Joe - Alert**JPEI.Looks like Davis is screwin with the wrong type of company!!
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LIQUIDITY AND CAPITAL RESOURCES
Effective May 27, 1999, the Company's principal source of liquidity is a $56.3 million demand loan from Comerica Bank (the "Comerica Facility"), which is available to fund daily working capital needs in excess of internally generated funds. Prior to May 27, 1999, the Company's source of liquidity was a Forbearance Agreement dated August 10, 1998 (as amended August 31, 1998, September 4, 1998, September 16, 1998, October 1, 1998, December 1, 1998, and March 26, 1999), and debtor-in possession financing by GMAC Business Credit, LLC for the Company's subsidiaries, Plastic Trim, Inc., and Starboard Industries, Inc. Borrowings under both the Forbearance Agreement and debtor-in-possession financing were repaid May 27, 1999 in connection with the Investment Transaction.
In connection with the Comerica Facility, the Company has executed three promissory notes in the amounts of $6.3 million, $20 million, and $30 million, each providing for borrowing options at either a Prime based rate plus 1/2% to 1% or Eurodollar plus 3% to 3 1/2%. Eurodollar borrowings for 1 to 6 months are permitted at the option of the Company. Advances under the $30 million demand note are subject to a borrowing base restriction equal to 80% of eligible trade receivables and the lesser of 50% of eligible inventory or $9 million. There are no restrictions on advances under either the $6.3 million or $20 million demand notes. Borrowings under the three promissory notes are secured by the Company's cash deposits, trade receivables, inventory, and personal property, as well as a guaranty from ASC. The collateral for ASC's guaranty is the Common Shares and First Series Preferred Shares of the Company held by ASC. > |
