Borrowing Base Certificate for Hauser Inc. and Subsidiaries in Favor of Wells Fargo Bank

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Summary

This Borrowing Base Certificate is submitted by Hauser Inc. and its subsidiaries to Wells Fargo Bank as required under their Credit Agreement. The certificate details the calculation of the borrowing base, including eligible accounts receivable, inventory, and real estate, and applies specific exclusions and limitations. The document certifies the accuracy of the financial information and confirms that no default has occurred. It is used by the bank to determine the amount of credit available to the borrowers under the terms of the Credit Agreement.

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EX-10.5 6 0006.txt FORM OF BORROWING BASE CERTIFICATE EXHIBIT A BORROWING BASE CERTIFICATE (Dollars are stated in thousands) To: Wells Fargo Bank, National Association Date: ------------------------------ Subject: BORROWING BASE CERTIFICATE for Hauser Inc. ("Hauser") and its subsidiaries: Hauser Technical Services, Inc. ("HTS"), ZetaPharm, Inc. ("ZETA"), Wilcox Natural Products, Inc. ("WILCOX"), and Botanicals International Extracts, Inc. ("EXTRACTS") (collectively, "Co-Borrowers") In accordance with our Credit Agreement as of June 11, 1999, with subsequent amendments (the "Credit Agreement"), set forth below is the calculation of the Borrowing Base and Availability as of -----------------------------(the "Reporting Date"). Unless defined herein, all capitalized terms used in this certificate have the meanings given to them in the Credit Agreement. Unless otherwise indicated, all amounts are as of the Reporting Date.
CONSOLIDATED CO-BORROWERS HTS ZETA WILCOX EXTRACTS GRAND TOTAL ----------------------------------------------------------- A. ACCOUNTS RECEIVABLE ("A/R") 1. Reconciliation from last month (a) Previous aged trial balance as of ------------------ (b) add: gross A/R sales per sales journal: less: credit memos to A/R (c) Deduct: cash receipts per cash receipts journal Cash discounts (d) Sub-Total (e) Journal entries debits (refund & other) Credits: (writeoffs & other) (f) Sub-Total (control balance as of -------------------- (g) A/R Balance on general ledger (explain any difference) (H) TOTAL ACCOUNTS RECEIVABLE (THE LESSER OF F AND G ABOVE) (I) LESS: NUTRACO (J) NET A/R SUBJECT TO 80% BORROWING LIMITATION CONSOLIDATED CO-BORROWERS HTS ZETA WILCOX EXTRACTS GRAND TOTAL ----------------------------------------------------------- 2. EXCLUSIONS FROM ACCOUNTS RECEIVABLE (a) that portion of A/R not yet earned by the final delivery of goods or rendition of services (b) A/R subject to contingencies (c) A/R not providing for payment in full within 120 daysOf shipment date (d) A/R over 60 days past due (e) A/R owned by a shareholder, subsidiary, affiliate, officer Or employee of Hauser (f) A/R in the form of progress billings (g) A/R owed by an account debtor that is insolvent, the subject of bankruptcy proceedings or has gone out of business. (h) A/R not subject to a duly perfected first priority security interest In favor of the Bank or which are subject to any lien security Interest or claim in favor of any person other than the Bank (i) that portion of A/R that constitutes finance charges, service charges or excise taxes (j) that portion of A/R payable in a currency other than US Dollars (k) that portion of A/R due and collectible outside the United States (l) A/R owing from account debtor outside of the U.S. except for The following Canadian provinces (British Columbia, Alberta, Saskachewan, Manitoba, Ontario and Yukon). (m) that portion of A/R, or portions thereof, otherwise deemed uncollectible for any reason by the Bank (n) that amount exceeding 25% of total A/R outstanding from one account debtor. (o) A/R owing from U.S. or governmental agency or entity (p) A/R owing from an account debtor whom Hauser is or may Be liable for goods purchased from such account debtor (q) credits over 60 days past due (r) excessive delinquency (amount over 60 days past due represents more than 20% of total) (s) total ineligibles (sum of line 2 (a) through 2(R) 3. TOTAL ELIGIBLE RECEIVABLES (LINE 1(J) LESS LINE 2(S)) CONSOLIDATED CO-BORROWERS HTS ZETA WILCOX EXTRACTS GRAND TOTAL ----------------------------------------------------------- B. INVENTORY 4. Total Inventory 5. Exclusions from Inventory (a) work-in-progress (b) in-transit, not under a letter of credit, or not an approved site, on consignment or subject to any bailment (c) proprietary software (d) damaged, inventory in Hauser's stock for greater than 18 months, obsolete, returned, defective, recalled or unfit for further processing or not currently saleable in the normal course of Hauser's operations (e) perishable or live (f) returned, has attempted to return, is in the process of returning or intends to return to the vendor thereof (g) not subject to a duly perfected first priority security interest in favor of the Bank or which are subject to any lien security interest or claim in favor of any person other than the Bank (h) sample inventory, demonstration inventory, or packaging materials (i) otherwise deemed ineligible by the Bank in its discretion (Potentially obsolete as reviewed by Hauser) (j) total ineligibles (sum of line 5(a) through line 5(i)) C. REAL ESTATE CONSOLIDATED CO-BORROWERS HTS ZETA WILCOX EXTRACTS GRAND TOTAL ----------------------------------------------------------- (a) Eligible Improved Real Estate (b) Eligible Land SUMMARY BORROWING BASE CERTIFICATE CONSOLIDATED CO-BORROWERS HTS ZETA WILCOX EXTRACTS GRAND TOTAL ----------------------------------------------------------- Reference: Exhibit A: Borrowing Base Certificate - Worksheet For the month of: - -------------------- 1. Total Accounts Receivable (from line 1h) 2. Total Ineligible A/R (from line 2s) 3. TOTAL ELIGIBLE RECEIVABLES (line 1 minus line 2) 4. Total Inventory (from line 4) 5. Total Ineligible Inventory (from line 5i) 6. TOTAL ELIGIBLE INVENTORY (line 4 minus line 5) 7. Borrowing Base: a. 80% of Eligible Receivables (.80% x line 3) b. 90% of Eligible Nutraco A/R c. 50% of Eligible Inventory (.5 x line 6) subject to $9 million cap d. 75% of Eligible Improved Real Estate (line C-a) e. 50% of Eligible Land (line C-b) TOTAL AVAILABILITY Additional availability for Hauser 8 a. Outstanding loan balance b. Outstanding letter of credit balance c. TOTAL OUTSTANDINGS 9 Available Credit/Payment Required (total availability less total outstanding) Borrowers represent and warrant that this Borrowing Base Certificate is a true and correct statement regarding the status of the matters set forth herein. Borrowers further represent and warrant that no Default of Event of Default has occurred and is continuing. Borrowers acknowledge that any advances made to Borrowers under the Credit Agreement will be based upon the Lender's reliance on the information contained herein.
Hauser, Inc. By_______________________________