Waiver of Default Agreement between General Electric Capital Corporation and Advanced Nutraceuticals, Inc. et al.

Summary

General Electric Capital Corporation agrees to waive certain defaults by Advanced Nutraceuticals, Inc., Bactolac Pharmaceutical Inc., and ANI Pharmaceuticals, Inc. under their existing Loan and Security Agreement. The waiver covers specific financial covenant breaches as of September 30, 2001, including failures to meet the required fixed charge coverage ratio, capital expenditure limits, and net worth minimums. This waiver applies only to these specific defaults and time periods, and does not waive any other past or future defaults or ongoing compliance requirements.

EX-10.63 12 dex1063.txt WAIVER OF DEFAULT Exhibit 10.63 GENERAL ELECTRIC CAPITAL CORPORATION 4601 Charlotte Park Drive, Suite 200 Charlotte, North Carolina 28217 WAIVER OF DEFAULT ----------------- December 26, 2001 Advanced Nutraceuticals, Inc. 106 South University Boulevard, Unit 14 Denver, Colorado 80209 Bactolac Pharmaceutical Inc. 7 Oser Avenue Happauge, New York ###-###-#### ANI Pharmaceuticals, Inc. 3600 25/th/ Avenue Gulfport, Mississippi 39501 Ladies and Gentlemen: Reference is made to the Amended and Restated Loan and Security Agreement, dated as of December 12, 2001 (such Amended and Restated Loan and Security Agreement, as from time to time amended, modified, supplemented or restated, being hereinafter known as the "Loan Agreement"), among Advanced Nutraceuticals, Inc., -------------- a Texas corporation ("Holding Co."), Bactolac Pharmaceutical Inc., a Delaware ----------- corporation, ANI Pharmaceuticals, Inc., a Mississippi corporation, and General Electric Capital Corporation, a Delaware corporation ("Lender"). Capitalized ------ terms used herein with definition shall have the meanings ascribed to them in the Loan Agreement. Effective as of the date hereof, the Lender hereby waives any Events of Default arising under the Loan Agreement by virtue of the failure of Holding Co. and its Subsidiaries to comply with Section 4.2 of the Loan Agreement as a result of: (a) Holding Co. and its Subsidiaries' failure to maintain a Fixed Charge Coverage Ratio of at least 1.5 to 1.0 as of September 30, 2001 and at all prior times; (b) Holding Co. and its Subsidiaries' failure to limit Capital Expenditures to $250,000 or less in the Fiscal Year ending September 30, 2001; and (c) Holding Co. and its Subsidiaries' failure to maintain Net Worth of at least $27,000,000 as of the end of the Fiscal Year ending September 30, 2001.his waiver shall be effective only for the specific Events of Default enumerated in the preceding sentence and only for the specific dates or periods stated therein. Nothing contained herein shall constitute a waiver of any other Event of Default heretofore or hereafter existing under the Loan Agreement or compliance by Holding Co. and its Subsidiaries with Section 4.2 of the Loan Agreement after September 30, 2001. Very truly yours, GENERAL ELECTRIC CAPITAL CORPORATION By: _____________________________________ Malcolm Ferguson Duly Authorized Signatory