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EXHIBIT 10.46
[LOGO] [XXXXXX FINANCIAL LETTERHEAD]
January 22, 1998
Jalate, Ltd.
0000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
Re: Collection Date Factoring Agreement and Revolving Loan
Agreement, both dated June 30, 1997
Dear Xx. Xxxxxxx:
This letter is in reference to the above described factoring and loan
agreements. We understand that Jalate, Ltd. ("Jalate") intends to sell and issue
to certain lenders (the "Lenders") $950,000 aggregate principal amount of 10%
subordinated secured promissory notes (the "Notes"). A copy of the form of the
Notes in substantially its final form is attached to this letter as Exhibit A.
We further understand that Xxxxxx will execute a Security and Pledge Agreement
(the "Security Agreement") pursuant to which Jalate will pledge as collateral
for the Notes (i) all of the capital stock of Air Shop Ltd. ("Air Shop") now or
hereafter acquired by Xxxxxx and (ii) all of Xxxxxx's rights under that certain
letter agreement (the "Letter Agreement") among Xxxxxx, Xxxxxxxxx Xxxxxxx and
Air Shop dated October 17, 1997 with respect to the investment by Xxxxxx in Air
Shop. A copy of the form of the Security Agreement in substantially its final
form is attached hereto as Exhibit B.
To the extent required by the terms of the above described factoring and loan
agreements, we hereby consent to the sale and issuance of the Notes (in
substantially the form attached hereto) by Jalate to the Lenders and the grant
of the security interests provided for in the Security Agreement (in
substantially the form attached hereto). In addition, we hereby waive any
security interest that we may otherwise have in the collateral provided for in
the Security Agreement.
Our consent and waiver is conditioned upon Xxxxxx's agreement that, without our
prior written consent, Jalate will not prepay the Notes except with the net
proceeds of an equity offering.
Please indicate your agreement to this condition by counter-signing both copies
of this letter and returning one of those copies to us.
Very truly your,
XXXXXX FINANCIAL, INC.
By: [SIG]
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Title:
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SIGNATURE ON FOLLOWING PAGE
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Jalate, Ltd.
Page 2
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[LOGO] XXXXXX FINANCIAL
Xxxxxx hereby agrees that, without the prior written consent of Xxxxxx
Financial, Inc. Jalate will not prepay the Notes except with the net proceeds
of an equity offering.
JALATE, LTD.
By: /s/ XXXXXXXXX X. XXXXXXX
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Xxxxxxxxx X. Xxxxxxx
Vice President and
Chief Financial Officer
