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EXHIBIT 10.01
THE TRADE BANK 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
XXXXX FARGO HSBC TRADE BANK, N.A. Xxx Xxxxxxx, XX 00000
April 1, 1998
Xx. Xxxxxxxxx X. Xxxxxxx
Jalate, Ltd.
0000 Xxxxxxxx
Xxxx xx Xxxxxxxx, XX 00000
Dear Xxxx:
Reference is made to that certain Credit Agreement by and between Jalate,
Ltd. (the "Borrower") and Xxxxx Fargo HSBC Trade Bank, N.A. (the "Trade Bank")
dated as of January 21, 1998 (the "Agreement"). Capitalized terms used herein
but not defined shall have the meanings set forth in the Agreement. We have
learned of the following breaches of the terms of the Agreement. Pursuant to
Exhibit A - Addendum to Credit Agreement of the Agreement:
1. Borrower is to maintain a Current Ratio from and after
December 31, 1997 not at any time less than 1.25 to 1.0.
For the periods ended January 31, 1998 and February 28, 1998
the Borrower was not in compliance with this covenant and
has informed the Bank that it will not be in compliance with
this covenant for subsequent reporting periods through and
including June 30, 1998.
2. Borrower is to maintain Working Capital from and after
December 31, 1997 not at any time less than $750,000. For
the periods ended January 31, 1998 and February 28, 1998 the
Borrower was not in compliance with this covenant and has
informed the Bank that it will not be in compliance with
this covenant for subsequent reporting periods through and
including June 30, 1998.
3. Borrower is maintain a ratio of Total Liabilities divided
by Tangible Net Worth from and after December 31, 1997 not
at any time greater than 2.25 to 1.0. For the periods ended
January 31, 1998 and February 28, 1998 the Borrower was not
in compliance with this covenant and has informed the Bank
that it will not be in compliance with this covenant for
subsequent reporting periods through and including June 30,
1998.
Subject to the terms and conditions that follow, the Bank has decided to
waive its default rights with respect to these breaches for all periods from
January 31, 1998 through and including June 30, 1998. Please note, however, that
this waiver applies only to the specific instances described above. It is not a
waiver of any breach of any other provision of the Agreement.
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Jalate, Ltd.
April 1, 1998
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Except as expressly stated in this letter, the Bank reserves all of the
rights, powers and remedies available to it under the Agreement and any other
contracts or instruments signed by the Borrower, including the right to cease
making advances to the Borrower and the right to accelerate any of the
Borrower's indebtedness, if any subsequent breach of any other provision of the
Agreement should occur.
Sincerely,
XXXXX FARGO HSBC
TRADE BANK, N.A.
By: /s/ Xxxx Xxxxxxxxxx
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Xxxx Xxxxxxxxxx
Vice President
