Subject: Lackawanna Letter of Credit
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked], [email-masked]
Date: Tue, 30 Jan 2001 02:35:00 -0800 (PST)

Based on our discussion last week, here is some information under the 
Lackawanna letter of credit.  Under the letter of credit, the stated amount 
is increased $4.5 million upon receipt from the trustee of notification of 
the Completion Date.  Completion Date is defined in the LC as in the 
Indenture.  However, this definition is exactly the same as used in the 
subordinated loan agreement.  I have attached my analysis of the requirements 
for the Completion Date under the Loan Agreement.

Completion requires, among other things, the production within a 24 day 
period of 3,000 units with certain quality specifications.  Approval of these 
specifications must be made by the independent engineer.  To date, we have 
taken a wait and see approach regarding completion.  Please review and advise 
on your thoughts on strategy going forward.  Obviously, we want to hold them 
to the letter of the agreement.  The LC expires on June 30 and it does not 
appear that under the loan agreement that we are required to fund after the 
expiration of the letter of credit.

If you need the pertinent documents, I have them in my office.

.