Document:

Prepared by MerrillDirect

AMENDMENT NO. 5 TO CREDIT
AGREEMENT

 

             AMENDMENT
NO. 5 TO CREDIT AGREEMENT (this “Amendment”) is entered into as of
March 31, 2001, by and among HAUSER, INC.,
a Delaware corporation (the “Company”), HAUSER
TECHNICAL SERVICES, INC., a Delaware corporation (“Technical”), BOTANICALS INTERNATIONAL EXTRACTS, INC., a
Delaware corporation, ZETAPHARM, INC.,
a New York corporation, and WILCOX NATURAL
PRODUCTS, INC., a Delaware corporation (collectively, the
“Borrowers”), and WELLS FARGO BANK, N.A.
(the “Lender”).

RECITALS

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

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

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

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

             A.         Amendments.

                           1.          In Section
1.01 of the Agreement, the
defined term "Borrowing Base" is amended by replacing the term
"$4,000,000" appearing in the provision at the end of the definition,
with the term "$4,800,000."

             B.          Conditions.  This Amendment shall not become effective
until the date on which pursuant to the provisions of Section 8.03 of the
Agreement, the Borrowers shall have paid, or reimbursed the Lender for, all of
the Lender’s costs and expenses (including the fees and disbursements of
outside counsel and allocated in-house counsel) in connection with, or related
to, the negotiating and execution and effectiveness of this Agreement.

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

             

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

[INTENTIONALLY LEFT BLANK]

 

 

 

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

 

	HAUSER,
  INC.	WELLS
  FARGO BANK, N.A.
	 	 
	By:   /S/ KENNETH CLEVELAND

	By:  /S/ ART BROKX

	Name:  Kenneth Cleveland	Name:  Art Brokx 
	Title:    Chief Executive Officer	Title:    Vice President
	 	 
	BOTANICALS
  INTERNATIONALEXTRACTS, INC.	ZETAPHARM,
  INC.
	 	 
	By:
  /S/ KENNETH CLEVELAND

	By:
  /S/ KENNETH CLEVELAND

	Name:  Kenneth Cleveland	Name:  Kenneth Cleveland
	Title:    Chief Executive Officer	Title:    Chief Executive Officer
	 	 
	WILCOX
  NATURAL PRODUCTS, INC.	HAUSER TECHNICAL SERVICES, INC.
	 	 
	By:
  /S/ KENNETH CLEVELAND

	By:
  /S/ KENNETH CLEVELAND

	Name:  Kenneth Cleveland	Name:  Kenneth Cleveland 
	Title:    Chief Executive Officer	Title:    Chief Executive OfficerPrepared by MerrillDirect

HAUSER, INC.

6 1⁄2% Senior Subordinated Notes due 2003

NOTE PURCHASE AGREEMENT

Dated as of October 11, 2000

 

 

Table of Contents

	1.	AUTHORIZATION OF
  NOTES; THE ACQUISITION
	 	1.1.	The Notes
	 	 
	2.	SALE AND PURCHASE OF
  SECURITIES
	 	 
	3.	CLOSING
	 	 
	4.	CONDITIONS
  TO CLOSING
	 	4.1.	Representations and
  Warranties
	 	4.2.	Performance;
  No Default
	 	4.3.	Compliance
  Certificate
	 	4.4.	Proceedings and Documents
	 	4.5.	Payment of Special
  Counsel Fees
	 	4.6.	Warrant
	 	4.7.	Consent
  of  Wells Fargo Bank, National
  Association
	 	4.8.	Registration
  Rights
	 	 
	5.	REPRESENTATIONS
  AND WARRANTIES OF THE COMPANY
	 	5.1.	Corporate
  Existence
	 	5.2.	No Breach
	 	5.3.	Authority
	 	5.4.	Approvals
	 	5.5.	Private Offering by the
  Company
	 	 
	6.	REPRESENTATIONS OF
  THE PURCHASER
	 	6.1.	Purchase
  of Notes
	 	 
	7.	EVENTS OF
  DEFAULT
	 	 
	8.	REMEDIES ON DEFAULT, ETC.
	 	8.1.	Acceleration
	 	8.2.	Other
  Remedies
	 	8.3.	No Waivers or
  Election of Remedies, Expenses, etc.
	 	 
