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To: Bert Kuo who wrote (3696)	7/15/1998 11:16:00 PM
From: CPAMarty	Respond to of 5058

what exactly is a "revolving line of credit"? The major difference between a revolving line of credit and term loan is the repayment schedule. A term loan has a set payback period in terms of time; this type of loan is normally secured by real estate or equipment. Revolving line of credit loans are usually used for the working capital needs and are often secured by accounts receivable and inventory and often are due to be repaid as accounts receivable and inventory levels decline. Example, you might have a revolving line that allows you to borrow up to 80% of accounts receivable and 35% of inventory.

To: Bert Kuo who wrote (3696)	7/15/1998 11:25:00 PM
From: Dennis R. Duke	Read Replies (2) \| Respond to of 5058

A revolver or revolving credit line is just like your personal ready reserve behind your checking account. If RDRT needs money they write the check and the bank revolves the money into the account and adds to the companies debt. From the CC John said they are out of compliance on one covenant, and are working with the bank and will have resolved in 30 days. They have not gotten a waiver from the bank because they want to handle it only once with that bank. That is not that unusual. If the bank wants to complain they will. My experience as a CFO is that they won't. As to the revolver available, they have drawn, or borrowed on $50,000,000, and have a second facility available, none of it take out in the form of a loan, for $150,000,000. BTW, John and Cy reported that at $200,000,000 in sales is breakeven with the improvements in production from a cashflow or EBITDA stand point. Depreciation and Amortization, post charge writedown is expected to be around $40,000,000. So they might need the $15,000,000 in cash for the write-off charge disclosed today, but other than that they should be near breakeven on cashflow. So net, $150,000,000 in cash there already, $150,000,000 available facility or revolver. This company is not going down for cashflow or anywhere near insolvent. As to Dr. Mark Re, please look at back press releases. Re was in April, along with a Seagate person. In May it was a Kodak Optical R&D person. 6/11 and 6/25 were qualification announcements. Later, Dennis P.S. The comments in 3697 are correct as to the sources of repayment the bank looks to in order to give the loan. Having one of those ratios out of line is a violation of the covenants, which RDRT has one now. We just don't know which ratio it is, nor if it is material at all for that matter.

To: Bert Kuo who wrote (3696)	7/16/1998 12:46:00 AM
From: Stitch	Read Replies (1) \| Respond to of 5058

Bert, Mark Re is the pony-tailed geek, with a much respected brilliance in physics specifically as it relates to head design, that RDRT lured away from IBM. He is a very well respected guy. However, he is not, IMO, a candidate for the presidency of RDRT. In fact, here is the latest on org which I have just learned. Mark Re is promoted to Exec VP, R+D. He is also acting VP of Slider Development while they search for a replacement for Jeff Windsor who moves over to VP, Info Systems. (This position isn't just the usual IMS stuff. At RDRT it entails the collection of, massaging of, and dissemination of the entire process data collection scheme that becomes the basis for process control and is a heavily technical position.) Aric Mennon, the new hire RDRT got from Seagate, is promoted to Chief Tech Officer reporting to the Pres. A well deserved position for him. He is top drawer IMO. Mennon and Re have slowly been developing their teams and I understand several key technology spots have been filled with people from Seagate. Looks like RDRT is still developing their crisis crew and response. Best, Stitch