borrower waives any right to enforce any remedy which the Lender now
has or may hereafter have against any other Borrower or any other person, and
waives any benefit of, or any right to participate in, any security now or
hereafter held by the Lender.

     (i) If any of the waivers herein is determined to be contrary to any
applicable law or public policy, such waiver shall be effective only to the
extent permitted by law.

     (j) It is the position of the Borrowers that each Borrower benefits from
the credit facilities that have been made available by the Lender under this
Agreement and from each extension of credit thereunder, regardless of whether
such credit is disbursed to a joint account of some or all of the Borrowers or
to or for the account of any other Borrower.

                   [Balance of Page Intentionally Left Blank]

                                       52

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.

                                       53

<PAGE>

                                        HAUSER, INC.

                                        By: /s/ Kenneth C. Cleveland
                                            ------------------------------
                                        Name:  Kenneth C. Cleveland
                                        Title: Chief Executive Officer

                                        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

                                        WELLS FARGO BANK, NATIONAL
                                        ASSOCIATION

                                        By: /s/ Art Brokx
                                            ------------------------------
                                        Name:  Art Brokx
                                        Title: VP

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