	9.	TRANSFER;
  REPLACEMENT
	 	9.1.	Transfer and Exchange
  of Notes
	 	9.2.	Replacement
  of Notes
	 	 
	10.	EXPENSES, ETC.
	 	10.1.	Transaction Expenses
	 	 
	11.	AMENDMENT
  AND WAIVER
	 	11.1.	Requirements
	 	11.2.	Binding Effect,
  etc.
	 	 
	12.	NOTICES
	 	 
	13.	MISCELLANEOUS
	 	13.1.	Successors
  and Assigns
	 	13.2.	Construction
	 	13.3.	Consent
  to Jurisdiction; Service of Process; Waiver of Jury Trial
	 	13.4.	Payments Due on
  Non-Business Days
	 	13.5.	Severability
	 	13.6.	Counterparts
	 	13.7.	Governing Law

 

HAUSER, INC.

5555 Airport Boulevard

Boulder, Colorado  80301

6 1⁄2% Senior Subordinated Notes due 2003

As of October 11, 2000

Zatpack Inc.

c/o Zuellig Group N.A., Inc.

2550 El Presidio Street

Long Beach, CA 90810

Attention: President

Ladies and
Gentlemen:

             Hauser,
Inc., a Delaware corporation (the "Company"), agrees with you, as follows:

1.          AUTHORIZATION OF NOTES; THE
ACQUISITION.

1.1.       The Notes.

             The Company has duly authorized the issue
and sale of its 6 1⁄2% Senior Subordinated Notes due 2003 (the "Notes")
in an aggregate original principal amount of $3,000,000, such Notes to be
substantially in the form set out in Exhibit A.  As used herein, the term "Notes" shall mean all notes
originally delivered pursuant to this Agreement, all notes issued in payment of
any interest on such notes (or such interest notes), and all notes delivered in
substitution or exchange for any such Note and, where applicable, shall include
the singular number as well as the plural. 
The term "Note" means one of the Notes.  Certain capitalized and other terms used in
this Agreement are defined in Schedule B; references to a "Schedule"
or an "Exhibit" are, unless otherwise specified, to a Schedule or an
Exhibit attached to this Agreement.

2.          SALE AND
PURCHASE OF SECURITIES.

Subject to the terms and conditions of this
Agreement, the Company will issue and sell to you and you will purchase from
the Company, at the Closing (as defined below) provided for in Section 3, Notes
in the original principal amount of $3,000,000 ($969,250 of which shall be
offset against amounts due pursuant to the Note, dated June 28, 2000, issued by
the Company to Zatpack), at a purchase price (the “Purchase Price”) of 100% of
the principal amount thereof.  In
addition, contemporaneously with the execution and delivery of this Agreement
and your payment for the Notes, the Company is issuing and delivering to you a
warrant (the “Warrant”) to purchase 992,789 shares of
common stock, par value $.001 per share of the Company (the “Common Stock”),
substantially in the form of Exhibit B. 
The Company shall allocate the Purchase Price between the Notes and the
Warrant as set forth on Schedule D which shall be attached hereto within 30
days of the date hereof.

3.          CLOSING
.

             The
sale and purchase of the Notes to be purchased by you shall occur at the
offices of Willkie Farr & Gallagher, 787 Seventh Avenue, New York, NY  10019-6099, at 10:00 a.m., at a closing (the
"Closing") on October
11, 2000 or on such other Business Day thereafter on or prior to October 11,
2000 as may be agreed upon by the Company and you.  At the Closing, the Company will deliver to you the Notes to be
purchased by you in the form of a single Note (or such greater number of Notes
in denominations of at least $500,000 as you may request prior to the Closing)
and the Warrant, each dated the date of the Closing and registered in your name
(or in the name of your nominee), against delivery by you to the Company or its
order of immediately available funds in the amount of the purchase price therefor
by wire transfer of immediately available funds in accordance with Schedule C
hereto.

             If
the Company fails to tender such Notes to you as provided in this Section 3, or
if any of the conditions specified in Section 4 shall not have been fulfilled
to your reasonable satisfaction, you shall, at your election, be relieved of
all further obligations under this Agreement, without thereby waiving any
rights you may have by reason of such failure or such nonfulfillment.

4.          
CONDITIONS TO
CLOSING.

             Your
obligation to purchase and pay for the Notes to be sold to you at the Closing
is subject to the fulfillment to your reasonable satisfaction, prior to or at
the Closing, of the following conditions:

4.1.       
Representations
and Warranties.

             The
representations and warranties of the Company in this Agreement shall be
correct when made and at the time of the Closing except to the extent that such
representations and warranties are expressly limited or refer to an earlier
date.

