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June 12, 2000
ATTACHMENT
Prime Capital Corporation ("Prime") has announced that the Letter of Intent
under which Finantra Capital, Inc. ("Finantra") agreed to acquire, through a
subsidiary to have been formed for that purpose, all of the authorized, issued
and outstanding common shares of Prime (the "Letter of Intent") has now expired.
In connection with the Letter of Intent, Finantra undertook and the transaction
was contingent upon Finantra's ability to negotiate mutually satisfactory
arrangements with the note holders of Prime's securitizations (the
"Securitizations") as well as certain lenders. Finantra failed to reach
satisfactory agreements with all of said parties.
Certain of Prime's subsidiaries are in default of various covenants under the
Securitizations and related agreements for the securitization of the assets of
such subsidiaries. Additionally, Prime is currently in default of certain
covenants under other loan agreements including its warehouse credit facilities
and other senior and subordinated debt. Further, Prime's main credit facility
has expired and Prime is not permitted to borrow additional funds under such
facility. As a result, Prime is no longer warehousing transactions.
Prime is considering all viable alternatives under the circumstances. As such,
Prime has actively undertaken negotiations directly with the holders of the
Securitizations and other lenders and has engaged Development Specialists, Inc.
to serve as Prime's financial advisor and the law firm of Pachulski, Zeihl,
Young & Jones P.C. as special counsel.