4.2.       Performance;
No Default.

             The
Company shall have performed and complied with all agreements and conditions
contained in this Agreement required to be performed or complied with by it
prior to or at the Closing and after giving effect to the issue and sale of the
Notes, no Default or Event of Default (as such terms are defined below) shall
have occurred and be continuing.

4.3.       Compliance
Certificate.

             (a)         Officer's Certificate.  The Company shall have delivered to you an
Officer's Certificate, dated the date of the Closing, certifying that the conditions
specified in Sections 4.1 and 4.2 have been fulfilled.

             (b)        Secretary's Certificate.  The Company shall have delivered to you a
certificate of the Secretary or an Assistant Secretary of the Company,
certifying as to the resolutions attached thereto and other proceedings
relating to the authorization, execution and delivery of the Notes and this
Agreement.

4.4.       Proceedings and

Documents.

             All
corporate and other proceedings to be completed in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be reasonably satisfactory to you and your
special counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.

4.5.       Payment of

Special Counsel Fees.

             Without
limiting the provisions of Section 10.1, the Company shall have paid on or
before the Closing the reasonable fees, charges and disbursements of your
special counsel to the extent reflected in a statement of such counsel rendered
to the Company at least one Business Day prior to the Closing.

4.6.       Warrant

             The
Company shall have delivered to you the Warrant.

4.7.       Consent of  Wells Fargo Bank, National Association

             The
Company shall have obtained the consent of Wells Fargo Bank, National
Association, on terms reasonably acceptable to you, to execute and deliver the
Notes and Warrant and to consummate the transactions contemplated hereby and
thereby.

4.8.       Registration
Rights

             The
Company shall have amended the Registration Rights Agreement, dated December 8,
1999, by and among the Company, Zuellig Group N.A., Inc. and Zuellig
Botanicals, Inc., to (i) include you as a party thereto and (ii) include the
Common Stock issuable upon exercise of the Warrant as Registrable Securities
for purposes thereof.

5.          
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.

             The
Company represents and warrants to you (as of the date of the Closing as
follows:

5.1.       Corporate
Existence.

             The
Company:  (a) is a corporation duly
organized, legally existing and in good standing under the laws of the State of
Delaware; (b) has all requisite corporate power, and has all material
governmental licenses, authorizations, consents and approvals necessary to own
its assets and to carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business in all jurisdictions in
which the nature of the business conducted by it makes such qualification
necessary except where the failure to so qualify could not be reasonably
expected to have a Material Adverse Effect.

5.2.       No Breach.

             Neither
the execution and delivery of the Note Documents (as defined below), nor
compliance with the terms and provisions hereof or thereof will conflict with
or result in a material breach of, or require any consent which has not been
obtained as of the date of the Closing under, the certificate of incorporation
and the by-laws of the Company, or any governmental requirement or any
agreement or instrument to which the Company is a party or by which it is bound
or to which it or its properties are subject, or constitute a default under any
such agreement or instrument, or result in the creation or imposition of any
lien upon any of the revenues or assets of the Company pursuant to the terms of
any such agreement or instrument.

5.3.       Authority.

             The
Company has all necessary corporate power and authority to execute, deliver and
perform its obligations under the Note Documents; and the execution, delivery
and performance by the Company of the Note Documents have been duly authorized
by all necessary corporate action on its part; and each Note, upon execution
and delivery thereof, will, and each of the other Note Documents, constitutes a
legal, valid and binding obligation of the Company enforceable in accordance
with its terms.

5.4.       Approvals.

             No
authorizations, approvals or consents of, and no filings or registrations with,
any governmental authority are necessary for the execution, delivery or
performance by the Company of the Note Documents or for the validity or
enforceability thereof.

5.5.       Private
Offering by the Company.

             Neither
the Company nor anyone authorized to act on its behalf has taken, or will take,
any action that would subject the issuance or sale of the Notes to the
registration requirements of Section 5 of the Securities Act (as defined
below).

6.          
REPRESENTATIONS
OF THE PURCHASER.

6.1.       Purchase of
Notes.

             You
represent that you are purchasing the Notes for your own account and not with a
view to the distribution thereof.  You
understand that the Notes have not been and will not be registered under the
Securities Act and may be resold only if registered pursuant to the provisions
of the Securities Act or if an exemption from registration is available, except
under circumstances where neither such registration nor such an exemption is
required by law, and that the Company is not required to register the Notes.

             You
represent that you are an "accredited investor" within the meaning of
Rule 501(a) under the Securities Act.

7.          EVENTS OF

DEFAULT.

             An
"Event of Default" shall
exist if any of the following conditions or events shall occur and be
continuing:

             (a)         the Company defaults in the payment of
any principal or interest on any Note when the same becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration or
otherwise; or

             (b)        the Company defaults in the payment of
any principal or interest on the Senior Debt when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or

             (c)         the Company defaults in the performance
of or compliance with any term contained herein (other than those referred
to in paragraphs (a) and (b) of this Section 7) and such default is
not remedied within 30 days after an executive officer of the Company obtains
knowledge of such default; or

             (d)        any representation or warranty made in
writing by or on behalf of the Company in this Agreement hereby proves to have
been false or incorrect in any material respect on the date as of which made;
or

             (e)         any event or condition occurs that
results in any Senior Debt 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 such indebtedness or any trustee or agent
acting on its or their behalf to cause any such indebtedness to become due, or
to require the prepayment, repurchase, redemption, or defeasance thereof, prior
to its scheduled maturity; or

             (f)         any event or condition occurs that
results in any indebtedness for money borrowed in the amount of more than
$5,000,000 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 such indebtedness or any trustee or agent acting on its or
their behalf to cause any such indebtedness to become due, or to require the
prepayment, repurchase, redemption, or defeasance thereof, prior to its scheduled
maturity; or

             (g)        the Company or any Subsidiary (i) is
generally not paying, or admits in writing its inability to pay, its debts as
they become due, (ii) files, or consents by answer or otherwise to the
filing against it of, a petition for relief or reorganization or arrangement or
any other petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law of any
jurisdiction, (iii) makes an assignment for the benefit of its creditors,
(iv) consents to the appointment of a custodian, receiver, trustee or
other officer with similar powers with respect to it or with respect to any
substantial part of its property, (v) is adjudicated as insolvent or to be
liquidated, or (vi) takes corporate action for the purpose of any of the
foregoing; or

             (h)        a court or governmental authority of
competent jurisdiction enters an order appointing, without consent by the
Company or any Subsidiary, a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial part of
its property, or constituting an order for relief or approving a petition for
relief or reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law of any jurisdiction,
or ordering the dissolution, winding-up or liquidation of the Company or any
such Subsidiary, or any such petition shall be filed against the Company or any
such Subsidiary and such petition shall not be dismissed within 60 days.

8.          
REMEDIES ON DEFAULT, ETC.

8.1.       Acceleration.

             (a)         If an Event of Default with respect to
the Company described in paragraph (g) or (h) of Section 7 has occurred,
all the Notes then outstanding shall automatically become immediately due and
payable.

             (b)        If any other Event of Default has
occurred and is continuing, a majority of the holders of the Notes may at any
time at their option, by notice or notices to the Company, declare all the
Notes then outstanding to be immediately due and payable.

             Upon
any Note becoming due and payable under this Section 8.1, whether
automatically or by declaration, such Note will forthwith mature and the entire
unpaid principal amount of such Note, plus all accrued and unpaid interest
thereon, shall all be immediately due and payable, in each and every case
without presentment, demand, protest or further notice, all of which are hereby
waived.

8.2.       Other Remedies.

             If
any Event of Default has occurred and is continuing, and irrespective of whether
any Notes have become or have been declared immediately due and payable under
Section 8.1, the holder of any Note at the time outstanding may proceed to
protect and enforce the rights of such holder by an action at law, suit in
equity or other appropriate proceeding, whether for the specific performance of
any agreement contained herein or in any Note, or for an injunction against a
violation of any of the terms hereof or thereof, or in aid of the exercise of
any power granted hereby or thereby or by law or otherwise.

8.3.       No
Waivers or
Election of Remedies, Expenses, etc.

             No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies.  No right, power or remedy conferred by this
Agreement or by any Note upon any holder thereof shall be exclusive of any
other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise.  The Company will pay to the holder of each Note on demand such
further amount as shall be sufficient to cover all reasonable costs and
expenses of such holder incurred in any enforcement or collection under this
Section 8, including, without limitation, reasonable attorneys' fees, expenses
and disbursements.

9.          TRANSFER;
REPLACEMENT

9.1.       Transfer an
d
Exchange of Notes.

             Upon
surrender of any Note at the principal executive office of the Company for
registration of transfer or exchange (and in the case of a surrender for
registration of transfer, duly endorsed or accompanied by a written instrument
of transfer duly executed by the registered holder of such Note or his attorney
duly authorized in writing and accompanied by the address for notices of each
transferee of such Note or part thereof), within ten Business Days thereafter
the Company shall execute and deliver, at the Company's expense (except as
provided below), one or more new Notes (as requested by the holder thereof) in
exchange therefor, in an aggregate principal amount equal to the unpaid
principal amount of the surrendered Note. 
Each such new Note shall be payable to such Person (as defined below) as
such holder may request.  Each such new
Note shall be dated and shall bear interest from the date to which interest
shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon.  The Company may require payment of a sum
sufficient to cover any stamp tax or governmental charge imposed in respect of
any such transfer of Notes.  Notes shall
not be transferred in denominations of less than $100,000, provided
that, if necessary to enable the registration of transfer by a holder of its
entire holding of Notes, one Note may be in a denomination of less than
$100,000.

9.2.       Replacement of
Notes.

             Upon
receipt by the Company of evidence reasonably satisfactory to the Company of
the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be notice from such holder of such ownership and such
loss, theft, destruction or mutilation), and

             (a)         in the case of loss, theft or
destruction, of indemnity reasonably satisfactory to the Company (provided that
such Person's own unsecured agreement of indemnity shall be deemed to be
satisfactory), or

             (b)        in the case of mutilation, upon
surrender and cancellation thereof, within ten Business Days thereafter the
Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have
been paid on such lost, stolen, destroyed or mutilated Note or dated the date
of such lost, stolen, destroyed or mutilated Note if no interest shall have
been paid thereon.

10.        EXPENSES, ETC
.

10.1.     Transaction Expenses.

             Whether or not the transactions contemplated hereby
are consummated, the Company will pay all reasonable costs and expenses
(including reasonable attorneys' fees of your special counsel and, if
reasonably required, local or other counsel) incurred by you and each holder of
a Note in connection with such transactions and in connection with any
amendments, waivers or consents under or in respect of this Agreement or the
Notes (whether or not such amendment, waiver or consent becomes effective),
including, without limitation: (a) the costs and expenses incurred in enforcing
or defending (or determining whether or how to enforce or defend) any rights
under this Agreement or the Notes or in responding to any subpoena or other legal
process or informal investigative demand issued in connection with this
Agreement or the Notes, or by reason of being a holder of any Note, and (b) the
costs and expenses, including financial advisors' fees, incurred in connection
with the insolvency or bankruptcy of the Company or any Subsidiary or in
connection with any work-out or restructuring of the transactions contemplated
hereby and by the Notes.  The Company
will pay, and will save you and each other holder of a Note harmless from, all
claims in respect of any fees, costs or expenses, if any, of brokers and
finders (other than those retained by you).

             In
furtherance of the foregoing, on the date of the Closing, the Company will pay
or cause to be paid the reasonable fees and disbursements and other charges
(including estimated unposted disbursements and other charges as of the date of
the Closing) of your special counsel which are reflected in the statement of
such special counsel submitted to the Company on or prior to the date of the
Closing.  The Company will also pay,
promptly upon receipt of supplemental statements therefor, reasonable
additional fees, if any, and disbursements and charges of such special counsel
in connection with the transactions hereby contemplated (including disbursements
and other charges unposted as of the date of the Closing to the extent such
disbursements exceed estimated amounts paid as aforesaid).

11.        AMENDMENT AND
WAIVER.

11.1.     Requirements
 .

             This
Agreement and the Notes may be amended, and the observance of any term hereof
or of the Notes may be waived with (and only with) the written consent of the
Company and you.

11.2.     Binding Effect, etc.

             No
course of dealing between the Company and the holder of any Note nor any delay
in exercising any rights hereunder or under any Note shall operate as a waiver
of any rights of any holder of such Note. 
As used herein, the term "this
Agreement" and references thereto shall mean this Agreement as
it may from time to time be amended or supplemented.

12.        NOTICES.

             All
notices and communications provided for hereunder shall be in writing and sent
(a) by telecopy if the sender on the same day sends a confirming copy of
such notice by a recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail with return receipt requested (postage
prepaid), or (c) by a recognized overnight delivery service (with charges
prepaid).  Any such notice must be sent:

             (i)          if to
you or your nominee, to you or it at the address specified for such
communications set forth on Schedule A, or at such other address as you or it
shall have specified to the Company in writing,

             (ii)         if to the Company, to the Company at
its address set forth at the beginning hereof to the attention of its
Secretary, or at such other address as the Company shall have specified to the
holder of each Note in writing.

Notices under this Section 12 will be deemed given
only when actually received.

13.        MISCELLANEOUS
.

13.1.     Successors and
Assigns.

             All
covenants and other agreements contained in this Agreement by or on behalf of
any of the parties hereto shall bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any
subsequent holder of a Note) whether so expressed or not.

13.2.     Construction
 .

             Each
provision contained herein shall be construed (absent express provision to the
contrary) as being independent of each other provision contained herein, so
that compliance with any one provision shall not (absent such an express
contrary provision) be deemed to excuse compliance with any other
provision.  Where any provision herein
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.

13.3.     Consent to
Jurisdiction; Service of Process; Waiver of Jury Trial.

             (a)         The Company irrevocably submits to the
non-exclusive, in personam
jurisdiction of any Delaware state or federal court, over any suit, action or
proceeding arising out of or relating to this Agreement or the Notes.  To the fullest extent it may effectively do
so under applicable law, the Company irrevocably waives and agrees not to
assert, by way of motion, as a defense or otherwise, any claim that it is not
subject to the in personam
jurisdiction of any such court, any objection that it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding brought in
any such court and any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum.

             (b)        Nothing in this Section 13 shall affect
the right of any holder of Notes to serve process in any manner permitted by
law, or limit any right that the holders of any of the Notes may have to bring
proceedings against the Company in the courts of any appropriate jurisdiction
or to enforce in any lawful manner a judgment obtained in one jurisdiction in
any other jurisdiction.

             (c)         EACH OF THE PARTIES HERETO WAIVES TRIAL
BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, THE NOTES
OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH.

13.4.     Payments Due on
Non-Business Days.

             Anything
in this Agreement or the Notes to the contrary notwithstanding, any payment of
principal or interest on any Note that is due on a date other than a Business
Day shall be made on the next succeeding Business Day without including the
additional days elapsed in the computation of the interest payable on such next
succeeding Business Day.

13.5.     Severability
 .

             Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the fullest extent permitted by applicable law) not
invalidate or render unenforceable such provision in any other jurisdiction.

13.6.     Counterparts
 .

             This
Agreement may be executed in any number of counterparts, each of which shall be
an original but all of which together shall constitute one instrument.  Each counterpart may consist of a number of
copies hereof, each signed by less than all, but together signed by all, of the
parties hereto.  Delivery of a facsimile
signature shall be deemed to be delivery of a manually executed original
signature.

13.7.     Governing Law.

             This
Agreement and the Notes shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by the laws of the State of
Delaware, excluding choice-of-law principles of the law of such State that
would require the application of the laws of a jurisdiction other than such
State.

 

             If
you are in agreement with the foregoing, please sign the form of agreement in
the space below provided on a counterpart of this Agreement and return it to
the Company, whereupon the foregoing shall become a binding agreement between
you and the Company.

	 	Very truly yours,
	 	 
	 	HAUSER,
  INC.
	 	 
	 	 
	 	/s/  Volker Wypyszyk

	 	By:	Volker
  Wypyszyk
	 	 	President
  and Chief Executive Officer

 

The foregoing
is hereby agreed

to as of the date thereof.

ZATPACK, INC.

	/s/ 
  Harvey L. Sperry

	By:	Harvey L. Sperry
	 	Director

 

SCHEDULE A

Zatpack, Inc.

c/o Zuellig Group N.A., Inc.

2550 El Presidio Street

Long Beach, CA  80310

Attention: President

             with
copy to:

Willkie Farr & Gallagher

787 Seventh Avenue

New York, NY 10019-6099

Attention: Harvey L. Sperry and/or Steven J. Gartner

SCHEDULE B

DEFINED
TERMS

             As
used herein, the following terms have the respective meanings set forth below
or set forth in the Section hereof following such term:

             "Business
Day" means any day other than a
Saturday, a Sunday or a day on which commercial banks in New York City or the
State of Colorado are required or authorized to be closed.

             "Closing" is defined in Section 3.

             "Code" means the Internal Revenue Code of 1986, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time.

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

             “Common
Stock” is defined in Section 2.

             "Credit Agreement" means that
certain Credit Agreement among the Company, Wells Fargo Bank, National
Association and certain other parties, dated as of June 11, 1999, as amended
October 29, 1999, or any extension, renewal or refinancing thereof.

             "Default" means an event or condition the occurrence or existence of which would,
with the giving of notice or the lapse of time, or both, become an Event of
Default.

             "Event of
Default" is defined in Section 7.

             "Material Adverse
Effect" means in respect of the
Company a material adverse effect on (a) the business, assets, operations,
prospects or condition, financial or otherwise, of the Company, (b) the ability
of the Company to perform any of its obligations under the Note Documents or
(c) the rights of or benefits available to Zatpack Inc. in respect of the
Company under the Note Documents.

             "Note
Documents" means this Agreement, the
Notes and the Warrant.

             "Notes" is defined in Section 1.

             "Person" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof.

             "Securities
Act" means the Securities Act
of 1933, as amended from time to time.

             "Senior Debt" shall have the meaning set forth in the Subordination Agreement.

             "Senior
Creditors" means the lenders and
other investors from time to time party to the Credit Agreement.

             "Subordination
Agreement" means the Subordination
Agreement, dated the date hereof, by and among the Company, Zatpack Inc. and
Wells Fargo Bank, National Association.

             "Subsidiary" means with respect to any Person, (i) a corporation a majority of whose
voting securities at any time is at such time directly or indirectly owned or
controlled by such Person or (ii) any other Person (other than a corporation)
in which such Person, or one or more Subsidiaries thereof, at such time
directly or indirectly has at least a majority ownership interest and the power
to direct the policies, management and affairs thereof.  For purposes of this definition, any
directors’ qualifying shares shall be disregarded in determining the ownership
of a Subsidiary.

             "Warrant" is defined in Section 2.

SCHEDULE C

Wells
Fargo Bank

Los Angeles, CA

Account number 4433691821

ABA number 121000248

EXHIBIT
A

[FORM
OF NOTE]

HAUSER, INC.

6 1⁄2% SENIOR SUBORDINATED NOTE DUE 2003

No. R-[_____]                                  
                                          
                                          
                                Boulder, Colorado

$[3,000,000]                                     
                                          
                                          
                                          
             [Date]

             FOR
VALUE RECEIVED, the undersigned, HAUSER, INC. (the "Company"), a Delaware corporation,
hereby promises to pay to Zatpack, Inc., or registered assigns (the "Holder"),
the principal sum of THREE MILLION DOLLARS on October __, 2003, with interest
(computed on the basis of a 360-day year of twelve 30-day months) from the date
hereof on the unpaid balance thereof at the rate of 6 1⁄2% per annum,
payable at maturity.

             Payments
of principal of and interest with respect to this Note are to be made in lawful
money of the United States of America at said principal office of the Holder or
at such other place as the Holder shall have designated by written notice to
the Company as provided in the Note Purchase Agreement referred to below.

             This
Note is one of a series of 6 1⁄2% Senior Subordinated Notes due 2003 issued
pursuant to a Note Purchase Agreement, dated as of October __, 2000 (as from
time to time amended, the "Note Purchase
Agreement"), between the Company and the Purchaser named
therein and is entitled to the benefits thereof.

             Payments
of principal of and interest on with respect to this Note are subordinated, to
the extent specified in the Subordination Agreement, dated as of October __,
2000, by and among the Company, the Holder and Wells Fargo Bank, National
Association (the “Subordination Agreement”), to all Senior Debt of the Company,
as such term is defined in the Subordination Agreement.

             This
Note is a registered Note and, as provided in the Note Purchase Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the
registered Holder hereof or such Holder's attorney duly authorized in writing,
a new Note for a like principal amount will be issued to, and registered in the
name of, the transferee.  Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.

             If
an Event of Default, as defined in the Note Purchase Agreement, occurs and is
continuing, the principal of this Note may be declared or otherwise become due
and payable in the manner, at the price and with the effect provided in the
Note Purchase Agreement.

             This
Note shall be construed and enforced in accordance with, and the rights of the
Company and the holder hereof shall be governed by, the laws of the State of
Delaware, excluding choice-of-law principles of the law of such State that
would require the application of the laws of a jurisdiction other than such
State.

	 	HAUSER,
  INC.
	 	 	 
	 	 	 
	 	 	 
	 	By	

	 	 	Name:  Volker Wypyszyk
	 	 	Title:   President & Chief Executive Officer

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